Exhibit (D)(ii)
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT is made as at the Effective Time (as
defined below) on the [ ] day of April, 2004,
BETWEEN:
HEMOSOL INC., (to be renamed LPBP Inc.) a corporation existing under
the laws of the Province of Ontario,
(hereinafter referred to as the "Vendor"),
- and -
HEMOSOL LP,
a limited partnership existing under the laws of the Province of
Ontario, by its general partner, HEMOSOL CORP., a corporation
existing under the laws of the Province of Ontario,
(hereinafter referred to as the "Purchaser").
WHEREAS the Vendor is restructuring its business pursuant to a plan
of arrangement (the "Arrangement") under Section 182 of the Business
Corporations Act (Ontario) (the "OBCA") effected through the filing of articles
of arrangement dated the date hereof with the Director under the OBCA;
AND WHEREAS the Vendor carries on the Purchased Business (as defined
below) and is the owner of the Purchased Assets (as defined below);
AND WHEREAS, as one of the steps in the Arrangement, the Vendor will
sell and the Purchaser will purchase the Purchased Assets in consideration for
the issuance to the Vendor by the Purchaser of the Consideration Units (as
defined below) and the assumption by the Purchaser of the Assumed Liabilities
(as defined below), all in accordance with the provisions hereof;
THIS AGREEMENT WITNESSES THAT in consideration of the respective
covenants, representations and warranties of the Parties hereinafter contained
and for other good and valuable consideration (the receipt and sufficiency of
which are hereby acknowledged by each Party), the Parties covenant and agree as
follows:
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ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
Where used in this Agreement, unless the context requires otherwise,
the following terms shall have the respective meanings set out below and
grammatical variations of such terms shall have corresponding meanings:
"ARRANGEMENT AGREEMENT" means the arrangement agreement dated as of
February 11, 2004 between MDS Inc. and the Vendor;
"ASSUMED CONTRACTS" means all contracts, agreements and other legally
binding instruments (written or otherwise) that the Vendor is party to
immediately prior to the Effective Time, including the contracts,
agreements and other legally binding instruments which are listed and/or
described on Schedule A, in each case together with all rights, benefits,
privileges and obligations of the Vendor thereunder, other than the
Excluded Contracts;
"ASSUMED LIABILITIES" has the meaning set out in subsection 3.3(a);
"CONSIDERATION UNITS" means 9,999 partnership units of the Purchaser;
"CORPORATION INDEMNITY AGREEMENT" means an indemnity agreement
substantially in the form attached as Exhibit 12 to the Arrangement
Agreement;
"EFFECTIVE TIME" means that time after 12:01 a.m. (Toronto time) on the
date hereof at which the transfer of the Purchased Assets contemplated by
this Agreement is deemed to occur in accordance with the Arrangement;
"EMPLOYEES" means all employees employed by the Vendor immediately prior
to the Effective Time, excluding employees transferred to Hemosol Corp. on
the date hereof;
"EXCLUDED CONTRACTS" means, collectively, the Blood Products LP Agreement,
the Corporation Indemnity Agreement, the Escrow Agreement, the MDS
Indemnity Agreement and the Partnership Interest Transfer Agreement;
"EXCISE TAX ACT" means part IX of the Excise Tax Act (Canada);
"PARTIES" means the Vendor and the Purchaser and "Party" means either one
of the Vendor or the Purchaser;
"PURCHASED ASSETS" has the meaning set out in Section 2.1;
"PURCHASED BUSINESS" means the business and operations of the Vendor
carried on by the Vendor and its subsidiaries immediately prior to the
Effective Time, including the development and manufacturing of
blood-related proteins;
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"TAX ACT" means the Income Tax Act (Canada); and
"TAX LOSSES" means tax credits and amounts deductible by the Vendor in
computing its income for the purposes of the Tax Act and the Corporations
Tax Act (Ontario).
Capitalized terms used and not otherwise defined herein shall have the
meaning given to such terms in the Arrangement Agreement.
1.2 RULES OF CONSTRUCTION
Unless the context otherwise requires, in this Agreement:
(a) "Agreement", "this Agreement", "the Agreement", "hereto", "hereof",
"herein", "hereby", "hereunder" and similar expressions mean or
refer to this Agreement as amended, restated, modified, replaced or
supplemented from time to time, including any amendment to this
Agreement, and any agreement or instrument supplemental hereto and
the expressions "Article", "Section" and "Schedule" followed by a
number or letter mean and refer to the specified Article, Section or
Schedule herein;
(b) the division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation thereof;
(c) "include", "includes" and "including" shall mean "including without
limitation" and "including without limiting the generality of the
foregoing";
(d) words importing the singular number only shall include the plural
and vice versa and words importing the use of any gender shall
include all genders;
(e) reference to any agreement, indenture or other instrument in writing
means such agreement, indenture or other instrument in writing, as
amended, restated, modified, replaced or supplemented form time to
time;
(f) reference to any statute shall be deemed to be a reference to such
statute as amended, re-enacted or replaced from time to time; and
(g) time is of the essence hereof.
1.3 SCHEDULES
The following schedules are annexed to and are incorporated by reference
in this Agreement:
Schedule A - Assumed Contracts
Schedule B - Allocation of Purchase Price
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1.4 ENTIRE AGREEMENT; AMENDMENT
This Agreement, together with the Arrangement Agreement and all
agreements, documents and instruments contemplated thereby, constitutes the
entire agreement between the Parties with respect to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether written or oral. There are no conditions, covenants,
agreements, representations, warranties or other provisions, express or implied,
collateral, statutory or otherwise, relating to the subject matter hereof except
as herein and therein provided. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
Parties in the same manner as the execution of this Agreement. In the event of
any conflict between the terms of this Agreement and the Arrangement, the terms
of the Arrangement shall prevail.
1.5 GOVERNING LAW
This Agreement shall be construed, interpreted and enforced in
accordance with, and the respective rights and obligations of the Parties shall
be governed by, the laws of the Province of Ontario and the federal laws of
Canada applicable in that province, and each Party irrevocably and
unconditionally submits to the non-exclusive jurisdiction of the courts of the
Province of Ontario and all courts competent to hear appeals therefrom.
1.6 SUCCESSORS AND ASSIGNS
This Agreement shall enure to the benefit of and shall be binding on
and enforceable by the Parties and their respective successors and permitted
assigns. Neither Party may assign any of its rights or obligations hereunder
without the prior written consent of the other Party.
ARTICLE 2
PURCHASE AND SALE OF PURCHASED ASSETS
2.1 TRANSFER OF PURCHASED ASSETS
Subject to the provisions of this Agreement, as of the Effective
Time, the Vendor hereby sells, assigns and transfers to the Purchaser and the
Purchaser hereby purchases from the Vendor all right, title and interest of the
Vendor in and to all the property and assets, whether real or personal, tangible
or intangible, of every kind and description and wheresoever situate (but for
greater certainty specifically excluding the Tax Losses), in which the Vendor
has any right, title or interest immediately prior to the Effective Time
(collectively, the "Purchased Assets"), including:
(a) real property, together with the buildings, structures, improvements
and appurtenances situated thereon;
(b) machinery, equipment, leasehold improvements, office equipment,
computer hardware and software, furniture, furnishings and other
tangible personal property;
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(c) trucks, cars and other vehicles;
(d) inventories of the Vendor, including raw materials and
work-in-process;
(e) stationery, forms and office supplies;
(f) accounts receivable, trade accounts, notes receivable, book debts
and other debts due or accruing due to the Vendor and the benefit of
security for such accounts, notes and debts;
(g) the benefit of prepaid expenses;
(h) cash on hand or in bank accounts (including cheques held for
deposit);
(i) the benefit of contracts, agreements, leases, commitments and
covenants (including non-competition and other restrictive
covenants), whether written or oral, and licences, permits and
authorizations to which the Vendor is entitled;
(j) all industrial and intellectual property and all rights therein in
any and all jurisdictions, including: (a) trademarks, service marks,
trade names, brand names, domain names and other identifying names
or marks; (b) patents and patent rights; (c) registered and
unregistered industrial designs; (d) trade secrets and other
confidential or non-public business information, including ideas,
formulae, compositions, inventor's notes, discoveries and
improvements, know-how, business processes and techniques,
manufacturing and production processes and techniques, and research
and development information (whether or not patentable), inventions
and invention disclosures, unpatented blueprints, drawings,
specifications, designs, plans, proposals and technical data,
business and marketing plans and supplier lists and information; (e)
writings and other copyrightable works of authorship, including
computer programs, data bases, business processes and documentation
therefor, and all copyrights to any of the foregoing; (f) moral
rights and waivers thereof; (g) internet protocol addresses and all
other network addresses; (h) any similar intellectual property or
proprietary rights; (i) registrations of, and applications to
register, any of the foregoing with any government authority and any
renewals or extensions thereof; and (j) any claims or causes of
action arising out of or related to any infringement or
misappropriation of any of the foregoing;
(k) files, documents and records, including clinical trial records,
manufacturing data, production records, employee manuals, supply
records and correspondence files, but excluding all minute books and
corporate records and the corporate seal of the Vendor; and
(l) goodwill, including the goodwill associated with any trademarks,
service marks, trade names, brand names, domain names and other
identifying names or marks, together with any rights to use the name
"Hemosol" as part of a name or style.
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2.2 ASSIGNMENT AND ASSUMPTION OF ASSUMED CONTRACTS
Subject to the terms and conditions of this Agreement, as of the
Effective Time, the Vendor hereby assigns to the Purchaser and the Purchaser
hereby assumes the Vendor's rights and obligations under the Assumed Contracts,
including all obligations arising on or in respect of the period prior to the
Effective Time and hereby agrees to pay, satisfy, discharge, perform and fulfil
all of the Vendor's obligations thereunder and to indemnify and save harmless
the Vendor against all liabilities, commitments and obligations thereunder,
including all obligations arising on or in respect of the period prior to the
Effective Time.
2.3 RIGHTS HELD IN TRUST
Anything contained in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an assignment of any
contract, licence, lease, commitment or any claim or right or any benefit
arising thereunder or resulting therefrom, if an attempted assignment thereof,
without the consent of a third party thereto, would constitute a breach thereof
or in any material adverse way affect the rights of the Vendor. The Vendor, at
the cost of the Purchaser and upon the written request of the Purchaser, shall
co-operate with the Purchaser in obtaining the consent of the other party or
parties to any of the foregoing to the assignment thereof to the Purchaser in
all cases in which such consent is required for assignment or transfer and has
not been obtained prior to the date hereof. The Vendor agrees, at the cost of
the Purchaser, to hold the benefit thereof in trust for the Purchaser and, at
the cost of the Purchaser and upon the written request of the Purchaser, to
co-operate with the Purchaser in any arrangements designed to provide to the
Purchaser the benefits thereunder, including enforcement for the benefit of the
Purchaser of any and all rights of the Vendor against the other party or parties
thereto arising out of the cancellation by such other party or parties or
otherwise.
2.4 ASSETS HELD IN TRUST
With respect to any asset or interest of the Vendor intended to be
sold, conveyed, assigned and transferred to the Purchaser on the date hereof and
the title to which may not have passed to the Purchaser by virtue hereof or any
agreement or instrument executed pursuant hereto, the Vendor shall hold the same
in trust for the Purchaser to sell, convey, assign and transfer the same, in
each case at the cost of the Purchaser and as the Purchaser may from time to
time direct and the Vendor shall account to the Purchaser for all receipts,
monies, profits, benefits and advantages derived by or accruing to the Vendor
from any such asset or interest after the date hereof.
ARTICLE 3
PURCHASE PRICE AND ALLOCATION THEREOF
3.1 AGGREGATE PURCHASE PRICE
The aggregate purchase price payable by the Purchaser to the Vendor
for the Purchased Assets shall be the sum of $59,994,000 and the amount of the
Assumed Liabilities, such sum being the fair market value thereof on the date
hereof (the "Purchase Price").
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3.2 ALLOCATION OF PURCHASE PRICE
The aggregate consideration for the Purchased Assets, as set out in
Section 3.3, shall be allocated among, and shall be applied in payment and
satisfaction of the Purchase Price for, the categories of Purchased Assets as
set out in Schedule B.
3.3 PAYMENT OF PURCHASE PRICE
In full payment and satisfaction of the Purchase Price, the
Purchaser, as of the Effective Time, hereby agrees to:
(a) assume, pay, satisfy, discharge, perform and fulfill all liabilities
(contingent or otherwise) and all other obligations of the Vendor
existing immediately prior to the Effective Time (collectively, the
"Assumed Liabilities") and to execute and deliver the Corporation
Indemnity Agreement and to perform its obligations thereunder; and
(b) issue to the Vendor, in accordance with the Arrangement, the
Consideration Units.
3.4 TRANSFER TAXES
The Purchaser shall be liable for and shall pay any and all federal,
provincial and other sales, goods and services, value added, land transfer and
other transfer taxes which are properly payable by the Purchaser in connection
with the transfer of the Purchased Assets by the Vendor to the Purchaser,
together with all duties, registration fees or other charges properly payable by
the Purchaser upon or in connection with the conveyance or transfer of the
Purchased Assets.
3.5 OFFERS OF EMPLOYMENT
The Purchaser shall offer to employ all Employees effective as of
the Effective Time on terms and conditions which are substantially similar to
those upon which such Employees are employed by the Vendor as of the Effective
Time. In such offer, the Purchaser shall recognize the seniority of each
Employee with respect to all employment related matters as if the Employee had
been employed by the Purchaser for a period of time equal to the time that such
Employee was employed by the Vendor.
ARTICLE 4
TAX ELECTIONS
4.1 SECTION 97(2) OF THE TAX ACT
The Parties hereby agree to elect jointly under subsection 97(2) of
the Tax Act in respect of the transfer of the Purchased Assets, in the
prescribed form and within the prescribed time for purposes of the Tax Act, and
shall therein specify that the Vendor's proceeds of disposition and the
Purchaser's cost of acquiring the relevant categories of Purchased Assets are
the amounts as set out in Schedule B subject to the limitations of subsection
85(1) of the Tax
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Act. For the purposes of subsection 97(2) and paragraph 85(1)(e.1) of the Tax
Act, the properties shall be deemed to be disposed of in the order designated by
the Purchaser. For greater certainty, the Parties agree that no election under
subsection 97(2) of the Tax Act shall be made in respect of the assets referred
to in Section 4.2 hereof. The Parties agree to jointly file corresponding
elections under the provisions of applicable provincial tax legislation, upon
request of the Vendor. All elections shall be prepared and filed by the Vendor.
4.2 SECTION 22 OF THE TAX ACT
The Parties hereby agree to elect jointly under Section 22 of the Tax Act,
in the prescribed form and within the prescribed time for purposes of the Tax
Act, as to the sale of such of the Purchased Assets in respect of which such an
election may be made and to therein designate an amount equal to the net book
value of such assets as at the date hereof as the consideration paid by the
Purchaser for such assets.
4.3 SECTION 167 OF THE EXCISE TAX ACT
The Parties hereby agree to elect jointly under Section 167 of the Excise
Tax Act, in the prescribed form and within the prescribed time for purposes of
the Excise Tax Act in respect of the purchase and sale of the Purchased Assets
hereunder.
ARTICLE 5
GENERAL
5.1 SURVIVAL OF COVENANTS
The covenants of the Purchaser and the Vendor contained in this agreement
shall survive the closing of the purchase and sale of the Purchased Assets
herein provided for until such covenants are performed or, by their respective
terms, terminate.
5.2 NOTICES
Any notice required or permitted to be given to any Party hereto shall be
in writing and shall be validly given if delivered personally, telecopied or
mailed by prepaid registered mail to that Party at the following address:
(a) if to the Purchaser:
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxx X. Xxxxxxxx
Fax No.: (000) 000-0000
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(b) if to the Vendor:
LPBP Inc.
000 Xxxxxxxxxxxxx Xxxx.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxx Xxxxxxxx
Fax No.: [ ]
Any notice or other document delivered personally or telecopied as
aforesaid shall be deemed to have been received by and given to the addressee on
the day of delivery of such delivery or telecopy (or, if such day is not a
business day, on the next following business day) and any such notice or other
document mailed as aforesaid, shall, except in cases of postal interruption, be
deemed to have been received five business days after mailing.
Either Party may, at any time, give notice to the other Party of any
change in address pursuant to the provisions of this Section 5.2.
5.3 FURTHER ASSURANCES
Each Party shall take such actions and execute all such transfers,
assignments, notices and other documents and use its commercially reasonable
efforts to secure all such consents and approvals as a Party may in writing at
any time and from time to time reasonably request in order to give full effect
to the provisions of this Agreement. For greater certainty, the Purchaser, at
its expense, hereby covenants to take, or cause to be taken, all commercially
reasonable actions necessary or desirable to assure the transfer of the
Purchased Assets, including making all necessary filings, giving all necessary
notices and obtaining all necessary consents and authorizations.
5.4 COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall
constitute an original and both of which taken together shall constitute one and
the same instrument.
IN WITNESS WHEREOF the Parties have executed this Agreement on the
day and year first above written.
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HEMOSOL CORP., IN ITS CAPACITY AS GENERAL
PARTNER OF HEMOSOL LP
by
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Name: Xxx X. Xxxxxxxx
Title: President, Chief Executive
Officer and Chief Financial
Officer
HEMOSOL INC.
by
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Name: Xxx X. Xxxxxxxx
Title: President, Chief Executive
Officer and Chief Financial
Officer
SCHEDULE A
ASSUMED CONTRACTS
SCHEDULE B
ALLOCATION OF PURCHASE PRICE
