EXHIBIT 2.1
PURCHASE AGREEMENT
BY AND AMONG
DOLLAR FINANCIAL GROUP INC.,
DOLLAR FINANCIAL CANADA LTD.,
CANADIAN CAPITAL CORPORATION,
DOLLAR ONTARIO LTD.,
XXX X. XXXXX,
XXXXXX X. XXXXX, and
THE XXXXX FAMILY TRUST,
DATED AS OF MARCH 31, 1997
TABLE OF CONTENTS
ARTICLE I - INTERPRETATION...................................................2
1.1 Defined Terms.................................................2
1.2 Schedules and Exhibits.......................................13
1.3 Table of Contents and Headings...............................14
ARTICLE II - SALE AND PURCHASE OF SHARES....................................15
2.1 Sale and Purchase of Shares..................................15
2.2 Assets.......................................................16
2.3 Excluded Assets..............................................18
2.4 Liabilities..................................................19
2.5 Excluded Liabilities.........................................19
2.6 Payment of Sales, Use or Similar Taxes.......................19
2.7 Expenses.....................................................19
2.8 Services of Xxx..............................................19
ARTICLE III - PURCHASE AND PAYMENT..........................................20
3.1 Amount of Purchase Price.....................................20
3.2 Payment of Cash..............................................20
3.3 Post Closing Chargebacks.....................................20
3.4 Adjustments..................................................20
3.5 Sale of Purchase Note........................................21
ARTICLE IV - CLOSING AND TERMINATION........................................21
4.1 Closing Date.................................................21
4.2 Termination of Agreement.....................................21
4.3 Procedure Upon Termination...................................21
4.4 Effect of Termination........................................22
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ARTICLE V - REPRESENTATIONS AND WARRANTIES OF THE VENDORS...................22
5.1 Organization and Good Standing...............................22
5.2 Authorization of Agreement...................................23
5.3 Capitalization...............................................23
5.4 Subsidiaries and Other Interests.............................24
5.5 Corporate Records............................................24
5.6 Conflicts; Consents of Third Parties.........................25
5.7 Ownership and Transfer of Shares.............................26
5.8 Financial Statements.........................................26
5.9 No Undisclosed Liabilities...................................27
5.10 Absence of Certain Developments..............................27
5.11 Taxes........................................................30
5.12 Leased Property..............................................32
5.13 Tangible Personal Property...................................36
5.14 Intangible Property..........................................37
5.15 Material Contracts...........................................37
5.16 Employee Benefits............................................38
5.17 Labour.......................................................40
5.18 Employment Matters...........................................41
5.19 Litigation...................................................43
5.20 Compliance with Laws.........................................43
5.21 Environmental Matters........................................44
5.22 Insurance....................................................45
5.23 Intentionally Deleted........................................46
5.24 Related Party Transactions...................................46
5.25 Banks........................................................46
5.26 Financial Advisors...........................................46
5.27 Franchise Operations.........................................46
5.28 Name.........................................................46
5.29 Third Party Discussion.......................................47
5.30 No Bankruptcy................................................47
5.31 No Misrepresentation.........................................47
5.32 Partnerships or Joint Ventures...............................47
5.33 Withholdings.................................................47
5.34 The Corporation..............................................48
5.35 Cornwall Outlet Insurance Claim..............................48
5.36 Keele Street Outlet..........................................48
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF PURCHASER....................48
6.1 Organization and Good Standing...............................48
6.2 Authorization of Agreement...................................48
6.3 Conflicts; Consents of Third Parties.........................49
6.4 Litigation...................................................49
6.5 Financial Advisors...........................................50
6.6 Bankruptcy...................................................50
6.7 Approvals....................................................50
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ARTICLE VII - COVENANTS.....................................................50
7.1 Access to Information........................................50
7.2 Conduct of the Business Pending the Closing..................50
7.3 Consents.....................................................54
7.4 Consents to Real Property Leases.............................54
7.5 No Solicitation..............................................54
7.6 Preservation of Records......................................55
7.7 Publicity....................................................55
7.8 Use of Name..................................................55
7.9 Environmental Matters........................................55
7.10 Non-Competition Agreements...................................56
7.11 Shareholder Releases.........................................56
7.12 Tax Matters..................................................56
7.13 Employer Health Tax..........................................58
7.14 Western Union Bonus..........................................58
7.15 Employees....................................................59
ARTICLE VIII - CONDITIONS TO CLOSING........................................60
8.1 Conditions Precedent to Obligations of Purchaser.............60
8.2 Conditions Precedent to Obligations of the Vendors...........62
8.3 Failure of Vendors to Satisfy Conditions Precedent...........63
8.4 Failure of Purchaser to Satisfy Conditions Precedent.........64
ARTICLE IX - DOCUMENTS TO BE DELIVERED......................................64
9.1 Documents to be Delivered by the Vendors.....................64
9.2 Documents to be Delivered by the Purchaser...................66
9.3 Minimum Lease Assignments....................................66
ARTICLE X - INDEMNIFICATION.................................................68
10.1 Survival.....................................................68
10.2 General Indemnification......................................68
10.3 Limitations on Indemnification for Breaches of
Representations and Warranties...............................70
10.4 Indemnification Procedures...................................70
10.5 Tax Matters..................................................72
10.6 Waiver of Subrogation and Other Rights.......................73
10.7 Treatment of Payment.........................................74
10.8 Limitation of Indemnity......................................74
ARTICLE XI - GENERAL........................................................74
11.1 Specific Performance.........................................74
11.2 Further Assurances...........................................75
11.3 Submission to Jurisdiction; Consent to Service of Process....75
11.4 Entire Agreement; Amendments and Waivers Confidentiality.....75
11.5 Severability.................................................76
11.6 Binding Effect; Assignment...................................76
11.7 Counterparts.................................................76
11.8 Notices......................................................76
11.9 Vendor's Representative......................................77
11.10 Governing Law................................................78
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THIS PURCHASE AGREEMENT made as of March 31, 1997 (the "Agreement"), BY AND
AMONG
DOLLAR FINANCIAL CANADA LTD. an Alberta Corporation
(the "Purchaser")
OF THE FIRST PART
- and -
CANADIAN CAPITAL CORPORATION an Ontario Corporation
("Cap Corp")
OF THE SECOND PART
- and -
DOLLAR ONTARIO LTD., an Ontario Corporation (the
"Corporation")
OF THE THIRD PART
- and -
XXX X. XXXXX of the City of Oakville, of the Province
of Ontario ("Xxx")
OF THE FOURTH PART
- and -
XXXXXX X. XXXXX of the City of Oakville, of the
Province of Ontario ("Xxxxxx")
OF THE FIFTH PART
- and -
XXXXX FAMILY TRUST, a trust created pursuant to a Deed of Settlement
as of February 6, 1985 under the Laws of the Province of Ontario
(the "Trust")
OF THE SIXTH PART
- and -
DOLLAR FINANCIAL GROUP, INC. a New York corporation
("Financial")
OF THE SEVENTH PART
WITNESSETH:
WHEREAS Cap Corp as of the date hereof owns and operates forty-three (43)
cheque cashing and financial service stores at various locations in Ontario (the
"Stores") as set out in Schedule 2.1(a);
WHEREAS Cap Corp intends to transfer to the Corporation for valuable
consideration and the Corporation intends to acquire and operate and operates
the Stores effective as of April 18, 1997;
WHEREAS the Purchaser desires to purchase from Cap Corp, Xxx, Xxxxxx and
the Trust (hereinafter collectively referred to as the "Vendors") and the
Vendors desire to sell to Purchaser, all of the Shares for the Purchase Price
and upon the terms and conditions hereinafter set forth;
WHEREAS the Purchaser desires that, effective upon the Closing Date, Xxx
and Xxxxxx will agree not to compete with Purchaser or any of its affiliates
pursuant to a separate Non-
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Competition Agreement to be entered into on the Closing Date in substantially
the form set forth on Exhibit A hereto;
WHEREAS, certain terms used in this Agreement are defined in Section 1.1;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter contained, the parties hereby agree as follows:
ARTICLE I - INTERPRETATION
1.1 DEFINED TERMS
For purposes of this Agreement, the following terms shall have the
meanings specified in this Section 1.1:
(a) "ACCOUNTS PAYABLE" means the aggregate dollar amount of
accounts payable, including all current liabilities of
the Corporation.
(b) "ACQUISITION TRANSACTION" shall have the meaning set
forth in Section 7.5 hereof.
(c) "AFFILIATE" means, with respect to any Person, any
relative or any other Person directly or indirectly
controlling, controlled by or under common control with
such Person. For the purpose of this definition,
"control" of a Person shall mean the possession,
directly or indirectly, of the power to direct or cause
the direction of its management or policies, whether
through the ownership of voting securities, by contract
or otherwise.
(d) "AGREEMENT" means this agreement and all schedules,
exhibits and attachments hereto.
(e) "ARTICLES" means the articles of incorporation of the
Corporation as set forth in Exhibit "C" hereto.
(f) "ASSETS" shall have the meaning ascribed to such term
in Section 2.2 hereof.
(g) "ASSET TRANSFER AGREEMENT" shall have the meaning
ascribed to such term in Section 7.12 hereof.
(h) "ASSUMED CONTRACTS" shall have the meaning ascribed to
such term in Section 5.15 hereof.
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(i) "AUDITED STATEMENTS" shall have the meaning ascribed to
such term in Section 5.8 hereof.
(j) "BALANCE SHEET" shall have the meaning ascribed to such
term in Section 5.8(b).
(k) "BALANCE SHEET DATE" shall mean January 31, 1997.
(l) "BUSINESS" shall have the meaning ascribed to such term
in Section 2.2(b) hereof.
(m) "BUSINESS DAY" means any day of the year on which national
banking institutions in Toronto are open to the public for
conducting business and are not required or authorized to
close.
(n) "CANADIAN CURRENCY" and the "C$" sign each means the
lawful money of Canada.
(o) "CAP CORP" shall have the meaning ascribed to such term
in the introductory paragraph hereto.
(p) "CAP CORP PROPERTY" shall have the meaning ascribed to
such term in Section 5.12(g).
(q) "CAPITAL EXPENDITURES" means, for any Person for any
period, the aggregate of all expenditures by such
Person, except interest capitalized during
construction, during such period for property, plant or
equipment, including, without limitation, renewals,
improvements, replacements and capitalized repairs,
that would be reflected as additions to property, plant
or equipment on a consolidated balance sheet of such
Person prepared in conformity with GAAP. For the
purpose of this definition, the purchase price of
equipment which is acquired simultaneously with the
trade-in of existing equipment owned by such Person or
with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of
such purchase price less the credit granted by the
seller of such equipment being traded in at such time
or the amount of such proceeds, as the case may be.
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(r) "CASH ON HAND" means the sum of all cash (Canadian
Currency and U.S. Currency) physically located in any
of the Stores as of the opening of business on the
Closing Date and all cash withdrawn from Cap Corp's
bank account at the close of business on the day
immediately preceding the Closing Date and at the
opening of business on the Closing Date to be delivered
by Brink's Armoured Car Services to the Stores on the
Closing Date.
(s) "CLAIM" shall have the meaning ascribed to such term in
Section 10.4(a) hereof.
(t) "CLOSING" shall have the meaning ascribed to such term
in Section 4.1 hereof.
(u) "CLOSING DATE" shall have the meaning ascribed to such
term in Section 4.1 hereof.
(v) "CLOSING DATE ACCOUNTS RECEIVABLE" means the aggregate
dollar amount of accounts receivable of Cap Corp related
to the Business immediately prior to the transfer of
Assets to the Corporation.
(w) "COMMON SHARES" has the meaning ascribed to such term
in Section 2.1 hereof.
(x) "COMMON STOCK" shall have the meaning ascribed to such
term in Section 5.3 hereof.
(y) "COMPANY PROPERTY" shall have the meaning ascribed to
such term in Section 5.12(a) hereof.
(z) "CONSENT DOCUMENTS" shall have the meaning ascribed to
such term in Section 9.3(a) hereof.
(aa) "CONTRACT" means any contract, agreement, indenture, note,
bond, loan, instrument, lease, commitment or other
arrangement or agreement.
(bb) "CONTRACT LIABILITIES" shall have the meaning ascribed
to such term in Section 2.4 hereof.
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(cc) "CORNWALL OUTLET" shall have the meaning ascribed to
such term in Section 5.35 hereof.
(dd) "CORPORATION" shall have the meaning ascribed to such
term in the introductory paragraph hereto.
(ee) "EFFECTIVE TIME" shall have the meaning ascribed to
such term in Section 4.1 hereof.
(ff) "EMPLOYEE BENEFIT PLANS" shall have the meaning ascribed
to such term in Section 5.16(a) hereof.
(gg) "ENVIRONMENTAL CLAIM" means any accusation, allegation,
notice of violation, action, claim, lien, demand,
abatement or other order or directive (conditional or
otherwise) by any Governmental Body or any other Person
for personal injury (including sickness, disease or
death), tangible or intangible property damage, damage
to the environment, nuisance, pollution, contamination
or other adverse effects on the environment, or for
fines, penalties or restrictions resulting from or
based upon (i) the existence, or the continuation of
the existence, of a Release (including, without
limitation, sudden or non-sudden accidental or
non-accidental Releases) of, or exposure to, any
Hazardous Material, odor or audible noise in, into or
onto the environment (including, without limitation,
the air, soil, surface water or ground water) at, in,
by, from or related to any property owned, operated or
leased by the Corporation or any activities or
operations thereof; (ii) the transportation, storage,
treatment or disposal of Hazardous Materials in
connection with any property owned, operated or leased
by the Corporation or any operations or facilities
thereof; or (iii) the violation, or alleged violation,
of any Environmental Law of or from any Governmental
Body relating to environmental matters connected with
any property owned, operated or leased by the
Corporation.
(hh) "ENVIRONMENTAL COSTS AND LIABILITIES" means any and all
losses, liabilities, obligations, damages, fines,
penalties, judgments, actions, claims, costs and
expenses (including, without limitation, fees,
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disbursements and expenses of legal counsel, experts,
engineers and consultants and the costs of
investigation and feasibility studies and Remedial
Action) arising from or under any Environmental Law or
order or contract with any Governmental Body or any
other Person.
(ii) "ENVIRONMENTAL LAW" means any foreign, federal, provincial
or local law, statute, regulation, code, ordinance, rule
of common law or other requirement in any way relating to
the protection of human health and safety or the
environment as now or hereafter in effect including,
without limitation, the Canadian Environmental Protection
Act and the Environmental Assessment Act (Ontario), as
such laws have been amended or supplemented, and the
regulations promulgated pursuant thereto, and all
analogous foreign, federal, provincial or local laws.
(jj) "ENVIRONMENTAL PERMITS" shall have the meaning ascribed
to such term in Section 5.21(a).
(kk) "EXCISE TAX ACT" means the Excise Tax Act, R.S.C., 1985,
c.E-15, together with the regulations promulgated
thereunder, as amended or supplemented from time to time.
(ll) "EXCLUDED LIABILITIES" means any and all liabilities or
obligations of the Cap Corp of any kind, nature and
description, absolute or contingent, known or unknown,
existing on or prior to the Closing Date or thereafter
coming into being or arising by reason of any state of
facts existing, or any transaction entered into, on or
prior to the Closing Date (including, without
limitation, any such liabilities arising under any
Environmental Laws and any such liabilities relating to
Taxes), other than Contract Liabilities referred to in
Section 2.4 hereof.
(mm) "FINANCIAL STATEMENTS" shall have the meaning ascribed
to such term in Section 5.8(a) hereof.
(nn) "GAAP" means Canadian generally accepted accounting
principles as of the date hereof.
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(oo) "GOVERNMENTAL BODY" means any government or governmental
or regulatory body thereof, or political subdivision
thereof, whether federal, provincial, local or foreign,
minister, governor or lieutenant governor-in-council,
board, tribunal or any agency, instrumentality or
authority thereof, or any court or arbitrator (public or
private).
(pp) "GST" shall refer to the Goods and Services Tax levied
under Part IX of the Excise Tax Act.
(qq) "XXX' SHARES" has the meaning ascribed to such term in
Section 2.1.
(rr) "HAZARDOUS MATERIAL" means any substance, material or
waste which is regulated by Canada, or any provincial
or local Governmental Body including, without
limitation, petroleum and its by-products, asbestos,
and any material or substance which is defined as a
"hazardous waste," "hazardous substance," "hazardous
material," "restricted hazardous waste," "industrial
waste," "solid waste," "contaminant," "pollutant,"
"toxic waste" or "toxic substance" under any provision
of Environmental Law.
(ss) "INDEMNIFYING PARTY" shall have the meaning ascribed to
such term in section 10.5(a) hereof.
(tt) "INDEMNITOR" shall have the meaning ascribed to such
term in Section 10.4(a) hereof.
(uu) "INTERIM PERIOD" shall mean the period between the date of
execution of this Agreement and the earlier of Closing and
the release of each party's obligations under Article IV
or Article VIII.
(vv) "KEELE STREET OUTLET" shall have the meaning ascribed
to it in Section 5.36 hereof.
(ww) "LAW" means any federal, state, provincial, local or
foreign law (including common law), statute, code,
ordinance, rule, regulation or other requirement.
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(xx) "LEGAL PROCEEDING" means any judicial, administrative or
arbitral actions, suits, proceedings (public or private),
claims or governmental proceedings.
(yy) "LESLIE'S SHARES" has the meaning ascribed to such term
in Section 2.1.
(zz) "LICENSES" shall have the meaning ascribed to such term
in Section 1.2(a) hereof.
(aaa) "LIEN" means any lien, pledge, mortgage, hypothecate, deed
of trust, security interest, claim, prior claim, lease,
charge, option, right of first refusal, easement,
servitude, transfer restriction under any shareholder or
similar agreement, encumbrance or any other restriction or
limitation whatsoever.
(bbb) "LISTED EMPLOYEES" shall have the meaning ascribed to
said term in Section 7.15 hereof.
(ccc) "LOSSES" means any and all losses, liabilities (accrued,
absolute, contingent or otherwise), suits, proceedings,
judgments, awards, demands, settlements, fines,
assessments, re-assessments, damages, interest and
penalties, and costs and expenses (including without
limitation reasonable legal fees and litigation expenses)
on a solicitor and his own client basis.
(ddd) "MATERIAL ADVERSE CHANGE" means any material adverse
change in the business, properties, results of operations,
prospects or condition (financial or otherwise) of Cap
Corp, the Corporation and the Business taken as a whole.
(eee) "MATERIAL CONTRACTS" shall have the meaning ascribed to
such term in Section 5.15 hereof.
(fff) "MINIMUM LEASE CONDITION" shall have the meaning ascribed
to such term in Section 9.3 hereof.
(ggg) "NON-ASSUMABLE CLAIM" shall have the meaning ascribed
to such term in Section 10.4(c) hereof.
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(hhh) "NON-COMPETITION AGREEMENT" shall have the meaning
ascribed to such term in Section 7.10 hereof.
(iii) "NON-MATERIAL CONTRACT" means any Contract, other than
Real Property Leases, leases of Cap Corp Properties and
those Contracts that are or should be Material Contracts,
which was entered into in the ordinary course of the
Business consistent with past practice in
an arm's length transaction.
(jjj) "ORDER" means any order, injunction, judgment, decree,
ruling, writ, assessment or arbitration award.
(kkk) "PERMITTED EXCEPTIONS" means (i) statutory liens for
current taxes, assessments or other governmental
charges not yet delinquent or the amount or validity of
which is being contested in good faith by appropriate
proceedings, provided an appropriate reserve is
established therefor; (ii) mechanics', carriers',
workers', repairers' and similar Liens arising or
incurred in the ordinary course of business provided
that they are not greater than $1000.00 in the
aggregate (iii) zoning, entitlement and other land use
and environmental regulations by any Governmental Body,
provided that such regulations have not been violated;
and (iv) such other imperfections in title, charges,
easements, restrictions and encumbrances which do not
materially detract from the value of or materially
interfere with the present use of any Company Property
subject thereto or affected thereby.
(lll) "PERMITS" means any approvals, authorizations,
consents, Licenses, permits or certificates.
(mmm) "PERSON" means any individual, corporation,
partnership, firm, joint venture, association,
joint-stock company, trust, unincorporated
organization, Governmental Body or other entity.
(nnn) "PERSONAL PROPERTY LEASE" shall have the meaning ascribed
to such term in Section 5.13(a) hereof.
(ooo) "POST CLOSING CHARGEBACK" shall have the meaning
ascribed to it in Section 3.3 hereof.
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(ppp) "PREFERRED SHARES" shall have the meaning ascribed to such
term in Section 5.3 (a)(ii) hereof.
(qqq) "PREPAIDS" means, without duplication, the aggregate
dollar amount of all prepaid assets, prepaid expenses,
prepaid rent, security deposits, all as determined in
accordance with GAAP, consistently applied, of the
Corporation related to the Business at the Effective Time,
as summarized in the attached Schedule 1.1(qqq).
(rrr) "PROPERTY CONTRACTS" shall have the meaning ascribed to
such term in Section 5.12(a) hereof.
(sss) "PURCHASE NOTE" means a demand non-interest bearing
promissory note made by the Corporation as debtor in
favour of Cap Corp as holder pursuant to the Asset
Transfer Agreement in the aggregate principal amount equal
to the aggregate of:
(i) the aggregate amount of all Prepaids that are
held to the credit of Cap Corp and the benefit of
which has been transferred to the Corporation as
set out in Schedule 1.1(qqq) including, without
limitation and for greater certainty, all rental
payments made by Cap Corp on behalf of the
Corporation pursuant to the Real Property Leases
for that period from the Closing Date to April
30, 1997 and all prepaid rents of Real Property
Leases;
(ii) the aggregate amount of all Cash on Hand;
(iii) the aggregate of the face amounts of all post-dated
cheques held by Cap Corp at the close of business on
the day immediately preceding Closing;
(iv) the aggregate amount of all commissions receivable
by Cap Corp in respect of the period ending at the
close of business on the day immediately preceding
Closing including without limitation commissions
receivable from Cardinal regarding phone cards;
(v) the aggregate amount of all overpayments made by Cap
Corp and refunds owing to it at Closing, including
without limitation amounts owing to it in respect of
Employer Health Tax, an amount owing to it by the
City of Brampton and
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amounts owing to it by the landlords of Stores nos.
813 and 840; and
(vi) the aggregate amount of all advances to employees
made by Cap Corp prior to Closing, such aggregate
amount not to exceed C$5,000.00.
(ttt) "PURCHASE PRICE" shall have the meaning ascribed to
such term in Section 3.1 hereof.
(uuu) "PURCHASER" shall have the meaning ascribed to such
term in the introductory paragraph hereto.
(vvv) "PURCHASER DOCUMENTS" shall have the meaning ascribed
to such term in Section 6.2 hereof.
(www) "PURCHASER INDEMNIFIED PARTIES" shall have the meaning
ascribed to such term in Section 10.2(a) hereof.
(xxx) "PURCHASER'S SOLICITORS" shall mean Messrs. Xxxxxx &
XxXxxxxx, Barristers and Solicitors, 2500, 00000 - 000
Xxxxxx, Xxxxxxxx, Xxxxxxx, X0X 0X0.
(yyy) "REAL PROPERTY LEASE" shall have the meaning ascribed to
such term in Section 5.12(a) hereof.
(zzz) "RELEASE" means any release, spill, emission, leaking,
pumping, pouring, dumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the
indoor or outdoor environment, or into or out of any
property.
(aaaa) "REMEDIAL ACTION" means all actions, including, without
limitation, any Capital Expenditures required, to (i)
clean up, remove, treat or in any other way address any
Hazardous Material; (ii) prevent the Release or threat
of Release of any Hazardous Material so it does not
endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment; (iii)
perform pre-remedial studies and investigations or
post-remedial monitoring and care; or (iv) bring any
facility owned, operated or leased by the Corporation
and the operations thereon into compliance with
Environmental Laws.
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(bbbb) "REPRESENTATIVES" shall have the meaning ascribed to such
term in Section 7.5 hereof.
(cccc) "SHARES" means the Common Shares and the Preferred
Shares.
(dddd) "STORES" shall have the meaning ascribed to such term in
the recitals hereto.
(eeee) "TAX", "TAXES" or "TAXES" means all taxes, charges,
fees, levies, imposts, duties, and other assessments,
including but not limited to any income, alternative
minimum or add-on tax, estimated, gross income, gross
receipts, sales, goods and services, business, use,
transfer, gains, transactions, intangibles, ad valorem,
value-added, franchise, registration, title, license,
capital, paid-up capital, profits, withholding,
payroll, employment, excise, severance, stamp,
occupation, premium, recording, real property, personal
property, health, education, highway use, commercial
rent, environmental, windfall profit tax, customs,
import duty or other tax, governmental fee or other
like assessment or charge of any kind whatsoever,
together with any interest, penalties, or additions to
tax, and any interest or penalties imposed with respect
to the filing, obligation to file or failure to file
any Tax Return.
(ffff) "TAX ACT" shall refer to the Income Tax Act, R.S.C.,
1985 (5th Suppl.) c. 1, together with the regulations
promulgated thereunder, as amended or supplemented from
time to time, including any proposed amendment to such
legislation announced by way of notice of ways and
means motion or press release from time to time by the
Minister of Finance of Canada or other Minister charged
with the administration of the Tax Act, which
announcement confirms that such proposed amendment,
when enacted, shall have retroactive effect to a date
prior to the date of its enactment.
(gggg) "TAX RETURN" means any return, election, declaration,
report, claim for refund, information return,
statement, or other similar document including any
schedule or attachment thereto, and including any
amendment thereof required to be filed under the
provisions of any
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legislation in relation to Taxes and any tax forms
required to be filed, whether in connection with a tax
return or not, under any provisions of any applicable
legislation in relation to Taxes.
(hhhh) "TIME OF CLOSING" shall mean 10:00 a.m. Toronto time.
(iiii) "TRANSACTION DOCUMENTS" shall have the meaning ascribed to
such term in Section 5.2 hereof.
(jjjj) "TRUST'S SHARES" has the same meaning ascribed to such
term in Section 2.1.
(kkkk) "UNAUDITED STATEMENT" shall have the meaning ascribed to
such term in Section 5.8 hereof.
(llll) "VENDOR INDEMNIFIED PARTIES" shall have the meaning
ascribed to such term in Section 10.2(b) hereof.
(mmmm) "VENDOR RELEASE" shall have the meaning ascribed to such
term in Section 7.11 hereof.
(nnnn) "VENDORS" shall have the meaning ascribed to such term in
the preamble hereof.
(oooo) "VENDORS' REPRESENTATIVE" shall have the same meaning
ascribed to such term in Section 11.9 hereof.
(pppp) "VENDORS' SOLICITORS" means Messrs. Fogler Xxxxxxxx,
Xxxxx 0000, X.X. Xxx 00, Xxxxx Xxxxx Xxxxx, Xxxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, X0X 0X0.
(qqqq) "WESTERN UNION AGREEMENT" shall have the same meaning
ascribed to such term in Section 7.14 hereof.
1.2 SCHEDULES AND EXHIBITS
The Schedules and Exhibits to this Agreement hereinafter referred to are
incorporated herein by reference and are deemed to be part of this Agreement.
The Exhibits to this Agreement are as follows:
(a) Exhibit "A" - Form of Non-Competition Agreement
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(b) Exhibit "B" - Form of Lease from Cap Corp or Xxx
(c) Exhibit "C" - Articles
(d) Exhibit "D" - Form of Vendor Release
(e) Exhibit "E" - Form of Consent and Estoppel Certificate
of Landlord
(f) Exhibit "F" - Form of Escrow Agreement re: Assignment
of Lease
(g) Exhibit "G" - Form of Release of Guarantee Agreements
The Schedules to this Agreement are as follows:
Schedule 1.1(qqq) - Summary of Prepaids
Schedule 2.2(a) - Stores
Schedule 2.2(d) - Personal Property
Schedule 2.3 - Excluded Assets
Schedule 5.6 - Conflicts, Consents of Third parties Schedule 5.8(a)
- Financial Statements Schedule 5.9 - Undisclosed Liabilities
Schedule 5.10 - Developments since Balance Sheet Date Schedule 5.11
- Tax Matters Schedule 5.12(a) - Real Property Leases Schedule
5.12(g) - Cap Corp Properties Schedule 5.13 - Personal Property
Leases Schedule 5.14 - Intangible Property Schedule 5.15 - Material
Contracts Schedule 5.16(a) - Employee Benefit Plans Schedule 5.17(a)
- Collective Bargaining Agreement Schedule 5.17(b) - Labour
Organizations Schedule 5.18 - Employees Schedule 5.19 - Litigation
Schedule 5.20 - Compliance with Laws Schedule 5.21 - Environmental
Matters Schedule 5.22 - Insurance Policies Schedule 5.24 - Related
Party Transactions Schedule 5.26 - Financial Advisors Schedule 5.29
- Third Party Discussions Schedule 5.35 - Cornwall Outlet Insurance
Claim Schedule 6.3 - Conflicts; Consents of Third Parties Schedule
7.2 - Increases to Compensation
1.3 TABLE OF CONTENTS AND HEADINGS
The table of contents and section headings of this Agreement are for
reference purposes only and are to be given no effect in the construction or
interpretations of this Agreement.
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ARTICLE II - SALE AND PURCHASE OF SHARES
2.1 SALE AND PURCHASE OF SHARES
Upon the terms and subject to the conditions contained herein, on the
Closing Date:
(a) Cap Corp shall sell, assign, transfer, convey and
deliver to the Purchaser (or its designees) good and
marketable title, free and clear of all Liens, and the
Purchaser shall purchase from Cap Corp 100 Common
Shares of the Corporation (the "Common Shares")
representing all of the issued and outstanding shares
of the Corporation, other than those shares described
in Subsection (b), (c) and (d) below;
(b) Xxx shall sell, assign, transfer, convey and deliver to
the Purchaser (or its designees) good and marketable
title, free and clear of all Liens, and the Purchaser
shall purchase from Xxx 400 Preferred Shares of the
Corporation ("Xxx' Shares") representing all of the shares
owned by Xxx, directly or indirectly in the Corporation;
(c) Xxxxxx shall sell, assign, transfer, convey and deliver to
the Purchaser (or its designees) good and marketable
title, free and clear of all Liens, and the Purchaser
shall purchase from Xxxxxx 400 Preferred Shares of the
Corporation ("Leslie's Shares") representing all of the
shares owned by Xxxxxx, directly or indirectly in the
Corporation;
(d) Trust shall sell, assign, transfer, convey and deliver to
the Purchaser (or its designees) good and marketable
title, free and clear of all Liens, and the Purchaser
shall purchase from the Trust 500 Preferred Shares of the
Corporation ("Trust's Shares") representing all of the
shares owned by Trust, directly or indirectly in the
Corporation;
In addition, from and after the Closing, the Vendors agree to provide, or
cause to be provided, to Purchaser and the Corporation access to all documents
and/or information as may be reasonably necessary to enable each of them to see
to the efficient and proper conduct and administration of the Assets owned by
the Corporation as hereinafter defined including, without limitation, all
historical files, copies of Tax Returns, records and personnel data of Cap Corp
related to the Business.
15
2.2 ASSETS
Without limiting the foregoing, the Vendors agree that, immediately prior
to the Effective Time, all of the following assets (the "Assets"), shall be
transferred by Cap Corp pursuant to the Asset Transfer Agreement and owned by
the Corporation free and clear of all Liens except for the Permitted Exceptions:
(a) Stores The Stores
(b) Licenses and Authorizations All authorizations,
approvals, orders, licenses, franchises, certificates
and permits (collectively, "Licenses") of and from all
Governmental Bodies necessary to own or lease the
properties and assets used or usable in the ownership
and/or operation of the Stores, and to otherwise
conduct the business of the operation of cheque cashing
and other financial services from the Stores that was
conducted by Cap Corp prior to the date hereof (the
"Business") together with any renewals, extensions or
modifications thereof and additions thereto and other
pending applications or applications to be filed with
any Governmental Body between the date of this
Agreement and the Closing Date.
(c) Accounts Receivable Closing Date Accounts Receivable
including without restriction all cheques returned unpaid,
post-dated cheques, accounts receivable, notes receivable
and similar items in the process of collection owned or
otherwise held by Cap Corp on or before the Closing Date.
(d) Other Personal Property, etc. All tangible and
intangible personal or moveable property, equipment,
machinery, furniture, fixtures, tools, computer
hardware, supplies and other assets, wherever located,
used or usable in the ownership and/or operation of the
Stores and the Business as set out in Schedule 2.1(d)
including security systems and all security codes
thereto, together with such additions, modifications
and replacements thereto, and subject to deletions
therefrom in connection with any such replacements, as
may be made in accordance with the terms of this
Agreement and in the ordinary course of business
between the date of this Agreement and the Closing Date.
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(e) Leasehold Property All leased real or immovable
property, buildings and structures, leasehold
improvements, fixtures and appurtenances used or usable
in the operation of Cap Corp (including all Company
Properties) and the Business and their interests and
rights arising under all agreements, rights and
appurtenances relating thereto (including all Real
Property Leases), any renewals, extensions, amendments
or modifications thereof, and any additional agreements
and leases made or entered into in accordance with the
terms of this Agreement and in the ordinary course of
business between the date of this Agreement and the
Closing Date.
(f) Leases and Agreements All contracts and agreements
used or usable in the ownership and/or operation of the
Stores and the Business, including any renewals,
extensions, amendments or modifications thereof, and
any additional agreements, leases, commitments and
orders made or entered into in accordance with the
terms of this Agreement between the date of this
Agreement and the Closing Date.
(g) Intellectual Property, etc. All patents, patent
licenses, franchises, copyrights, trademarks, trade
names, service marks, trade secret rights, computer
programs and software, permits, licenses or other
similar rights used or usable in the ownership and/or
operation of the Stores and the Business, including,
specifically, the trade names enumerated on Schedule
5.14 hereof, together with any additions or
modifications thereto and subject to any deletions
therefrom made in accordance with the terms of this
Agreement between the date of this Agreement and the
Closing Date.
(h) Books and Records All books, records and files pertaining
to the Stores and the Business for all periods ending on
or before the Closing Date, including the Corporation's
minute book and stock register.
(i) Prepaid Expenses All security deposits and other prepaid
expenses relating to the operation and/or ownership of the
Stores and the Business, including, but not limited to,
any prepaid rent, licenses, postage and any other prepaid
assets or deposits relating to the
17
operation and/or ownership of the Stores existing as of
the Closing Date.
(j) Customer Lists All goodwill of the Business as a going
concern together with customer lists, vendor lists,
telephone numbers and other intangible assets relating
to the operation and/or ownership of the Stores and the
Business, together with any additions or modifications
thereto and subject to any deletions therefrom made in
accordance with the terms of this Agreement between the
date of this Agreement and the Closing Date.
(k) Inventories All inventories of or relating to the Business
at the Stores as of the Closing Date including all
packaged materials, manufactured supplies and finished
goods.
(l) Insurance Benefits Any benefits payable under all
insurance policies relating to the Assets or the
Business at the Stores in respect of any claims based
on occurrences prior to the Closing Date including
without restricting the generality of the foregoing the
insurance proceeds payable to Cap Corp in respect of
all claims made by Cap Corp regarding the Cornwall
Outlet, but excluding the insurance proceeds payable to
Cap Corp in respect of all claims made by Cap Corp
regarding the Keele Street Outlet which will remain the
property of Cap Corp.
(m) Supply Contracts The full benefit of all contracts
providing for the supply of goods and services to the
Business.
(n) Warranty Rights and Maintenance Contracts Full benefit of
all warranties and warranty rights against manufacturers
or sellers which apply to any of the Assets and all
maintenance contracts on machinery equipment and the other
Assets subject to the Purchaser's review and acceptance of
such contracts and agreements prior to the Closing Date.
2.3 EXCLUDED ASSETS
Schedule 2.3 sets out the assets of Cap Corp that will not be transferred
to the Corporation on Closing.
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2.4 LIABILITIES
Purchaser shall, following Closing, cause the Corporation, to perform and
discharge its obligations under the Assumed Contracts to the extent such
obligations arise and accrue after the Effective Time (the "Contract
Liabilities") whether billed directly to or provided with invoices in respect
thereof by Cap Corp and shall not assume and discharge or be liable for those
obligations that either arise out of or would have been satisfied prior to the
Closing. The Vendors agree that in the normal course following Closing Cap Corp
shall satisfy and discharge all of its obligations and liabilities for amounts
due or to become due for services rendered or goods delivered to Cap Corp with
respect to the Business prior to Closing.
2.5 EXCLUDED LIABILITIES
With the exception of Assumed Contracts, it is understood and agreed that
the Corporation is not assuming and shall not be liable or responsible for any
liabilities of Cap Corp including Excluded Liabilities. The Vendors shall
indemnify and save harmless the Purchaser, the Corporation or their officers,
directors, employees, agents and shareholders from and against all costs,
expenses, losses, claims or liabilities including legal fees on a solicitor and
client basis suffered or incurred by the Purchaser or any of its Affiliates
arising out of any of the Excluded Liabilities.
2.6 PAYMENT OF SALES, USE OR SIMILAR TAXES
All sales, use, transfer, intangible, recordation, documentary stamp or
similar Taxes or charges, of any nature whatsoever, applicable to, or resulting
from, the transfer of Assets from Cap Corp to the Corporation contemplated by
this Agreement shall be borne by the Vendors.
2.7 EXPENSES
Except as otherwise provided in this Agreement, the Vendors and the
Purchaser shall each bear their own expenses incurred in connection with the
negotiation and execution of this Agreement and each other agreement, document
and instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.
2.8 SERVICES OF XXX
For a period of two (2) months following the Closing Date Xxx shall
provide his part-time services requested by the Purchaser to assist the
Purchaser and the Corporation in the transition and operation and administration
of the Business and all matters related thereto. Xxx shall use his best efforts
to encourage all key management and employees of Cap Corp to accept the offer of
employment with the Corporation and continue to provide their services in a
consistent manner.
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ARTICLE III - PURCHASE AND PAYMENT
3.1 AMOUNT OF PURCHASE PRICE
The purchase price for the Shares (the "Purchase Price") shall be an
amount equal to C$17,763,090.00 to be allocated as follows:
Xxx' Shares $ 400,000.00
Leslie's Shares $ 400,000.00
Trust's Shares $ 500,000.00
Common Shares $16,463,090.00
TOTAL: $17,763,090.00
The Purchase Price is subject to adjustment as provided in this Agreement.
3.2 PAYMENT OF CASH
On the Closing Date and subject to the terms and conditions of this
Agreement, the Purchaser shall pay to the account of the Vendors by wire
transfer the full amount of the Purchase Price to the trust account of the
Vendor's Solicitors.
3.3 POST CLOSING CHARGEBACKS
The Vendors make no representations or warranties as to the Closing Date
Accounts Receivable transferred to the Corporation immediately prior to Closing
and delivered to the Purchaser on Closing. Except as otherwise set forth in
Section 3.4, it is understood and agreed that there shall be no adjustment of
the Purchase Price with respect to collected or uncollected Closing Date
Accounts Receivables. The Purchaser shall reimburse Cap Corp for the face amount
of any cheque up to $20,000.00 per maker of cheques negotiated by Cap Corp in
any Store prior to Closing which is charged back against the bank account of Cap
Corp after Closing ("Post Closing Chargeback"). The Purchaser shall reimburse
Cap Corp for the amount of each Post Closing Chargeback within ten (10) days
following receipt of documents satisfactory by the Purchaser acting reasonably
establishing the same. Cap Corp shall not be entitled to any reimbursement for
any item charged back to the account of Cap Corp prior to the Closing Date.
3.4 ADJUSTMENTS
(a) Immediately following Closing on the Closing Date the
Purchaser shall cause the Corporation to pay all rent due
to Cap Corp or its Affiliate pursuant to the leases on the
Cap Corp Properties for that period from the Closing Date
to April 30, 1997.
(b) The accrued vacation pay owing to employees of Cap Corp
up to the Effective Time has been estimated at
$165,000.00. The Purchase Price shall be increased
dollar for dollar by the amount by which accrued
vacation pay of the employees of Cap Corp at Closing
Date is less than $165,000.00 and decreased dollar for
dollar by the amount
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by which the accrued vacation pay of the employees of Cap
Corp at the Closing Date is greater than $165,000.00.
(c) On the Closing Date Cap Corp shall reimburse the
Corporation for all payments due or accruing due
(exclusive of accrued vacation pay) to all employees of
Cap Corp up to and including the day immediately prior to
the Closing Date.
(d) Cap Corp shall be entitled to receive cheques in
respect of the aggregate amount of all commissions
receivable by Cap Corp from Western Union and various
transit authorities for the period ending at the close
of business on the day immediately preceding Closing.
In the event that Western Union or such transit
authorities issue cheques payable to the Corporation
for the period both before and after the Effective
Time, the Corporation shall forthwith reimburse Cap
Corp in respect of all such commissions earned up to
the Effective Time upon receipt of such cheques by the
Corporation. In the event that Western Union or such
transit authorities issue cheques payable to Cap Corp
for the period both before and after the Effective
Time, Cap Corp shall forthwith reimburse the
Corporation in respect of all such commissions earned
from and after the Effective Time upon receipt of such
cheques by Cap Corp.
3.5 SALE OF PURCHASE NOTE
Immediately following Closing on the Closing Date, Cap Corp shall sell,
assign, transfer, convey and deliver to the Purchaser good and marketable title,
free and clear of all Liens, and the Purchaser shall purchase from Cap Corp the
Purchase Note for an aggregate amount equal to its face amount.
ARTICLE IV - CLOSING AND TERMINATION
4.1 CLOSING DATE
Subject to the satisfaction of the conditions set forth in Sections 8.1
and 8.2 hereof (or the waiver thereof by the party entitled to waive that
condition), the closing of the sale and purchase of the Shares provided for in
21
Section 2.1 hereof (the "Closing") shall take place at the Time of Closing at
the offices of the Vendors' Solicitors (or at such other place as the parties
may designate in writing) on April 18, 1997, with an effective time (the
"Effective Time") of 12:02 a.m. or on such other date and at such other place as
the Vendors and the Purchaser may jointly designate in writing. The date on
which the Closing shall be held is referred to in this Agreement as the "Closing
Date."
4.2 TERMINATION OF AGREEMENT
This Agreement may be terminated prior to the Closing as follows:
(a) by mutual written consent of the Vendors and the
Purchaser; or
(b) by the Vendors or the Purchaser by written notice to the
other if there shall be in effect a final non-appealable
Order of a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby.
4.3 PROCEDURE UPON TERMINATION
In the event of termination of this Agreement pursuant to Section 4.2
hereof, this Agreement shall, subject to Section 4.4, terminate, and the
purchase of the Shares hereunder shall be abandoned, without further action by
the Purchaser or the Vendors. If this Agreement is terminated as provided
herein, each party shall redeliver all documents, work papers and other material
of any other party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the party furnishing the same.
4.4 EFFECT OF TERMINATION
In the event that this Agreement is validly terminated as provided herein,
then the parties shall be relieved of their duties and obligations arising under
this Agreement after the date of such termination and such termination shall be
without liability to the Vendors, the Corporation or the Purchaser; however,
nothing in this Section 4.4 shall relieve any party hereto of any liability for
a breach of this Agreement.
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF THE VENDORS
Each of the Vendors hereby jointly and severally represents and
warrants to Purchaser as follows:
5.1 ORGANIZATION AND GOOD STANDING
(a) The Corporation is a corporation duly organized,
validly existing and in good standing under the laws of
the Province of Ontario and has all
22
requisite corporate power and authority to own, lease and
operate its properties and to carry on the Business. The
Corporation is a "private company" within the meaning of
the Securities Act (Ontario). The Corporation is duly
qualified or authorized to do business and is in good
standing under the laws of each jurisdiction in which it
owns or leases real or immovable property and each other
jurisdiction in which the conduct of the Business or the
ownership of its properties requires such qualification or
authorization.
(b) Cap Corp is a corporation duly organized, validly existing
and in good standing under the laws of the Province of
Ontario and has all requisite corporate power and
authority to own, lease and operate its properties and to
carry on the Business. Cap Corp is a "private company"
within the meaning of the Securities Act (Ontario).
5.2 AUTHORIZATION OF AGREEMENT
The Corporation, Cap Corp and the Trust have all requisite power and
authority to execute and deliver this Agreement, and each other agreement,
document, instrument or certificate contemplated by this Agreement to be
executed by such Person in connection with the consummation of the transactions
contemplated by this Agreement (together with this Agreement and the
Non-Competition Agreements, the "Transaction Documents"), and to consummate the
transactions contemplated hereby and thereby. This Agreement has been, and each
of the Transaction Documents will be at or prior to the Closing, duly and
validly executed and delivered by the Vendors Xxx the Corporation and (assuming
the due authorization, execution and delivery by Purchaser if a party thereto)
this Agreement constitutes, and each of the Transaction Documents when so
executed and delivered will constitute, the legal, valid and binding obligations
of the Vendors the Corporation, enforceable against such Person in accordance
with their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
5.3 CAPITALIZATION
(a) The authorized capital of the Corporation consists
solely of:
(i) an unlimited number of Common Shares, without par
value (the "Common Stock"). Prior to the Time of
Closing there
23
will be 100 shares of Common Stock issued and
outstanding which constitute all of the issued and
outstanding shares of Common Stock and were duly
authorized for issuance and are validly issued,
fully paid and non-assessable and free of preemptive
rights; and
(ii) one thousand three hundred (1,300) preference
shares, without par value. Prior to the Time of
Closing, the 1300 preference shares (the
"Preferred Shares") outstanding shall constitute
all of the issued and outstanding Preferred
Shares in the capital stock of the Corporation
and shall have been duly authorized for issuance
and validly issued, fully paid and non-assessable
and free of pre-emptive rights.
(b) The Articles set out the rights restriction and
privileges of the Shares.
(c) There is no existing option, warrant, call, right,
commitment or other agreement of any character to which
the Vendors or the Corporation is a party requiring (or
which may in the future require), and there are no
securities of the Corporation outstanding which upon
conversion or exchange would (or may in the future)
require, the issuance, sale or transfer of any shares
of capital stock or other securities of the Corporation
or other securities convertible into, exchangeable for
or evidencing the right to subscribe for or purchase
shares of capital stock or other securities of the
Corporation. None of the Vendors, or the Corporation
is a party to any voting trust or other voting
agreement with respect to any of the shares of Common
Stock or to any agreement relating to the issuance,
sale, redemption, transfer or other disposition of the
capital stock of the Corporation.
5.4 SUBSIDIARIES AND OTHER INTERESTS
Registered and beneficial title to all of the Assets is held in the name
of Cap Corp or its Affiliates and there are no Assets or rights with respect
thereto held by any partnership, joint venture or minority interest. At Closing
the registered and beneficial title to all of the Assets will be held in the
name of the Corporation solely.
5.5 CORPORATE RECORDS
(a) The Corporation and the Vendors have delivered to the
Purchaser true, correct and complete copies of the
Articles (certified by the Registrar of Corporations or
other appropriate official of the
24
applicable jurisdiction of organization) and by-laws
(certified by the secretary, assistant secretary or other
appropriate officer) or comparable organizational
documents of the Corporation.
(b) The minute book of the Corporation has been previously
made available to the Purchaser and contains complete
and accurate records of the Articles, Articles of
Amendment, if any, Bylaws and all minutes of meetings
and accurately reflects all other corporate action of
the shareholders and board of directors (including
committees thereof) of the Corporation. The share
certificate books and stock transfer ledgers of the
Corporation have been previously made available to the
Purchaser and are true, correct and complete. There
are no outstanding filing or applications and no
resolutions or bylaws have been passed, enacted,
consented or adopted by the directors or shareholders
of the Corporation except for those as are contained in
the Minute Book. The corporate records are complete
and accurate in all material respects and have been
maintained in accordance with all applicable statutory
requirements.
(c) Prior to the Effective Time the Corporation will have made
all filings required under the Corporations Information
Act (Ontario) and the Business Names Act
(Ontario).
5.6 CONFLICTS; CONSENTS OF THIRD PARTIES
(a) Except in respect of the Real Property Leases as set
forth in Schedule 5.12(a) and as set forth on Schedule
5.6 none of the execution and delivery by any of the
Vendors and the Corporation of this Agreement and the
Transaction Documents, the consummation by each of the
Vendors and the Corporation of the transactions
contemplated hereby and thereby, or compliance by the
Vendors or the Corporation with any of the provisions
hereof or thereof will (i) conflict with, or result in
the breach of, any provision of the certificate of
incorporation, articles, bylaws, shareholders
agreement, trust agreements or other organizational
documents of Cap Corp, the Corporation or the Trust;
(ii) conflict with, violate, result in the breach or
termination of, constitute a default under, or give
rise to any right of acceleration
25
under, any note, bond, mortgage, deed of trust, indenture,
license, lease, agreement or other instrument or
obligation to which the Vendors or the Corporation is a
party or by which any of them or any of their respective
properties or assets is bound; (iii) violate any statute,
rule, regulation, judgment or Order of any Governmental
Body by which the Vendors or the Corporation is bound; or
(iv) result in the creation of any Lien upon the Shares or
the Assets.
(b) No consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or
notification to, any Person or Governmental Body is
required on the part of the Vendors, or the
Corporation in connection with the execution and
delivery of this Agreement or the Transaction
Documents, or the compliance by the Vendors or the
Corporation, as the case may be, with any of the
provisions hereof or thereof.
5.7 OWNERSHIP AND TRANSFER OF SHARES
The Vendors will be prior to Time of Closing the registered and beneficial
owners of all of the Shares free and clear of any and all Liens. The Vendors
will have prior to Time of Closing the power and authority to sell, transfer,
assign and deliver the Shares as provided in this Agreement, and such delivery
will convey to the Purchaser good and marketable title to such Shares, free and
clear of any and all Liens. Immediately after the Closing, Purchaser will own
all the equity interests in the Corporation.
5.8 FINANCIAL STATEMENTS
(a) Attached hereto as Schedule 5.8(a) are: (i) the
audited balance sheets of Cap Corp as at May 31, 1994,
1995 and 1996 and the related audited statements of
income and of changes in financial position of Cap Corp
for the years then ended (collectively called the
"Audited Statements"); and (ii) the management prepared
unaudited balance sheet of Cap Corp as at January 31,
1997 and the related statement of income of Cap Corp
(the "Unaudited Statements") for the period then ended
(such Audited and Unaudited Statements, including the
related notes and schedules thereto, are referred to
herein as the "Financial Statements"). Each of the
Audited Statements is complete and correct in all
material respects, has been prepared in accordance with
GAAP (subject to normal year-end adjustments in the
case of the unaudited
26
statements) and in conformity with the practices
consistently applied by Cap Corp without modification of
the accounting principles used in the preparation thereof,
and presents fairly the financial position, results of
operations and changes in financial position of Cap Corp
as at the dates and for the periods indicated.
(b) The Unaudited Statements have been prepared in all
material respects on a basis consistent with the
Audited Statements, are true, correct and complete in
all material respects and present fairly the financial
condition of Cap Corp as of January 31, 1997 including
the assets and liabilities of the Corporation as of
January 31, 1997, and the revenues, expenses and
results of the operations of Cap Corp for the eight (8)
month period ended on January 31, 1997.
(c) The financial condition of Cap Corp is now at least as
good as the financial condition reflected in the
Unaudited Statements.
(d) For the purposes of this Article V, the unaudited balance
sheet of Cap Corp as at January 31, 1997 is collectively
referred to as Cap Corp's "Balance Sheet" and January 31,
1997, is referred to as the "Balance Sheet Date".
5.9 NO UNDISCLOSED LIABILITIES
Except as set forth on Schedule 5.9, Cap Corp has no indebtedness,
obligations or liabilities of any kind (whether absolute, contingent or
otherwise, and whether due or to become due) which are not reflected on its
Balance Sheet other than such indebtedness, obligations or liabilities (i) as
were incurred in the ordinary and usual course of business consistent with its
past practices since the Balance Sheet Date, (ii) existing pursuant to any
contract or agreement disclosed on Schedules 5.12(a), 5.13 or 5.15 or any
contract or agreement not required to be disclosed thereon because such contract
or agreement was not of the type required to be disclosed thereon by such
Sections.
5.10 ABSENCE OF CERTAIN DEVELOPMENTS
Except as expressly required by this Agreement or as set forth on Schedule
5.10, at any time with respect to the Corporation and since the Balance Sheet
Date with respect to Cap Corp:
(a) there has not been any Material Adverse Change in Cap Corp
or the Corporation nor has there occurred any event which
is reasonably likely to result in a Material Adverse
Change in Cap Corp or the Corporation;
27
(b) Cap Corp has not made any material change with respect
to any method of management, operation or accounting in
respect of the Business;
(c) except as set out in Schedule 5.35 there has not been any
damage, destruction or loss, whether or not covered by
insurance, with respect to the property and assets of Cap
Corp having a replacement cost of more than C$10,000 for
any single loss or C$25,000 for all such losses;
(d) there has not been any declaration, setting aside or
payment of any dividend or other distribution in respect
of any shares of capital stock of the Corporation or any
repurchase, redemption or other acquisition by the
Corporation of any outstanding shares of capital stock or
other securities of, or other ownership interest in, the
Corporation;
(e) neither Cap Corp nor the Corporation has (i) awarded or
paid any bonuses to employees of Cap Corp (other than
to Xxx and Xxxxxx) with respect to the fiscal year
ended May 31, 1996, or (ii) entered into, or increased
or agreed to increase the compensation payable or to
become payable by it or the coverage or benefits
available under, any written or oral employment
agreement or arrangement, deferred compensation
agreement, severance pay, termination pay, vacation
pay, company awards, salary continuation for
disability, sick leave, deferred compensation, bonus or
other incentive compensation, insurance, pension or
other employee benefit plan, payment or arrangement
made to, for or with Cap Corp's directors, officers,
employees, agents or representatives (other than normal
increases in the ordinary course of business consistent
with past practice) and that in the aggregate have not
resulted in a material increase in the benefits or
compensation expense of Cap Corp taken as a whole;
(f) there has not been any change by the Corporation or Cap
Corp in accounting or Tax reporting principles, methods
or policies;
28
(g) neither the Corporation nor Cap Corp has entered into any
transaction or Contract or conducted the Business other
than in the ordinary course consistent with past practice;
(h) neither the Corporation nor Cap Corp has failed to
promptly pay and discharge current liabilities except
where disputed in good faith by appropriate proceedings;
(i) neither the Corporation nor Cap Corp has made any loans,
advances or capital contributions to, or investments in,
any Person or paid any fees or expenses to any of the
Vendors and any Affiliate of the Vendors;
(j) neither the Corporation nor Cap Corp has mortgaged,
pledged or subjected to any Lien any of its assets, or
acquired any assets or sold, assigned, transferred,
conveyed, leased or otherwise disposed of any assets,
except for assets acquired or sold, assigned,
transferred, conveyed, leased or otherwise disposed of
in the ordinary course of business consistent with past
practice;
(k) neither the Corporation nor Cap Corp has discharged or
satisfied any Lien, or paid any obligation or liability
(fixed or contingent), except in the ordinary course of
business consistent with past practice;
(l) neither the Corporation nor Cap Corp has canceled or
compromised any debt or claim or amended, canceled,
terminated, relinquished, waived or released any Contract
or right except in the ordinary course of business
consistent with past practice and which, in the aggregate,
would not be material to the Corporation and Cap Corp
taken as a whole;
(m) neither the Corporation nor Cap Corp has engaged in any
business in which it had not been engaged prior to the
Balance Sheet Date;
(n) neither the Corporation nor Cap Corp has made any Capital
Expenditure or capital additions or betterments in excess
of C$25,000 individually or C$100,000 in the aggregate or
committed to make but
29
not made or completed any Capital Expenditure or capital
additions or betterments of any amount;
(o) neither the Corporation nor Cap Corp has instituted or
settled any material Legal Proceeding; and
(p) none of the Vendors or the Corporation has agreed to do
anything set forth in this Section 5.10.
5.11 TAXES
(a) All Tax Returns required to be filed by or with respect to
Cap Corp and the Assets have been properly prepared and
all such Tax Returns are true, complete and correct in all
material respects.
(b) Prior to the Closing the Corporation has not incurred or
accrued any liability for Taxes whatsoever. The
Corporation has not and is not required under applicable
Tax Legislation, to file any Tax Return for the period
prior to the Closing Date other than a Nil return in
respect to the taxation year ending immediately before the
Time of Closing.
(c) No claim has been made by a taxing authority in a
jurisdiction where the Corporation or Cap Corp do not file
Tax Returns such that it is or may be subject to taxation
by that jurisdiction.
(d) Neither the Corporation nor Cap Corp is a party to any tax
sharing or similar agreement or arrangement (whether
written or not) pursuant to which it will have any
obligation to make any payments after Closing.
(e) There are no Liens with respect to Taxes upon any of
the Assets.
(f) The fair market value of all depreciable Assets of Cap
Corp is at least the amount of the undepreciated capital
cost therefor as recorded on its books.
(g) The paid up capital of the Common Shares as at the Time of
Closing will be determined in accordance with the Asset
Transfer Agreement and the paid up capital of the
Preferred Shares as at the Time of Closing will be $17.00;
30
(h) The Corporation has not and will not make any election
under Subsection 83(2) of the Tax Act with respect to
payment out of a capital dividend account;
(i) Neither the Corporation nor Cap Corp has, within the last
four completed fiscal years, acquired or had the use of
any property which forms part of the Assets from a person
with whom it was not dealing at arm's length except as
disclosed on Schedule 5.11.
(j) The Corporation and Cap Corp have made all elections
required to be made under the Tax Act in connection with
any distributions in connecting directly or indirectly,
with the Business and the Assets and all such elections
were true and correct and in prescribed form and were made
within the prescribed time periods;
(k) The transactions occurring on or before the Closing Date
between the Corporation and the Vendors including, without
limitation, the Asset Transfer Agreement will not create
any liability to the Corporation, including Taxes, whether
or not such liability is immediate or deferred except as
expressly contemplated in the Asset Transfer Agreement;
(l) There are no circumstances existing which could result in
the application to the Corporation of either Section 78 or
Section 80, 80.01, 80.02, 80.3 or 80.04 of the Tax Act;
(m) Except for a $839,357.00 bonus received from Western Union
that may be eligible for a reserve, the Corporation has
not claimed and will not claim any reserve under any one
or more of subparagraph 40(1)(a)(iii) or subparagraphs
20(1)(m) or 20(1)(n) of the Tax Act if any such amount
could be included in their income for a period ending
after Closing;
(n) The financial statements and schedules attached to the
corporate income tax returns as filed by Cap Corp for
its taxation years reflect and disclose all
transactions to which it was or is a party as required
by the Tax Act and the regulations made thereunder or
other applicable revenue laws and all of the
transactions to which Cap Corp
31
was or is a party are reflected or disclosed in these
financial statements and schedules and these statements
and schedules have been duly and accurately completed as
required by these acts and regulations;
(o) The Corporation does not have any net capital loss or
non-capital losses as of the Closing Date;
(p) Cap Corp is and the Corporation will be prior to the
Closing Date duly registered under subdivision (d) of
Division V of Part IX of the Excise Tax Act with respect
to the GST, and their respective registration numbers are
as set forth on Schedule 5.11.
(q) Each of the Corporation and Cap Corp have paid all
Taxes imposed by the Retail Sales Tax (Ontario) and the
applicable legislation of each other province of Canada
on the acquisition of its tangible personal property
and, except as contemplated by the Asset Transfer
Agreement, none of its tangible personal property or
moveable property has been acquired in a transaction
contemplated under the provisions of Section 13 of
Regulation 1013 to the Retail Sales Tax Act (Ontario),
or any predecessor thereof or the analogous provisions
of the sales tax legislation of any other province;
(r) None of the Corporation nor Cap Corp has made or been a
party to any election under Sections 150(1), 156(1),
227(1) or 273(1) of the Excise Tax Act.
5.12 LEASED PROPERTY
(a) Schedule 5.12(a) sets forth a complete list of all real
or immovable property and interests in real or
immovable property leased by Cap Corp or an Affiliate
as lessee in which a Store is located (individually, a
"Real Property Lease") and the real or immovable
properties specified in such leases, together with the
expiry date of each Real Property Lease and renewal
term available. Real Property Leases and Cap Corp
Properties (as hereinafter defined) are herein
individually referred to as a "Company Property" and
collectively as the "Company Properties". The Company
Properties constitute all inter-
32
ests in real or immovable property currently used or
currently held for use in connection with the ownership
and/or operation of the Stores or which are necessary for
the continued operation of the Stores as currently
conducted. Cap Corp or its Affiliate has and at Time of
Closing the Corporation will have a valid and enforceable
leasehold interest under each of the Real Property Leases,
subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a
proceeding at law or in equity); neither the Corporation
nor Cap Corp has caused an event of default or received
any written notice of any default or event that with
notice or lapse of time, or both, would constitute a
default by the Corporation or Cap Corp under any of the
Real Property Leases; and to the best of the knowledge of
Cap Corp and Xxx none of the landlords in respect of the
Real Property Leases has caused an event of default that
with notice or lapse of time, or both, would constitute a
default by any one of such landlords under any of the Real
Property Leases. Each of the Company Properties,
buildings, fixtures and improvements thereon is in good
operating condition and repair (subject to normal wear and
tear). With respect to each Company Property, there is no
management agreement, equipment lease, service contract or
other contract or agreement to which the Corporation or
Cap Corp is a party affecting such Company Property
(collectively, "Property Contracts") which (i) was not
made in the ordinary course of business, (ii) is not
terminable upon 30 days' prior notice by Cap Corp without
payment of a premium or penalty or (iii) requires payments
in excess of an amount that, if added to the monthly
payment obligations of all other Property Contracts in
respect of such Company Property, would cause the
aggregate amount of all monthly payment obligations in
respect of all Property Contracts for such Company
Property to exceed C$1,000. Cap Corp has delivered to the
Purchaser true, correct and complete copies of the Real
Property Leases, together with all amendments,
modifications or supplements, if any, thereto. Cap Corp
presently owns and operates cheque cashing and financial
33
services stores at the locations set forth next to each
Company Property on Schedule 5.12(a) and (g).
(b) Cap Corp has obtained and will validly transfer to the
Corporation prior to Closing all material certificates
of occupancy and Permits of any Governmental Body
necessary or useful for the current use and operation
of each Company Property, and Cap Corp has fully
complied with all material conditions of the Permits
applicable to them. No material default or violation,
or event that with the lapse of time or giving of
notice or both would become a default or violation, has
occurred in the due observance of any Permit.
(c) There does not exist any actual or, to the best
knowledge of Cap Corp and Xxx, threatened or
contemplated condemnation or eminent domain proceedings
that affect any Company Property or any part thereof,
and none of Cap Corp, Xxx and the Corporation has
received any notice, oral or written, of the intention
of any Governmental Body or other Person to take or use
all or any part thereof.
(d) None of Cap Corp, Xxx or the Corporation has received any
written notice from any insurance company municipality or
of the governmental authority requiring performance of any
structural or other repairs or alterations to such Company
Property.
(e) the Corporation does not own or hold, or is obligated
under or a party to, any option, right of first refusal or
other Contract right to purchase, acquire, sell, assign or
dispose of any real estate or any portion thereof or
interest therein.
(f) The Corporation does not own or hold any real or
immovable property in fee.
(g) Schedule 5.12(g) sets forth all of the real and
immovable property owned by Cap Corp or an Affiliate of
Cap Corp in which certain Stores are located
(collectively "Cap Corp Properties"). Cap Corp or its
Affiliates, as the case may be, has good and marketable
title to the Cap Corp Properties free and clear of all
Liens except as set forth in Schedule 5.12 (g). At
Closing Cap Corp or its Affiliates, as the case
34
may be, and the Corporation shall as lessor and lessee
enter into a lease in the form set out in Exhibit "B" for
a term of five (5) years for each Cap Corp Property. Each
said Lease shall constitute a first charge against the Cap
Corp Property or Cap Corp shall on or before Closing
provide a form of Non-Disturbance Agreement duly executed
by the holder of any mortgage, charge or other security on
the Cap Corp Property undertaking not to disturb the
occupation and quiet possession by the Corporation so long
as the Corporation shall perform all the terms, covenants
and agreements contained in the lease of the Cap Corp
Property. Schedule 5.12(g) sets forth the approximate
square footage, monthly minimum rent and approximate
monthly additional rent payable by the Corporation to Cap
Corp for each Cap Corp Property.
(h) Cap Corp or its Affiliate has sent notice of intention to
renew to each lessor for a Real Property Lease that is due
to receive notification of renewal of Lease in accordance
with the terms thereof.
(i) the Company Property and the current uses thereof and the
conduct of the Business comply with all regulations,
statutes, enactments, laws and by-laws including, without
limitation, those dealing with zoning, parking, access,
loading facilities, landscaped areas, building
construction, fire and public health and safety and
Environmental Laws.
(j) except as provided in Schedule 5.12(g), the Company
Property (including all buildings, improvements and
fixtures) is fit for its present use, and there are no
material or structural repairs to, or replacements of,
the roof or the mechanical, electrical, heating,
ventilating, air-conditioning, plumbing or drainage
equipment or systems that are necessary and the Company
Property is not currently undergoing any alteration or
renovation nor is any such alteration or renovation
contemplated.
35
5.13 TANGIBLE PERSONAL PROPERTY
(a) Schedule 5.13 sets forth all leases of personal or
moveable property ("Personal Property Leases") relating
to personal property used or usable in the operation of
the Stores or the Business. Cap Corp has delivered or
otherwise made available to the Purchaser true, correct
and complete copies of the Personal Property Leases,
together with all amendments, modifications or
supplements thereto.
(b) Cap Corp has and will validly transfer to the
Corporation prior to Closing a valid leasehold interest
under each of the Personal Property Leases under which
it is a lessee, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in
a proceeding at law or in equity), and there is no
default under any Personal Property Lease by the
Corporation or Cap Corp or, to the best knowledge of
the Corporation, and Cap Corp, by any other party
thereto, and no event has occurred that with the lapse
of time or the giving of notice or both would
constitute a default thereunder. Each of the items of
tangible personal property used by Cap Corp under the
Personal Property Leases is in good condition and
repair (ordinary wear and tear excepted) and is
suitable for the purposes used.
(c) Cap Corp has and at the Time of Closing the Corporation
will have good and marketable title to all of the items
of tangible personal or moveable property reflected in
the Balance Sheet (except as sold or disposed of
subsequent to the date thereof in the ordinary course
of business consistent with past practice), free and
clear of any and all Liens other than the Permitted
Exceptions and except as set out in Schedule 5.13. All
such items of tangible personal or moveable property
which, individually or in the aggregate, are material
to the operation of the Stores and the Business are in
good condition and in a state of good maintenance and
repair (ordinary wear and tear excepted) and are
suitable for the purposes used.
(d) Cap Corp owns (or leases from unaffiliated Persons) all
tangible property necessary to conduct the Business and
will validly transfer
36
ownership of its interest in all tangible property to the
Corporation prior to Closing.
5.14 INTANGIBLE PROPERTY
Schedule 5.14 under the heading "software" contains a complete and correct
list of each software computer program licensed by Cap Corp and the license
agreement for each computer software program is in good standing. Schedule 5.14
under the heading "Custom Software (written-in-house)" contains a complete and
correct list of each software computer program owned by Cap Corp free and clear
of all Liens and is in good standing. Cap Corp does not own any patent, patent
license or trade secrets. There have been no claims made and none of Cap Corp,
Xxx and the Corporation has received any notice or otherwise knows or has reason
to believe that any of the foregoing is invalid or conflicts with the asserted
rights of others. Cap Corp possesses all patents, patent licenses, trade names,
trademarks, trade secret rights, computer programs, software, service marks,
brand marks, brand names, copyrights, know-how, formulae and other proprietary
and trade rights necessary for the conduct of the Business as now conducted, not
subject to any restrictions and without any known conflict with the rights of
others and Cap Corp has not forfeited or otherwise relinquished any such patent,
patent license, trade name, trademark, trade secret right, computer program,
software, service xxxx, brand xxxx, brand name, copyright, know-how, formulae or
other proprietary right necessary for the conduct of its business as conducted
on the date hereof. Neither the Corporation nor Cap Corp is under any obligation
to pay any royalties or similar payments in connection with any license to the
Vendors, any Affiliate thereof or any other Person other than as set out in
Schedule 5.14.
5.15 MATERIAL CONTRACTS
Schedule 5.15 sets forth all of the following Contracts to which Cap Corp
is a party or by which it is bound (collectively, the "Material Contracts"): (i)
Contracts with the Vendors or any direct or indirect shareholder, partner or
equity holder of Cap Corp (or any Affiliates of any of the foregoing) or any
current or former officer or director of Cap Corp; (ii) Contracts with any labor
union or association representing any employee of Cap Corp; (iii) Contracts
pursuant to which any Person is required to purchase or sell a stated portion of
its requirements or output from or to another Person; (iv) Contracts for the
sale of any of the assets of Cap Corp other than in the ordinary course of
business or for the grant to any Person of any preferential rights to purchase
any of its assets; (v) partnership, shareholder or joint venture agreements;
(vi) Contracts containing covenants of Cap Corp or Affiliates not to compete in
any line of business or with any Person in any geographical area or covenants of
any other Person not to compete with Cap Corp in any line of business or in any
geographical area; (vii) Contracts relating to the acquisition by Cap Corp of
any operating business or the capital stock of any other Person; (viii)
Contracts relating to the borrowing of money; (ix) Contracts relating to the
distribution of money orders or similar instruments; (x) Contracts relating to
money transfers; (xi) Contracts relating to the payment of utility or other
bills for third parties; (xii) any other Contracts, other than Real Property
Leases, which were not entered into in the ordinary course consistent with past
practice, or which involve the expenditure of more than C$25,000 in the
aggregate or require performance by any party more than one year from the date
hereof; (xiii) Contracts involving an obligation to make a Capital Expenditure;
and (xiv) franchise or licensing Contracts pursuant to which Cap
37
Corp is a franchisor, franchisee, licensor or licensee. There have been made
available to the Purchaser true and complete copies of each of the Material
Contracts. Except as set forth on Schedule 5.15, each of the Material Contracts
and other agreements is in full force and effect and is the legal, valid and
binding obligation of each party thereto, enforceable against such party in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity). Except as set forth on Schedule 5.15, Cap Corp is not in default in any
material respect under any Material Contracts nor, to the knowledge of Cap Corp
and Xxx, is any other party to any Material Contract in default thereunder in
any material respect. For purposes hereof, "Assumed Contracts" shall consist of
(i) the Material Contracts listed on Schedule 5.15 excepting the Royal Bank of
Canada-Credit Facilities Agreement dated June 26, 1996, (ii) the Non-Material
Contracts, (iii) Personal Property Leases and (iv) all Real Property Leases.
5.16 EMPLOYEE BENEFITS
(a) Schedule 5.16(a) contains an accurate and complete list
and description of, and sets forth the annual amount
payable pursuant to, all pension, profit sharing,
retirement, death benefit, welfare, severance pay,
vacation pay, company awards, salary continuation for
disability, sick leave, deferred compensation, bonus or
other incentive compensation, stock purchase
arrangements or policies, life insurance, scholarship
or other employee benefit plan, program, policy or
arrangement maintained by Cap Corp or to which Cap Corp
has any liability (contingent or otherwise) with
respect to employees, officers, directors or
shareholders of Cap Corp ("Employee Benefit Plans")
therein described and the Financial Statements reflect
in the aggregate an accrual of all amounts accrued but
unpaid under all such Employee Benefit Plans as of the
dates thereof. Cap Corp does not have any commitment,
whether formal or informal, and whether legally binding
or not, to create any additional such Employee Benefit
Plan and no promise of improvement has been made
relating to any Employee Benefit Plan. Each of such
Employee Benefit Plans disclosed on Schedule 5.16(a) is
in effect and Cap Corp is in compliance with all laws,
rules and regulations applicable thereto. All Employee
Benefit Plans disclosed on Schedule 5.16(a) have been
duly registered where required by, and are in good
standing under, all applicable legislation and Cap Corp
has fulfilled its funding obligations under all such
plans
38
and each Employee Benefit Plan that is required to be
funded or that is a registered pension plan is fully
funded on both a "solvency" and "going concern" basis as
determined in accordance with the actuarial methods and
assumptions used in the most recent actuarial report
prepared in respect of the Employee Benefit Plan. With
respect to each current Employee Benefit Plan or plan
under which benefits may be due to, or liabilities may
exist in respect of, current or former employees, Cap Corp
has delivered to the Purchaser accurate and complete
copies of (i) all currently applicable plan texts and
agreements and any amendments thereto; (ii) all summary
plan descriptions and material employee communications;
(iii) the most recent annual report and/or annual
information return filed in respect of the Employee
Benefit Plan with any applicable regulatory authority;
(iv) the most recent annual and periodic accounting of
plan assets; (v) the most recent actuarial valuation; (vi)
the trust agreement or other funding agreement (including
all amendments made thereto); and (vii) a copy of the most
recent letter confirming regulation of the Employee
Benefit Plan with each applicable regulatory authority.
Each Employee Benefit Plan has been administered
materially in accordance with its terms. All material
reports, returns and similar documents with respect to the
Employee Benefit Plans required to be filed with any
Governmental Body or distributed to any Employee Benefit
Plan participant has been duly and timely filed or
distributed. There are no pending investigations by any
Governmental Body, termination proceedings or other claims
(except claims for benefits payable in the normal
operation of the Employee Benefit Plans), suits or
proceedings against or involving any Employee Benefit Plan
or asserting any rights or claims to benefits under any
Employee Benefit Plan that could give rise to any material
liability.
(b) All contributions and premiums required by law or by the
terms of any Employee Benefit Plan or any agreement
relating thereto have been timely made (without regard to
any waivers granted with respect thereto).
39
(c) There are no pending Legal Proceedings which have been
asserted or instituted against any of the Employee
Benefit Plans, the assets of any such plans of Cap Corp
or the plan administrator or any fiduciary of the
Employee Benefit Plans with respect to the operation of
such plans (other than routine, uncontested benefit
claims), and, to the knowledge of Cap Corp and Xxx,
there are no facts or circumstances which could form
the basis for any such Legal Proceeding.
(d) Except as disclosed on Schedule 5.16(a), neither the
execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby
will (i) result in any payment becoming due to any
employee of Cap Corp; (ii) increase any benefits
otherwise payable under any Employee Benefit Plan; or
(iii) result in the acceleration of the time of payment
or vesting of any such benefits.
(e) There has been no withdrawal by the Corporation, Cap
Corp, or any other employer of assets from the Employee
Benefit Plans and no application for approval of a
withdrawal of assets has been made to any applicable
federal or provincial regulatory authority. Any
application of surplus assets in any of the Employee
Benefit Plans to offset employer contributions required
to be made thereto has been permitted by the terms of
the Employee Benefit Plan and any funding agreement
maintained in connection therewith.
5.17 LABOUR
(a) Except as set forth on Schedule 5.17(a), neither the
Corporation nor Cap Corp are party to any labor or
collective bargaining agreement and there are no labor
or collective bargaining agreements which pertain to
employees of Cap Corp. The Vendors have delivered or
otherwise made available to the Purchaser true, correct
and complete copies of the labor or collective
bargaining agreements listed on Schedule 5.17(a),
together with all amendments, modifications or
supplements thereto.
(b) Except as set forth on Schedule 5.17(b), no employees
of Cap Corp are represented by any labor organization.
No labor organization or
40
group of employees of Cap Corp have made a pending demand
for recognition, and there are no representation
proceedings or petitions seeking a representation
proceeding presently pending or, to the best knowledge of
Cap Corp and Xxx, threatened to be brought or filed, with
any federal or provincial agency responsible for labor or
employment laws or other labor relations tribunal. There
is no organizing activity involving the Corporation or Cap
Corp pending or, to the best knowledge of Cap Corp and
Xxx, , threatened by any labor organization or group of
employees of Cap Corp.
(c) There are no (i) strikes, work stoppages, slowdowns,
lockouts or arbitrations or (ii) material grievances or
other labor disputes pending or, to the best of the
knowledge of Cap Corp and Xxx, threatened against or
involving the Corporation or Cap Corp. There are no
unfair labor practice charges, grievances or complaints
pending or, to the best of the knowledge of Cap Corp
and Xxx, threatened by or on behalf of any employee or
group of employees of Cap Corp.
(d) The Corporation has no employees and will have no
employees until the Closing Date immediately prior to
Closing.
5.18 EMPLOYMENT MATTERS
Schedule 5.18 annexed hereto is a complete and accurate list of
(a) The job categories, number of employees in each category
and salary or wage range for each category with respect to
employees of Cap Corp who earn total annual compensation
of less than C$25,000, and
(b) With respect to all other employees, officers and
directors of Cap Corp, such employee's name and a brief
job description for each such employee (collectively,
the "Employees") and, for each such person, his or her
current rate of compensation (including salary, bonus
and all other forms of compensation), the date of hire
and the date and amount of the most recent increase in
compensation, whether any commitment, promise or
undertaking has been made by Cap Corp or the
Corporation or any of its officers with respect to any
increase in the compensation payable to any such
employee or any portion
41
thereof the extent of such employee's participation in any
Employee Benefit Plans and any accrued rights under such
Employee Benefit Plans that will lapse or terminate by
reason of the consummation of the transactions
contemplated by this Agreement. Neither Cap Corp nor the
Corporation has any employment, consulting or severance
contract, arrangement or understanding (either written or
oral) with any person whomsoever except such contracts as
are listed on Schedule 5.18. Cap Corp has made all
deductions required by law to be made for wages and
salaries, which deductions are consistent with past
practices and in accordance with generally accepted
accounting principles and has either remitted same to the
respective legally constituted authorities entitled to
receive payment of same or has provided for same in its
accounts. Hours worked by, and payments made to, employees
of Cap Corp have not been in violation of any applicable
laws, rules or regulations dealing with such matters and
all severance payments due to any employee have been paid
or accrued as a liability on the books of Cap Corp. The
consummation of the transactions contemplated by this
Agreement will not give rise to any liability of the
Corporation and Cap Corp for severance pay or termination
benefits.
(c) No notice has been received by Cap Corp of any
complaint filed by any of the employees against Cap
Corp claiming Cap Corp has violated the Employment
Standards Act (Ontario) or the Human Rights Code
(Ontario) (or any applicable employees or human rights
or similar legislation in the other jurisdictions in
which the Business is conducted or Cap Corp operates)
or of any complaints or proceedings of any kind
involving Cap Corp or, to Cap Corp's knowledge, after
due inquiry, any of the employees of Cap Corp before
any labour relations board.
(d) There are no outstanding orders or charges against Cap
Corp under the Occupational Health and Safety Act
(Ontario) (or any applicable health and safety legislation
in the other jurisdictions in which the
Business is conducted).
42
(e) Cap Corp has complied with all of its obligations under
the Pay Equity Act (Ontario) and has provided the
Purchaser with a copy of any "pay equity" plans filed with
any governmental or regulatory authority or delivered to
its employees.
(f) Cap Corp has paid all assessments pursuant to workers'
compensation legislation levied by all governmental
authorities and, to the best of the knowledge of Cap
Corp and Xxx, Cap Corp has no liability for and there
is no pending any state of facts which may result in
the levying of a special assessment or a penalty charge
of any nature with respect to the period prior to the
Closing. Cap Corp has filed on a timely basis all
payroll statements required to be filed pursuant to
applicable workers' compensation legislation. Cap Corp
is not liable to indemnify any of its employees or any
governmental body in respect of compensation and/or
healthcare payable to its employees pursuant to
applicable workers' compensation legislation. Cap Corp
notified the relevant governmental authorities, within
the time periods specified by applicable legislation,
of all occurrences of accidents for which notification
is required by applicable legislation and has provided
requisite details thereof.
5.19 LITIGATION
Except as set forth in Schedule 5.19, there is no suit, action,
proceeding, investigation, claim or order pending or, to the knowledge of the
Corporation, Cap Corp and Xxx overtly threatened against the Corporation or Cap
Corp (or to the knowledge of the Corporation, Cap Corp and Xxx, pending or
threatened, against any of the officers, directors or key employees of Cap Corp
with respect to their business activities on behalf of Cap Corp), or to which
the Vendors or the Corporation are otherwise a party, before any court, or
before any governmental department, commission, board, agency, or
instrumentality; nor, to the knowledge of the Corporation, Cap Corp and Xxx, are
there any reasonable basis for any such action, proceeding, or investigation.
Neither the Corporation nor Cap Corp is subject to any judgment, Order or decree
of any court or Governmental Body and neither the Corporation nor Cap Corp are
engaged in any legal action to recover monies due it or for damages sustained by
it.
5.20 COMPLIANCE WITH LAWS
Cap Corp possesses all material Licenses of and from all Governmental
Bodies, and has made all material filings with all Governmental Bodies,
necessary to own or lease its properties and assets and to conduct the Business.
Except as set forth on Schedule 5.20, no proceeding has been served or, to the
knowledge of Cap Corp and Xxx, threatened or commenced which seeks to, or could
reasonably be anticipated to, cause the suspension, modification, revocation or
43
withdrawal of any License. The Corporation and Cap Corp are currently, and at
all times have been, in material compliance with all Laws applicable to the
Corporation and Cap Corp and/or the Businesses at any time or on prior to the
Balance Sheet Date, including, without limitation, all applicable credit,
banking and consumer protection Laws, regulating check cashing, debt collection,
plain language Laws and Laws proscribing unfair and/or deceptive acts or
practices and franchise disclosure Laws. Neither the Corporation nor Cap Corp
nor any of their directors, officers, employees or representatives has offered,
proposed, promised or made any illegal payment of a material amount of money or
material value to officers, employees or representatives of any Governmental
Body, or engaged in any illegal reciprocal practices or made any illegal payment
or given any other illegal consideration of a material amount of money or
material value to any third party.
5.21 ENVIRONMENTAL MATTERS
Except as set forth on Schedule 5.21 hereto with respect to Company
Properties:
(a) The operations of Cap Corp have been and are in compliance
with all applicable Environmental Laws and all Licenses
issued pursuant to Environmental Laws ("Environmental
Permits");
(b) Cap Corp has obtained all Environmental Permits
necessary to operate the Business and is in compliance
with such Environmental Permits;
(c) Neither the Corporation nor Cap Corp is the subject of any
outstanding written order, agreement or Contract with any
governmental authority or person respecting (i)
Environmental Laws, (ii) Remedial Action, (iii) any
Release or threatened Release of a Hazardous Material or
(iv) any Environmental Claim;
(d) Neither the Corporation nor Cap Corp has received any
written communication alleging that the Corporation or Cap
Corp or the operations thereof may be in violation of any
Environmental Law or any Environmental Permit, or may have
any liability under any Environmental Law;
(e) Neither the Corporation nor Cap Corp has any liability in
connection with any Release of any Hazardous Materials
into the indoor or outdoor environment (whether on-site or
off-site) and no facts or circumstances exist which could
reasonably be expected to give rise to such liability
under Environmental Laws;
44
(f) There are no legal or administrative proceedings pending
or, to the knowledge of Cap Corp and Xxx threatened
against the Corporation or Cap Corp alleging the violation
of or seeking to impose liability pursuant to
Environmental Laws;
(g) Neither the Corporation nor Cap Corp has received
notice of any investigations of the business,
operations, or currently or previously owned, operated
or leased property of the Corporation or Cap Corp in
connection with the Business nor, to the knowledge of
any of Cap Corp and Xxx, are there any such pending or
threatened investigations which could lead to the
imposition of any liability pursuant to Environmental
Law;
(h) There is not located at any of the Cap Corp Properties
any (i) underground storage tanks, (ii)
asbestos-containing material or (iii) equipment
containing polychlorinated biphenyls;
(i) Cap Corp has not transported, incorporated or otherwise
deposited or installed any (i) underground storage tanks,
(ii) asbestos - containing material or (iii) equipment
containing polychlorinated biphenyls at any of the
properties leased under the Real Property Leases;
(j) Neither of Xxx and Cap Corp has obtained or is aware of
the existence of any environmentally related audits,
studies, reports, analyses, and results of investigations
that have been performed with respect to the properties
owned by Cap Corp and to be leased to the Corporation; and
(k) Cap Corp has not had prepared any environmentally related
audits, studies, reports, analyses, or results of
investigation that have been performed with respect to the
currently leased, used or operated properties of Cap Corp.
5.22 INSURANCE
Schedule 5.22 sets forth a complete and accurate list of all policies of
insurance of any kind or nature covering Cap Corp or any of its respective
employees, properties or assets, including, without limitation, policies of
life, disability, fire, theft, workers compensation, employee fidelity and other
casualty and liability insurance. All such policies are in full force and effect
and Cap Corp is not in default of any provision thereof. To the best of the
knowledge
45
of Cap Corp and Xxx there are no circumstances under which Cap Corp
would be required to or in order to maintain its coverage should give any notice
to insurers under any such insurance policies related to the Assets or Company
Properties which has not been given. Neither the Corporation nor Cap Corp has
received notice from any of the insurers regarding cancellation of such
insurance policies. Cap Corp has not failed to give any notice of or present any
claim under such insurance policy in due and timely fashion. Cap Corp has not
received notice from any insurers denying any claims.
5.23 INTENTIONALLY DELETED
5.24 RELATED PARTY TRANSACTIONS
Except as set forth on Schedule 5.24, at any time with respect to the
Corporation and as at the Balance Sheet Date with respect to Cap Corp none of
the Corporation, the Vendors and any Affiliate of the Corporation or the Vendors
has borrowed any monies from or has outstanding any indebtedness or other
similar obligations to the Corporation or Cap Corp. Except as set forth in
Schedule 5.24, none of the Vendors the Corporation, any Affiliate of the
Corporation, or any officer, director or employee of any of them (i) owns any
direct or indirect interest of any kind in, or controls or is a director,
officer, employee or partner of, or consultant to, or lender to or borrower from
or has the right to participate in the profits of, any Person which is (A) a
competitor, supplier, customer, landlord, tenant, creditor or debtor of Cap Corp
or the Corporation, (B) engaged in a business related to the business of Cap
Corp or the Corporation, or (C) a participant in any transaction to which Cap
Corp or the Corporation is a party or (ii) is a party to any Contract or
transaction with Cap Corp or the Corporation. With the exception of the Real
Property Leases, since the Balance Sheet Date, neither Cap Corp nor the
Corporation have entered into any transactions with any Affiliate with respect
to the Assets and the Business.
5.25 BANKS
The Corporation has no bank accounts or safe deposit boxes and no person
holds a power of attorney to act on behalf of the Corporation.
5.26 FINANCIAL ADVISORS
Except as set forth on Schedule 5.26, no Person has acted, directly or
indirectly, as a broker, finder or financial advisor for the Vendors or the
Corporation in connection with the transactions contemplated by this Agreement
and no Person is entitled to any fee or commission or like payment in respect
thereof.
5.27 FRANCHISE OPERATIONS
Each of the cheque cashing and retail financial locations set out in
Schedule 2.1(a) are operated by Cap Corp pursuant to a franchise agreement with
National Money Mart Inc.
5.28 NAME
"Money Mart" is the only name used by Cap Corp in the operation of the
Stores and the Business.
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5.29 THIRD PARTY DISCUSSION
Schedule 5.29 sets forth a list of all current and proposed plans or
discussions with third parties related to potential acquisitions of equity
interest in cheque cashing, currency exchange, tax rebate programs, tax
preparation or retail financial service outlets.
5.30 NO BANKRUPTCY
There has not been filed any petition or application, or any proceeding
commenced which has not been discharged, by or against the Vendors or Cap Corp
or any Affiliate of any of them with respect to any Assets of any of them under
any law, domestic or foreign, relating to bankruptcy, re-organization,
insolvency, re-adjustment of debt or creditors rights and no assignment has been
made by any of them for the benefit of their respective creditors.
5.31 NO MISREPRESENTATION
None of the Vendors has omitted to state a material fact or make a
statement which would make any of the representations or warranties contained
herein misleading or inaccurate.
5.32 PARTNERSHIPS OR JOINT VENTURES
Cap Corp is not, in relation to any part of the Business or Assets a
partner or participant in any partnership, joint venture, profit sharing
arrangement or other association of any kind, is not a party to any agreement
under which Cap Corp agrees to carry on any part of the Business in such manner
by which Cap Corp agrees to share any revenue or profit of the Business with any
other person.
5.33 WITHHOLDINGS
(a) Cap Corp has withheld and will continue until the
Closing Date to withhold from each payment made to the
Listed Employees the amount of all taxes, including but
not limited to income tax, premium contributions,
remittance and assessments or re-assessments for
unemployment insurance employer health tax, Canada
Pension Plan, income tax, workers' compensation and any
other employment related legislation, accrued wages,
Taxes, salaries, commission and employee benefit plan
payments, and other amounts required to be withheld
therefrom, and will have paid the same to the proper
tax or other receiving authorities within the time
required under any applicable legislation. The amount
of tax withheld but not remitted will be retained in
Cap Corp's account and will be remitted by Cap Corp on
the earlier of the date same is due or the Closing Date.
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5.34 THE CORPORATION
The Corporation has not and will not during the Interim Period carry on,
be engaged or involved in any business or activity whatsoever, including an
adventure in the nature of trade, have any employees, have any assets or
liabilities or enter into contracts or agreements excepting this Agreement,
other than the Asset Transfer Agreement. During the Interim Period, Xxxxxx is
and shall be vice-president of Cap Corp and Xxx is and shall be the sole
director and officer of the Corporation and the sole director and hold all
offices except vice-president of Cap Corp.
5.35 CORNWALL OUTLET INSURANCE CLAIM
Cap Corp has in place a valid insurance policy to cover the loss resulting
from the fire to the Money Mart outlet at 00 Xxxxxx Xxxxxx Xxxx, Xxxxxxxx,
Xxxxxxx ("Cornwall Outlet"). The insurer has not denied coverage and neither Cap
Corp nor Xxx is aware of any fact, event or circumstance that would result in
the payment of a claim under the insurance policy being denied.
5.36 KEELE STREET OUTLET
The Money Mart outlet at 0000 Xxxxx Xxxxxx, Xxxxx Xxxx (the "Keele Street
Outlet") was closed on December 10, 1996 due to a neighbouring fire. Cap Corp
has proceeded diligently with repairs and reconstruction to the Keele Street
Outlet. The Keele Street Outlet will be open for business and in full operation
prior to Closing.
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF PURCHASER The
Purchaser hereby represents and warrants to the VENDORS that:
6.1 ORGANIZATION AND GOOD STANDING
The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the Province of Alberta.
6.2 AUTHORIZATION OF AGREEMENT
The Purchaser has full corporate power and authority to execute and
deliver this Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by the Purchaser in
connection with the consummation of the transactions contemplated hereby and
thereby (the "Purchaser Documents"), and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by the
Purchaser of this Agreement and each Purchaser Document have been duly
authorized by all necessary corporate action on behalf of the Purchaser. This
Agreement has been, and each Purchaser Document will be at or prior to the
Closing, duly executed and delivered by the Purchaser and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
this Agreement constitutes, and each Purchaser Document when so executed and
delivered will constitute, legal, valid and binding obligations of the
Purchaser, enforceable against the Purchaser in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies
48
generally, and subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
6.3 CONFLICTS; CONSENTS OF THIRD PARTIES
(a) Except as set forth on Schedule 6.3 hereto, none of the
execution and delivery by the Purchaser of this
Agreement and of the Purchaser Documents, the
consummation by the Purchaser of the transactions
contemplated hereby and thereby which will affect the
Purchaser's ability to close, or compliance by the
Purchaser with any of the provisions hereof or thereof
will (i) conflict with, or result in the breach of, any
provision of the certificate of incorporation or
by-laws of the Purchaser, (ii) conflict with, violate,
result in the breach or termination of, constitute a
default under, or give rise to any right of
acceleration under, any note, bond, mortgage,
indenture, license, agreement or other instrument or
obligation to which the Purchaser is a party or by
which the Purchaser or its properties or assets is
bound or (iii) violate any statute, rule, regulation,
judgment or Order of any Governmental Body by which the
Purchaser is bound.
(b) Except as set forth on Schedule 6.3, no consent,
waiver, approval, Order, Permit or authorization of, or
declaration or filing with, or notification to, any
Person or Governmental Body not previously obtained is
required on the part of the Purchaser in connection
with the execution and delivery of this Agreement or
the Purchaser Documents or the compliance by Purchaser
with any of the provisions hereof or thereof.
6.4 LITIGATION
There are no Legal Proceedings pending or, to the best knowledge of the
Purchaser, threatened that are reasonably likely to prohibit or restrain the
ability of the Purchaser to enter into this Agreement or consummate the
transactions contemplated hereby.
49
6.5 FINANCIAL ADVISORS
No Person has acted, directly or indirectly, as a broker, finder or
financial advisor for the Purchaser in connection with the transactions
contemplated by this Agreement and no Person is entitled to any fee or
commission or like payment in respect thereof.
6.6 BANKRUPTCY
The Purchaser is not insolvent, nor has it committed an act of bankruptcy,
proposed a compromise or arrangement to its creditors generally, had any
petition or receiving order in bankruptcy filed against it, taken any
proceedings with respect to a compromise or arrangement, taken any proceedings
to have itself declared bankrupt or wound-up, taken any proceedings to have a
receiver appointed over any material part of its assets, had any encumbrancer
take possession of any of its property, or had any execution or distress become
enforceable or become levied upon any of its properties or assets.
6.7 APPROVALS
The Purchaser does not have to obtain any federal, provincial, municipal
or other governmental approvals and consents in order to permit the change of
ownership of the Shares as contemplated herein.
ARTICLE VII - COVENANTS
7.1 ACCESS TO INFORMATION
During the Interim Period the Corporation and the Vendors agree that, the
Purchaser shall be entitled, through its officers, employees and representatives
(including, without limitation, its legal advisors and accountants), to make
such investigation of the properties, businesses and operations of Cap Corp and
the Corporation and such examination of the books, records and financial
condition of Cap Corp as it reasonably requests and to make extracts and copies
of such books and records. Any such investigation and examination shall be
conducted during regular business hours and under reasonable circumstances, and
Cap Corp shall cooperate, fully therein. No investigation by the Purchaser prior
to or after the date of this Agreement shall diminish or obviate any of the
representations, warranties, covenants or agreements of the Vendors or the
Corporation contained in this Agreement or the Transaction Documents. In order
that the Purchaser may have full opportunity to make such physical, business,
accounting and legal review, examination or investigation as it may reasonably
request of the affairs of Cap Corp , the Corporation and the Vendors shall cause
the officers, employees, consultants, agents, accountants, lawyers and other
representatives of Cap Corp to cooperate fully with such representatives in
connection with such review and examination.
7.2 CONDUCT OF THE BUSINESS PENDING THE CLOSING
(a) Except as otherwise expressly contemplated by this
Agreement or with the prior written consent of the
Purchaser, Cap Corp during the Interim Period shall:
50
(i) conduct the business of Cap Corp only in the
ordinary course consistent with past practice;
(ii) use its best efforts to (A) preserve its present
business operations, organization (including,
without limitation, management and the staff) and
goodwill of Cap Corp and (B) preserve its present
relationship with Persons having business dealings
with the Corporation and Cap Corp;
(iii) maintain (A) all of the assets and properties of Cap
Corp in their current condition, ordinary wear and
tear excepted and (B) insurance upon all of the
Assets in such amounts and of such kinds comparable
to that in effect on the date of this Agreement;
(iv) maintain
(A) the books, accounts and records of Cap Corp in the
ordinary course of business consistent with past
practices,
(B) continue to collect accounts receivable and pay
accounts payable utilizing normal procedures and
without discounting or accelerating payment of such
accounts, and
(C) comply with all contractual and other obligations
applicable to the operation of Cap Corp;
(v) promptly pay and discharge all liabilities
(including liabilities for services rendered or
goods delivered to Cap Corp) that are due and
payable by it prior to the Closing Date except where
such liabilities are being disputed in good faith by
appropriate proceedings; and
(vi) comply in all material respects with applicable
Laws.
(b) Except as otherwise expressly contemplated by this
Agreement or with the prior written consent of the
Purchaser, the Corporation and the Vendors during the
Interim Period shall not:
(i) repurchase, redeem or otherwise acquire any
outstanding shares of the capital stock or other
securities of, or other ownership interests in, Cap
Corp or the Corporation;
(ii) transfer, issue, sell or dispose of any shares of
capital stock, partnership interests or other
securities of the Corporation or Cap Corp or grant
options, warrants, calls or other rights to
51
purchase or otherwise acquire shares of the capital
stock, partnership interests or other securities of
the Corporation or Cap Corp;
(iii) effect any recapitalization, reclassification, share
split or like change in the capitalization of the
Corporation or Cap Corp (except in the case of the
amalgamation of Cap Corp with other companies held
directly or indirectly by Xxx);
(iv) amend the certificate of incorporation, articles,
bylaws, certificate of limited partnership or
partnership agreement of the Corporation or Cap
Corp;
(v) except as set forth on Schedule 7.2, (A)
increase the annual level of compensation of any
employee of Cap Corp whose annual compensation
exceeds C$40,000, other than any such increases
of less than 5% in the aggregate granted in the
ordinary course of business consistent with past
practice, (B) increase the annual level of
compensation payable or to become payable by Cap
Corp to any of their respective executive
officers, (C) grant any bonus, benefit or other
direct or indirect compensation to any employee,
director or consultant whose annual compensation
exceeds C$40,000, other than in the ordinary
course consistent with past practice and in such
amounts as are fully reserved against in the
Financial Statements, (D) increase the coverage
or benefits available under any (or create any
new) severance pay, termination pay, vacation
pay, company awards, salary continuation for
disability, sick leave, deferred compensation,
bonus or other incentive compensation, insurance,
pension or other employee benefit plan or
arrangement made to, for, or with any of the
directors, officers, employees, agents or
representatives of Cap Corp or otherwise modify
or amend or terminate any such plan or
arrangement or (E) enter into any employment,
deferred compensation, severance, consulting,
non-competition or similar agreement (or amend
any such agreement) to which Cap Corp is a party
or involving a director, officer or employee of
Cap Corp in his or her capacity as a director,
officer or employee of Cap Corp;
(vi) except for trade payables and for indebtedness
for borrowed money incurred in the ordinary
course of business and consistent with past
practice, borrow monies for any reason or draw
down on any line of credit or debt obligation, or
become the guarantor, surety, endorser or
otherwise liable for any debt,
52
obligation or liability (contingent or otherwise) of
any other Person;
(vii) subject to any Lien, any of the Assets;
(viii)acquire any material properties or assets or sell,
assign, transfer, convey, lease or otherwise dispose
of any of the Assets, except (other than with
respect to the Stores or the Business) for fair
consideration in the ordinary course of business
consistent with past practice of Cap Corp;
(ix) cancel or compromise any debt or claim or waive or
release any material right related to the Business
or the Assets of Cap Corp except in the ordinary
course of business consistent with past practice;
(x) enter into any commitment for Capital
Expenditures of Cap Corp or the Corporation;
(xi) enter into, modify or terminate any labor or
collective bargaining agreement of the Corporation
or Cap Corp or, through negotiation or otherwise,
make any commitment or incur any liability to any
labor organization with respect to the Corporation
or Cap Corp;
(xii) introduce any material change with respect to the
operation of Cap Corp, including any material change
in the types, nature, composition or quality of its
products or services or, other than in the ordinary
course of business, make any change in
specifications for product or services of the
Business or prices or terms of distributions of such
product or services;
(xiii)enter into any transaction or to make or enter into
any Contract which by reason of its size or
otherwise is not in the ordinary course of business
consistent with past practice of Cap Corp or the
Business;
(xiv) become obligated to develop any new locations;
(xv) enter into or agree to enter into any merger or
consolidation with any Person or engage in any new
business or invest in, make a loan, advance or
capital contribution to, or otherwise acquire the
securities of, any other Person;
(xvi) except for transfers of cash pursuant to normal cash
management practices, make any investments in or
loans to, or
53
pay any fees or expenses to, or enter into or modify
any Contract with any of the Vendors, partner or
Affiliate of the Vendors;
(xvii)restructure, change, modify or renegotiate the
terms of any obligation of Cap Corp to another
Person which restructuring, change, modification or
renegotiation has the effect of extending, delaying
or deferring the time for payment or performance of
any such obligation, other than in the ordinary
course of business consistent with past practice;
(xviii) agree to do anything prohibited by this Section
7.2 or take or omit to take any action which would
make any of the representations and warranties of
the Vendors in this Agreement or the Transaction
Documents untrue or incorrect in any material
respect during the Interim Period; or
(xix) make any material Tax allocation or settle or
compromise any Tax liability for an amount
materially in excess of the liability therefor that
is reflected on the financial statements of Cap Corp
for the period ended January 31, 1997.
7.3 CONSENTS
During the Interim Period Cap Corp and Xxx shall use their commercially
reasonably best efforts, and the Purchaser shall cooperate with them to obtain
at the earliest practicable date all consents, waivers, approvals, Orders,
Permits and authorizations of any Person or Governmental Body required to
consummate the transactions contemplated by this Agreement, including, without
limitation, the consents, waivers, approvals, Orders, Permits and authorizations
of any Person or Governmental Body referred to in Section 5.6(b) hereof.
7.4 CONSENTS TO REAL PROPERTY LEASES
Cap Corp and Xxx shall use their commercially reasonable best efforts to
obtain all consents and estoppels from landlords and lessors which are required
to be obtained under Section 9.3 hereof to transfer the Real Property Leases to
the Corporation and effect a change in control of the Corporation and consummate
all other transactions contemplated by this Agreement pursuant to the terms of
any of the Real Property Leases.
7.5 NO SOLICITATION
During the Interim Period none of the Corporation and the Vendors will,
nor will they cause or permit Cap Corp or the Corporation or any of Cap Corp's
or the Corporation's directors, officers, employees, representatives or agents
(collectively, the "Representatives") to, directly or indirectly, (i) discuss,
negotiate, undertake, authorize, recommend, propose or enter into, either as the
proposed surviving, merged, acquiring or acquired corporation, any transaction
involving a merger, consolidation, business combination, purchase or disposition
of any capital stock or other equity interest in, or material assets of, Cap
Corp or the Corporation other than the
54
transactions set forth in this Agreement (an "Acquisition Transaction"), (ii)
facilitate, encourage, solicit or initiate discussions, negotiations or
submissions of proposals or offers in respect of an Acquisition Transaction,
(iii) furnish or cause to be furnished, to any Person, any information
concerning the business, operations, properties or assets of the Corporation in
connection with an Acquisition Transaction, or (iv) otherwise cooperate in any
way with, or assist or participate in, facilitate or encourage, any effort or
attempt by any other Person to do or seek any of the foregoing. The Corporation
and the Shareholder will inform Cap Corp in writing immediately following the
receipt by Cap Corp, the Corporation or any Representative of any proposal or
inquiry in respect of any Acquisition Transaction.
7.6 PRESERVATION OF RECORDS
Subject to Section 7.12(b) hereof (relating to the preservation of Tax
records), the Vendors and the Purchaser agree that each of them shall preserve
and keep the records held by any of them relating to the business of Cap Corp
and the Corporation for a period of four years from the Closing Date and shall
make such records and personnel available to the other as may be reasonably
required by such party in connection with, among other things, any insurance
claims by, preparation of financial records and tax returns, audits, legal
proceedings against or governmental investigations of the Vendors or the
Purchaser or any of their Affiliates or in order to enable the Vendors or the
Purchaser to comply with their respective obligations under this Agreement, the
Non-Competition Agreements and each other agreement, document or instrument
contemplated hereby or thereby. In the event that either the Vendors or the
Purchaser wishes to take possession of the records within ninety (90) days
following the expiry of such four (4) year period it shall provide notice to the
other party within such ninety (90) day period of such fact and shall arrange
for pick-up of such records at a mutually convenient time. If both parties wish
to retain their original records then the requesting party shall at its expense
be provided with photocopies of such requested documents.
7.7 PUBLICITY
None of the Corporation, the Vendors and the Purchaser shall issue any
press release or public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written approval of
the other parties hereto, which approval will not be unreasonably withheld or
delayed, unless, in the sole judgment of the Purchaser, disclosure is otherwise
required by applicable Law, provided that, to the extent required by applicable
law, the party intending to make such release shall use its best efforts
consistent with such applicable law to consult with the other party with respect
to the text thereof.
7.8 USE OF NAME
Cap Corp hereby agrees that upon the consummation of the transactions
contemplated hereby, the Purchaser and the Corporation shall have the sole right
to the use of the name "Money Mart" in connection with the Stores.
7.9 ENVIRONMENTAL MATTERS
Cap Corp and Xxx shall identify the Environmental Permits required by
Purchaser to operate the Business of the Corporation and shall promptly file all
materials required under
55
Environmental Laws (including, without limitation,
foreign or provincial property transfer laws) and all requests required for the
issuance, transfer or re-issuance to Purchaser of all such Permits prior to the
Closing Date.
7.10 NON-COMPETITION AGREEMENTS
Each of Xxx and Xxxxxx hereby agree that, on or prior to the Closing Date,
each of them shall execute and deliver to the Purchaser a Non-Competition
Agreement, substantially in the form of Exhibit A hereto ("Non-Competition
Agreement").
7.11 SHAREHOLDER RELEASES
The Vendors hereby agree that, on or prior to the Closing Date, they shall
each execute and deliver to the Purchaser and the Corporation a release,
substantially in the form of Exhibit D hereto (the "Vendor Release").
7.12 TAX MATTERS
(a) Pre-Closing Transactions
It is the intent of the parties that Cap Corp transfer the
Assets (other than Accounts Receivable) to the Corporation
in accordance with section 85(1) of the Tax Act and in
accordance with section 22 of the Tax Act in relation to
the Closing Date Accounts Receivable pursuant to a form of
Agreement (the "Asset Transfer Agreement") in a form
satisfactory to the Purchaser. Prior to the Effective Time
Cap Corp and the Corporation shall execute an Asset
Transfer Agreement and shall do all such things as are
necessary to transfer the Assets from Cap Corp to the
Corporation as provided in section 2.2 hereof. In
addition, the Corporation and Cap Corp shall execute Form
T2057, T2022 and GST Form #44, if applicable, in a form
satisfactory to the Purchaser and such executed forms
shall be filed, without amendment or revision, by Cap Corp
and the Corporation with the applicable Revenue Canada
District Taxation Office within 5 business days of the
Closing Date. Purchaser's approval to the Asset Transfer
Agreement and the elections set out above shall not
mitigate or affect the representations and warranties or
indemnities of the Vendor, which shall continue in full
force and effect.
(b) Preparation of Tax Returns; Payment of Taxes
(i) Cap Corp shall be responsible for filing or
causing to be filed all Tax Returns required to
be filed by or on behalf of the Corporation
and/or its operations and assets for the taxation
year ending immediately before the Closing Date
and shall pay or cause to be paid any Taxes shown
to be due thereon, within the statutory time
periods provided in the Tax Act and
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other applicable legislation, Cap Corp shall file
all such Tax Returns in a manner consistent with
past practices and shall provide copies of such Tax
Returns to the Purchaser for Purchaser's review and
comment at least fifteen (15) business days prior to
filing, provided that such review and comment shall
not in any way mitigate or affect the Vendor's
representations and warranties or indemnities which
shall continue in full force and effect.
(ii) Cap Corp shall not file any amended Tax Returns or
refund claims in respect of any taxable period of
the Corporation ending on or prior to the Closing
Date without the prior written consent of Purchaser.
(c) Tax Audits.
(i) Purchaser shall promptly notify Cap Corp upon
receipt by Purchaser or the Corporation of
written notice of any Tax audits of or proposed
assessments against the Corporation for the
taxation year ending immediately prior to the
Closing Date; provided, however, that the failure
-------- -------
of Purchaser to give Cap Corp prompt notice as
required herein shall not relieve Cap Corp of any
of its obligations to pay such Taxes except and
to the extent that Cap Corp is actually and
materially prejudiced thereby. Purchaser shall
have the right to represent the Corporation in
any such Tax audit or administrative or court
proceeding and to employ counsel of its choice;
provided, that Purchaser may not agree to a
--------
settlement or compromise thereof without the
prior consent of Cap Corp which consent will not
be unreasonably withheld. Cap Corp and Xxx agree
that they will cooperate fully with Purchaser and
its counsel in the defense against or compromise
of any claim in any said audit or proceeding.
(ii) Cap Corp shall promptly notify Purchaser upon
receipt by Cap Corp of written notice of any Tax
audit or proposed assessment or other proposed
change or adjustment which may affect the
Corporation or its Tax attributes. Cap Corp
shall keep Purchaser duly informed of the
progress thereof and, if the results of such Tax
audit or proceeding may have an adverse effect on
the Corporation, Purchaser or its Affiliates for
any taxable period including or ending after the
Closing Date, then Cap Corp may not agree to a
settlement or compromise thereof without
Purchaser's consent, which consent will not be
unreasonably withheld.
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(d) Transfer Taxes.
(i) Cap Corp shall be liable for and shall pay (and
shall indemnify and hold harmless Purchaser
against) all sales, use, goods and services,
stamp, documentary, filing, recording, transfer
or similar fees or taxes or governmental charges
as levied by any taxing authority or governmental
agency in connection with the transactions
contemplated by this Agreement including, without
limitation the Asset Transfer Agreement (other
than taxes measured by or with respect to income
imposed on Purchaser) and the Non-Competition
Agreement. Cap Corp hereby agrees to file all
necessary documents (including, but not limited
to, all Tax Returns) with respect to all such
amounts in a timely manner.
7.13 EMPLOYER HEALTH TAX
Cap Corp acknowledges and agrees that, notwithstanding the completion of
the transactions contemplated by this Agreement, it shall continue to have sole
responsibilities and liability for the payment of tax pursuant to the Employer
Health Tax Act (Ontario) or any similar legislation in respect of all
remuneration paid to employees of Cap Corp in the Business in respect of
services provided during the period up to the Closing Date, whether or not the
same is paid by Cap Corp or Purchaser and whether or not before or after the
Closing Date.
7.14 WESTERN UNION BONUS
The Parties recognize and agree that the payment of $839,357.00 Dollars
(the "Western Union Bonus") received by Cap Corp from Western Union Financial
Services (Canada) Inc. ("Western Union") pursuant to that certain agreement
dated January 1, 1996 (the "Western Union Agreement") is contingent in nature
and dependent upon the performance by Cap Corp of its obligations thereunder and
that should such agreement be terminated as a result of a default by Cap Corp
prior to Closing thereunder, then Cap Corp would be obliged to return to Western
Union that portion of the Western Union Bonus that is in proportion to the
unexpired balance of the term thereunder. For greater certainty and
notwithstanding anything to the contrary herein contained, any Taxes payable on
that portion of the Western Union Bonus that is unearned as at the Closing Date
in the amount of $657,885.00 shall be for the sole account of the Corporation
and Cap Corp shall have no liability in respect thereto. For clarification:
(a) should the Western Union Agreement be terminated after
Closing, then the Corporation shall be obliged to return
to Western Union that portion of the Western Union Bonus
that is in the proportion to the unexpired balance of the
term thereunder and Cap Corp shall have no liability in
respect thereof;
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(b) in the event that Cap Corp's treatment of the Western
Union Bonus is reviewed by Revenue Canada, neither the
Purchaser nor the Corporation shall have any liability for
interest or penalties re-assessed against Cap Corp by
Revenue Canada.
7.15 EMPLOYEES
(a) Cap Corp agrees to provide the Purchaser with an
up-to-date list of the names of the employees of the
Business at least two Business Days and not more than
four Business Days prior to the Closing Date (the
"Listed Employees"). The Purchaser on behalf of the
Corporation agrees that it shall offer employment to
the Listed Employees, effective as at the Effective
Time, on substantially the same terms and conditions of
employment as are then applicable to such employees.
The Vendors shall indemnify and hold harmless the
Corporation to the respective limits set out in Article
X from and against all losses suffered or incurred by
the Corporation as a result of or arising directly or
indirectly out of, in connection with or pursuant to
any claims by any employees of the Business, other than
claims by such employees who accept the Corporation's
offers of employment with respect to their employment
with the Corporation. No employee of the Business
shall be entitled to any rights under this subsection
7.15 or under any other provisions of this Agreement.
(b) Cap Corp shall employ all of the employees set out in
Schedule 5.18 until Closing Date, except for any employees
who prior to the Closing Date:
(i) are terminated for cause;
(ii) are terminated with the Purchaser's consent,
which consent shall not be unreasonably withheld;
(iii) voluntarily resign; or
(iv) retire.
The Vendors shall not attempt in any way to discourage any of the employees from
accepting any offer of employment to be made by the Corporation or its
Affiliates. The Vendors shall not solicit the services of any of the employees
during the five (5) year period following the Closing
59
Date without the consent in writing of the Purchaser, which consent shall not be
unreasonably withheld.
ARTICLE VIII - CONDITIONS TO CLOSING
8.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligation of the Purchaser to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on or prior to the
Closing Date, of each of the following conditions (any or all of which may be
waived by the Purchaser in whole or in part):
(a) All representations and warranties of the Vendors
contained herein shall be true and correct as of the
date hereof;
(b) All representations and warranties of the Vendors
contained herein not qualified as to materiality shall
be true and correct, and the representations and
warranties of the Vendors contained herein qualified as
to materiality shall be true and correct in all
material respects, at and as of the Closing Date with
the same effect as though those representations and
warranties had been made again at and as of that time;
(c) The Vendors and the Corporation shall have performed and
complied in all material respects with all obligations and
covenants required by this Agreement to be performed or
complied with by them on or prior to the Closing Date;
(d) The Purchaser shall have been furnished with certificates
(dated the Closing Date and in form and substance
reasonably satisfactory to the Purchaser) executed by the
Vendors certifying as to the fulfillment of the conditions
specified in Sections 8.1(a), 8.1(b) and 8.1(c) hereof;
(e) Certificates representing 100% of the Shares shall have
been, or shall at the Closing be, validly delivered and
transferred to the Purchaser, free and clear of any and
all Liens;
(f) The Purchaser shall have obtained all consents and waivers
referred to in Section 6.3 hereof with respect to the
transactions contemplated by this Agreement and the
Purchaser Documents;
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(g) There shall not have been or occurred any Material
Adverse Change in Cap Corp or the Corporation since
the Balance Sheet Date;
(h) The Vendors shall have obtained all consents and waivers
referred to in Section 5.6 hereof, in a form reasonably
satisfactory to the Purchaser, with respect to the
transactions contemplated by this Agreement or the
Transaction Documents.
(i) No Legal Proceedings shall have been instituted or
threatened or claim or demand made against any of the
Vendors, the Corporation, or the Purchaser or any of
its Affiliates seeking to restrain or prohibit or to
obtain substantial damages with respect to the
consummation of the transactions contemplated hereby,
and there shall not be in effect any Order by a
Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby;
(j) The Vendors shall have furnished, or caused to be
furnished, to Purchaser, in form and substance
satisfactory to Purchaser, such certificates and other
evidence as Purchaser may have reasonably requested as
to the satisfaction of the conditions contained in this
Section and as to such other matters relating to the
representations, warranties, covenants and undertakings
in this Agreement as Purchaser may reasonably request;
(k) Estoppels, assignments and any necessary consents from the
landlords and lessors under each Real Property Lease shall
have been obtained in form and substance satisfactory to
Purchaser in accordance with Section 9.3;
(l) Each of the directors and officers of the Corporation
shall deliver to the Purchaser as of the Closing Date his
or her resignation as an officer, director and employee of
the Corporation (as the case may be) and shall grant to
the Corporation a full and final release in respect of any
and all liabilities of the Corporation to such person;
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(m) The Vendors shall have delivered to the Purchaser an
affidavit attesting that they are residents of Canada
within the meaning of Section 116 of the Tax Act;
(n) Title to all of the Assets have been validly
transferred into the name of the Corporation in
accordance with the terms of this Agreement and the
Asset Transfer Agreement in a form and substance
satisfactory to the Purchaser. The Purchaser shall be
satisfied in its sole discretion with all pre-closing
transactions involving the Corporation, including the
organization of the Corporation, elections made in
respect to any pre-closing transactions under the Tax
Act and such other material that may be ancillary or
supplementary thereto;
(o) The Keele Street Outlet is open for business and in
full operation;
(p) The Vendors shall have presented a form of opinion of
the Vendors Solicitors in a form and substance
satisfactory to the Purchaser acting reasonably;
(q) The Purchaser shall have received duly executed copies
of each of the documents enumerated in Section 9.1;
(r) The Purchaser shall have been furnished with evidence of
consents or discharges of security agreements registered
against the Assets under the Personal Property Security
Act (Ontario) as the Purchaser may reasonably require to
give effect to the terms of this
Agreement.
8.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE VENDORS
The obligations of the Vendors to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions (any or all of which may
be waived by the Vendors in whole or in part to the extent permitted by
applicable law):
(a) all representations and warranties of the Purchaser
contained herein shall be true and correct as of the
date hereof;
(b) all representations and warranties of the Purchaser
contained herein not qualified as to materiality shall
be true and correct, and all representations and
warranties of the Purchaser contained herein
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qualified as to materiality shall be true and correct in
all material respects, at and as of the Closing Date with
the same effect as though those representations and
warranties had been made again at and as of that date;
(c) the Purchaser shall have performed and complied in all
material respects with all obligations and covenants
required by this Agreement to be performed or complied
with by Purchaser on or prior to the Closing Date;
(d) the Vendors shall have been furnished with a certificate
(dated the Closing Date and in form and substance
reasonably satisfactory to the Vendors executed by the
President, Secretary/Treasurer or Chief Executive Officer
of the Purchaser) certifying as to the fulfillment of the
conditions specified in Sections 8.2(a), 8.2(b) and
8.2(c);
(e) the Purchase Price shall at the Closing be delivered to
the Vendors' Solicitors;
(f) the Vendors shall have received duly executed copies of
each of the documents enumerated in Section 8.2; and
(g) the Purchaser shall have obtained all consents and waivers
referred to in Section 6.3 hereof, in a form reasonably
satisfactory to the Vendors, with respect to the
transactions contemplated by this Agreement or the
Transaction Documents.
8.3 FAILURE OF VENDORS TO SATISFY CONDITIONS PRECEDENT
If any of the foregoing conditions contained in Section 8.1 are not
satisfied at the Time of Closing, the Purchaser may:
(a) refuse to complete the transaction contemplated in this
Agreement by notice in writing to the Vendors and, in
such event, the Purchaser shall be released from all of
its obligations under this Agreement and this Agreement
shall thereupon be deemed to be null and void and of no
force or effect whatsoever. Vendors shall not be
released from their obligations hereunder unless the
ability to satisfy the unsatisfied condition was beyond
reasonable the control of the Vendors; or
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(b) complete the transactions contemplated in this Agreement,
it being expressly understood and agreed that following
such completion the Purchaser may not rely upon the
warranties, representations or covenants relating to any
unsatisfied condition unless the ability to satisfy the
unsatisfied condition was within the reasonable control of
the Vendors.
provided that any of the said conditions may be waived in whole or in part by
the Purchaser without prejudice to its rights of rescission in the event of
non-fulfillment and/or non-performance of any other condition or conditions, any
such waiver prior to the Time of Closing to be binding on the Purchaser only if
same is in writing.
8.4 FAILURE OF PURCHASER TO SATISFY CONDITIONS PRECEDENT
If any of the conditions contained in Section 8.2 are not satisfied at
the Time of Closing, the Vendors may:
(a) refuse to complete the transactions contemplated in
this Agreement by notice in writing to the Purchaser
and, in such event, the Vendors hereto shall be
released from all of their respective obligations under
this Agreement and this Agreement shall be thereupon be
deemed to be null and void and of no force or effect
whatsoever. Purchaser shall not be released from its
obligations hereunder unless the ability to satisfy the
unsatisfied condition was beyond the reasonable control
of the Purchaser; or
(b) complete the transactions contemplated in this Agreement,
it being expressly understood and agreed that following
such completion, none of the Vendors may rely upon the
warranties, representations or covenants relating to any
unsatisfied condition unless the ability to satisfy the
unsatisfied condition was within the reasonable control of
the Purchaser.
provided that any of the said conditions may be waived in whole or in part by
the Vendors without prejudice to their rights of rescission in the event of
non-fulfillment and/or non-performance of any other condition or conditions, any
such waiver prior to the Time of Closing to be binding on the Vendors only if
same is in writing.
ARTICLE IX - DOCUMENTS TO BE DELIVERED
9.1 DOCUMENTS TO BE DELIVERED BY THE VENDORS
At the Closing, the Vendors shall deliver, or cause to be delivered, to
the Purchaser the following:
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(a) share certificates representing the Shares, duly endorsed
in blank or accompanied by share transfer powers and with
all requisite share transfer tax stamps attached;
(b) the certificates referred to in Section 8.1(d) hereof;
(c) the opinion of the Vendors' Solicitors, in a form
acceptable to the Purchaser acting reasonably;
(d) copies of all consents and waivers referred to in
Section 8.1(h) hereof;
(e) Non-Competition Agreement, substantially in the form of
Exhibit A hereto, duly executed by Xxx and Xxxxxx;
(f) written resignations of each of the directors and
officers of the Corporation;
(g) certificates of good standing with respect to the
Corporation issued by the Ministry of Consumer and
Commercial Relations (Ontario);
(h) Vendor Releases, substantially in the form of Exhibit D
hereto, duly executed by each of the Vendors and Xxx;
(i) a Certificate issued under Section 6 of the Retail
Sales Act (Ontario) which covers the Interim Period;
(j) Asset Transfer Agreement duly executed by Cap Corp and
Corporation together with Form T2057 and T2022 and GST
Form #44, if applicable;
(k) necessary Consents and or Assignments from all lessors
to all material Personal Property Leases and other
parties to the Material Contracts;
(l) Estoppel Certificates by all landlords of the Real
Property Leases substantially in the form of Exhibit
"E" hereto;
(m) Assignment of each Real Property Lease duly executed by
Cap Corp or its Affiliates as the case may be and
Corporation;
65
(n) all necessary consent of landlords of the Real Property
Leases to assignment of lease to the Corporation and
change in control of the Corporation;
(o) Leases for each Cap Corp Property in the form of
Exhibit "B" duly executed by Cap Corp or Xxx as the
case may be and Corporation;
(p) Certified Copy of Resolution of the sole director of
Cap Corp approving the transactions contemplated by
this Agreement;
(q) Certificates of Insurance insuring all of the Assets in
the name of the Corporation;
(r) Assignment to the Corporation of proceeds to insurance
claim for the Cornwall Outlet; and
(s) such other documents as the Purchaser shall reasonably
request.
9.2 DOCUMENTS TO BE DELIVERED BY THE PURCHASER
At the Closing, the Purchaser shall deliver to the Vendors the
following:
(a) evidence of the payments required to be made pursuant
to Section 3.2 hereof;
(b) the certificate referred to in Section 8.2(d) hereof;
(c) the opinion of the Purchaser's Solicitors in a form
acceptable to the Vendors acting reasonably;
(d) the Release of Guarantee Agreement in the form of
Exhibit "G";
(e) Indemnity of Financial in the form set out in Exhibit
"H";
(f) such other documents as the Vendors reasonably request.
9.3 MINIMUM LEASE ASSIGNMENTS
(a) The Corporation is required under Section 8.1(k) to
obtain all of the estoppel certificates, consents to
assignment and consents to change in control of the
landlord/lessors ("Consent Documents") under the Real
66
Property Leases for transfer of the Real Property
Leases to the Corporation and the Shares from Cap Corp
to the Purchaser hereunder. If the Vendors obtain the
Consent Documents under 90% of the Real Property Leases
listed on Schedule 5.9 (the "Minimum Lease Condition"
for purposes of Article IX) then the condition
precedent set forth in Section 8.1(k) shall be deemed
to be met. Assuming the satisfaction of the Minimum
Lease Condition, if either Purchaser, on the one hand,
or the Vendors, on the other hand, shall give the
written notice to the other party as provided in
Section 11.8, as to each Real Property Lease as to
which the Vendors have not obtained Consent Documents:
(i) for each such Real Property Lease for a Store whose
annual gross revenue for the fiscal period ending on
the Balance Sheet Date is above the median for gross
revenue of Stores the amount of C$200,000 of the
Purchase Price; and
(ii) for each such Real Property Lease for a Store whose
annual gross revenue for the fiscal period ending on
the Balance Sheet Date is below the median for gross
revenue of Stores the amount of C$100,000 of the
Purchase Price
shall be placed into escrow in the trust account of
Vendors' Solicitors pending receipt and delivery of such
consent (and the Purchase Price deliverable to the Seller
pursuant to Section 3.2 shall be correspondingly reduced
pro rata). Any such amounts shall be held in escrow and
disbursed pursuant to and as provided in the form of
escrow agreement attached as Exhibit "F".
(b) In the event that Consent Documents are not thereafter
procured as to a particular Real Property Lease and
Purchaser is forced to move the location of the subject
Store to another site, all relocation and related costs of
the Purchaser incurred in connection with the relocation
of such Store shall be reimbursed to the Purchaser out of
the escrowed amount for such Store.
(c) In the event that Consent Documents in substantially the
form proffered by the Purchaser is thereafter procured,
the funds escrowed as to the particular Store shall be
remitted to the Vendors.
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(d) In the event neither of the above occurs as to a
particular Store within one (1) year of the Closing
Date, the funds escrowed as to that particular Store
shall be remitted to the Vendors, provided that such
Persons have acted in good faith and have reasonably
assisted the Purchaser in its efforts to obtain such
Consent Documents; and otherwise, such funds shall be
reimbursed to the Purchaser.
ARTICLE X - INDEMNIFICATION
10.1 SURVIVAL
The representations and warranties of the applicable Vendors and the
Purchaser shall remain operative and in full force and effect for a period of
twenty-four (24) months after the Closing Date, regardless of any investigation
or statement as to the results thereof made by or on behalf of any party hereto;
provided that the representations and warranties contained in Sections 5.11 and
5.33 and the obligations of the Purchaser to cause the Corporation to perform
its obligations under the Assumed Contracts shall survive indefinitely.
Notwithstanding anything to the contrary herein, any representation or warranty
which is the subject of a claim or dispute which is asserted in writing prior to
the expiration of the applicable period set forth above shall survive with
respect to such claim or dispute until the final resolution and satisfaction
thereof.
10.2 GENERAL INDEMNIFICATION
(a) The Vendors hereby jointly and severally agree to
indemnify and hold harmless the Purchaser and its
Affiliates (including, after the Closing, the
Corporation and their respective directors, officers,
employees, agents, successors and assigns
(collectively, the "Purchaser Indemnified Parties"))
from and against and in respect of any and all Losses
resulting from, arising out of, based on or relating to:
(i) the failure of any representation or warranty of
the Vendors or of the Corporation set forth in
this Agreement, any Transaction Document or any
certificate or instrument delivered by or on
behalf of the Vendors or the Corporation pursuant
to this Agreement, to be true and correct in all
respects both as of the date of this Agreement
and on the Closing Date;
(ii) the breach of any covenant or other agreement on
the part of the Vendors or of the Corporation
under this Agreement or any Transaction Document;
(iii) any Excluded Liability;
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(iv) (A) any Release of Hazardous Materials by or held
on behalf of (i) the Corporation or (ii) any
Person for whose actions the Corporation is
responsible in law in, on, at, or from the
Company Properties which occurred, or resulted
from operations occurring, as of or prior to the
Closing; (B) any tort liability to third parties
as a result of any Releases or from exposure to
Hazardous Materials arising from any Releases as
of or prior to the Closing; (C) notification or
designation under any Environmental Law as a
potentially responsible party for onsite or
offsite disposal of Hazardous Materials, which
disposal occurred as of or prior to the Closing;
or (D) any other Environmental Costs and
Liabilities and any other Environmental Claim or
Remedial Action resulting from or based upon
anything related to the property currently or
previously owned, leased or operated by the
Corporation or any of its respective predecessors
thereof conducted prior to Closing; or
(v) non-compliance with the Bulk Sales Act (Ontario) as
a result of the transactions contemplated under the
Asset Transfer Agreement.
(b) Purchaser and Financial hereby jointly and severally
agree to indemnify and hold harmless the Vendors and
their respective Affiliates, and their respective
directors, officers, employees, agents, successors and
assigns (collectively, the "Vendor Indemnified
Parties") from and against and in respect of any and
all Losses resulting from, arising out of, based on or
relating to:
(i) the failure of any representation or warranty of the
Purchaser set forth in this Agreement or any
Purchaser Document or any certificate and instrument
delivered by or on behalf of the Purchaser pursuant
to this Agreement, to be true and correct in all
respects both as of the date of this Agreement and
on the Closing Date;
(ii) the breach of any covenant or other agreement on
the part of the Purchaser under this Agreement or
any Purchaser Document;
(iii) any Contract Liabilities; or
69
(iv) any payment made to the Corporation in error of the
insurance proceeds payable to Cap Corp regarding the
Keele Street Outlet;
10.3 LIMITATIONS ON INDEMNIFICATION FOR BREACHES OF REPRESENTATIONS
AND WARRANTIES
(a) The Vendors shall not have any liability under Section
10.2(a)(i), unless and until the aggregate amount of
losses subject to indemnification thereunder exceeds
C$30,000.00 and in such event, the Vendors shall be
required to pay the entire amount of such Losses in
excess of C$30,000.00. The Purchaser and Financial
shall not have any liability under Section 10.2(b)(i),
unless and until the aggregate amount of Losses subject
to indemnification thereunder exceeds C$30,000.00 and,
in such event, the Purchaser shall be requested to pay
the entire amount of such Losses in excess of
C$30,000.00.
(b) The maximum liability with respect to representations
and warranties of:
(i) Xxx and Cap Corp shall not in total exceed the
amount of the Purchase Price. The maximum
liability of each of Xxxxxx and the Trust to
contribute to indemnification of the Purchaser
Indemnified Parties hereunder shall not exceed
the amount of the Purchase Price received
directly or indirectly by Xxxxxx and the Trust
respectively.
10.4 INDEMNIFICATION PROCEDURES
Except as provided in Sections 10.5 with respect to Taxes, for the
purposes of administering the indemnification provisions of Sections 10.2 and
10.3, the following procedures shall apply:
(a) If an indemnified party shall receive notice of any
action or proceeding by a third party with respect to
which the indemnified party asserts is indemnifiable
under Section 10.2 (a "Claim"), the indemnified party
shall notify the indemnifying party (the "Indemnitor")
of such Claim in writing promptly following the receipt
of notice of the commencement of such Claim. The
failure to give notice as required by this Section 10.4
in a timely fashion shall not
70
result in a waiver of any right to indemnification
hereunder except to the extent that the Indemnitor is
actually prejudiced thereby.
(b) Except as provided below, the Indemnitor shall be
entitled to assume the defense or settlement of any
Claim of the type referred to in clause (a) hereof
(with counsel reasonably satisfactory to the
indemnified parties) if the Indemnitor shall provide
the indemnified parties a written acknowledgment of its
liability to indemnify such indemnified parties against
all Losses resulting from, relating to or arising out
of such Claim. If the Indemnitor assumes any such
defense or settlement, it shall pursue such defense or
settlement in good faith. If the Indemnitor fails to
elect in writing to assume the defense of any Claim or
to provide the written acknowledgment provided for
above within 10 days after the notification referred to
above, the indemnified party may engage counsel to
defend, settle or otherwise dispose of such Claim,
which counsel shall be reasonably satisfactory to the
Indemnitor; provided, however, that the indemnified
party shall not settle or compromise any such Claim
without the consent of the Indemnitor (which consent
will not be unreasonably withheld or delayed).
(c) Notwithstanding anything to the contrary contained
herein, the Purchaser shall have the sole right, with
counsel reasonably satisfactory to the Indemnitor, to
defend and settle in its sole discretion any Claim
which constitutes a Non-Assumable Claim and no other
party hereto shall be entitled to assume the defense
thereof or settle such claim. A "Non-Assumable Claim"
means any claim, action or proceeding (i) arising out
of or in connection with, or relating to, any violation
or asserted violation of any Law, Order, judgment or
decree, (ii) involving any Governmental Body, or (iii)
seeking injunctive relief.
(d) In cases where the Indemnitor has elected to assume the
defense or settlement with respect to a Claim as
provided above, the Indemnitor shall be entitled to
assume such defense or settlement provided that: (i)
the indemnified party (and its counsel) shall be
entitled to continue to participate at its own cost in
any such action or proceeding or in
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any negotiations or proceedings to settle or otherwise
eliminate any claim for which indemnification is being
sought; (ii) the Indemnitor shall not be entitled to
settle or compromise any such claim without the consent or
agreement of the indemnified party (such consent not to be
unreasonably withheld or delayed); and (iii) after written
notice by the Indemnitor to the indemnified party of its
election to assume control of the defense of any Claim,
the Indemnitor shall not be liable to such indemnified
party hereunder for any legal fees and disbursements
subsequently incurred by such indemnified party in
connection therewith.
10.5 TAX MATTERS
(a) The Vendors (the Indemnifying Party") do hereby agree to
jointly and severally indemnify and hold harmless each of
the Purchaser Indemnified Parties from and against any and
all Losses resulting from, arising out of, based on or
relating to:
(i) any breach of any representation, warranty or
covenant contained in Sections 5.11 or 7.12
hereof;
(ii) any Taxes for which Cap Corp is liable pursuant
to subsections 7.12 or 7.13 hereof;
(iii) any assessment or re-assessment for Taxes and
interest or penalties for any period up to the
Closing Date;
(iv) any Taxes payable by any of the Purchaser
Indemnified Parties resulting from any share
transactions, cancellation, surrender, repurchases,
redemptions or other dealings by, through or on
behalf of the Corporation on or before the Time of
Closing; and
(v) any Taxes payable by any of the Purchaser
Indemnified Parties arising from the Asset
Transfer Agreement.
(b) The Purchaser Indemnified Parties shall give prompt
written notice to the Indemnifying Party of any written
or oral notice or inquiry, notice of assessment, or
notice of re-assessment received from a taxing
authority and relating to a matter that may give rise
to a claim for indemnity under this clause 10.5
provided, however, that the failure to
72
give prompt written notice shall not affect the liability
of the Indemnifying Party hereunder unless the failure to
give such notice adversely and materially affects the
ability of such Indemnifying Party to defend, object,
oppose, or contest any claim, assessment, or re-assessment
made by a taxing authority as provided for hereunder.
Notwithstanding any other provisions of this clause 10.5,
provided that the Indemnifying Party promptly acknowledges
in writing its liability pursuant to this clause 10.5 for
any amount for which it may have the right at its expense
to represent the interests of the Corporation in any tax
audit or administrative or court proceedings relating to
fiscal year years of the Corporation ending on or prior to
the Closing Date or with respect to any other matter which
may give rise to a claim for indemnity under this clause
10.5 and to control the conduct of such audit or
proceeding, including settlement or other disposition
thereof proved that no settlement shall be made without
the consent of the Purchaser, such consent not to be
unreasonably withheld. In the event that the Purchaser
Indemnified Party in its sole discretion, refuses to give
its consent, the Purchaser Indemnified Party shall no
longer be entitled to indemnification from the
indemnifying party under this clause as with respect to
the claim, assessment or re-assessment for which the
consent was unreasonably refused. The Purchaser
Indemnified Party shall cooperate with the reasonable
requests of the Indemnifying Party for information and
assistance and shall permit such party during normal
business hours to inspect and make copies, at its expense,
of relevant books and records. The Purchaser Indemnified
Party agrees to execute or cause to be executed any
document necessary, reasonable, and appropriate to enable
the Indemnifying Party to so defend, object, oppose, or
contest.
(c) Any claim for indemnity made under this Section 10.5 may
be made at any time prior to 120 days following the
expiration of the applicable Tax statute of limitations
with respect to the relevant taxable period (including
extensions).
10.6 WAIVER OF SUBROGATION AND OTHER RIGHTS
The Vendors hereby agree that if, following the Closing, any payment is
made or required to be made by any of them pursuant to the terms of this
Agreement, the Transaction Documents
73
(including without limitation this Article X), the Vendors shall not have any
rights against the Corporation, whether by reason of subrogation or otherwise,
in respect of any such payments, and the Vendors shall not take any action
against the Corporation with respect thereto. Any such rights which any of the
Vendors may, by operation of law or otherwise, have against the Corporation
shall, effective at the time of the Closing, be deemed to be hereby expressly
and knowingly waived. Following the closing of the transactions provided for
herein, the rights of the Purchaser Indemnified Parties and Vendor Indemnified
Parties set out in this Article X shall be the sole remedy in respect of any
breach of representation, warranty or covenant contained in the Transaction
Documents or injunctive or other equitable relief where appropriate.
10.7 TREATMENT OF PAYMENT
The Vendors and Purchaser agree to treat any indemnity payment made
pursuant to Sections 10.2 or 10.5 of this Agreement as an adjustment to the
Purchase Price for federal, provincial, local and foreign income tax purposes.
10.8 LIMITATION OF INDEMNITY
The amount of any loss or damage which may be claimed by a party pursuant
to the provisions of this Article X shall be calculated after giving effect to:
(a) any insurance proceeds received by the party, or the
Corporation in the case of a claim by the Purchaser, in
relation to the matter which is the subject of the
claim; and
(b) the value of any tax benefits realized or which will be
realized relating thereto, less any tax imposed as a
result of the receipt of the indemnification hereunder,
as determined by Xxxxx Xxxxx in the case by the
Corporation or the Purchaser in the case of a claim by
or by B.D.O. Dunwoody in the case of a claim by the
Vendors, in relation to the matter which is the subject
of the claim.
ARTICLE XI - GENERAL
11.1 SPECIFIC PERFORMANCE
The Vendors acknowledge and agree that the breach of this Agreement would
cause irreparable damage to the Purchaser and that the Purchaser will not have
an adequate remedy at law. Therefore, the obligations of the Vendors under this
Agreement, including, without
74
limitation, the Vendors' obligation to sell the Shares to the Purchaser, shall
be enforceable by a decree of specific performance issued by any court of
competent jurisdiction, and appropriate injunctive relief may be applied for and
granted in connection therewith. Such remedies shall, however, be cumulative and
not exclusive and shall be in addition to any other remedies which any party may
have under this Agreement or otherwise.
11.2 FURTHER ASSURANCES
The Vendors and the Purchaser agree to execute and deliver such other
documents or agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.
11.3 SUBMISSION TO JURISDICTION; CONSENT TO SERVICE OF PROCESS
(a) The parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of any federal or court
located within the Province of Ontario over any dispute
arising out of or relating to this Agreement or any of
the transactions contemplated hereby and each party
hereby irrevocably agrees that all claims in respect of
such dispute or any suit, action proceeding related
thereto may be heard and determined in such courts.
The parties hereby irrevocably waive, to the fullest
extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of venue
of any such dispute brought in such court or any
defense of inconvenient forum for the maintenance of
such dispute. Each of the parties hereto agrees that a
judgment in any such dispute may be enforced in other
jurisdictions by action on the judgment by or in any
other manner provided by law.
(b) Each of the parties hereto hereby consents to process
being served by any party to this Agreement in any suit,
action or proceeding by the mailing of a copy thereof in
accordance with the provisions of Section 11.8.
11.4 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS CONFIDENTIALITY
This Agreement (including the schedules and exhibits hereto) represents
the entire understanding and agreement between the parties hereto with respect
to the subject matter hereof and can be amended, supplemented or changed, and
any provision hereof can be waived, only by
75
written instrument making specific reference to this Agreement signed by the
party against whom enforcement of any such amendment, supplement, modification
or waiver is sought. No action taken pursuant to this Agreement, including
without limitation, any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance with
any representation, warranty, covenant or agreement contained herein. The waiver
by any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such breach or as a
waiver of any other or subsequent breach. No failure on the part of any party to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law. The parties acknowledge that they each participated in drafting this
Agreement, and there shall be no presumption against any party on the ground
that such party was responsible for preparing this Agreement or any part
thereof.
11.5 SEVERABILITY
If any provision of this Agreement is invalid or unenforceable, the
balance of this Agreement shall remain in effect.
11.6 BINDING EFFECT; ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights
in any person or entity not a party to this Agreement except as provided below.
No assignment of this Agreement or of any rights or obligations hereunder may be
made by any party hereto without the prior written consent of the other parties
hereto and any attempted assignment without the required consents shall be void;
provided, however, that the Purchaser may assign this Agreement and any or all
rights hereunder (including, without limitation, the Purchaser's rights to
purchase the Shares and the Purchaser's rights to seek indemnification
hereunder) to (a) any Affiliate of the Purchaser (provided that the Purchaser
shall remain liable for all of its obligations under this Agreement) or (b)
after the Closing, to any purchaser or transferee of any of the Shares or Assets
of the Corporation. Upon any such permitted assignment, the references in this
Agreement to the Purchaser shall also apply to any such assignee unless the
context otherwise requires.
11.7 COUNTERPARTS
This Agreement may be executed by the parties hereto 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.
Each counterpart may consist of a number of copies hereof each signed by less
than all, but together signed by all of the parties hereto.
11.8 NOTICES
All notices and other communications under this Agreement shall be in
writing and shall be deemed given when delivered personally or mailed by
registered mail, return receipt
76
requested, to the parties (and shall also be transmitted by facsimile to the
Persons receiving copies thereof) at the following addresses (or to such other
address as a party may have specified by notice given to the other party
pursuant to this provision): If to Purchaser, Financial or, after the Closing,
the Corporation: c/o Dollar Financial Group, Inc. Xxxxxxxxxx Xxxxx, Xxxxx 000
0000 Xxxxxxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxx 00000 Attention: Xxxxxx X. Xxxxxxxx,
Vice President - Corporate Development Telephone No.: (000) 000-0000 Telecopy
No.: (000) 000-0000 with a copy to: Xxxxxx & XxXxxxxx 2500, 00000 - 000 Xxxxxx
Xxxxxxxx, Xxxxxxx X0X 0X0 Attention: Xxxxxx X.X. Xxxxxx Telephone No.: (403)
000-0000 Telecopy No.: (000) 000-0000 If to the Vendors or prior to Closing, the
Corporation: Canadian Capital Corporation #201, 0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxx X0X 0X0 Attention: Xxx X. Xxxxx Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000 with a copy to: Fogler Xxxxxxxx Xxxxx 0000, Xxx 00
Xxxxx Xxxxx Xxxxx Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxxx, Xxxxxxx X0X 0X0 Attention:
Xxxxxxx X. Xxxxx Telephone No: (000) 000-0000 Telecopy No: (000) 000-0000 Any
notice given in accordance with this paragraph shall be deemed received on the
date of personal delivery or three (3) days after posting by registered mail.
Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed.
11.9 VENDOR'S REPRESENTATIVE
Xxx is hereby designated and authorized by each of Xxxxxx, the Trust and
Cap Corp as their representative ("Vendor's Representative") to act for and
represent the Vendors and in those
77
matters which require or permit notice to be given to any one of the Vendors
under this Agreement.
11.10 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario without giving effect to principles of conflicts
of law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written above.
------------------------------------ ------------------------------------
Witness XXX X. XXXXX
------------------------------------ ------------------------------------
Witness XXXXXX X. XXXXX
XXXXX FAMILY TRUST
PER:________________________________
CANADIAN CAPITAL CORPORATION
Per:________________________________
DOLLAR ONTARIO LTD.
Per:________________________________
DOLLAR FINANCIAL CANADA LTD.
Per:________________________________
DOLLAR FINANCIAL GROUP, INC.
Per:________________________________
78
Exhibit A
Non-Competition Agreement among Xxx Xxxxx, Dollar Financial Canada LTD. and
Dollar Ontario Ltd.
Exhibit B
Lease
Exhibit C
Articles of Incorporation for Dollar Ontario LTD.
Exhibit D
Vendor Release
Exhibit E
Lease
Exhibit F
Escrow Agreement among Canadian Capital Corporation, Dollar Financial Canada
LTD., and Fogler, Xxxxxxxx.
Exhibit G
Release of Guarantees
Schedule 1.1(qqq)
Summary of Prepaids
Schedule 2.2(a)
List of Stores
Schedule 2.2(d)
Personal Property
Schedule 2.3
Excluded Assets
Schedule 5.6
Conflicts; Consents of Third Parties
Schedule 5.8(a)
Financial Statements
Schedule 5.9
Undisclosed Liabilities
Schedule 5.10
Developments since the balance sheet date
Schedule 5.11
Tax Matters
Schedule 5.12(a)
Real Property Leases
Schedule 5.12(g)
Cap Corp Properties
Schedule 5.13
(1)Personal Property Leases
(2)Liens against tangible personal property or moveable property of Cap Corp
reflected in Balance Sheet
Schedule 5.14
Intangible Property
Schedule 5.15
Material Contracts
Schedule 5.16(a)
Employee Benefit Plans
Schedule 5.17(a)
Collective Bargaining Agreeements
Schedule 5.17(b)
Labour Organization
Schedule 5.18
Employees
Schedule 5.19
Litigation
Schedule 5.20
Compliance with Laws
Schedule 5.21
Environmental Matters
Schedule 5.22
Insurance Poilicies
Schedule 5.24
Related Party Transactions
Schedule 5.26
Financial Advisors
Schedule 5.29
Third Party Discussions
Schedule 6.3
Conflicts; Consents of Third Parties
Schedule 7.2
Increases to Compensation
