Exhibit 10.A
December 4, 2000
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FAMILY GUIDANCE GROUP INC.
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GREEN SPRING CANADIAN HOLDINGS, INC.
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GREEN SPRING HEALTH SERVICES OF CANADA CO.
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GREEN SPRING HEALTH SERVICES INC.
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SHARE PURCHASE AGREEMENT
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XXXXXXX XXXXXXXX & XXXXXXXX
Barristers & Solicitors
Suite 2400
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
TABLE OF CONTENTS
PAGE NO.
ARTICLE 1 INTERPRETATION..........................................................................................2
1.1 Definitions.....................................................................................2
1.2 Construction....................................................................................6
1.3 Accounting Principles...........................................................................6
1.4 Knowledge.......................................................................................6
1.5 Schedules.......................................................................................6
ARTICLE 2 PURCHASE AND SALE OF PURCHASED SHARES...................................................................8
2.1 Purchase and Sale of Purchased Shares...........................................................8
2.2 Purchase Price and Allocation...................................................................8
2.3 Withholding under Section 116 of the TAX ACT....................................................8
ARTICLE 3 CLOSING ARRANGEMENTS....................................................................................8
3.1 Place of Closing................................................................................8
3.2 Delivery of Certificates and Intercorporate Notes...............................................8
3.3 Payment of the Purchase Price...................................................................9
3.4 Security for Payment............................................................................9
ARTICLE 4 REPRESENTATIONS AND WARRANTIES..........................................................................9
4.1 Representations and Warranties of the Corporation, Vendor and Guarantor.........................9
4.2 Representations and Warranties of the Purchaser................................................25
4.3 Non-Waiver.....................................................................................26
4.4 Nature and Survival of Representations and Warranties..........................................27
4.5 Survival of Purchaser's Representations and Warranties.........................................27
ARTICLE 5 COVENANTS OF THE PARTIES PRIOR TO CLOSING..............................................................27
5.1 Operations before Closing......................................................................27
5.2 Approvals and Consents.........................................................................30
5.3 Payment of Intercompany Indebtedness...........................................................30
5.4 Confidentiality................................................................................31
5.5 Access and Information.........................................................................31
5.6 Nature and Survival of Covenants...............................................................31
ARTICLE 6 CONDITIONS PRECEDENT TO THE PERFORMANCE BY THE PARTIES OF THEIR OBLIGATIONS UNDER THIS AGREEMENT.......32
6.1 The Purchaser's Conditions.....................................................................32
6.2 Conditions of the Vendor.......................................................................36
6.3 Waiver by Purchaser............................................................................37
PAGE NO.
6.4 Waiver by Vendor...............................................................................38
ARTICLE 7 COVENANTS OF THE PARTIES FOLLOWING CLOSING.............................................................38
7.1 Closing Date Statements........................................................................38
7.2 Adjustments....................................................................................39
7.3 Tax Filings....................................................................................40
7.4 Ongoing Services...............................................................................40
7.5 Change of Name.................................................................................41
ARTICLE 8 INDEMNIFICATION........................................................................................41
8.1 Indemnification by Vendor and Guarantor........................................................41
8.2 Indemnification by the Purchaser...............................................................42
8.3 Procedure for Indemnification..................................................................42
8.4 Additional Rules and Procedures................................................................44
8.5 Rights Cumulative..............................................................................45
8.6 Purchase Price Adjustment......................................................................45
8.7 Set-Off........................................................................................45
8.8 GST............................................................................................46
ARTICLE 9 GENERAL................................................................................................46
9.1 Public Notice..................................................................................46
9.2 Expenses.......................................................................................46
9.3 Further Assurances.............................................................................46
9.4 Time of the Essence............................................................................46
9.5 Benefit of the Agreement.......................................................................46
9.6 Entire Agreement...............................................................................46
9.7 Waiver.........................................................................................47
9.8 Notices........................................................................................47
9.9 Assignment.....................................................................................48
9.10 Severability...................................................................................48
9.11 Counterparts...................................................................................48
9.12 Governing Law..................................................................................49
9.13 Arbitration....................................................................................49
9.14 Service........................................................................................49
( ii )
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made the 4th day of December, 2000.
A M O N G:
GREEN SPRING HEALTH SERVICES OF CANADA CO.,
an unlimited liability company incorporated
under the laws of the province of
Nova Scotia
(the "CORPORATION")
OF THE FIRST PART;
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FAMILY GUIDANCE GROUP INC., a corporation
incorporated under the laws of the province
of Ontario
(the "PURCHASER")
OF THE SECOND PART;
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GREEN SPRING CANADIAN HOLDINGS, INC., a
corporation incorporated under the laws of
the State of Delaware
(the "VENDOR")
OF THE THIRD PART;
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GREEN SPRING HEALTH SERVICES INC., a
corporation incorporated under the laws of
the State of Delaware
(the "GUARANTOR")
OF THE FOURTH PART.
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WHEREAS the Vendor is the registered and beneficial owner of
all of the issued and outstanding shares in the capital of the Corporation;
AND WHEREAS the Vendor wishes to sell to the Purchaser and the
Purchaser wishes to purchase from the Vendor all of the issued and outstanding
shares in the capital of the Corporation;
NOW THEREFORE in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto hereby covenant
and agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Agreement, or in any amendments hereto, unless there
is something in the subject matter or context inconsistent therewith, the
following terms shall have the following meanings, respectively:
(a) "ACCOUNTS RECEIVABLE" has the meaning attributed thereto in
Section 4.1(u).
(b) "ADJUSTMENT DATE" means the date five Business Days after the
date on which the Final Effective Date Statements have been
agreed upon, deemed to be agreed upon or delivered, all as
contemplated by Section 7.1;
(c) "AGREEMENT" means this Agreement and includes all Schedules
set out in Section 1.4 of this Agreement;
(d) "ARM'S LENGTH" has the meaning attributed thereto in the Tax
Act and the related jurisprudence;
(e) "AUDITED BALANCE SHEET" means the audited consolidated balance
sheet of the Corporation as at September 30, 2000 forming part
of the Audited Financial Statements;
(f) "AUDITED FINANCIAL STATEMENTS" means the audited consolidated
financial statements of the Corporation for the fiscal year
ended September 30, 2000 consisting of a balance sheet as of
that date, a statement of income (loss) and retained earnings
(deficit) and a statement of changes in cash flows and all
notes thereto, a copy of which is annexed as SCHEDULE 1.1(f)
hereto;
(g) "AUTHORITY" means any governmental authority, body, agency,
department, whether federal, provincial or municipal;
(h) "BANK CONSENT" means the consent of the Chase Manhattan Bank,
the secured lender to the Vendor and Guarantor, to the
transactions contemplated hereby;
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(i) "BUSINESS" means the employee assistance program,
disability management services, wellness programs and
other related business presently carried on by the
Corporation;
(j) "BUSINESS DAY" means everyday except a Saturday, Sunday
or a day which is a statutory holiday under the laws of
Canada or the Province of Ontario;
(k) "CLOSING" means the completion of the transactions described
in this Agreement;
(l) "CLOSING DATE" or "DATE OF CLOSING" means December 7, 2000 or
such other date as the Purchaser and the Vendor may agree
upon, but in no event later than December 15, 2000;
(m) "CONFIDENTIAL CONTRACTS" has the meaning ascribed thereto in
Section 4.1(ll);
(n) "CONSENTS" means the consents referred to in SCHEDULES
4.1(kk)(i) and 4.1 (kk)(ii) and the acknowledgement from the
landlord of each of the Locations identified in SCHEDULE
4.1(p)(ii) as to the matters set out in Sections 6.1(g)(i),
(ii) and (iii);
(o) "CORPORATION" means Green Spring Health Services of Canada
Co., an unlimited liability company incorporated under the
laws of Nova Scotia;
(p) "DEBT" means all current liabilities and long term debt of
the Corporation and its Subsidiaries, including a debt owing
from the Corporation and its Subsidiaries to the Vendor or
the Guarantor;
(q) "EFFECTIVE DATE" means 11:59 p.m. on November 30, 2000;
(r) "EFFECTIVE DATE STATEMENTS" means the audited consolidated
financial statements of the Corporation for the period ending
on the Effective Date consisting of a balance sheet as at
that date, a statement of income (loss) and retained earnings
and a statement of changes in financial position and all
notes thereto, prepared in accordance with generally accepted
accounting principles;
(s) "ENVIRONMENTAL LAWS" means all federal, municipal or local
laws, statutes, regulations, ordinances, rules, guidelines,
orders, directives and other requirements of any government
or political subdivision, agency or instrumentality or of
any court, tribunal or other similar body, relating to
environmental or health matters, including legislation
governing the labelling, use and storage of Hazardous
Substances;
(t) "ENVIRONMENTAL ORDERS" means applicable orders, decisions,
or the like rendered by any Authority under or pursuant to
any Environmental Laws;
(u) "ETA" means the EXCISE TAX ACT (Canada);
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(v) "FINAL EFFECTIVE DATE STATEMENTS" has the meaning attributed
thereto in Section 7.1;
(w) "GAAP" means Canadian generally accepted accounting principles
as set forth in the handbook published by the Canadian
Institute of Chartered Accountants from time to time;
(x) "GENERAL SECURITY AGREEMENT" means the general security
agreement to be executed by the Purchaser in favour of the
Vendor in the form attached as SCHEDULE 2.3 to this
Agreement;
(y) "GST" means all Taxes payable under the ETA or under any
provincial legislation similar to the ETA and any reference to
a specific provision of the ETA or any such provincial
legislation shall refer to any successor provision thereto of
like or similar effect;
(z) "GUARANTOR" means Green Spring Health Services Inc.;
(aa) "HAZARDOUS SUBSTANCES" means PCBs, asbestos, urea
formaldehyde foam insulation or any other substance or
material that is prohibited, controlled or regulated under
any Environmental Laws;
(bb) "INTERCORPORATE NOTES" means, collectively, the notes payable
by the Corporation to the Vendor in the aggregate principal
amount of U.S.$5,274,262 and the note payable by the
Corporation to the Vendor in the principal amount of
$157,980, each bearing interest at the rate of 8.5% per
annum;
(cc) "LOCATION" means the premises utilized in the Business
subject to a lease or sublease entered into by the
Corporation;
(dd) "MATERIAL ADVERSE EFFECT" means, where used in relation to
the Corporation, a material adverse effect on the business,
operations, assets, financial condition or prospects of the
Corporation;
(ee) "PERSON" means an individual, partnership, unincorporated
association, organization, syndicate, corporation, trust and
a trustee, executor, administrator or other legal or personal
representative;
(ff) "PLANS" means a plan or plans established, organized and
administered to provide pensions for employees and former
employees of the Corporation, or predecessor corporations and
their beneficiaries;
(gg) "PRIME RATE" means the reference rate published by the Bank
of Nova Scotia for the calculation of floating interest rates
and referred to as its "PRIME RATE";
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(hh) "PROMISSORY NOTE" means a subordinated secured promissory
note in favour of the Vendor in the aggregate principal
amount of $2,000,000, as more particularly defined in Section
3.3.
(ii) "PURCHASED SHARES" means all of the issued and outstanding
shares in the capital of the Corporation as at the Time of
Closing, which, as at the date of this Agreement consist of
1,000,000 issued and outstanding Class B Common Shares in the
capital of the Corporation;
(jj) "PURCHASE PRICE" has the meaning attributed thereto in
Section 2.2;
(kk) "PURCHASER" means Family Guidance Group Inc.;
(ll) "REAL PROPERTY" means any real property, whether owned or
leased, and used for the conduct of the Business or
previously used for such purpose;
(mm) "REGULATORY APPROVALS" means all necessary approvals,
permits, sanctions, rulings, orders or consents from any
Authority or self-regulatory organization within or outside
of Canada with respect to the transactions contemplated by
this Agreement;
(nn) "SECURED INDEBTEDNESS" means the secured bank indebtedness
of the Purchaser, existing from time to time, in the
aggregate principal amount of up to $18,5000,000;
(oo) "SUBSIDIARIES" means the subsidiaries of the Corporation set
out in SCHEDULE 4.1(b);
(pp) "TAX" means all governmental taxes, levies, duties,
assessments, reassessments and other charges of any nature
whatsoever, whether direct or indirect, including income tax,
profits tax, gross receipts tax, corporation tax, sales and
use tax, wage tax, payroll tax, worker's compensation levy,
capital tax, stamp duty, real and personal property tax,
land transfer tax, customs or excise duty, excise tax,
turnover or value added tax on goods sold or services
rendered, withholding tax, social security and unemployment
insurance charges or retirement contributions, and any
interest, fines, additions to tax and penalties thereon;
(qq) "TAX ACT" means the INCOME TAX ACT (Canada);
(rr) "TIME OF CLOSING" means 10:00 a.m. (Toronto time) on the
Closing Date or such other time as the Purchaser and the
Vendor may agree upon;
(ss) "VENDOR" means Green Spring Canadian Holdings, Inc.; and
(tt) "WORKING CAPITAL" means current assets less current
liabilities.
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1.2 CONSTRUCTION
In this Agreement:
(a) words denoting the singular include the plural and vice
versa and words denoting any gender include all genders;
(b) the words "including", "include", and "includes" shall mean
"including without limitation", "include, without limitation"
and "includes, without limitation", respectively;
(c) any reference to a statute shall mean the statute in force as
at the date hereof and any regulation in force thereunder,
unless otherwise expressly provided;
(d) the use of headings is for convenience of reference only and
shall not affect the construction of this Agreement;
(e) when calculating the period of time within which or following
which any act is to be done or step taken, the date which is
the reference day in calculating such period shall be
excluded. If the last day of such period is not a Business
Day, the period shall end on the next Business Day;
(f) all dollar amounts are expressed in Canadian funds; and
(g) any tender of documents or money under this Agreement may be
made upon the parties or their respective counsel and money
may be tendered by bank draft drawn upon a Canadian chartered
bank or by negotiable cheque payable in Canadian funds and
certified by a Canadian chartered bank.
1.3 ACCOUNTING PRINCIPLES
Wherever in this Agreement reference is made to generally
accepted accounting principles, such reference shall be deemed to be GAAP,
applied consistently with past practice.
1.4 KNOWLEDGE
Any reference herein to the knowledge of a body corporate
shall refer to the knowledge of the members of management of such body corporate
and all other persons involved in the operation and affairs of the Business,
after due enquiry as to the relevant matters in consideration.
1.5 SCHEDULES
The following are the schedules annexed hereto and
incorporated by reference herein and deemed to be part of this Agreement:
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Schedule 1.1(f) - Audited Financial Statements
Schedule 4.1(b) - Subsidiaries
Schedule 4.1(f) - Licenses, permits and authorizations
Schedule 4.1(g) - Capitalization
Schedule 4.1(j) - Undisclosed liabilities
Schedule 4.1(k) - Tax Matters
Schedule 4.1(l) - Absence of Changes
Schedule 4.1(m) - Unusual Transactions
Schedule 4.1(m)(iii) - Wage or salary increases
Schedule 4.1(m)(ix) - Liens, charges and encumbrances
Schedule 4.1(m)(x) - Fees
Schedule 4.1(n) - Title to Properties
Schedule 4.1(o) - Leased equipment
Schedule 4.1(p) - Leased real property
Schedule 4.1(p)(ii) - Material Leases
Schedule 4.1(r) - Fixed assets
Schedule 4.1(t) - Litigation
Schedule 4.1(u) - Accounts Receivable
Schedule 4.1(v)(i) - Material contracts not disclosed elsewhere
Schedule 4.1(v)(ii) - Unsigned Contracts
Schedule 4.1(w) - Employment Matters
Schedule 4.1(x) - Benefit plans
Schedule 4.1(y) - Insurance
Schedule 4.1(aa) - Intellectual property
Schedule 4.1(cc) - Non arm's-length contracts
Schedule 4.1(dd) - CHC Corporate Clients and Principal Suppliers
Schedule 4.1(ff) - Bank accounts
Schedule 4.1(kk)(i) - Regulatory Consents
Schedule 4.1(kk)(ii) - Contractual Consents
Schedule 9.13 - Arbitration Procedures
DOCUMENT SCHEDULES
Schedule 2.1 - Form of Promissory Note
Schedule 2.2 - Form of Non-Competition and Non-Solicitation Agreement
Schedule 2.3 - Form of General Security Agreement
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ARTICLE 2
PURCHASE AND SALE OF PURCHASED SHARES
2.1 PURCHASE AND SALE OF PURCHASED SHARES
Subject to the terms and conditions of this Agreement, at the
Time of Closing, the Vendor shall sell to the Purchaser the Purchased Shares and
the Intercorporate Notes free and clear from all liens, charges and
encumbrances, and the Purchaser shall purchase such shares and notes.
2.2 PURCHASE PRICE AND ALLOCATION
The consideration to be paid by the Purchaser for the
Intercorporate Notes shall be $8,106,293 (the "DEBT PURCHASE PRICE") and the
consideration to be paid by the Purchaser for the Purchased Shares shall be
$6,693,707 (the "SHARE PURCHASE PRICE" and, collectively with the Debt Purchase
Price, the "PURCHASE PRICE"), subject to adjustment in accordance with Article
7.
2.3 WITHHOLDING UNDER SECTION 116 OF THE TAX ACT
The Vendor agrees to deliver to the Purchaser, at or before
Closing, a certificate (a "CERTIFICATE") issued pursuant to Section 116 of the
TAX ACT in respect of the sale of Purchased Shares containing a "certificate
limit" at least equal to the Share Purchase Price.
ARTICLE 3
CLOSING ARRANGEMENTS
3.1 PLACE OF CLOSING
The closing shall take place at the Time of Closing at the
offices of Xxxxxxx Xxxxxxxx & Xxxxxxxx LLP, Suite 2400, 000 Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx at the Time of Closing or at such other place and time as may
be agreed upon by the Purchaser and the Vendor.
3.2 DELIVERY OF CERTIFICATES AND INTERCORPORATE NOTES
The Vendor shall transfer and deliver to the Purchaser at the
Time of Closing share certificates representing the Purchased Shares and the
Intercorporate Notes duly endorsed in blank for transfer, or accompanied by
irrevocable security transfer powers of attorney duly executed in blank, with
such signatures guaranteed to the satisfaction of the Purchaser, and shall take
such steps as shall be necessary to cause the Corporation to enter the Purchaser
upon the books of the Corporation as the holder of the Purchased Shares and to
issue a share certificate to the Purchaser representing the Purchased Shares
purchased by it.
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3.3 PAYMENT OF THE PURCHASE PRICE
The Purchase Price shall be paid and satisfied by the
Purchaser at the Time of Closing as follows:
(a) by delivery of a non-interest bearing secured subordinated
promissory note (the "PROMISSORY Note") in the form attached
as, and having the terms described in, SCHEDULE 2.1 hereto in
the aggregate principal amount of $2,000,000 payable (except
as provided for in Schedule 2.1) as to 50% on the first
anniversary of the Closing Date and as to the balance on the
second anniversary of the Closing Date; the Promissory Note
shall be subordinated and postponed to the Purchaser's Secured
Indebtedness;
(b) by payment to the Vendor, on behalf of the Corporation, of
the amount of $8,106,293, by certified cheque or wire
transfer, representing the principal amount owing by the
Corporation to the Vendor under the Intercorporate Notes at
the Date of Closing; and
(c) by delivery to the Vendor of a certified cheque, wire transfer
or bank draft made payable to the Vendor in an amount equal to
$4,693,707.
3.4 SECURITY FOR PAYMENT
The Purchaser shall execute and deliver the General Security
Agreement at the Time of Closing to secure all amounts payable under the
Promissory Note and under this Agreement. The General Security Agreement shall
form a second ranking charge against all of the property of the Purchaser,
subordinated and postponed only to the Purchaser's Secured Indebtedness.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION, VENDOR AND GUARANTOR
The Corporation, Vendor and Guarantor jointly and severally
represent and warrant to the Purchaser (and acknowledge that the Purchaser is
relying on the representations and warranties in completing the transactions
contemplated herein) that:
(a) CORPORATE
The Corporation is a corporation duly incorporated and
organized and is validly existing and in good standing as an
unlimited liability company under the laws of Nova Scotia and
has all necessary corporate power, authority and capacity to
own its properties and assets and to carry on the Business as
presently conducted. The Corporation is a private company as
that term is defined in the SECURITIES ACT
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(Ontario). Neither the nature of the Business nor the
location or character of the property owned or leased by the
Corporation requires the Corporation (or the Subsidiaries)
to be registered, licensed or otherwise qualified in any
jurisdiction other than in the Provinces of British Columbia,
Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova
Scotia, Newfoundland and Xxxxxx Xxxxxx Island and the
Territory of Nunavut, where as at the Time of Closing it
shall be duly registered, licensed or otherwise qualified
for such purpose. Copies of the articles and by-laws of the
Corporation, including any amendments thereto, have been
provided by the Vendor to the Purchaser.
(b) SUBSIDIARIES
The Corporation does not own, directly or indirectly, nor has
it agreed to acquire (i) any of the outstanding shares or
securities convertible into shares of any other corporation,
or (ii) any participating interest in any partnership, joint
venture or other business enterprise, other than as set out
in SCHEDULE 4.1(b).
The Corporation owns all of the issued and outstanding shares
in the capital of the Subsidiaries, and the Subsidiaries are
corporations duly incorporated and organized and are validly
subsisting and in good standing under the laws of their
respective jurisdictions of incorporation.
(c) BINDING AGREEMENT, VALIDITY OF TRANSACTIONS
This Agreement constitutes a legal, valid, and binding
obligation of each of the Corporation, Vendor and Guarantor,
enforceable against each in accordance with its terms
(subject, as to the enforcement of remedies, to bankruptcy,
reorganization, insolvency, moratorium, and other laws
relating to or affecting creditors' rights generally and
subject to the availability of equitable remedies). The
execution and delivery of this Agreement by the Corporation,
Vendor and Guarantor the consummation of the transactions
contemplated hereby and the fulfilment by the Corporation,
Vendor and Guarantor of the terms, conditions and provisions
hereof will not contravene or violate or result in the breach
(with or without the giving of notice or lapse of time, or
both) or acceleration of any obligations of the Vendor,
Corporation or Guarantor under:
(A) to the knowledge of the Corporation, the Vendor
and the Guarantor, any laws applicable to the
Vendor, Corporation or Guarantor;
(B) any judgment, order, writ, injunction or decree of
any court or of any governmental, agency or
instrumentality which is presently and exclusively
applicable to the Vendor, Corporation or Guarantor;
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(C) the articles, by-laws or any resolutions of the
Vendor, Corporation or Guarantor or amendments
thereto or restatements thereof; or
(D) upon receipt of the Bank Consent, the provisions
of any agreement, arrangement or understanding to
which the Vendor, Corporation or Guarantor is a
party or by which it is bound.
(d) VENDOR AND GUARANTOR
The Vendor and the Guarantor are each corporations duly
incorporated and organized and are validly subsisting and in
good standing under the laws of their respective jurisdictions
of incorporation and have all necessary corporate power,
authority and capacity to enter into this Agreement, perform
their respective obligations hereunder and, in the case of the
Vendor, subject to the Bank Consent, own the Purchased Shares
and the execution and delivery of this Agreement and the
performance by the Vendor and Guarantor of their respective
obligations hereunder have been duly authorized by all
necessary corporate action on the part of each of the Vendor
and the Guarantor, respectively.
(e) INTENTIONALLY DELETED
(f) LICENCES, PERMITS AND AUTHORIZATIONS
To the knowledge of the Corporation, Vendor and Guarantor, the
Corporation has conducted the Business in compliance with, and
the Corporation holds all licenses, permits and authorizations
necessary for the lawful operation of the Business, pursuant
to all applicable statutes, laws, ordinances, rules and
regulations of all Authorities having jurisdiction over the
Corporation or over any part of the Business, except where a
failure to do so would not have a Material Adverse Effect, all
material licenses, permits and authorizations necessary for
the conduct of the Business are listed on SCHEDULE 4.1(f) and
all of which are valid and subsisting and in good standing
with no violations in respect thereof as of the date of this
Agreement, except where a failure in such regard would not
have a Material Adverse Effect.
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(g) CAPITALIZATION
The authorized, issued and outstanding share capital of the
Corporation is set out in SCHEDULE 4.1(g) hereto. The issued
and outstanding share capital has been duly and validly issued
and is outstanding as fully paid and non-assessable shares in
the capital of the Corporation. There are no outstanding
securities convertible into or exchangeable or exercisable for
any shares of the capital stock of the Corporation, nor does
the Corporation have outstanding any rights to subscribe for
or to purchase, or any options for the purchase of, or any
agreements providing for the issuance of, any shares of its
capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital
stock. On the Closing Date, the Purchased Shares shall
constitute all the issued and outstanding shares in the
capital of the Corporation.
(h) OWNERSHIP OF PURCHASED SHARES
The Vendor is, or on Closing will be, the sole beneficial
owner of the Purchased Shares free and clear of any liens,
charges, encumbrances or rights of others (other than the
rights of the Purchaser hereunder). Subject to the receipt of
the Bank Consent, there is no contract, option or other right
of another binding upon or which at any time in the future may
become binding upon any Vendor or the Corporation to sell,
transfer, assign, pledge, charge, mortgage or in any other way
dispose of or encumber any of the Purchased Shares, other than
pursuant to this Agreement.
(i) FINANCIAL STATEMENTS
The Audited Financial Statements present fairly the financial
position of the Corporation and the Subsidiaries, on a
consolidated basis, as at September 30, 2000 in all material
respects and have been prepared in accordance with GAAP,
consistently applied with prior fiscal years of the
Corporation. The Audited Balance Sheet presents fairly, in all
material respects, a statement of the assets, liabilities
(whether accrued, absolute, contingent or otherwise) and
financial condition of the Corporation as at September 30,
2000, and the statement of income (loss) and retained earnings
(deficit) and statement of changes in cash flows forming a
part of the Audited Financial Statements presents fairly, in
all material respects, the results of the operations of the
Corporation and the source and application of the cash flows
thereof throughout the periods covered thereby.
(j) ABSENCE OF UNDISCLOSED LIABILITIES
Except to the extent reflected or reserved against in the
Audited Balance Sheet (including the notes thereto) or
incurred subsequent to the date thereof and disclosed in
SCHEDULE 4.1(j) and except normal trade creditors payable in
the ordinary and normal course of business and customers of
the Corporation, neither
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the Corporation nor its Subsidiaries have any outstanding
indebtedness or any liabilities or obligations (whether
accrued, absolute, contingent or otherwise) nor any
outstanding commitments or obligations of any kind whether
or not such obligations or commitments are presently
considered liabilities of the Corporation or its
Subsidiaries under GAAP.
(k) TAX MATTERS
(i) Adequate provision has been made by the
Corporation in the Audited Balance Sheet for any
Taxes due and unpaid in respect of the Corporation
and its Subsidiaries at the date of the Audited
Balance Sheet, or for the payment of any Tax
instalments due as of such date. Except to the
extent reflected or reserved against in the
Audited Balance Sheet or as disclosed in SCHEDULE
4.1(k), the Corporation and its Subsidiaries are
not liable for any Taxes. Canadian federal and
provincial income tax assessments or reassessments
have been received by the Corporation and the
Subsidiaries covering all past periods through the
most recently completed fiscal year of the
Corporation, and, other than as disclosed in
SCHEDULE 4.1(k), the Corporation and the
Subsidiaries have paid all such assessments and
reassessments. Other than as disclosed in SCHEDULE
4.1(k), there are no notices of objection or
appeals outstanding with respect to any
assessment, reassessment or determination of the
Corporation or the Subsidiaries by any Authority.
Other than as disclosed in SCHEDULE 4.1(k) there
are no actions, suits, audits, investigations,
claims or other proceedings pending or, to the
knowledge of the Vendor, the Corporation and the
Guarantor, after due enquiry, threatened, against
the Corporation or the Subsidiaries in respect of
any Taxes. There are no agreements, waivers or
other arrangements providing for an extension of
time with respect to the filing of any Tax return
or the payment of any Taxes by the Corporation or
the Subsidiaries;
(ii) The Corporation and its Subsidiaries have on a
timely basis filed all material Tax returns,
information returns, elections or designations
required to be filed by it pursuant to any Tax
legislation. No such filing has contained any
material misstatement or omitted any statement of
any material fact that should have been included
therein. Neither the Corporation nor its
Subsidiaries have filed nor are they required to
file any material Tax returns, information returns
or designations in any jurisdiction outside Canada;
(iii) Other than as disclosed in SCHEDULE 4.1(k), the
Corporation and the Subsidiaries have each
withheld and remitted to the proper authority, or
where permitted by law provided security for, on a
timely basis and in a form required under the
appropriate Tax legislation, all amounts in
respect of Taxes, including Canada Pension Plan
contributions and unemployment
- 14 -
insurance premiums and any other deductions required
to be withheld and remitted by it;
(iv) There is no deductible outlay or expense owing by the
Corporation or the Subsidiaries to a person with whom
it was not dealing at arm's length at the time the
outlay or expense was incurred which is unpaid and
which will be included in the Corporation's income
for any taxation year ending on or after the Closing
Date;
(v) Other than as disclosed in SCHEDULE 4.1(k), the
Corporation and the Subsidiaries do not have any
loans or indebtedness outstanding which have been
made to directors, former directors, officers,
shareholders or employees of the Corporation or the
Subsidiaries or to any person or corporation not
dealing at arm's length with any of the foregoing;
(vi) The Corporation is a registrant for purposes of the
ETA, and its registration number is 12000670;
(vii) Neither the Corporation nor the Subsidiaries have
either directly or indirectly, transferred property
to or acquired property from a Person with whom the
Corporation or the Subsidiaries, as the case may be,
were not dealing at arm's length for consideration
other than consideration equal to the fair market
value of the property at the time of the disposition
or acquisition thereof;
(viii) The Corporation is not a financial institution within
the meaning of ETA; and
(ix) To the knowledge of the Corporation, the Vendor and
the Guarantor, the Corporation is not a party to any
elections made under the ETA.
(l) ABSENCE OF CHANGES
Since September 30, 2000:
(i) except as disclosed in SCHEDULE 4.1(l), no
material adverse change has occurred in any of the
assets, business, financial condition, results of
operation or prospects of the Corporation and the
Subsidiaries nor has any other event, condition or
state of facts occurred or arisen that might
materially and adversely affect, or threaten to
materially and adversely affect, the Corporation
or the Subsidiaries, or the business, results of
operations or prospects of the Corporation or the
ability of any of the Corporation to carry on its
business substantially the same as if such
business was being conducted as of September 30,
2000 and
- 15 -
(ii) no damage, destruction or loss, labour trouble or
any other event, development or condition of any
character (whether or not covered by insurance)
has occurred which might have a Material Adverse
Effect.
(m) ABSENCE OF UNUSUAL TRANSACTIONS
Since September 30, 2000, the Corporation and the Subsidiaries
have not:
(i) transferred, assigned, sold or otherwise disposed of
any of the assets shown in the Audited Balance Sheet
or cancelled any material debts or material claims
except in each case in the ordinary and normal course
of business;
(ii) incurred or assumed any material obligation or
material liability (direct or contingent), except
those listed in SCHEDULE 4.1(j) hereto and except
unsecured current obligations and liabilities
incurred in the ordinary and normal course of
business;
(iii) issued or sold any shares in its capital or any
warrants, bonds, debentures or other corporate
securities of the Corporation or issued, granted or
delivered any right, option or other commitment for
the issuance of any such other securities;
(iv) except as disclosed in SCHEDULE 4.1(m), discharged or
satisfied any lien or encumbrance, or paid any
material obligation or material liability (fixed or
contingent) other than liabilities included in the
Audited Balance Sheet and liabilities incurred since
the date thereof in the ordinary and normal course of
business;
(v) declared or made any payment of any dividend or other
distribution in respect of any shares in its capital
or purchased or redeemed any such shares thereof or
effected any subdivision, consolidation or
reclassification of any such shares or repaid in full
or in part any shareholder loans;
(vi) except as disclosed in SCHEDULE 4.1(m), suffered a
material operating loss or any material extraordinary
loss, or waived any rights of substantial value, or
entered into any commitment or transaction not in the
ordinary and normal course of business;
(vii) amended or changed or taken any action to amend or
change its constating documents or by-laws;
(viii) made any wage or salary increases or in respect of
personnel which it employs, other than those made in
the ordinary course of business or as provided for in
SCHEDULE 4.1(m)(viii);
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(ix) other than in the ordinary course of business and
except as disclosed in SCHEDULE 4.1(m)(ix),
mortgaged, pledged, subjected to lien, granted a
security interest in or otherwise encumbered any of
its assets or property, whether tangible or
intangible;
(x) other than in the ordinary course of business and
except as disclosed in SCHEDULE 4.1(m)(x), paid or
become liable for any management fee or any other fee
or charge whatsoever to the Vendor or any Person who
is an associate of the Vendor, (as defined in the
BUSINESS CORPORATIONS ACT (Ontario)) or paid or
agreed to pay any bonus or like payment to any
Person;
(xi) loaned or agreed to lend money to any Person,
including a shareholder; or
(xii) authorized or agreed or otherwise become committed
to any of the foregoing.
(n) TITLE TO PROPERTIES
Except as disclosed in the Audited Balance Sheet or in
SCHEDULE 4.1(n) hereto, the Corporation and the Subsidiaries
have good and marketable title to all of their respective
material properties, interests in properties and assets,
including those reflected on the Audited Balance Sheet or
acquired since the date of the Audited Balance Sheet (except
as since transferred, sold or otherwise disposed of in the
ordinary and normal course of business), free and clear, in
all material respects, of all mortgages, pledges, liens, title
retention agreements, encumbrances or charges of any kind or
character.
(o) LEASES OF PERSONAL PROPERTY
SCHEDULE 4.1(o) sets forth a true and complete list in all
material respects, of all equipment, other personal property
and fixtures, having a book value in excess of $5,000 per
item, in the possession or custody of the Corporation or the
Subsidiaries which, as of the date hereof, is leased or held
under licence or similar arrangement and of the leases,
licenses, agreements, or other documentation relating thereto.
(p) LEASES OF REAL PROPERTY
(i) Other than the leases and subleases referred to in
SCHEDULE 4.1(p), the Corporation is not a party to
or bound by any lease, sublease, license or other
instrument relating to real property and the
Corporation has not entered into any other
instrument relating to real property. All
interests held by the Corporation under such
leases or subleases are free and clear
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of any and all liens, charges and encumbrances of
any nature and kind whatsoever.
(ii) All leases or subleases entered into by the
Corporation and which are referred to in SCHEDULE
4.1(p)(ii) are in good standing and in full force and
effect without amendment except as otherwise set out
in SCHEDULE 4.1(p)(ii), and the Corporation is
entitled to the benefit of all such leases or
subleases.
(iii) Except as otherwise set out in SCHEDULE 4.1(p), all
amounts of rent and other invoiced amounts presently
owing under the leases or subleases to which the
Corporation is a party, have been paid.
(iv) The Corporation and each of the landlords of the
leased real property identified in SCHEDULE
4.1(p)(ii) have complied with all of their respective
obligations under the leases or subleases to which it
is a party, and the Corporation and such landlords
are not in default or breach and have not received a
notice of default or breach of their respective
obligations under such leases or subleases.
(q) REAL PROPERTY
The Corporation and the Subsidiaries do not own any real
property nor, except for the leases referred to in SCHEDULE
4.1(p), any interest in real property.
(r) FIXED ASSETS
SCHEDULE 4.1(r) sets out a list of all of the tangible assets,
machinery, equipment, vehicles, furniture, office equipment
and computer hardware and software having a book value of at
least $1,000 per item, wherever situate and owned by the
Corporation and/or the Subsidiaries and also sets out any
encumbrances on such assets.
(s) CONDITION OF ASSETS
To the knowledge of the Corporation, Vendor and Guarantor, all
material tangible assets owned or leased by the Corporation or
the Subsidiaries used in or in connection with the Business or
any part thereof are in good condition, repair and (where
applicable) proper working order, having regard to the use and
age thereof, except only for reasonable wear and tear.
(t) LITIGATION
Except as disclosed in SCHEDULE 4.1(t) there is no suit,
action, dispute, civil or criminal litigation, claim,
arbitration or legal, administrative or other proceeding or
governmental investigation, complaint to any professional body
or Authority,
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including appeals and applications for review (collectively,
"CLAIMS") or, to the best of the Corporation's, Vendor's and
Guarantor's knowledge, pending or threatened against the
Corporation or the Subsidiaries or affecting any of their
respective assets or properties or the Business. There are no
facts or circumstances known to the Corporation, Vendor or
Guarantor which are reasonably likely to give rise to any
such Claims. Except as disclosed in SCHEDULE 4.1(t), there is
not presently outstanding against the Corporation or the
Subsidiaries any judgement, execution, decree, injunction,
rule or order of any court, Authority, administrative agency
or arbitrator.
(u) ACCOUNTS RECEIVABLE
SCHEDULE 4.1(u) sets forth a detailed aged list of the
accounts receivable (the "ACCOUNTS RECEIVABLE") of the
Corporation and the Subsidiaries as at November 30, 2000 which
list is true and correct. The Accounts Receivable of the
Corporation set out in SCHEDULE 4.1(u) are, and all other
accounts receivable at the Time of Closing shall be, BONA FIDE
and good and collectible at their face amounts in the ordinary
course of business and consistent with past practices (subject
to no defence, counterclaim or set-off) except to the extent
of any reserves provided for doubtful accounts in the ordinary
course of business. All Accounts Receivable which will be
outstanding on the Closing Date:
(i) are fairly presented, in all material respects, on
the Audited Balance Sheet or, with respect to
Accounts Receivable created after September 30, 2000
and through the date of this Agreement, will have
been fairly presented, in all material respects, in
the books and records of the Corporation and will be
fairly presented, in all material respects, on the
Closing Date Statements; and
(ii) are and will be as at the Closing Date, fully
collectable, net of reserves, to the knowledge of
the Vendor, the Corporation and the Guarantor.
(v) MATERIAL CONTRACTS
Except for the liens, charges and encumbrances referred to in
SCHEDULE 4.1(m)(ix), the leases and agreements referred to in
SCHEDULE 4.1(o), the leases of Real Property referred to in
SCHEDULE 4.1(p), the written employment contracts referred to
in SCHEDULE 4.1(w) and the contracts and agreements (including
government grants or incentives) referred to in SCHEDULES
4.1(v)(i) and 4.1(v)(ii) and except as otherwise disclosed in
the Audited Financial Statements, the Corporation is not a
party to or bound by any material contract or material
commitment either now or in the future, whether oral or
written. To the knowledge of the Corporation, Vendor and
Guarantor, the contracts and agreements referred to in
SCHEDULE 4.1(v)(i) are all in full force and effect unamended
and no default exists in respect thereof on the part of any of
the parties
- 19 -
thereto. The Corporation is providing services under the
material unsigned contracts referred to in SCHEDULE
4.1(v)(ii) (together with non-material unsigned contracts,
the "UNSIGNED CONTRACTS") on the same basis as if such
contracts were fully executed, current and in good standing.
To the knowledge of the Corporation, the Vendor and the
Guarantor, the Corporation is not in default or in breach of,
nor has the Corporation received any notice, threat or
allegation of a breach of, any contract, commitment, or
Unsigned Contract to which it is a party (or under which it
is currently providing services) and there exists no
condition, event or act which, with the giving of notice or
lapse of time or both would constitute such a default or
breach, and all such contracts and commitments (other than
the Unsigned Contracts) are in good standing and in full
force and effect without amendment thereto and the Corporation
is entitled to all benefits thereunder.
(w) EMPLOYMENT MATTERS
(i) SCHEDULE 4.1(w) contains a complete and accurate
list of all employees and independent contractors
and consultants (including those on retainer with
the Corporation) of the Corporation and the
Subsidiaries, their respective positions, dates of
hire (or commencement of services, as the case may
be) with the Corporation, or any predecessors of
the Corporation or the Subsidiaries, current
salaries, fees, and other remunerations (other
than pursuant to the Corporation's standard
benefit plans).
(ii) There are no contracts of employment entered into
with any employees employed by the Corporation or the
Subsidiaries which are not terminable in accordance
with applicable law and the Corporation and the
Subsidiaries have not entered into any agreements
with such employees with respect to the termination
of employment. Neither the Corporation nor the
Subsidiaries has any obligation to re-instate any
employees.
(iii) From September 30, 2000 up to the Time of Closing,
other than in the ordinary course of business, the
Corporation will not have terminated, laid-off or
dismissed (whether such dismissal is actual or
constructive) any employees of the Corporation or
terminated any contract for services to the
Corporation to which the Corporation is a party,
whether written or verbal.
(iv) All liabilities in respect of employees and other
persons providing services to the Corporation have
or shall have been paid in the ordinary course of
business, to the Closing Date, including premium
contributions, remittance and assessments for
unemployment insurance, employer health tax,
Canada Pension Plan, income tax, Workers'
Compensation, source deductions and any other
employment related legislation, accrued wages,
Taxes, salaries, commissions and employee benefit
plan payments.
- 20 -
(v) Except as set out in SCHEDULE 14.1(k), There are
no outstanding or, to the knowledge of the
Corporation, the Vendor and the Guarantor,
pending, threatened or anticipated assessments,
actions, causes of action, claims, complaints,
demands, orders, prosecutions or suits against the
Corporation, the Subsidiaries or their respective
directors, officers or agents pursuant to or under
any applicable rules, regulations, orders or laws,
including Canada Pension Plan, unemployment
insurance, Tax, employer health tax, employment
standards, labour relations, occupational health
and safety, human rights, workers' compensation
and pay equity laws.
(vi) Neither the Corporation nor the Subsidiaries have
made any agreements, whether directly or
indirectly, with any labour union, employee
association or other similar entity or made
commitments to or conducted negotiations with any
labour union or employee association or similar
entity with respect to any future agreements. To
the knowledge of the Corporation, the Vendor and
the Guarantor, no trade union, employee
association or other similar entity has any
bargaining rights acquired by either certification
or voluntary recognition with respect to the
employees of the Corporation or the Subsidiaries.
Neither the Corporation, the Vendor or the
Guarantor is aware of any current attempts to
organize or establish any other labour union,
employee association or other similar entity.
(vii) Except as disclosed in SCHEDULE 4.1(w), there are no
outstanding employment proceedings of any kind
(including unfair labour complaints, grievances,
arbitrations or applications for declaration of
successor employer) in respect of the Corporation or
the Subsidiaries.
(viii) All vacation pay, bonuses, commissions and other
emoluments relating to the employees of the
Corporation and the Subsidiaries are presented
fairly, in all material respects, and have been
accrued in the financial records of the Corporation.
(x) PENSION AND BENEFIT MATTERS
Except as disclosed in SCHEDULE 4.1(x), there is not now and
on the Closing Date there will not be any benefit plans or
Plans established by or for the Corporation for its employees.
(y) INSURANCE
SCHEDULE 4.1(y) is a true and complete list setting forth all
insurance policies (specifying the issuer, the amount of the
coverage, the type of insurance, the policy number and any
pending claims thereunder) maintained by the Corporation with
respect to its assets, property and undertaking and the
Business as of the date
- 21 -
hereof. All of the Corporation's insurance coverage will be
continued in full force and effect (with all premiums paid)
up to and including the Closing Date. The Corporation is not
in default, whether as to the payment of premium or otherwise,
under the terms of any such policies. The Corporation has not
failed to give any notice or present any claim under any such
policies in due and timely fashion. Nothing has been done or
omitted to be done by the Corporation which could make any
policy of insurance void or voidable.
(z) COPIES OF AGREEMENTS, ETC.
True, correct and to the knowledge of the Corporation, the
Vendor and the Guarantor, complete copies of all material
mortgages, leases, agreements, instruments, policies of
insurance, and other documents listed in the schedules hereto
have been delivered to the Purchaser.
(aa) INTELLECTUAL PROPERTY
SCHEDULE 4.1(aa) lists all material domestic and foreign
inventions, patents, trade-marks, proposed trade marks, trade
names, copyrights, industrial designs, business names,
certification marks, distinguishing guises, business styles,
software (including, without limitation, all internally
developed software (i.e., EASE) and the Corporation's
disability management software), source code and other
intellectual property, whether or not registered, that are
owned by or licensed to the Corporation, and all applications
in respect thereof (collectively, the "INTELLECTUAL
PROPERTY"), including particulars of any registration thereof,
details of all applications for registration in respect
thereof and, where unregistered, the date of first use
thereof. The Corporation is the sole owner of the Intellectual
Property and, to the knowledge of the Corporation, the Vendor
and the Guarantor, the Intellectual Property is free and clear
of any claims, encumbrances or charges and the Corporation has
not used or enforced, or failed to use or enforce, the
Intellectual Property in any manner which could limit its
validity or result in its invalidity, except where such
failure would not have a Material Adverse Effect. Except as
disclosed in SCHEDULE 4.1(aa), there has been no material
infringement or violation of the Corporation's rights in and
to the Intellectual Property or any trade secrets or
confidential information, nor any material claim of adverse
ownership, invalidity or other opposition to or conflict with
any of the Intellectual Property. The Corporation is not and
has not engaged in any activity that violates or infringes, in
any material respect, any intellectual property rights of any
Person.
- 22 -
(bb) COMPLIANCE WITH LAWS
To the knowledge of the Corporation, Vendor and Guarantor, the
Corporation is in compliance with, and will, at the Closing
Date, have filed all reports or returns required under, all
laws, regulations, orders, judgments or decrees applicable to
it, except where a failure to so file, would not result in a
Material Adverse Effect.
(cc) CONTRACTS WITH NON-ARM'S LENGTH PERSONS
Except as set forth in SCHEDULE 4.1(cc), there are no existing
contracts or arrangements to which the Corporation is a party
in which the Vendor, any director or officer of the
Corporation or any other Person not dealing at arm's length
with the Vendor, the Corporation or any director or officer of
the Corporation has an interest, whether directly or
indirectly, including, without limitation, arrangements for
the payment of management or consulting fees of any kind
whatsoever.
(dd) CUSTOMERS AND SUPPLIERS
SCHEDULE 4.1(dd) sets out the principal suppliers (being the
suppliers of the Corporation providing goods and/or services
to the corporation having an invoiced cost of at least $20,000
per year) and all of the corporate customers of the
Corporation and since October 5, 2000 there has been no
termination or cancellation of, and no material modification
or change in, the Corporation's business relationship with any
such principal supplier, any of the top 50 corporate customers
or group of top 50 corporate customers or principal suppliers.
Except as described in SCHEDULE 4.1(dd), the Corporation has
not been advised, whether orally or in writing, that the
benefits of any relationship with any of the corporate
customers or principal suppliers of the Corporation will not
continue after the Closing Date in substantially the same
manner as prior to the date of this Agreement.
(ee) AGREEMENTS RESTRICTING BUSINESS
The Corporation is not a party to any agreement or arrangement
which restricts the freedom of the Corporation to carry on the
Business, including any contract or agreement which contains
covenants by the Corporation not to compete in any line of
business with any other Person.
(ff) BANK ACCOUNTS, ETC.
There is set forth in SCHEDULE 4.1(ff) hereto the name of each
bank or other depository in which the Corporation and the
Subsidiaries maintain any bank account, trust account or
safety deposit box and the names of all persons authorized to
draw thereon or who have access thereto.
- 23 -
(gg) ABSENCE OF GUARANTEES
Neither the Corporation nor the Subsidiaries have given or
agreed to give, or is a party to or bound by, any guarantee of
indebtedness, indemnity, bond or suretyship or other
obligations of another Person or Persons or any other
commitment by which the Corporation or the Subsidiaries is, or
is contingently, responsible for such indebtedness or other
obligations except as specifically provided for or referred to
in this Agreement or in any schedule hereto, save for the
Chase Manhattan Bank, which guarantee the Vendor undertakes to
have released on or before Closing.
(hh) COMPUTER SYSTEMS
Other than the computer system referred to as "Ease" which is
under development by the Corporation, the Corporation's
computer systems, including but not limited to mainframes,
mini-computers, personal computers, special purpose systems
and software are fully operational and have documentation
describing, among other things, the operation of the hardware,
software, required maintenance and other operational
procedures, all operating systems, applications and utilities.
Other than the computer system referred to as "Ease" which is
under development by the Corporation, the software employed by
the Corporation in connection with the Business and its
respective elements have been assembled in a workmanlike
manner and in accordance with industry standards of design and
implementation and such software will meet or exceed all
performance, functionality and other technical specifications
required in accordance with the operation thereof and
specified in the documentation relating thereto.
(ii) CORPORATE RECORDS
The minute books of the Corporation will contain at the
Closing Date, accurate and complete minutes of all meetings
and resolutions of its directors and shareholders held since
their incorporation. All resolutions of the Corporation were
duly passed and all meetings of the Corporation were duly
held, and its share certificate books and share certificate
registers are, and will at the Closing Date be, complete and
accurate and shall reflect all transactions contemplated by
this Agreement.
(jj) RIGHT TO SELL
Subject to the receipt of the requisite Consents and Bank
Consents, the Vendor has the exclusive right to dispose of the
Purchased Shares as provided in this Agreement and, to the
knowledge of the Corporation, Vendor and Guarantor, such
disposition will not violate, contravene, breach or offend
against, result in any default under, entitle any other party
thereto to terminate its obligations under or
- 24 -
result in any material adverse change in the terms or
conditions of any indenture, mortgage, lease, agreement,
instrument, statute, regulation, order, judgement, decree or
law to which any of the Vendor, the Corporation is a party
or subject or by which the Vendor or the Corporation is bound
or affected.
(kk) CONSENTS
(i) Regulatory Consents
To the knowledge of the Corporation, Vendor and Guarantor,
except as set out in SCHEDULE 4.1(kk)(i), no consent, approval
or authorization of, or declaration, filing (other than
administrative filings with Tax authorities, companies
registries and the like) or registration with, any Authority
is required to be made or obtained by the Corporation or the
Vendor prior to, or as a condition of, the consummation of the
transactions contemplated in this Agreement.
(ii) Contractual Consents
Except as set out in SCHEDULE 4.1(kk)(ii) no consents are
required to be obtained by the Corporation pursuant to any
contract to which the Corporation is a party in connection
with the transactions contemplated hereby, except where a
failure to obtain such consent would not have a Material
Adverse Effect. SCHEDULE 4.1(kk)(ii) sets out the name of the
party from whom such consent is required, the agreement in
respect of which such consent relates, and the contact
information of such party. SCHEDULE 4.1(kk)(ii) also sets out
all material contracts in respect of which consent from a
third party is required to disclose to the Purchaser the
existence or contents thereof or any other material aspect of
the business of the Corporation (the "CONFIDENTIAL
CONTRACTS").
(ll) POWERS OF ATTORNEY
The Corporation has not given any power of attorney relating
to the Business to any Person for any purpose whatsoever.
(mm) ENVIRONMENTAL MATTERS
The Business has been and is being carried on (and the
business of the Corporation has been carried on by its
predecessors) and the processes and undertakings of the
Corporation have been and are being conducted in compliance
with common law and all applicable Environmental Laws and
Environmental Orders. Neither the Corporation, the Vendor nor
the Guarantor knows or has reasonable grounds to know, of any
fact which could give rise to a notice of non-compliance with
any Environmental Laws or Environmental Orders.
(nn) COMPETITION ACT
- 25 -
The Vendor, together with its affiliates (as defined in the
COMPETITION ACT (Canada)), have assets in Canada with an
aggregate value of less than $400 million, as shown on the
audited financial statements of the Vendor and its affiliates
for the fiscal year ending September 30, 2000, which were
prepared in accordance with generally accepted accounting
principles normally used by each of them.
(oo) BROKERS
Other than Capital Canada Limited, the Vendor and the
Corporation have not engaged any broker or other agent in
connection with the transactions contemplated in this
Agreement and, accordingly, there is no commission, fee or
other remuneration payable to any broker or agent who purports
or may purport to act or have acted for the Vendor or the
Corporation, other than to Capital Canada Limited. The Vendor
is responsible for any such payments to Capital Canada
Limited.
(pp) FULL DISCLOSURE
To the knowledge of the Corporation, Vendor and Guarantor,
none of the foregoing representations and statements of fact
contains any untrue statement of a material fact or omits to
state any material fact necessary to make any such statement
or representation not misleading to a prospective purchaser of
the Purchased Shares seeking full information as to the
Corporation and its properties, business and affairs. There is
no fact that the Corporation, Vendor or Guarantor has not
disclosed to the Purchaser in writing or, so far as the
Corporation, Vendor or Guarantor can foresee, that might have
a Material Adverse Effect or that might materially adversely
effect the ability of the Corporation, Vendor or Guarantor to
perform their respective obligations under this Agreement.
4.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Vendor
(and acknowledges that the Vendor is relying on the representations and
warranties in completing the transactions contemplated hereby) that:
(a) CORPORATE
The Purchaser is a corporation duly incorporated under the
laws of the province of Ontario and has not been dissolved.
(b) AUTHORITY
The Purchaser has all necessary corporate power, authority and
capacity to enter into this Agreement and to perform its
obligations hereunder and the execution and delivery of this
Agreement and the performance by the Purchaser of its
- 26 -
obligations hereunder has been duly authorized by all
necessary corporate action on the part of the Purchaser.
(c) ENFORCEABILITY
This Agreement constitutes a legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms (subject, as to the enforcement
of remedies, to bankruptcy, reorganization, insolvency,
moratorium, and other laws relating to or affecting creditors'
rights generally and subject to the availability of equitable
remedies). The execution and delivery of this Agreement by the
Purchaser, the consummation of the transactions contemplated
hereby and the fulfilment by the Purchaser of the terms,
conditions and provisions hereof will not contravene or
violate or result in the breach (with or without the giving of
notice or lapse of time, or both) or acceleration of any
obligations of the Purchaser under:
(A) any laws applicable to the Purchaser;
(B) any judgement, order, writ, injunction or decree
of any court or of any Authority which is
presently applicable to the Purchaser;
(C) the articles, by-laws or any resolutions of the
Purchaser or any amendments thereto or restatements
thereof; or
(D) the provisions of any agreement, arrangement or
understanding to which the Purchaser is a party
or by which it is bound.
(d) PURCHASER NOT NON-CANADIAN
The Purchaser is not a "non-Canadian" within the meaning of
the INVESTMENT CANADA ACT (Canada).
(e) BROKERS
The Purchaser has not engaged any broker in connection with
the transactions contemplated in this Agreement and,
accordingly, there is no commission, fee or other remuneration
payable to any broker who purports or may purport to have
acted for the Purchaser.
4.3 NON-WAIVER
No investigations made by or on behalf of any party at any
time shall have the effect of waiving, diminishing the scope of or otherwise
affecting any representation or warranty made by the other parties herein or
pursuant hereto.
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4.4 NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of the Vendor contained in
this Agreement or in any document or certificate given pursuant to this
Agreement shall survive the Closing for the benefit of the Purchaser as follows:
(a) as to the representations and warranties contained in
sections 4.1(a), (b), (c), (g), (h), (n) and (t)
indefinitely;
(b) as to all Tax matters, until the date following expiration
of all periods allowed for objecting and appealing the
determination of any proceedings relating to any assessment
or reassessment of the Corporation by any Taxing authority in
respect of any taxation period ending on or prior to the
Closing or in which the Closing occurs unless a BONA FIDE
notice of a claim shall have been made in writing before the
expiry of that period, in which case the representation and
warranty to which such notice apply shall survive in respect
of that claim until the final determination or settlement of
the claim; and
(c) as to all other matters, for a period of three years, unless a
BONA FIDE notice of a claim shall have been given in writing
before the expiry of that period, in which case the
representation and warranty to which such notice applies shall
survive in respect of that claim until the final determination
or settlement of that claim.
4.5 SURVIVAL OF PURCHASER'S REPRESENTATIONS AND WARRANTIES
The representations and warranties of the Purchaser contained
in this Agreement or any document or certificate given pursuant to this
Agreement shall survive the Closing for the benefit of the Vendor for a period
of three years, unless a BONA FIDE notice of claim shall have been made in
writing before the expiry of that period, in which case the representation and
warranty to which such notice applies shall survive in respect of that claim
until the final determination or settlement of that claim.
ARTICLE 5
COVENANTS OF THE PARTIES PRIOR TO CLOSING
5.1 OPERATIONS BEFORE CLOSING
Except as otherwise contemplated or permitted by this
Agreement, during the period from the Effective Date to the Time of Closing, the
Vendor:
(a) shall maintain the goodwill of the Corporation and of all
persons having business relations with the Corporation and
shall continue to operate, in consultation with the Purchaser,
the Business in the ordinary course consistent with past
practice, including, with the prior written consent of the
Purchaser, paying and satisfying
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all Debts and obligations of the Corporation as such Debts
and obligations mature;
(b) shall not, without the prior written consent of the Purchaser,
perform or make any act or decision to enter into any
contract, commitment or transaction not in the ordinary course
of business or which could reasonably have a Material Adverse
Effect, or which could constitute a breach of the covenants,
representations or warranties of the Vendor contained in this
Agreement or which could cause such covenants, representations
and warranties not to be true at the Time of Closing,
including:
(i) entering into commitments acquiring or initiating
new businesses or undertakings or assuming any
commitment or obligation (by written agreement or
otherwise) or selling, encumbering or otherwise
disposing or distributing any assets, in each
case, except in the ordinary course of business
consistent with past practice. For purposes
hereof, a commitment, obligation or asset will be
deemed to be material if, among other things, it
alone has a value in excess of $25,000 or all such
commitments and obligations have a value of more
than $50,000 in the aggregate;
(ii) entering into any employment, labour, consulting or
service contracts, except in the ordinary course of
business consistent with past-practice and as
disclosed in the Schedules to this Agreement;
(iii) terminating any employment agreements or giving
notice of termination except in the ordinary
course of business consistent with past practice;
(iv) initiating or settling any litigation to which the
Corporation may be or may become a party;
(v) entering into any transaction, understanding or
arrangement with any Person or Persons with whom
it is not acting at arm's length;
(vi) incurring any additional indebtedness, other than
in the ordinary course of business, which, in the
aggregate, exceeds $20,000; or
(vii) except for negotiations disclosed in SCHEDULE
4.1(p)(ii), amending, revising, renewing or
terminating any lease, licence, registered user or
any other material agreement to which the
Corporation may be a party or which may affect the
Business or the Purchased Shares or Intellectual
Property (whether domestic or foreign and whether
registered or unregistered relating to the
Business);
(c) shall give notice to the Purchaser of any potential default or
breaches of representations, warranties or covenants of the
Vendor, or any other material
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matter which may affect the Business or the Purchased Shares,
forthwith upon becoming aware of such matters;
(d) shall obtain the Bank Consent and the release of any
guarantees made by the Corporation and the Subsidiaries in
favour of the Chase Manhattan Bank or otherwise to the benefit
of the Vendor or the Guarantor or their affiliates;
(e) shall continue to maintain in full force and effect all
policies of insurance currently in effect in respect of the
Business and give all notices and present all claims under all
policies of insurance in a due and timely fashion;
(f) shall use its best efforts to ensure that there will not be:
(i) any material adverse change in the condition or
operations of the business, assets or financial
condition of the Corporation other than changes in
the ordinary and normal course of business, none of
which might have a Material Adverse Effect; or
(ii) any damage, destruction or loss, labour trouble or
any other event, development or condition of any
character (whether or not covered by insurance) which
might have a Material Adverse Effect;
(g) shall ensure that the Corporation will not, without the
prior written consent of the Purchaser:
(i) issue or sell any shares in its capital, or any
warrants, bonds, debentures or other securities of
the Corporation or issue, grant or deliver any right,
option or other commitment for the issuance of any
such other securities;
(ii) discharge or satisfy any lien or encumbrance, or pay
any obligation or liability (fixed or contingent)
other than liabilities disclosed in the Audited
Balance Sheet (excluding the Intercorporate Notes)
and liabilities incurred after the date thereof in
the ordinary and normal course of business consistent
with past practice;
(iii) suffer a loss, or waive any rights of substantial
value, or enter into any commitment or transaction,
in all cases not in the ordinary and normal course of
business consistent with past practice, where such
loss, rights, commitment or transaction has or would
have a Material Adverse Effect;
(iv) amend or change or take any action to amend or change
its constating documents or by-laws or any contract
(including leases);
(v) make any general wage or salary increase, pay any
bonuses or extraordinary payments or enter into any
employment agreements in
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respect of personnel which it employs, except in the
ordinary course of business;
(vi) except as disclosed in SCHEDULE 5.1, pay or become
liable for any management fee or any other fee or
charge whatsoever to the Vendor or any Person who is
an associate of the Vendor or pay or agree to pay any
bonus or like payment to any Person;
(vii) lend or agree to lend money to any Person, including
a shareholder, except in the ordinary course of
business; or
(viii) authorize or agree or otherwise become committed
to any of the foregoing;
(h) shall cause the Corporation to pay all payables and collect
all receivables in a timely manner in the ordinary course of
business consistent with past practice; and
(i) shall not have discussions with any Person with a view to
selling, directly or indirectly, the Purchased Shares.
5.2 APPROVALS AND CONSENTS
(a) The Corporation shall forthwith use its reasonable best
efforts to obtain as of the Time of Closing all Consents and
Regulatory Approvals, and shall comply with any conditions
thereof, which are required in connection with the completion
of the transactions contemplated by this Agreement, the
execution of this Agreement, and the closing or the
performance of any of the terms and conditions hereof,
including, without limitation, any consents required to
disclose the Confidential Contracts to the Purchaser.
(b) The Purchaser shall forthwith file the notice, take all steps
reasonably necessary and in the Purchaser's control and use
its best efforts to ensure that the purchase and sale of the
Purchased Shares and the completion of the transactions
contemplated by this Agreement are allowed under the
INVESTMENT CANADA ACT (Canada) and shall make all filings
required to be made by the Purchaser under the COMPETITION ACT
(Canada).
5.3 PAYMENT OF INTERCOMPANY INDEBTEDNESS
The Purchaser shall provide the Corporation with any amounts
necessary to ensure payment in full of the amount of $2,487,246, representing
all intercompany indebtedness, other than the Intercorporate Notes, between the
Vendor and its affiliates, on the one and, and the Corporation, on the other
hand, net of all intercompany receivables.
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5.4 CONFIDENTIALITY
No public disclosure of any kind shall be made or permitted in
respect of the subject matter of this Agreement by any party without
consultation with and the consent of the other parties (such consent not to be
unreasonably withheld) except for such disclosure as may be required by law or
the rules and regulations of any stock exchange of which such party is subject.
The parties acknowledge that there will be a public announcement or
announcements as soon as is reasonably practicable following the execution and
delivery hereof and in such form as is approved by the Vendor and the Purchaser.
Until the Closing, the Purchaser shall not (and shall use its
best efforts to ensure that its agents, employees, officers and directors do
not) without the prior written consent of the Vendor, disclose or permit to be
disclosed any confidential information relating to the Vendor except such
information as is or becomes (i) available to the Purchaser from third parties
not subject to an undertaking of confidentiality; (ii) generally available to
the public other than as a result of a breach by the Purchaser hereunder; or
(iii) required to be disclosed under applicable law; and except such information
as was in the possession of the Purchaser prior to obtaining such information
from the Vendor as to which the fact of prior possession the Purchaser shall
have the burden of proof. This section does not prohibit disclosure to the
professional advisors, bankers and employees of the Purchaser who need to know
such information, or to the extent necessary to authorize the purchase and sale
of the Purchased Assets pursuant to this Agreement, or as may be required by
law.
5.5 ACCESS AND INFORMATION
The Vendor will cause the Corporation to provide the Purchaser
and its agents, accountants, and lawyers full access at all reasonable times to
the Corporation's assets, facilities, books, records, other documents and
materials, and appropriate management/supervisory personnel, suppliers and
customers and provide all other cooperation and assistance necessary or
desirable in order for the Purchaser to conduct such investigations as it deems
necessary in order to effect the transactions contemplated hereby and monitor
the operation of the Business.
The Vendor shall provide the Purchaser with copies of all
Confidential Contracts at least 3 Business Days prior to the Closing Date.
5.6 PURCHASER'S OPTION IF DAMAGE, ETC.
If any of the assets of the Corporation are damaged or
destroyed or appropriated, expropriated or seized by any person, on or prior to
the Closing Date, the Vendor shall give the Purchaser notice thereof forthwith
after such action comes to its attention and the Purchaser shall have the
option:
(i) to reduce the Purchase Price by an amount equal to
the cost of repair or, if appropriated, expropriated,
seized, destroyed or damaged beyond repair, by an
amount equal to the replacement cost of such assets
and to complete
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the purchase, in which event, the Vendor shall be
entitled to all proceeds of insurance and all
proceeds and claims relating to the applicable event;
or
(ii) to reduce the Purchase Price by an amount equal to
the deductible amounts of the relevant insurance
policies and to complete the purchase, in which
event, all proceeds of insurance paid to the Vendor
and all right and claims of the Vendor to any such
amounts not paid by the Closing Date shall be
assigned to the Purchaser.
5.7 NATURE AND SURVIVAL OF COVENANTS
Except as may otherwise be provided in this Agreement, the
covenants of the Vendor and the Purchaser, as the case may be, set forth in this
Agreement shall not merge on Closing and shall survive the Closing and,
notwithstanding the Closing, shall continue in full force and effect for the
benefit of the Purchaser and the Vendor, as the case may be, indefinitely.
ARTICLE 6
CONDITIONS PRECEDENT TO THE PERFORMANCE
BY THE PARTIES OF THEIR OBLIGATIONS UNDER THIS AGREEMENT
6.1 THE PURCHASER'S CONDITIONS
The obligation of the Purchaser to complete the purchase of
the Purchased Shares hereunder shall be subject to the satisfaction of, or
compliance with, at or before the Time of Closing, each of the following
conditions (each of which is hereby acknowledged to be inserted for the
exclusive benefit of the Purchaser):
(a) REPRESENTATIONS AND WARRANTIES
All representations and warranties of the Vendor and the
Guarantor made in or pursuant to this Agreement shall be true
and correct with the same force and effect as if made at and
as of the Time of Closing, and the Vendor and the Guarantor
shall have delivered to the Purchaser at the Time of Closing a
certificate dated the Closing Date under corporate seal, duly
executed by a senior officer of each of the Vendor and the
Guarantor acceptable to the Purchaser, to such effect. The
receipt of such certificate and the closing of the transaction
of purchase and sale provided for in this Agreement shall not
be nor deemed to be a waiver of the representations and
warranties of the Vendor and the Guarantor contained in this
Agreement, which representations and warranties shall continue
in full force and effect for the benefit of the Purchaser as
provided in Article 4.
(b) PERFORMANCE OF OBLIGATIONS
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The Vendor shall have performed or complied with, in all
respects, all of its obligations, covenants and agreements in
this Agreement which are to be performed or complied with by
the Vendor at or prior to the Time of Closing, and the Vendor
shall have delivered to the Purchaser at the Time of Closing a
certificate dated the Closing Date, duly executed by a senior
officer of the Vendor acceptable to the Purchaser, to such
effect.
(c) RECEIPT OF CLOSING DOCUMENTATION
All documentation relating to the due authorization and
completion of the purchase and sale of the Purchased Shares
and all actions and proceedings taken on or prior to the
Closing Date in connection with the performance by the Vendor
of its obligations, covenants and agreements under this
Agreement shall be satisfactory to the Purchaser and its
counsel, acting reasonably, and the Purchaser shall have
received copies of all such documentation or other evidence as
it may reasonably request in order to establish the
consummation of the transactions contemplated hereby and the
taking of all corporate proceedings in connection therewith in
compliance with these conditions, in form and substance
satisfactory to the Purchaser and its counsel, acting
reasonably.
(d) CLOSING OPINIONS
The Purchaser shall have received opinions dated the Closing
Date from Nova Scotia, Quebec and U.S. Counsel for the
Corporation, Subsidiaries, Vendor and Guarantor, as
applicable, in such form and as to such matters as the
Purchaser or its counsel may reasonably request provided that,
insofar as the opinions expressed in such opinion are based on
matters of fact, such opinions may be based upon certificates
of the Corporation, Vendor or Guarantor, as applicable, public
officials and officers of the Corporation, Vendor or
Guarantor, as applicable, and, as to matters involving the
laws of jurisdictions in which such counsel is not qualified
to practice, on opinions of recognized local counsel in such
jurisdictions.
(e) APPROVALS AND CONSENTS
All Regulatory Approvals and all Consents and compliance with
any conditions thereof, required in connection with the
completion of any of the transactions contemplated by this
Agreement, the execution of this Agreement, the Closing or the
performance of any of the terms and conditions hereof
(including the delivery of copies of the Confidential
Contracts) shall have been obtained and complied with on or
before the Time of Closing except where a failure to obtain
such a consent would not have a Material Adverse Effect on the
Business.
(f) FINANCING
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The Purchaser shall have received the proceeds of the
financing from such Person who agrees to finance the Purchase
Price.
(g) LEASE MATTERS
Without limiting the generality of Section 6.1(e), the Vendor
shall have obtained from the landlords of all of the Locations
listed in SCHEDULE 4.1(p)(ii) an acknowledgement that:
(i) the leases or subleases governing occupancy of such
premises, are in good standing and in full force and
effect without amendment except for any amendment
as set out in SCHEDULE 4.1(p)(ii);
(ii) the closing of the transactions contemplated herein
will not result in the increase in the rent presently
being paid under any lease or sublease or any change
in terms of any lease or sublease as they exist on
the date hereof; and
(iii) the Corporation has paid or caused to be paid all
rents and other amounts presently owing under the
leases or subleases governing occupancy to which it
is a party.
(h) INTERCOMPANY INDEBTEDNESS
The Vendor and its affiliates, as applicable, shall have
executed and delivered to the Purchaser and the Corporation a
release in respect of the payment of all intercompany
indebtedness, other than the Intercorporate Notes, between the
Vendor and its affiliates, on the one hand, and the
Corporation, on the other hand, in form and substance
reasonably satisfactory to the Purchaser.
(i) TAXES
Documentation satisfactory to the Purchaser shall have been
put in place in respect of cross-border management fees
between and among the Guarantor, the Vendor and the
Corporation. Such documentation shall be in compliance with
the transfer pricing documentation requirements of the Tax
Act.
(j) GUARANTOR
The Purchaser shall have received satisfactory evidence that
the Guarantor has sufficient financial means to fulfill its
obligations hereunder.
(k) GUARANTEES
The Corporation and the Subsidiaries shall have been released
from any guarantees provided in connection with any
indebtedness of the Vendor,
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the Guarantor and their affiliates, or to the benefit of any
of such Persons, including, without limitation, from the
Chase Manhattan Bank.
(l) NO ACTION TO RESTRAIN
No action or proceeding shall be pending or threatened by any
Authority or any other Person (including a party hereto) to
restrain or prohibit the completion of the transactions
contemplated by this Agreement or to prevent or restrain the
Corporation, from carrying on the Business as presently
carried on.
(m) NO MATERIAL ADVERSE CHANGE
Except as has been specified in this Agreement, since the
Effective Date there shall not have been:
(i) any material adverse change in any of the assets,
business, financial condition, results of operation
or prospects of the Corporation nor shall any other
event, condition or state of facts have occurred or
arisen that the Purchaser reasonably believes has, or
threatens to have, a Material Adverse Effect of or
which might materially adversely effect, in the
Purchaser's opinion, the ability of the Corporation
to carry on its business after the Closing
substantially as such business is being conducted
upon the date hereof; or
(ii) any damage, destruction or loss, or other event,
development or condition of any character (whether or
not covered by insurance) which would have a Material
Adverse Effect.
(n) DIRECTORS AND OFFICERS
All directors and officers of the Corporation specified by the
Purchaser shall have resigned and shall have executed a form
of release satisfactory to the Purchaser and its counsel.
(o) RESTRICTIVE COVENANTS
The Vendor and the Guarantor shall have each executed and
delivered non-competition and non-solicitation agreements in
the form attached as SCHEDULE 2.2 hereto.
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(p) REPORTING
The Vendor shall have delivered to the Purchaser the Audited
Financial Statements and a detailed aged accounts receivable
report as at the Effective Date.
6.2 CONDITIONS OF THE VENDOR
The obligation of the Vendor to complete the sale of the
Purchased Shares hereunder shall be subject to the satisfaction of or compliance
with, at or before the Time of Closing, of each of the following conditions
(each of which is hereby acknowledged to be inserted for the exclusive benefit
of the Vendor):
(a) REPRESENTATIONS AND WARRANTIES
All representations and warranties that the Purchaser made in
or pursuant to this Agreement shall be true and correct with
the same force and effect as if made at and as of the Time of
Closing, and the Purchaser shall have delivered to the Vendor
at the Time of Closing its certificate dated the Closing Date
under corporate seal, duly executed by a senior officer of the
Purchaser acceptable to the Vendor, to such effect. The
receipt of such certificate and the Closing of the transaction
of purchase and sale provided for in this Agreement shall not
be nor be deemed to be a waiver of the representations and
warranties of the Purchaser contained in this Agreement, which
representations and warranties shall continue in full force
and effect for the benefit of the Vendor as provided in
Article 4.
(b) PERFORMANCE OF AGREEMENT
The Purchaser shall have performed or complied with, in all
respects all of its obligations, covenants and agreements in
this Agreement which are to be performed or complied with by
the Purchaser at or prior to the Time of Closing and shall
have delivered to the Vendor at the time of Closing the duly
executed General Security Agreement, the duly executed
Promissory Note and its certificate dated the Closing Date,
duly executed by a senior officer of the Purchaser acceptable
to the Vendor, to such effect.
(c) RECEIPT OF CLOSING DOCUMENTATION
All documentation relating to the due authorization and
completion of the purchase and sale of the Purchased Shares
and all actions and proceedings taken on or prior to the
Closing Date in connection with the performance by the
Purchaser of its obligations under this Agreement shall be
satisfactory to the Vendor and its counsel, acting reasonably,
and the Vendor shall have received copies of all such
documentation or other evidence as they may reasonably request
in order to establish the consummation of the transactions
contemplated hereby and the taking of all corporate
proceedings in connection therewith in compliance
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with these conditions, in form and substance satisfactory to
the Vendor and its counsel, acting reasonably.
(d) CONSENT AND APPROVALS
The Guarantor and the Vendor shall have received the Bank
Consent.
(e) INTERCOMPANY INDEBTEDNESS
The Purchaser shall have provided the Corporation with all
amounts necessary to ensure payment in full of the amount of
$2,487,246, representing all intercompany indebtedness, other
than the Intercorporate Notes, between the Vendor and its
affiliates, on the one hand, and the Corporation, on the other
hand, net of all intercompany receivables.
All intercompany indebtedness, other than the Intercorporate
Notes, between the Vendor or any of its affiliates, on the one
hand, and the Corporation, on the other hand, net of all
intercompany receivables, shall have been paid in full to
affiliates of the Vendor or the Vendor.
(f) PURCHASER'S CLOSING OPINIONS
The Vendor shall have received opinions dated the Closing Date
from counsel for the Purchaser in such form and as to such
matters as the Vendor or their counsel may reasonably request
provided that, insofar as the opinions expressed in such
opinion are based on matters of fact, such opinions may be
based upon certificates of the Purchaser, public officials and
officers of the Purchaser and, as to matters involving the
laws of jurisdictions in which such counsel is not qualified
to practice, on opinions of recognized local counsel in such
jurisdictions.
(g) NO ACTION TO RESTRAIN
No action or proceeding shall be pending or threatened by any
Authority or any other Person (including a party hereto) to
restrain or prohibit the completion of the transactions
contemplated by this Agreement.
6.3 WAIVER BY PURCHASER
If any of the conditions set forth in Section 6.1 have not
been fulfilled, performed or satisfied at or prior to the Closing, the Purchaser
may, by written notice to the Vendor terminate all of its obligations hereunder
and the Purchaser shall be released from all its obligations under this
Agreement. Any of such conditions may be waived in whole or in part by the
Purchaser by instrument in writing given to the Vendor without prejudice to any
of the Purchaser's rights of termination in the event of non-performance of any
other condition, obligation or covenant in whole or in part, and without
prejudice to its right to complete the
- 38 -
transaction of purchase and sale contemplated by this Agreement and claim
damages for breach of representation, warranty or covenant.
6.4 WAIVER BY VENDOR
If any of the conditions set forth in Section 6.2 have not
been fulfilled, performed or satisfied at or prior to the Closing, the Vendor
may, by written notice to the Purchaser, terminate all of its obligations
hereunder and the Vendor shall be released from all its obligations under this
Agreement. Any of such conditions may be waived in whole or in part by the
Vendor by instrument in writing given to the Purchaser, without prejudice to any
of the Vendor's rights of termination in the event of non-performance of any
other condition, obligation or covenant in whole or in part, and without
prejudice to its right to complete the transaction of purchase and sale
contemplated by this Agreement and claim damages for breach of representation,
warranty or covenant.
ARTICLE 7
COVENANTS OF THE PARTIES FOLLOWING CLOSING
7.1 CLOSING DATE STATEMENTS
Within 60 days after the Closing Date, the Vendor shall
prepare and deliver to the Purchaser, the draft Effective Date Statements,
audited by Xxxxxxx Xxxxx Xxxxxxxx Co. Following delivery of the draft Effective
Date Statements to the Purchaser, the Vendor shall provide the Purchaser with
access to its working papers relating to the draft Effective Date Statements
and, if requested, the Vendor will provide the Purchaser with reasonable access
to its books and records with respect to the Business. The Purchaser shall
complete its review within 20 days after the receipt by the Purchaser of the
draft Effective Date Statements. In the event that the Purchaser, as a result of
its review, objects in writing to the draft Effective Date Statements within
such 20 days, the Vendor and the Purchaser will agree upon draft Effective Date
Statements on which the adjustments hereafter provided for are to be based,
provided that if the Vendor and the Purchaser are unable to so agree within 30
days after delivery to the Purchaser of the draft Effective Date Statements,
then the Purchaser and the Vendor shall retain the independent chartered
accounting firm of Xxxxxx Xxxxxxxx to resolve the differences on specific points
of disagreement and to provide revised Effective Date Statements on the
resolution of the points of disagreement. The fee for preparing the Effective
Date Statements and of such chartered accounting firm shall be shared equally by
the Purchaser, on the one hand, and the Vendor, on the other hand, and the
decision of such chartered accounting firm shall be conclusive, final and
binding upon the Purchaser and the Vendor. The "Final Effective Date Statements"
shall be the statements meeting the definition of Effective Date Statements and
with respect to which one of the following has occurred: (a) the Purchaser has
not objected in writing to the draft Effective Date Statements within such 20
days (in which case the Effective Date Statements shall be deemed to have been
agreed upon as at the end of the 20th day), (b) the Vendor and the Purchaser
have agreed on such statements, or (c) such chartered accounting firm has
delivered revised draft Effective Date Statements reflecting the resolution of
specific points of disagreement between the parties.
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7.2 ADJUSTMENTS
(a) If the Working Capital deficit of the Corporation as shown on
the Final Effective Date Statements is greater than
$1,447,319, the Purchase Price shall be decreased by an amount
equal to the absolute value of the difference plus $50,000
(such amount being referred to as the "Negative Adjustment")
and the Vendor and/or the Guarantor, on a joint and several
basis, shall pay to the Purchaser an amount equal to the
Negative Adjustment by certified cheque or wire transfer on
the date the Final Effective Date Statements are completed.
(b) If the Working Capital deficit of the Corporation as shown on
the Final Effective Date Statements is less than $1,347,319,
the Purchase Price shall be increased by an amount equal to
the absolute value of the difference plus $50,000 (such amount
being referred to as the "Positive Adjustment"), and the
Purchaser shall pay to the Vendor an amount equal to the
Positive Adjustment by certified cheque or wire transfer on
the date the Final Effective Date Statements are completed.
(c) In the event a settlement amount or court ordered resolution
of the litigation claim involving the Corporation and Xxxxxx
Xxxxxxxxx (identified in SCHEDULE 4.1(w)) is less than the
amount of $181,395, the Purchaser shall, as soon as
practicable following such determination (but in any event
within ten days thereof), pay to the Vendor the amount of such
difference (less any out of pocket costs incurred by the
Purchaser or the Corporation relating to the defence and
settlement of such claim).
(d) In the event that the Corporation recovers income Taxes in
excess of the "income taxes recoverable" amount identified in
the Audited Financial Statements, the Purchaser shall, as soon
as practicable following the date of receipt of the recovered
amounts (but in any event within ten days thereof), pay to the
Vendor the amount of such difference.
(e) In the event the Corporation declares or makes any payment
of any dividend or other distribution in respect of any
shares in its capital or purchases or redeems any such
shares or effects any subdivision, consolidation or
reclassification of any such shares or repays in full or in
part any shareholder loans during the period beginning on
the Effective Date and terminating at the Time of Closing,
the Vendor shall, as soon as practicable following receipt
of notice by the Purchaser of the occurrence of such an
event and reasonable documentation in support of the claim
of the occurrence of such an event, pay to the Purchaser
the amount of any such dividend or other distribution,
purchase or redemption. Further, the Purchased Shares shall
be deemed to include any shares issued or reclassified in
connection with such reorganization.
- 40 -
7.3 TAX FILINGS
The Purchaser agrees to cause the Corporation to file, on a
timely basis, all tax returns required to be filed by the Corporation pursuant
to any Tax legislation in respect of the fiscal year during which the
transactions contemplated hereby occur, and agrees to cause the Corporation to
pay, on a timely basis, any applicable Taxes required to be paid by the
Corporation in respect of such fiscal year.
7.4 ONGOING SERVICES
For a period of 2 years following the Closing Date, to the
extent requested by the Purchaser from time to time, the Guarantor (or an
affiliate thereof) shall continue to provide services, on behalf of the
Corporation, for the Corporation's customers with U.S. operations on at least
the same basis and quality standards it currently provides on behalf of the
Corporation for a fee equal to fees charged to the Guarantor's arm's length
customers for the provision of similar services.
For a period of 2 years following the Closing Date, to the
extent requested by the Guarantor (or an affiliate thereof) from time to time,
the Purchaser shall cause the Corporation to continue to provide services, on
behalf of the Guarantor, for the Guarantor's or its affiliate's customers, or as
the case may be, with Canadian operations on at least the same basis and quality
standards the Corporation currently provides on behalf of the Guarantor or an
affiliate thereof for a fee equal to fees charged to the Corporation's arm's
length customers for the provision of similar services.
The current Disability Management services being provided by
the Corporation to the employees of the Guarantor and its Affiliates will
continue in the manner and at the rate and place as at the Effective Date for a
period of ninety days following the Closing Date, during which period the
Guarantor and the Purchaser will negotiate in good faith a renewed term at
commercially reasonable rates and, if not so negotiated, such Disability
Management services may be terminated by either party on a further thirty days'
notice.
The current After Hour/Emergency back up employee assistance
program services being provided by the Guarantor and its affiliates to the
Corporation will continue in a manner and at the rate in place as at the
Effective Date for a period of ninety days following the Closing Date, during
which period the Guarantor and the Purchaser will negotiate in good faith a
renewed term at commercially reasonable rates and, if not so negotiated, such
After Hour/Emergency back up employee assistance program services may be
terminated by either party on a further ninety days' notice.
The Purchaser shall cause the Corporation to sublicense and/or
otherwise make available to the Guarantor and its affiliates, on a non-exclusive
basis, the licensed XXXXXX XXXXX disability management model and all supporting
software and materials at the same cost as the Corporation pays to Xxxxxx Xxxxx
under its license. The Guarantor and its affiliates will be prohibited from
using such products in Canada for a period of three years following the Closing
- 41 -
Date. The Purchaser agrees to cause the Corporation to provide support and
training to the Guarantor and its affiliates at market prices for such services,
to be determined by the parties in good faith, acting reasonably. The Purchaser
shall also cause the Corporation to serve as liason and relationship manager
between the Guarantor and its affiliates on the one hand and Xxxxxx Xxxxx on the
other, provided that, under no circumstances shall the Corporation be or be
deemed to be acting as agent for the Guarantor. In the event it is requested to
do so by the Guarantor or its affiliates, the Corporation will use its
reasonable commercial efforts to assist the Guarantor and its affiliates in
negotiating and entering into a direct licensing agreement with Xxxxxx Xxxxx for
use outside of Canada.
7.5 CHANGE OF NAME
Within 3 months following the Closing Date, the Purchaser
shall cause the Purchaser to file an amendment to the Corporation's articles of
incorporation and take all other actions necessary to change the Corporation's
name (for any and all uses, whether internal or external, wherever used and for
any and all purposes whatsoever) to a name that is not similar to, nor includes
any words or expressions that may be deemed to be similar to or cause confusion
with, "Green Spring" and the Purchaser shall deliver to the Vendor a copy of the
amendment to such articles of incorporation effecting such name change.
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNIFICATION BY VENDOR AND GUARANTOR
The Vendor and the Guarantor jointly and severally covenant
and agree with the Purchaser and the Corporation to indemnify and save harmless
the Purchaser and the Corporation, from and against any claim, demand, action,
cause of action, damage, loss (including lost profits), cost, liability or
expense (including professional fees and disbursements) (collectively, "CLAIMS")
which may be made or brought against the Purchaser, the Corporation or any one
or more of them, or which they or any one or more of them may suffer or incur in
respect of, as a result of, or arising out of:
(a) any nonfulfillment of any covenant or agreement on the part of
the Vendor, contained in this Agreement or any document or
certificate given pursuant to this Agreement;
(b) any inaccuracy in or breach of any representation or warranty
of the Vendor or Guarantor, or any one or more of them,
contained in this Agreement or any document or certificate
given pursuant to this Agreement;
(c) any debts and liabilities of the Corporation for Taxes
existing at the Effective Date, or any reassessment for
Taxes for any period ending on or before the Effective Date
(including any potential Tax liabilities relating to
intercorporate management fees or the failure by the
Corporation to withhold and remit any
- 42 -
amounts in respect of Taxes owing in connection with the issue
by the Corporation in July, 2000 of a note payable to the
Vendor or relating to the failure by the Corporation to
withhold or remit any amounts in respect of Taxes, including
Canada Pension Plan contributions and unemployment insurance
premiums and any other deductions required to be withheld by
the Corporation, (collectively, "KNOWN CLAIMS")), for which no
adequate reserve has been provided for and disclosed in the
Audited Balance Sheet; and
(d) the outstanding litigation commenced by Xxxxxx Xxxxxxxxx
against the Corporation referred to in SCHEDULE 4.1(t) in an
amount greater $181,395.
8.2 INDEMNIFICATION BY THE PURCHASER
The Purchaser covenants and agrees with the Vendor and the
Guarantor to indemnify and save harmless the Vendor and the Guarantor, from and
against any claim, demand, action, cause of action, damage, loss (including loss
of profits), costs, liability or expense (including professional fees and
disbursements) which may be made or brought against the Vendor, or which it may
suffer or incur, directly or indirectly, in respect of, as a result of, or
arising out of
(a) any nonfulfillment of any covenant or agreement on the part
of the Purchaser under this Agreement or any document or
certificate given pursuant to this Agreement;
(b) any inaccuracy in or breach of any of the Purchaser's
representations or warranties contained in this Agreement
or any document or certificate given pursuant to this
Agreement;
(c) any liabilities incurred by the Vendor after Closing solely by
reason of Section 135 of the Nova Scotia Companies Act as a
result of the failure by the Corporation to meet its
obligations which arise following the Time of Closing out of,
or related to, acts occurring or taken, or conditions
existing, following the Time of Closing, provided that the
Purchaser shall be under no obligation to indemnify the Vendor
under this subsection (c) where the failure to meet its
obligations arises as a result of matters which are
indemnifiable under Section 8.1 hereof;
(d) any liability or obligation with respect to the Business
arising out of or related to acts occurring or taken or
conditions existing following the Time of Closing.
8.3 PROCEDURE FOR INDEMNIFICATION
(a) CLAIMS OTHER THAN THIRD PARTY CLAIMS
Following receipt from the Vendor or the Purchaser, as the
case may be (the "INDEMNIFIED Party"), of a written notice of a claim for
indemnification which has not arisen in
- 43 -
respect of a Third Party Claim (as defined in Section 8.3(b) below), the
party who is in receipt of such notice (the "INDEMNIFYING PARTY") shall have
30 days to make such investigation of the claim as the Indemnifying Party
considers necessary or desirable. For the purpose of such investigation, the
Indemnified Party shall make available to the Indemnifying Party the
information relied upon by the Indemnified Party to substantiate the claim.
If the Indemnified Party and the Indemnifying Party agree at or prior to the
expiration of such 30 day period (or any mutually agreed upon extension
thereof) to the validity and amount of the claim, the Indemnifying Party
shall immediately pay to the Indemnified Party the full agreed upon amount of
the claim. If the Indemnified Party and the Indemnifying Party do not agree
within such period (or any mutually agreed upon extension thereof), such
dispute shall be resolved by arbitration as set out in Section 9.13.
(b) THIRD PARTY CLAIMS
The Indemnified Party shall notify the Indemnifying Party in
writing as soon as is reasonably practicable after being informed in writing
that facts exist which may result in a claim originating from a Person other
than the Indemnified Party (a "THIRD PARTY CLAIM") and in respect of which a
right of indemnification given pursuant to Section 8.1 or 8.2 may apply. The
Indemnifying Party shall have the right to elect, by written notice delivered to
the Indemnified Party within 10 days of receipt by the Indemnifying Party of the
notice from the Indemnified Party in respect of the Third Party Claim, at the
sole expense of the Indemnifying Party, to participate in or assume control of
the negotiation, settlement or defence of the Third Party Claim, provided that:
(i) such will be done at all times in a diligent and
BONA FIDE matter;
(ii) the Indemnifying Party acknowledges in writing its
obligation to indemnify the Indemnified Party in
accordance with the terms contained in this Agreement
in respect of that Third Party Claim; and
(iii) the Indemnifying Party shall pay all reasonable
out-of-pocket expenses incurred by the Indemnified
Party as a result of such participation or
assumption.
If the Indemnifying Party elects to assume such control, the Indemnified Party
shall cooperate with the Indemnifying Party and its counsel and shall have the
right to participate in the negotiation, settlement or defence of such Third
Party Claim at its own expense. If the Indemnifying Party does not so elect or,
having elected to assume such control, thereafter fails to proceed with the
settlement or defence of any such Third Party Claim, the Indemnified Party shall
be entitled to assume such control. In such case, the Indemnifying Party shall
cooperate where necessary with the Indemnified Party and its counsel in
connection with such Third Party Claim and the Indemnifying Party shall be bound
by the results obtained by the Indemnified Party with respect to such Third
Party Claim.
- 44 -
8.4 ADDITIONAL RULES AND PROCEDURES
The obligation of the parties to indemnify each other pursuant
to this Article 8 shall also be subject to the following:
(a) an Indemnified Party shall only be entitled to make a claim
for indemnification pursuant to Section 8.1 or 8.2, as the
case be, if written notice containing reasonable particulars
of such claim is delivered to the Indemnifying Party within
the time periods provided for in Section 4.4 or 4.5, as the
case may be;
(b) if any Third Party Claim is of a nature such that the
Indemnified Party is required by applicable law to make a
payment to any Person (a "THIRD PARTY") with respect to
such Third Party Claim before the completion of settlement
negotiations or related legal proceedings, the Indemnified
Party may make such payment and the Indemnifying Party
shall, forthwith after demand by the Indemnified Party,
reimburse the Indemnified Party for any such payment. If
the amount of any liability under the Third Party Claim in
respect of which such a payment was made, as finally
determined, is less than the amount which was paid by the
Indemnifying Party to the Indemnified Party, the
Indemnified Party shall, forthwith after receipt of the
difference from the Third Party, pay such difference to the
Indemnifying Party;
(c) except in the circumstances contemplated by Section 8.4(b)
above, and whether or not the Indemnifying Party assumes
control of the negotiation, settlement or defence of any
Third Party Claim, the Indemnified Party shall not settle
or compromise any Third Party Claim except with the prior
written consent of the Indemnifying Party (which consent
shall not be unreasonably withheld). A failure by the
Indemnifying Party to respond in writing to a written
request by the Indemnified Party for consent for a period
of ten days or more, shall be deemed a consent by the
Indemnifying Party to such request;
(d) the Indemnifying Party and the Indemnified Party shall provide
each other on an ongoing basis with all information which may
be relevant to the other's liability hereunder and shall
supply copies of all relevant documentation promptly as they
become available;
(e) notwithstanding Section 8.4(c), the Indemnifying Party shall
not settle any Third Party Claim or conduct any related legal
or administrative proceeding in a manner which would, in the
opinion of the Indemnified Party, acting reasonably, have a
material adverse impact on the Indemnified Party;
(f) notwithstanding anything else contained in this Article 8, the
indemnity obligations of an Indemnifying Party pursuant to
this Article 8 shall not apply until the aggregate of all
indemnifiable Claims pursuant to Section 8.1 or Section 8.2,
as applicable, exceed $50,000; provided that thereafter the
Indemnifying
- 45 -
Party shall be liable pursuant to Section 8.1 or Section 8.2,
as applicable, for the full amount of such indemnifiable
Claims in excess of the initial $50,000.
(g) for greater certainty, the $50,000 amount with respect to
Claims against the Indemnifying Party is a deductible and not
a threshold. The $50,000 deductible described in the preceding
paragraph shall not apply to nor in any way limit the ability
of the Purchaser to receive 100% of all amounts to which it is
entitled in connection with any claim for indemnification made
in respect of the matters contemplated by subsection 8.1(d) or
Known Claims.
(h) notwithstanding anything else contained in this Article 8, in
no case shall the Indemnifying Party be required to indemnify
the Indemnified Party for an amount exceeding $7,400,000 in
the aggregate, other than with respect to Claims under Section
8.1 relating to Taxes, in which case this Section 8.4(h) shall
not apply where the Purchaser is the Indemnified Party.
8.5 RIGHTS CUMULATIVE
The rights of indemnification contained in this Article 8 are
cumulative and are in addition to every other right or remedy of the parties
contained in this Agreement or otherwise, such as injunctive relief and specific
performance.
8.6 PURCHASE PRICE ADJUSTMENT
Any indemnification payment hereunder shall be treated by the
parties hereto for all Tax reporting purposes as an adjustment first to the
Share Purchase Price and then, in respect of cumulative amounts exceeding the
Share Purchase Price, to the Debt Purchase Price.
8.7 SET-OFF
The Purchaser shall be entitled to set-off any indemnifiable
payments required to be made by the Corporation, the Vendor or the Guarantor to
the Purchaser against any payments required to be made by the Purchaser to such
parties hereunder (including, without imitation, under the Promissory Note). In
the event that any such set-off is made, the parties to the set-off shall be
considered, for all purposes, to have actually paid the amounts that were
required to be made in full and complete satisfaction of their respective
obligations.
8.8 GST
If the Vendor and the Purchaser acting reasonably determine
that any payment (the "PAYMENT") made pursuant to this Article 8 is subject to
GST or are deemed by the ETA to be inclusive of GST, the Indemnifying Party
agrees to pay to the Indemnified Party in addition to the Payment an amount
equal to the Payment multiplied by the applicable rate of GST.
- 46 -
ARTICLE 9
GENERAL
9.1 PUBLIC NOTICE
No public disclosure of any kind shall be made or permitted in
respect of the subject matter of this Agreement by any party without
consultation with and the consent of the other parties (such consent not to be
unreasonably withheld).
9.2 EXPENSES
Except as otherwise provided in this Agreement, each party
shall be responsible for its own fees, expenses, and other costs incurred in
connection with the transactions contemplated by this Agreement.
9.3 FURTHER ASSURANCES
The parties shall do all such things and provide all such
reasonable assurances as may be required to consummate the transactions
contemplated this Agreement, and each party shall provide such further documents
or instruments required by any other party as may be reasonably necessary or
desirable to effect the purpose of this Agreement and carry out its provisions,
whether before or after the Closing.
9.4 TIME OF THE ESSENCE
Time is of the essence to every provision of this Agreement.
Extension, waiver or variation of any provision of this Agreement shall not be
deemed to affect this provision and there shall be no implied waiver of this
provision.
9.5 BENEFIT OF THE AGREEMENT
This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns.
9.6 ENTIRE AGREEMENT
With respect to the subject matter of this Agreement, this
Agreement supersedes all prior understandings and communications between the
parties or any of them, oral or written, and constitutes the entire agreement
between the parties. Each party acknowledges that it shall have no right to rely
upon any amendment, promise, modification, statement or representation made or
occurring subsequent to the execution of this Agreement unless the same is in
writing and executed by the Purchaser and the Vendor.
- 47 -
9.7 WAIVER
The failure of any party to enforce at any time any of the
provisions of this Agreement or any of its rights in respect thereto or to
insist upon strict adherence to any term of this Agreement shall not be
considered to be a waiver of such provision, right or term or in any way to
affect the validity of this Agreement or deprive the applicable party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. The exercise by any party of any of its rights provided by
this Agreement shall not preclude or prejudice such party from exercising any
other right it may have under this Agreement, notwithstanding any previous
action or proceeding taken by it hereunder. Any waiver by any party of the
performance of any of the provisions of this Agreement shall be effective only
if in writing and signed by a duly authorized representative of such party.
9.8 NOTICES
All payments and communications which may be or are required
to be given by any party to any other party, shall be in writing and (a)
delivered personally, (b) sent by prepaid courier service or mail, or (c) sent
by prepaid telecopier or other similar means of electronic communication to the
parties at their following respective addresses:
For the Purchaser:
Family Guidance Group Inc.
00 Xxxxxxxx Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxx X. Xxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxxx & Xxxxxxxx LLP
Barristers & Solicitors
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000
- 48 -
For the Vendor and the Guarantor:
Green Spring Health Services Inc.
0000 Xxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxx, XX
X.X.X. 00000
Attention: Xxxx Xxxxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxxxx Xxxxxxxx Xxxxxx X'Xxxxx LLP
Suite 0000
Xxxxx Xxxx Xxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx X. XxxXxxxxxx
Telecopier: (000) 000-0000
Any such notice so given shall be deemed conclusively to have been given and
received when so personally delivered or delivered, by courier or on the day on
which termination is confirmed if sent by telecopier or other electronic
communication or on the fifth day following the sending thereof by mail. Any
party may from time to time change its address hereinbefore set forth by notice
to the other parties in accordance with this section.
9.9 ASSIGNMENT
Neither this Agreement nor any rights or obligations hereunder
shall be assignable by any party without the prior written consent of each of
the other parties. Any assignment without such consent shall be null and void.
9.10 SEVERABILITY
If any provision of this Agreement is invalid or
unenforceable, such provision shall be severed and the remainder of this
Agreement shall be unaffected thereby but shall continue to be valid and
enforceable to the fullest extent permitted by law.
9.11 COUNTERPARTS
This Agreement may be executed by the parties in separate
counterparts (by original or facsimile signature) each of which when so executed
and delivered shall be an original, but all of which, when taken together, shall
together constitute one and the same
- 49 -
instrument. This Agreement shall not be binding upon any party until it has been
executed by each of the parties and delivered to all other parties.
9.12 GOVERNING LAW
This Agreement and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with the laws of the
Province of Ontario (but without giving effect to the conflict of laws rules
thereof) and the laws of Canada applicable therein. The parties agree that the
Courts of the Province of Ontario shall have non-exclusive jurisdiction to
entertain any action or other legal proceedings based on any provisions of this
Agreement. Each party does hereby irrevocably attorn to the non-exclusive
jurisdiction of the Courts of the Province of Ontario.
9.13 ARBITRATION
Any controversy or claim arising out or relating to this
Agreement shall be settled by arbitration in accordance with the procedures set
out in SCHEDULE 9.13.
9.14 SERVICE
If any party is or becomes a party on which service or legal
process with respect to an action commenced in the Province of Ontario must be
served out of the jurisdiction of the Province of Ontario (an "EX-JURIS PARTY"),
the Ex-Juris Party shall in writing to the other parties designate, appoint and
empower a party or agent within the Province of Ontario to receive for and on
behalf of the Ex-Juris Party service of process in the Province of Ontario in
any legal action or proceeding with respect to this Agreement, which agent shall
undertake to enter an unconditional appearance within 30 days after the date of
such service. A copy of such process served on the agent will be promptly
forwarded by mail by the party initiating such proceeding to the Ex-juris Party
at the address referred to in the next sentence. Failure of the Ex-juris Party
to receive such copy shall not affect in any way the service of such process on
the Ex-juris Party by service upon its agent for service as designated above.
Each party agrees that if it becomes a Ex-juris Party and it fails to maintain
such a duly appointed agent for service of process, it irrevocably consents to
the service of process out of any Court of the Province of Ontario by mailing
all copies of such process by registered or certified mail, postage pre-paid to
the last address designated for delivery of notice to such Ex-juris Party under
the terms of Section 9.8, such service to be effective 30 days after the date of
such mailing. The mailing to such Ex-Juris Party at such address shall be deemed
personal service and acceptance of service by such Ex-juris Party for any action
or proceeding with respect to any matter relating to this Agreement. Service in
accordance with the foregoing provisions shall not preclude any other manner of
service permitted by the laws of the Province of Ontario.
[The remainder of this page 48 has been intentionally left blank.]
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IN WITNESS WHEREOF the parties have hereunto duly executed
this Agreement on the date first above written.
FAMILY GUIDANCE GROUP INC.
Per: c/s
-----------------------------------
Authorized Signing Officer
GREEN SPRING CANADIAN HOLDINGS INC.
Per: c/s
-----------------------------------
Authorized Signing Officer
GREEN SPRING HEALTH SERVICES OF CANADA CO.
Per: c/s
-----------------------------------
Authorized Signing Officer
GREEN SPRING HEALTH SERVICES INC.
Per: c/s
-----------------------------------
Authorized Signing Officer
SCHEDULE 4.1(p)
MATERIAL LEASES
Suites 201-203,300-301,303,305-306
0000 Xxxxxxxxxx Xx.
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Suite 000
000 Xxxxxx Xxxxxxxx
Xxxxxxxx, XX
X0X 0X0
Suite 000
000-00xx Xxx.
XX Xxxxxxx, Xxxx.
X0X 0X0
Xxxxx 000
0000 Xxxx Xx.
Xxxxxxxxx, XX
X0X 0X0
0000 Xxxxxx Xxxxxx Xx.
Xxxxxxx, XX
X0X 0X0
Xxxxx 000
000 Xxxxxxxx Xx.
Xxxxxx, Xxxxxxx
X0X 0X0
SCHEDULE 9.13
ARBITRATION
Any dispute, controversy or claim arising out of this Agreement, including any
question regarding its existence, validity or termination, shall be submitted by
any party to be finally resolved by arbitration under the UNCITRAL Model Law
(the "Law"). The Law is incorporated by reference into this clause.
The place of arbitration shall be Xxxxxxx, Xxxxxxx, Xxxxxx. The language of the
arbitration shall be English. The arbitration shall be governed by the
substantive and procedural law of Ontario.
The arbitration shall be conducted by a single arbitrator appointed by agreement
between the parties, or in the absence of agreement, in accordance with the Law.
The arbitration must be completed, and a decision rendered, within ninety (90)
days of the submission of the dispute to arbitration.
The decision arrived at pursuant to the arbitration shall be final and binding.
No appeal shall lie from the arbitration. Any award granted as a result of
arbitration proceedings under this section shall be recognized internationally,
and may be entered in any court having jurisdiction to enforce such awards.
