Exhibit 10.7
MOTOR VEHICLE EMISSIONS INSPECTION AND
MAINTENANCE PROGRAM AMENDMENT NO. 6
THIS AGREEMENT dated for reference the 15th day of July, 1994
BETWEEN:
HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH
COLUMBIA represented by the Superintendent of Motor Vehicles,
Ministry of Transportation and Highways
(the "Province")
OF THE FIRST PART
AND:
EBCO-XXXXXXXX TEST SYSTEMS LTD., EBCO AUTOMOTIVE TESTING
HOLDINGS LTD. and XXXXXXXX TEST SYSTEMS (B.C.) LTD., carrying
on business as EBCO-XXXXXXXX PARTNERS, a general partnership
registered in accordance with the laws of the Province of
British Columbia under No. 121626-91 and having an office at
0000 Xxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Contractor")
OF THE SECOND PART
WHEREAS:
A. By an agreement dated for reference the 30th day of August, 1991 and
entitled the MOTOR VEHICLE EMISSIONS INSPECTION AND MAINTENANCE PROGRAM
ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assumption Agreement"), the
Contractor assumed the obligations under the agreement dated for
reference the 15th day of April, 1991, between the Province and
Ebco-Xxxxxxxx Test Systems Ltd., as amended on May 15, 1991 (Amendment
No. 1) and May 31, 1991 (Amendment No. 2), by letter agreements, which,
inter alia, provides for the Motor Vehicle Emissions Inspection and
Maintenance Program established by the Superintendent of Motor Vehicles
for the purpose of certifying compliance of motor vehicles with
regulations concerning motor vehicle air pollution emissions which
agreement was further amended by an agreement dated for reference the
13th day of December, 1991 and entitled Motor Vehicle Emissions
Inspection and Maintenance Program Amendment No. 3, further amended by
an agreement dated for reference the 1st day of April, 1992 and
entitled Motor Vehicle Emissions Inspection and Maintenance Program
Amendment No. 4, and further amended by an agreement dated for
reference the 14th day of August, 1992 and entitled Motor Vehicle
Inspection and Maintenance Program Amendment No. 5 (such agreement as
amended and the Assumption Agreement being hereinafter collectively
referred to as the "Contract").
B. By a letter dated July 12, 1993, the Contractor referred to the April
7, 1993, notice of an event of Force Majeure delivered to the Province,
and requested a consultation with the Province to make an equitable
adjustment to the Contract, and by a letter dated July 28, 1993, the
Contractor advised the Province that performance of the contract had
been materially affected by events within the meaning of Article XXII,
Performance Constraints, of the Contract and requested the Province to
consult towards an equitable resolutions;
C. Pursuant to an agreement dated for reference the 17th day of June 1994
and entitled AIRCARE VOLUME ADJUSTMENT AGREEMENT (1992/93), the parties
reached an agreement to adjust the CFPT for the first year of operation
of the Program and to satisfy all claims by the Contractor with respect
to reduced test volumes as referred to in that agreement, and in
accordance with that agreement the Province paid the Contractor
$4,015,174.15 on June 23, 1994.
D. The parties have been consulting with respect to the equitable
adjustment and resolution claimed by the Contractor, and have achieved
a resolution on all issues and, inter alia, wish to amend the Contract
to implement the equitable adjustments for the first year of operation
of the Program from September 1, 1992 to August 31, 1993, inclusive;
E. The parties wish to coordinate the agreement on equitable adjustments
with the adjustment to the CFPT for the second year of operation of the
Program (i.e., September 1, 1993 to August 31, 1994, inclusive) as
required by section 4, Changes in Test Volume, of Schedule "2",
CONTRACT FEE SCHEDULE, of the Contract, which adjustment as at August
31, 1994 is estimated to result in a payment of $342,752.00 to the
Province by the Contractor; and
F. The parties wish to have the foregoing adjustments to the CFPT coincide
with the $0.18 increase to the CFPT for the third year of operation of
the Program (i.e., September 1, 1994 to August 31, 1995 inclusive) as
required by section 3, Inflation Adjustment, of Schedule "2", CONTRACT
FEE SCHEDULE, of the Contract.
NOW THEREFORE in consideration of the premises and the covenants, agreements,
representations and warranties hereinafter contained, the parties agree as
follows:
DEFINITIONS
1. (1) In this Agreement those terms that are defined in the Contract
and used in this Agreement:
(a) are hereby incorporated by reference in this
Agreement as if set out at length in this Agreement;
and
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(b) will have the respective meanings assigned to them as
in the Contract unless the context otherwise required
or unless otherwise defined in this Agreement.
(2) In this Agreement, unless the context requires otherwise:
(a) "Cash Amount" has the meaning set out in paragraph
3(a) of this Agreement;
(b) "Equitable Adjustment" has the meaning set out in
section 2 of this Agreement;
(c) "Net 1994 Volume Adjustment Amount" has the meaning
set out in paragraph 4(b) of this Agreement;
(d) "Net Adjustment Amount" has the meaning set out in
paragraph 4(a) of this Agreement;
(e) "Set-off Amount" has the meaning set out in paragraph
3(b) of this Agreement; and
(f) "Total Adjustment" has the meaning set out in section
2 of this Agreement.
TOTAL ADJUSTMENT
2. The parties agree that as an equitable adjustment of the provisions of
the Contract and as an equitable resolution of all matters which were
raised by the notice on an event of Force Majeure and the notice of a
material affect on the Contract referred to in Recital B hereof, the
CFPT will be increased as of September 1, 1993, by $1.28 (the
"Equitable Adjustment") and for the purposes of section 3, Inflation
Adjustment, of Schedule "2", CONTRACT FEE SCHEDULE, the inflation
adjustment for the 1993 Program Year is agreed to be $0.33 as of
September 1, 1993, for a total adjustment to the CFPT of $1.61
effective September 1, 1993 plus interest to August 31, 1994 at the
rate of 8.75% per annum compounded daily (the "Total Adjustment"),
which is estimated as of the date of execution of this Agreement to
be $1,986,752.00.
3. The Total Adjustment will be paid as follows:
(a) the Province will pay the Contractor $1,644,000.00 upon this
Agreement being signed, sealed and delivered (the "Cash
Amount");
(b) the Contractor will set-off $342,752.00 of the Total
Adjustment against the amount payable by the Contractor to the
Province on September 1, 1994 as required by section 4, Change
in Test Volume, of Schedule "2", CONTRACT FEE SCHEDULE, of the
Contract (the "Set-off Amount"); and
(c) the balance of the Total Adjustment will be calculated and
paid in accordance with section 4 of this Agreement.
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FINAL ADJUSTMENT OF TOTAL ADJUSTMENT
4. The parties agree that the balance of the Total Adjustment shall be
calculated and paid as follows:
(a) as soon as possible after August 31, 1994 the Total Adjustment
will be calculated and the "Net Adjustment Amount" shall mean
the amount obtained by subtracting the Cash Amount, and the
Set-off Amount from the Total Adjustment;
(b) as soon as possible after August 31, 1994 the total amount
payable by the Contractor to the Province on September 1, 1994
as required by section 4, Changes in Test Volume, of Schedule
"2", CONTRACT FEE SCHEDULE, of the Contract will be calculated
and the "Net 1994 Volume Adjustment Amount" shall mean the
amount obtained by subtracting the Set-off Amount from the
total amount payable by the Contractor to the Province on
September 1, 1994 as required by section 4, Changes in Test
Volume, of Schedule "2", CONTRACT FEE SCHEDULE, of the
Contract; and
(c) the Contractor will set-off the Net Adjustment Amount against
the Net 1994 Volume Adjustment Amount in satisfaction of the
balance of the Total Adjustment and remit the remaining Net
1994 Volume Adjustment Amount, if any, to the Province.
RELEASES
5. The Contractor, in consideration of the payment of the Total Adjustment
as provided in this Agreement does hereby release and forever discharge
the Province, the Minister of Transportation and Highways of the
Province of British Columbia, the Attorney General of the Province of
British Columbia, and all of their respective servants, employees and
agents of and from all causes of action, suits, debts, dues, accounts,
bonds, covenants, contracts, claims and demands whatsoever which
against any of them the Contractor ever had, now has or may have or
which its successors or assigns or any of them, hereafter has or may
have for any reason to and including the day this Agreement is signed
by the Superintendent of Motor Vehicles on behalf of the Province
including without limitation any of the foregoing arising by reason of
or out of or connected directly or indirectly with the event of Force
Majeure and the material affect on the Contract asserted by the
Contractor, both referred to in Recital B hereof, and the reduced test
volumes experienced in the Program resulting from any acts or omissions
of the Province, the Minister of Transportation and Highways of British
Columbia, the Attorney General of the Province of British Columbia and
all of their respective servants, employees and agents, or the
enactment of amendments to the EMISSION INSPECTION EXEMPTION
REGULATION, B.C. Reg. 320/92, including, without limitation, the
enactment of B.C. Reg. 379/92, and B.C. Reg. 142/93.
6. The Province, in consideration of the release provided by the
Contractor in section 5 does hereby release and forever discharge the
Contractor, and all of their respective servants, employees and agents
of and from all causes of action, suits, debts, dues, accounts,
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covenants, contracts, claims and demands whatsoever which against any
of them the Province ever had, now has or which its successors or
assigns or any of them, hereafter has or may have by reason of or
arising out of or connected directly or indirectly with the performance
of the Contract by the Contractor from the 15th day of April 1991, to
and including the day this Agreement is signed by the Superintendent of
Motor Vehicles on behalf of the Province.
7. Notwithstanding section 6, the parties agree that this Agreement is not
a waiver of the performance of any of the provisions of the Contract by
the Contractor after the day this Agreement is signed by the
Superintendent of Motor Vehicles on behalf of the Province, and that
the Province is not estopped by section 6 of this Agreement from
pursuing claims against the Contractor for matters which do not relate
to the performance of the Contract by the Contractor, including,
without limitation, claims on the guarantee pursuant to Article V,
GUARANTEE, for indemnification in accordance with Article XII,
INSURANCE AND INDEMNIFICATION, or claims on the bond pursuant to
Article XIII, BOND.
NON-ADMISSION
8. The parties agree that the payment by the Province of the Total
Adjustment is not an admission of liability on the part of the Province
and that liability is denied and that payment of the said sum is in
settlement of a disputed claim.
9. Notwithstanding section 8, the Province acknowledges that section 3,
Inflation Adjustment, of Schedule "2", CONTRACT FEE SCHEDULE, of the
Contract required the Province to adjust the CFPT for the second year
of operation of the Program (i.e., September 1, 1993 to August 31,
1994, inclusive).
CONTRACT AMENDMENTS
10. The Contract is amended as follows:
(a) by adding the following as section 22.04 to Article XXII,
PERFORMANCE CONSTRAINTS:
22.04 The parties agree that nothing in this Article XXII,
PERFORMANCE CONSTRAINTS, shall entitle the Contractor
to seek an equitable resolution to compensate the
Contractor, or make any adjustment to the provisions
of this Agreement in favour of the Contractor, as a
result of the increased labour costs from any labour
settlement or agreement between the Contractor and
any of its employees.
(b) by adding the following as section 31.05 to Article XXXI,
FORCE MAJEURE:
31.05 The parties agree that nothing in this Article XXXI,
FORCE MAJEURE, shall entitle the Contractor to seek
an equitable adjustment of the provisions of this
Agreement to compensate the Contractor, or make any
adjustment to the provisions of this Agreement in
favour of the Contractor,
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as a result of the increased labour costs from any
labour settlement or agreement between the Contractor
and any of its employees.
(c) by making the following deletions and additions to section 3,
Inflation Adjustment, of Schedule "2", CONTRACT FEE SCHEDULE:
(i) delete the first paragraph and replace it with:
The CFPT shall be subject to an annual adjustment for
inflation beginning with the second twelve (12)
months of testing commencing in 1993. The adjustment
will be predicated on the average hourly rate for the
"Auto Vehicle, Parts and Accessories, Sale and
Services Grouping (631-639)" for the Province of
British Columbia as published in the annual
publication prepared by Statistics Canada derived
from the "Survey of Employee Payroll and Hours"; and
(ii) delete the sub-paragraph numbered "(2)" and replace
it with:
(2) The average hourly rate for the "Auto
Vehicle, Parts and Accessories, Sale and
Services Grouping (631-639)" for the
Province of British Columbia for any
calendar year after 1990 will be calculated
and referred to herein as the Annual Average
for that year.
11. The parties agree that for the Program Year starting September 1, 1994
and for the balance of the Term the dollar value of the CFPT used for
the purpose of calculating the annual adjustment to the CFPT, as
required by section 3, Inflation Adjustment, of Schedule "2", Contract
Fee Schedule, shall be $14.03.
12. The parties confirm that the CFPT as at September 1, 1994 will be
$14.54, which amount is comprised of the original CFPT of $12.75, the
Equitable Adjustment of $1.28, and the inflation adjustments of $0.33
and $0.18 for the Program Years commencing September 1, 1993 and
September 1, 1994 respectively.
RATIFICATION
13. The Contract, as amended by this Agreement, is hereby ratified and
confirmed by the Province and the Contractor.
HEADINGS
14. The headings appearing in this Agreement have been inserted for
reference and as a matter of convenience and in no way define, limit or
enlarge the scope of any provision of this Agreement.
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COUNTERPARTS
15. This Agreement may be executed in any number of counterparts with the
same effect as if al of the parties had signed the same document. All
counterparts shall be construed together, and shall constitute one and
the same agreement.
DULY EXECUTED by the Superintendent of Motor Vehicles, on behalf of Her Majesty
the Queen in Right of the Province of British Columbia and by Ebco-Xxxxxxxx
Partners by its authorized representatives, Ebco-Xxxxxxxx Test Systems Ltd.,
Ebco Automotive Testing Holdings Ltd. And Xxxxxxxx Test Systems (B.C.) Ltd., as
of the date first above written.
SIGNED on behalf of Her Majesty )
the Queen in Right of the Province )
of British Columbia by the )
Superintendent of Motor Vehicles )
in the presence of: )
)
)
)
/S/ XXXXXX X. XXXX ) (ILLEGIBLE)
------------------ ) -----------
(Name) ) Superintendent of Motor Vehicles
)
BARRISTER AND SOLICITOR ) Dated AUGUST 31, 1994
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(Title)
EBCO-XXXXXXXX PARNERS by its authorized representatives,
Ebco-Xxxxxxxx Test Systems Ltd., Ebco Automotive Testing
Holdings Ltd. And Xxxxxxxx Test Systems (B.C.) Ltd.:
THE COMMON SEAL of )
EBCO-XXXXXXXX TEST )
SYSTEMS LTD. was hereunto )
affixed in the presence of: ) C/S
)
)
------------------------------------------ )
(Name) )
)
)
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(Title)
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THE COMMON SEAL of )
EBCO AUTOMOTIVE TESTING )
HOLDINGS LTD. was hereunto )
affixed in the presence of: ) C/S
)
)
------------------------------------------ )
(Name) )
)
)
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(Title)
THE COMMON SEAL of )
XXXXXXXX TEST SYSTEMS )
(B.C.) LTD. was hereunto )
affixed in the presence of: ) C/S
)
)
------------------------------------------ )
(Name) )
)
)
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(Title)
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