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EXHIBIT 2.1
TRANSFER AND ASSUMPTION AGREEMENT
THE TORONTO-DOMINION BANK
(AS TD TRANSFEROR)
- AND -
TD WATERHOUSE SECURITIES (CANADA), INC.
(AS TRANSFEREE)
DATED JUNE o, 1999
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TRANSFER AND ASSUMPTION AGREEMENT
THIS AGREEMENT effective as of the o day of June, 1999,
BETWEEN:
THE TORONTO-DOMINION BANK
(a Canadian chartered bank)
(hereinafter referred to as "TD Transferor")
OF THE FIRST PART,
- and -
TD WATERHOUSE SECURITIES (CANADA), INC.,
a corporation incorporated under the laws of
Ontario (hereinafter referred to as the "Transferee")
OF THE SECOND PART.
WHEREAS TD Transferor wishes to transfer the Service Operations and the
Transferee wishes to acquire the Service Operations, subject to and in
accordance with the terms and conditions hereof;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises,
the mutual covenants and agreements hereinafter set forth and for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties have agreed as follows:
ARTICLE 1
INTERPRETATION
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1.1 DEFINITIONS.
In this Agreement, including the recitals and the Schedules, unless the
context otherwise requires:
(a) "ACCOUNTS PAYABLE" mean the payables owing at the Effective
Time by TD Transferor to creditors for the purposes of, or in
connection with, the Service Operations (including the trade
payables, other payables, accrued expenses and arrears);
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(b) "ACCOUNTS RECEIVABLE" mean the receivables owing at the
Effective Time by debtors of TD Transferor for the purposes of, or
in connection with, the Service Operations (including trade
receivables, other receivables, accrued income, and prepayments);
(c) "ASSURANCE" means any warranty, representation, statement,
assurance, comfort letter, covenant, agreement, undertaking,
indemnity, guarantee or commitment of any nature whatsoever;
(d) "BOOKS AND RECORDS" mean all books and records of TD
Transferor containing Service Operations Information or other media
on which any such information is recorded, including all forms of
computer or machine readable material but excluding all books and
records relating to Excluded Assets or Excluded Liabilities;
(e) "BUSINESS DAY" means any day which is not a Saturday, Sunday
or statutory holiday in Toronto, Ontario;
(f) "COMMITMENTS" mean contracts, arrangements, indentures,
mortgages, licence agreements, commitments and engagements,
including any quotation, order or tender for any of the foregoing
which remains open for acceptance and any manufacturers' or
suppliers' warranty, guarantee or commitment (express or implied),
excluding the Leases;
(g) "DIRECTION AND ESCROW AGREEMENT REGARDING THE 1999 GREEN LINE
REORGANIZATION" means the agreement entered into among TD
Transferor, TD Waterhouse Group, Inc., TD Securities Inc. and the
Transferee, dated the date hereof setting out with respect to the
transactions contemplated therein, the list of documents to be
exchanged, the parties to whom such documents are to be delivered,
the participants in the closing and the terms of escrow and release
of escrow, including the times at which the various deliveries of
documents are made and the transactions contemplated thereby become
effective;
(h) "EFFECTIVE TIME" means 00:01 a.m. on the first day of the
month in which the IPO Closing Date occurs;
(i) "ELIGIBLE PROPERTY" means eligible property within the
meaning of subsection 85(1.1) of the Tax Act or its applicable
provincial counterpart, in respect of which an election has been or
will be made as provided in Section 4.1 of this Agreement;
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(j) "EMPLOYEE TRANSFER DATE" means the date designated by notice
given by TD Transferor to the Transferee as the date for the
transfer of the Employees to the Transferee; provided that the date
so designated shall be on the same day as or after the Effective
Time and prior to the first anniversary of the Effective Time;
(k) "EMPLOYEES" mean those Persons whose names are set out in
Schedule "A" hereto;
(l) "ENCUMBRANCES" mean liens, charges, security interests,
rights of others or other encumbrances;
(m) "EXCLUDED ASSETS" mean: (i) amounts recoverable in respect of
Taxes relating to the Service Operations arising or relating to a
period of time ending prior to the Effective Time, (ii) the rights of
TD Transferor under the Reorganization Agreements, (iii) the benefits
of the TD Transferor under the master service agreement dated January
1, 1996 between TD Securities Inc. and TD Transferor to the extent
that such services do not relate to the Service Operations, (iv) all
stock exchange seats, (v) the benefits under the Leases and (vi)
Accounts Receivable, cash and cash equivalents;
(n) "EXCLUDED LIABILITIES" mean: (i) all Taxes relating to the Service
Operations arising or relating to a period of time ending prior to
the Effective Time, (ii) the obligations of TD Transferor under the
Reorganization Agreements, (iii) the burdens of TD Transferor under
the master service agreement dated January 1, 1996 between TD
Securities Inc. and TD Transferor to the extent that such services do
not relate to the Service Operations, (iv) the obligations under the
Leases and (v) Accounts Payable;
(o) "INDEPENDENT CONTRACTORS" mean those Persons whose names are
set out in Schedule "B" hereto;
(p) "INTELLECTUAL PROPERTY RIGHTS" mean patents, trade marks,
service marks, trade names, business names, rights in design,
copyright (including rights in computer software and moral rights),
database rights, rights in domain names and all other intellectual
property rights, in each case whether registered or unregistered and
including applications for the grant of any of the foregoing rights,
and all rights or forms of protection having equivalent or similar
effect to any of the foregoing but excluding Service Operations
Information;
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(q) "IPO CLOSING DATE" means the date of the initial offering to
the public of common shares in the capital stock of TD Waterhouse
Group, Inc.;
(r) "LEASES" mean collectively the leases pertaining to the
Premises and includes, if applicable, all amendments to and renewals
and extensions of such documents and all documents issued in
substitution therefor;
(s) "LOSSES AND LIABILITIES" mean, in relation to a Person,
claims, demands, causes of action, liabilities, losses, costs,
damages and expenses which such Person suffers, sustains, pays or
incurs including legal fees on a "solicitor and his own client"
basis;
(t) "MATERIAL CONSENT" means a regulatory approval or consent
which if not obtained would preclude the Transferee from carrying on
the business of a dealer in any Province or Territory of Canada;
(u) "PARTIES" mean the parties to this Agreement and "PARTY"
means any one of them;
(v) "PERSON" shall include any individual, heir, executor,
administrator or other legal representative of an individual, firm,
company, corporation, other body corporate, association,
unincorporated organization, partnership, trust, government and
governmental or regulatory department or agency (whether or not
having separate legal personality);
(w) "PREMISES" mean the premises used by TD Transferor in
connection with the Service Operations;
(x) "RELEASE TIME" means the time of the release of this
Agreement from the escrow constituted by the Direction and Escrow
Agreement Regarding the 1999 Green Line Reorganization (such time
being specified in the Direction and Escrow Agreement Regarding the
0000 Xxxxx Xxxx Xxxxxxxxxxxxxx);
(y) "REORGANIZATION AGREEMENTS" mean this Agreement and all other
agreements, Specific Conveyances or Specific Assumptions to be
entered into pursuant to this Agreement;
(z) "SALES TAXES" includes all federal, provincial, and other
sales, goods and services, value added, use or other transfer taxes,
and all other taxes whatsoever, including, without limitation, any
goods and services tax and harmonized sales tax payable under the
Excise Tax Act (Canada), and tax payable under An Act Respecting
Quebec Sales Tax and any retail sales tax imposed by any Province in
Canada;
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(aa) "SERVICE OPERATIONS" means: (i) the provision of services by
the TD Transferor to the Canadian discount brokerage business
presently and/or heretofore carried on by TD Securities Inc. through
its division known as "Green Line Investor Services" and (ii) the
provision of services by the TD Transferor to TD Securities Inc.
through the TD Transferor's division known as "TD Securities
Services";
(bb) "SERVICE OPERATIONS INFORMATION" means all information that
is used exclusively in the Service Operations and is owned or the
rights in which are owned by TD Transferor;
(cc) "SERVICE OPERATIONS IPR" means all Intellectual Property
Rights owned by or on behalf of TD Transferor which is used
exclusively in the Service Operations;
(dd) "SPECIFIC ASSUMPTIONS" mean all assumption instruments,
novations and other documents or instruments that are reasonably
required to effectively cause the Transferee to assume the TD
Assumed Liabilities, to make the Transferee, in the place and stead
of the TD Transferor, liable to satisfy the TD Assumed Liabilities
to the Third Parties to whom they are owed and to effect a release
of the TD Transferor from the TD Assumed Liabilities;
(ee) "SPECIFIC CONVEYANCES" mean all conveyances, assignments,
transfers, novations and other documents or instruments that are
reasonably required to convey, assign and transfer the TD Assets to
the Transferee;
(ff) "TANGIBLE ASSETS" mean all the tangible assets, including
motor vehicles, computer equipment (but not software), other
equipment and machinery, desks, chairs, other furniture and fixtures
beneficially owned by TD Transferor and used exclusively in
connection with the Service Operations;
(gg) "TAX" means: (a) taxes on income, profit or gains and (b) all
other taxes, levies, duties, imposts, charges and withholdings of
any nature, including any Sales Taxes, any excise, property,
capital, franchise and payroll taxes and any national or provincial
insurance or social security contributions, together with all
penalties, charges and interest relating to any of the foregoing or
to any late or incorrect return in respect of any of them,
regardless of whether such taxes, levies, duties, imposts, charges,
withholdings, penalties and interest are chargeable directly or
primarily against or attributable directly or primarily to the
Service Operations or any other Persons and of whether any amount in
respect of them is recoverable from any other Person;
(hh) "TAX ACT" means the Income Tax Act (Canada) 1985 R.S.C. (5th
Supp.), c.1, as amended;
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(ii) "TD ASSETS" mean all of the assets, properties and
undertakings owned, used or held by TD Transferor which exclusively
relate to the Service Operations, including but not limited to, to
the extent they are owned, used or held by TD Transferor and
exclusively relate to the Service Operations, the Service Operations
Information, the Service Operations IPR, Tangible Assets, Books and
Records, and the benefits of the Commitments (including the rights
and benefits of the TD Transferor under the master service agreement
dated January 1, 1996 between TD Securities Inc. and TD Transferor)
but excluding the Excluded Assets;
(jj) "TD ASSUMED LIABILITIES" mean all liabilities and obligations
of TD Transferor relating to or in respect of the Service
Operations, whether direct or indirect, existing or contingent,
accrued on or prior to, or accruing subsequent to, the Effective
Time, including but not limited to liabilities relating to or
incurred in connection with the TD Assets or the use of thereof,
Assurances, Commitments (including all payment obligations
thereunder), causes of action, claims and lawsuits presently or
hereafter in existence whether known or unknown which relate to or
are in respect of the Service Operations (including without
limitation, causes of action, claims and lawsuits made by Employees)
but excluding the Excluded Liabilities;
(kk) "TD EXCHANGEABLE SHARES" mean o exchangeable preferred shares
of the Transferee having the share conditions set forth in Schedule
"C" hereto;
(ll) "TD PROMISSORY NOTE" means the promissory note in the
principal amount of $o to be made and delivered by the Transferee in
favour of TD Transferor;
(mm) "TD PURCHASE CONSIDERATION" has the meaning ascribed thereto
in Section 2.3;
(nn) "TD PURCHASE PRICE" has the meaning ascribed thereto in
Section 2.3;
(oo) "THIRD PARTY" means any Person other than a Party;
(pp) "THIS AGREEMENT", "HEREIN", "HERETO", "HEREOF" and similar
expressions refer to this Transfer and Assumption Agreement as
amended from time to time;
(qq) "TRANSFEREE INDEMNIFIED PARTIES" has the meaning ascribed
thereto in Section 6.2 hereof; and
(rr) "TRANSFEROR INDEMNIFIED PARTIES" has the meaning ascribed
thereto in section 6.1 hereof.
1.2 ARTICLE, SECTION AND SCHEDULE REFERENCES.
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Except as otherwise expressly provided, a reference in this Agreement to
an "Article", "section", "subsection", "paragraph" or "Schedule" is a
reference to an article, section, subsection, paragraph or schedule of or
to this Agreement.
1.3 INTERPRETATION NOT AFFECTED BY HEADINGS
The headings in this Agreement are for convenience only and shall not
affect the construction or interpretation of this Agreement.
1.4 INCLUDED WORDS
When the context reasonably permits, words suggesting the singular shall
be construed as suggesting the plural and vice versa, and words
suggesting one gender shall be construed as suggesting other genders.
1.5 SCHEDULES
The following Schedules are attached to and form a part of this Agreement:
Schedule "A" - List of Employees;
Schedule "B" - List of Independent Contractors;
Schedule "C" - Share Conditions of Transferee's Exchangeable Shares; and
Schedule "D" - Pension Arrangements.
ARTICLE 2
PURCHASE AND SALE
2.1 TRANSFER
As of the Effective Time, TD Transferor hereby transfers, assigns, sells
and conveys all of its right, title and interest in and to the TD Assets
to the Transferee and the Transferee hereby purchases and accepts from TD
Transferor all of TD Transferor's right, title and interest in and to the
TD Assets, subject to and in accordance with this Agreement including
Section 7.8. The Transferee acknowledges that the TD Assets may be
subject to Encumbrances and it accepts the TD Assets in the condition in
which they exist at the Effective Time.
2.2 ASSUMPTION OF ASSUMED LIABILITIES, Etc.
The Transferee hereby assumes, and agrees to duly and fully perform,
satisfy, pay and discharge, the TD Assumed Liabilities.
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2.3 PURCHASE PRICE
The purchase price for the TD Assets shall be equal to the aggregate fair
market value of the TD Assets (such price being herein referred to as the
"TD Purchase Price"). TD Transferor hereby acknowledges the receipt from
the Transferee, and the sufficiency of, the consideration for the TD
Assets (the "TD Purchase Consideration") being the TD Exchangeable
Shares, the assumption of the TD Assumed Liabilities and the TD
Promissory Note.
2.4 ALLOCATION OF THE TD PURCHASE CONSIDERATION
(a) The TD Purchase Price shall be allocated among each of the TD
Assets as to an amount equal to the fair market value of each of the
TD Assets.
(b) The TD Assumed Liabilities and the TD Promissory Note shall
be allocated as follows:
(i) to each of the TD Assets which is an Eligible Property, other
than Tangible Assets and computer software, to the extent of
the amount agreed to by the TD Transferor and the Transferee in
their joint election under subsection 85(1) of the Tax Act, in
respect of the transfer of the particular property; and
(ii) to each of the TD Assets which is not an Eligible Property, a
Tangible Asset or computer software, pro rata based on the fair
market value of each such property but in no event shall the
amount so allocated to a particular property exceed the fair
market value of the property.
(c) The TD Exchangeable Shares shall be allocated to each of the
TD Assets to the extent that the fair market value of the particular
property exceeds the principal amount of the liabilities allocated
to the particular property as set out in Section 2.4(b) above.
2.5 GST
(a) The TD Purchase Price does not include any Sales Taxes, which
are or may become exigible in connection with the transfer of the TD
Assets.
(b) The Transferee shall pay to the TD Transferor any applicable
goods and services tax or harmonized sales tax payable under the
Excise Tax Act (Canada) and any applicable tax payable under An Act
Respecting Quebec Sales Tax in connection with the transfer of the
TD Assets.
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2.6 BULK SALES ACT LEGISLATION
The Parties hereto waive compliance with any and all applicable bulk
sales legislation.
ARTICLE 3
TRANSFERS
3.1 SPECIFIC CONVEYANCES AND SPECIFIC ASSUMPTIONS
The Transferee shall bear all costs incurred in preparing and entering
into and, if necessary, registering any Specific Conveyances or Specific
Assumptions and registering any further assurances required pursuant to
this Agreement. The Transferee shall register all such Specific
Conveyances and Specific Assumptions promptly.
ARTICLE 4
TAXES
4.1 SECTION 85
TD Transferor and the Transferee will jointly elect under subsection
85(1) of the Tax Act and under any similar provincial legislation, in
prescribed form and within the time provided, with respect to the
transfer of each of the TD Assets which is an eligible property within
the meaning of subsection 85(1.1) of the Tax Act and in respect of which
TD Transferor designates, and the agreed amount for purposes of paragraph
85(1)(a) of the Tax Act and any similar provincial legislation in respect
of each such property will be the amount as determined by TD Transferor.
4.2 UNEARNED AMOUNTS
TD Transferor agrees with the Transferee that TD Transferor is
transferring assets with a fair market value equal to the amount of TD
Transferor's obligations in respect of undertakings which arise from the
operations of the Service Operations and to which paragraph 12(1)(a) of
the Tax Act applies and, in respect of such transfer by TD Transferor to
the Transferee at TD Transferor's option, the Transferee will jointly
elect with TD Transferor under subsection 20(24) of the Tax Act, and any
similar provision of any provincial legislation, to have the rules in
subsection 20(24) apply.
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4.3 TRANSFER TAXES
The Transferee shall be liable for all Sales Taxes that may be imposed or
assessed in connection with the transfer of TD Assets and the Transferee
shall, subject to Section 2.5(b) hereof, pay such Sales Taxes directly to
the relevant governmental authority.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF TD TRANSFEROR
TD Transferor represents and warrants to the Transferee that:
(a) TD Transferor Standing: TD Transferor is a Canadian chartered
bank, duly organized and validly existing under the laws of Canada
and now has the requisite corporate power and authority to perform
its obligations in accordance with the Agreement;
(b) No Conflicts: the consummation of the transactions
contemplated herein will not violate, nor be in conflict with, any
of the constating documents, by-laws or governing documents of TD
Transferor;
(c) Execution of Documents: this Agreement has been duly executed
and delivered by TD Transferor and all other documents (including
the Specific Conveyances) executed and delivered by TD Transferor
pursuant hereto will be duly executed and delivered by TD
Transferor, and this Agreement does, and such documents will,
constitute legal, valid and binding obligations of the TD Transferor
enforceable in accordance with their respective terms;
(d) Sufficiency of Assets and Services: As a result of: the
transfer to the Transferee of the TD Assets, the assets transferred
by TD Securities Inc. to the Transferee as of the date hereof
pursuant to a separate transfer and assumption agreement, the
provisions of Article 7 herein and of Article 7 of such separate
transfer and assumption agreement, and the services to be provided
by TD Transferor and certain of its affiliates to the Transferee
pursuant to the master services agreement made as of the o day of
June, 1999 between TD Transferor and TD Waterhouse Group, Inc., the
Transferee will have all assets or services required to carry on the
Canadian discount brokerage business presently or heretofore carried
on by TD Securities Inc. through its division known as "Green Line
Investor Services" and the Canadian brokerage clearing business
presently and/or heretofore carried on by TD Securities Inc.
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(e) Encumbrances: to the best of its knowledge, immediately after
the transfer provided for in Section 2.1, any Encumbrances
applicable to the TD Assets will not in any material way prevent the
Transferee from using the TD Assets in the manner in which they were
used immediately prior to such time. Furthermore, TD Transferor has
not created or permitted the creation of any Encumbrance on the TD
Assets, except in connection with the conduct of the Service
Operations;
(f) Residency: TD Transferor is not a non-resident of Canada
within the meaning of the provisions of the Tax Act; and
(g) Registration Numbers: TD Transferor is registered under the
Excise Tax Act (Canada) and An Act Respecting Quebec Sales Tax and
its respective registration numbers are 105255145 and 100042923.
5.2 REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE
The Transferee represents and warrants TD Transferor that:
(a) Standing: the Transferee is a taxable Canadian corporation as
defined in subsection 89(1) of the Tax Act, duly organized and
validly existing under the laws of Ontario and now has the
requisite corporate power and authority to perform its obligations
in accordance with this Agreement;
(b) No Conflicts: the consummation of the transactions
contemplated by this Agreement will not violate, nor be in conflict
with, the constating documents, by-laws or governing documents of
the Transferee;
(c) Execution of Documents: this Agreement has been duly executed
and delivered by the Transferee and all other documents (including
the Specific Conveyances) executed and delivered by the Transferee
pursuant hereto will be duly executed and delivered by the
Transferee, and this Agreement does, and such documents will,
constitute legal, valid and binding obligations of the Transferee
enforceable in accordance with their respective terms; and
(d) Exchangeable Shares: the TD Exchangeable Shares are validly
created, allotted and issued as fully-paid and non-assessable
shares, are registered in the name of TD Transferor, except for o ,
are the only issued and outstanding shares of the Transferee and are
free and clear of any Encumbrance.
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5.3 LIMITATION
No claim under this Article 5 shall be made or be enforceable by the TD
Transferor or by the Transferee, unless written notice of such claim,
with reasonable particulars, is given by such Party to the Party against
whom the claim is made.
5.4 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
(a) The representations and warranties set forth in Sections 5.1
and 5.2 shall survive the completion of the Transfer of the TD
Assets herein provided for and, notwithstanding such completion,
shall continue in full force and effect for a period of three (3)
years from the Release Time.
(b) The covenants and indemnities of a Party set forth in this
Agreement shall survive the transfer of the TD Assets herein
provided for and, notwithstanding such completion, shall continue in
full force and effect in accordance with the terms thereof.
ARTICLE 6
INDEMNITIES
6.1 GENERAL INDEMNITY OF TRANSFEREE
The Transferee covenants and agrees with TD Transferor to indemnify and
save harmless TD Transferor, its directors, officers, agents, employees
and their respective executors, heirs, administrators, successors and
permitted assigns (collectively the "Transferor Indemnified Parties")
from and against all Losses and Liabilities that any of the Transferor
Indemnified Parties may suffer or incur directly or indirectly as a
result of, or in connection with: (a) the TD Assumed Liabilities, (b) the
use of any Service Operations IPR in the Service Operations, whether
before or after the Effective Time, (c) the operation of the Service
Operations from and after the Effective Time, (d) any breach of the
Transferee's representations and warranties and covenants set out herein,
(e) Sales Taxes payable in connection with the transfer of the TD Assets
or (f) any misstatement or omission relating to the Service Operations in
the prospectus of TD Waterhouse Group, Inc. dated o , 1999.
6.2 GENERAL INDEMNITY OF TD TRANSFEROR
TD Transferor covenants and agrees with the Transferee to indemnify and
save harmless the Transferee, its directors, officers, agents, employees
and their respective executors, heirs, administrators, successors and
permitted assigns (collectively the "Transferee Indemnified Parties")
from and against all Losses and Liabilities that any of the Transferee
Indemnified Parties may suffer or incur directly or indirectly as a
result of, or in connection with:
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(a) the operation by TD Transferor of any business or operations
other than the Service Operations, whether before or after the
Effective Time; or
(b) any breach of TD Transferor's representations warranties and
covenants set out herein.
6.3 CONDUCT OF THIRD PARTY CLAIMS
(a) Unless otherwise notified by the beneficiary of an indemnity
herein granted (an "Indemnified") in connection with any claim,
demand or cause of action of, or asserted by a Third Party in
respect of which a Party has given an indemnity under this Agreement
(the "Indemnifier"), the Indemnifier shall take control of the
defence or settlement of such claim, demand or cause of action;
provided that the Indemnifier may not settle or make any admission
of liability without having first obtained the Indemnified's written
consent, which consent shall not be unreasonably withheld.
(b) An Indemnifier shall not be entitled to exercise and hereby
waives any rights or remedies the Indemnifier may now or in the
future have against an Indemnified in respect of matters in respect
of which it has indemnified the Indemnified, whether such rights and
remedies are pursuant to the common law or statute or otherwise,
including without limitation, the right to name the Indemnified as a
third party to any action commenced by any Third Party against the
Indemnifier.
ARTICLE 7
CERTAIN RIGHTS AND OBLIGATIONS
7.1 THIRD PARTY CONSENTS
The Transferee acknowledges and agrees that it has been responsible for
ascertaining and obtaining prior to the Release Time all licenses,
permits, consents and giving all notices necessary to permit the
effective transfer of the TD Assets from TD Transferor to the Transferee,
to ensure that no Commitments or Assurances relating to the Service
Operations are breached and that the Transferee may operate the Service
Operations. In the event that it has failed to do so, the Transferee
shall promptly use its commercially reasonable efforts to do so. The
Transferee hereby indemnifies and saves harmless the Transferor
Indemnified Parties from and against all Losses and Liabilities that any
of the Transferor Indemnified Parties may suffer as a result of, or in
connection with, its failure to have obtained such licences, permits,
consents and given such notices prior to the Release Time. After the
Release Time, TD Transferor shall provide reasonable co-operation and
assistance to the Transferee to obtain any outstanding licences, permits
and consents. Each of the TD Transferor
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and the Transferee shall be responsible for their internal and
professional costs in carrying out their respective obligations under
this section. The Transferee shall be liable for and shall pay all fees,
charges, costs and expenses levied by a Person in granting, or as a
condition to grant a license, permit or its consent or including
assignment fees.
7.2 ABSENCE OF CONSENT
(a) Where any consent or agreement of any Third Party is
required to the transfer of any of the TD Assets (other than in
relation to the transfer of any Commitment (which is dealt with in
Section 7.3)), and such consent or agreement has not been obtained
at or before the Release Time, the transfer of the relevant asset
shall not take effect until that consent or agreement has been
obtained.
(b) After the Release Time, and until such time as any consent
or agreement referred to in Section 7.2 (a) is obtained, TD
Transferor shall be deemed to hold the benefit of such asset for
the Transferee.
7.3 COMMITMENTS
(a) Where any consent or agreement of any Third Party is
required to enable the Transferee to enjoy or perform any
Commitment or to enable TD Transferor to transfer the benefit or
burden of any Commitment to the Transferee, then the following
provisions shall apply:
(i) this Agreement shall not constitute an
assignment or an attempted assignment of the relevant
Commitment if, or to the extent that, such an assignment or
attempted assignment would constitute a breach of such
Commitment;
(ii) the Parties shall use all reasonable efforts
to obtain the consent or agreement of the Third Party to
whatever assignment, transfer or novation is necessary to
enable the Transferee to perform such Commitment after the
Effective Date or as the case may be to transfer the benefit
and burden of such Commitment to the Transferee;
(iii) until the consent or agreement referred to
in Section 7.3(a) is obtained, the Transferee shall, unless
the relevant Commitment prohibits it, perform all the
obligations of TD Transferor under such Commitment, as agent
for or sub-contractor to TD Transferor and indemnify the
Transferor Indemnified Parties in respect of such
performance or, if the relevant Commitment prohibits the
Transferee
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from so acting as agent and sub-contractor or the
Transferee cannot be permitted to act as agent and
sub-contractor because of confidentiality obligations, the
Transferor Indemnified Parties shall, at the cost of the
Transferee and to the extent that the TD Transferor is
reasonably able, do all such acts and things as the
Transferee may reasonably require to enable due performance
of the Commitment and to provide for the Transferee the
benefits, subject to the burdens, of the Commitment and the
Transferee shall indemnify the Transferor Indemnified
Parties in respect of all such acts and things.
(b) Until such time as the consent or agreement referred to in
Section 7.3(a) is obtained, TD Transferor shall be deemed to hold
the benefit of the relevant Commitment referred to in Section
7.3(a) for the Transferee.
(c) If the rights or obligations under the Commitment to which
TD Transferor is a party extend to both the Service Operations and
any other operation or business of TD Transferor (in this Section
7.3(c) a "Retained Business"), TD Transferor and the Transferee
agree that:
(i) the Commitment shall remain with the TD
Transferor which shall hold all rights under such
Commitment to the extent they relate to the Service
Operations for the benefit of the Transferee;
(ii) to the extent that any rights under
such Commitment are held by TD Transferor for the benefit
of the Transferee, TD Transferor and the Transferee shall
cooperate with each other to ensure that:
(A) the Transferee obtains the
benefit of any such rights and satisfies any
associated or commensurate obligations;
(B) the Transferee's rights
under such Commitment are enforced against the
issuer thereof or the other party or parties
thereto;
(C) all such actions are taken
and all such things are done by TD Transferor as
may reasonably be requested by the Transferee, to
the extent TD Transferor can do so without
prejudice to its own rights under such Commitment;
(D) all such actions are taken
and all such things are done by the Transferee as
may reasonably be requested by TD Transferor which
are necessary to ensure that all associated or
commensurate obligations are satisfied by the
Transferee; and
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(E) all monies and properties
collected by or paid or transferred to TD
Transferor in respect of such rights are paid over
or transferred to the Transferee as appropriate,
and all monies and properties payable or
transferable by the TD Transferor in respect of
such obligations are first paid over or transferred
to TD Transferor by the Transferee, as appropriate;
and.
(iii) the Transferee shall indemnify and
save harmless TD Transferor from and against any claims
in respect of any such Commitments in connection with or
arising as a result of any action reasonably taken by TD
Transferor in its capacity as holder of the Commitment
(including, any such actions taken by TD Transferor in
accordance with this Section 7.3).
7.4 LETTERS TO SUPPLIERS
The Transferee shall promptly following the Release Time send out
notices and letters to all suppliers of the Service Operations informing
them of the transfer of the Service Operations and the Transferee's
assumption of the TD Assumed Liabilities.
7.5 RELEASE OF THE ASSURANCES
The Transferee covenants that, at the written request of TD Transferor
made from time to time after the Release Time, the Transferee will use
best efforts to execute and deliver all such instruments of assumption
and acknowledgements in order to effect the release and discharge in
full of any Assurance given by TD Transferor to any Person in respect of
any obligation or liability of the Service Operations, and shall procure
the assumption of, and the substitution of the Transferee as the primary
obligor in respect of, each such Assurance on a non-recourse basis to TD
Transferor. Pending such release and discharge, the Transferee hereby
agrees with the TD Transferor that the Transferee will assume and pay
and discharge when due, and indemnify each Transferor Indemnified Person
against, all such Assurances.
7.6 EMPLOYEES AND INDEPENDENT CONTRACTORS
(a) The Transferee will, effective as of the Employee Transfer
Date and on terms and conditions (including remuneration and
benefits, if any) which in the aggregate are similar to those which
they presently enjoy, (i) employ from and after such time the
Employees and (ii) retain from and after the Employee Transfer Date
the Independent Contractors.
(b) The Transferee will recognize, to the extent previously
recognized by the TD Transferor, accrued vacation, and other
similar entitlements of
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Employees and the past service of the Employees with the TD
Transferor and any prior service for which the TD Transferor has
given the Employees service credit for all purposes, including
eligibility to participate and extent of participation in all
benefit plans and entitlement to notice of termination of employment
or pay in lieu thereof or severance pay.
(c) The Transferee will indemnify and save harmless the
Transferor Indemnified Parties against any Losses and Liabilities
arising from or relating to: (i) the employment by the TD
Transferor or Transferee of an Employee or termination thereof by
the TD Transferor or Transferee, except that the TD Transferor
shall bear any termination costs owing as a direct result of the
transfer of the Service Operations, other than those termination
costs attributable to an Employee's refusal to accept employment
with the Transferee; or (ii) the retainer by TD Transferor or the
Transferee of an Independent Contractor or termination of that
retainer by TD Transferor or the Transferee.
(d) Without limiting Section 7.6(a), the Transferee shall also
employ or retain persons on short or long term disability or
workers compensation leave, child care leave or any other approved
paid or unpaid leave of absence who at the time of their
disability, injury or the commencement of their leave were employed
or retained in the Service Operations.
(e) The Parties agree to comply with the provisions relating to
pensions set out in Schedule "D" hereof.
(f) It is acknowledged that the TD Transferor provides an
unfunded benefit plan known as Executive Benefit Plan for some of
the Employees and it is agreed by the parties that the TD
Transferor will continue to provide such benefits with respect to
employment with the TD Transferor prior to the Employee Transfer
Date and with respect to employment with the Transferee on and
after the Employee Transfer Date.
7.7 AMOUNTS RECEIVED IN RESPECT OF THE TD ASSETS
Where after the Effective Date any amount is paid to TD Transferor in
respect of a TD Asset, TD Transferor shall forthwith (and in any event, within
30 days of the receipt of such amount) remit such amount to the Transferee.
7.8 TRANSFER OF LEGAL TITLE
All parties acknowledge and agree that the legal transfer of the TD Assets
will occur on the later of immediately after the IPO Closing Date and the date
on which the last Material Consent is
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obtained, but in any event the Parties acknowledge that the Transferee is
entitled to receive the net economic benefit derived from the operation of the
Service Operations from and after the Effective Time, as provided in Section
2.1.
ARTICLE 8
GENERAL
8.1 FURTHER ASSURANCES
Each Party will, from time to time and at all times after the Release
Time, without further consideration, do such further acts and deliver
all such further assurances, deeds and documents as shall be reasonably
required in order to fully perform and carry out the terms of this
Agreement.
8.2 NO MERGER
Subject to any limitations set forth herein, the covenants,
representations, warranties and indemnities contained in this Agreement
shall survive the execution and delivery hereof and shall not merge in
any assignments, conveyances, transfers or other documents executed and
delivered at or after the date hereof, notwithstanding any rule of law,
equity or statute to the contrary and such rules are hereby waived.
8.3 ENTIRE AGREEMENT
The provisions contained in any and all documents and agreements
collateral hereto shall at all times be read subject to the provisions
of this Agreement and, in the event of conflict, the provisions of this
Agreement shall prevail.
8.4 GOVERNING LAW
This Agreement shall be subject to and interpreted, construed and
enforced in accordance with the laws of Ontario and the laws of Canada
applicable therein and shall be treated as a contract made in Ontario.
The Parties irrevocably attorn and submit to the jurisdiction of the
courts of Ontario and courts of appeal therefrom in respect of all
matters arising out of this Agreement.
8.5 ASSIGNMENT, ENUREMENT, ETC.
Neither the obligations nor the benefits under this Agreement shall be
assignable unless:
(a) The assignor has given notice to the other party hereto;
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(b) The assignment is an assignment of all of the assignor's
rights, benefits and obligations hereunder; and
(c) The assignment is made in connection with or as part of a
corporate reorganization of the assignor, a merger or amalgamation
of the assignor with one or more other corporations or the sale by
the assignor of all or substantially all of its assets.
Notwithstanding any such assignment, the assignor shall continue to
remain liable for its obligations hereunder jointly and severally with
the assignee, and the assignee's rights and benefits hereunder shall be
subject to any rights of set-off and equities existing as between the
assignor and the other party hereto. Any purported assignment in
contravention of this section shall be void. This Agreement shall be
binding upon and enure to the benefit of the Transferee, TD Transferor,
the Transferor Indemnified Parties, the Transferee Indemnified Parties
and their respective heirs, executors, administrators, successors and
permitted assigns.
8.6 TIME OF ESSENCE
Time shall be of the essence in this Agreement.
8.7 NOTICES
The addresses and fax number of each Party for notices shall be as follows:
TD Transferor Xxxxxxx-Xxxxxxxx Xxxxxx
X.X. Xxx 0, 00xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Senior Vice-President, Compliance
Fax: (000) 000-0000
The Transferee: c/o TD Waterhouse Group, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attention: Executive Vice-President and General Counsel
Fax: (000) 000-0000
Any notice, communication or statement (a "notice") required, permitted
or contemplated hereunder shall be in writing and shall be delivered as
follows:
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(a) by delivery to a Party between 8:00 a.m. and 4:00 p.m.
local time on a Business Day at the address of such Party for
notices, in which case the notice shall be deemed to have been
received by that Party when it is delivered; or
(b) by telecopier to a Party to the telecopier number of such
Party for notices, in which case, if the notice was telecopied
prior to 4:00 p.m. local time on a Business Day the notice shall be
deemed to have been received by that Party when it was telecopied
and if it was faxed on a day which is not a Business Day or is
faxed after 4:00 p.m. local time on a Business Day, it shall be
deemed to have been received on the next following Business Day.
A Party may from time to time change its address for service or its fax
number for service by giving written notice of such change to the other
Party.
8.8 INVALIDITY OF PROVISIONS
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, that shall not affect or impair:
(a) the legality, validity or enforceability in that
jurisdiction of any other provision of this Agreement; or
(b) the legality, validity or enforceability under the law of
any other jurisdiction of that or any other provision of this
Agreement.
8.9 WAIVER
No waiver by any Party of any breach (whether actual or anticipated) of
any of the terms, conditions, representations or warranties contained
herein shall take effect or be binding upon that Party unless the waiver
is expressed in writing under the authority of that Party. Any waiver
so given shall extend only to the particular breach so waived and shall
not limit or affect any rights with respect to any other or future
breach.
8.10 REMEDIES GENERALLY
No failure on the part of any Party in exercising any right or remedy
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy in
law or in equity or by statute or otherwise conferred.
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8.11 AMENDMENT
This Agreement shall not be varied in its terms or amended by oral
agreement or by representations or otherwise other than by an instrument
in writing dated subsequent to the date hereof, executed by a duly
authorized representative of each Party.
8.12 COUNTERPART EXECUTION
This Agreement may be executed in counterpart and all executed
counterparts together shall constitute one agreement.
8.13 ACCESS TO BOOKS, RECORDS AND PERSONNEL
After the Release Time, the Transferee shall permit TD Transferor and
its representatives to continue to have full and complete access to the
books and records of the Service Operations and its personnel as TD
Transferor may require for the purpose of complying with all laws as
well as its legitimate business purposes, including without limitation
in connection with any claims, demands or litigation. The Transferee
shall provide TD Transferor with its full co-operation (including
testimony if requested) in connection with such purposes. The
Transferee shall preserve and maintain its books and records for the
greater of: (i) 15 years or (ii) such other time as they may be
relevant.
8.14 AGENCY FOR INDEMNITIES
The Parties acknowledge and agree that TD Transferor has entered into
the Agreement on its own behalf and as agent for and on behalf of the
Transferor Indemnified Parties (whether or not formally appointed as
agent on or before the date of this Agreement) and it is the express
intention of the Parties that TD Transferor on behalf of the Transferor
Indemnified Parties or the Transferor Indemnified Parties themselves may
exercise and enforce all their rights and remedies provided herein in
the same manner as if each were a signatory hereto. The Transferee
shall be generally entitled to deal with TD Transferor on behalf of the
Transferor Indemnified Parties in respect of all matters concerning this
Agreement without any obligation whatsoever to investigate the authority
of the TD Transferor and notwithstanding anything contained herein, TD
Transferor will continue to be bound by all of its obligations under
this Agreement as if no such agency relationship existed and shall
remain liable to perform the obligations of the Transferor Indemnified
Parties hereunder to the extent that such persons fail to do so. The
foregoing also applies mutatis mutandis to the Transferee in respect of
the Transferee Indemnified Parties.
IN WITNESS WHEREOF the Parties have executed this Agreement.
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THE TORONTO-DOMINION BANK TD WATERHOUSE SECURITIES (CANADA), INC.
Per:____________________________ Per:_______________________________
Per:____________________________ Per:_______________________________
24
TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION
1.1 Definitions............................................ 2
1.2 Article, Section and Schedule References............... 6
1.3 Interpretation Not Affected by Headings................ 7
1.4 Included Words......................................... 7
1.5 Schedules.............................................. 7
ARTICLE 2 PURCHASE AND SALE
2.1 Transfer............................................... 7
2.2 Assumption of Assumed Liabilities, Etc................. 7
2.3 Purchase Price......................................... 8
2.4 Allocation of the TD Purchase Consideration............ 8
2.5 GST.................................................... 8
2.6 Bulk Sales Act Legislation............................. 9
ARTICLE 3 TRANSFERS
3.1 Specific Conveyances and Specific Assumptions.......... 9
ARTICLE 4 TAXES
4.1 Section 85............................................. 9
4.2 Unearned Amounts....................................... 9
4.3 Transfer Taxes.........................................10
ARTICLE 5 REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of TD Transferor........10
5.2 Representations and Warranties of the Transferee.......11
5.3 Limitation.............................................12
5.4 Survival of Representations, Warranties and Covenants..12
ARTICLE 6 INDEMNITIES
6.1 General Indemnity of Transferee........................12
6.2 General Indemnity of TD Transferor.....................12
6.3 Conduct of Third Party Claims..........................13
ARTICLE 7 CERTAIN RIGHTS AND OBLIGATIONS
7.1 Third Party Consents...................................13
7.2 Absence of Consent.....................................14
7.3 Commitments............................................14
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7.4 Letters to Suppliers.................................16
7.5 Release of the Assurances............................16
7.6 Employees and Independent Contractors................16
7.7 Amounts Received in Respect of the TD Assets.........17
7.8 Transfer of Legal Title..............................17
ARTICLE 8 GENERAL
8.1 Further Assurances...................................18
8.2 No Merger............................................18
8.3 Entire Agreement.....................................18
8.4 Governing Law........................................18
8.5 Assignment, Enurement, Etc...........................18
8.6 Time of Essence......................................19
8.7 Notices..............................................19
8.8 Invalidity of Provisions.............................20
8.9 Waiver...............................................20
8.10 Remedies Generally...................................20
8.11 Amendment............................................21
8.12 Counterpart Execution................................21
8.13 Access to Books, Records and Personnel...............21
8.14 Agency For Indemnities...............................21
