EXHIBIT 2.1
PURCHASE AGREEMENT
THIS AGREEMENT made this 13th day of November, 2000
A M O N G:
IRON MOUNTAIN CANADA CORPORATION, a company existing under
the laws of the Province of Nova Scotia
("PURCHASER")
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IRON MOUNTAIN RECORDS MANAGEMENT, INC., a corporation
existing under the laws of Delaware
("IMRM")
- and -
FACS RECORDS STORAGE INCOME FUND, a trust established under
the laws of the Province of British Columbia
("VENDOR")
- and -
FACS RECORDS CENTRE INC., a company existing under the laws
of the Province of British Columbia
(the "COMPANY")
- and -
3796281 CANADA INC., a company existing under the laws of
Canada
("VENDORCO")
RECITALS:
1. The Vendor is an unincorporated, single purpose trust which has distributed
publicly traded units and holds in trust for the use and benefit of its
Unitholders all of the issued and outstanding shares of the Company and
$37,500,000 aggregate principal amount of 12.5% unsecured subordinated notes
(the "NOTES") issued by the Company.
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2. The Company is engaged in the business of records storage and management of
documents and records and related services, and the franchise of such services.
3. The Vendor is willing to sell and the Purchaser is willing to purchase all of
the issued and outstanding shares of the Company and the Notes upon and subject
to the terms and conditions set forth in this Agreement.
4. At Closing, the Vendor will sell, transfer and assign the Purchased Shares
and the Notes to Vendorco and Vendorco will sell, transfer and assign the
Purchased Shares and the Notes to the Purchaser, upon and subject to the terms
and conditions set forth in this Agreement.
5. FACS Management Inc. ("FACS MANAGEMENT") provides management assistance to
the Company pursuant to a management agreement dated March 26, 1997 among FACS
Management, the Vendor and the Company.
6. The Purchaser is an Affiliate of IMRM.
NOW THEREFORE for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties covenant and agree as
follows:
ARTICLE 1
INTERPRETATION
DEFINITIONS. In this Agreement, unless the context otherwise requires or
unless otherwise defined herein:
"ACCOUNTS PAYABLE" means any and all amounts owing by the Company or the
Subsidiaries to trade creditors and suppliers in respect of trade accounts of
the Business as at the Effective Date, determined in accordance with generally
accepted accounting principles;
"ACCOUNTS RECEIVABLE" means all accounts receivable of the Company and the
Subsidiaries as at the Effective Date, determined in accordance with generally
accepted accounting principles;
"ACCRUED LIABILITIES" means any and all accrued liabilities of the Company
or the Subsidiaries, determined in accordance with generally accepted accounting
principles, as of the Effective Date, including, without limitation, accrued
Taxes, employee bonuses, commissions, profit sharing entitlements and severance
payments, and liabilities for vacation pay for employees of the Company or the
Subsidiaries in respect of any and all periods ending on or before the Effective
Date, but excluding Current Taxes, the current portion of the long-term Debt,
interest accrued on the Notes, amounts included in subsection 3.3(b)(ii) of this
Agreement and the amount of the Management Severance Obligations;
"ACQUISITION PROPOSAL" means any proposal or offer with respect to any
merger, amalgamation, reorganization, consolidation, arrangement, business
combination, recapitalization, take-over bid, sale of assets (or any lease,
long-term supply agreement or other transaction having the same economic effect
as a sale of assets), liquidation, issue or sale of shares (or in the case of
the Vendor, any issue of trust units or any sale of 20% or more of the
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trust units of the Vendor then outstanding) or rights or interests therein or
thereto or similar transactions involving the Vendor, the Company or any of
their Affiliates, excluding the Transactions;
"ADJUSTMENT AMOUNT" has the meaning ascribed thereto in subsection 3.3(d)
of this Agreement;
"ADJUSTMENT DATE" means the date that is two (2) Business Days following
the agreement of the parties or the final determination of the Independent
Auditor on the Audited Closing Statements, as the case may be, in accordance
with Section 3.5 of this Agreement;
"AFFILIATE" means, with respect to any Person, any other Person who
directly or indirectly controls, is controlled by, or is under direct or
indirect common control with, such Person, and includes any Person in like
relation to an Affiliate. A Person shall be deemed to control a Person if such
Person possesses, directly or indirectly, the power to elect a majority of the
board of directors or similar managing bodies of such Person, whether through
the ownership of voting securities, by contract or otherwise; and the term
"controlled" shall have a similar meaning, provided that FACS Management is
deemed not to be an Affiliate of the Company or the Vendor;
"AGED ACCOUNTS RECEIVABLE" means Accounts Receivable aged over 90 days as
at the Effective Date;
"AGREEMENT" means this agreement (including the Schedules hereto), as it
may be amended or supplemented from time to time; and the expressions "article",
"Section", and "subsection" followed by a number means and refers to the
specified article, Section or subsection of this Agreement, and the expressions
"hereof", "hereto", "hereunder" and similar expressions mean and refer to this
Agreement;
"ANNUAL FINANCIAL STATEMENTS" has the meaning ascribed thereto in
Subsection 4.1(29) of this Agreement;
"APPLICABLE LAW" means, with respect to any Person, property, transaction,
event or other matter, any law, rule, statute, regulation, order, judgement,
decree, treaty or other requirement having the force of law relating or
applicable to such Person, property, transaction, event or other matter.
Applicable Law also includes, where appropriate, any interpretation of the law
(or any part thereof) by any Person having jurisdiction over it, or charged with
its administration or interpretation;
"ASSETS" means the undertaking and all property, assets and rights of the
Company and each of the Subsidiaries of every kind and description wheresoever
situated, including, without limitation, fixed assets, equipment, leasehold
improvements, vehicles, computer equipment, Records Management Agreements,
Company Agreements, Leases, Franchise Agreements, Personal Property and
Intellectual Property of the Company and each of the Subsidiaries;
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"AUDITED CLOSING STATEMENTS" has the meaning ascribed thereto in subsection
3.5(a) of this Agreement;
"BUILDINGS" means all plants, buildings, structures, erections,
appurtenances, fixtures and other improvements, systems and facilities situated
on or forming part of the Owned Real Property;
"BUSINESS" means the business of records storage and management of
documents and records and related services, and the franchise of such services,
carried on by the Company and the Subsidiaries;
"BUSINESS DAY" means any day, other than a Saturday, Sunday or statutory
holiday in Vancouver, British Columbia;
"CAPITALIZED LEASES" means leases which are, or should be, in accordance
with generally accepted accounting principles, recorded as capital leases in
respect of which any of the Company or the Subsidiaries is liable as lessee;
"CASH-BASED DEFERRED REVENUE" means services for which the Company or any
of the Subsidiaries has received payment as of the Effective Date but which will
be performed after the Effective Date;
"CIRCULAR" means the notice of the Unitholder Meeting and accompanying
management information circular, including all schedules thereto, to be sent to
Unitholders in connection with the Unitholder Meeting;
"CLOSING DATE" means the earlier of (i) two (2) Business Days following the
Unitholder Meeting, and (ii) December 28, 2000, as such date may be extended by
the cure provisions of subsection 12.1(b), but in no event earlier than two (2)
Business Days after delivery to the Purchaser of the Unaudited Financial
Statements in accordance with Section 3.4 of this Agreement, or such earlier or
later date, if any, as may be mutually agreed to in writing by the parties
hereto; and "CLOSING" means the completion of the Transactions on the Closing
Date;
"COMPANY" means FACS Records Centre Inc.;
"COMPANY AGREEMENTS" has the meaning ascribed thereto in subsection 4.1(20)
of this Agreement;
"COMPANY'S AUDITOR" means PricewaterhouseCoopers LLP, Chartered
Accountants;
"COMPANY'S FACILITIES" has the meaning ascribed thereto in subsection
4.1(33)(b) of this Agreement;
"CONTRACT" means any agreement, obligation, contract, understanding,
commitment, indenture or instrument, whether written, oral or implied;
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"CURRENT ASSET ITEMS" means Accounts Receivable, Inventories and Pre-paid
Expenses of the Company and the Subsidiaries, on a consolidated basis, and all
other short-term assets determined in accordance with generally accepted
accounting principles (other than cash and marketable securities);
"CURRENT LIABILITY ITEMS" means Accounts Payable, Accrued Liabilities,
Current Taxes and Deferred Revenues of the Company and the Subsidiaries, on a
consolidated basis, and all other short-term liabilities determined in
accordance with generally accepted accounting principles, other than the current
portion of long-term Debt and Capitalized Leases;
"CURRENT TAXES" means any and all Taxes due and payable by the Company or
any of the Subsidiaries as at the Effective Date in respect of periods ending on
or prior to the Effective Date, determined in accordance with generally accepted
accounting principles;
"DEBT" means indebtedness of the Company or any of the Subsidiaries for
borrowed money, including obligations with respect to loans, operating lines of
credit and all interest, fees and other amounts at any time owing by the Company
or any of the Subsidiaries in connection therewith and all security granted
therefor, excluding the Notes;
"DEFERRED REVENUES" means those amounts paid or payable to the Company or
any of the Subsidiaries in return for services to be performed from and after
the Effective Date, determined in accordance with generally accepted accounting
principles;
"EFFECTIVE DATE" means the close of business on November 30, 2000;
"EMPLOYEE PLANS" has the meaning ascribed thereto in subsection 4.1(28)(a)
of this Agreement;
"EMPLOYEES" has the meaning ascribed thereto in subsection 4.1(23) of this
Agreement.
"ENCUMBRANCE" means any mortgage, charge, pledge, claim, hypothec, lien,
encumbrance, restriction, option, right of others or security interest of any
kind, whether fixed or floating, absolute, contingent or conditional;
"ENVIRONMENTAL LAWS" has the meaning ascribed thereto in subsection
4.1(33)(a) of this Agreement;
"ERISA" means the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law;
"ESCROW AGENT" means the escrow agent appointed pursuant to the Escrow
Agreement;
"ESCROW AGREEMENT" means the agreement in the form of Exhibit 7.7;
"ESCROW AMOUNT" has the meaning ascribed thereto in subsection 3.6(c) of
this Agreement;
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"FACS FLORIDA" means FACS Records Center (Florida), Inc., a Florida
corporation;
"FACS MANAGEMENT" means FACS Management Inc.;
"FACS PARTNERSHIP" means FACS Records Limited Partnership, a Florida
limited partnership created by agreement dated as of March 13, 1997, by and
among FACS Florida and FACS Subco, Inc., as general partners, and Xxxxxx Xxxxxx,
as the limited partner;
"FACS SUBCO" means FACS Subco, Inc., a Florida corporation.
"FINANCIAL STATEMENTS" has the meaning ascribed thereto in subsection
4.1(29) of this Agreement;
"FRANCHISE AGREEMENTS" means (i) the license agreement dated September 14,
1982 between the Company and 254682 B.C. Ltd. and related software license
agreement dated May 1, 1990 between the Company and Mornet Investment Management
Ltd. (formerly 254682 B.C. Ltd.), and (ii) the license agreement dated October
27, 1985 between the Company and Xxxxx Bros. and related software license
agreement dated December 30, 1993 between the Company and Xxxxx Bros.;
"GOVERNMENTAL AUTHORIZATION" means any approval, authorization,
certificate, commitment, consent, franchise, grant, license, order, permit,
privilege, quota, registration or right, or the like which may be issued or
granted by any Governmental Body;
"GOVERNMENTAL BODY" means any government, parliament, legislature,
regulatory authority, governmental department, agency, commission, board,
tribunal, crown corporation, or court or other law, rule or regulation-making
entity having or purporting to have jurisdiction on behalf of any nation or
state or province or other subdivision thereof or any municipality, district or
other subdivision thereof;
"HAZARDOUS SUBSTANCES" has the meaning ascribed thereto in subsection
4.1(33)(a) of this Agreement;
"IM DOCUMENTS" has the meaning ascribed thereto in subsection 5.1(1) of
this Agreement;
"INDEPENDENT AUDITOR" means Deloitte & Touche or such other nationally
recognized accounting firm as may be agreed to by the parties hereto;
"INTELLECTUAL PROPERTY" means all registered and unregistered, domestic and
foreign, trade-marks, trade names, certification marks, distinguishing guises,
copyrights, industrial designs, patents, styles, logos, designs, service marks,
inventions, licences, formulas and processes and research data, all computer and
data processing systems, and all software programs and computer support
documentation, technical expertise, know-how, trade secrets and other
proprietary rights of the Company and the Subsidiaries, and including any
rights, licences and registration applications with respect thereto;
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"INVENTORIES" means all inventories of the Company and the Subsidiaries
used or produced in connection with the Business and determined in accordance
with generally accepted accounting principles, including, without limitation,
raw materials, work in progress, computer tapes, optical discs, microfilm,
videotapes, storage boxes, data retrieval and billing supplies, other than
inventory which is obsolete, outdated, not useable or in excess of what is
required in the normal course of business;
"IRC" means the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code of 1986 or
any successor law;
"IRS" means the United States Internal Revenue Service or any successor
agency and, to the extent relevant, the United States Department of the
Treasury;
"JUNE FINANCIAL STATEMENTS" has the meaning ascribed thereto in subsection
4.1(29) of this Agreement;
"LEASED PREMISES" means the premises described on Schedule 4.1(14) of this
Agreement;
"LEASES" has the meaning ascribed thereto in subsection 4.1(14)(a) of this
Agreement;
"MANAGEMENT OPTION" means the ten year option held by FACS Management to
acquire up to 25% of the common shares of the Company, after giving effect to
the option, at $1.27 per share;
"MANAGEMENT SEVERANCE OBLIGATIONS" has the meaning ascribed thereto in
subsection 4.1(26) of this Agreement;
"MATERIAL ADVERSE CHANGE" has the meaning ascribed thereto in subsection
4.1(32) of this Agreement;
"MORTGAGE" means collectively all of the mortgages registered against the
Owned Real Property and described on Schedule 4.1(15) of this Agreement;
"OWNED REAL PROPERTY" means the real property described in Schedule 4.1(15)
including all rights of way, licenses or rights of occupation, easements or
other similar rights and interests relating to such lands or appurtenances
thereto;
"PERMITTED ENCUMBRANCES" means:
(a) Encumbrances for Taxes if such Taxes are not due and payable;
(b) mechanics', construction, carriers', workers', repairers', storers' or
other similar liens (inchoate or otherwise) which individually or in
the aggregate are not material, arising or incurred in the ordinary
course of business which have not
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been filed, recorded or registered in accordance with Applicable Law
or of which notice has not been given to the Company;
(c) minor title defects or irregularities consisting of minor survey
exceptions, minor unregistered easements or rights of way,
restrictions in the original grant from the Crown, restrictions
implied by Applicable Law and other minor unregistered restrictions as
to the use of Owned Real Property which title defects, irregularities
or restrictions, do not, in the aggregate, materially impair the
operation of the Business or the continued use of the Owned Real
Property to which they relate after the Closing on substantially the
same basis as such Owned Real Property is currently being used and the
Business is currently being operated;
(d) easements, covenants, rights of way and other restrictions which are
registered, provided that they do not, in the aggregate, materially
impair the operation of the Business or the continued use of the Owned
Real Property to which they relate after the Closing on substantially
the same basis as the Business is currently being operated and such
Owned Real Property is currently being used;
(e) registered agreements with municipalities provided that they have been
complied with or adequate security has been furnished to secure
compliance and provided that they do not, in the aggregate, materially
impair the operation of the Business or the continued use of the Owned
Real Property to which they relate after the Closing on substantially
the same basis as the Business is being operated and such Owned Real
Property is currently being used; and
(f) the Mortgage, security interests, charges and other liens and
encumbrances listed on Schedules 4.1(15) and 4.1(16);
"PERSON" means any individual, legal or personal representative,
partnership, company, corporation, incorporated syndicate, unincorporated
association, trust or governmental body or any other entity however designated
or constituted and words importing "person" have a similar meaning;
"PERSONAL PROPERTY" means all personal property which is owned or being
used by the Company and its Subsidiaries, including, without limitation, all
equipment (telecommunications and computer equipment included), fixtures and
furnishings, vehicles, storage racking, and Inventory items, such as folding
cartons, containers and other storage materials. The Personal Property includes
lists of all customers of the Business and the books and records (whether
electronically maintained or otherwise) which will provide the Purchaser with
the ability to generate such lists, as well as all business addresses, post
office boxes, telephone, telex and telecopier numbers and marketing and
administrative data. Also included as Personal Property is the computerized
records management and billing system currently utilized by the Company and its
Subsidiaries to manage the Business;
"PRE-PAID EXPENSES " means amounts paid in advance by the Company or the
Subsidiaries as at the Effective Date in respect of the Business determined and
calculated in accordance with generally accepted accounting principles,
including, without limitation, pre-paid
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taxes, utility charges, pre-paid wages and lease deposits and payments, but
excluding any pre-paid amounts or part thereof in respect of which the Company
or the Subsidiaries will derive no benefit or which amount or part thereof
cannot be fully utilized by the Company or the Subsidiaries after Effective
Date;
"PURCHASE DOCUMENTS" has the meaning ascribed thereto, in the case of the
Company, in subsection 4.1(2), in the case of the Vendor, in subsection 4.2(6)
and in the case of Vendorco, in subsection 4.3(2) of this Agreement;
"PURCHASED SHARES" means all of the issued and outstanding shares of the
Company;
"PURCHASE PRICE" has the meaning ascribed thereto in Section 3.1 of this
Agreement;
"PURCHASER'S AUDITOR" means Xxxxxx Xxxxxxxx LLP;
"PURCHASER'S COUNSEL" means Blake, Xxxxxxx & Xxxxxxx LLP;
"RECORDS MANAGEMENT AGREEMENTS" has the meaning ascribed thereto in
subsection 4.1(19) of this Agreement;
"SCHEDULES" means the schedules attached to and forming part of this
Agreement and listed in Section 1.7 of this Agreement;
"SHARE PURCHASE PRICE" has the meaning ascribed thereto in subsection
3.2(b) of this Agreement;
"SPECIFIED PURCHASER EVENT" means a material breach by the Purchaser of its
obligations under this Agreement which (a) has been the subject of written
notice by the Vendor to the Purchaser and IMRM specifying the breach, and (b)
IMRM or the Purchaser have failed to cure within five (5) Business Days after
receipt of such notice, before (x) the applicable date of termination under
Section 12.1 and (y) where applicable under subsection 7.15(a), an Acquisition
Proposal has been made or announced;
"SUBSIDIARIES" means FACS Florida, FACS Subco, FACS Partnership, 397499
British Columbia Ltd. and 326252 British Columbia Ltd.;
"SUPPORT AGREEMENT" means the support agreement among the Purchaser, FACS
Management, Xxxxxx Xxxxx, Xxxxxxx X. Xxxxxx, Xxxxx Xxxxxxx and Western Corporate
Enterprises Inc. to be executed concurrently with this Agreement;
"TAMPA PROPERTIES" means the premises at 4501 Acline, Tampa, Florida leased
by the Company or a Subsidiary;
"TAX" means any tax, duty, excise, fee, impost, assessment, deduction,
charge or withholding tax including federal or provincial sales tax, goods and
services tax, land transfer tax, property purchase tax, income taxes, business
tax, capital tax, and other provincial and
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xxxxxxx xxxxx, xxxxxxxxx tax, local tax, and all liabilities with respect
thereto, including without limitation any penalty and interest payable with
respect thereto;
"TRANSACTIONS" means the purchase and sale of the Purchased Shares and the
Notes as contemplated by this Agreement, including the sale, transfer and
assignment of the Purchased Shares and the Notes by the Vendor to Vendorco and
the sale, transfer and assignment of the Purchased Shares and the Notes from
Vendorco to the Purchaser as provided in Section 2.4;
"TRUSTEES" means the Trustees of the Vendor;
"TRUST DEED" means the Declaration of Trust dated February 1, 1997
establishing the Vendor;
"UNAUDITED CLOSING STATEMENTS" has the meaning ascribed thereto in Section
3.4 of this Agreement;
"UNITHOLDER MEETING" means the special meeting of Unitholders (including
any adjournment thereof) that is to be convened as provided in this Agreement to
consider and, if deemed advisable, to approve the Transactions;
"UNITHOLDER RESOLUTION" means the resolution of Unitholders required
pursuant to the Trust Deed to approve the Transactions;
"UNITHOLDERS" means holders of trust units of the Vendor;
"VENDOR" means FACS Records Storage Income Fund;
"VENDORCO" means 3796281 Canada Inc.; and
"VENDOR'S COUNSEL" means Farris, Vaughan, Xxxxx & Xxxxxx.
1.2 HEADINGS AND TABLE OF CONTENTS. The division of this Agreement into
Articles, Sections and subsections, the insertion of headings and the provision
of any table of contents are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
1.3 EXTENDED MEANINGS. Unless the context requires otherwise, words importing
the singular number include the plural and vice-versa; words importing the
masculine gender include the feminine and neuter genders.
1.4 CURRENCY AND PAYMENT OBLIGATIONS. Except as otherwise expressly provided in
this Agreement all dollar amounts referred to in this Agreement are stated in
Canadian Dollars and any payment contemplated by this Agreement shall be made by
wire transfer, certified cheque or any other method that provides immediately
available funds.
1.5 ACCOUNTING PRINCIPLES. Wherever in this Agreement reference is made to a
calculation to be made in accordance with generally accepted accounting
principles, such
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reference shall, unless otherwise specifically provided in this Agreement, be
deemed to be to the generally accepted Canadian accounting principles from time
to time applicable as at the date on which such calculation is made or required
to be made in accordance with generally accepted accounting principles,
consistently applied. All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles.
1.6 INCLUSION. Where the word "including" or "includes" is used in this
Agreement, it means "including (or includes) and without limitation".
1.7 KNOWLEDGE OF THE COMPANY. Reference herein to "the Company's knowledge" or
"knowledge of Company" or similar references shall mean to the best of the
knowledge, information and belief of the Company and its Subsidiaries after
having made all due inquiries of the senior management and operating personnel
of the Company, its Subsidiaries and FACS Management and after having reviewed
such books, records and information in the possession of the Company, its
Subsidiaries and FACS Management or subject to their control relating to the
Business.
1.8 EXHIBITS AND SCHEDULES. The following are the Exhibits and Schedules annexed
hereto and incorporated by reference and deemed to be a part hereof:
Exhibit 2.3 - Assignment of Notes
Exhibit 7.6 - Escrow Agreement
Exhibit 9.14(e) - Release of Trustees
Exhibit 9.17 - Non-Competition and Confidentiality Agreement
Exhibit 11.2(i) - Opinion of Vendor's, Vendorco's and
Company's Counsel
Exhibit 11.3(d) - Opinion of Purchaser's Counsel
Exhibit 11.3(e) - Guarantee of Management Severance Obligations
Schedule 3.3 - Filing and Refiling Tasks
Schedule 4.1(7) - Authorized and Issued Capital and Management Option
Schedule 4.1(8) - List of Leased Assets
Schedule 4.1(9) - Description of Notes
Schedule 4.1(10) - Interest in FACS Partnership
Schedule 4.1(11) - Non-Arm's Length Transactions
Schedule 4.1(13) - Liabilities
Schedule 4.1(14) - Leased Premises
Schedule 4.1(15) - Owned Real Property and Mortgage
Schedule 4.1(16) - Personal Property
Schedule 4.1(17) - Intellectual Property
Schedule 4.1(19A) - Records Management Agreements
Schedule 4.1(19B) - Material Records Management Agreements
Schedule 4.1(20A) - Other Contracts
Schedule 4.1(20B) - Consents
Schedule 4.1(21) - Customers and Suppliers
Schedule 4.1(22) - Records Services and Storage
Schedule 4.1(23) - Employees
Schedule 4.1(24) - Employee Contracts
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Schedule 4.1(26) - Management Severance Obligations
Schedule 4.1(28) - Employee Benefit Plans
Schedule 4.1(29) - Financial Statements
Schedule 4.1(31) - Directors, Officers, Bank Accounts
Schedule 4.1(32) - Material Changes
Schedule 4.1(34) - Tax Matters
Schedule 4.1(35) - Governmental Authorizations
Schedule 4.1(36) - Insurance
ARTICLE 2
PURCHASE AND SALE
2.1 PURCHASE OF PURCHASED SHARES. Subject to the terms and conditions hereof and
based upon the representations and warranties herein contained, at Closing with
effect as of the Effective Date, the Vendor agrees to sell, transfer and assign
the Purchased Shares to the Purchaser free and clear of all Encumbrances, and
the Purchaser agrees to purchase from the Vendor the Purchased Shares free and
clear of all Encumbrances, on the basis contemplated in Section 2.4.
2.2 PURCHASE OF NOTES. Subject to the terms and conditions hereof and based upon
the representations and warranties herein contained, at Closing with effect as
of the Effective Date, the Vendor agrees to sell, transfer and assign the Notes
free and clear of all Encumbrances to the Purchaser and the Purchaser agrees to
purchase the Notes from the Vendor free and clear of all Encumbrances on the
basis contemplated in Section 2.4.
2.3 DELIVERY OF PURCHASED SHARES AND NOTES. Subject to the fulfillment of all
the terms and conditions hereof (unless waived as herein provided), at Closing
the Vendor shall deliver to Vendorco: (i) certificates representing all the
Purchased Shares and will cause the transfer of such shares to be duly and
regularly recorded on the books of the Company in the name of Vendorco, and (ii)
an executed assignment of the Notes to Vendorco in the form attached hereto as
Exhibit 2.3 and Vendorco shall deliver to the Purchaser: (i) certificates
representing all the Purchased Shares and will cause the transfer of such shares
to be duly and regularly recorded on the books of the Company in the name of the
Purchaser, and (ii) an executed assignment of the Notes to the Purchaser in the
form attached hereto as Exhibit 2.3. All such share certificates shall be fully
transferable on the books of the Company and endorsed in blank for transfer in a
manner satisfactory to the Purchaser's Counsel.
2.4 TRANSFER THROUGH VENDORCO. At the Closing, subject to the terms and
conditions of this Agreement, the Vendor shall sell, transfer and assign the
legal, beneficial and registered title to the Purchased Shares and the Notes
(such transfer of the Notes to be made as of the Effective Date consistent with
the assignment of the Notes in the form attached as Exhibit 2.3), free and clear
of any and all Encumbrances, to Vendorco for the Purchase Price and Vendorco
will sell, transfer and assign the legal, beneficial and registered title to the
Purchased Shares and the Notes (such transfer of the Notes to be made as of the
Effective Date consistent with the assignment of the Notes in the form attached
as Exhibit 2.3), free and clear of any and all Encumbrances, to the Purchaser
for the Purchase Price. Vendorco hereby directs that the
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Purchaser make all payments in respect of the Purchase Price as provided in this
Agreement to, or in accordance with the direction of, the Vendor in satisfaction
of the obligation of Vendorco to the Vendor, and of the Purchaser to Vendorco,
for the Purchase Price.
2.5 DIRECT OBLIGATIONS OF VENDOR AND PURCHASER. The parties agree that,
notwithstanding the transfers of the Purchased Shares and Notes to and by
Vendorco as provided for in Section 2.4, the obligations of purchase and sale
provided for in Sections 2.1 and 2.2 are direct obligations of the Vendor and
the Purchaser which are intended to be satisfied by means of the transfers
contemplated in section 2.4.
ARTICLE 3
PURCHASE PRICE
3.1 AGGREGATE PURCHASE PRICE. Subject to adjustment as provided in Sections 3.3
and 3.3A, the aggregate purchase price (the "PURCHASE PRICE") payable by the
Purchaser to the Vendor for the Purchased Shares and the Notes shall be an
amount equal to $58,000,000 plus accrued and unpaid interest, if any, on the
Notes up to and including the Effective Date.
3.2 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated as
follows:
(a) $37,500,000 plus accrued and unpaid interest, if any, on the Notes up
to and including the Effective Date, shall be allocated to the Notes;
and
(b) subject to the adjustments provided in Section 3.3, $20,500,000 shall
be allocated to the Purchased Shares (the "SHARE PURCHASE PRICE").
3.3 ADJUSTMENTS TO SHARE PURCHASE PRICE.
(a) The Share Purchase Price shall be adjusted as follows:
(i) if the result of subtracting the sum of the Current Liability
Items from the sum of the Current Asset Items is a figure which
falls in the range of negative ($400,000) and $350,000, no
adjustment shall be made to the Share Purchase Price;
(ii) if the result of subtracting the sum of Current Liability Items
from the sum of Current Asset Items is a lower value than
negative ($400,000), the Share Purchase Price shall be reduced by
the amount by which such result is lower than negative
($400,000); and
(iii) if the result of subtracting the sum of Current Liability Items
from the sum of Current Asset Items is an amount greater than
$350,000, the Share Purchase Price shall be increased by the
amount by which such result is greater than $350,000.
For purposes of determining the difference between the sum of the
Current Asset Items and the sum of the Current Liability Items as at
the Effective Date:
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(i) the amount of Accounts Receivable (before any reserve for
doubtful Accounts Receivable included in Aged Accounts
Receivable) will be reduced by the face value of the Aged
Accounts Receivable;
(ii) any credit amounts owing in respect of Accounts Receivable will
be classified as Accounts Payable; and
(iii) the amount of Accounts Receivable and Accounts Payable shall not
include any amounts in excess of $25,000 that have been billed,
accrued or incurred, as the case may be, by the Company or its
Subsidiaries since June 30, 2000 relating to termination or
permanent removal charges in respect of any customer or former
customer of the Company or its Subsidiaries or of the Purchaser
or its Affiliates, as the case may be, that has transferred, or
notified the Company or any of the Subsidiaries, or the Purchaser
or its Affiliates, as the case may be, that it intends to
transfer the management and storage of its records to the
Purchaser or an Affiliate of the Purchaser or from the Purchaser
or an Affiliate of the Purchaser to the Company or its
Subsidiaries, as the case may be.
(b) The Share Purchase Price shall also be reduced by:
(i) the amount of Debt (including the current portion of long-term
Debt and the amount of Capitalized Leases), Cash-Based Deferred
Revenues, and any accrued and unpaid interest under the Notes all
as determined as at the Effective Date less the amount of cash
and marketable securities of the Company and its Subsidiaries as
at the Effective Date;
(ii) an amount equal to the total rent cost for the Tampa Properties
in excess of the sublease rent payments under the sublease for
such property in effect on the Effective Date through the
expiration date of the lease for the Tampa Properties, measured
from the Effective Date;
(iii) an amount equal to the amount (if any) by which the Management
Severance Obligations (including without limitation, any amounts
paid to management employees as contemplated in subsection
9.14(c)) exceed $3,200,000;
(iv) $150,000 in respect of the portion of the cost of the
representation and warranty insurance purchased by the Purchaser
pursuant to Section 8.3 attributable to the Company;
(v) an amount equal to 50% of the fees and expenses of the Company's
Auditor in respect of the audit of the Audited Closing Statements
pursuant to Section 3.5 of this Agreement;
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(vi) an amount equal to 50% of the fees and expenses of the
Independent Auditor (if any) in respect of the determination of
the amounts set out on the Audited Closing Statements pursuant to
Section 3.5 of this Agreement;
(vii) an amount equal to the aggregate of any interest or other
payments made by the Company in connection with the Notes on or
after the Effective Date;
(viii) any expenses, liabilities, costs or other amounts incurred by
the Company or any of the Subsidiaries that are the
responsibility of the Vendor or Vendorco pursuant to the terms of
this Agreement, including, without limitation, those referred to
in Section 13.1; and
(ix) the amount determined in accordance with Schedule 3.3 as the cost
of completing the tasks associated with filing or refiling
records received for filing or refiling (including shelving for
placement of all records to be filed or refiled) and completing
destructions and other inventory projects for which the Company
or the Subsidiaries have invoiced customers or for which they
have been paid as at the Effective Date, but excluding the costs
associated with filing records received for filing or refiling
during the three (3) Business Days prior to the Effective Date.
(c) The adjustments made pursuant to any subsection or clause of this
Section 3.3 will be determined in respect of the Company and the
Subsidiaries on a consolidated basis in accordance with generally
accepted accounting principles, applied on a basis consistent with the
Company's past practice, except as specifically provided for in this
Agreement and without duplicating any adjustment made pursuant to any
other subsection or clause of this Section 3.3.
(d) The adjustments made pursuant to this Section 3.3 shall be referred to
collectively as the "ADJUSTMENT AMOUNT".
3.3A AGED ACCOUNTS RECEIVABLE. At Closing, the Purchaser shall pay to the Vendor
an amount equal to 50% of the amount, if any, by which the face value of the
Aged Accounts Receivable as set out in the Unaudited Closing Statement exceeds
the greater of (i) $150,000 or (ii) the Aged Accounts Receivable over 180 days.
If the face value of the Aged Accounts Receivable as set out on the Audited
Closing Statement is different than the face value of the Aged Accounts
Receivable set out on the Unaudited Closing Statement, the Purchaser and the
Vendor agree that on the Adjustment Date appropriate adjustments will be made to
the amount paid by the Purchaser at Closing in respect of the Aged Accounts
Receivable.
3.4 PREPARATION OF UNAUDITED CLOSING STATEMENTS. As soon as possible after the
Effective Date, but in any event no later than seven (7) Business Days following
the Effective Date, the Company shall prepare and deliver to the Vendor and the
Purchaser consolidated financial statements (including a balance sheet and an
income statement) of the Company for the 11 month period ending on the Effective
Date and a statement setting out the estimated calculation of the Share Purchase
Price as adjusted by the Adjustment Amount and the value of
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the Aged Accounts Receivable as at the Effective Date (as determined by the
formula set forth in Section 3.3A), including a summary of the basis upon which
they were calculated (collectively, the "UNAUDITED CLOSING STATEMENTS"). The
Unaudited Closing Statements shall be prepared in accordance with generally
accepted accounting principles, applied on a basis consistent with the Company's
past practice except as specifically provided for in this Agreement and except
that (i) no reserve shall be established for Aged Accounts Receivable, (ii) the
amount of Accounts Receivable shall be reduced by the face value of the Aged
Accounts Receivable, (iii) accruals shall be made for vacation pay, and (iv) any
management bonuses not included as part of the Management Severance Obligations
and not otherwise included in Accrued Liabilities shall be accrued. For greater
certainty, it is agreed and acknowledged that the Unaudited Closing Statements
shall include a reserve for doubtful Accounts Receivable (other than the Aged
Accounts Receivable).
3.5 AUDIT OF UNAUDITED CLOSING STATEMENTS.
(a) Promptly after the delivery of the Unaudited Closing Statements to the
Vendor and the Purchaser as provided in Section 3.4, the Company shall
direct the Company's Auditor to audit the Unaudited Closing Statements
and prepare and deliver audited consolidated financial statements
(consisting of a balance sheet and an income statement but without a
statement of cash flow or notes) of the Company for the 11 month
period ending on the Effective Date and a statement setting out the
estimated calculation of the Share Purchase Price as adjusted by the
Adjustment Amount (except for amounts under subsection 3.3(b)(vi)) and
the value of the Aged Accounts Receivable as at the Effective Date (as
determined by the formula set forth in Section 3.3A), including a
summary of the basis upon which they were calculated and an audit
report thereon (collectively, the "AUDITED CLOSING STATEMENTS"). The
Company shall direct the Company's Auditor to complete a draft of the
Audited Closing Statements within fifteen (15) Business Days after the
Effective Date. The Audited Closing Statements shall be prepared in
accordance with generally accepted accounting principles, applied on a
basis consistent with the Company's past practice except as
specifically provided for in this Agreement and except that (i) no
reserve shall be established for Aged Accounts Receivable, (ii) the
amount of Accounts Receivable shall be reduced by the face value of
the Aged Accounts Receivable, (iii) accruals shall be made for
vacation pay, and (iv) any management bonuses not included as part of
the Management Severance Obligations and not otherwise included in
Accrued Liabilities shall be accrued. For greater certainty, it is
agreed and acknowledged that the Audited Closing Statements shall
include a reserve for doubtful Accounts Receivable (other than the
Aged Accounts Receivable).
(b) As promptly as practicable, but in no event later than fifteen (15)
Business Days after the Effective Date, the Company shall cause the
Company's Auditor to deliver to the Purchaser and the Purchaser's
Auditor for consideration and comment, a draft of the Audited Closing
Statements which the Company's Auditor proposes to deliver as the
Audited Closing Statements. For the purposes of such review, the
Company shall provide the Purchaser's Auditor full access to all books
and records of the Company and shall cause the Company's Auditors to
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permit the Purchaser and the Purchaser's Auditors to examine the
working papers, schedules and other documentation used or prepared by
the Company's Auditors in connection with the draft Audited Closing
Statements.
(c) The Vendor and the Purchaser, together with the Company's Auditors and
the Purchaser's Auditors, shall, as promptly as practicable, but in no
event later than a period of ten (10) Business Days after the delivery
of the draft Audited Closing Statements pursuant to subsection 3.5(b)
(the "Audit Review Period"), review and discuss the draft Audited
Closing Statements and the Company's Auditor and the Purchaser's
Auditor shall identify and attempt to resolve any objections to any
matters in the draft Audited Closing Statements about which the
Purchaser or the Purchaser's Auditor disagree (the "DISPUTED ITEMS").
If at the end of such Audit Review Period there are Disputed Items
which cannot be agreed to, the Company's Auditors shall deliver the
Audited Closing Statements to the Vendor and the Purchaser and
immediately refer the determination of the Disputed Items and the
Adjustment Amount to the Independent Auditor. The Independent Auditor
shall be requested to resolve the Disputed Items and deliver his
determination of the amount of the Adjustment Amount to the Vendor,
the Purchaser and the Escrow Agent within five (5) Business Days
following referral of the matter to the Independent Auditor and the
decision of the Independent Auditor as to any Disputed Item and the
Adjustment Amount shall be final and binding on both parties. The fees
and expenses of the Independent Auditor shall be shared equally by the
Company and the Purchaser.
3.6 PAYMENT OF PURCHASE PRICE. Subject to the fulfillment of all the terms and
conditions hereof (unless waived as herein provided), the Purchase Price shall
be paid and satisfied by the Purchaser as follows:
(a) at the Closing, $37,500,000 plus accrued and unpaid interest, if any,
on the Notes shall be paid to the Vendor in accordance with subsection
3.2(a) above;
(b) at the Closing, 75% of the Share Purchase Price as adjusted by the
Adjustment Amount as set out on the Unaudited Closing Statements
determined in accordance with Section 3.4, shall be paid to the
Vendor;
(c) at the Closing, the balance of the Share Purchase Price as adjusted by
the Adjustment Amount as set out on the Unaudited Closing Statements
determined in accordance with Section 3.4 (the "ESCROW AMOUNT") shall
be deposited by the Purchaser with the Escrow Agent in accordance with
the Escrow Agreement; and
(d) on the Adjustment Date:
(i) in the event that the Share Purchase Price as adjusted by the
Adjustment Amount as determined in accordance with Section 3.5 is
greater than the amount paid by the Purchaser pursuant to
subsection 3.6(b) above, then an amount equal to such difference
(the "DEFICIT AMOUNT") shall be paid by the Escrow Agent to the
Vendor out of the Escrow Amount in accordance
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with the terms of the Escrow Agreement and in the event the
Deficit Amount exceeds the Escrow Amount, the Purchaser shall pay
or shall cause to be paid to the Vendor an amount equal to such
excess;
(ii) in the event that the amount paid by the Purchaser pursuant to
subsection 3.6(b) above is greater than the Share Purchase Price
as adjusted by the Adjustment Amount as determined in accordance
with Section 3.5 (the amount equal to such difference referred to
as the "SURPLUS AMOUNT"), then the Escrow Amount shall be paid by
the Escrow Agent to the Purchaser in accordance with the terms of
the Escrow Agreement and in the event the Surplus Amount exceeds
the Escrow Amount, the Vendor shall pay or shall cause to be paid
to the Purchaser an amount equal to such excess; and
(iii) after any payments required pursuant to subsection 3.6(d)(i)
above, the remaining balance of the Escrow Amount deposited (if
any) shall be released by the Escrow Agent to the Purchaser in
accordance with the terms of the Escrow Agreement.
All income earned upon the Escrow Amount will be paid to the Purchaser
and Vendor in the same proportion that the Escrow Amount is payable to
the Purchaser and the Vendor.
Each of the Vendor and the Purchaser shall direct the Escrow Agent to
pay the Escrow Amount or parts thereof, and income earned thereon, in
accordance with the foregoing provisions of this subsection 3.6(d).
3.7 FILING OF INCOME TAX RETURNS. The Vendor, Vendorco and the Purchaser agree
that the Share Purchase Price is the fair market value of the Purchased Shares
and the Purchaser, the Vendor and Vendorco shall file all returns and reports in
respect of Taxes in respect of the transactions contemplated hereunder
accordingly.
3.8 IMRM FINANCIAL STATEMENTS. In addition to the Unaudited Closing Statements,
the Company shall also prepare unaudited financial statements in the manner
contemplated by section 3.4 except that the statements shall be adjusted to
comply with generally accepted U.S. accounting principles with respect to the
following items: (i) provision shall be made for the amount of deferred rent
relating to the Florida facility leases and all deferred moving costs, (ii)
provision shall be made for the amounts included for leasehold improvements on
the Florida leased facilities, (iii) provision shall be made for rent for
facility leases which include defined escalator clauses to normalize the
escalations, (iv) provision shall be made for the deferral of monthly xxxxxxxx
billed in advance, and (v) prior period rental credits shall be amortized and
rent free periods shall be amortized. For greater certainty, the parties
acknowledge that such statements shall not be used for the purposes of
calculating the Adjustment Amount.
3.9 VENDORCO PAYMENTS. The parties hereto agree that the aggregate purchase
price payable by Vendorco to the Vendor for the Purchased Shares and the Notes
shall be the Purchase Price. Vendorco hereby authorizes and consents to all the
payments as provided in this Article 3,
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including the payment provided for in Section 3.3A and the escrow arrangements
as provided in Section 3.6 and the Escrow Agreement and confirms that payments
to the Vendor in accordance with this Article 3 will satisfy any obligation of
the Purchaser to Vendorco.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE VENDOR AND VENDORCO
4.1 REPRESENTATIONS AND WARRANTIES OF VENDORCO REGARDING THE COMPANY. As a
material inducement to the Purchaser to enter into this Agreement and purchase
the Purchased Shares and the Notes, Vendorco makes the following representations
and warranties to the Purchaser:
(1) STATUS OF THE COMPANY. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the Province
of British Columbia and has full power and authority and is duly
authorized, qualified and licensed to own its properties and to carry
on its Business in each jurisdiction where ownership of its properties
or the nature of its Business requires such authorization,
qualification or licensing.
(2) CORPORATE AUTHORITY OF THE COMPANY. The board of directors of the
Company has recommended to the Trustees that they approve the
Transactions subject to the approval of the Unitholders Resolution,
and that the Trustees unanimously recommend to the Unitholders that
they vote in favour of the Unitholders Resolution. The board of
directors of the Company has duly authorized and approved the
execution and delivery of this Agreement and any and all agreements,
documents or instruments to be executed and/or delivered by the
Company in connection herewith, and the performance of its obligations
hereunder and thereunder (collectively, all documents referred to in
this subsection 4.1(2), subsection 4.2(6) and subsection 4.3(2), the
"PURCHASE DOCUMENTS"). No other action by the Company is required in
connection with the foregoing.
(3) POWER AND AUTHORITY OF THE COMPANY. The Company has full right, power
and authority to enter into, execute and deliver this Agreement and
all other agreements, documents and instruments required to be
delivered by it hereunder and to perform its obligations hereunder and
thereunder.
(4) DUE AUTHORIZATION; ENFORCEABILITY OF AGREEMENT. The entering into,
execution and delivery of this Agreement and all other agreements to
be delivered by the Company hereunder have been duly and validly
authorized and approved by all necessary action on the part of the
Company. Each of this Agreement and the Purchase Documents to which
the Company is a party constitutes (or will constitute when executed)
a legal, valid and binding obligation of the Company enforceable
against it in accordance with their respective terms except as the
same may be limited by bankruptcy, insolvency, reorganization or other
laws affecting the enforcement of creditors' rights generally, now or
hereafter in effect, and subject to the availability of equitable
remedies.
(5) NO BREACH, ETC. The execution, delivery and performance of this
Agreement by the Company and the consummation of the Transactions do
not and will not: (a) conflict with,
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violate or result in the breach of any of the terms or conditions of,
or constitute a default under (i) the constating documents of the
Company or any of the Subsidiaries or, except as indicated on Schedule
4.1(20)(B), any Contract to which the Company or any of the
Subsidiaries is a party or any Governmental Authorization to which the
Company, or any of the Subsidiaries is party or by which the Company
or any of the Subsidiaries or any of their respective assets or
properties are bound or affected, or (ii) any law, regulation,
ordinance or decree to which the Company, the Subsidiaries, or any of
their respective assets or properties are bound or subject, or (b)
result in the creation or imposition of any Encumbrance or right,
including rights of termination or cancellation, in or with respect
to, or otherwise adversely affect, the Purchased Shares, the Notes,
the Company, the Subsidiaries, the Business, the Assets or the Owned
Real Property.
(6) CORPORATE RECORDS. The minute books and share transfer registers of
the Company and each of the Subsidiaries are complete and accurate in
all material respects and all signatures included therein are the
genuine signatures of the persons whose signatures are required. True
and correct copies of the memorandum and articles and by-laws of the
Company and the Subsidiaries including all amendments thereto, and the
minute books and share transfer registers of the Company and the
Subsidiaries shall have been delivered to the Purchaser on or before
the Closing Date.
(7) AUTHORIZED AND ISSUED CAPITAL OF THE COMPANY AND SUBSIDIARIES. The
authorized and issued capital of the Company and each of the
Subsidiaries is set out on Schedule 4.1(7) hereof. The shares
described on Schedule 4.1(7) as issued capital of the Company and each
of the Subsidiaries are validly issued and outstanding as fully paid
and non-assessable and are the only issued and outstanding shares of
the Company and each of the Subsidiaries. Other than pursuant to the
Management Option (which is described on Schedule 4.1(7)) and the
corporate governance agreement referred to in Section 9.6, no Person
has any Contract or option or any right or privilege (whether by law,
pre-emptive right that may be exercised or contract) capable of
becoming a contract, including convertible securities, warrants or
convertible obligations of any nature, for any purchase, subscription,
allotment or issuance of any of the unissued shares in the capital of
the Company or the Subsidiaries.
(8) TITLE TO ASSETS.
(a) ASSETS OF THE COMPANY. The Company owns all of its Assets (except
for leased assets disclosed on Schedule 4.1(8)) free and clear of
any and all Encumbrances except Permitted Encumbrances. The
Assets are sufficient to permit the continued operation of the
Business in substantially the same manner as conducted in the
year prior to the date hereof. Schedule 4.1(8) sets out a
complete and accurate list of all locations where the Assets are
situate. There is no agreement, option or other right or
privilege outstanding in favour of any Person for the purchase
from the Company of any of its Assets other than sales of
inventory in the ordinary course of business or in respect of
worn out or fully depreciated Assets sold in the ordinary course
of business which individually and in the aggregate are not
material to the operation of the Business.
(b) ASSETS OF THE SUBSIDIARIES. The Subsidiaries own all of their
Assets (except for leased assets) free and clear of any and all
Encumbrances except for Permitted
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Encumbrances. There is no agreement, option or other right or
privilege outstanding in favour of any Person for the purchase
from any of the Subsidiaries of any of their Assets other than
sales of inventory in the ordinary course of business or in
respect of worn out or fully depreciated Assets sold in the
ordinary course of business which individually and in the
aggregate are not material to the operation of the Business.
(9) THE NOTES. The aggregate principal amount outstanding under the
Notes is now and as at the Closing Date shall be $37,500,000. All
agreements and instruments governing the terms of the Notes are
described in Schedule 4.1(9) and true and complete copies of such
documentation have been delivered to the Purchaser. The amount
outstanding under the Notes bears interest at 12.5% per annum. There
are no contracts, agreements, arrangements or commitments between the
Vendor or Vendorco and the Company the terms of which would: (i)
reduce the principal amount of the Notes; (ii) extend the maturity
date applicable to the principal amount owing under the Notes; (iii)
reduce the rate of interest payable in respect of the Notes; or (iv)
extend any applicable interest payment dates relating to the Notes.
Neither the Vendor nor Vendorco has waived any Default or Event of
Default (as those terms are defined in the Notes) under the Notes. The
Company has performed and complied with all of its obligations under
the Notes which have fallen due for performance. Except as set out on
Schedule 4.1(9), neither the Vendor nor Vendorco has entered into any
agreement or taken any action that would subject the Notes to any
subordination, reduction or disallowance by any set-off, right of
recoupment, defence, counterclaim or impairment of any kind. The Notes
are unsecured.
(10) SUBSIDIARIES.
(a) The Company does not own or hold directly or indirectly: (i) any
shares or other securities of any other body corporate nor is it
a party to any Contract to acquire any such shares other than its
ownership of 100% of the issued and outstanding shares of FACS
Florida, FACS Subco; 397499 British Columbia Ltd. and 326252
British Columbia Ltd. and or (ii) any partnership interest or
other interest of any kind in any corporation, partnership, joint
venture, association or other entity other than as franchisor of
franchised operations in Victoria, B.C. and Phoenix, Arizona and
other than its interest in FACS Partnership as described in
Schedule 4.1(10). The Company does not carry on any business or
activity other than the Business.
(b) FACS Florida is a corporation duly incorporated and organized and
validly existing under the laws of the State of Florida with the
corporate power to own and lease its property and to carry on its
business as now being conducted by it and is fully qualified to
do business in each jurisdiction in which the nature of its
business and assets make such qualification necessary. No person
has any written or oral agreement or option for the purchase or
acquisition of any shares or other security in the capital of
FACS Florida. The Company is the registered, legal and beneficial
owner of all of the issued and outstanding shares in the capital
of FACS Florida free and clear of any Encumbrances except for
item 2(a) on Schedule 4.1(16) and all such shares have been duly
issued and are outstanding as fully paid and non-assessable. No
person, firm or corporation
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has any agreement or option capable of becoming an agreement,
including convertible securities, warrants or convertible
obligations of any nature, for the purchase, subscription,
allotment or issuance of any shares or other securities of FACS
Florida. The only property and assets owned by FACS Florida is
its 99.9% general partnership interest in FACS Partnership and a
note receivable from FACS Partnership. FACS Florida is not a
party to any contracts or agreements other than the Agreement of
Limited Partnership of FACS Partnership dated as of March 13,
1997, as amended, by and among FACS Florida, FACS Subco and
Xxxxxx Xxxxxx, a true and complete copy of which has been
delivered to the Purchaser. FACS Florida has no liabilities or
obligations of any nature whatsoever, whether absolute,
contingent or otherwise (including, without limitation,
liabilities which are not yet due and liabilities for Taxes),
other than a note payable to the Company in the amount of
Cdn$3,250,000 bearing interest at 10% annually and other than as
reflected in the Financial Statements.
(c) FACS Subco is a corporation duly incorporated and organized and
validly existing under the laws of the State of Florida with the
corporate power to own and lease its property and to carry on its
business as now being conducted by it and is fully qualified to
do business in each jurisdiction in which the nature of its
business and assets make such qualification necessary. No person
has any written or oral agreement or option for the purchase or
acquisition of any shares or other security in the capital of
FACS Subco. The Company is the registered, legal and beneficial
owner of all of the issued and outstanding shares in the capital
of FACS Subco free and clear of any Encumbrances except for item
2(a) on Schedule 4.1(16) and all such shares have been duly
issued and are outstanding as fully paid and non-assessable. No
person, firm or corporation has any agreement or option capable
of becoming an agreement, including convertible securities,
warrants or convertible obligations of any nature, for the
purchase, subscription, allotment or issuance of any shares or
other securities of FACS Subco. The only property and assets
owned by FACS Subco is its 0.099% general partnership interest in
FACS Partnership. FACS Subco is not a party to any contracts or
agreements other than the Agreement of Limited Partnership of
FACS Partnership dated as of March 13, 1997, as amended, by and
among FACS Subco, FACS Florida and Xxxxxx Xxxxxx, a true and
complete copy of which has been delivered to the Purchaser. FACS
Subco has no liabilities or obligations of any nature whatsoever,
whether absolute, contingent or otherwise (including, without
limitation, liabilities which are not yet due and liabilities for
Taxes), other than DE MINIMIS expenses reflected in the Financial
Statements.
(d) FACS Partnership is a limited partnership organized and validly
existing under the laws of the State of Florida with the power to
own and lease its property and to carry on its business as now
being conducted by it and is fully qualified to do business in
each jurisdiction in which the nature of its business and assets
make such qualification necessary. No person has any written or
oral agreement or option for the purchase or acquisition of any
interest in FACS Partnership. FACS Florida and FACS Subco are the
only general partners of FACS Partnership. As
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of the date of this Agreement, Xxxxxx Xxxxxx is the only limited
partner of FACS Partnership. The Company, together with FACS
Florida and FACS Subco will, at Closing, be the only partners of
FACS Partnership and no other person shall have any interest
whatsoever in FACS Partnership. The interest of FACS Florida,
FACS Subco and the Company in FACS Partnership is and will be at
Closing free and clear of any Encumbrances except for item 2(a)
on Schedule 4.1(16). No person, firm or corporation has any
agreement or option capable of becoming an agreement for the
purchase of any interest in FACS Partnership.
(e) 397499 British Columbia Ltd. is a corporation duly incorporated
and organized and validly existing under the laws of the province
of British Columbia with the corporate power to own and lease its
property and to carry on its business as now being conducted by
it and is fully qualified to do business in each jurisdiction in
which the nature of its business and assets makes such
qualification necessary. No Person has any written or oral
agreement or option for the purchase or acquisition of any shares
or other security in the capital of 397499 British Columbia Ltd.
The Company is the registered, and legal and beneficial owner of
all of the issued and outstanding shares in the capital of 397499
British Columbia Ltd. free and clear of any Encumbrances except
for item 2(a) on Schedule 4.1(16) and all such shares have been
duly issued and are outstanding as fully paid and non-assessable.
No Person, firm or corporation has any agreement or option
capable of becoming an agreement, including convertible
securities, warrants or convertible obligations of any nature,
for the purchase, subscription, allotment or issuance of any
shares or other securities of 397499 British Columbia Ltd. The
only property and assets owned by 397499 British Columbia Ltd. is
bare legal title to the Owned Real Property. 397499 British
Columbia Ltd. is not a party to any contracts or agreements and
397499 British Columbia Ltd. has no liabilities or obligations of
any nature whatsoever, whether absolute, contingent or otherwise
(including, without limitation, liabilities which are not yet due
and liabilities for Taxes), other than DE MINIMIS expenses
reflected in the Financial Statements.
(f) 326252 British Columbia Ltd. is a corporation duly incorporated
and organized and validly existing under the laws of the province
of British Columbia with the corporate power to own and lease its
property and to carry on its business as now being conducted by
it and is fully qualified to do business in each jurisdiction in
which the nature of its business and assets makes such
qualification necessary. No Person has any written or oral
agreement or option for the purchase or acquisition of any shares
or other security in the capital of 326252 British Columbia Ltd.
The Company is the registered, and legal and beneficial owner of
all of the issued and outstanding shares in the capital of 326252
British Columbia Ltd. free and clear of any Encumbrances except
for item 2(a) on Schedule 4.1(16) and all such shares have been
duly issued and are outstanding as fully paid and non-assessable.
No Person, firm or corporation has any agreement or option
capable of becoming an agreement, including convertible
securities, warrants or convertible obligations of any nature,
for the purchase, subscription, allotment or
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issuance of any shares or other securities of 326252 British
Columbia Ltd. 326252 British Columbia Ltd. has no property or
assets. 326252 British Columbia Ltd. is not a party to any
contracts or agreements and 326252 British Columbia Ltd. has no
liabilities or obligations of any nature whatsoever, whether
absolute, contingent or otherwise (including, without limitation,
liabilities which are not yet due and liabilities for Taxes),
other than DE MINIMIS expenses reflected in the Financial
Statements.
(g) None of the Subsidiaries other than FACS Partnership has any
employees.
(11) NON-ARM'S LENGTH TRANSACTIONS. Neither the Company nor any of the
Subsidiaries has, since January 1, 1998, made any payment or loan to,
or borrowed any monies from, and is not otherwise indebted to, any
officer, director, employee, shareholder of the Company or any of the
Subsidiaries or any Person not dealing at arm's length (within the
meaning of the INCOME TAX ACT (CANADA)) with the Company or any of the
Subsidiaries, or to any Affiliate of any of the foregoing except as
disclosed in the Financial Statements or Schedule 4.1(11) and except
for usual compensation paid to employees and directors in the ordinary
course of the Business of the Company, consistent with past practice.
Except as disclosed in Schedule 4.1(11) and except for contracts of
employment, none of the Company or the Subsidiaries is a party to or
bound by any contract or agreement with any officer, director,
employee or shareholder of the Company or any of the Subsidiaries or
any person not dealing at arm's length (within the meaning of the
INCOME TAX ACT (Canada)) with the Company or any of the Subsidiaries
or with any Affiliate of any of the foregoing.
(12) NO DIVIDENDS OR RETURN ON CAPITAL. Since June 30, 2000, the Company
has not, directly or indirectly, declared or paid any dividends or
declared or made any other payments or distribution on or in respect
of any of its shares. Since June 30, 2000, there has not been any
purchase or redemption of any shares of the Company or any transfer,
distribution or payment, directly or indirectly, of any money or other
property or assets to the Vendor or to any other Person, other than
payment of liabilities shown on the Financial Statements on or after
the scheduled maturity or due date thereof, payment of interest on the
Notes, payment of compensation for services actually rendered at rates
not in excess of the rates prevailing on the date of, or reflected in
the Financial Statements, payments due under the Company Agreements,
rental payments, other payments in the ordinary course of business and
payments of those amounts described in subsection 3.3(b)(viii) but
only to the extent that such payments will be included in the
calculation of subsection 3.3(b)(viii).
(13) LIABILITIES OF THE COMPANY. Except as set forth on Schedule 4.1(13),
the Company and the Subsidiaries do not have any liabilities,
financial obligations or indebtedness including, without limitation,
any liability for Taxes (whether accrued, absolute, contingent or
otherwise) (collectively, in this subsection 4.1(13) the
"liabilities") which are not disclosed or referred to in the Financial
Statements nor has any of them incurred, since June 30, 2000, any
indebtedness or liability for money borrowed which is not disclosed on
or reflected in the Financial Statements other than indebtedness or
liability for borrowed money or liabilities arising in the ordinary
course of business and except for amounts included in subsection
3.3(b)(viii). Except as set forth on Schedule 4.1(13), neither the
Company nor any of the Subsidiaries is a party to or bound by any
guarantee, indemnification, assumption or endorsement or any other
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like commitment of the obligations or indebtedness (contingent or
otherwise) of any other Person except for the indemnification by the
Company in accordance with this Agreement.
(14) LEASED PREMISES.
(a) The Company or its Subsidiaries leases, as tenant, the Leased
Premises described on Schedule 4.1(14) and neither the Company
nor any of the Subsidiaries is a party to any other real property
lease. True, complete and correct copies of the lease agreements
pertaining to the Leased Premises have been provided to the
Purchaser and are described on Schedule 4.1(14) (individually a
"LEASE" and collectively the "LEASES"). The Company or its
Subsidiaries has paid all amounts due and is not in default under
any of the Leases, and there exists no condition or event which,
with the passage of time, the giving of notice or both, will
constitute a default under or breach of any of the Leases. To the
knowledge of the Company, the subtenants of the Company's Leased
Premises in Edmonton and Tampa are not in default under any of
the terms and conditions of their respective subleases, and there
exists no condition or event which, with the passage of time, the
giving of notice or both, will constitute a default under or
breach of such subleases.
(b) To the knowledge of the Company, there is no pending or proposed
expropriation proceeding or assessment for public improvements
with respect to any of the Leased Premises which could adversely
affect the use, operation or value of the Business or the Assets
of the Company or any of its Subsidiaries. Neither the Company
nor its Subsidiaries has received any notice from any insurer or
landlord for any of the Leased Premises notifying the Company or
its Subsidiaries of the need to undertake any repairs,
alterations or construction or to take any action with respect to
any of the Leased Premises.
(c) To the knowledge of the Company each of the Leased Premises and
all of the buildings, fixtures and improvements owned or leased
by the Company or any of its Subsidiaries, and all heating and
air conditioning equipment, plumbing, electrical and other
mechanical facilities which are part of, or located on or in,
such buildings or improvements are in good operating condition
and repair, having regard to the age thereof, and, to the
knowledge of the Company, do not require any repairs other than
normal routine maintenance to maintain them in good operating
condition and repair.
(d) All Taxes currently due and payable by the Company or any of its
Subsidiaries with respect to the Leased Premises have been paid,
and there is no abatement in effect with respect to all or any
portion of the real estate taxes.
(e) All amounts payable to contractors, subcontractors and other
persons or entities furnishing work, labour, materials or
supplies for any development or construction work done at the
Leased Premises by or on behalf of the Company or any of its
Subsidiaries have been paid in full and there are no claims
against the Company or the Leased Premises in connection
therewith.
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(15) OWNED REAL PROPERTY.
(a) Schedule 4.1(15) sets out a complete and accurate description of
all Owned Real Property owned by the Company or any of its
Subsidiaries which, together with the Leased Premises, is all of
the real property used in the Business. The Company or its
Subsidiaries has good and marketable title to the Owned Real
Property in fee simple free and clear of all Encumbrances except
Permitted Encumbrances. Neither the Company nor any of its
Subsidiaries has owned any other real property in the last five
(5) years.
(b) Schedule 4.1(15) contains a list of all Encumbrances which affect
the Owned Real Property and there is no material default nor is
there any event that with the passage of time or the giving of
notice would constitute a material default under or with respect
to any Encumbrances relating to the Owned Real Property, each of
which has been complied with in all material respects and is in
good standing.
(c) A true and complete copy of the Mortgage and all related
documents has been provided to the Purchaser. The Mortgage is
described in Schedule 4.1(15). The Mortgage does not contain any
prepayment obligation, expense, cost, penalty or premium that
would be triggered as a result of the completion of the
Transactions.
(d) There are no unregistered agreements to which the Owned Real
Property is subject and to which the Vendor or the Company or any
Subsidiary is a party, and to the knowledge of the Company, there
are no other unregistered agreements, in respect of access to or
encroachments on or by the Owned Real Property, except for
Permitted Encumbrances. To the knowledge of the Company, no
Permitted Encumbrances exist with respect to such matters.
(e) All municipal and realty taxes, rates, special levies and
assessments with respect to the Owned Real Property are paid in
full or have been properly accrued in the books and records of
the Company or its Subsidiaries.
(f) No local improvement charges or special levies outstanding
against the Owned Real Property are currently due and owing by
the Company or its Subsidiaries nor has the Company, any of its
Subsidiaries or the Vendor received any notice of a proposed new
local improvement charge or special levy.
(g) To the knowledge of the Company, the Buildings have been
constructed in a good and workmanlike manner, and comply in all
material respects with all agreements, restrictions and
regulations registered against title to the Owned Real Property
or otherwise affecting the Owned Real Property.
(h) To the knowledge of the Company, each of the Buildings and all
heating and air conditioning equipment, plumbing, electrical and
other mechanical facilities which are located on or in the
Buildings, or form a part thereof, are in good operating
condition and repair, having regard to the age thereof, and to
the
-27-
knowledge of the Company, do not require any repairs other than
normal routine maintenance to maintain them in good operating
condition and repair.
(i) To the knowledge of the Company, there is no material defect in
the design, construction or structure of the Buildings or any
other material defect in the Buildings including the footings,
foundations, bearing walls, cladding or roof of the Buildings.
Neither the Vendor nor the Company nor its Subsidiaries has
received any reports, correspondence or advice from any
consultant or engineer retained by it which recommended or called
attention to the need for repairs or other necessary work on the
Buildings.
(j) The Buildings are located entirely within the boundaries of the
Owned Real Property.
(k) The Company or its Subsidiaries has such rights of access to and
from the Owned Real Property as are necessary to carry on the
Business in the manner in which the Business is currently carried
on and the Company does not have any knowledge of any fact or
condition which would result in the termination of such access.
(l) To the knowledge of the Company, all public utilities required
for the use and operation of the Owned Real Property connect into
the Owned Real Property through adjoining public streets, or, if
they pass through adjoining private land, do so in accordance
with valid registered easements and are sufficient for the actual
use of the Owned Real Property.
(m) The Owned Real Property and the Buildings and the use thereof
comply in all material respects with all Applicable Laws relating
to the use of real property including, without limitation laws
relating to zoning, fire, safety, building standards, health
standards and Environmental laws (as defined herein), and neither
the Company nor the Vendor has received notice of any impending
or threatened change in any such Applicable Law which would
materially adversely affect the Owned Real Property or the
Buildings. The current use of the Owned Real Property is in
compliance in all material respects with, and is not in violation
of, any covenants, conditions, restrictions or easements
affecting the Owned Real Property or with respect to the use or
occupancy of the Owned Real Property.
(n) Neither the Company nor the Subsidiaries has received any written
work order, deficiency notice, notice of violation or other
similar communication from any governmental agency or otherwise
which is outstanding requiring or recommending that material work
or repairs in connection with the Owned Real Property or any part
thereof is necessary or required.
(o) No part of the Owned Real Property has been taken or expropriated
by any federal, provincial, municipal or other competent
authority nor has any notice or proceeding in respect thereof
been given or, to the knowledge of the Company, commenced.
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(p) All accounts for work and services performed and materials placed
or furnished upon or in respect of the Owned Real Property at the
request of the Company or its Subsidiaries have been fully paid
and satisfied and no person is entitled to claim a construction,
builders, mechanics or similar lien against the Owned Real
Property or any part thereof, other than current accounts in
respect of which the payment due date has not yet passed.
(16) PERSONAL PROPERTY.
(a) Except as disclosed on Schedule 4.1(16), the Company or its
Subsidiaries has good and marketable title to, and is the
absolute owner of, all of its Personal Property, free and clear
of all Encumbrances, except for Permitted Encumbrances and except
the Company leases the Personal Property described as leased by
the Company on Schedule 4.1(16).
(b) All of the Personal Property is in good operating condition and
repair and does not require any repairs other than normal routine
maintenance to maintain the Personal Property in good operating
condition and repair. The Subsidiaries, other than FACS
Partnership, do not own any Personal Property other than the note
referred to in subsection 4.1(10)(b) and the interests in FACS
Partnership.
(17) INTELLECTUAL PROPERTY. Schedule 4.1(17) contains a complete and
accurate list of the Intellectual Property. The corporate name of the
Company and the tradenames, trade-marks, service marks and copyrights
listed on Schedule 4.1(17) are the only names, trade-marks, service
marks and copyrights which are used by the Company and the
Subsidiaries in the operation of the Business. The Company and the
Subsidiaries are the sole and exclusive owners of its Intellectual
Property (other than the software licensed as disclosed in Schedule
4.1(17) and other than applications software licensed by the Company
in the ordinary course of business) free and clear of all Encumbrances
except for item 2(a) on Schedule 4.1(16). No claim is being asserted
against the Company or its Subsidiaries that its corporate name or any
of its Intellectual Property conflict with the tradenames,
trade-marks, service marks, copyrights, corporate names or other
proprietary rights of any other Person and to the knowledge of the
Company, there is no basis for any such claim or conflict; and no
Person other than the Company and the Subsidiaries has an interest in
the Intellectual Property. Neither the Company nor the Subsidiaries
owns any patents or has patent applications pending and, to the
Company's knowledge, the Company and the Subsidiaries are not engaged
in any activity which infringes upon any patent, patent application,
tradename, trade-xxxx, service xxxx, copyright or proprietary right of
any other Person. Within the past three (3) years the Company and its
Subsidiaries have not done business under or been known by any other
name other than their current corporate name.
(18) LEGAL MATTERS. There is no suit, action, arbitration, claim, demand,
administrative or other proceeding or any governmental legislation
against the Company or any of the Subsidiaries pending or, to the
knowledge of the Company, threatened before any Governmental Body or
administrative agency, and there is no judgment, order, award or
decree outstanding or enforceable against the Company, any of the
Subsidiaries, the Business or the Assets. The Company is not
contemplating the institution of any suit, action, arbitration,
administrative or other proceeding. To the Company's knowledge, there
is no accident, injury or
-29-
event that may result in a claim for damages against the Company or
the Subsidiaries. To the knowledge of the Company, no state of facts
exists or event or circumstance has occurred which gives or may give
rise to any material claim by a Person relating to services performed
or actions taken or failed to be taken by the Company or the
Subsidiaries prior to the Closing Date (notwithstanding that the
damage therefrom may be suffered on or after the Closing Date).
(19) RECORDS MANAGEMENT AGREEMENTS. Attached as Schedule 4.1(19A) is a list
as of August 31, 2000, by account number of all customers whose files
and records are stored, held or maintained by the Company or a
Subsidiary in cartons, containers (including materials stored in
vaults) on computer tape, optical discs, microfilm, videotape or
otherwise pursuant to written or oral agreements (collectively, the
"RECORDS MANAGEMENT AGREEMENTS"). At Closing, the rights and benefits
of the Company and the Subsidiaries under and pursuant to the Records
Management Agreements will be the property of the Company or such
Subsidiary. Except as set forth in items 2(a) and 2(c) on Schedule
4.1(16), no Records Management Agreement has been pledged as
collateral or is subject to any security agreement, lease, conditional
sales contract or other title retention or security arrangement. True,
correct and accurate copies of all standard written forms of Records
Management Agreements used by the Company and the Subsidiaries have
been delivered to the Purchaser. Schedule 4.1(19B) lists the Records
Management Agreements for the top 25 customers of the Company, true,
correct and accurate copies of which (other than the names of the
customers) have been delivered to the Purchaser.
(20) CONTRACTS, LEASES AND OTHER COMMITMENTS. Neither the Company nor any
of the Subsidiaries is a party to or bound by any Contract, except for
the following (collectively, the "COMPANY AGREEMENTS"):
(i) the Records Management Agreements;
(ii) the Leases;
(iii) the Franchise Agreements;
(iv) contracts involving a maximum liability or obligation on the part
of the Company of less than $20,000 each and less than $100,000
in the aggregate; and
(v) the Contracts listed on Schedule 4.1(20A) hereto.
True, correct and complete copies of all written Company Agreements (other
than those listed on Schedule 4.1(19A) which are not listed on Schedule
4.1(19B)), including all amendments thereto, have been delivered to the
Purchaser. All of the Company Agreements are valid, binding and enforceable
against the respective parties thereto in accordance with their respective
terms. The Company and the Subsidiaries and all other parties to all of the
Company Agreements have performed substantially all of the obligations required
to be performed under the Company Agreements, and neither the Company or any of
the Subsidiaries nor, to the knowledge of the Company, any other party is in
default or in arrears under the terms thereof, and no condition exists or event
has occurred which, with the giving of notice or lapse of time or both, would
constitute a default under such Company Agreements. All rights of the Company
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and the Subsidiaries under the Company Agreements extending beyond the Closing
Date shall continue unimpaired and unchanged after the Closing Date except as
contemplated by this Agreement, without (i) the consent of any person (except
for any consent(s) which are to be obtained by the Closing Date and are set
forth on Schedule 4.1(20B)), or (ii) the payment of any penalty, the incurrence
of any additional obligations or the change of any term. Other than as indicated
on Schedule 4.1(20B), (i) neither the Company nor any of the Subsidiaries is
bound by any Company Agreement which requires prior approval or consent to, or
notice of, the change of ownership of the Purchased Shares resulting from the
consummation of the Transactions and (ii) the consummation of the Transactions
will not result in an impairment or termination of any of the Company's or the
Subsidiaries' rights under any Company Agreement. Schedule 4.1(20A) also
contains a listing of all outstanding written and, to the knowledge of the
Company, oral, offers, guarantees, advances or credit granted (other than
ordinary course trade receivables and agreements with customers) which, if
accepted, could impose any debts, obligations or liabilities upon the Purchaser,
the Company or any of the Subsidiaries after the Closing Date. All outstanding
written and oral proposals are in the ordinary course of business with arm's
length parties on competitive terms.
(21) SUPPLIERS AND CUSTOMERS; CONFLICTS OF INTEREST.
(a) CUSTOMERS AND SUPPLIERS. Schedule 4.1(21) lists by identification
number the 25 largest customers by revenue and the ten largest
suppliers by cost of the Company for the 12 month period ending
December 31, 1999 and the six month period ending June 30, 2000,
and the aggregate amount which each customer was invoiced and
each supplier was paid during such period. Except as set forth on
Schedule 4.1(21), the Company has no knowledge of, nor has the
Company or the Vendor received notice of, any intention on the
part of any such customer to cease doing business with the
Company or to modify or change in any material manner any
existing arrangement with the Company for the purchase of any
products or services. The relationships of the Company with each
of its principal suppliers, shippers and customers are
satisfactory, and there are no unresolved disputes with any such
supplier, shipper or customer. Prior to the Closing Date, the
Company shall cooperate with the Purchaser in making or causing
to be made such reasonable inquiries of and written introductions
to customers and suppliers of the Business as the Purchaser may
reasonably deem necessary or advisable.
(b) CONFLICTS OF INTEREST. No partner, shareholder, director, officer
or employee of the Company, the Subsidiaries or the Vendor or any
Affiliate of any of the foregoing: (i) has any pecuniary interest
in any supplier or customer of the Company or any of the
Subsidiaries or in any other business with which the Company or
any of the Subsidiaries conducts business or with which the
Company or any of the Subsidiaries is in competition other than
records management customer agreements that result in annual
aggregate revenues to the Company and the Subsidiaries of less
than $150,000 and which are entered into in the ordinary course
of business on competitive terms; (ii) has any interest in any
property or assets used by the Company or any of the
Subsidiaries; or (iii) has any contractual or other claim,
express or implied, of any kind whatsoever against the Company or
any of the Subsidiaries in connection with the Business, the
Assets or the
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Owned Real Property or against the Vendor in connection with the
Purchased Shares other than those agreements which are to be
terminated at Closing.
(22) RECORDS SERVICES AND STORAGE.
(a) Substantially all items received and stored by the Company and
the Subsidiaries on behalf of each of the Company's or the
Subsidiaries' customers (singly or in the aggregate) are held in
storage by the Company or the Subsidiaries and are locatable and
accessible without extraordinary effort except for items
withdrawn or destroyed at the respective customer's request.
(b) Substantially all items received by the Company or the
Subsidiaries from customers have been logged into the Company's
bar-coded computer inventory system and can be located through
use of such inventory system.
(c) The stored items for which customers of the Company or the
Subsidiaries are billed exist and, in all material respects, can
be accounted for.
(d) Except as set forth on Schedule 4.1(22) or as adjusted in
accordance with subsection 3.3(b)(ix), the Company and the
Subsidiaries invoice their customers for special projects, such
as purges and re-boxing programs, only with respect to completed
work, and have completed all destructions and other inventory and
special-service projects for which the Company or the
Subsidiaries have invoiced customers or for which they have been
paid.
(e) To the Company's knowledge, except as set forth on Schedule
4.1(22) none of the Company's or the Subsidiaries' customer
records in storage have suffered material damage (including
damage from water) or been wrongfully destroyed except where the
owner of such records has been promptly notified of such event.
(23) EMPLOYEES. Attached as Schedule 4.1(23) is a complete and accurate
list of all employees of the Company and the Subsidiaries (the
"EMPLOYEES") as at June 30, 2000, setting forth their positions,
salaries and other compensation, vacation benefits (both maximum
annual and accrued and outstanding as of a recent date), years of
service, original date of hire, classification as full time, part time
or on lay-off or other type of leave as at such date. None of the
Employees is on long-term disability, extended sick leave or receiving
workers' compensation benefits other than those specifically
identified on Schedule 4.1(23) as receiving such benefits. All
salaries, wages, vacation pay, bonuses, commissions and other
emoluments for or in respect of the Employees have been paid or
accrued in the books and records of the Company or the Subsidiaries
(as applicable) and, except as disclosed in Schedule 4.1(23), there
are no bonuses presently accruing, due or payable to any of the
Employees. Each of the Company and the Subsidiaries is in compliance
in all material respects with all Applicable Laws respecting
employment, employment practices, pay equity terms and conditions of
employment, wages and hours and is not in arrears in the payment of
any wages, pension or other benefits or contributions in respect
thereof and no dispute or grievance exists with respect thereto. All
amounts withheld, required to be withheld, paid or required to be paid
prior to Closing in respect of the Employees pursuant to any
Applicable Law, including statutes relating to income and
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other Taxes, unemployment insurance, employment standards, health
insurance, workers' compensation and statutory pension plans have been
withheld, paid, discharged or otherwise settled by the Company or the
Subsidiaries, as applicable. The Company and/or the Subsidiaries have
delivered to the Purchaser complete and correct copies of all
personnel policies, handbooks, written procedures and forms of
employment applications relating to the Employees. Neither the Company
nor any of its Subsidiaries has received any complaint from, and to
the knowledge of the Company, no complaint has been filed or
threatened to be filed against the Company or any of the Subsidiaries
before any federal, provincial or local governmental or
quasi-governmental agency or authority alleging violation of law
(federal, provincial or local) relating to employment practices or
discrimination in employment.
(24) EMPLOYMENT CONTRACTS. Except as set out in Schedule 4.1(24): (i)
neither the Company nor any Subsidiary is a party to or bound by any
written agreement with any Employee nor are there any other agreements
with any Employee providing for a specified period of notice of
termination or providing for any fixed term of employment; (ii)
neither the Company nor any Subsidiary is a party to or bound by any
sales representative agreement, consulting agreement, collective
bargaining agreement or any agreement or commitment with any former
Employee; and (iii) neither the Company nor any of the Subsidiaries
has any Employees who cannot be terminated by the Company or the
Subsidiary (as applicable) with or without notice, except for those
Employees who are employed on an indefinite basis who require only
reasonable notice of termination as required by Applicable Law.
(25) EMPLOYEE COMPENSATION. Since June 30, 2000, neither the Company nor
any Subsidiary has increased or promised to increase the compensation
or the rate of compensation or commissions payable or to become
payable by the Company or the Subsidiary (as applicable) to any
director, officer, Employee or agent except for annual salary
increases and bonuses (including employee profit sharing plans) in the
ordinary course of business and consistent with past practice, and,
except for Management Severance Obligations and as set forth on
Schedule 4.1(23), neither the Company nor any Subsidiary has agreed to
any payment of any bonus, profit-sharing or other extraordinary
compensation to any Employee.
(26) MANAGEMENT SEVERANCE OBLIGATIONS. The aggregate of all obligations and
liabilities of the Company and the Subsidiaries in respect of (i) all
termination and severance payments required to be paid to the
management employees of the Company or the Subsidiaries listed on
Schedule 4.1(26) in the event of the termination of their employment,
(ii) the acquisition of Xxxxxx Xxxxxx'x interest in FACS Records
Limited Partnership, and (iii) bonuses or other payments payable to
the management employees of the Company or the Subsidiaries listed on
Schedule 4.1(26), including without limitation, any bonuses payable in
connection with the completion of the Transactions but excluding
bonuses that are payable as part of the normal compensation of any
such management employee (collectively, the "MANAGEMENT SEVERANCE
OBLIGATIONS"), do not exceed the amount in respect thereof included in
the Unaudited Closing Statement.
(27) COLLECTIVE AGREEMENTS. Neither the Company nor any of the Subsidiaries
is a party to or bound by any Contract with, or commitment to, any
labour union, trade union, employee association or employer's
association. No trade union, employee association or other entity has
acquired any bargaining rights by either certification or voluntary
recognition with
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respect to any of the Employees of the Company or any of the
Subsidiaries and there are no applications or discussions involving
the Company or any of the Subsidiaries regarding such certification or
recognition. To the knowledge of the Company there is no
union-organizing activity or threatened union-organizing activity
involving the Employees of the Company or any of the Subsidiaries nor
has there been any such activity in the past three years.
(28) BENEFIT PLANS.
(a) Schedule 4.1(28) lists all the employee benefits, pension benefit
plans, 401(k) plans, bonuses, pensions, profit sharing, deferred
compensation, stock compensation, stock purchases, stock options,
retirement, hospitalization insurance, medical, dental or
disability insurance, health, welfare or similar plans or
practices, formal and informal, relating to the Employees or
former Employees or others which are currently maintained or were
maintained at any time in the last five (5) calendar years (the
"EMPLOYEE PLANS").
(b) All of the Employee Plans are and have been established,
registered, qualified, invested and administered in all
respects in accordance with all laws, regulations, orders or
other legislative, administrative or judicial promulgations
applicable to the Employee Plans ("APPLICABLE EMPLOYEE BENEFIT
LAWS"). To the knowledge of the Company, no fact or circumstance
exists that adversely affects the tax-exempt status of an
Employee Plan.
(c) All obligations regarding the Employee Plans have been satisfied,
there are no outstanding defaults or violations by any party to
any Employee Plan and no Taxes, penalties or fees are owing or
exigible under any of the Employee Plans.
(d) The Company may unilaterally amend, modify, vary, revoke or
terminate, in whole or in part, each Employee Plan and take
contribution holidays under or withdraw surplus from each
Employee Plan, subject only to approvals required by Applicable
Employee Benefit Laws and the terms of the Employee Plans.
(e) No Employee Plan, nor any related trust or other funding medium
thereunder, is subject to any pending investigation, examination
or other proceeding, action or claim initiated by any
Governmental Body or instrumentality, or by any other party
(other than routine claims for benefits), and there exists no
state of facts which after notice or lapse of time or both could
reasonably be expected to give rise to any such investigation,
examination or other proceeding, action or claim or to affect the
registration of any Employee Plan required to be registered.
(f) All contributions or premiums required to be made by the Company
or the Subsidiaries under the terms of each Employee Plan or by
Applicable Employee Benefit Laws have been made in a timely
fashion in accordance with Applicable Employee Benefit Laws and
the terms of the Employee Plans, and the Company and the
Subsidiaries do not have, and as of the Closing Date will not
have, any liability (other than liabilities accruing after the
Closing Date) with respect to any of the Employee Plans.
Contributions or premiums will be paid by the Company
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or the Subsidiaries on an accrual basis for the period up to the
Closing Date even though not otherwise required to be made until
a later date.
(g) No amendments have been made to any Employee Plan and no
improvements to any Employee Plan have been promised and no
amendments or improvements to an Employee Plan will be made or
promised by the Company or the Subsidiaries before the Closing
Date.
(h) There have been no improper withdrawals, applications or
transfers of assets from any Employee Plan or the trusts or other
funding media relating thereto, and neither the Company, the
Subsidiaries, nor any of their agents have been in breach of any
fiduciary obligation with respect to the administration of the
Employee Plans or the trusts or other funding media relating
thereto.
(i) Subject to approvals under Applicable Employee Benefit Laws, the
Company may amend, revise or merge any Employee Plan or the
assets transferred from any Employee Plan with any other
arrangement, plan or fund.
(j) The Company has furnished to the Purchaser true, correct and
complete copies of all the Employee Plans as amended as of the
date hereof together with all related documentation including
funding agreements, actuarial reports, funding and financial
information returns and statements, all professional opinions
(whether or not internally prepared) with respect to each
Employee Plan, all material internal memoranda concerning the
Employee Plans, copies of material correspondence with all
regulatory authorities with respect to each Employee Plan and
plan summaries, booklets and personnel manuals. No material
changes have occurred to the Employee Plans or are expected to
occur which would affect the actuarial reports or financial
statements required to be provided to the Purchaser pursuant to
this subsection 4.1(28).
(k) Each Employee Plan is fully funded or fully insured on both an
ongoing and solvency basis pursuant to the actuarial assumptions
and methodology set out in Schedule 4.1(28).
(l) None of the Employee Plans enjoys any special tax status under
Applicable Employee Benefit Laws, nor have any advance tax
rulings been sought or received in respect of the Employee Plans.
(m) All employee data necessary to administer each Employee Plan has
been provided by the Vendor to the Purchaser and is true and
correct.
(n) No insurance policy or any other contract or agreement affecting
any Employee Plan requires or permits a retroactive increase in
premiums or payments due thereunder. The level of insurance
reserves under each insured Employee Plan is reasonable and
sufficient to provide for all incurred but unreported claims.
-35-
(o) Except as disclosed in Schedule 4.1(28), none of the Employee
Plans provides benefits to retired Employees or to the
beneficiaries or dependants of retired Employees.
(p) No actions, suits or claims against the Company with respect to
any of the Employee Plans are pending, or to the Company's
knowledge, threatened, and the Company has no knowledge of any
facts which would reasonably be expected to give rise to or
result in any such action, suit or claim.
(q) No payment that is owed or may become due to any director,
officer or employee of the Company or a Subsidiary will
constitute an "excess parachute payment" under IRC Section 280G.
(r) All Employee Plans are, where required, in full compliance with
ERISA, the IRC and other applicable laws. No transaction
prohibited by ERISA and no "prohibited transactions" under the
IRC have occurred with respect to the Employee Plans. The Company
has no liability to the IRS or under ERISA with respect to any
Employee Plan. All filings required by ERISA and the IRC with
respect to the Employee Plans have been timely filed, and all
notices and disclosures to participants required by either ERISA
or the IRC have been timely provided. All Taxes have been paid
and no Taxes are payable in respect of the Employee Plans.
(29) FINANCIAL STATEMENTS. Schedule 4.1(29) contains (i) audited
consolidated financial statements of the Company and its Subsidiaries
as at and for the twelve months ended December 31, 1999 and December
31, 1998 (the "Annual Financial Statements"), and (ii) the
consolidated balance sheet and income statement of the Company and its
Subsidiaries as at and for the six month period ending June 30, 2000
(the "JUNE FINANCIAL STATEMENTS"), and (iii) the consolidated balance
sheet and income statement of the Company and its subsidiaries as at
and for the eight month period ending August 31, 2000 (the "AUGUST
FINANCIAL STATEMENTS") (collectively referred to as the "FINANCIAL
STATEMENTS"). The Financial Statements (other than the August
Financial Statements) have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods reported upon and present fairly and accurately the
consolidated financial position as at the end of, and the results of
operations and cash flows of the Company and its Subsidiaries for, the
periods reported upon. The August Financial Statements have been
prepared by the Company in accordance and consistent with past
practice for the preparation of its month end financial statements.
(30) ACCOUNTS RECEIVABLE. Each of the Accounts Receivable of the Company
and the Subsidiaries have been acquired in the ordinary course of
Business. No account debtor has any valid setoff, deduction or defense
with respect thereto and no account debtor has asserted any such
setoff, deduction or defense. The reserve for doubtful Accounts
Receivable (which does not include the Aged Accounts Receivable) set
forth in the Financial Statements is reasonable and was established in
accordance with generally accepted accounting principles.
(31) DIRECTORS, OFFICERS, BANK ACCOUNTS. Attached as Schedule 4.1(31) is a
correct and complete list of (i) the directors of the Company and each
Subsidiary, (ii) the officers of the
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Company and each Subsidiary, (iii) the bank accounts of the Company
and each Subsidiary, and (iv) the persons authorized to sign cheques
drawn on such accounts.
(32) NO MATERIAL CHANGE. Except as set forth on Schedule 4.1(32) since June
30, 2000, the Company and the Subsidiaries have operated in the normal
and ordinary course, and there has been no Material Adverse Change in
the business, assets, operations, prospects, (other than general
business and economic conditions which affect the economy generally)
operating results (including operating cash flow) or financial
condition of the Business. For purposes hereof, "Material Adverse
Change" means any change, development or occurrence which has had, or
may reasonably be expected to have, an adverse effect aggregating 5%
or more on the revenues or cash flow of the Company as shown on the
financial statements of the Company for the period ending June 30,
2000. Specifically, except as set forth on Schedule 4.1(32), since
June 30, 2000, the Company and each of the Subsidiaries:
(a) has not taken any action outside of the ordinary course of
business;
(b) has not borrowed any money (except in the ordinary course of
business) or become contingently liable for any obligation or
liability of others;
(c) has paid all of its debts and obligations as they became due;
(d) has not incurred any debt, liability or obligation of any nature
to any party except for obligations arising in the ordinary
course of business and except for amounts included in subsection
3.3(b)(viii);
(e) has not knowingly waived any right of substantial value;
(f) has not purchased or redeemed any shares in its capital, or
transferred, distributed or paid, directly or indirectly, any
money or other property or assets to the Vendor other than
amounts due under the Notes and dividends in respect of the
Purchased Shares in the ordinary course of business and
consistent with past practice; and
(g) has not sold or otherwise issued any shares in its capital; and
since June 30, 2000, the Company and each of the Subsidiaries have used their
best efforts to preserve its business organization intact, to keep available the
services of its Employees, and to preserve its relationships with its customers,
suppliers and others with whom it deals.
(33) ENVIRONMENTAL COMPLIANCE.
(a) The Company and the Subsidiaries are in compliance in all
material respects with all federal, provincial, state, municipal
or local laws, rules, statutes, regulations, guidelines,
policies, orders and directions or other requirements of any
Governmental Body relating in any way to the environment,
occupational health or safety or the manufacture, processing,
importation, handling, distribution, use, transportation,
storage, disposal or treatment of any contaminant, pollutant,
dangerous substance, toxic substance, hazardous waste, liquid
industrial waste, petroleum product, hazardous material or
hazardous substance, and any
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controlled, restricted, regulated or banned substances
("HAZARDOUS SUBSTANCES") including any matters relating to a
discharge, spill or other release, whether actual or potential of
any contaminant (collectively, the "ENVIRONMENTAL LAWS").
(b) Hazardous Substances have not been used by the Company or any of
the Subsidiaries at any of the facilities used by the Company or
any of the Subsidiaries now or in the past, including without
limitation the Leased Premises and the Owned Real Property
(collectively, the "COMPANY'S FACILITIES") during the occupancy
thereof by the Company or any of the Subsidiaries and the Company
has no knowledge of such use by any other Person at any real
property previously owned or leased by the Company or any
Subsidiary during or prior to the Company's or the Subsidiaries'
occupancy thereof in any manner which: (i) violates in any
material respect any applicable Environmental Law; (ii) requires
removal or remediation under applicable Environmental Law; or
(iii) if found on any of the Company's Facilities, or, if
improperly disposed of off of any of the Company's Facilities
would subject the owner or occupant of such facility to damages,
penalties, liability or an obligation to perform any work,
clean-up, removal, remediation, repair, construction, alteration,
demolition, renovation or installation in or in connection with
such facility in order to comply with any Environmental Law
("ENVIRONMENTAL CLEANUP WORK").
(c) Neither the Company or any of the Subsidiaries nor, to the
knowledge of the Company, any other Person has emitted,
discharged, deposited or released or caused or permitted to be
emitted, discharged, deposited or released any Hazardous
Substances at the Leased Premises or in connection with the
operation of the Business or at the Owned Real Property, or to
the knowledge of the Company, at any real property previously
owned or leased by the Company or any Subsidiary, except in
compliance in all material respects with the Environmental Laws.
(d) No notice from any Governmental Body has ever been served upon
the Company or any of the Subsidiaries, their agents or Employees
that remains outstanding and the Company has no knowledge of any
notice served upon any occupant, owner or prior owner of any of
the Company's Facilities claiming any violation of any of the
aforesaid Environmental Laws on or in connection with any of the
Company's Facilities or with respect to the Business, or
requiring or calling attention to the need for any Environmental
Cleanup Work, on or in connection with any of the Company's
Facilities in order to comply with any of the aforesaid
Environmental Laws. Neither the Company, the Subsidiaries or
their agents or Employees, nor, to the knowledge of the Company,
any occupant, owner or prior owner or occupant of any of the
Company's Facilities has ever been informed of any threatened or
proposed serving of any such violation or corrective work order
on or in connection with any of the Company's Facilities or with
respect to the Business.
(e) The soil and subsoil and the surface and ground water in, on or
under the Leased Premises and the Owned Real Property and, to the
knowledge of the Company,
-38-
at any real property previously owned or leased by the Company or
the Subsidiaries, do not contain any Hazardous Substances
resulting from the activities of the Company or the Subsidiaries
or their Employees or agents, except in compliance in all
material respects with the Environmental Laws and, to the
knowledge of the Company, there are no underground storage tanks
on or under the Leased Premises or the Owned Real Property. All
Hazardous Substances disposed of, treated or stored on the Leased
Premises and the Owned Real Property by the Company or the
Subsidiaries and, to the knowledge of the Company, by any Person
at any real property previously owned or leased by the Company or
the Subsidiaries, have been generated, treated, stored and
disposed of, in compliance in all material respects with all
Environmental Laws.
(f) The conduct of the Company and the Subsidiaries in carrying on
the Business including the keeping of all necessary records and
the notification of any Governmental Body and the use and
operation by the Company and the Subsidiaries of the Business has
been and is in compliance in all material respects with all
Environmental Laws. To the knowledge of the Company, there are no
facts which could give rise to non-compliance with any
Environmental Laws.
(g) There are no claims, actions, prosecutions, charges,
investigations, hearings or other proceedings or, to the
Company's knowledge, contemplated investigations or proceedings
of any kind in any court or tribunal or before any Governmental
Body, and no notice has been received by the Vendor, the Company
or any of the Subsidiaries of any such proceeding or contemplated
proceeding, which alleges the violation or non-compliance with
any Environmental Law or relates to the presence of, discharge,
deposit, escape or release of a Hazardous Substance in connection
with the Business or the Assets or the Owned Real Property.
(h) Neither the Company nor any of the Subsidiaries has received
notice of and the Company has no knowledge of any pending or
proposed changes to Environmental Laws which would materially
restrict or otherwise adversely affect the operation of the
Business or the Owned Real Property.
(i) The Leased Premises and the Owned Real Property do not contain
any urea formaldehyde insulation, aluminium wiring or asbestos.
(34) TAX MATTERS.
(a) TAX FILINGS. The Company and each of the Subsidiaries has
prepared and filed, before the imposition of any penalty for late
filing, with all appropriate Governmental Bodies all Tax returns,
declarations, remittances, information returns, reports and other
documents of every nature required to be filed by or on behalf of
the Company and each of the Subsidiaries in respect of any Taxes
or in respect of any other provision in any domestic or foreign
federal, provincial, municipal, state, territorial or other
taxing statute for all fiscal periods ending prior to the date
hereof and will continue to do so in respect of any fiscal period
ending on or before the Closing Date. All such returns,
declarations, remittances,
-39-
information returns, reports and other documents are correct and
complete in all material respects, and no material fact has been
omitted therefrom. No extension of time in which to file any such
returns, declarations, remittances, information returns, reports
or other documents is in effect. All Taxes shown on all such
returns, or on any assessments or reassessments in respect of any
such returns have been paid in full or will be paid in full prior
to the Closing Date. True and correct copies of all Tax returns
filed, by or on behalf of the Company and each of the
Subsidiaries (including any amended returns) since January 1,
1997 have been or, upon request of Purchaser, will be provided to
Purchaser.
(b) TAXES PAID. The Company and each of the Subsidiaries has paid in
full all Taxes required to be paid on or prior to the date hereof
and has made adequate provision in the June Balance Sheet and in
the books and records made available to the Purchaser in
accordance with generally accepted accounting principles for the
payment of all Taxes in respect of all fiscal periods ending on
or before the Closing Date. All Taxes for which the Company and
each of the Subsidiaries is or will be liable (or that are
imposed with respect to the Company) and that are due on or
before the Closing Date (including Taxes shown to be due on all
returns filed on or before the Closing Date) have been paid or
will be paid in full on or before the Closing Date. The June
Balance Sheet accurately reflects accruals or reserves for all
liabilities for Taxes accrued by the Company on or prior to the
date of the June Balance Sheet. Since the date of the June
Balance Sheet, the Company has not incurred or accrued any
liability for Taxes other than in connection with transactions in
the ordinary course of business, and nor has it changed its
method of accounting for Taxes or any method of accounting used
in calculating Taxes.
(c) REASSESSMENTS OF TAXES. There are no reassessments of any of the
Company's or the Subsidiaries' Taxes that have been issued and
are outstanding and there are no outstanding issues which have
been raised and communicated to the Company by any Governmental
Body in respect of any Taxes. No Governmental Body has
challenged, disputed or questioned the Company or any of its
Subsidiaries in respect of Taxes or of any returns, filings or
other reports filed under any statute providing for Taxes. The
Company is not negotiating any draft assessment or reassessment
with any Governmental Body. The Company is not aware of any
contingent Tax liabilities or any grounds for an assessment or
reassessment of the Company or any of its Subsidiaries,
including, without limitation, unreported benefits conferred on
the shareholder of the Company, or aggressive treatment of
income, expenses, credits or other claims for deduction under any
return or notice other than as disclosed in the Financial
Statements. Neither the Company nor its Subsidiaries has received
any indication from any Governmental Body that an assessment or
reassessment of the Company or any of its Subsidiaries is
proposed in respect of any Taxes, regardless of its merits.
Neither the Company nor any of its Subsidiaries has executed or
filed with any Governmental Body any agreement or waiver
extending the period for assessment, reassessment or collection
of any Taxes. Notices of assessment for all taxation years up to
and including the taxation year ended December 30, 1998 have been
received from the Canadian federal and provincial Governmental
Bodies.
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(d) WITHHOLDINGS AND REMITTANCES. The Company and each of the
Subsidiaries has withheld from each payment made to any of its
present or former Employees, officers and directors, and to all
persons who are non-residents of Canada for the purposes of the
INCOME TAX ACT (Canada) all amounts required by law to be
withheld, and furthermore, has remitted such withheld amounts
within the prescribed periods to the appropriate Governmental
Body. The Company and each of the Subsidiaries has remitted all
Canada Pension Plan contributions, provincial and state pension
plan contributions, unemployment insurance premiums, employer
health taxes and other Taxes payable by it in respect of its
Employees and has remitted such amounts to the proper
Governmental Body within the time required under the applicable
legislation. The Company and each of the Subsidiaries has
charged, collected and remitted on a timely basis all Taxes as
required under applicable legislation on any sale, supply or
delivery whatsoever, made by the Company.
(e) TAX BASIS. At the Closing Date, for purposes of the INCOME TAX
ACT (Canada), the Company will own depreciable property of the
prescribed classes and having undepreciated capital costs as
provided for in its most recently completed tax return (which are
set out in Schedule 4.1(34)) plus any additions and minus any
dispositions since that time in the ordinary course of business.
Schedule 4.1(34) sets forth the amount, as of the date of the
Annual Financial Statements, of (i) all federal, provincial,
state or local net operating loss, tax credit or charitable
contribution carryovers available to the Company and (ii) the tax
basis of the assets of the Company, by reasonable category,
reflected in the Annual Financial Statements, and includes an
explanation of how such items are reflected in the Annual
Financial Statements. The Company has provided to the Purchaser
complete and materially accurate workpapers supporting any
deferred Taxes or similar account on the Annual Financial
Statements.
(f) TAX ELECTIONS. Schedule 4.1(34) sets forth all federal, state or
provincial income tax elections that have been made or will be
made by the Vendor, Vendorco and the Company and the Subsidiaries
with respect to any period ending on or prior to the Closing Date
that will apply to any subsequent period.
(35) COMPLIANCE WITH LAWS. The Company and each of the Subsidiaries is in
compliance in all material respects with all applicable federal,
provincial, state and local laws, rules and regulations and all
requirements of all Governmental Bodies and has all necessary
Government Authorizations, and other authorizations required to carry
on the Business and to own, lease and operate the Assets in compliance
with such laws, rules and regulations and there are no Governmental
Authorizations which are necessary to the conduct of the Business
other than those of a routine nature. Schedule 4.1(35) contains a
complete accurate list of all material Governmental Authorizations
required by the Company and the Subsidiaries to conduct the Business.
There have been no violations or breaches of such Governmental
Authorizations and no proceedings are pending or, to the knowledge of
the Company, threatened, which could result
-41-
in the revocation, cancellation or any adverse modification or
limitation of any Governmental Authorizations. Neither the Company nor
any of its Subsidiaries is subject to any outstanding deficiency
notice, default notice, control orders, orders for compliance or work
orders from or required by any Governmental Body and to the knowledge
of the Company, there are no facts or circumstances which may give
rise to any such deficiency notices, control orders, orders for
compliance or work orders. Neither the Company nor any of its
Subsidiaries has received any notice, not previously complied with,
from any federal, provincial or municipal authority or any insurance
or inspection body, that any of its properties, facilities, equipment
or business procedures or practices fails to comply with any
Applicable Law, ordinance, regulation, building or zoning law, or
requirement of any public authority or body. To the knowledge of the
Company, there are no regulations or legislation pending before any
federal, provincial, state, local or foreign governmental body or
legislature which, if adopted, would have a materially adverse effect
on the Business. The transactions provided for in this Agreement will
not result in the cancellation or termination of any of the
Governmental Authorizations, and no consent from or notice to any
federal, provincial, state or local Governmental Body is required to
transfer any Governmental Authorization to the Purchaser.
(36) INSURANCE. The Company and its Subsidiaries maintains insurance
policies bearing the numbers, for the terms, with the companies, in
the amounts, providing the general coverage, and with the premiums set
forth on Schedule 4.1(36). All of such policies are in full force and
effect and the Company and the Subsidiaries are not in default of any
provision thereof. Neither the Company nor any of its Subsidiaries has
received notice from any insurer of any such policies of its intention
to cancel or refusal to renew any policy issued by it.
(37) BANKRUPTCY. Neither the Company, any of its Subsidiaries nor the
Vendor has proposed a compromise or arrangement to its creditors
generally, had any petition for a receiving order in bankruptcy filed
against it, taken any proceeding with respect to a compromise or
arrangement, taken any proceeding to have itself declared bankrupt or
wound-up, taken any proceeding to have a receiver appointed over any
part of its assets, had any encumbrancer take possession of any of its
property, or had any execution or distress become enforceable or
become levied upon any of its property.
(38) RESIDENCY. The Vendor is not a non-resident of Canada within the
meaning of the INCOME TAX ACT (Canada).
(39) REGULATORY APPROVALS. No Governmental Authorization, notice, order,
consent, approval, license, permit, waiver or filing is required to be
made or obtained on the part of the Vendor, the Company or any of the
Subsidiaries in connection with the execution, delivery and
performance of this Agreement or any other documents and agreements to
be delivered hereunder or the performance of the obligations hereunder
or thereunder.
(40) COMPETITION ACT AND HSR ACT. The Company, together with its
Subsidiaries and Affiliates, (i) do not have assets in Canada, or
gross revenues from sales in, from or into Canada, that exceed
$35,000,000 in aggregate value as determined in accordance with the
Notifiable Transactions Regulations promulgated under the COMPETITION
ACT (Canada); and (ii) do not have assets in the United States with a
book value of US $15,000,000 or more, or gross revenues from sales
into the United States of US$25,000,000 or more during the Company's
most recent fiscal year as determined in accordance with the U.S.
XXXX-XXXXX-XXXXXX ANTITRUST IMPROVEMENTS ACT.
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(41) CIRCULAR. The information to be contained in the Circular or any
amendment thereto (including any information referred to therein or
incorporated therein by reference) will not contain a
misrepresentation (as such term is defined in the SECURITIES ACT
(British Columbia)) as at the date thereof.
(42) ACQUISITION PROPOSALS. Neither the Company nor the Vendor has received
an Acquisition Proposal which is outstanding at the date of this
Agreement or any request for non-public information relating to the
Vendor, the Company or FACS Management or any of their respective
Affiliates in connection with an Acquisition Proposal or for access to
the properties, books or records of the Vendor, the Company or FACS
Management, by any Person that informs the Vendor, the Company or FACS
Management that such Person is considering making an Acquisition
Proposal or has made an Acquisition Proposal that in any such case, is
outstanding at the date of this Agreement.
(43) STATEMENTS AND OTHER DOCUMENTS NOT MISLEADING. Neither this Agreement,
including all Exhibits and Schedules, nor any other financial
statements, documents or instruments delivered to the Purchaser in
connection with this Agreement and the transactions contemplated by
this Agreement, contains or will contain any untrue statement of any
material fact or omits or will omit to state any material fact
required to be stated to make such statement, document or instrument
not misleading. The information contained in any public filing made by
the Vendor does not contain a misrepresentation (as such term is
defined in the SECURITIES ACT (British Columbia)) as at the date
thereof.
4.2 REPRESENTATIONS AND WARRANTIES OF THE VENDOR AND VENDORCO REGARDING THE
VENDOR, THE PURCHASED SHARES AND THE NOTES. As a material inducement to the
Purchaser to enter into this Agreement and purchase the Purchased Shares and the
Notes, the Vendor and Vendorco jointly and severally make the following
representations and warranties to the Purchaser:
(1) STATUS OF THE VENDOR. The Vendor is an unincorporated open-ended,
single purpose trust established and validly existing under the laws
of the Province of British Columbia with all necessary power,
authority, qualification and license to hold the Purchased Shares and
the Notes in trust for the use and benefit of the Unitholders.
(2) CORPORATE AUTHORITY OF THE VENDOR. The Trustees have approved the
Transactions subject to the approval of the Unitholder Resolution and
the Trustees have unanimously resolved to unanimously recommend to the
Unitholders that they vote in favour of the Unitholder Resolution. The
Trustees have duly authorized and approved the execution and delivery
of this Agreement and the performance of its obligations as herein
provided. Except for the actions required to hold the Unitholder
Meeting, no other action by the Vendor is required in connection with
the foregoing.
(3) POWER AND AUTHORITY OF THE VENDOR. The Trustees hold the Purchased
Shares and Notes for the use and benefit of the Unitholders in
accordance with the terms of the Trust
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Deed. The Trustees have the legal right, power and authority to
conduct the affairs of the Vendor, including without limitation, the
right, power and authority to enter into, execute and deliver on
behalf of the Vendor this Agreement and to perform or cause to be
performed the obligations of the Vendor hereunder, provided only that
the power and authority of the Trustees to transfer the Purchased
Shares and Notes requires approval by the Unitholders which upon
approval of the Unitholder Resolution will be satisfied.
(4) DUE AUTHORIZATION; ENFORCEABILITY OF AGREEMENT. The entering into,
execution and delivery of this Agreement has been duly and validly
authorized and approved by all necessary action on the part of the
Trustees. This Agreement constitutes a legal, valid and binding
obligation of the Vendor enforceable against it in accordance with its
terms except as the same may be limited by bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors'
rights generally, now or hereafter in effect, and subject to the
availability of equitable remedies.
(5) NO BREACH, ETC. The execution, delivery and performance of this
Agreement in accordance with its terms by the Vendor and the
consummation of the transactions as provided for herein do not and
will not: (a) conflict with, violate or result in the breach of any of
the terms or conditions of, or constitute a default under (i) the
Trust Deed or any Contract or any Governmental Authorization to which
the Vendor is a party or by which the Vendor or the Purchased Shares
or Notes are bound or affected, or (ii) any law, regulation, ordinance
or decree to which, the Vendor or the Purchased Shares or Notes are
bound or subject, or (b) result in the creation or imposition of any
Encumbrance or right, including rights of termination or cancellation,
in or with respect to, or otherwise adversely affect the Purchased
Shares, the Notes or the Vendor.
(6) FURTHER APPROVALS BY THE VENDOR (SUBJECT TO THE APPROVAL OF THE
UNITHOLDER RESOLUTION). At the Closing, subject to the approval of the
Unitholder Resolution having been obtained:
(a) the Trustees will have approved any and all agreements, documents
or instruments to be executed and/or delivered by the Vendor in
connection herewith and the performance of its obligations
thereunder (collectively, this Agreement and all documents
referred to in this subsection 4.2(6)(a), the "PURCHASE
DOCUMENTS") and no other action by the Vendor will be required in
connection with the foregoing;
(b) the Trustees will have the legal right, power and authority to
enter into, execute and deliver on behalf of the Vendor the
Purchase Documents and to perform or cause to be performed the
obligations of the Vendor thereunder;
(c) the entering into, execution and delivery of the Purchase
Documents by the Vendor hereunder will have been duly and validly
authorized and approved by all necessary action on the part of
the Trustees. Each of the Purchase Documents to which the Vendor
is a party will constitute when executed a legal, valid and
binding obligation of the Vendor enforceable against it in
accordance with their respective terms except as the same may be
limited by bankruptcy, insolvency,
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reorganization or other laws affecting the enforcement of
creditors' rights generally, now or hereafter in effect, and
subject to the availability of equitable remedies; and
(d) the performance of the Agreement and the Purchase Documents in
accordance with their respective terms by the Vendor, and the
consummation of the transactions provided for therein will not:
(a) conflict with, violate or result in the breach of any of the
terms or conditions of, or constitute a default under (i) the
Trust Deed, or any other Contract or any Governmental
Authorization to which the Vendor is a party or by which the
Vendor or the Purchased Shares or Notes are bound or affected, or
(ii) any law, regulation, ordinance or decree to which the Vendor
or the Purchased Shares or Notes are bound or subject, or (b)
result in the creation or imposition of any Encumbrance or right,
including rights of termination or cancellation, in or with
respect to, or otherwise adversely affect, the Purchased Shares
or the Notes.
(7) NO AGREEMENTS TO SELL SHARES OR NOTES AND NO OPTIONS. There is no
Contract, option or any other right of any Person binding upon or
which at any time in the future may become binding upon the Vendor to
sell, transfer, assign, pledge, charge, mortgage or in any other way
dispose of or encumber any of the Purchased Shares or the Notes other
than pursuant to this Agreement. The Vendor is not a party to or bound
by any Contract (other than the Trust Deed, certain provisions of
which require approval by the Unitholders and which upon approval of
the Unitholder Resolution will be satisfied) or other obligation
whatsoever which limits or impairs the Vendor's ability to sell or
convey good and marketable title to the Purchased Shares and the
Notes, free and clear of any and all Encumbrances in accordance with
the terms of this Agreement. No Person has any Contract or option or
any right or privilege (whether by law, pre-emptive right or contract)
capable of becoming a contract, including convertible securities,
warrants or convertible obligations of any nature, for the purchase of
any of the Purchased Shares or Notes, other than the Purchaser and
Vendorco pursuant to this Agreement. None of the Purchased Shares is
subject to any voting trust, shareholder agreement or voting agreement
other than the corporate governance agreement referred to in Section
9.6 of this Agreement. Upon the completion of the transactions as
contemplated by this Agreement, the Vendor shall have transferred to
Vendorco, and Vendorco shall have transferred to the Purchaser,
beneficial, legal and registered title to all of the Purchased Shares
free and clear of any and all Encumbrances.
(8) TITLE TO PURCHASED SHARES. The Vendor holds the Purchased Shares for
the use and benefit of the Unitholders in accordance with the Trust
Deed and has good and marketable title to the Purchased Shares free
and clear of any and all Encumbrances. Subject to the approval of the
Unitholder Resolution, the Vendor has the sole and exclusive right to
sell, transfer and assign the legal, beneficial and registered title
to the Purchased Shares to Vendorco in accordance with the terms of
this Agreement, and at the Closing, will transfer the legal,
beneficial and registered title to the Purchased Shares to Vendorco
free and clear of all Encumbrances.
(9) TITLE TO NOTES. The aggregate principal amount outstanding under the
Notes is now and as at the Closing Date shall be $37,500,000. The
Vendor holds the Notes for the use and benefit of the Unitholders in
accordance with the Trust Deed, free and clear of all
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Encumbrances and, subject to the approval of the Unitholder
Resolution, has the power and authority to sell, assign or otherwise
transfer the legal and beneficial title to the Notes and, at the
Closing, will transfer the legal and beneficial title to the Notes to
Vendorco free and clear of all Encumbrances. The Vendor has not
assigned or agreed to assign the Notes to any Person other than the
Purchaser and Vendorco, pursuant to this Agreement. All agreements and
instruments governing the terms and conditions of the Notes are listed
in Schedule 4.1(9) and true and complete copies of such documentation
has been delivered to the Purchaser. The amount outstanding under the
Notes bears interest at 12.5% per annum. There are no contracts,
agreements, arrangements or commitments between the Vendor and
Vendorco or the Company the terms of which would: (i) reduce the
principal amount of the Notes; (ii) extend the maturity date
applicable to the principal amount owing under the Notes; (iii) reduce
the rate of interest payable in respect of the Notes; or (iv) extend
any applicable interest payment dates relating to the Notes. The
Vendor has not waived any Default or Event of Default (as those terms
are defined in the Notes) under the Notes. Except as set out on
Schedule 4.1(9), the Vendor has not entered into any agreement or
taken any action that would subject the Notes to any subordination,
reduction or disallowance by any set-off, right of recoupment,
defence, counterclaim or impairment of any kind. The Notes are
unsecured.
4.3 REPRESENTATIONS AND WARRANTIES OF VENDORCO REGARDING VENDORCO, THE PURCHASER
SHARES AND THE NOTES. As a material inducement to the Purchaser to enter into
this Agreement and purchase the Purchased Shares and the Notes, Vendorco makes
the following representations and warranties to the Purchaser:
(1) STATUS OF VENDORCO. Vendorco is a corporation duly organized, validly
existing and in good standing under the laws of Canada and has full
power and authority and is duly authorized, qualified and licensed to
hold the Purchased Shares and the Notes. The only property and assets
owned by Vendorco, and that will be owned by Vendorco prior to
Closing, are its rights pursuant to this Agreement. At Closing, the
only property and assets owned by Vendorco will be the Purchased
Shares, the Notes and its rights pursuant to this Agreement. Vendorco
is not a party to any contracts or agreements other than this
Agreement. Vendorco has no liabilities or obligations of any nature
whatsoever, whether absolute, contingent or otherwise (including,
without limitation, liabilities which are not yet due and liabilities
for Taxes), other than pursuant to this Agreement.
(2) CORPORATE AUTHORITY OF VENDORCO. The board of directors and
shareholders of Vendorco have duly authorized and approved the
execution and delivery of this Agreement and any and all agreements,
documents or instruments to be executed and/or delivered by Vendorco
in connection herewith, and the performance of its obligations
hereunder and thereunder (collectively, all documents referred to in
this subsection 4.3(2), the "Purchase Documents"). No other action by
Vendorco is required in connection with the foregoing.
(3) POWER AND AUTHORITY OF VENDORCO. Vendorco has full right, power and
authority to enter into, execute and deliver this Agreement and all
other agreements, documents and instruments required to be delivered
by it hereunder and to perform its obligations hereunder and
thereunder.
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(4) DUE AUTHORIZATION; ENFORCEABILITY OF AGREEMENT. The entering into,
execution and delivery of this Agreement and all other agreements to
be delivered by Vendorco hereunder have been duly and validly
authorized and approved by all necessary action on the part of
Vendorco. Each of this Agreement and the Purchase Documents to which
Vendorco is a party constitutes (or will constitute when executed) a
legal, valid and binding obligation of Vendorco enforceable against it
in accordance with their respective terms except as the same may be
limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally, now or
hereafter in effect, and subject to the availability of equitable
remedies.
(5) NO BREACH, ETC. The execution, delivery and performance of this
Agreement by Vendorco and the consummation of the Transactions do not
and will not: (a) conflict with, violate or result in the breach of
any of the terms or conditions of, or constitute a default under (i)
the constating documents of Vendorco or, any Contract to which
Vendorco is a party or any Governmental Authorization to which
Vendorco is party or by which Vendorco or any of the Purchased Shares
or the Notes are bound or affected, or (ii) any law, regulation,
ordinance or decree to which Vendorco, or any of the Purchased Shares
or the Notes are bound or subject, or (b) result in the creation or
imposition of any Encumbrance or right, including rights of
termination or cancellation, in or with respect to, or otherwise
adversely affect, the Purchased Shares, the Notes, or Vendorco.
(6) NO AGREEMENTS TO SELL SHARES OR NOTES AND NO OPTIONS. There is no
Contract, option or any other right of any Person binding upon or
which at any time in the future may become binding upon Vendorco to
sell, transfer, assign, pledge, charge, mortgage or in any other way
dispose of or encumber any of the Purchased Shares or the Notes other
than pursuant to this Agreement. Vendorco is not a party to or bound
by any Contract or other obligation whatsoever which limits or impairs
Vendorco's ability to sell or convey good and marketable title to the
Purchased Shares and the Notes, free and clear of any and all
Encumbrances in accordance with the terms of this Agreement. No Person
has any Contract or option or any right or privilege (whether by law,
pre-emptive right or contract) capable of becoming a contract,
including convertible securities, warrants or convertible obligations
of any nature, for the purchase of any of the Purchased Shares or
Notes, other than the Purchaser pursuant to this Agreement. None of
the Purchased Shares is subject to any voting trust, shareholder
agreement or voting agreement other than the corporate governance
agreement referred to in Section 9.6 of this Agreement. Upon the
completion of the transactions contemplated by this Agreement,
Vendorco shall have transferred to the Purchaser beneficial, legal and
registered title to all of the Purchased Shares, free and clear of any
and all Encumbrances.
(7) TITLE TO PURCHASED SHARES. At Closing, Vendorco shall be the sole
legal, beneficial and registered owner of the Purchased Shares and
shall have good and marketable title to the Purchased Shares free and
clear of any and all Encumbrances. At Closing, Vendorco shall have the
sole and exclusive right to sell, transfer and assign the legal,
beneficial and registered title to the Purchased Shares to the
Purchaser in accordance with the terms of this Agreement, and upon
Closing, will transfer the legal, beneficial and registered title to
the Purchased Shares to the Purchaser free and clear of all
Encumbrances.
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(8) TITLE TO NOTES. At Closing, Vendorco shall have good legal and
beneficial ownership of the Notes, and shall have the power and
authority to sell, assign or otherwise transfer the legal and
beneficial title to the Notes, free and clear of all Encumbrances.
Upon Closing, Vendorco will transfer the legal and beneficial title to
the Notes to the Purchaser free and clear of all Encumbrances.
Vendorco has not assigned or agreed to assign the Notes to any Person
other than the Purchaser pursuant to this Agreement. Vendorco has not
waived any Default or Event of Default (as those terms are defined in
the Notes) under the Notes. Except as set out in Schedule 4.1(9),
Vendorco has not entered into any agreement or taken any action that
would subject the Notes to any subordination, reduction or
disallowance by any set-off, right of recoupment, defence,
counterclaim or impairment of any kind.
4.4 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations,
warranties and covenants of the Vendor and Vendorco contained herein shall
survive the Closing, and notwithstanding such Closing and any investigation made
by or on behalf of the Purchaser, shall continue in full force and effect after
the Closing for the benefit of the Purchaser for a period of three (3) years
following the Closing, subject to the provisions of Article 8.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND IMRM
5.1 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND IMRM. As a material
inducement to the Vendor to enter into this Agreement and to consummate the
transactions provided for in this Agreement, the Purchaser and IMRM hereby
represent and warrant to the Vendor that:
(1) CORPORATE STATUS. The Purchaser is a company duly organized, validly
existing and in good standing under the laws of the Province of Nova
Scotia and has full power and authority to own its properties and to
carry on the business presently conducted by it. IMRM is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each of the Purchaser and IMRM has the
corporate power and authority to enter into and perform its respective
obligations under this Agreement and any and all agreements, documents
or instruments to be executed and delivered by the Purchaser or IMRM
in connection herewith (collectively, the "IM DOCUMENTS") to which it
is a party.
(2) DUE AUTHORIZATION; ENFORCEABILITY OF AGREEMENT. The board of directors
of the Purchaser and IMRM have duly authorized and approved the
execution and delivery of this Agreement and the IM Documents to which
each is a party and the performance of the transactions provided for
herein or therein. No other corporate action by either the Purchaser
or IMRM is required in connection herewith or therewith. This
Agreement constitutes and, when executed, the IM Documents will
constitute legal, valid and binding obligations of the Purchaser and
IMRM to the extent they are parties thereto, enforceable against the
Purchaser and IMRM to the extent they are a party thereto in
accordance with their terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally now or hereafter in effect,
and subject to the availability of equitable remedies.
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(3) NO BREACH, ETC. The execution, delivery and performance of this
Agreement and the IM Documents by the Purchaser and IMRM and the
consummation of the Transactions do not and will not conflict with,
violate or result in the breach of any of the terms or conditions, or
constitute a default under (i) the constating documents of the
Purchaser or IMRM, or (ii) any law, regulation, ordinance or degree to
which the Purchaser or IMRM or any of their assets or properties are
bound or subject, or (iii) any Contract to which the Purchaser or IMRM
is a party or any of their assets or properties are bound or subject.
(4) REGULATORY APPROVALS. No Governmental Authorization, notice, order,
consent, approval, license, permit, waiver or filing is required to be
made or obtained on the part of the Purchaser or IMRM in connection
with the execution, delivery and performance of this Agreement or the
IM Documents or the performance of the obligations hereunder or
thereunder, other than the filing of a notification under the
INVESTMENT CANADA ACT.
(5) BANKRUPTCY. Neither the Purchaser nor IMRM has proposed a compromise
or arrangement to its creditors generally, had any petition for a
receiving order in bankruptcy filed against it, taken any proceeding
with respect to a compromise or arrangement, taken any proceeding to
have itself declared bankrupt or wound up, taken any proceeding to
have the receiver appointed over any part of its assets, had any
encumbrancer take possession of any of its property, or had any
execution or distress become enforceable or become levied upon any of
its property. The Transactions will not result in the Purchaser or
IMRM becoming insolvent.
(6) REPRESENTATION AND WARRANTY INSURANCE. A true and complete copy of the
commitment provided by the insurer to the Purchaser relating to the
insurance referred to in Section 8.4 has been provided to the Vendor.
5.2 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations,
warranties and covenants of the Purchaser and IMRM contained herein shall
survive the Closing, and notwithstanding such Closing and any investigation made
by or on behalf of the Vendor or the Company, shall continue in full force and
effect after the Closing for the benefit of the Vendor and the Company for a
period of three (3) years following the Closing, subject to the provisions of
Article 8.
ARTICLE 6
CONDUCT OF BUSINESS PENDING CLOSING
6.1 CONDUCT OF BUSINESS PENDING CLOSING. The Company agrees that between
the date hereof and the Closing Date, the Company shall and shall
cause the Subsidiaries to (except as may be specifically required to
comply with its obligations under this Agreement):
(a) except to the extent provided in Section 9.1, not take, suffer or
permit any action or omit to take any action which would cause
any of the representations and warranties of the Vendor or
Vendorco contained in this Agreement or in any Schedule or
Exhibit hereto to become untrue;
(b) conduct the Business in a good and diligent manner in the
ordinary and usual course consistent with past practice;
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(c) not enter into any Contract other than Contracts in the ordinary
course of business, and not amend, modify or terminate any
Records Management Agreement involving more than $10,000 per
annum, without the prior written consent of the Purchaser, and
not amend, modify or terminate any other Company Agreement except
in the ordinary course of business and pursuant to their terms;
(d) use its best reasonable efforts to preserve the Company's and the
Subsidiaries' business organization intact, to keep available the
service of its employees and to preserve its relationships with
customers, suppliers and others with whom it deals;
(e) not reveal to any party, other than the Purchaser or its
authorized representatives, any of the business procedures and
practices followed by the Company or the Subsidiaries in the
conduct of the Business except as permitted in this Agreement in
respect of a Superior Proposal;
(f) maintain in full force and effect all insurance currently
maintained by the Company or the Subsidiaries;
(g) keep the Premises and all of the Company's and the Subsidiaries'
equipment and tangible personal property in good operating repair
to current standards and perform all necessary repairs and
maintenance consistent with past practice;
(h) comply with all material provisions of any Company Agreement
applicable to it as well as with all Applicable Laws, rules and
regulations;
(i) not dispose of any Assets except in the ordinary course of
business;
(j) not engage in any transactions in respect of the Business which
involve the expenditure or commitment of more than $50,000 in the
aggregate in any month without the prior written consent of the
Purchaser;
(k) continue to maintain all of the Company's and Subsidiaries' usual
business books and records in accordance with past practices;
(l) not amend the memorandum, articles or by-laws of the Company or
any of the Subsidiaries;
(m) not declare or make any dividend or other payment on or with
respect to the Purchased Shares or any shares or partnership
units (as the case may be) in the capital of the Subsidiaries,
redeem or otherwise acquire any of its shares or units or issue
any shares or units or any option, warrant or right relating
thereto;
(n) not waive any material right or cancel any material claim;
(o) not to pay any bonuses or additional compensation to Employees or
increase the compensation or rate of compensation payable to any
Employees except in the ordinary course of business consistent
with past practice;
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(p) maintain the corporate existence of the Company and each of the
Subsidiaries and not merge or consolidate the Company or any of
the Subsidiaries with any other entity;
(q) not place any additional Encumbrances on any of the Assets or the
Owned Real Property other than in connection with purchase money
financing of capital expenditures permitted under subsection
6.1(j) above or otherwise approved in writing by the Purchaser;
(r) not borrow any money or become contingently liable for any
obligation or liability of others and not incur any debt,
liability or obligation of any nature to any party except for
obligations arising in the ordinary course of business and except
Debt incurred in the ordinary course of business up to the
Effective Date, it being acknowledged and agreed that any Debt
incurred after the Effective Date will require the consent of the
Purchaser;
(s) not engage in any extraordinary transactions or take any
extraordinary action to accelerate collections of Accounts
Receivable; and
(t) make interest payments in connection with the Notes in the
ordinary course of business consistent with past practice;
provided, however, that the Company shall not make any interest
payment or any other payments in connection with the Notes after
the Effective Date.
In addition, the Company agrees that between the Effective Date and the
Closing Date: (i) the Company shall not and shall cause the Subsidiaries not to
commit to or incur any cost, liability or expenditure in excess of $5,000
without the approval of the Purchaser, other than payment of remuneration to
employees in the ordinary course of business at rates in effect on the Effective
Date; and (ii) the Company and the Subsidiaries shall ensure that the amount of
records requiring filing or refiling shall not exceed the level of such records
as at the Effective Date.
In order that the Purchaser may provide timely responses to requests by the
Company and/or the Subsidiaries for the approval of any act to be taken or
obligation to be incurred by the Company or the Subsidiaries that requires the
approval of the Purchaser under this Section 6.1, the Purchaser hereby
designates Xxxx Xxxxx and Xxxxxx Xxxxxxx with the authority to approve any such
act or the incurring of any such obligation, and the approval of such act or the
incurring of such obligation by either such individual shall be binding upon the
Purchaser, and the Purchaser shall ensure that all such responses are provided
in a timely manner to enable the Company and the Subsidiaries to carry on the
Business in the normal course.
ARTICLE 7
FURTHER COVENANTS AND AGREEMENTS
7.1 ACCESS TO INFORMATION. Until the Closing and subject to the provisions of
the confidentiality agreement executed by Iron Mountain Records Management, Inc.
and the Company dated June 20, 2000, the Company will give to the Purchaser and
its agents full access
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to all of the Assets of the Company and the Subsidiaries and all of the
Company's and Subsidiaries' documents, books and records relating to its current
and past operations and to the Business, and shall permit the Purchaser and its
agents to make copies thereof, and the Company shall permit the Purchaser to
interview Employees during reasonable business hours and upon reasonable prior
notice. As soon as possible after the request of the Purchaser, the Company will
deliver letters addressed to any Governmental Body as may be reasonably
requested by the Purchaser or its agents authorizing each such Governmental Body
to release to the Purchaser such information and material presently in their
files with respect to the Leased Premises, the Owned Real Property, the Assets
or the Business together with advice as to any orders, directives, action,
requests, memoranda or instructions presently outstanding against the Leased
Premises, the Owned Real Property or the Assets or the Business or any part
thereof. Without limiting the generality of the foregoing, upon the request of
the Purchaser, the Company and the Subsidiaries shall, prior to Closing, provide
the Purchaser or its agents access to the Company's and the Subsidiaries' books
and records for the purpose of enabling the Purchaser (or its agents) to audit
such books and records and prepare audited financial statements of the Company
and the Subsidiaries if the Purchaser determines it requires such statements.
The provision and review of such documentation and the investigations made by or
on behalf of the Purchaser shall not limit, waiver, diminish the scope of, or
otherwise affect in any way the representations and warranties made by the
Vendor or Vendorco herein.
7.2 TERMINATION OR PERMANENT REMOVAL CHARGES. The Company and the Subsidiaries
shall not invoice or request payment of any amounts from customers or former
customers of the Company or its Subsidiaries, including, without limitation,
Customer Nos. 313, 104 and 252 identified in Schedule 4.1(19A) (the "IMRM
CUSTOMERS"), relating to or in respect of termination or permanent removal
charges for the transfer of such customers' or former customers' records to the
Purchaser or an Affiliate of the Purchaser. The Company represents and warrants
to the Purchaser that the Company and the Subsidiaries have not invoiced or
requested payment of any amounts from the IMRM Customers relating to such
matters prior to the date hereof.
7.3 COOPERATION. The Vendor, Vendorco and the Purchaser agree to execute and
deliver all other instruments and take all such other actions as either party
may reasonably request from time to time, before or after Closing and without
payment of further consideration, to effectuate the transactions provided herein
and to confer to Purchaser the benefits intended by such transactions. The
parties shall cooperate fully with each other and with their respective counsel
and accountants in connection with any steps required to be taken as part of
their respective obligations under this Agreement.
7.4 NOTICE OF BREACH OR DEFAULT. The Vendor and the Company shall make
reasonable efforts to give prompt notice to the Purchaser, and the Purchaser
shall make reasonable efforts to give prompt notice to the Vendor and the
Company, of (i) the occurrence or non-occurrence of any event of which such
party has knowledge, whose occurrence or non-occurrence does or would be likely
to cause any representation or warranty of such party contained in this
Agreement to be untrue or inaccurate at any time from the date hereof to the
Closing Date or (ii) any failure, of which such party has knowledge, of any of
the Company, Vendorco or the Vendor, on the one hand, or the Purchaser, on the
other hand, or any officer, director, employee or agent of any of the foregoing,
to comply with or satisfy any covenant,
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condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 7.5
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
7.5 CONSENTS TO CHANGE OF CONTROL. The Company shall use its best efforts to
obtain all third party or governmental consents required (i) by virtue of a
change of control of the Company pursuant to any Company Agreement; or (ii) to
consummate the Transactions.
7.6 ESCROW AGREEMENT. At Closing, the Purchaser, Vendorco and the Vendor shall
enter into the Escrow Agreement in the form of Exhibit 7.6.
7.7 CONFIDENTIALITY.
(a) The Vendor acknowledges that it may have had access to confidential
and proprietary information and trade secrets, including without limitation
financial information and information relating to the present and contemplated
products, techniques and modes of merchandising, marketing techniques,
procedures and know-how of the Company and confidential information and trade
secrets concerning the customers and clients of the Company, including their
names, addresses, historical product or service purchases and specifications,
the disclosure of any of which confidential and proprietary information and
trade secrets to competitors of the Company or to the general public would be
detrimental to the best interests of the Company. The Vendor acknowledges and
agrees with the Purchaser that the right to maintain the confidentiality of such
confidential and proprietary information and trade secrets, and the right to
preserve the goodwill of the Company, constitute proprietary rights which the
Purchaser is entitled to protect. Accordingly, the Vendor covenants and agrees
with the Purchaser that it will not at any time hereafter disclose any of such
confidential and proprietary information (other than information which is in the
public domain at the time of such disclosure or information which subsequently
comes into the public domain without breach of the Vendor of its obligations
hereunder) or trade secrets to any Person.
(b) Between the date hereof and the Closing and thereafter if the
Transaction is not completed for any reason, the Purchaser shall be bound by the
provisions of the confidentiality agreement executed by IMRM and the Company
dated June 20, 2000 as if it were a party thereto.
7.8 EXCLUSIVE DEALING.
(a) Except as hereinafter permitted, neither the Vendor nor the Company
shall, directly or indirectly, through any Trustee, officer, director,
employee, representative or agent or any of their respective
Affiliates:
(i) solicit, initiate or knowingly encourage (including by way of
furnishing non-public information or entering into any form of
agreement, transaction or understanding) the initiation of any
inquiries or proposals regarding an Acquisition Proposal;
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(ii) participate in any discussions or negotiations regarding any
Acquisition Proposal;
(iii) withdraw or modify in a manner adverse to the Purchaser the
approval of the Trustees of the Transactions or the Trustees'
recommendation that Unitholders vote in favour of the Unitholder
Resolution;
(iv) approve or recommend any Acquisition Proposal; or
(v) enter into any agreement related to any Acquisition Proposal;
provided, however, that, prior to receipt of approval of the
Unitholders of the Transactions, nothing shall prevent the Trustees
from considering and taking any action otherwise prohibited under
clauses (ii) through (v) in accordance with Sections 7.8 and 7.9 which
the Trustees determine, in good faith, after consultation with their
independent financial advisors and outside counsel, is necessary for
them to fulfill their fiduciary duties in respect of any unsolicited
BONA FIDE written Acquisition Proposal with respect to the Vendor or
the Company that is a proposal to acquire, directly or indirectly,
assets representing more than 50% of the book value of the Vendor's or
the Company's assets or more than 50% of the Vendor's outstanding
trust units or 50% of the Company's outstanding shares and Notes,
whether by way of merger, amalgamation, reorganization, consolidation,
arrangement, business combination, recapitalization, take-over bid,
sale of assets, sale or issue of shares or trust units or otherwise,
that the Trustees shall have determined, in good faith, after
consultation with their independent financial advisors and outside
counsel, is reasonably capable of being completed on the terms
proposed, taking into account all legal, financial, regulatory and
other aspects of the proposal and the party making such proposal, and
offers greater value to the Unitholders than the Transactions (and the
Vendor's independent financial advisors opine in writing that such
Acquisition Proposal is superior from a financial point of view) (any
such Acquisition Proposal being referred to herein as a "SUPERIOR
PROPOSAL").
(b) The Vendor and the Company shall immediately notify the Purchaser, at
first orally and then in writing, of all Acquisition Proposals of
which the Trustees or the Company are or become aware, or any
amendments to the foregoing, or any request of which the Vendor or the
Company are or become aware for non-public information relating to the
Vendor, the Company or FACS Management or any of their respective
Affiliates in connection with an Acquisition Proposal or for access to
the properties, books or records of the Vendor, the Company or FACS
Management, by any Person that informs the Vendor, the Company or FACS
Management that such Person is considering making, or has made, an
Acquisition Proposal. Such notice shall include a description to the
extent then known of the material terms and conditions of the
Acquisition Proposal (and the Vendor and the
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Company shall in a timely manner advise the Purchaser of all other
material terms of the Acquisition Proposal as they become known) and
the identity of the Person making such proposal, inquiry or contact
and the Vendor and the Company shall provide such other details of the
Acquisition Proposal, inquiry or contact as the Purchaser may
reasonably request.
(c) The Vendor and the Company shall immediately cease and cause to be
terminated all existing discussions or negotiations with any parties
conducted before the date of this Agreement with respect to an
Acquisition Proposal. Neither the Vendor nor the Company shall release
any third party from or waive any provision of, any confidentiality or
standstill agreement to which it is a party with respect to their
respective businesses, the Company or the Business.
(d) If the Vendor or the Company receives a request for non-public
information from a Person who proposes a BONA FIDE Acquisition
Proposal in respect of the Vendor or the Company (the existence and
content of which have been disclosed to the Purchaser), and the
Trustees determine that such proposal would be a Superior Proposal
pursuant to subsection 7.8(a) then, and only in such case, the
Trustees may, subject to the execution by such Person of a
confidentiality agreement (no less onerous to such Person than the
Purchaser's obligations to the Vendor and the Company in that regard),
provide such Person with access to non-public information regarding
the Vendor or the Company. The Vendor shall send a copy of any such
confidentiality agreement to the Purchaser immediately upon its
execution and shall provide the Purchaser with a list of or copies of
the information provided to such Person and immediately provide the
Purchaser with access to similar information to which such Person was
provided.
(e) Each of the Vendor and the Company shall ensure that its Trustees,
officers, directors, employees, representatives and agents and any
Affiliates of the Vendor and the Company and their respective
officers, directors and employees, representatives and agents are
aware of the provisions of this Section 7.8, and it shall be
responsible for any breach of this Section 7.8 by any of the
foregoing.
7.9 NOTICE BY THE VENDOR OF SUPERIOR PROPOSAL DETERMINATION.
(a) During the term of this Agreement, neither the Vendor nor the Company
shall accept, approve, recommend or enter into any agreement relating
to an Acquisition Proposal (other than a confidentiality agreement
contemplated by Section 7.8) on the basis that it would constitute a
Superior Proposal unless:
(i) it has provided the Purchaser with a copy of the Acquisition
Proposal document which the Trustees have determined would be a
Superior Proposal;
(ii) five (5) Business Days shall have elapsed from the date the
Purchaser received a copy of the Acquisition Proposal; and
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(iii) it has previously or concurrently with entering into such
agreement will have paid to the Purchaser the break fee payable
under Section 7.15.
(b) During the five (5) Business Day period referred to in subsection
7.9(a) above, the Vendor acknowledges that the Purchaser shall have
the opportunity, but not the obligation, to offer to amend the terms
of this Agreement, which amendment, for greater certainty, may
contemplate, in the Purchaser's discretion, a revised offer to
purchase the Purchased Shares and the Notes, or an offer to purchase
trust units of the Vendor or assets of the Company or such other
transaction as the Purchaser, in its discretion, may determine. The
Trustees will review any offer by the Purchaser to amend the terms of
this Agreement in good faith in order to determine, in their
discretion, in the proper exercise of their fiduciary duties, whether
the Purchaser's offer to amend the terms of this Agreement upon
acceptance by the Vendor would result in the Acquisition Proposal not
being a Superior Proposal. If the Trustees determine that the
Purchaser's offer to amend this Agreement would result in the
Acquisition Proposal not being a Superior Proposal, the Vendor and the
Purchaser will enter into an amended agreement with the Purchaser
reflecting the Purchaser's amended proposal. If the Trustees continue
to believe, in good faith and after consultation with their
independent financial advisors and independent outside counsel, that
the Acquisition Proposal is nonetheless a Superior Proposal and
therefore reject the Purchaser's amended proposal, the Vendor shall
pay the break fee to the Purchaser under Section 7.15 as required
thereunder.
(c) The Vendor shall promptly reaffirm its recommendation of the
Transactions by press release and at the Purchaser's option, by
supplementary mailing to Unitholders, after:
(i) any Acquisition Proposal (which is determined by the Trustees
under Section 7.8 or 7.9 not to be a Superior Proposal) is
publicly announced or made; or
(ii) the Purchaser increases (by written notice to the Vendor
pursuant to this Section 7.9), the consideration offered under
this Agreement in an amount or manner that the Trustees
determine, in accordance with this Section 7.9, matches or
xxxxxxx an Acquisition Proposal that the Trustees had initially
determined was a Superior Proposal;
any such press release shall be prepared in accordance with Section 13.3. The
Vendor also acknowledges and agrees that each successive modification of any
Acquisition Proposal which increases the consideration or otherwise materially
alters the terms thereof shall constitute a new Acquisition Proposal for
purposes of this Section 7.9.
7.10 RECOMMENDATION. The Vendor and the Company shall, and shall where
appropriate cause their respective Affiliates to, perform all obligations
required or desirable to be performed by the Vendor and the Company and their
respective Affiliates under this Agreement and shall do all such other acts and
things as may be necessary or desirable in order to
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consummate and make effective, as soon as reasonably practicable, the
Transactions and, without limiting the generality of the foregoing, the Vendor
or the Company, as appropriate in the circumstances shall, except as provided in
Sections 7.8 and 7.9:
(a) through the Trustees, recommend in the Circular and at the
Unitholder Meeting that Unitholders vote in favour of the
Unitholder Resolution, and all public comment by the Vendor and
the Company in relation to the Transactions shall be consistent
with and supportive of such recommendation; neither the Vendor
nor the Trustees shall recommend to Unitholders an Acquisition
Proposal and if an Acquisition Proposal shall have been
announced or otherwise become publicly known, the Trustees
shall (A) recommend against acceptance of such by the
Unitholders (and shall not fail to take a position or indicate
their inability to take a position) and (B) reconfirm their
approval and recommendation of the Transactions and their
recommendation that Unitholders vote in favour of the Unitholder
Resolution within five (5) Business Days of the first
announcement or other public knowledge of such an Acquisition
Proposal;
(b) not withdraw the recommendation that Unitholders vote in favour
of the Unitholder Resolution or change, modify or amend, in a
manner adverse to the completion of the Transactions by the
Purchaser, such recommendation;
(c) use all reasonable efforts to cause the Trustees and officers of
the Vendor and the officers and directors of the Company and FACS
Management to (i) support the Transactions, (ii) not dispose of
any trust units held by them before the Unitholder Resolution has
been approved by Unitholders or this Agreement is terminated in
accordance with its terms, whichever occurs first, and (iii) vote
the trust units held by them at the Unitholder Meeting in favour
of the Unitholder Resolution; and
(d) make all commercially reasonable efforts to actively solicit
proxies from the Unitholders on behalf of management of the
Vendor pursuant to the Circular (and in accordance with the
Applicable Law).
7.11 UNITHOLDER APPROVAL. The Vendor shall as soon as reasonably practicable
after the execution and delivery of this Agreement and in any event on or before
December 22, 2000, convene and hold the Unitholder Meeting for the purpose of
considering the Unitholder Resolution (and for any other proper purpose as may
be set out in the notice for such meeting).
7.12 INFORMATION CIRCULAR. The Vendor shall prepare the Circular together with
any other documents required by applicable securities laws, regulations, orders
and policy statements and other Applicable Laws in connection with the
Transactions, and the Vendor shall cause the Circular and other documentation
required in connection with the Unitholder Meeting to be sent, in a form
consented to by the Purchaser, acting reasonably, to each Unitholder and filed
as required by Applicable Laws within 10 days of the date of this Agreement. The
Purchaser will provide the Vendor with such information regarding the Purchaser
and IMRM as the Vendor may reasonably require to enable the Vendor to include in
the Circular such information in respect of the Purchaser and IMRM as may be
required by applicable securities laws, regulations, orders and policy
statements and other Applicable Laws.
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7.13 SECURITIES AND CORPORATE COMPLIANCE. The Vendor shall diligently do all
such acts and things as may be necessary to comply with National Policy
Statement No. 41 of the Canadian Securities Administrators in relation to the
Unitholder Meeting on an accelerated basis as contemplated in Section 1 of Part
XII thereof and, without limiting the generality of the foregoing, shall, in
consultation with the Purchaser, use its best efforts to accelerate the timing
contemplated by such policy.
7.14 PREPARATION OF FILINGS. The Vendor shall ensure that the Circular complies
with all Applicable Laws. Without limiting the generality of the foregoing, the
Vendor shall ensure that the Circular provides Unitholders with information in
sufficient detail to permit them to form a reasoned judgment concerning the
matters to be placed before them at the Unitholder Meeting.
7.15 BREAK FEE.
(a) If, on or before the Closing Date:
(i) the Purchaser shall terminate this Agreement pursuant to
subsection 12.1(b) (provided that if the Purchaser shall
terminate this Agreement pursuant to subsection 12.1(b)(ii) such
breach of a covenant shall have been with respect to a failure by
the Vendor, Vendorco or the Company to perform such covenant in a
material respect or the Vendor shall have been aware of an
Acquisition Proposal at the time of such termination) and (x) an
Acquisition Proposal shall have been made or publicly announced
by any Person before the Unitholder Meeting and not withdrawn at
least five (5) Business Days before the date of the Unitholder
Meeting or (y) the Vendor, the Company or any of their Affiliates
enters into an agreement with respect to an Acquisition Proposal,
or an Acquisition Proposal is consummated, after the date hereof
and prior to the expiration of twelve months following the
termination of this Agreement, unless at the time of such
termination a Specified Purchaser Event shall have occurred and
is continuing;
(ii) (A) the Purchaser shall terminate this Agreement pursuant to
subsection 12.1(e)(i) and (x) an Acquisition Proposal shall have
been made or publicly announced by any Person before the
Unitholder Meeting and not withdrawn at least five (5) Business
Days before the date of the Unitholder Meeting or (y) the Vendor,
the Company or any of their Affiliates enters into an agreement
with respect to an Acquisition Proposal, or an Acquisition
Proposal is consummated, after the date hereof and prior to the
expiration of twelve months following the termination of this
Agreement, or (B) if the Purchaser shall terminate this Agreement
pursuant to subsections 12.1(e)(ii) or (iii), unless at the time
of such failure to recommend or reconfirm, withdrawal or adverse
recommendation or change or recommendation of an Acquisition
Proposal, or determination, a Specified Purchaser Event shall
have occurred and is continuing;
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(iii) the Vendor shall terminate this Agreement pursuant to subsection
12.1(f), unless at the time of such termination a Specified
Purchaser Event shall have occurred and is continuing;
(iv) either the Vendor or the Purchaser shall terminate this Agreement
pursuant to subsection 12.1(g), unless at the time of such
termination a Specified Purchaser Event shall have occurred and
is continuing, and (x) an Acquisition Proposal shall have been
made or publicly announced by any Person before the Unitholder
Meeting and not withdrawn at least five (5) Business Days before
the date of the Unitholder Meeting and (y) the Vendor or the
Company or any of their Affiliates enters into an agreement with
respect to an Acquisition Proposal, or an Acquisition Proposal is
consummated, after the date hereof and prior to the expiration of
twelve (12) months following the termination of this Agreement;
or
(v) the Purchaser shall terminate this Agreement pursuant to
subsection 12.1(j), unless at the time of such termination a
Specified Purchaser Event shall have occurred and is continuing;
then in any such case the Company shall pay, as liquidated damages, to the
Purchaser $2,000,000 in immediately available funds to an account designated by
the Purchaser. Such payment shall be due (A) in the case of a termination by the
Purchaser specified in clauses (i), (ii), (iv) or (v) above, within five (5)
Business Days of written notice of termination by the Purchaser, and (B) in the
case of a termination by the Vendor specified in clause (iii) or a termination
by the Vendor specified in clause (iv), prior to or at the time of termination
of this Agreement (provided that if any payment under clauses (i), (ii) or (iv)
is not otherwise payable unless the circumstances described in subclauses
(i)(y), (ii)(y) or (iv)(y) shall have occurred, then such payment shall be due
at or prior to the earlier of the entering into of the agreement and the
consummation of the transaction referred to therein).
(b) If (i) the Purchaser terminates this Agreement pursuant to subsection
12.1(e)(i), (ii) an Acquisition Proposal shall not have been made or
publicly announced before the Unitholder Meeting, or if an Acquisition
Proposal shall have been made or publicly announced before the
Unitholder Meeting it shall have been withdrawn before the Unitholder
Meeting and (iii) the Unitholders shall have failed to approve the
Unitholder Resolution at the Unitholder Meeting, then the Company
shall pay to the Purchaser $500,000.00 as liquidated damages in
immediately available funds to an account designated by the Purchaser,
payable within two (2) Business Days of such termination.
(c) The parties agree that the payments contained in this Section 7.15 are
an integral part of the transactions contemplated by this Agreement
and constitute liquidated damages and not a penalty. For greater
certainty, the parties agree that if the Company pays to the Purchaser
the amounts required by, and in accordance with, Section 7.15, the
Purchaser shall have no other remedy for any breach of this Agreement
by the Vendor, Vendorco or the Company. Any payment due under
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subsection 7.15(a) or 7.15(b) shall be reduced dollar-for-dollar by
any payment previously made under subsection 7.15(b) or Section 12.4.
7.16 INVESTMENT CANADA NOTIFICATION. Within 30 days following the Closing Date,
the Purchaser shall file a notification with Industry Canada pursuant to the
requirements of the INVESTMENT CANADA ACT.
7.17 SUPPORT AGREEMENT. The Purchaser's obligations under this Agreement are
subject to the execution and delivery of the Support Agreement.
7.18 PURCHASE OF XXXXXX XXXXXX'X INTEREST IN FACS RECORDS LIMITED PARTNERSHIP.
On or prior to Closing, the Company shall purchase Xxxxxx Xxxxxx'x interest in
FACS Records Limited Partnership for a purchase price of US$400,000 on condition
that Xxxxxx Xxxxxx has no recourse whatsoever against the Company or any
Subsidiaries in respect of his interest in FACS Records Limited Partnership. The
Company shall provide the Purchaser with copies of all agreements and documents
delivered or to be delivered in connection with this purchase from Xxxxxx
Xxxxxx. At Closing, the Purchaser shall provide funds to the Company (either by
way of loan, equity or otherwise) sufficient to purchase Xxxxxx Xxxxxx'x
interest in FACS Records Limited Partnership as contemplated by this Section
7.18.
7.19 CHANGE OF NAME. The Vendor shall, within ninety (90) days following Closing
dissolve or change its name to delete any reference to "FACS Records Storage".
7.20 ACTIONS TO SATISFY CLOSING CONDITIONS. Each of the parties hereto hereby
agrees to take all such actions as are within its power and control, and to use
its reasonable efforts to cause other actions to be taken which are not within
its power and control, so as to ensure compliance with any conditions set forth
in Articles 9 and 10 hereof which are for the benefit of any other party hereto.
ARTICLE 8
INDEMNIFICATION AND COVENANTS
8.1 GENERAL INDEMNITY BY COMPANY AND VENDORCO. Subject to the limitations on
liability and on recourse in respect thereof contained in this Article 8, in the
event that the Transactions are not completed the Company shall, and in the
event that the Transactions are completed Vendorco shall, indemnify and save
harmless the Purchaser and IMRM and their respective directors, officers, agents
and employees from and against any and all claims, actions, suits, losses,
costs, damages, expenses and liabilities, including, without limitation,
reasonable legal fees, which any of them may directly or indirectly suffer or
incur as a result of or in connection with:
(a) any breach of, incorrectness or misrepresentation in, any
representation or warranty made by the Vendor or Vendorco in this
Agreement or under any other agreement or instrument executed or
delivered by the Vendor or Vendorco pursuant to this Agreement;
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(b) any breach of or non-fulfilment by the Vendor, Vendorco or the Company
of any covenant or agreement of the Vendor, Vendorco or the Company
contained in this Agreement or under any other agreement or instrument
executed and delivered by the Vendor, Vendorco or the Company pursuant
to this Agreement; and
(c) any and all acts, suits, proceedings, demands, assessments, judgments,
legal fees, costs and expenses incident to any of the foregoing.
8.2 INDEMNITY BY THE VENDOR. The Vendor agrees: (i) to vote and take such other
action as appropriate or necessary with respect to the Purchased Shares and/or
the Notes and the Vendor's ownership thereof to facilitate, cause or permit, as
the case may be, the Company to comply with all of its obligations under this
Agreement and to cause the business and affairs of the Company to be carried on
in a manner contemplated by this Agreement; (ii) not to acquiesce in, or take
any action as the owner of the Purchased Shares and/or the Notes which would
cause or permit, the Company to default in observing any of its obligations
under this Agreement. and (iii) subject to the limitations on its liability and
on recourse in respect thereof as set forth in this Article 8, to be liable for
and to indemnify and save harmless the Purchaser from all claims, actions,
suits, losses, costs, damages, expenses and liabilities, including, without
limitation, reasonable legal fees, which it may suffer or incur as a result of
or in connection with, any breach of, or incorrectness or misrepresentation in,
any representation or warranty made by the Vendor in this Agreement or any
Purchase Document or any breach of or non-fulfillment by the Vendor of any
covenant or agreement of the Vendor contained in this Agreement or any Purchase
Document.
8.3 GENERAL INDEMNITY BY THE PURCHASER. Subject to the limitations on its
liability and on recourse in respect thereof contained in this Article 8, the
Purchaser agrees to indemnify and save harmless the Vendor and its Trustees and
the Company and its directors, officers and employees from and against all
claims, actions, suits, losses, costs, damages, expenses and liabilities
including, without limitation, reasonable legal fees, which any of them may
directly or indirectly suffer or incur as a result of or in connection with:
(a) any breach of, incorrectness or misrepresentation in any
representation or warranty made by the Purchaser or IMRM in this
Agreement or under any other agreement or instrument executed or
delivered by the Purchaser or IMRM pursuant to this Agreement;
(b) any breach of or non-fulfilment of any covenant or agreement of the
Purchaser or IMRM contained in this Agreement or under any other
agreement or instrument executed and delivered by the Purchaser or
IMRM pursuant to this Agreement; and
(c) any and all acts, suits, proceedings, demands, assessments, judgments,
legal fees, costs and expenses incident to any of the foregoing.
8.4 REPRESENTATION AND WARRANTY INSURANCE. The Purchaser shall: (i) arrange for
insurance to cover losses that may be incurred by the Purchaser arising from the
breach of the Vendorco's representations and warranties contained in this
Agreement; and (ii) comply with or
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satisfy or cause to be satisfied all conditions for such insurance that are
within its power and control to satisfy or cause to be satisfied. The insurance
arranged by the Purchaser involves an insurance policy insuring Vendorco and
Vendorco has (i) signed the application and will sign such other documents as
may reasonably be required for the Purchaser to obtain such insurance policy
(the "POLICY") and which are not inconsistent with the terms of this Agreement,
(ii) assign all of its rights and benefits under the Policy to and for the
benefit of the Purchaser pursuant to agreements and documents as reasonably
required by the insurance company, and (iii) comply with or satisfy or cause to
be satisfied all conditions for such insurance that are within its power and
control to satisfy or cause to be satisfied, provided that, upon completion of
the Transactions, in no event shall the Vendor (or any of the Trustees) have any
obligation or liability to any party hereto or to the insurer(s) in respect of
or pursuant to the Policy including, without limitation, any direct or indirect
liability to the Purchaser, IMRM or the Company (except as contemplated in
Article 8 hereof) or to the insurer(s) as a result of any untruth, inaccuracy or
breach of any of the representations and warranties herein ("BREACH") and no
obligation to make or otherwise be party to any claim in respect of any Breach
or the Policy in respect thereof. The Purchaser, IMRM and the Company
acknowledge and agree that they will have no claim, and will not bring or make
any claim, against the Vendor (or the Trustees thereof) in respect of the Policy
or any Breach on the part of the Vendor or Vendorco in this Agreement. The
Company shall pay up to $150,000 of the cost of obtaining the Policy and such
amount shall be deducted from the Share Purchase Price in accordance with
subsection 3.3(b)(iv). The Purchaser shall pay for all such costs in excess of
$150,000.
8.5 LIMITATIONS ON INDEMNITIES.
(a) Each Party hereby acknowledges and agrees that its only recourse in
respect of this Agreement shall be pursuant to and subject to the
provisions set forth in this Agreement.
(b) The only recourse of the Purchaser and IMRM in respect of the
representations, warranties, covenants or agreements contained herein
or in the Purchase Documents or otherwise in respect of this Agreement
against any and all of the Vendor, Vendorco the Unitholders and the
Trustees (collectively, the "VENDOR GROUP") and the only liabilities
or obligations of any and all of the Vendor Group shall be as set
forth in this Article 8.
(c) The only recourse of the Company, Vendorco and the Vendor in respect
of the representations, warranties, covenants or agreements contained
herein or in the Purchase Documents or otherwise in respect of this
Agreement against the Purchaser and IMRM (collectively, the "PURCHASER
GROUP") and the only liabilities or obligations of any and all of the
Purchaser Group shall be as set forth in this Article 8.
(d) In the event that the Transactions are completed, the sole recourse of
the Purchaser Group (and any member thereof) and the Company and any
and all claims made by the Purchaser Group (or any member thereof) or
the Company against the Vendor Group (or any member thereof) in
respect of any matter whatsoever arising in respect of or in
connection with this Agreement or the
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Transactions, including pursuant to the indemnities provided in
Sections 8.1 and 8.2, shall be as permitted and limited pursuant to
their entitlement under the insurance referred to in Section 8.4, and
regardless of the extent of such insurance and any deficiency therein,
none of the Purchaser Group (or any member thereof) and the Company
shall make any further or other claim against any of the Vendor Group
(or any member thereof) in respect of or as a result of any matter
arising out of or in connection with this Agreement or the
Transactions, including by way of subrogation, tort, contract or
otherwise, and none of the Vendor Group (or any member thereof) shall
be responsible for or have any other obligation or liability in
connection with any such matter.
(e) In the event that the Transactions are completed, the Vendor Group
(and any member thereof) shall have no recourse whatsoever and shall
not be entitled to make any claims against any of the Purchaser Group
(or any member thereof) or the Company in respect of any matter
whatsoever arising in respect of or in connection with this Agreement
or the Transactions, including pursuant to the indemnities provided in
Section 8.3 and including by way of tort, contract or otherwise, and
none of the Purchaser Group (or any member thereof) or the Company
shall be responsible for or have any other obligation or liability in
connection with any such matter.
(f) In the event that the Transactions are not completed, the sole
recourse of the Purchaser Group (and any member thereof) against the
Vendor Group (and any member thereof) or the Company in respect of any
matter howsoever arising in respect of this Agreement shall be to
receive payment of the amount to which they are entitled as provided
in Section 7.15 or Section 12.4.
(g) In the event that the Transactions are not completed, the sole
recourse of the Company and the Vendor Group (and any member thereof)
against the Purchaser Group (and any member thereof) in respect of any
matter howsoever arising in respect of this Agreement shall be to
receive payment of the amount to which they are entitled as provided
in Section 12.3.
(h) In the event that the Transactions are completed, nothing in this
Section 8.5 is intended to or shall operate so as to limit or preclude
the obligations of the parties hereto to complete the payments and
adjustments as provided for in Article 3 of this Agreement and the
Escrow Agreement.
(i) No director, officer or shareholder of Vendorco in his capacity as a
director, officer or shareholder of Vendorco, shall have any personal
liability whatsoever to the Vendor, the Purchaser Group (or any member
thereof), the Company or any Subsidiary under this Agreement or any
Purchase Document or the application for the Policy referred to in
Section 8.4 of this Agreement.
8.6 PERFORMANCE BY PURCHASER. IMRM shall cause the Purchaser to perform its
obligations under the terms of this Agreement and in addition to the provisions
for indemnification set out elsewhere in this Agreement, IMRM agrees, jointly
and severally, with
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the Purchaser, to indemnify and save harmless the Vendor from and against all
claims, actions, suits, losses, costs, damages, expenses and liabilities
(including reasonable legal fees) for which the Purchaser has agreed to
indemnify the Vendor pursuant to this Agreement. IMRM agrees that in the event
of a breach of any representation, warranty, covenant or agreement of the
Purchaser contained herein, IMRM shall be liable to the Vendor for such breach
as though it were the primary obligor with respect to any such representation,
warranty, covenant or agreement.
8.7 LIABILITY OF TRUSTEES AND UNITHOLDERS. The parties hereto acknowledge that
the Trustees are entering into this Agreement solely in their capacity as
trustees on behalf of the Vendor and the obligations of the Trustees hereunder
and under the Purchase Documents shall not be personally binding upon the
Trustees or any of the Unitholders and that any recourse against the Vendor, the
Trustees or any Unitholders in any matter in respect of any indebtedness,
obligation or liability of the Vendor arising under or in connection therewith
or from the matters to which this Agreement relates, if any, including without
limitation, claims based on negligence or otherwise tortious behaviour, shall be
limited to, and satisfied only out of, the Vendor's property and assets.
Notwithstanding any other provision hereof or the nature of any claim which may
be advanced by any party hereto arising in connection with this Agreement,
including the Purchase Documents, the liability and obligations of and recourse
against any of the Trustees or the Unitholders is limited as provided in this
Section 8.7.
8.8 DISTRIBUTION OF SALE PROCEEDS BY THE VENDOR. The Purchaser and IMRM
acknowledge that, upon completion of the Transactions, the Vendor intends to
terminate, wind-up its affairs and distribute the sale proceeds in their
entirety to the Unitholders and the Purchaser and IMRM agree not to take any
action to prevent, restrain, enjoin or interfere with any such distribution to
the Unitholders.
ARTICLE 9
CONDITIONS IN FAVOUR OF THE PURCHASER
The obligations of the Purchaser to purchase the Purchased Shares and the
Notes as contemplated by this Agreement are subject to the satisfaction, on or
prior to the Closing Date, of each of the following conditions, any or all of
which the Purchaser may waive:
9.1 REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties
of the Vendor and Vendorco set forth in this Agreement and any Schedule or
Exhibit hereto must have been accurate in all material respects as of the date
of this Agreement and must be accurate in all material respects on and as of the
Closing Date as if made on and as of the Closing Date, provided that each of the
representations and warranties of the Vendor and Vendorco in subsections 4.1(2),
4.1(3), 4.1(4), 4.1(7), 4.1(8), 4.1(9), 4.1(10), 4.1(15)(a), 4.1(15)(b),
4.1(15)(c), 4.1(15)(d), 4.1(15)(m), 4.1(15)(n), 4.1(15)(o), 4.1(16)(a), 4.1(26),
4.1(42), 4.2 and 4.3 and each of the representations and warranties that contain
a materiality qualification within its terms must have been accurate in all
respects as of the date of this Agreement and must be accurate in all respects
on and as of the Closing Date as if made on and as of the Closing Date except:
(i) insofar as such representations and warranties are given as of a particular
date or for a particular period and relate solely to such date or period; and
(ii) to the extent any of such representations and warranties have been waived
by the Purchaser in writing or are cured as contemplated by subsection 12.1(b).
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9.2 COMPLIANCE WITH AGREEMENT. The Vendor, Vendorco and the Company shall have:
(i) performed and satisfied all of the covenants and conditions as required by
this Agreement to be performed or satisfied by the Vendor, Vendorco and the
Company at or prior to the Closing or shall be ready, willing and able to do so
(subject only to the prior or concurrent, as applicable, satisfaction of the
conditions required to be satisfied by the Purchaser in Section 11.3 of this
Agreement), and (ii) taken all necessary and appropriate action to enable it to
duly perform its obligations hereunder and the transactions contemplated hereby.
9.3 GOOD TITLE. The Vendor shall have transferred to Vendorco the legal,
beneficial and registered title to the Purchased Shares and the Notes, free and
clear of any and all Encumbrances. Vendorco shall have good and marketable title
to the Purchased Shares and the Notes free and clear of any and all Encumbrances
and shall be the registered and beneficial owner of the Purchased Shares and
Notes. Vendorco shall transfer the legal, beneficial and registered title to the
Purchased Shares and the Notes to the Purchaser, free and clear of any and all
Encumbrances. The Company and the Subsidiaries shall have good and marketable
title to the Assets and the Owned Real Property free and clear of all
Encumbrances except for Permitted Encumbrances.
9.4 STATUS OF THE VENDOR AND VENDORCO. Each of the Vendor and Vendorco shall
have delivered to the Purchaser a statutory declaration stating that it is at
the Closing Date a resident of Canada within the meaning of the INCOME TAX ACT
(Canada).
9.5 UNITHOLDER APPROVAL. The Unitholder Resolution shall have been approved at
the Unitholder Meeting by the requisite number of votes cast by the Unitholders
present in person or represented by proxy at the Unitholder Meeting to approve
the Transactions.
9.6 TERMINATION OF CONTRACTUAL ARRANGEMENTS WITH FACS MANAGEMENT. The management
agreement between the Company and FACS Management dated March 26, 1997, the
corporate governance agreement between the Company, the Vendor and FACS
Management dated March 26, 1997, and all other contractual arrangements between
the Company and FACS Management shall be terminated on or before Closing without
cost or liability to the Purchaser or the Company and the Vendor on the one hand
and the Company on the other hand shall have delivered a mutual full release of
any claims, actions, demands, suits, causes of action or debts whatsoever
against each other with respect to or in connection with such agreements.
9.7 CANCELLATION OF MANAGEMENT OPTION. The Management Option shall not have been
exercised and shall have been cancelled on or prior to Closing without cost or
liability to the Purchaser or the Company.
9.8 NO ACTIONS, ETC. No litigation, governmental action or other proceedings
involving or potentially involving a liability, obligation or loss on the part
of the Company or any of the Subsidiaries, or which by reason of the nature of
the relief sought might have an adverse effect on the Business, the Owned Real
Property, the Purchased Shares or the Notes, shall be threatened or commenced
against the Company, the Subsidiaries, Vendorco or the
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Vendor, and no litigation, governmental action or other proceeding shall be
threatened or commenced against any Person with respect to the consummation of
the Transactions or which would affect the right of the Purchaser to own the
Purchased Shares or the Notes or the Company and the Subsidiaries to own any of
the Assets or the Company and the Subsidiaries to operate the Business.
9.9 OPINION OF VENDOR'S, VENDORCO'S AND COMPANY'S COUNSEL. The Purchaser shall
have received an opinion from the Vendor's, Vendorco's and the Company's
Counsel, dated as of the Closing Date, in substantially form attached as Exhibit
11.2(i).
9.10 ESCROW AGREEMENT. The Purchaser shall have received the Escrow Agreement
duly executed by the Vendor and Vendorco in substantially the form attached as
Exhibit 7.9.
9.11 NO MATERIAL ADVERSE CHANGE. During the period from the date hereof until
the Closing Date there shall have been no:
(a) Material Adverse Change in the business, assets, prospects, results of
operations (including operating cash flows), or financial condition of
the Business or the Company; or
(b) damage to any Assets or any part thereof (other than Assets which are
covered by insurance at full replacement value excluding the
deductible portion thereof and which have no impact on the revenues or
prospects of the Company (on a consolidated basis) or the Company's
ability to generate revenue) which in the opinion of the Purchaser is
material, provided that the Share Purchase Price shall be reduced by
the amount of any deductible portion of any insurance.
9.12 CONSENTS AND AUTHORIZATIONS. There shall have been obtained:
(a) all Governmental Authorizations, exemptions and certificates from all
appropriate Governmental Bodies as are required by the Vendor,
Vendorco the Company or the Subsidiaries to permit the transactions
contemplated herein;
(b) confirmation from the bankers to the Company and its Subsidiaries and
the lessors under the Capitalized Leases (including the holder of the
Mortgage) to the effect that, to the knowledge of the party giving
such confirmation, the Company and the Subsidiaries are not in default
thereunder (except that consent may be required in connection with the
change of control of the Company);
(c) all consents required under any Company Agreements (other than consent
from HSBC Bank Canada in respect of the Company's operating bank
loan), by virtue of the transactions contemplated by this Agreement,
including the Capitalized Leases; and
(d) all consents required from landlords where a Lease requires consent to
the change of control of the Company or the Subsidiaries.
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9.13 AUTHORIZATION. At or before the Closing, the Vendor, Vendorco and the
Company shall take or cause to be taken all necessary or desirable actions,
steps and proceedings, as appropriate, to (i) approve or authorize the sale and
transfer of the Purchased Shares and the Notes to Vendorco and by Vendorco to
the Purchaser and the execution, delivery and performance of this Agreement and
all other agreements and instruments contemplated hereby and the transactions
contemplated herein and therein, and (ii) permit the Purchased Shares to be
validly transferred to, and duly registered in the name of, Vendorco and to the
Purchaser and the Notes to be validly assigned to Vendorco and to the Purchaser.
9.14 RESIGNATIONS AND RELEASES.
(a) There shall have been delivered to the Purchaser and the Company
resignations and releases from each of the directors and officers of
the Company and the Subsidiaries (other than Xxxxxx Xxxxx), in a form
satisfactory to the Purchaser's Counsel (which release shall in the
case of Xxxxx Xxxxxxx be in the form attached as Exhibit 4.5(C) to the
Support Agreement), to the effect that such Person resigns his/her
office as director and/or officer of the Company and each of the
Subsidiaries and releases all of his/her claims, actions, liabilities,
demands, suits, causes of action and debts whatsoever against the
Company and the Subsidiaries for or by reason of any cause, matter or
thing existing up to and including the Closing Date or relating to any
cause, matter or thing on or prior thereto, whether as an officer,
director, shareholder, employee or otherwise, without, however,
releasing any current right of indemnification of any such director by
the Company or the Subsidiaries.
(b) There shall have been delivered to the Purchaser and the Company a
release from FACS Management, Western Corporate Enterprises Inc. and
Xxxxxxx X. Xxxxxx, in the respective form attached as an exhibit to
the Support Agreement, to the effect that such Person releases the
Company and the Subsidiaries from all claims, actions, liabilities,
demands, suits, causes of action and debts whatsoever against the
Company and the Subsidiaries for or by reason of any cause, matter or
thing existing up to and including the Closing Date.
(c) There shall have been delivered to the Purchaser resignations and
releases from each of the management employees listed on Schedule
4.1(26) (other than Xxxxxx Xxxxx), in a form satisfactory to the
Purchaser's Counsel, to the effect that such Person releases all of
his or her claims, actions, liabilities, demands, suits, causes of
action and debts whatsoever against the Company and the Subsidiaries
for or by reason of any cause, matter or thing existing up to and
including the Closing Date or relating to any cause, matter or thing
on or prior thereto, including, without limitation, under the
Management Severance Obligations, whether as an officer, director,
shareholder, employee or otherwise, but without affecting any rights
or benefits to which any such management employee may be entitled as
at the Closing Date under any policy of insurance maintained by the
Company or any Subsidiary for the benefit of such management employee,
but only to the extent the Company and the Subsidiaries have no
liability in respect of such rights or benefits, upon payment by the
Company to such management employees of the
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termination and severance payments required pursuant to their
respective severance agreements with the Company, which severance
payment amounts shall be set out in such releases and included in
calculating the Management Severance Obligations.
(d) There shall have been delivered to the Purchaser and the Company, a
resignation in a form satisfactory to the Purchaser's Counsel from
Xxxxxx Xxxxx in his capacity as a director, officer and employee of
the Company and the Subsidiaries and a release in the form of Exhibit
4.5(D) to the Support Agreement to the effect that he releases all of
his claims, actions, liabilities, demands, suits, causes of action and
debts whatsoever against the Company and the Subsidiaries for or by
reason of any cause, matter or thing existing up to and including the
Closing Date or relating to any cause, matter or thing on or prior
thereto, including, without limitation, under the Management Severance
Obligations, whether as an officer, director, shareholder, employee or
otherwise, upon payment by the Company to Xxxxxx Xxxxx of the
termination and severance payments required pursuant to his respective
severance agreements with the Company, which severance payment amounts
shall be set out in such release and included in calculating the
Management Severance Obligations without, however, releasing any
current right of indemnification of such director by the Company or
the Subsidiaries, but without affecting any rights or benefits to
which Xxxxxx Xxxxx may be entitled as at the Closing Date under any
policy of insurance maintained by the Company or any Subsidiary for
the benefit of its management employees, but only to the extent the
Company and the Subsidiaries have no liability in respect of such
rights or benefits.
(e) There shall have been delivered to the Purchaser and the Company a
release from each of the Trustees in the form attached as Exhibit
9.14(e), to the effect that such Person releases all of his/her
claims, actions, liabilities, demands, suits, causes of action and
debts whatsoever against the Company and the Subsidiaries for or by
reason of any cause, matter or thing existing up to and including the
Closing Date or relating to any cause, matter or thing on or prior
thereto, but without, however, releasing any current right of
indemnification (the "Right of Indemnification") of such Trustee under
the indemnification agreement (the "Indemnification Agreement") dated
as of March 12, 1997 between the Company and the Trustees with respect
to Proceedings and Liabilities (as such terms are defined in the
Indemnification Agreement) suffered by such Trustee in connection with
his duties as a Trustee before the Closing, containing the written
agreement and acknowledgement from each of the Trustees to the effect
that such Person is not aware of any claims or demands whatsoever
against the Company or any of the Subsidiaries under the
Indemnification Agreement. The Right of Indemnification shall expire
on the seventh anniversary of the Closing and shall be subject to such
Trustee having exhausted his recourse under the Directors & Officers
Insurance Policy (the "Pre-Closing D & O Insurance") maintained by the
Vendor and/or the Company with respect to the Trustees prior to
Closing, a true and complete copy of which has been provided to the
Purchaser. The Indemnification Agreement shall be amended on or before
Closing, without cost or liability to the Purchaser or the Company, to
provide the Right of Indemnification described above.
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9.15 FACS RECORDS LIMITED PARTNERSHIP. The Company shall have (i) acquired
Xxxxxx Xxxxxx'x limited partnership interest in FACS Partnership in accordance
with Section 7.22 and the Company shall own, directly or indirectly, 100% of
FACS Partnership free and clear of all Encumbrances except for item 2(a) on
Schedule 4.1(16); and (ii) received a release from Xxxxxx Xxxxxx releasing the
Company and its Subsidiaries from all claims, actions, liabilities, demands,
suits, causes of action and debts whatsoever for or by reason of any cause,
matter or thing existing up to and including the Closing Date, including with
respect to FACS Partnership and Xxxxxx Xxxxxx'x interest therein, but excluding
the termination and severance payments to which he is entitled as part of the
Management Severance Obligations.
9.16 ENVIRONMENTAL AUDIT. The Purchaser shall have received a report in the form
of a Phase I environmental audit or assessment respecting the Owned Real
Property (the "Environmental Audit") performed by a firm acceptable to the
Purchaser, the results of which shall be acceptable in all respects to the
Purchaser, acting reasonably. Such Environmental Audit shall be paid for by the
Purchaser.
9.17 NON-COMPETITION AGREEMENTS. The Purchaser shall have received the
non-competition and confidentiality agreement in the form of Exhibit 9.17
attached hereto, duly executed and delivered by each of FACS Management, Xxxxxx
Xxxxx, Xxxxxxx X. Xxxxxx, Xxxxx Xxxxxxx and Western Corporate Enterprises Inc.
9.18 FACS MANAGEMENT SUPPORT AGREEMENT. The parties to the Support Agreement
shall have performed and satisfied all of the covenants and conditions required
pursuant to the Support Agreement to be performed and satisfied at or prior to
the Closing.
9.19 REPRESENTATION AND WARRANTY INSURANCE. The insurer with which the Purchaser
shall have arranged for insurance to cover losses arising from any breach of the
Vendor's and Vendorco's representations and warranties in accordance with
Section 8.4 of this Agreement shall not have withdrawn its binding commitment to
issue such insurance on terms acceptable to the Purchaser (provided that there
shall be no change to the terms of the insurance relating to the liability of
the Vendor as contemplated by Section 8.4) and the conditions precedent to the
issuance of the insurance by such insurer shall have been satisfied on or prior
to Closing to the satisfaction of the insurer, except if the failure to satisfy
any such condition is a result of any act or omission on the part of the
Purchaser.
ARTICLE 10
CONDITIONS IN FAVOUR OF THE VENDOR
The obligations of the Vendor, Vendorco and the Company to consummate the
transactions contemplated by this Agreement are subject to the satisfaction, on
or prior to the Closing Date, of each of the following conditions, any or all of
which the Vendor may waive:
10.1 REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties
of the Purchaser and IMRM set forth in this Agreement shall be accurate in all
material respects as
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of the date of this Agreement and must be accurate in all material respects on
and as of the Closing Date as if made on and as of the Closing Date, provided
that each of the representations and warranties of the Purchaser and IMRM in
subsection 5.1(2) must have been accurate in all respects as of the date of this
Agreement and must be accurate in all respects on and as of the Closing Date as
if made on and as of the Closing Date, except: (i) insofar as such
representations and warranties are given as of a particular date of for a
particular period and relate solely to such date or period; and (ii) to the
extent any of such representations and warranties have been waived by the Vendor
in writing or are cured as contemplated by subsection 12.1(b).
10.2 COMPLIANCE WITH AGREEMENT. The Purchaser shall have: (i) performed and
satisfied all of the covenants and conditions as required by this Agreement to
be performed or satisfied by the Purchaser at or prior to the Closing, or shall
be ready, willing and able to do so (subject only to the prior or concurrent, as
applicable, satisfaction of all conditions required to be satisfied by the
Vendor in this Agreement); and (ii) taken all necessary and appropriate action
to enable it to duly perform its obligations hereunder and the transactions
contemplated hereby.
10.3 UNITHOLDER APPROVAL. The Unitholder Resolution shall have been approved at
the Unitholder Meeting by the requisite number of votes cast by the Unitholders
present in person or represented by proxy at the Unitholder Meeting to approve
the Transactions.
10.4 RELEASES. There shall have been delivered to Xxxxxx Xxxxx, Xxxxx Xxxxxxx,
FACS Management, Western Corporate Enterprises Inc. and Xxxxxxx X. Xxxxxx, a
release from the Company and the Subsidiaries, in the respective form attached
as an exhibit to the Support Agreement, to each of the Trustees a release from
the Company and the Subsidiaries in the form attached as Exhibit 9.14(e) and to
each of directors of the Company and the Subsidiaries that provide a release
pursuant to subsection 9.14(a), a release from the Company and the Subsidiaries
to the effect that the Company and the Subsidiaries release each such Person
from all claims, actions, liabilities, demands, suits, causes of action and
debts whatsoever against such Person for or by reason of any cause, matter or
thing existing up to and including the Closing Date, provided that the Company
and the Subsidiaries shall not be required to release such Persons from any
claims, actions, liabilities, demands, suits, causes of action and debts arising
by reason of any wilful misconduct, wilful default, gross negligence, violations
of law or, for actions taken in the capacity of a director of the Company or any
Subsidiary, wilful breach of fiduciary duties.
10.5 NO ACTIONS, ETC. No action, suit, proceeding or investigation by or before
any court, administrative agency or other governmental authority shall have been
instituted or threatened, the effect of which would restrain, prohibit or
invalidate the transactions contemplated by this Agreement.
ARTICLE 11
CLOSING ARRANGEMENTS
11.1 CLOSING. The closing of the transactions contemplated by this Agreement
shall take place at the offices of the Purchaser's Counsel in Vancouver, B.C. at
8:00 a.m., local time, on the Closing Date or at such other place as may be
approved in writing by the parties.
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11.2 DELIVERIES OF THE VENDOR. At or before the Closing, the Vendor shall
deliver or cause to be delivered to the Purchaser:
(a) share certificates or other documents of title representing the
Purchased Shares in accordance with Section 2.3 hereof;
(b) assignment of the Notes in the form attached as Exhibit 2.3
accompanied by the original Notes;
(c) evidence satisfactory to the Purchaser of the sale, transfer and
assignment of the legal, beneficial and registered title to the
Purchased Shares and the Notes (such transfer of Notes to be made as
of the Effective Date consistent with the assignment of the Notes in
the form attached as Exhibit 2.3) by the Vendor to Vendorco.
(d) a certificate signed by each of the Vendor, Vendorco or the Company,
as the case may be, dated the Closing Date, confirming: (i) the
accuracy of each of the representations and warranties of the Vendor
and Vendorco, as the case may be, contained in this Agreement and the
Exhibits and Schedules hereto as provided in Section 9.1 of this
Agreement; (ii) that all agreements and covenants of the Vendor,
Vendorco or the Company, as the case may be, required by this
Agreement to have been performed or complied with on or prior to the
Closing Date have been so performed or complied with; and (iii) that
all corporate or other action required of the Company, Vendorco or the
Vendor (including any actions required by directors, trustees,
shareholders and unitholders), as the case may be, to authorize the
consummation of the transactions and agreements provided for herein
have been taken;
(e) certified copies of the resolutions of the Trustees and the
Unitholders approving the transactions contemplated by this Agreement;
(f) evidence, in form satisfactory to the Purchaser, of the termination of
contractual arrangements between the Company and FACS Management and
the release by FACS Management and the Vendor in favour of the Company
as required in accordance with Sections 9.6, 9.7 and 9.14(b);
(g) such resignations and releases of the directors, officers and
employees of the Company and the Subsidiaries and releases of Western
Corporate Enterprises Inc. and Xxxxxxx X. Xxxxxx as required in
accordance with Section 9.14 hereof, including, without limitation,
releases of the Management Severance Obligations executed by the
management employees of the Company listed on Schedule 4.1(26) of this
Agreement;
(h) all necessary consents, approvals or authorizations of the directors,
shareholders or other persons which may be necessary under the
constating documents or by-laws of the Company and the Subsidiaries or
any Company Agreements to enable the Purchased Shares to be
transferred by the Vendors to the Purchaser and the Notes to be
assigned to the Purchaser;
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(i) evidence in the form of a statutory declaration satisfactory to the
Purchaser's Counsel that each of the Vendor and Vendorco is at the
Closing Date a resident of Canada within the meaning of the INCOME TAX
ACT (Canada);
(j) the opinion of the Vendor's, Vendorco's and Company's Counsel in the
form attached as Exhibit 11.2(i);
(k) the Escrow Agreement in the form attached as Exhibit 7.6, duly
executed by the Vendor and Vendorco;
(l) all necessary consents required pursuant to Section 9.12 of this
Agreement;
(m) duly executed originals of the non-competition and confidentiality
agreements contemplated by Section 9.17 hereof;
(n) the Unaudited Closing Statements contemplated by Section 3.4 of this
Agreement;
(o) evidence of the cancellation of the Management Option;
(p) evidence of the purchase by the Company of Xxxxxx Xxxxxx'x interest in
the FACS Partnership as required by Sections 7.18 and 9.15 of this
Agreement; and
(q) all other agreements, documents, instruments and certificates or
evidence required or contemplated by this Agreement (including,
without limitation documents and information contemplated by this
Agreement to be included or contained in the Schedules hereto) or as
the Purchaser's Counsel, acting reasonably considers necessary or
desirable shall have been delivered to the Purchaser prior to or at
Closing to validly and effectively complete the transfer of the
Purchased Shares and assign the Notes to the Purchaser in accordance
with this Agreement, to complete all other transactions contemplated
hereby and to establish that the terms, covenants and conditions
contained in this Agreement to be performed by the Company, Vendorco
or the Vendor have been performed or complied with at or prior to
Closing.
11.3 DELIVERIES OF THE PURCHASER. At or before Closing, the Purchaser shall
deliver or cause to be delivered to the Vendor (or as the Vendor may direct):
(a) the Purchase Price required pursuant to Section 3.6;
(b) the Escrow Agreement in substantially the form of Exhibit 7.6 duly
executed by the Purchaser and the Escrow Amount to be deposited with
the escrow agent thereunder;
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(c) a certificate signed by a duly authorized officer of the Purchaser or
IMRM, as the case may be, dated the Closing Date, confirming: (i) the
accuracy of each of the representations and warranties of each of the
Purchaser or IMRM, as the case may be, contained in this Agreement and
the Exhibits and Schedules hereto as provided in Section 10.1 of this
Agreement; (ii) that all agreements and covenants of the Purchaser or
IMRM, as the case may be, required by this Agreement to have been
performed or complied with on or prior to the Closing Date have been
so performed or complied with; and (iii) that all corporate action
required by the Purchaser or IMRM (including any actions required by
directors or shareholders), as the case may be, to authorize the
consummation of the transactions and agreements provided for herein
have been taken;
(d) the opinion of the Purchaser's Counsel in the form attached as Exhibit
11.3(d);
(e) the guarantee of the Purchaser, in the form of Exhibit 11.3(e) in
favour of each of the management employees listed on Schedule 4.1(26),
guaranteeing payment of the Management Severance Obligations payable
by the Company to each such management employee; and
(f) all other agreements, documents, instruments and certificates or
evidence required or contemplated by this Agreement, (including,
without limitation, documents and information contemplated by this
Agreement to be included or contained in the Schedules hereto) or as
the Vendor's Counsel, acting reasonably, considers necessary or
desirable shall have been delivered to the Vendor prior to or at
Closing to complete the Transactions and to establish that the terms,
covenants and conditions contained in this Agreement to be performed
by the Purchaser or IMRM have been performed or complied with at or
prior to Closing.
ARTICLE 12
TERMINATION OF AGREEMENT
12.1 TERMINATION. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, by written notice promptly given to the
other parties hereto, at any time prior to the Closing Date:
(a) by mutual written consent of the Purchaser and the Vendor; or
(b) by (i) the Purchaser, if any representation or warranty of the Vendor
or Vendorco set forth in this Agreement or any Schedule or Exhibit
hereto shall be inaccurate in a manner contemplated by Section 9.1;
(ii) the Purchaser, if there shall have been a breach of any covenant
or agreement on the part of the Vendor, Vendorco or the Company set
forth in this Agreement; (iii) the Purchaser, if there shall have been
a breach of any representation, warranty, covenant or agreement on the
part of FACS Management in the Support Agreement; (iv) the Vendor, if
any representation or warranty of the Purchaser or IMRM set forth in
this Agreement or any Schedule or Exhibit hereto shall be inaccurate
in a manner contemplated by Section 10.1; or (v) the Vendor, if there
shall have been a breach of any
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covenant or agreement on the part of the Purchaser or IMRM set forth
in this Agreement; provided that in the event that a party intends to
terminate this Agreement pursuant to this subsection 12.1(b), such
party (the "non-defaulting party") shall notify the other party (the
"defaulting party") of the breach or inaccuracy, as the case may be,
for which it is proposing to terminate this Agreement and the
defaulting party shall have five (5) Business Days to cure or cause to
be cured such breach or inaccuracy to the reasonable satisfaction of
the non-defaulting party, failing which this Agreement shall be
terminated in accordance herewith; or
(c) by either the Purchaser or the Vendor if any permanent injunction or
other order of a court or competent authority or government agency
which prevents the consummation of the transaction shall have become
final and not appealable; or
(d) by either the Purchaser or the Vendor, if the Transactions shall not
have been consummated on or before January 31, 2001 (other than
adjustment matters to be completed after Closing as contemplated in
Sections 3.3 through 3.6); or
(e) by the Purchaser, if (i) the Trustees withdraw, modify or change their
recommendation of the Transactions in a manner adverse to the
Purchaser, or their recommendation that Unitholders vote in favour of
the Unitholder Resolution, (ii) the Trustees shall have recommended to
the Unitholders an Acquisition Proposal, or (iii) an Acquisition
Proposal shall have been announced or otherwise become publicly known
and the Trustees shall have (A) failed to recommend against acceptance
of such by the Unitholders (including by taking no position or
indicating their inability to take a position), or (B) failed to
reconfirm their approval and recommendation of the Transactions or
their recommendation that Unitholders vote in favour of the Unitholder
Resolution within five (5) Business Days of the first announcement or
other public knowledge of such an Acquisition Proposal, or (C)
determined that an Acquisition Proposal was a Superior Proposal and to
take any of the actions then allowed by the proviso in subsection
7.8(a); or
(f) by the Vendor, provided that neither the Company nor Vendorco nor the
Vendor is then in breach or default of any of its obligations under
this Agreement, upon any determination by the Trustees that an
Acquisition Proposal constitutes a Superior Proposal, subject to
compliance by the Vendor and the Company with Sections 7.8 and 7.9 and
by FACS Management with Section 4.2 of the Support Agreement and the
payment by the Company of the moneys payable to the Purchaser under
Section 7.15; or
(g) by the Vendor or the Purchaser by notice to the other upon the failure
of the Unitholders to approve the Unitholder Resolution at the
Unitholder Meeting; or
(h) by the Vendor if any of the conditions specified in Article 10 has not
been met or waived by the Vendor at any such time as such conditions
can no longer be satisfied; or
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(i) by Purchaser if any of the conditions specified in Article 9 has not
been met or waived by Purchaser at any such time as such conditions
can no longer be satisfied; or
(j) by the Purchaser if the Vendor or the Company fails to comply in any
respect with Section 7.8 or 7.9 or FACS Management fails to comply in
any respect with Section 4.2 of the Support Agreement.
12.2 EFFECT OF STATUS OF AGREEMENT AFTER TERMINATION. If this Agreement is
terminated in accordance with the provisions of Section 12.1, no party shall
have any further liability to perform its obligations hereunder, except as
provided in Sections 7.7 and 7.15, Article 8, Sections 12.3, 12.4, 13.1 and 13.3
and as otherwise contemplated hereby, provided that, subject to Sections 7.15,
12.3 and 12.4, neither the termination of this Agreement nor anything contained
in this Section 12.2 shall relieve any party from any liability for any breach
by it of this Agreement, including from any inaccuracy if its representations
and warranties and any non-performance by it of its covenants under this
Agreement.
12.3 TERMINATION BY VENDOR. If this Agreement is terminated by the Vendor
pursuant to subsection 12.1(b), then the Purchaser shall pay to the Vendor the
amount of $800,000 (within two (2) Business Days in immediately available funds
to an account designated by the Vendor) as liquidated damages and not as a
penalty in full satisfaction of all claims, actions, liabilities, demands,
suits, causes of action, damages, losses, costs and expenses incurred by the
Vendor, the Company and Vendorco as a result of the breach of any
representation, warranty, covenant or agreement on the part of the Purchaser or
IMRM set forth in this Agreement.
12.4 TERMINATION BY PURCHASER. If (a) this Agreement is terminated by the
Purchaser pursuant to subsection 12.1(b), but no amounts are payable by the
Company to the Purchaser under Section 7.15 within five (5) Business Days of the
date of termination, then the Company shall pay to the Purchaser the amount of
$500,000 (within two (2) Business Days in immediately available funds to an
account designated by the Purchaser) as liquidated damages and not as a penalty
in full satisfaction of all claims, actions, liabilities, demands, suits, causes
of action, damages, losses, costs and expenses incurred by the Purchaser as a
result of the breach of any representation, warranty, covenant or agreement on
the part of the Vendor, Vendorco or the Company set forth in this Agreement.
Nothing contained in this Section 12.4 shall be construed as limiting the
Purchaser's right to payment of any amount under Section 7.15 after the date of
such termination; provided however, that any payment by the Company under
Section 7.15 shall be reduced dollar-for-dollar by any payment previously made
under this Section 12.4.
12.5 PAYMENTS BY THE COMPANY. The Vendor hereby consents to the payments by the
Company to the Purchaser contemplated under Sections 7.15 and 12.4 and shall
take such action as contemplated by Section 8.2 as appropriate or necessary to
cause or permit the Company to comply with its obligation to make such payments.
The Vendor shall take no action or omit to take any action which shall have the
effect of delaying, preventing, restraining, enjoining or interfering with any
such payments to the Purchaser.
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ARTICLE 13
GENERAL
13.1 FEES AND EXPENSES. Whether or not the Transactions are consummated, except
as otherwise provided herein, each of the parties hereto shall pay their
respective legal, accounting, and other advisory fees, costs and expenses
incurred in connection with the purchase and sale of the Purchased Shares and
the Notes and the preparation, execution and delivery of this Agreement and all
documents and instruments executed pursuant hereto and any other costs and
expenses whatsoever and howsoever incurred. The Vendor shall pay and be liable
for any and all such legal, accounting and other advisory fees, costs and
expenses incurred by the Company and Vendorco in connection with the purchase
and sale of the Purchased Shares and the Notes, including without limitation any
fairness or valuation opinion prepared by financial advisors and all legal and
accounting costs relating to the preparation, execution and delivery of this
Agreement and all documents and instruments required in connection therewith,
other than the fees and expenses of the Company's Auditor in respect of the
audit of the Audited Closing Statements pursuant to Section 3.5 of this
Agreement.
13.2 NOTICES. Any notice, certificate, consent, determination or other
communication required or permitted to be given or made under this Agreement
shall be in writing and shall be effectively given and made if (i) delivered
personally, (ii) sent by prepaid overnight courier service, (iii) mail, or (iv)
sent prepaid by fax or other similar means of electronic communication, in each
case to the applicable address set out below:
for the Vendor:
Xxxxxx Xxxx, Q.C., Trustee of FACS Records Storage Income Fund
c/o Xxxxxx Xxxxxxx
0000-000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Tel: (000) 000-0000
Fax: (000) 000-0000
for the Company:
X.X. Xxx 00000
Xxxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
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for Vendorco:
X.X. Xxx 00000
Xxxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Farris, Vaughn, Xxxxx & Xxxxxx
Suite 0000-000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxxxxxx Xxxxxxx, Q.C.
Tel: (000) 000-0000
Fax: (000) 000-0000
for the Purchaser:
Iron Mountain Canada Corporation
c/o Iron Mountain Records Management, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx
X.X.X. 00000
Attention: Xxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
-77-
with a copy to:
Iron Mountain Records Management, Inc.:
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx
X.X.X. 00000
Attention: Xxxxx Xxxxxx
General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
Any such communication so given or made shall be deemed to have been given
or made and to have been received on the day of delivery if delivered, or on the
day of faxing or sending by other means of recorded electronic communication,
provided that such day in either event is a Business Day and the communication
is so delivered, faxed or sent before 4:30 p.m. local time at the place of
receipt on such day. Otherwise, such communication shall be deemed to have been
given and made and to have been received on the next following Business Day. Any
such communication sent by mail shall be deemed to have been given and made and
to have been received on the fifth Business Day following the mailing thereof;
provided however that no such communication shall be mailed during any actual or
apprehended disruption of postal services. Any such communication given or made
in any other manner shall be deemed to have been given or made and to have been
received only upon actual receipt.
Any party may from time to time change its address under this Section by
notice to the other parties given in the manner provided by this Section.
13.3 PUBLIC ANNOUNCEMENTS. The parties agree to consult with each other as to
the general nature of any news releases or public statements with respect to
this Agreement or the Transactions and to use all their respective reasonable
efforts not to issue any news releases inconsistent with the results of such
consultations. Subject to Applicable Laws, each party shall use all reasonable
efforts to enable the other party to review and comment on all news releases
before the release thereof. The parties agree to jointly issue a news release as
soon as practicable following the execution of this Agreement. The provisions of
this Section 13.3 shall survive the termination of this Agreement in respect of
news releases or public statements relating to the termination of this
Agreement.
13.4 ENTIRE AGREEMENT. This Agreement, together with Schedules and Exhibits
attached hereto, constitutes the entire agreement between the parties pertaining
to this subject matter and supersedes all prior or contemporaneous agreements
and understandings of the parties relating to the same. This Agreement may be
amended only in writing signed by all parties.
13.5 SEVERABILITY. If any term or provision of this Agreement or any application
thereof shall be invalid or unenforceable, the remainder of this Agreement and
any other application of such term or provision shall not be affected thereby.
-78-
13.6 COUNTERPART EXECUTION. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.
13.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of British Columbia and the federal
laws of Canada applicable therein.
13.8 WAIVER. Any of the terms or conditions of this Agreement may be waived at
any time by the party entitled to the benefit thereof, but only by written
notice signed by the party waiving such terms or conditions.
13.9 FURTHER ASSURANCES. Each of the parties hereto shall with reasonable
diligence do all things and provide all reasonable assurances as may be required
to complete the transactions contemplated by this Agreement, and each of such
parties shall provide such further documents or instruments required by any
other party as may be reasonably necessary or desirable to give effect to this
Agreement and to carry out its provisions, whether before or after Closing.
13.10 ASSIGNABILITY, BINDING EFFECT. Neither this Agreement nor any part hereof
nor any rights or obligations under this Agreement may be assigned by any of the
parties hereto without the written consent of each of the other parties,
provided that this Agreement and any rights or obligations hereunder may be
assigned by the Purchaser, without the consent of the Vendor, to any Affiliate
of the Purchaser, provided that Purchaser and IMRM will continue to be bound by
the terms of this Agreement. This Agreement shall be binding upon the parties
hereto, and their successors and permitted assigns.
13.11 TIME OF ESSENCE. Time shall be of the essence of this Agreement in all
respects.
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13.12 REFERENCES TO ACTS PERFORMED BY THE VENDOR. For greater certainty, where
any reference is made in this Agreement to an act to be or not to be performed
by the Vendor, such reference shall be construed and applied for all purposes as
if it referred to an act to be or not to be performed by the Trustees on behalf
of the Vendor.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto.
IRON MOUNTAIN CANADA CORPORATION
By: /s/ Xxxx X. Xxxxx, Xx.
-------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: Executive Vice President and
Chief Financial Officer
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
IRON MOUNTAIN RECORDS MANAGEMENT, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
-------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: Executive Vice President and
Chief Financial Officer
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
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FACS RECORDS STORAGE INCOME FUND
By: /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: Trustee
By: /s/ R.E. Xxxxxx
-------------------------------
Name: R.E. Xxxxxx
Title: Trustee
FACS RECORDS CENTRE INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
Title: President
3796281 CANADA INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
Title: President
