Exhibit 3
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XXXXXXX XXXXXXXXX
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XXXXX XXXXX XXXXX
A/K/A XXXXX XXXXX XXXXXXX AS
TRUSTEE OF THE XXXXX XXXXX
XXXXX REVOCABLE TRUST
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XXXXX XXXXX HOLDINGS, INC., XXXXX XXXXX MANAGEMENT COMPANY, DIAMOND TECHNOLOGY
SOLUTIONS LLC, XX XXXXX AND ASSOCIATES OF ARIZONA INC., XX XXXXX AND ASSOCIATES
OF CALIFORNIA INC., XX XXXXX AND ASSOCIATES OF COLORADO INC., XX XXXXX AND
ASSOCIATES OF FLORIDA INC., XX XXXXX AND ASSOCIATES OF GEORGIA INC., XX XXXXX
AND ASSOCIATES OF MINNESOTA INC., XX XXXXX AND ASSOCIATES OF OHIO INC., XX XXXXX
AND ASSOCIATES OF TEXAS INC., XX XXXXX AND ASSOCIATES OF ILLINOIS INC.
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X-XXXXXXX.XXX INC.
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PLAN OF REORGANIZATION AND STOCK ACQUISITION AGREEMENT
APRIL 3, 2001
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EMALFARB, SWAN & XXXX AND AKERMAN, SENTERFITT & XXXXXX,
SOLICITORS FOR THE VENDORS XXXXXX-XXXXXXXXX, HILL &
XXXXXXXXX LLP, SOLICITORS FOR THE PURCHASER
THIS PLAN OF REORGANIZATION AND STOCK ACQUISITION is made as of April
3, 2001
BETWEEN:
XXXXXXX XXXXXXXXX, of the City of Lake Forest, Illinois
("Xxxxxxxxx"),
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XXXXX XXXXX XXXXX A/K/A XXXXX XXXXX XXXXXXX, AS TRUSTEE OF THE
XXXXX XXXXX XXXXX REVOCABLE TRUST DATED JANUARY 17, 1995 (the
"Trust"),
(Xxxxxxxxx and the Trust shall be collectively referred to as
the "Vendors")
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XXXXX XXXXX HOLDINGS, INC., a corporation incorporated
pursuant to the laws of the state of Florida, (the
"Corporation"), XXXXX XXXXX MANAGEMENT COMPANY ("Management"),
a corporation incorporated pursuant to the laws of the state
of Florida, DIAMOND TECHNOLOGY SOLUTIONS LLC, a corporation
incorporated pursuant to the laws of the state of Illinois
("Diamond"), XX XXXXX AND ASSOCIATES OF ARIZONA INC., a
corporation incorporated pursuant to the laws of the state of
Arizona ("Arizona"), XX XXXXX AND ASSOCIATES OF CALIFORNIA
INC., a corporation incorporated pursuant to the laws of the
state of California ("California"), XX XXXXX AND ASSOCIATES OF
COLORADO INC., a corporation incorporated pursuant to the laws
of the state of Colorado ("Colorado"), XX XXXXX AND ASSOCIATES
OF FLORIDA INC., a corporation incorporated pursuant to the
laws of the state of Florida ("Florida'), XX XXXXX AND
ASSOCIATES OF GEORGIA INC., a corporation incorporated
pursuant to the laws of the state of Georgia ("Georgia"), XX
XXXXX AND ASSOCIATES OF MINNESOTA INC., a corporation
incorporated pursuant to the laws of the state of Minnesota
("Minnesota"), XX XXXXX AND ASSOCIATES OF OHIO INC., a
corporation incorporated pursuant to the laws of the state of
Ohio ("Ohio"), XX XXXXX AND ASSOCIATES OF TEXAS INC., a
corporation incorporated pursuant to the laws of the state of
Texas ("Taxas"), XX XXXXX AND ASSOCIATES OF ILLINOIS INC., a
corporation incorporated pursuant to the laws of the state of
Illinois ("Illinois"), (Management, Diamond, Arizona,
California, Colorado, Florida, Georgia, Minnesota, Ohio, Texas
and Illinois are collectively hereinafter referred to as
"Subsidiaries")
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X-XXXXXXX.XXX INC., a corporation incorporated pursuant to the
laws of Canada, (the "Purchaser")
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RECITALS:
A. The Vendors own and control all of the issued and outstanding shares of
the Corporation.
B. The Corporation owns and controls all of the issued and outstanding
shares of the Subsidiaries.
C. The Vendors have agreed to the following plan of reorganization and to
sell to the Purchaser, and the Purchaser has agreed to purchase, the
Purchased Shares (as defined below), and the Vendors have agreed to
cause the Corporation to fulfil all of its obligations under this
Agreement.
D. This Agreement is intended to be a reorganization within the meaning of
section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
The Purchaser will acquire from the Vendors all of the issued and
outstanding shares of the Corporation in exchange solely for shares of
the Purchaser.
THEREFORE, in consideration of the foregoing recitals and the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
ARTICLE 1
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 DEFINITIONS
Whenever used in this Agreement, the following words and terms shall have the
meanings set out below:
"ACCOUNTS RECEIVABLE" means all accounts receivable, bills receivable,
trade accounts, book debts and insurance claims recorded as receivable
in the Books and Records and any other amount due to the Corporation or
the Subsidiaries, including any refunds and rebates, and the benefit of
all security (including cash deposits), guarantees and other collateral
held by the Corporation or the Subsidiaries;
"ACCREDITED INVESTOR" has the meaning ascribed thereto in Rule 501 of
Regulation 1 of the United States Securities Act of 1933, as amended;
"AFFILIATE" shall have the meaning given in the Canada Business
Corporations Act, as amended;
"AGREEMENT" means this Share Purchase Agreement, including all
schedules, and all instruments supplementing or amending or confirming
this Agreement, and references to "ARTICLE" or "SECTION" mean and refer
to the specified Article or Section of this Agreement;
"ASSOCIATE" shall have the meaning given in the Canada Business
Corporations Act, as amended;
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"BENEFIT PLANS" means all plans, arrangements, agreements, programs,
policies, practices or undertakings, whether oral or written, formal or
informal, funded or unfunded, registered or unregistered to which the
Corporation or any of the Subsidiaries is or has been a party or by
which any of them is or has been bound or under which the Corporation
or any of the Subsidiaries has, or will have, any liability or
contingent liability, relating to:
(a) Pension Plans;
(b) Insurance Plans; or
(c) Compensation Plans,
with respect to any of the Employees or former employees (or any
dependants or beneficiaries of any such Employees or former employees),
directors or shareholders of the Corporation or any Subsidiary,
individuals working on contract with the Corporation or any of the
Subsidiaries or other individuals providing services to any of them of
a kind normally provided by employees or eligible dependants of such
person;
"BOOKS AND RECORDS" means all books and records of the Corporation and
the Subsidiaries, or any of their respective Affiliates or Associates,
relating to the Corporation or any Subsidiary, including financial,
corporate, operations, sales and purchase books and records, lists of
suppliers and customers, business reports, plans and projections and
all other documents, surveys, plans, files, records, correspondence,
and other data and information, financial or otherwise, including all
data and information stored on computer-related or other electronic
media;
"BUSINESS" means the services in the human resources and technology
field carried on by the Corporation and the Subsidiaries, and the term
"Business" shall include any part of the businesses held or carried on
by the Corporation or the Subsidiaries;
"BUSINESS DAY" means a day, other than a Saturday or Sunday, on which
the principal commercial banks located in Ottawa, Ontario are open for
business during normal banking hours;
"CLAIMS" means any claim, demand, action, assessment or reassessment,
suit, cause of action, damage, loss, charge, judgment, debt, costs,
liability or expense, including reasonable professional fees and all
costs incurred in investigating or pursuing any of the foregoing or any
proceeding relating to any of the foregoing;
"CLOSING" means the completion of the sale to and purchase by the
Purchaser of the Purchased Shares under this Agreement;
"CLOSING DATE" means the 23rd day of April, 2001 or such other date as
the Parties may agree in writing as the date upon which the Closing
shall take place;
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"CLOSING TIME" means 2 o'clock p.m. Ottawa time on the Closing Date, or
such other time on such date as the Parties may agree in writing as the
time at which the Closing shall take place;
"CODE" means the United States Internal Revenue Code of 1986, as
amended;
"COMPENSATION PLANS" means all employment benefits relating to bonus,
incentive pay or compensation, performance compensation, deferred
compensation, profit sharing or deferred profit sharing, share
purchase, share option, stock appreciation, phantom stock, vacation or
vacation pay, sick pay, severance or termination pay, employee loans or
separation from service benefits, or any other type of arrangement
providing for compensation or benefits additional to base pay or
salary;
"CONTRACTS" means all contracts, licences, leases, agreements,
commitments, entitlements and engagements to which the Corporation or
any of the Subsidiaries is a party or by which any of them are bound or
under which the Corporation or any of the Subsidiaries has, or will
have, any liability or contingent liability, and includes all
quotations, orders or tenders for contracts which remain open for
acceptance and any warranties, guarantees or commitments (express or
implied);
"EMPLOYEES" means all persons employed or retained by the Corporation
or any of the Subsidiaries, including for greater certainty, those
employees on disability leave, parental leave or other absence;
"ENCUMBRANCES" means any pledge, lien, charge, security interest,
lease, title retention agreement, mortgage, restriction, development or
similar agreement, easement, right-of-way, title defect, option,
adverse claim or encumbrance of any kind or character whatsoever;
"ENVIRONMENT" means the environment or natural environment as defined
in any Environmental Laws and includes air, surface, water, ground
water, land surface, soil, subsurface strata, any sewer system and the
environment in the workplace and disposal of Hazardous Substances;
"ENVIRONMENTAL APPROVALS" means all approvals, permits, certificates,
licences, authorizations, consents, agreements, instructions or
directions having the force of law, registrations or approvals issued
or required by any Governmental Authority pursuant to Environmental
Laws with respect to the operations, business or assets of the
Corporation or any of the Subsidiaries;
"ENVIRONMENTAL LAWS" means all Laws relating in full or in part to the
Environment or employee or public health or safety, and includes those
Environmental Laws relating to the storage, generation, use, handling,
manufacture, processing, labelling, advertising, sale, display,
transportation, treatment, Release and disposal of Hazardous
Substances;
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"EQUIPMENT CONTRACTS" means all motor vehicle leases, equipment leases,
conditional sales contracts, title retention agreements and other
similar agreements relating to equipment used by the Corporation or any
of the Subsidiaries;
"GOVERNMENTAL AUTHORITY" means any government, regulatory authority,
governmental department, agency, commission, board, tribunal or court
or other law, rule or regulation-making entity having or purporting to
have jurisdiction on behalf of any nation, or any province, state or
other geographic or political subdivision of any nation;
"GOVERNMENTAL AUTHORIZATIONS" means all authorizations, approvals,
including Environmental Approvals, orders, consents, directions,
notices, licences, permits, variances, registration or similar rights
issued to or by or required by any Governmental Authority;
"HAZARDOUS SUBSTANCE" means any pollutant, contaminant, waste of any
nature, hazardous substance, hazardous material, toxic substance,
prohibited substance, dangerous substance or dangerous good as defined,
judicially interpreted or identified in any Environmental Laws,
including any asbestos or asbestos-containing materials;
"INDEPENDENT AUDITORS" means PricewaterhouseCoopers LLP or such other
independent auditing firm as the Parties may otherwise agree;
"INSURANCE PLANS" means all employment benefits relating to disability
or wage continuation during period of absence from work (including
short term disability, long term disability and workers compensation),
hospitalization, health, medical or dental treatments or expenses, life
insurance, death or survivor's benefits and supplementary employment
insurance, in each case regardless of whether or not such benefits are
insured or self-insured;
"INTELLECTUAL PROPERTY" means registered and unregistered trade-marks
(including the Trade-marks), copyright, and other intellectual property
rights and all rights (proprietary, contractual or otherwise) in or
relating to all trade secrets, confidential and proprietary
information, methods, procedures, know-how and information;
"LAWS" means all applicable laws (including common law), statutes,
by-laws, rules, regulations, orders, ordinances, protocols, codes,
guidelines, tax treaties, policies, notices, directions and judgments
or other requirements of any Governmental Authority;
"LEASED REAL PROPERTY" means all premises which are leased, subleased,
licensed or otherwise occupied by the Corporation or any of the
Subsidiaries, and the interest of the Corporation and the Subsidiaries
in all plants, buildings, structures, fixtures, erections,
improvements, easements, rights-of-way and other appurtenances situate
on or forming part of such premises, all of which is listed in Schedule
1.1(a);
"MARKETING INVENTORIES" means all inventories of every kind and nature
and wheresoever situate owned by the Corporation or the Subsidiaries
and pertaining to the Business, including all inventories of operating
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supplies, marketing and promotional materials and other materials of or
pertaining to the Business;
"MATERIAL CONTRACT" means any Contract: (i) involving aggregate
payments to or by the Corporation or any of the Subsidiaries in excess
of $50,000; (ii) involving rights or obligations of the Corporation or
any of the Subsidiaries that may reasonably extend beyond one year;
(iii) which is outside the ordinary course of business; (iv) which does
not or cannot be terminated without penalty on less than six months
notice; or (iv) which restricts in whole or in part in any material way
the scope of the business or activities of the Corporation or any of
the Subsidiaries or which restricts in anyway the scope of the business
or activities of any of their Affiliates or Associates;
"NOTICE" shall have the meaning given in Section 11.3;
"OWNED REAL PROPERTY" means all freehold lands which are owned or
purported to be owned, in fee simple, by the Corporation or any of the
Subsidiaries including all plants, buildings, structures, fixtures,
erections, improvements, easements, rights-of-way and other
appurtenances situate on or forming part of such lands;
"PARTIES" means all of the parties to this Agreement;
"PENSION PLANS" means all benefits relating to retirement or retirement
savings including pension plans, pensions or supplemental pensions,
registered retirement savings plans, registered pension plans and
retirement compensation arrangements;
"PERMITTED ENCUMBRANCES" means the Encumbrances listed in Schedule
1.1(c);
"PERSON" means any individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, corporation, limited liability company, unlimited
liability company, Governmental Authority, and a natural person in such
person's capacity as trustee, executor, administrator or other legal
representative;
"PURCHASE PRICE" shall have the meaning given in Section 3.1;
"PURCHASED SHARES" means all of the issued and outstanding shares in
the capital of the Corporation;
"REAL PROPERTY" means the Owned Real Property and the Leased Real
Property;
"REAL PROPERTY LEASES" means those agreements to lease, leases,
subleases or licences or other occupancy rights pursuant to which the
Corporation or any of the Subsidiaries uses or occupies the Leased Real
Property;
"RELEASE" has the meaning prescribed in any Environmental Laws and
includes any release, spill, leak, pumping, pouring, addition,
emission, emptying, discharge, injection, escape, leaching, disposal,
dumping, deposit, spraying, burial, abandonment, incineration, seepage,
or placement;
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"REMEDIAL ORDER" means any administrative complaint, direction, order
or sanction issued, filed, imposed or threatened by any Governmental
Authority pursuant to any Environmental Laws and includes any order
requiring any remediation or clean-up of any Hazardous Substance, or
requiring that any Release or any other activity be reduced, modified
or eliminated or requiring a payment to be made to any Governmental
Authority;
"REQUIRED APPROVALS" means those Governmental Authorizations,
shareholder approval and third Person approvals, consents and notices
referred to in Schedule 1.1(e);
"SUBSIDIARY" shall have the meaning given to it in the Canada Business
Corporations Act, as amended;
"TAX RETURNS" includes all returns, reports, declarations, elections,
notices, filings, information returns and statements filed or required
to be filed in respect of Taxes;
"TAXES" includes all taxes, duties, fees, premiums, assessments,
imposts, levies and other charges of any kind whatsoever imposed by any
Governmental Authority, together with all interest, penalties, fines,
additions to tax or other additional amounts imposed by any
Governmental Authority in respect thereof, including those levied on,
or measured by, or in respect of income, gross receipts, profits,
capital, gains, capital gains, transfer, land transfer, sales, goods
and services, harmonized sales, use, value-added, excise, stamp,
withholding, business, franchising, property, employer health, payroll,
employment, health, social services, education and social security
taxes, all surtaxes, all customs duties and import and export taxes,
all license, franchise and registration fees and all employment
insurance, health insurance and other government pension plan premiums
or contributions;
"TRADE-MARKS" means all trade-marks, trade names, brands, trade dress,
business names, Uniform Resource Locators ("URL"), domain names, tag
lines, designs, graphics, logos and other commercial symbols and
indicia of origin, whether registered or not, owned by, licensed to or
used by the Corporation or any of the Subsidiaries and any goodwill
associated with any of them, including trade-marks, trade names,
brands, trade dress, business names, URL, domain names, tag lines,
designs, graphics, logos and other commercial symbols and indicia of
origin owned by, licensed to or used by the Corporation or any of the
Subsidiaries listed and described in Schedule 4.23;
1.2 CERTAIN RULES OF INTERPRETATION
In this Agreement and the schedules:
(a) TIME - time is of the essence in the performance of the
Parties' respective obligations;
(b) CURRENCY - unless otherwise specified, all references to money
amounts are to lawful currency of Canada;
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(c) HEADINGS - descriptive headings of Articles and Sections are
inserted solely for convenience of reference and are not
intended as complete or accurate descriptions of the content
of such Articles or Sections;
(d) SINGULAR, ETC. - use of words in the singular or plural, or
with a particular gender, shall not limit the scope or exclude
the application of any provision of this Agreement to such
person or persons or circumstances as the context otherwise
permits;
(e) CONSENT - whenever a provision of this Agreement requires an
approval or consent by a Party to this Agreement and
notification of such approval or consent is not delivered
within the applicable time limited, then, unless otherwise
specified, the Party whose consent or approval is required
shall be conclusively deemed to have withheld its approval or
consent;
(f) CALCULATION OF TIME - unless otherwise specified, time periods
within or following which any payment is to be made or act is
to be done shall be calculated by excluding the day on which
the period commences and including the day on which the period
ends and by extending the period to the next Business Day
following if the last day of the period is not a Business Day;
(g) BUSINESS DAY - whenever any payment is to be made or action to
be taken under this Agreement is required to be made or taken
on a day other than a Business Day, such payment shall be made
or action taken on the next Business Day following such day;
and
(h) INCLUSION - where the words "including" or "includes" appear
in this Agreement, they mean "including (or includes) without
limitation".
1.3 KNOWLEDGE
Except as specified otherwise in this Agreement, any reference to the knowledge
of any Person shall mean to the best of the knowledge, information and belief of
such Person after reviewing all relevant records available to such person and
making due inquiries regarding the relevant matter of all relevant directors,
officers and employees of the Person and its Affiliates and Associates.
1.4 ENTIRE AGREEMENT
This Agreement, together with the agreements and other documents to be delivered
pursuant to this Agreement, constitute the entire agreement between the Parties
pertaining to the subject matter of this Agreement and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties pertaining to that subject matter, including the letter
of intent entered into between the Parties dated February 22, 2001, and there
are no warranties, representations or other agreements between the Parties in
connection with the subject matter of this Agreement except as specifically set
forth in this Agreement and any document delivered pursuant to this Agreement.
No supplement, modification or waiver or termination of this Agreement shall be
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binding unless executed in writing by the Party to be bound thereby.
1.5 APPLICABLE LAW
This Agreement shall be governed and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable in the
Province of Ontario, and without regard to the conflict of laws principles
applicable in such jurisdiction.
1.6 ACCOUNTING PRINCIPLES
All references to generally accepted accounting principles mean generally
accepted accounting principles in Canada as at the Closing Date, applied on a
consistent basis.
1.7 SCHEDULES AND EXHIBITS
The schedules and exhibits to this Agreement are an integral part of this
Agreement.
ARTICLE 2
PURCHASE AND SALE
2.1 ACTION BY VENDORS AND PURCHASER
Subject to the provisions of this Agreement, at the Closing Time:
(a) PURCHASE AND SALE OF PURCHASED SHARES - the Vendors shall sell
and the Purchaser shall purchase the Purchased Shares for the
Purchase Price payable as provided in this Agreement;
(b) PAYMENT OF PURCHASE PRICE - as consideration for the Purchased
Shares, the Purchaser shall deliver to the Vendors the
E-Cruiter Shares as provided in Section 3.3;
(c) TRANSFER AND DELIVERY OF THE PURCHASED SHARES - the Vendors
shall transfer and deliver to the Purchaser the share
certificates representing the Purchased Shares, in each case
duly endorsed in blank for transfer, or accompanied by
irrevocable security transfer powers of attorney duly executed
in blank, in either case by the holders of record, and shall
take such steps as shall be necessary to cause the Corporation
to enter the Purchaser or its nominee(s) upon the books of the
Corporation as the holder of the Purchased Shares and to issue
share certificates to the Purchaser or its nominee(s)
representing the Purchased Shares; and
(d) OTHER DOCUMENTS - each of the Vendors and the Purchaser shall
deliver such other documents as may be necessary to complete
the transactions contemplated by this Agreement.
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2.2 PLACE OF CLOSING
The Closing shall take place at the Closing Time at the offices of
Xxxxxx-Xxxxxxxxx, Xxxx & XxXxxxxxx LLP located at Xxxxx 000, 00 Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxx, X0X 0X0, or at such other place as may be agreed upon in
writing by the Parties.
2.3 TENDER
Any tender of documents or money under this Agreement may be made upon the
Parties or their respective counsel and money shall be tendered in Canadian
dollars by official bank certified cheque, bank draft or by such other method as
the Parties agree in writing.
ARTICLE 3
PURCHASE PRICE
3.1 PURCHASE PRICE
The aggregate amount payable by the Purchaser for the Purchased Shares (the
"Purchase Price") shall, subject to any adjustment, be determined as of the
Closing Time.
3.2 ADJUSTMENTS
The Purchase Price shall be subject to adjustment pursuant to paragraph 3.4
herein and the Escrow Agreement (as herein later defined).
3.3 SATISFACTION OF PURCHASE PRICE
(a) Subject to the provisions of this Agreement and the Escrow
Agreement as defined below, at the Closing Time the Purchaser
shall satisfy the Purchase Price by (i) issuing and
delivering, subject to paragraph 3.4 herein, from treasury
5,000,000 common shares of the Purchaser (the "E-Cruiter
Shares") to the Vendors, in the respective amounts set forth
in Schedule 3.3 (a); and (ii) the Purchaser assuming all
indebtedness, up to a maximum of US$1,000,000, owing by the
Corporation to Xxxxx Xxxxx pursuant to promissory notes issued
in January 2001.
3.4 DELIVERY OF THE E-CRUITER SHARES
3.4.1 At the Closing Time, the Purchaser shall deliver 4,000,000 of
the E-Cruiter Shares to the Vendors in the respective amounts
set forth in Schedule 3.3(a).
3.4.2 At the Closing Time, the Parties shall enter into the escrow
agreement as set out in Schedule 3.4.2 (the "Escrow
Agreement").
3.4.3 Pursuant to this Agreement and the Escrow Agreement, 1,000,000
of the E-Cruiter Shares shall be placed in escrow and released
in 500,000 instalments to the Vendors pending the meeting of
revenue and profit targets by the Purchaser for the years 2001
and 2002 as set forth in Schedule 3.4.3 or at any other time
at the discretion of the board of directors of the Purchaser.
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3.5 ALLOCATION OF THE PURCHASE PRICE
The Purchase Price shall be allocated among the Purchased Shares in accordance
with the provisions of Schedule 3.5. Each of the Vendors and the Purchaser agree
to report the purchase and sale of the Purchased Shares in any Tax Returns
required to be filed in accordance with the provisions of Schedule 3.5.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE VENDORS
The Vendors, the Corporation and the Subsidiaries hereby jointly and severally
represent and warrant to the Purchaser the matters set out below.
4.1 INCORPORATION AND REGISTRATION
(a) Each of the Corporation and the Subsidiaries is a corporation
duly incorporated and validly existing under the laws of its
jurisdiction of incorporation and has all necessary corporate
power, authority and capacity to enter into this Agreement and
to carry out its obligations under this Agreement, to own its
property and assets and to carry on its business as presently
conducted. Neither the nature of its business nor the location
or character of the property owned or leased by any of the
Subsidiaries requires it to be registered, licensed or
otherwise qualified as an out-of-province or foreign
corporation in any other jurisdiction other than those listed
opposite its name in Schedule 4.1, where it is duly
registered, licensed or otherwise qualified for such purpose.
4.2 SUBSIDIARIES
(a) As of the Closing Date, the Corporation will be the sole
registered and beneficial owner of all of the issued and
outstanding shares in the capital of the Subsidiaries, free
and clear of all Encumbrances, and does not own, or have any
interest in, any of the shares of any other corporation or
other Person.
(b) None of the Corporation or the Subsidiaries owns or has any
interest in any of the shares of any corporation or other
Person other than as disclosed in Schedule 4.2.
(c) None of the Corporation or the Subsidiaries is a partner,
beneficiary, trustee, co-tenant, joint-venturer or otherwise a
participant in any partnership, trust, joint venture,
co-tenancy or similar jointly owned business undertaking, and
none of the Corporation or the Subsidiaries has any investment
interests in any business owned or controlled by any third
Person.
4.3 RIGHT TO SELL
The Vendors are the sole registered and beneficial owners of the Purchased
Shares free and clear of all Encumbrances. The Vendors have the exclusive right
to dispose of the Purchased Shares as provided in this Agreement and such
disposition will not violate, contravene, breach or offend against or result in
any default under any indenture, mortgage, lease, agreement, obligation,
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instrument, charter or by-law provision, statute, regulation, order, judgement,
decree, licence, permit or Laws to which any of the Vendors is a party or
subject or by which any of the Vendors is bound or affected. The Purchased
Shares are not subject to the terms of any agreement between or among any of the
shareholders of the Corporation other than this Agreement.
4.4 CAPITALIZATION
The authorized and issued share capital of the Corporation and each of the
Subsidiaries is as set forth in Schedule 4.4, together with a corporate
structure diagram illustrating the issued share capital and shareholders of the
Corporation and each of the Subsidiaries. All of the shares in the capital of
the Corporation and each of the Subsidiaries have been duly and validly issued
and are outstanding as fully paid and non-assessable shares of the Corporation
or such Subsidiary, as the case may be. No options, warrants or other rights to
purchase shares or other securities of the Corporation or any of the
Subsidiaries, and no securities or obligations convertible into or exchangeable
for shares or other securities of the Corporation or any of the Subsidiaries,
have been authorized or agreed to be issued or are outstanding.
4.5 TITLE TO ASSETS
Each of the Corporation and the Subsidiaries is the sole beneficial and legal
owner of all of its assets and interests in assets, real and personal, including
all of the assets used in the Business, with good and valid title, free and
clear of all Encumbrances, other than Permitted Encumbrances. In particular,
without limiting the generality of the foregoing, there has been no assignment,
subletting or granting of any licence (of occupation or otherwise) of or in
respect of any of the assets of the Corporation or the Subsidiaries or any
granting of any agreement or right capable of becoming an agreement or option
for the purchase of any of such assets. All of the assets of the Corporation and
the Subsidiaries are located on the Owned Real Property or the Leased Real
Property.
4.6 DUE AUTHORIZATION AND ENFORCEABILITY
The execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been, or will prior to the
Closing Date be, duly authorized by all necessary corporate action on the part
of each of the Corporation and the Subsidiaries. This Agreement constitutes a
valid and binding obligation of each of the Vendors enforceable against each of
them in accordance with its terms.
4.7 ABSENCE OF CONFLICTING AGREEMENTS
Neither the Corporation, the Subsidiaries nor any of the Vendors is a party to,
bound or affected by or subject to any indenture, mortgage, lease, agreement,
obligation, instrument, charter or by-law provision, Law or Governmental
Authorization which would be violated, contravened, breached by, or under which
default would occur or an Encumbrance would be created as a result of the
execution and delivery of this Agreement or any other documents or agreements to
be delivered or entered into under the terms of this Agreement, or the
performance by any of the Corporation, the Subsidiaries or the Vendors of any of
their obligations provided for under this Agreement or any other documents or
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agreements to be delivered or entered into under this Agreement.
4.8 APPROVALS
(a) Except as disclosed in Schedule 4.8, no approval, order or
consent of or notice to or filing with any Governmental
Authority or other Person is required on the part of the
Corporation or any of the Vendors or Subsidiaries in
connection with the execution, delivery and performance of
this Agreement or any other documents or agreements to be
delivered under this Agreement or the performance of the
obligations of the Vendors, the Corporation or the
Subsidiaries under this Agreement or any other documents or
agreements to be delivered or entered into under this
Agreement.
(b) Schedule 4.8 sets out a complete list of all notifications,
approvals and consents required to be made or obtained by the
Corporation, the Vendors and the Subsidiaries in connection
with the execution, delivery and performance of this Agreement
or any other documents and agreements to be delivered under
this Agreement.
4.9 FINANCIAL STATEMENTS
Schedule 4.9 attached hereto sets forth the audited balance sheet of the
Corporation as of December 31, 2000 and the unaudited balance sheets of
Corporation as of March 30, 2001, and the related statements of income and
retained earnings for the periods ending on those respective dates. The
financial statements in Schedule 4.9 are hereinafter collectively referred to as
the "Company Financial Statements". The Company Financial Statements have been
prepared in accordance with generally accepted accounting principles
consistently followed by the Corporation and the Subsidiaries throughout the
periods indicated, and fairly present the financial position of the Corporation
and the Subsidiaries as of the respective dates of the balance sheets included
in the Company Financial Statements, and the results of its operations for the
respective periods indicated. As of the Closing Date, the Corporation and the
Subsidiaries shall not have any material liability or obligation of any nature,
except for liabilities or obligations that are reflected on Company Financial
Statements as of March 30, 2001.
4.10 ABSENCE OF UNDISCLOSED LIABILITIES
Since the date of the Company Financial Statements, neither the Corporation nor
any of the Subsidiaries has incurred any liabilities or obligations (whether
accrued, absolute, contingent or otherwise) which continue to be outstanding,
except those incurred in the ordinary and usual course of business and which
were not, individually or in the aggregate, materially adverse. The reserves and
accrued liabilities disclosed on or reflected in the Company Financial
Statements and the Books and Records are sufficient in all respects to provide
for the liabilities in respect of which they have been established.
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4.11 ABSENCE OF CHANGES AND UNUSUAL TRANSACTIONS
Except as described in Schedule 4.11, or except as consented to in advance in
writing by the Purchaser, since the date of the Company Financial Statements:
(i) there has not been any material change in the
financial condition, operations or prospects of the
Corporation or any of the Subsidiaries other than
changes in the ordinary and usual course of business,
none of which has been materially adverse;
(ii) there has not been any damage, destruction, loss,
labour dispute, organizing drive, application for
certification or other event, development or
condition of any character (whether or not covered by
insurance) materially and adversely affecting the
business, assets, properties or future prospects of
any of the Corporation or the Subsidiaries;
(iii) neither the Corporation nor any of the Subsidiaries
has transferred, assigned, sold or otherwise disposed
of any of the assets shown or reflected in the
Company Financial Statements or cancelled any debts
or entitlements except, in each case, in the ordinary
and usual course of business;
(iv) neither the Corporation nor any of the Subsidiaries
incurred or assumed any obligation or liability
(fixed or contingent) except unsecured current
obligations and liabilities incurred in the ordinary
and usual course of business, none of which has been
materially adverse;
(v) neither the Corporation nor any of the Subsidiaries
discharged or satisfied any Encumbrance, or paid any
obligation or liability (fixed or contingent) other
than liabilities included in the Company Financial
Statements and liabilities incurred since the date of
the Company Financial Statements in the ordinary and
usual course of business;
(vi) neither the Corporation nor any of the Subsidiaries
suffered any cumulative operating loss or any
extraordinary loss, waived or omitted to take any
action in respect of any rights of substantial value,
or entered into any commitment or transaction not in
the ordinary and usual course of business where such
loss, rights, commitment or transaction is or would
be material in relation to the Corporation or the
Subsidiary, as the case may be;
(vii) neither the Corporation nor any of the Subsidiaries
granted any bonuses, whether monetary or otherwise,
or made any general wage, salary or Benefit Plan
increases in respect of its Employees or changed the
terms of employment for any Employee except in the
ordinary and usual course of business and consistent
with past practice;
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(viii) neither the Corporation nor any of the Subsidiaries
hired or dismissed any senior Employees or hired or
dismissed any other Employees other than in ordinary
and usual course of business;
(ix) neither the Corporation nor any of the Subsidiaries
mortgaged, pledged, subjected to lien, granted a
security interest in or otherwise encumbered any of
its assets or property, whether tangible or
intangible;
(x) neither the Corporation nor any of the Subsidiaries,
directly or indirectly, declared or paid any
dividends or declared or made any other payments or
distributions on or in respect of any of its shares
or, directly or indirectly, purchased or otherwise
acquired any of its shares;
(xi) neither the Corporation nor any of the Subsidiaries,
directly or indirectly, has paid any management fees
or other amounts (other than salaries and benefits of
employees, the terms of which are disclosed in
Schedule 4.28) to any of the Vendors; and
(xii) neither the Corporation nor any of the Subsidiaries
has authorized, agreed or otherwise become committed
to do any of the foregoing.
4.12 NON-ARM'S LENGTH TRANSACTIONS
Except as disclosed in Schedule 4.12, no director or officer, former director or
officer, shareholder or Employee of the Corporation or a Subsidiary, or any
other person not dealing at arm's length (within the meaning of the Code) with
the Corporation or any of the Vendors or Subsidiaries, has any indebtedness,
liability or obligation to the Corporation or a Subsidiary, and none of the
Corporation and the Subsidiaries is indebted or otherwise obligated to or is
party to any Contract with any such person, except for employment arrangements
with Employees, the terms of which are disclosed in Schedule 4.28.
4.13 ABSENCE OF GUARANTEES
Except as described in Schedule 4.13, neither the Corporation nor any of the
Subsidiaries has given or agreed to give, or is a party to or bound by, any
guarantee, surety or indemnity in respect of any indebtedness or other
obligation of any Person, or any other commitment by which the Corporation or
any Subsidiary is, or is contingently, responsible for any such indebtedness or
other obligation.
4.14 OPERATING BUSINESSES
The Business is carried on exclusively by the Corporation and the Subsidiaries.
All assets used in or necessary to carry on the Business are owned by the
Corporation and the Subsidiaries, or leased or licensed by the Corporation and
the Subsidiaries from Persons acting at arm's length (within the meaning of the
Code) from the Vendors, the Corporation and the Subsidiaries.
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4.15 MAJOR SUPPLIERS
(a) A comprehensive listing of all suppliers of goods and services
to the Corporation and the Subsidiaries (including suppliers
of goods and services to their respective customers, which are
arranged for by the Corporation or the Subsidiaries), where
the value of the goods or services supplied exceeded $50,000,
in each case individually or in the aggregate, during the 12
month period ending January 31, 2001 is attached as Schedule
4.15.
(b) True and complete copies of all Contracts with those suppliers
of goods and services for the Business (or for customers of
the Business) referred to in subsection 4.15(a) have been made
available to the Purchaser. None of the Vendors, the
Corporation or the Subsidiaries has any reason to believe that
any of such Contracts will not be honoured in the ordinary and
usual course of business consistent with the past experience
of the Business.
(c) Except as disclosed in Schedule 4.15, neither the Corporation
nor any of the Subsidiaries is subject to any Contract under
which any of them has made any commitment or is subject to any
obligation or would suffer any penalty (financial or
otherwise) as a result of a failure to acquire, or arrange for
the acquisition of, a specified minimum volume of products or
services.
(d) Except as disclosed in Schedule 4.15, neither the Corporation
nor any of the Subsidiaries is subject to any Contract
involving a commitment of exclusivity whereby its ability, or
the ability of its Affiliates, to acquire goods or services
from any Person would be restricted in any manner.
(e) To the knowledge of the Corporation and each of the Vendors
and the Subsidiaries, none of the suppliers included in the
list referred to in subsection 4.15(a) has any intention to
change its relationship or the terms upon which it conducts
business with the Corporation or any Subsidiary, including as
a result of the transactions contemplated by this Agreement.
4.16 CONDITION OF ASSETS
The fixed assets, machinery, equipment, fixtures, furniture, furnishings and
vehicles owned or used or held by the Corporation and the Subsidiaries,
including any of the foregoing which are in storage or in transit, and other
tangible property and facilities used by the Corporation and the Subsidiaries,
whether located in or on the premises of the Corporation or the Subsidiaries or
elsewhere, are in good condition, repair and (where applicable) proper working
order, having regard to their use and age and such assets have been properly and
regularly maintained.
4.17 MARKETING INVENTORIES
All Marketing Inventories are valued on the books of the Corporation and the
Subsidiaries at cost, amortized over the applicable season. All Marketing
Inventories are merchantable or usable and in quantities usable or saleable in
the ordinary and usual course of business.
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4.18 ACCOUNTS RECEIVABLE
The Accounts Receivable are good and collectible at the aggregate recorded
amounts, except to the extent of any reserves provided for such accounts in the
Company Financial Statements, and are not subject to any defence, counterclaim
or set off.
4.19 BUSINESS IN COMPLIANCE WITH LAW
In all material respects, the business and operations of the Corporation and the
Subsidiaries have been and are now conducted in compliance with all Laws of each
jurisdiction in which the Corporation and the Subsidiaries carry on or have
carried on business and none of the Corporation and the Subsidiaries has
received any notice of any alleged violation of any such Laws.
4.20 GOVERNMENTAL AUTHORIZATIONS
Schedule 4.20 sets forth a complete list of the Governmental Authorizations
issued to or required by the Corporation or any of the Subsidiaries to enable
them to carry on business in compliance, in all material respects, with all
Laws. The Governmental Authorizations listed in Schedule 4.20 are, in all
material respects, in full force and effect in accordance with their terms, and
there have been no material violations of them and no proceedings are pending
or, to the knowledge of the Corporation or any of the Subsidiaries, threatened,
which could result in their revocation or limitation.
4.21 GOVERNMENTAL ASSISTANCE
Except as disclosed in Schedule 4.21, neither the Corporation nor any of the
Subsidiaries has received any grants or other forms of assistance, including
loans with interest below market rates or guarantees of any loans, from any
Governmental Authority that have not been fully repaid or reimbursed and
satisfied, and neither the Corporation nor any of the Subsidiaries is a party to
any Contract or understanding with respect to any such grant or form of
assistance.
4.22 RESTRICTIVE COVENANTS
Except as disclosed in Schedule 4.22, neither the Corporation nor any of the
Subsidiaries is a party to or bound or affected by any Contract or document
limiting the freedom of the Corporation or any of the Subsidiaries to compete in
any line of business, acquire goods and services from any supplier, sell goods
and services to any customer, or transfer or move any of its assets or
operations, or which would materially adversely affect the business practices,
operations or conditions of the Corporation or any of the Subsidiaries, or, to
the knowledge of the Vendors, materially adversely affect the Purchaser, or the
continued operation of their businesses, after the Closing.
4.23 INTELLECTUAL PROPERTY
(a) Schedule 4.23 sets forth a complete list and brief description
of all Intellectual Property owned by the Corporation or the
Subsidiaries (including Trade-marks) that have been registered
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or for which applications for registration have been filed by
or on behalf of the Corporation or the Subsidiaries.
(b) Except as disclosed in Schedule 4.23, the Corporation and the
Subsidiaries have the exclusive right to use and are the
exclusive owners of all right, title and interest in and to
all Intellectual Property used in or necessary to carry on the
Business (with no breaks in the chain of title). Any
Intellectual Property used in or necessary to carry on the
Business that is not owned by the Corporation or the
Subsidiaries is being used by the Corporation or the
Subsidiaries solely in accordance with a licence from or the
express consent of the rightful owner of such Intellectual
Property, and all such licences and consents are in full force
and effect.
(c) All Intellectual Property owned or licensed by the Corporation
or the Subsidiaries is in full force and effect and has not
been used, enforced or licensed or failed to be used, enforced
or licensed in a manner that would result in the abandonment,
cancellation or unenforceability of or any loss of rights in
any of such Intellectual Property.
(d) Except as disclosed in Schedule 4.23, neither the Corporation
nor any of the Vendors or Subsidiaries has any knowledge of
any claim of adverse ownership, invalidity or other opposition
to or conflict with any Intellectual Property owned or
licensed by the Corporation or the Subsidiaries nor of any
pending or threatened action, litigation, investigation,
claim, opposition, complaint, grievance or proceeding of any
nature or kind against any of them relating to such
Intellectual Property.
(e) Except as disclosed in Schedule 4.23, to the knowledge of the
Corporation, Vendors and Subsidiaries:
(i) the use of any of the Intellectual Property owned or
licensed by the Corporation or the Subsidiaries;
(ii) any activity in which the Corporation or any of the
Subsidiaries is or has been engaged;
(iii) any product or service which the Corporation or any
of the Subsidiaries sells, provides, produces or
uses, or has sold, provided, produced or used; and
(iv) any process, method, advertising, or material that
the Corporation or any of the Subsidiaries employs or
has employed in the marketing or sale of any such
product or service,
does not breach, violate, infringe or interfere with any
proprietary, contractual or other rights of any Person
relating to Intellectual Property.
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(f) Except as disclosed in Schedule 4.23, neither the Corporation
nor any of the Vendors or Subsidiaries has any knowledge of
any breach, violation, infringement or interference with the
Intellectual Property owned or licensed by the Corporation or
the Subsidiaries.
4.24 EQUIPMENT CONTRACTS
Schedule 4.24 sets forth a complete list of all Equipment Contracts involving
aggregate payments in excess of $10,000 per annum, together with a description
of the assets to which the Equipment Contracts relate. The Equipment Contracts
listed in Schedule 4.24 are all those used to earn the revenue shown on the
Company Financial Statements. All of the Equipment Contracts are in full force
and effect and no default exists on the part of the Corporation or any
Subsidiary, or, to the knowledge of the Corporation, the Vendors and the
Subsidiaries, on the part of any of the other parties thereto. The entire
interest of the Corporation or Subsidiary under each of the Equipment Contracts
is held by it free and clear of any Encumbrances, other than Permitted
Encumbrances, and all payments due under the Equipment Contracts have been duly
and punctually paid. To the extent any rights under the Equipment Contracts are
not used directly in the Business, the Corporation and the Subsidiaries have
legally enforceable commitments from Franchisees which are at arm's length from
the Vendors, the Corporation and the Subsidiaries, to reimburse the Corporation
and the Subsidiaries for the costs of those rights.
4.25 OWNED REAL PROPERTY
(a) Neither the Corporation nor the Subsidiaries are the legal or
beneficial owner of any Owned Real Property.
(b) No Owned Real Property is used or is reasonably required for
the Business.
4.26 LEASED REAL PROPERTY
(a) Schedule 4.26 sets forth a complete list of the Leased Real
Property (by reference to municipal address) and Real Property
Leases (by reference to all relevant documents including
details of parties to the Real Property Leases and dates of
documents as well as details of annual rent payable, any
discounts or associated premiums, current terms, renewal
rights, security deposits or prepaid rent, and area of
premises). True copies of all the Real Property Leases have
been provided or made available to the Purchaser. The terms of
the Real Property Leases as summarized in Schedule 4.26 are
true and accurate in all respects. The Real Property Leases
have not been altered or amended and are in full force and
effect.
(b) There are no agreements or understandings between the landlord
and tenant, or sublandlord and subtenant, in respect of any
Leased Real Property other than as contained in the Real
Property Leases, pertaining to the rights and obligations of
the parties to the Real Property Leases relating to the use
and occupation of the Leased Real Property.
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(c) Except for the Real Property Leases listed in Schedule 4.26,
none of the Corporation or the Subsidiaries is a party to or
bound by any other leases, subleases, agreements to lease,
licenses or occupancy agreements pertaining to real property.
(d) All interests held by the Corporation or the Subsidiaries as
lessee or occupant under the Real Property Leases are free and
clear of all Encumbrances other than Permitted Encumbrances.
(e) All payments required to be made by the Corporation or the
Subsidiaries pursuant to the Real Property Leases have been
duly paid and none of the Corporation or the Subsidiaries is
otherwise in default in meeting any of its obligations under
any of the Real Property Leases.
(f) None of the landlords and sublandlords, and to the knowledge
of the Vendors, the Corporation and the Subsidiaries, none of
the tenants or subtenants under any of the Real Property
Leases, is in default in meeting any of its obligations under
Real Property Leases to which it is a party.
(g) None of the Corporation or the Subsidiaries has any option,
right of first refusal or other contractual right relating to
the Leased Real Property which is not provided under the Real
Property Leases.
(h) To the knowledge of the Vendors, the Corporation and the
Subsidiaries, no event exists which, but for the passing of
time or the giving of notice, or both, would constitute a
default by any party to any of the Real Property Leases and no
party to any Real Property Lease is claiming any such default
or taking any action purportedly based upon any such default.
4.27 ENVIRONMENTAL MATTERS
(a) There are no Environmental Approvals.
(b) All operations of the Corporation and the Subsidiaries have
been and are now in compliance with all Environmental Laws.
There has been no Release by the Corporation or any of the
Subsidiaries of any Hazardous Substance into the Environment.
(c) None of the Corporation and the Subsidiaries nor any of its
operations has been or is now the subject of any Remedial
Order, nor do any of the Vendors, the Corporation and the
Subsidiaries have any knowledge of any investigation or
evaluation commenced as to whether any such Remedial Order is
necessary nor, to their knowledge, has any threat of any such
Remedial Order been made nor, to their knowledge, are there
any circumstances which could reasonably result in the
issuance of any such Remedial Order.
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(d) None of the Corporation and the Subsidiaries has ever been
prosecuted for or convicted of any offence under Environmental
Laws, nor has the Corporation or any of the Subsidiaries been
found liable in any proceeding to pay any fine, penalty,
damages, amount or judgment to any person as a result of any
Release or threatened Release of any Hazardous Substance into
the Environment or as the result of the breach of any
Environmental Law and to the knowledge of the Vendors, the
Corporation and the Subsidiaries, there is no basis for any
such proceeding or action.
(e) None of the Vendors, the Corporation and the Subsidiaries has
any knowledge of any Hazardous Substance in, on or under the
Leased Real Property or any other assets of the Corporation or
the Subsidiaries.
(f) No part of the Owned Real Property has ever been used as a
landfill or for the disposal of waste.
(g) Except as disclosed in Schedule 4.27, no asbestos or asbestos
containing materials are used, stored or otherwise present in
or on the Owned Real Property. No equipment, waste or other
material containing polychlorinated biphenyls (PCBs) are used,
stored or otherwise present in or on the Owned Real Property.
(h) All material environmental data and studies (including the
results of any environmental audit) relating to the Real
Property, the Corporation or any of the Subsidiaries have been
delivered or made available to the Purchaser.
(i) There has been no Release of any Hazardous Substance which is
now present in, on or under any of the Owned Real Property
(including underlying soils and substrata, surface water and
groundwater) at levels which exceed decommissioning or
remediation standards under any Environmental Laws or
standards published or administered by those Governmental
Authorities responsible for establishing or applying such
standards.
(j) There are no underground storage tanks on the Owned Real
Property and any underground storage tanks formerly on the
Owned Real Property have been removed and any affected soil,
surface water or ground water has been remediated in
compliance with all Laws.
(k) None of the Vendors, the Corporation and the Subsidiaries has
any knowledge of any Hazardous Substance originating from any
neighbouring or adjoining properties which has migrated onto,
or is migrating towards any of the Owned Real Property.
4.28 EMPLOYMENT MATTERS
(a) Schedule 4.28 (Part A) sets forth a complete list of all
Employees, together with their titles, service dates and
material terms of employment, including current wages,
salaries or hourly rates of pay, and bonus (whether monetary
or otherwise) paid since the beginning of the most recently
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completed fiscal year (including the date of payment if paid
since March 30, 2001) or payable to each such Employee, the
date upon which such wage, salary, rate or bonus became
effective and the date upon which each such Employee was first
hired by the Corporation or any of the Subsidiaries. Except as
disclosed in Schedule 4.28, no Employee is on disability
leave, pregnancy or parental leave, extended leave of absence
or receiving benefits pursuant to the Laws.
(b) Except for those written employment contracts with salaried
Employees identified in Schedule 4.28 (Part B), there are no
written contracts of employment entered into with any
Employees or any oral contracts of employment, which are not
terminable on the giving of reasonable notice in accordance
with applicable law.
(c) There are no written or oral change of control provisions or
Contracts with any of the Employees which provide for any
rights of Employees contingent upon or affected by a change of
control of the Corporation or any of the Subsidiaries or the
sale of any or all of their assets.
(d) Schedule 4.28 (Part C) sets out a complete list of all
independent contractors with whom the Corporation or any of
the Subsidiaries has entered into any Contract, together with
the material terms of all Contracts with them.
(e) Except for the Benefit Plans, there are no employment policies
or plans which are binding upon the Corporation or any of the
Subsidiaries.
(f) The Corporation and the Subsidiaries have been and are being
operated in full compliance with all Laws relating to
employees, including employment standards, occupational health
and safety, human rights, labour relations and pay equity.
(g) There are no Claims or complaints nor, to the knowledge of the
Vendors, the Corporation and the Subsidiaries, are there any
threatened Claims or complaints, against the Corporation or
any of the Subsidiaries pursuant to any Laws relating to
employees, including employment standards, human rights,
labour relations, occupational health and safety, worker's
compensation or pay equity. To the knowledge of the Vendors,
the Corporation and the Subsidiaries, nothing has occurred
which might lead to a Claim or complaint against the
Corporation or any of the Subsidiaries under any such Laws.
There are no outstanding decisions or settlements or pending
settlements which place any obligation upon the Corporation or
any of the Subsidiaries to do or refrain from doing any act.
(h) All current assessments under workers' compensation
legislation in relation to the Corporation and the
Subsidiaries have been paid or accrued and the Corporation and
the Subsidiaries have not been subject to any special or
penalty assessment under such legislation which has not been
paid.
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4.29 COLLECTIVE AGREEMENTS
(a) None of the Corporation or the Subsidiaries is a party, either
directly or by operation of law, to any collective agreement,
letters of understanding, letters of intent or other written
communication with any trade union or association which may
qualify as a trade union, which would cover any of the
Employees or any dependent contractors of the Corporation or
the Subsidiaries.
(b) There are no outstanding or, to the knowledge of the Vendors,
the Corporation or the Subsidiaries, threatened labour
tribunal proceedings of any kind, including any proceedings
which could result in certification of a trade union as
bargaining agent for Employees or dependent contractors of the
Corporation or the Subsidiaries, and there have not been any
such proceedings within the last two years.
(c) To the knowledge of the Vendors, the Corporation and the
Subsidiaries, there are no threatened or apparent union
organizing activities involving any Employees or dependent
contractors of the Corporation or the Subsidiaries.
(d) None of the Corporation or the Subsidiaries has any serious
labour problems that might materially affect the value of the
Corporation or the Subsidiaries or lead to an interruption of
its operations at any location.
4.30 BENEFIT PLANS
(a) Schedule 4.30 sets forth a complete list of the Benefit Plans.
(b) Current and complete copies of all written Benefit Plans or,
where oral, written summaries of the material terms of them,
have been provided or made available to the Purchaser together
with current and complete copies of all documents relating to
the Benefit Plans, including: all documents establishing,
creating or amending any of the Benefit Plans; all trust
agreements, funding agreements; insurance contracts, and the
most recent financial statements and accounting statements and
reports; all booklets, summaries, manuals and written
communications of a general nature distributed or made
available to any Employees or former employees concerning any
Benefit Plans.
(c) Each Benefit Plan is, and has been, established, registered
(where required), qualified, administered and invested, in
compliance with (i) the terms thereof, and (ii) all Laws; and
neither the Corporation nor any of the Subsidiaries has
received, in the last six years, any notice from any Person
questioning or challenging such compliance (other than in
respect of any claim related solely to that Person).
(d) All obligations to or under the Benefit Plans (whether
pursuant to their terms or any Laws) have been satisfied, and
there are no outstanding defaults or violations under the
Benefits Plans by the Corporation or any of the Subsidiaries
nor do the Vendors, the Corporation or any of the Subsidiaries
have any actual knowledge, without further enquiry or
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investigation, of any default or violation by any other party
to any Benefit Plan.
(e) There have been no improvements, increases or changes to, or
promised improvements, increases or changes to, the benefits
provided under any Benefit Plan. None of the Benefit Plans
provides for benefit increases or the acceleration of or an
increase in funding obligations that are contingent upon or
will be triggered by the entering into of this Agreement or
the completion of the transactions contemplated by this
Agreement.
(f) All employer or employee payments, contributions or premiums
required to be remitted, paid to or in respect of each Benefit
Plan have been paid or remitted in a timely fashion in
accordance with the terms of that Benefit Plan and all Laws,
and no Taxes, penalties or fees are owing or exigible under
any Benefit Plan, and there are no liabilities or contingent
liabilities in respect of any Benefit Plans that have been
discontinued.
(g) There is no proceeding, action, investigation, suit or claim
(other than routine claims for payment of benefits) pending
or, to the knowledge of the Vendors, the Corporation and the
Subsidiaries, threatened involving any Benefit Plan or its
assets, and no facts exist which could reasonably be expected
to give rise to any such proceeding, action, suit or Claim
(other than routine claims for benefits).
(h) No event has occurred respecting any registered Benefit Plan
which would entitle any person (without the consent of the
Corporation or any of the Subsidiaries) to wind-up or
terminate any Benefit Plan, in whole or in part, or which
could otherwise reasonably be expected to adversely affect the
tax status of any such plan.
(i) Neither the Corporation nor any of the Subsidiaries has
received, or applied for, any payment of surplus or any
payments as a result of the demutalization of the insurer of
any Benefit Plan out of or in respect of any Benefit Plan.
(j) Neither the Corporation nor any of the Subsidiaries has taken
any contribution or premium holidays under any Benefit Plan
and there have been no withdrawals or transfers of assets from
any Benefit Plan.
(k) All employee data necessary to administer each Benefit Plan is
in the possession of the Corporation or the Subsidiaries and
is complete, correct and in a form which is sufficient for the
proper administration of the Benefit Plan in accordance with
its terms and all Laws.
(l) None of the Benefit Plans provide benefits beyond retirement
or other termination of service to Employees or former
employees or to the beneficiaries or dependants of such
employees.
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(m) None of the Benefit Plans require or permit a retroactive
increase in premiums or payments, or require additional
payments or premiums on the termination of any Benefit Plan or
insurance contract in respect thereof, and the level of
insurance reserves, if any, under any insured Benefit Plan is
reasonable and sufficient to provide for all incurred but
unreported claims.
4.31 INSURANCE
The Corporation and the Subsidiaries each maintain such policies of insurance,
issued by responsible insurers, as are appropriate to its respective business,
operations, property and assets, in such amounts and against such risks as are
customarily carried and insured against by owners of comparable businesses,
properties and assets. All such policies of insurance are in full force and
effect and each of the Corporation and the Subsidiaries is not in default, as to
the payment of premium or otherwise, under the terms of any such policy.
Schedule 4.31 sets forth a complete list of all policies of insurance which the
Corporation and the Subsidiaries maintain and the particulars of such policies,
including the name of the insurer, the risk insured against, the amount of
coverage and the amount of any deductible.
4.32 MATERIAL CONTRACTS
Schedule 4.32 sets forth a complete list of the Material Contracts. The Material
Contracts are all in full force and effect unamended and no default exists under
any of the Material Contracts on the part of the Corporation or any of the
Subsidiaries or, to the knowledge of the Vendors, the Corporation and the
Subsidiaries, on the part of any other party to such Contracts. The Corporation
and each of the Subsidiaries has the capacity, including the necessary
personnel, equipment and supplies, to perform all of their respective
obligations under the Material Contracts. Current and complete copies of the
Material Contracts have been delivered or made available to the Purchaser and
there are no current or pending negotiations with respect to the renewal,
repudiation or amendment of any such Contract.
4.33 LITIGATION
Except as disclosed in Schedule 4.33, there is no action, suit, litigation,
investigation, claim, complaint, grievance or proceeding, including appeals and
applications for review, in progress or, to the knowledge of the Vendors, the
Corporation and the Subsidiaries, pending or threatened against or relating to
the Corporation or any of the Subsidiaries before any court, Governmental
Authority, commission, board, bureau, agency or arbitration panel which, if
determined adversely to the Corporation or any of the Subsidiaries, would,
(a) materially and adversely affect the properties, business,
future prospects or financial condition of the Corporation or
any of the Subsidiaries;
(b) enjoin, restrict or prohibit the transfer of all or any part
of the Purchased Shares or any of the other transactions
contemplated by this Agreement; or
(c) prevent the Vendors from fulfilling all of their obligations
set out in this Agreement or arising from this Agreement,
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and the Vendors, the Corporation and the Subsidiaries have no knowledge of any
existing ground on which any such action, suit, litigation or proceeding might
be commenced with any reasonable likelihood of success. Except as disclosed in
such Schedule 4.33, there is not presently outstanding against the Corporation
or any of the Subsidiaries any judgment, decree, injunction, rule or order of
any court, Governmental Authority, commission, board, bureau, agency or
arbitrator.
4.34 TAX MATTERS
Except as disclosed in Schedule 4.34:
(a) The Corporation and the Subsidiaries are not, and have never
been, members of an affiliated group, within the meaning of
Section 1504(a) of the Code, and neither the Corporation nor
the Subsidiaries nor any entity whose liabilities the
Corporation or the Subsidiaries has succeeded has ever filed a
consolidated United States federal income tax return with (or
been included in a consolidated return or) an affiliated
group;
(b) The Corporation and the Subsidiaries have filed or caused to
be filed all tax returns and reports required to have been
filed by or for them on or before the Closing Date, and all
information set forth in such returns or reports is accurate
and complete in all material respect
(c) No tax return or report of the Corporation or any of the
Subsidiaries contains any position which is, or could be
subject to, penalties under the Code Section 6662 or
corresponding provision of state, local or foreign Tax law;
(d) The Corporation and the Subsidiaries have paid all taxes due
and payable by them;
(e) The Corporation and the Subsidiaries are in material
compliance with, and their records contain all information and
documents (including, without limitation, properly completed
United States Internal Revenue Services Forms W-9) necessary
to comply with, all applicable information tax reporting and
tax withholding requirements;
(f) There are no unpaid taxes, additions to tax, penalties, or
interest payable by the Corporation or the Subsidiaries or any
other person that are or could become a lien on any assets, or
otherwise adversely affect the business, properties, or
financial condition of the Corporation or the Subsidiaries;
(g) The Corporation and the Subsidiaries have collected or
withheld all amounts required to be collected or withheld by
them for any taxes, and all such amounts have been paid to the
appropriate governmental agencies or set aside in appropriate
accounts for future payment when due;
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(h) The balance sheets of the Corporation and the Subsidiaries
fully and properly reflect, as of the Closing Date, the
liabilities of the Corporation and the Subsidiaries for all
accrued taxes for all periods ending on or before the Closing
Date;
(i) The Corporation and the Subsidiaries have not granted (nor is
subject to) any waiver currently in effect of the period of
limitations for the assessment or collection of tax, no unpaid
tax deficiency has been asserted against or with respect to
the Corporation or the Subsidiaries by any taxing authority,
and there is no pending examination, administrative or
judicial proceeding, or deficiency or refund litigation with
respect to any taxes or tax returns of the Corporation or the
Subsidiaries;
(j) The Corporation and the Subsidiaries have not made or entered
into, nor hold any assets subject to, a consent filed pursuant
to Section 341(f) of the Code and the regulations there under
or a "safe harbour lease" subject to former Section 168(f)(8)
of the Internal Revenue Code of 1954, as amended before the
Tax Reform Act of 1984, and the regulations thereunder;
(k) The Corporation and the Subsidiaries are not required to
include in income any amount from an adjustment pursuant to
Section 481 of the Code or the regulations thereunder or any
similar provision of state law;
(l) The Corporation and the Subsidiaries are not a party to, nor
obligated under, any agreement or other arrangement providing
for the payment of any amount that is or would be
non-deductible under Section 280G or the Code;
(m) The Corporation and the Subsidiaries have not distributed to
their stockholders or security holders stock or securities of
a controlled corporation in a transaction to which Section
355(a) of the Code applies;
(n) There are no outstanding rulings or requests for rulings from
any taxing authority that are, or if issued would be, binding
on the Corporation or the Subsidiaries;
(o) The Corporation and the Subsidiaries are not, nor have they
been at any time within the last five years, a "United States
real property holding corporation" for the purposes of Section
897 of the Code;
(p) The Corporation and the Subsidiaries do not have and have not
had any permanent establishment, nor are otherwise subject to
taxation, in any country other than the United States;
(q) All accounts, books, ledgers, tax returns and reports,
financial and other similar records (or, where applicable,
true and accurate copies thereof) of or including the
Corporation and the Subsidiaries; and
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(r) Schedule 4.34 attached hereto describes all material tax
elections, consents, and agreements made by or affecting the
Corporation and the Subsidiaries that would be effective after
the Closing, lists all material types of taxes paid and tax
returns filed by or on behalf of the Corporation and the
Subsidiaries, expressly indicates each tax with respect to
which the Corporation and the Subsidiaries are or have been
included in a consolidated, unitary, or combined return and
describes the status of all examinations, administrative or
judicial proceedings, and litigation with respect to taxes of
the Corporation and the Subsidiaries.
4.35 BOOKS AND RECORDS
All Books and Records have been delivered or made available to the Purchaser.
Such Books and Records fairly and correctly set out and disclose in all respects
the financial position of the Corporation and the Subsidiaries and all financial
transactions to which the Corporation or any Subsidiary is or was a party have
been accurately recorded in such Books and Records.
4.36 CORPORATE RECORDS
(a) The articles and by-laws for each of the Corporation and the
Subsidiaries, including any and all amendments, have been
delivered or made available to the Purchaser and such articles
and by-laws as so amended are in full force and effect
unamended.
(b) The corporate records and minute books for each of the
Corporation and the Subsidiaries have been delivered or made
available to the Purchaser. The minute books include complete
and accurate minutes of all meetings of the directors and
shareholders for each of the Corporation and the Subsidiaries
held to date and resolutions passed by the directors or
shareholders on consent. The share certificate books,
registers of shareholders, registers of transfers and
registers of directors of each of the Corporation and the
Subsidiaries are complete and accurate.
4.37 TRADE ALLOWANCES
No customers of the Corporation or the Subsidiaries are entitled to or
customarily receive discounts, allowances, volume rebates, customer vouchers or
coupons, preferential terms, customer credits or similar reductions in price or
other trade terms arising from any agreements or understandings (whether written
or oral) with or concessions granted to any customer other than in the usual
course of the Business. All such discounts, allowances, volume rebates, customer
vouchers and coupons, preferential terms or customer credits are at the same
levels as have been in existence for the three immediately preceding financial
years. There are no material marketing or pricing policies, including promotions
and trade allowances relating to the Business, which are currently in effect or
which have been in effect during any of the last three years. For the avoidance
of doubt, the representations in this Section 4.37 do not apply to arrangements
between a Franchisee and a customer of that Franchisee to which none of the
Corporation and the Subsidiaries is a party, directly or indirectly.
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4.38 BANK ACCOUNTS, ETC.
Schedule 4.38 sets forth a complete list of every financial institution in which
the Corporation or any of the Subsidiaries maintains any depository account,
trust account or safe deposit box, details of all such accounts and safe deposit
boxes and the names of all persons authorized to draw on or who have access to
such accounts or safe deposit boxes.
4.39 NO BROKER
Each of the Vendors has carried on all negotiations relating to this Agreement
and the transactions contemplated by this Agreement directly and without
intervention on his, her or its behalf of any other party in such manner as to
give rise to any valid claim for a brokerage commission, finder's fee or other
like payment against the Purchaser, the Corporation or any of the Subsidiaries.
4.40 ANTITRUST
Any waiting period applicable to the transactions contemplated herein under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, shall have
been terminated or shall have expired.
4.41 FULL DISCLOSURE
The Vendors have made available to the Purchaser all information, including
financial, marketing, sales and operational information on a historical basis,
relating to the Corporation and the Subsidiaries which would be material to a
purchaser of the Corporation and the Subsidiaries. All information which has
been provided to the Purchaser is true and correct in all material respects and
no material fact or facts have been omitted from that information which would
make such information misleading. Without limiting the generality of the
foregoing, the Vendors have not failed to disclose to the Purchaser any fact or
information which would be material to a purchaser of the Corporation and the
Subsidiaries.
4.42 FEDERAL SECURITIES ACT - UNREGISTERED SHARES
The Vendors acknowledge that the E-Cruiter Shares to be delivered to them
pursuant to this Agreement have not and are not being registered under the
United States Securities Act of 1933, as amended (the "1933 Act"), and that
accordingly the E-Cruiter Shares are not fully transferable except as permitted
under the various exemptions contained in the 1933 Act, the rules of the
Securities and Exchange Commission interpreting the 1933 Act or any applicable
United States state law. The provisions contained in this paragraph 4.42 are
intended to ensure compliance with the 1933 Act.
4.43 ACCREDITED INVESTORS
The Vendors are Accredited Investors and have such knowledge, sophistication and
experience in financial and business matters that they are capable of evaluating
the merits and risks of the prospective investment and have the ability to bear
the economic risks of the prospective investment and can afford the complete
loss of such investment.
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4.44 NO DISTRIBUTION OF E-CRUITER SHARES TO PUBLIC
The Vendors represent and warrant to the Purchaser that they are acquiring the
E-Cruiter Shares for their own account, for investment, not as a nominee or
agent and not with a view to their resale or other distribution; that they
currently have no intention of selling, transferring, hypothecating, or
otherwise disposing of all or any part of the E-Cruiter Shares at any particular
time, for any particular price, or on the happening of any particular event or
circumstances; that they do not have any contract, undertaking, agreement or
arrangement with any person to transfer or grant participations to such Person
or to any third Person with respect to the E-Cruiter Shares and that the
Purchaser is relying on the truth and accuracy of these covenants, warranties,
and representations in issuing the E-Cruiter Shares without first registering
them under the 1933 Act.
4.45 INVESTMENT LEGEND ON CERTIFICATES
The Vendors agree not to sell, transfer, hypothecate or otherwise dispose of any
of the E-Cruiter Shares received pursuant to this Agreement unless and until
they have: (i) presented the Purchaser with a written legal opinion in form and
substance satisfactory to the solicitors for the Purchaser to the effect that
the disposition is permissible under the terms of the 1933 Act and regulations
interpreting the 1933 Act; (ii) have complied with the registration and
prospectus requirements of the 1933 Act relating to the disposition; or (iii)
have presented the Purchaser satisfactory evidence that the transfer will comply
with Rule 144 under the 1933 Act and therefore will be exempt from registration
under section 4(2) of the 1933 Act. The Vendors further agree that the
certificates evidencing the E-Cruiter Shares they will receive shall contain the
following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT) OR UNDER
THE SECURITIES LAWS OF ANY APPLICABLE STATE. THE HOLDER HEREOF BY
ACQUIRING THE SECURITIES, AGREES FOR THE BENEFIT OF THE ISSUER, THAT
THESE SECURITIES MAY NOT BE RESOLD, PLEDGED, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR IN A TRANSACTION THAT IS EXEMPT FROM REGISTRATION
UNDER THE ACT AND, IN EITHER CASE, IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF INVESTOR'S COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
TO THE EFFECT THAT ANY PROPOSED RESALE, PLEDGE, ENCUMBRANCE OR TRANSFER
IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS."
The Purchaser shall also place a "stop transfer" order against any transfer of
the E-Cruiter Shares until one of the conditions set forth above has been met.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Vendors the matters set out
below.
5.1 INCORPORATION
The Purchaser is a corporation duly incorporated and validly existing under the
laws of Canada.
5.2 DUE AUTHORIZATION
The Purchaser has all necessary corporate power, authority and capacity to enter
into this Agreement and to carry out its obligations under this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of the Purchaser.
5.3 ENFORCEABILITY OF OBLIGATIONS
This Agreement constitutes a valid and binding obligation of the Purchaser
enforceable against it in accordance with its terms.
5.4 ABSENCE OF CONFLICTING AGREEMENTS
The Purchaser is not a party to, bound or affected by or subject to any
indenture, mortgage, lease, agreement, obligation, instrument, charter or by-law
provision, Law or Governmental Authorization which would be violated,
contravened, breached by, or under which any default would occur or an
Encumbrance would be created as a result of the execution and delivery by it of
this Agreement or the performance by it of any of its obligations provided for
under this Agreement.
5.5 APPROVALS
Except for the notifications required to be filed by the Purchaser pursuant to
the Investment Canada Act, as amended, applicable security commissions, and
shareholder approval no approval, order or consent of or filing with any
Governmental Authority or any other Person is required on the part of the
Purchaser in connection with the execution, delivery and performance of this
Agreement or any other documents or agreements to be delivered under this
Agreement or the performance of the Purchasers' obligations under this Agreement
or any other documents or agreements to be delivered or entered into under this
Agreement.
5.6 LITIGATION
There is no action, suit, litigation, investigation, claim, complaint, grievance
or proceeding, including appeals and applications for review, in progress or, to
the knowledge of the Purchaser pending or threatened against or relating to the
Purchaser before any court, Governmental Authority, commission, board, bureau,
agency or arbitration panel, which, if determined adversely to the Purchaser
would:
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(a) prevent the Purchaser from paying to the Vendors the Purchase
Price;
(b) enjoin, restrict or prohibit the transfer of all or any part
of the Purchased Shares contemplated by this Agreement; or
(c) prevent the Purchaser from fulfilling all of its obligations
set out in this Agreement or arising from this Agreement,
and the Purchaser has no knowledge of any existing ground on which any such
action, suit, litigation or proceeding might be commenced with any reasonable
likelihood of success.
5.7 NO BROKER
The Purchaser has carried on all negotiations relating to this Agreement and the
transactions contemplated by this Agreement directly and without the
intervention on their behalf of any other party in such manner as to give rise
to any valid claim for a brokerage commission, finder's fee or other like
payment against any of the Vendors.
5.8 ACCREDITED INVESTOR
The Purchaser is an Accredited Investor and has such knowledge, sophistication
and experience and financial and business matters that it is capable of
evaluating the merits and risks of the prospective investment and has the
ability to bear the economic risk of the prospective investment and can afford
the complete loss of such investment.
ARTICLE 6
NON-WAIVER; SURVIVAL
6.1 NON-WAIVER
No investigations made by or on behalf of the Purchaser at any time shall have
the effect of waiving, diminishing the scope of or otherwise affecting any
representation or warranty made by any of the Vendors in or pursuant to this
Agreement. No waiver of any condition or other provision, in whole or in part,
shall constitute as a waiver of any other condition or provision (whether or not
similar) nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
6.2 NATURE AND SURVIVAL
(a) All representations, warranties and covenants contained in
this Agreement on the part of each of the Parties shall
survive the Closing, the execution and delivery under this
Agreement of any share or security transfer instruments or
other documents of title to any of the Purchased Shares and
the payment of the consideration for the Purchased Shares.
(b) The representations and warranties of the Vendors contained in
Article 4 shall survive the Closing as follows:
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(i) the representations and warranties contained in
Sections 4.1, 4.2, 4.3, 4.4, 4.5 and 4.6 shall
survive indefinitely;
(ii) all representations and warranties relating to Taxes,
including Section 4.34, shall survive until the date
which is 90 days following the expiration of all
periods allowed for objecting or appealing the
determination of any proceedings relating to any
assessment or reassessment of the Corporation or any
of the Subsidiaries, as the case may be, by any
taxing authority in respect of any taxation period
ending on or prior to the Closing or in which the
Closing occurs unless a bona fide notice of a Claim
shall have been made in writing before the expiry of
such period, in which case the representation and
warranty to which such notice applies shall survive
in respect of that Claim until the final
determination or settlement of the Claim;
(iii) all representations and warranties relating to
environmental matters, including Section 4.27, shall
survive until the expiry of seven years after the
Closing Date, unless a bona fide notice of a Claim
shall have been given in writing before the expiry of
such period, in which case the representation and
warranty to which such notice relates shall survive
in respect of that Claim until final determination or
settlement of such Claim; and
(iv) representations and warranties as to all other
matters shall survive until April 30, 2006, unless a
bona fide notice of a Claim shall have been given in
writing before the expiry of such period, in which
case the representation and warranty to which such
notice relates shall survive in respect of that Claim
until final determination or settlement of such
Claim.
(c) The representations and warranties of the Purchaser contained
in Article 5 shall survive the Closing as follows:
(i) the representations and warranties contained in
Sections 5.1, 5.2 and 5.3 shall survive indefinitely;
(ii) all other representations and warranties shall
survive until April 30, 2006, unless a bona fide
notice of a Claim shall have been given in writing
before the expiry of that period, in which case the
representation and warranty to which such notice
relates shall survive in respect of that Claim until
final determination or settlement of such Claim.
ARTICLE 7
PURCHASER'S CONDITIONS PRECEDENT
The obligation of the Purchaser to complete the purchase of the Purchased Shares
under this Agreement shall be subject to the satisfaction of, or compliance
with, at or before the Closing Time, each of the following conditions precedent
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(each of which is acknowledged to be inserted for the exclusive benefit of the
Purchaser and may be waived by it in whole or in part).
7.1 TRUTH AND ACCURACY OF REPRESENTATIONS OF VENDORS AT THE CLOSING TIME
All of the representations and warranties of the Vendors made in or pursuant to
this Agreement shall be true and correct in all material respects as at the
Closing Time and with the same effect as if made at and as of the Closing Time
and the Purchaser shall have received a certificate from each of the Vendors
confirming, to the best of his or her knowledge, information and belief, the
truth and correctness in all material respects of such representations and
warranties.
7.2 PERFORMANCE OF OBLIGATIONS
The Vendors shall have performed or complied with, in all respects, all their
obligations and covenants under this Agreement.
7.3 RECEIPT OF CLOSING DOCUMENTATION
All documentation relating to the due authorization and completion of the sale
and purchase of the Purchased Shares under this Agreement and all actions and
proceedings taken on or prior to the Closing in connection with the performance
by each of the Vendors of their obligations under this Agreement, shall be
satisfactory to the Purchaser, acting reasonably, and the Purchaser shall have
received copies of all such documentation or other evidence as it may reasonably
request in order to establish the consummation of the transactions contemplated
by this Agreement and the taking of all corporate proceedings in connection with
such transactions in compliance with these conditions, in form (as to
certification and otherwise) and substance satisfactory to the Purchaser.
7.4 RELEASES
Each of the Vendors shall have executed and delivered comprehensive releases of
the Corporation and the Subsidiaries substantially in the form of Schedule 7.4.
7.5 OPINION OF COUNSEL FOR VENDORS
The Purchaser shall have received an opinion dated the Closing Date from counsel
for the Vendors, in form and substance acceptable to the Purchaser and its
counsel, acting reasonably.
7.6 CONSENTS, AUTHORIZATIONS AND REGISTRATIONS
The Required Approvals shall have been obtained at or before the Closing Time on
terms acceptable to the Purchaser, acting reasonably.
7.7 NO PROCEEDINGS
There shall be no injunction or restraining order issued preventing, and no
claim, action, suit, litigation or proceeding, judicial or administrative, or
investigation against any Party pending by any Person, or pending or threatened
by any Governmental Authority, for the purpose of enjoining or preventing, the
consummation of the transactions contemplated by this Agreement or otherwise
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claiming that this Agreement or the consummation of those transactions is
improper or would give rise to proceedings under any Laws.
7.8 NON-COMPETITION
Each of the Vendors shall have executed and delivered a non-competition
agreement substantially in the form attached as Schedule 7.8.
7.9 SUBSTANTIAL DAMAGE
No substantial damage by fire or other hazard to the assets or business of the
Corporation or any of the Subsidiaries shall have occurred prior to the Closing
Time.
7.10 NO LAWS
No Laws shall have been enacted, introduced or announced which would be
reasonably likely to materially and adversely affect the Corporation or any of
the Subsidiaries or the Business carried on by any of them.
7.11 NO MATERIAL CHANGE
There shall have been no material adverse change in the assets (tangible or
otherwise), business, financial condition or prospects of the Corporation or any
of the Subsidiaries since the date of this Agreement.
7.12 DIRECTORS AND OFFICERS OF THE CORPORATION AND SUBSIDIARIES
There shall have been delivered to the Purchaser on or before the Closing Time,
the resignations of all individuals who are currently directors or officers of
the Corporation and the Subsidiaries (except to the extent that the Vendors have
been notified to the contrary by the Purchaser) and duly executed comprehensive
releases from each such individual in favour of the Corporation and the
Subsidiaries.
7.13 XXXXXXXXX EMPLOYMENT AGREEMENT
Xxxxxxxxx shall have executed and delivered an employment agreement with the
Purchaser in substantially the form attached as Schedule 7.13.
7.14 XXXXXXX EMPLOYMENT AGREEMENT
Xxxxx Xxxxxxx shall have executed and delivered an employment agreement with the
Purchaser in substantially the form attached as Schedule 7.14.
7.15 BOARD OF DIRECTORS
Xxxxxxxxx shall be elected as a director of the Purchaser's board of directors,
subject to election by the Purchaser's shareholders.
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7.16 SHAREHOLDER DEBT
All amounts owing to and from current and former shareholders of the Corporation
or any Subsidiary (other than amounts referred to in Schedule 7.16 and other
than amounts owed to or from the Corporation or a Subsidiary to another
Subsidiary or the Corporation) shall be repaid or cancelled prior to the
Closing.
7.17 CORPORATE RECORDS
The deficiencies in the corporate records of the Corporation and the
Subsidiaries that are identified in Schedule 7.17 shall have been corrected or
resolved to the satisfaction of the Purchaser.
7.18 TRANSFER AND DELIVERY OF THE PURCHASED SHARES
The Vendors shall have provided the Purchaser with the share certificates
representing the Purchased Shares, in each case duly endorsed in blank for
transfer, or accompanied by irrevocable security transfer powers of attorney
duly executed in blank, in either case by the holders of record, and shall take
such steps as shall be necessary to cause the Corporation to enter the Purchaser
or its nominee(s) upon the books of the Corporation as the holder of the
Purchased Shares and to issue share certificates to the Purchaser or its
nominee(s) representing the Purchased Shares, free and clear of all encumbrances
including any pledge of shares to the Trust.
7.19 THE FORM AND LEGALITY OF MATTERS
The form and legality of all matters incidental to this Agreement shall be
subject to the reasonable approval of the solicitors of the Purchaser.
7.20 AUDITS
An audit of the Corporation and Subsidiaries shall be conducted by the
Purchaser's auditors, PriceWaterhouseCoopers LLP, to the satisfaction of the
Purchaser, for the fiscal years ending December 31, 1999 and 2000.
7.21 TERMINATION OF SHAREHOLDERS AGREEMENT
The Shareholders Agreement entered into by the Corporation and the Vendors shall
have been terminated.
7.22 CONTRACTS AFFECTED BY CHANGE OF CONTROL
Any consents required by any outstanding contract or commitment of the
Corporation and/or the Subsidiaries which requires prior approval of any change
of control of the Corporation and/or the Subsidiaries resulting from the
consummation of this Agreement, shall be delivered to the Purchaser.
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7.23 CORPORATE RECORDS
The Vendors shall have delivered to the Purchaser all corporate records of the
Corporation and the Subsidiaries including, but not limited to all financial
statements, books, records, contracts and facilities.
If any of the foregoing conditions in this Article has not been fulfilled by
Closing, the Purchaser may terminate this Agreement by notice in writing to the
Vendors, in which event the Purchaser will be released from all obligations
under this Agreement, and unless the Purchaser can show that the condition
relied upon could reasonably have been performed by the Vendors, the Vendors
will also be released from all obligations under this Agreement. The Purchaser
may, however, waive compliance with any condition in whole or in part if it sees
fit to do so, without prejudice to its rights of termination in the event of
non-fulfilment of any other condition, in whole or in part, or to its rights to
recover damages for the breach of any representation, warranty, covenant or
condition contained in this Agreement.
ARTICLE 8
VENDORS' CONDITIONS PRECEDENT
The obligations of the Vendors to complete the sale of the Purchased Shares and
under this Agreement shall be subject to the satisfaction of or compliance with,
at or before the Closing Time, each of the following conditions precedent (each
of which is acknowledged to be inserted for the exclusive benefit of the Vendors
and may be waived by the Vendors, in whole or in part).
8.1 TRUTH AND ACCURACY OF REPRESENTATIONS OF THE PURCHASER AT THE CLOSING
TIME
All of the representations and warranties of the Purchaser made in or pursuant
to this Agreement shall be true and correct in all material respects as at the
Closing Time and with the same effect as if made at and as of the Closing Time
and the Vendors shall have received a certificate from an officer of the
Purchaser confirming to the best of his or her knowledge, information and
belief, the truth and correctness in all material respects of such
representations and warranties.
8.2 PERFORMANCE OF OBLIGATIONS
The Purchaser shall have performed or complied with, in all respects, all its
obligations and covenants under this Agreement.
8.3 RECEIPT OF CLOSING DOCUMENTATION
All documentation relating to the due authorization and completion of the sale
and purchase of the Purchased Shares under this Agreement and all actions and
proceedings taken on or prior to the Closing in connection with the performance
by the Purchaser of its obligations under this Agreement, shall be satisfactory
to the Vendors, acting reasonably, and the Vendors shall have received copies of
all extra documentation or other evidence as they may reasonably request in
order to establish the consummation of the transactions contemplated by this
Agreement and the taking of all corporate proceedings in connection with such
transactions in compliance with these conditions in form (as to certification
and otherwise) and substance satisfactory to the Vendors.
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8.4 CONSENTS, AUTHORIZATIONS AND REGISTRATIONS
The Required Approvals shall have been obtained at or before the Closing Time on
terms acceptable to the Vendors, acting reasonably.
8.5 NO PROCEEDINGS
There shall be no injunction or restraining order issued preventing, and no
pending or threatened claim, action, suit, litigation or proceeding, judicial or
administrative, or investigation against any Party by any Person, for the
purpose of enjoining or preventing, the consummation of the transactions
contemplated by this Agreement or otherwise claiming that this Agreement or the
consummation of those transactions is improper or would give rise to proceedings
under any Laws.
8.6 OPINION OF COUNSEL FOR PURCHASER
The Vendors shall have received an opinion dated as of the Closing Date from
counsel to the Purchaser, in form and substance acceptable to the Vendors and
their counsel, acting reasonably.
8.7 PAYMENT OF XXXXXXXXX INDEBTEDNESS
At the Time of Closing the Purchaser or its nominee, shall pay TWO HUNDRED
THOUSAND DOLLARS (US$200,000.00) to the Corporation, as full and complete
payment of any and all indebtedness owed by the Corporation to Xxxxxxxxx.
8.8 STOCK OPTIONS
The Vendors and employees of the Corporation and the Subsidiaries, who are
eligible to receive options pursuant to the Purchaser's Stock Option Plan, a
copy of which is attached hereto as Schedule 8.8, shall be entitled to receive,
pursuant to the Purchaser's Stock Option Plan, options to purchase an aggregate
of up to 350,000 common shares of the Purchaser.
ARTICLE 9
OTHER COVENANTS OF THE PARTIES
9.1 CONDUCT OF BUSINESS PRIOR TO CLOSING
During the period from the date of this Agreement to the Closing Time, the
Vendors will cause the Corporation and the Subsidiaries to do the following:
(a) CONDUCT BUSINESS IN THE ORDINARY COURSE - Except as otherwise
expressly contemplated under this Agreement, conduct its
business in the ordinary and usual course, consistent with
past practice and regular customer service and business
policies and not, without the prior written consent of the
Purchaser, enter into any transaction or Contract which, if
effected before the date of this Agreement, would constitute a
breach of the representations, warranties or covenants of the
Vendors contained in this Agreement.
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(b) MAINTAIN GOOD RELATIONS - Use all reasonable efforts to
maintain good relations with the Employees, its customers and
suppliers.
(c) CONTINUE INSURANCE - Continue in force all policies of
insurance maintained by or for the benefit of the Corporation
and the Subsidiaries and give all notices and present claims
under all insurance policies in a timely fashion.
(d) PERFORM OBLIGATIONS - Comply with all Laws affecting the
operation of the Corporation or any of the Subsidiaries.
(e) PREVENT CERTAIN CHANGES - Not, without the prior written
consent of the Purchaser, take any of the actions, do any of
the things or perform any of the acts described in Section
4.11.
(f) APPROVALS - Co-operate with the Purchaser and use all
reasonable efforts and diligently pursue obtaining the
Required Approvals.
9.2 ACCESS FOR INVESTIGATION
(a) The Vendors shall permit the Purchaser and its
representatives, on reasonable notice to the Vendors, between
the date of this Agreement and the Closing Time, without
interference to the ordinary conduct of the Business, to have
free and unrestricted access during normal business hours to
(i) the Real Property; (ii) all other locations where Books
and Records or other material relevant to the Business are
stored; (iii) all the Books and Records; and (iv) the
properties and assets used in the Business. The Vendors shall
furnish to the Purchaser copies of Books and Records (subject
to any confidentiality agreements or covenants relating to any
Books and Records) as the Purchaser shall from time to time
reasonably request to enable confirmation of the matters
warranted in Article 4. Without limiting the generality of the
foregoing, it is agreed that the accounting representatives of
the Purchaser shall be afforded ample opportunity to make a
full investigation of all aspects of the financial affairs of
the Corporation and the Subsidiaries.
(b) Notwithstanding subsection (a), the Vendors shall not be
required to disclose any information, records, files or other
data to the Purchaser where prohibited by Laws. If any consent
of any Person is required to permit any of the Vendors to
release or cause to be released any information to the
Purchaser, each of the Vendors shall make all reasonable
efforts to obtain such consent.
9.3 CONFIDENTIALITY
(a) Prior to the Closing, the Purchaser shall keep confidential
all information disclosed to it by the Vendors or their agents
relating to the Corporation or any of the Subsidiaries, except
information which:
(i) is or becomes generally available to the public;
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(ii) the Purchaser received from an independent third
Person, who had obtained the information lawfully and
was under no obligation of secrecy, or
(iii) the Purchaser can show was in its possession before
receipt of such information from the Vendors or their
agents.
If this Agreement is terminated without completion of the
transactions contemplated by this Agreement, the Purchaser
shall promptly return all documents, work papers and other
written material (including all copies) obtained from the
Vendors or their agents in connection with this Agreement and
not previously made public, and shall continue to maintain the
confidence of all such information.
(b) After the Closing, the Vendors shall, and shall cause their
Affiliates, Associates and agents to, keep confidential all
information relating to the Business, the Corporation or any
of the Subsidiaries and each of the Vendors and the Purchaser
shall, and shall cause their Affiliates, Associates and agents
to, keep confidential all information relating to this
Agreement and the transactions contemplated by this Agreement,
except information which:
(i) is or becomes generally available to the public; or
(ii) the Vendors received after Closing from an
independent third Person, who had obtained the
information lawfully and was under no obligation of
secrecy.
9.4 ACTIONS TO SATISFY CLOSING CONDITIONS
Each of the Parties shall take all such actions as are within its power to
control, and shall use its reasonable efforts to cause other actions to be taken
which are not within its power to control, so as to ensure compliance with each
of the conditions and covenants set forth in Articles 7, 8 and 9 which are for
the benefit of any other Party.
9.5 INVESTMENT CANADA NOTIFICATION
The Purchaser shall file the notification required to be filed by the Purchaser
under the Investment Canada Act in respect of the transaction contemplated under
this Agreement within 30 days following the Closing.
9.6 STUB PERIOD RETURNS
The Purchaser shall cause to be prepared and filed on a timely basis all Tax
Returns for the Corporation and the Subsidiaries for any period which ends on or
before the Closing Date and for which Tax Returns have not been filed as of such
date. The Purchaser shall also cause to be prepared and filed on a timely basis
all Tax Returns of the Corporation and the Subsidiaries for periods beginning
before and ending after the Closing Date. Each of the Vendors and the Purchaser
shall co-operate fully with each other and make available to each other in a
timely fashion such data and other information as may reasonably be required for
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the preparation of any Tax Return of the Corporation or any of the Subsidiaries
for a period ending on, prior to or including the Closing Date and shall
preserve such data and other information until the expiration of any applicable
limitation period under any applicable law with respect to Taxes.
9.7 INVESTMENT LETTERS
The Vendors shall have delivered to the Purchaser an executed written statement
that they are acquiring the E-Cruiter Shares for investment purposes as
indicated in this Agreement, in a form and substance acceptable to the
solicitors for the Purchaser.
9.8 SECURITIES LAWS
It is understood and agreed that the Closing is subject to any and all
requirements of any and all applicable securities laws applying to the issuance
and transfer of the E-Cruiter Shares in exchange for all of the issued and
outstanding shares of the Corporation. In no event shall the Purchaser be liable
to anyone for failure to sell or issue any of the E-Cruiter Shares unless and
until all applicable requirements of any and all applicable securities laws
relating to the sale and issuance have been met.
ARTICLE 10
INDEMNIFICATION
10.1 MUTUAL INDEMNIFICATION FOR BREACHES OF COVENANTS AND WARRANTY, ETC.
The Vendors jointly and severally covenant and agree with the Purchaser, and the
Purchaser covenants and agrees with each of the Vendors (the Party or Parties so
covenanting and agreeing to indemnify another Party being referred to as the
"Indemnifying Party" and the Party so to be indemnified being referred to as the
"Indemnified Party") to indemnify and save harmless, on an after-tax basis, the
Indemnified Party effective as and from the Closing Time, from and against all
Claims that may be made or brought against the Indemnified Party, or that it may
suffer or incur, directly or indirectly as a result of or in connection with any
non-fulfilment of any covenant or agreement on the part of the Indemnifying
Party under this Agreement or any incorrectness in or breach of any
representation or warranty of the Indemnifying Party contained in this Agreement
or in any certificate or other document furnished by the Indemnifying Party
pursuant to this Agreement. The foregoing obligation of indemnification shall be
subject to:
(a) the requirement that the Indemnifying Party shall, in respect
of any Claim made by any third person, be afforded an
opportunity at its sole expense to resist, defend and
compromise such Claim;
(b) the limitation that, for Claims made in connection with any
representation or warranty contained in Article 4 or 5, the
Indemnifying Party shall not be required to pay any such
amount until the aggregate amount of such Claims exceeds
$10,000 and upon the aggregate amount of such Claims exceeding
$10,000, the Indemnifying Party shall be required to pay the
amount owing in respect of all such Claims including the
$10,000; and
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(c) the limitation that, for Claims made in connection with any
representation or warranty contained in Article 4 or 5, the
Vendors in the aggregate, on the one hand, and the Purchaser,
on the other hand, shall not be required to pay any amount in
excess of the Purchase Price.
10.2 DELETED
10.3 OTHER SPECIFIC INDEMNITIES
(a) The Vendors jointly and severally covenant and agree to
indemnify and save harmless, on an after-tax basis, the
Purchaser, the Corporation and the Subsidiaries (each an
"Indemnified Party") effective as and from the Closing Time,
from and against all Claims that may be made or brought
against an Indemnified Party, or that it may suffer or incur,
directly or indirectly as a result of or in connection with
each of the matters identified in Schedule 10.23.
10.4 INDEMNIFICATION PROCEDURES FOR THIRD PERSON CLAIMS
(a) In the case of Claims made by a third Person with respect to
which indemnification is sought, the Party seeking
indemnification shall give Notice promptly, and in any event
within 20 days, to the other Party of any such Claims made
upon it. In the event of a failure to give such notice, such
failure shall not preclude the Party seeking indemnification
from obtaining such indemnification but its right to
indemnification may be reduced to the extent that such delay
prejudiced the defence of the Claim or increased the amount of
liability or cost of defence and provided that,
notwithstanding anything else contained in this Agreement, no
Claim for indemnity in respect of the breach of any
representation or warranty contained in this Agreement may be
made unless Notice of such Claim has been given prior to the
expiry of the survival period applicable to such
representation and warranty pursuant to Section 6.2.
(b) The Indemnifying Party shall have the right, by Notice to the
Indemnified Party given not later than 30 days after receipt
of the Notice described in subsection (a), to assume the
control of the defence, compromise or settlement of the Claim,
provided that such assumption shall, by its terms, be without
cost to the Indemnified Party and provided the Indemnifying
Party acknowledges in writing its obligation to indemnify the
Indemnified Party in accordance with the terms contained in
this Article 10 in respect of that Claim.
(c) Upon the assumption of control of any Claim by the
Indemnifying Party as set out in subsection (b), the
Indemnifying Party shall diligently proceed with the defence,
compromise or settlement of the Claim at its sole expense,
including if necessary, employment of counsel reasonably
satisfactory to the Indemnified Party and, in connection
therewith, the Indemnified Party shall co-operate fully, but
at the expense of the Indemnifying Party with respect to any
out-of-pocket expenses incurred, to make available to the
Indemnifying Party all pertinent information and witnesses
under the Indemnified Party's control, make such assignments
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and take such other steps as in the opinion of counsel for the
Indemnifying Party are reasonably necessary to enable the
Indemnifying Party to conduct such defence. The Indemnified
Party shall also have the right to participate in the
negotiation, settlement or defence of any Claim at its own
expense.
(d) The final determination of any Claim pursuant to this Section,
including all related costs and expenses, will be binding and
conclusive upon the parties as to the validity or invalidity,
as the case may be, of such Claim against the Indemnifying
Party.
(e) If the Indemnifying Party does not assume control of a Claim
as permitted in subsection (b), the Indemnified Party shall be
entitled to make such settlement of the Claim as in its sole
discretion may appear advisable, and such settlement or any
other final determination of the Claim shall be binding upon
the Indemnifying Party.
ARTICLE 11
GENERAL
11.1 PUBLIC NOTICES
All public notices to third Persons and all other publicity concerning the
transactions contemplated by this Agreement shall be jointly planned and
co-ordinated by the Vendors, on the one hand, and the Purchaser, on the other
hand, and no Party shall act unilaterally in this regard without the prior
approval of the other Parties, such approval not to be unreasonably withheld,
except where required to do so by law or by the applicable regulations or
policies of any Governmental Authority or any stock exchange in circumstances
where prior consultation with the other Parties is not practicable.
11.2 EXPENSES
The Purchaser shall pay all of the Parties' respective, reasonable legal,
accounting, and other professional advisory fees, costs and expenses incurred
from the date immediately following the signing of the Letter of Intent entered
into by the Parties, in connection with the purchase and sale of the Purchased
Shares and the preparation, execution and delivery of this Agreement and all
documents and instruments executed pursuant to this Agreement and any reasonable
other costs and expenses incurred.
11.3 NOTICES
Any notice or other writing required or permitted to be given under this
Agreement or for the purposes of this Agreement (a "Notice") shall be in writing
and shall be sufficiently given if delivered, or if sent by prepaid registered
mail or if transmitted by facsimile or other form of recorded communication
tested prior to transmission to such Party:
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(a) in the case of a Notice to Xxxxxxxxx:
0000 X. Xxxxxxxx Xxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxx X. Xxxx
Emalfarb, Swan & Xxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
(b) in the case of a Notice to the Trust at:
Xxxxx Xxxxx Xxxxx Xxxxxxx
0000 X. Xxx Xxxx Xxx
XxxxxxXxxx, Xxxxxxx 00000
with a copy to:
Xxxxxx Xxxxxxx
Akerman, Senterfitt & Xxxxxx, P.A.
000 X. Xxxxxx Xxx., 00xx xxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
(c) in the case of a Notice to the Purchaser at:
X-XXXXXXX.XXX INC.
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX X0X 0X0
Attention: Xxxxx Xxxxxxx, President and Chief Executive
Officer
Facsimile: 000 000 0000
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with a copy to:
Xxxxxx-Xxxxxxxxx, Xxxx & XxXxxxxxx LLP
00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX X0X 0X0
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
or at such other address as the Party to whom such Notice is to be given shall
have last notified the Party giving the Notice in the manner provided in this
Section. Any Notice delivered to the Party to whom it is addressed as provided
above shall be deemed to have been given and received on the day it is so
delivered at such address, provided that if such day is not a Business Day then
the Notice shall be deemed to have been given and received on the next Business
Day. Any Notice sent by prepaid registered mail shall be deemed to have been
given and received on the fifth Business Day following the date of its mailing.
Any Notice transmitted by facsimile or other form of recorded communication
shall be deemed to have been given and received on the first Business Day after
its transmission.
11.4 GUARANTEE OF CORPORATION AND SUBSIDIARIES
The Vendors hereby jointly and severally, irrevocably and unconditionally,
guarantee to the Purchaser the performance by each of the Corporation and the
Subsidiaries of their obligations pursuant to this Agreement. The Vendors shall
jointly and severally cause each of the Corporation and the Subsidiaries to
perform all of its obligations under this Agreement and shall be liable for the
failure of any of the Corporation and the Subsidiaries to discharge any of its
obligations under this Agreement and for the fulfilment of all of the
representations, warranties, indemnities and other obligations of each of the
Corporation and the Subsidiaries to the Purchaser under this Agreement or
arising in connection with the transactions contemplated by this Agreement.
11.5 ASSIGNMENT
The Purchaser shall be entitled, upon giving written notice to the Vendors, to
assign all of its rights and obligations under this Agreement to any Affiliate
of the Purchaser. In such case, such assignee shall have and may exercise all
the rights, and shall assume all of the obligations, of the Purchaser under this
Agreement, and any reference to the Purchaser in this Agreement shall be deemed
to refer to such assignee. In the event of such an assignment, each of the
Vendors and such assignee shall execute an agreement confirming such assignment
and such assumption of obligations and no such assignment shall release the
Purchaser from liability for its obligations under this Agreement. Except as
otherwise provided in this Section, neither this Agreement nor any benefits or
burdens under this Agreement may be assigned by any Party without the prior
written consent of each of the other Parties. Subject to the foregoing, this
Agreement shall enure to the benefit of and be binding upon the Parties and
their respective successors (including any successor by reason of amalgamation
or merger of any Party) and permitted assigns.
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11.6 FURTHER ASSURANCES
The Parties shall, with reasonable diligence, do all such things and provide all
such reasonable assurances as may be required to consummate the transactions
contemplated by this Agreement, and each Party shall provide such further
documents or instruments required by any other Party as may be reasonably
necessary or desirable to effect the purpose of this Agreement and carry out its
provisions, whether before or after the Closing.
11.7 COUNTERPARTS
This Agreement may be executed by the Parties in separate counterparts each of
which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument. The Parties
agree that this Agreement may be transmitted by facsimile or such other device
and that reproduction of signatures by facsimile or such similar device will be
treated as binding as if originals and each Party hereto undertakes to provide
each and every other Party with a copy of this Agreement bearing original
signature forthwith upon demand.
11.8 ENUREMENT
This Agreement shall enure to the benefit of and binding upon the Parties hereto
and their respective personal representatives, heirs, successors, executors,
administrators and permitted assigns.
IN WITNESS OF WHICH the Parties have duly executed this Agreement as of the date
first set forth above on the first page of this Agreement.
SIGNED, SEALED & DELIVERED In the presence of:
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx Xxxxxxxxx
--------------------- -----------------------------------------------------
Witness XXXXXXX XXXXXXXXX
THE XXXXX XXXXX XXXXX REVOCABLE TRUST
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
XXXXX XXXXX XXXXX A/K/A XXXXX XXXXX XXXXXXX, AS TRUSTEE
XXXXX XXXXX HOLDINGS, INC.
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
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XXXXX XXXXX MANAGEMENT COMPANY
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
DIAMOND TECHNOLOGY SOLUTIONS LLC
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
XX XXXXX AND ASSOCIATES OF
ARIZONA INC
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
XX XXXXX AND ASSOCIATES OF CALIFORNIA INC.
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
XX XXXXX AND ASSOCIATES OF COLORADO INC.
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
XX XXXXX AND ASSOCIATES OF
FLORIDA INC.
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
XX XXXXX AND ASSOCIATES OF
GEORGIA INC.
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
XX XXXXX AND ASSOCIATES OF MINNESOTA INC.
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
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XX XXXXX AND ASSOCIATES OF OHIO INC
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
XX XXXXX AND ASSOCIATES OF
TEXAS INC.
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
XX XXXXX AND ASSOCIATES OF
ILLINOIS INC.
Per:/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
X-XXXXXXX.XXX INC.
Per:/s/ Xxxx Xxxxxx Xxxxxxx
-------------------------------------------------
