Exhibit 10.33
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SHARE PURCHASE AGREEMENT
BETWEEN
0744062 B.C. LTD.
AND
GLACIER VENTURES INTERNATIONAL CORP.
AND
XXXXXXXXX CANADIAN PUBLISHING HOLDINGS CO.
AND
XXXXXXXXX INTERNATIONAL INC.
MADE AS OF
JANUARY 11, 2006
SALE OF 3120574 NOVA SCOTIA COMPANY
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XXXXXXXX XXXXXXXX LLP
FARRIS, VAUGHAN, XXXXX & XXXXXX LLP
TABLE OF CONTENTS
SHARE PURCHASE AGREEMENT
ARTICLE 1 - INTERPRETATION................................................. 2
1.01 Definitions...................................................... 2
1.02 Knowledge........................................................ 15
1.03 Headings......................................................... 15
1.04 Extended Meanings................................................ 15
1.05 Accounting Principles............................................ 16
1.06 Currency......................................................... 16
1.07 Schedules........................................................ 16
ARTICLE 2 - PURCHASE AND SALE.............................................. 16
2.01 Purchase and Sale and Purchase Price............................. 16
2.02 Adjustment of Purchase Price..................................... 18
2.03 Escrow........................................................... 18
2.04 Closing and Deliverables......................................... 20
2.05 Xxxxxxxxx International Guarantee................................ 21
2.06 Glacier Guarantee................................................ 22
2.07 Taxes............................................................ 22
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES................................. 22
3.01 Vendor's Representations and Warranties.......................... 22
3.02 Survival of Vendor's and Xxxxxxxxx International's
Representations, Warranties and Covenants........................ 32
3.03 Purchaser's Representations and Warranties....................... 33
3.04 Survival of Purchaser's Representations, Warranties and
Covenants........................................................ 33
3.05 Investigations................................................... 34
3.06 No Inducement or Reliance; Independent Assessment................ 34
3.07 Release.......................................................... 34
3.08 Kodiak and Real Estate Weekly.................................... 34
ARTICLE 4 - COVENANTS RELATING TO CONDUCT OF BUSINESS...................... 35
4.01 Conduct of the Business Prior to Closing by Vendor............... 35
4.02 Appropriate Action; Consents; Filings............................ 37
4.03 Preservation of Books and Records................................ 38
4.04 Tax Matters...................................................... 40
4.05 Mail; Payments................................................... 41
4.06 Name Change of the Corporation................................... 42
4.07 Release of Obligations........................................... 43
4.08 Indemnity Cooperation Agreement.................................. 43
4.09 Employee Matters................................................. 44
4.10 Glacier Pre-Closing Reorganization Steps......................... 45
4.11 Xxxxxxxxx Pre-Closing Reorganization Steps....................... 46
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ARTICLE 5 - CONDITIONS..................................................... 46
5.01 Conditions to Obligations of Each Party.......................... 46
5.02 Conditions for the Benefit of the Purchaser...................... 47
5.03 Conditions for the Benefit of the Vendor......................... 48
ARTICLE 6 - INDEMNIFICATION................................................ 49
6.01 Indemnification.................................................. 49
ARTICLE 7 - SPECIAL INDEMNITIES............................................ 55
7.01 Publication Status Indemnity..................................... 55
7.02 Special Committee Litigation Indemnity........................... 56
7.03 CanWest Arbitration Indemnity.................................... 56
7.04 Excluded Employee Severance Payment Indemnity.................... 57
7.05 Litigation Indemnity............................................. 57
7.06 HCNLP Securities Law Indemnity................................... 58
7.07 Outstanding Indemnity Obligations Indemnity...................... 58
7.08 Glacier Securities Law Indemnity................................. 59
7.09 Claims Process and Limits........................................ 59
ARTICLE 8 - TERMINATION.................................................... 59
8.01 Termination...................................................... 59
8.02 Effect of Termination............................................ 60
ARTICLE 9 - GENERAL........................................................ 60
9.01 Further Assurances............................................... 60
9.02 Time of the Essence.............................................. 60
9.03 Commissions...................................................... 60
9.04 Confidentiality and Public Announcements......................... 60
9.05 Benefit of the Agreement......................................... 61
9.06 Entire Agreement................................................. 61
9.07 Amendments and Waiver............................................ 61
9.08 Assignment....................................................... 61
9.09 Notices.......................................................... 61
9.10 Severability..................................................... 64
9.11 Parties in Interest.............................................. 64
9.12 Expenses......................................................... 64
9.13 Governing Law; Attornment........................................ 64
9.14 Counterparts; Facsimile.......................................... 65
9.15 Waiver........................................................... 65
9.16 Disclaimer....................................................... 65
9.17 Waiver of Jury Trial............................................. 65
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of the 11th day of January, 2006;
BETWEEN:
0744062 B.C. LTD., a corporation
incorporated under the laws of British
Columbia (hereinafter referred to as the
"Purchaser"),
OF THE FIRST PART,
- and -
GLACIER VENTURES INTERNATIONAL CORP., a
corporation governed by the laws of
Canada (hereinafter referred to as
"Glacier"),
OF THE SECOND PART,
- and -
XXXXXXXXX CANADIAN PUBLISHING HOLDINGS
CO., an unlimited liability company
existing under the laws of Nova Scotia,
and any successor in interest thereto
(hereinafter referred to as the
"Vendor"),
OF THE THIRD PART,
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XXXXXXXXX INTERNATIONAL INC., a
corporation governed by the laws of the
State of Delaware (hereinafter referred
to as "Xxxxxxxxx International"),
OF THE FOURTH PART.
WHEREAS the Vendor is the beneficial and registered owner of the Shares,
being all of the issued and outstanding shares of 3120574 Nova Scotia Company, a
corporation incorporated under the laws of Nova Scotia as an unlimited liability
company (the "Corporation");
AND WHEREAS the sole assets of the Corporation consist of: (i) 158,909,495
units of Xxxxxxxxx Canadian Newspapers, Limited Partnership ("HCNLP"); (ii) 100
common shares of
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Xxxxxxxxx Canadian Newspapers G.P. Inc.; (iii) 10,000 Class A common shares and
400 Class B preferred shares of KCN Capital News Company; (iv) 100 common shares
of Eco Log Environmental Risk Information Services Ltd.; and (v) a beneficial
interest in certain real property;
AND WHEREAS the Vendor desires to sell and the Purchaser desires to
purchase the Shares upon and subject to the terms and conditions hereinafter set
forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
respective representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:
ARTICLE 1 - INTERPRETATION
1.01 DEFINITIONS
In this Agreement, unless something in the subject matter or context is
inconsistent therewith:
(a) "Advance Ruling Certificate" means an advance ruling certificate
issued by the Commissioner of Competition pursuant to Section 102 of
the Competition Act with respect to the transactions contemplated by
this Agreement;
(b) "Affiliate", with respect to the relationship between two or more
corporations, has the meaning attributed to "affiliated bodies
corporate" under the Canada Business Corporations Act as of the date
of this Agreement and, with respect to the relationship between two or
more Persons any of which is not a corporation, a Person is deemed to
be an Affiliate of another Person if one of them is Controlled by the
other or if both are Controlled by the same Person, and "Affiliated"
has a corresponding meaning;
(c) "Agreement" means this agreement and all amendments made hereto by
written agreement between the Vendor, Xxxxxxxxx International, Glacier
and the Purchaser;
(d) "Ancillary Agreements" means the Indemnity Cooperation Agreement, the
Non-Competition Agreement and the Pension and Benefits Agreement;
(e) "Applicable Law" means:
(i) any domestic or foreign statute, law (including common and civil
law), code, ordinance, rule, regulation, restriction or by-law
(zoning or otherwise); or
(ii) any judgment, order, writ, injunction, decision, ruling, decree
or award;
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of any Governmental Entity, statutory body (including stock
exchange) or self-regulatory authority, to the extent only that
the same is legally binding on the Person referred to in the
context in which the term is used;
(f) "Authorization" means any permit, licence, approval or similar
authorization of any Governmental Entity;
(g) "Benefit Plan" means all bonus, deferred compensation, incentive
compensation, share purchase, share option, share appreciation,
phantom share, savings, profit sharing, severance or termination
pay, health, dental or other medical, life, disability or other
insurance (whether insured or self-insured), mortgage insurance,
employee loan, employee assistance, supplementary unemployment
benefit, pension, retirement, supplementary retirement, plan,
program and every other benefit plan, program, agreement,
arrangement or practice (whether written or unwritten) maintained
or contributed to for the benefit of any of the Business
Employees, former employees or their respective dependants or
beneficiaries, but excluding the Canada Pension Plan, the Quebec
Pension Plan, any health or drug plan established and
administered by a Province and workers' compensation insurance
provided by federal or provincial legislation or a comparable
program established and administered outside Canada;
(h) "Books and Records" means all books, records, files and papers of
the Corporation and the Subsidiaries, including computer manuals,
computer data, financial and Tax working papers, financial and
Tax books and records, business reports, business plans and
projections, sales and advertising materials, sales and purchases
records and correspondence, trade association files, research and
development records, lists of present and former customers and
suppliers, personnel and employment records (including Benefit
Plan records), minute and share certificate books, and all copies
and recordings of the foregoing;
(i) "Business" means the business of newspaper publication and
delivery, commercial printing, magazine publishing, operation of
related websites, provision of data and other business
information, business directories and related information
services as currently carried on by the Subsidiaries;
(j) "Business Employees" means all employees of the Subsidiaries
including Glacier Disabled Employees but excluding Xxxxxxxxx
Disabled Employees;
(k) "Business Day" means a day other than a Saturday, Sunday or
statutory holiday in Ontario;
(l) "Canadian Securities Laws" is defined in Section 7.06;
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(m) "CanWest" means CanWest Global Communications Corp.;
(n) "CanWest Agreement" means the Transaction Agreement dated July
30, 2000 and the Transaction Amending Agreement dated November
15, 2000 between CanWest and Xxxxxxxxx International and related
parties relating to the sale by Xxxxxxxxx International, HCNLP
and others to CanWest of certain newspaper and related
businesses;
(o) "CanWest Arbitration" means the arbitration proceedings involving
Xxxxxxxxx International and related entities and CanWest that
were initiated to determine amounts due to or payable by
Xxxxxxxxx International, Southam Inc., HCNLP and HCN Publications
Company by and to CanWest including those related to the sale by
Xxxxxxxxx International and related entities to CanWest of
certain newspaper and related businesses pursuant to the CanWest
Agreement;
(p) "CanWest Arbitration Indemnity" is defined in Section 7.03;
(q) "Cash" means, collectively, HCNLP Cash and Non-HCNLP Cash;
(r) "Cash Deficit" is defined in Section 2.02(1);
(s) "Closing" means the closing of the purchase and sale of the
Shares and Real Estate Company Shares contemplated by this
Agreement;
(t) "Closing Date" is defined in Section 2.04(1);
(u) "Closing Payment" means the Purchase Price less the Escrow
Amount;
(v) "Competition Act" means the Competition Act (Canada);
(w) "Competition Act Compliance" means:
(i) the issuance of an Advance Ruling Certificate;
(ii) the Purchaser and the Vendor have given the notice required
under section 114 of the Competition Act with respect to
the transactions contemplated by this Agreement and the
applicable waiting period under section 123 of the
Competition Act has expired or been waived in accordance
with the Act; or
(iii) the obligation to give the requisite notice has been waived
pursuant to subsection 113(c) of the Competition Act;
and, in the case of (ii) and (iii), the Commissioner of
Competition advising the Purchaser, in writing, on terms
satisfactory to the Purchaser and the Vendor, acting reasonably,
that the Commissioner of Competition is of the view that there
are not sufficient grounds to initiate proceedings
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before the Competition Tribunal under the merger provisions of
the Competition Act with respect to the transactions contemplated
by this Agreement;
(x) "Commissioner of Competition" means the Commissioner of
Competition appointed pursuant to the Competition Act;
(y) "Consent" is defined in Section 4.02(1);
(z) "Contract" means any agreement, contract, indenture, lease, deed
of trust, option or other legally binding commitment or
obligation in the nature of a contract, whether oral or written,
for which there are continuing rights or obligations;
(aa) "Control", with respect to the relationship with a Person, means:
(i) if that Person is a corporation, the holding (other than by
way of security) of Equity Securities of that Person to
which are attached more than 50% of the votes that may be
cast for the election of directors and those votes are
sufficient, if exercised, to elect a majority of the board
of directors;
(ii) the right, directly or indirectly, to direct or cause the
direction of the management of the affairs of that Person,
whether by ownership of Equity Securities, by Contract or
otherwise; or
(iii) if that Person is a limited partnership, being the general
partner or controlling the general partner within the
meaning of paragraph (i) or (ii).
and "Controls" and "Controlled" have corresponding meanings;
(bb) "Cooperating Subsidiaries" is defined in Section 4.08;
(cc) "Corporation" means 3120574 Nova Scotia Company, a corporation
incorporated under the laws of Nova Scotia as an unlimited
liability company;
(dd) "Deductible" is defined in Section 6.01(3);
(ee) "Deficit" is defined in Section 2.02(1);
(ff) "Disclosure Letter" means the disclosure letter of the Vendor to
be delivered to the Purchaser hereunder;
(gg) "Dormant Subsidiaries" means East Kootenay Newspapers Ltd., Peace
River Block News Ltd., Sterling Publishers Ltd., Alaska Highway
Publications Ltd., Trail Times Limited, News Publishing Company
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Limited, XS FrasPub (1999) Ltd., 626488 B.C. Ltd., CHMM Inc. and
1496505 Ontario Limited;
(hh) "Eco Log" means Eco Log Environmental Risk Information Services
Ltd.;
(ii) "Encumbrance" means any lien, pledge, charge, claim, security
interest, contingent sale or title retention agreement, option,
deed of trust, mortgage, conditional sales agreement, right of
first refusal or other right of a third party substantially
equivalent thereto;
(jj) "End Date" is defined in Section 8.01(2);
(kk) "Environmental Laws" means all applicable federal, provincial,
state, local and foreign laws, imposing liability or standards of
conduct for or relating to the regulation of activities,
materials, substances or wastes in connection with or for or to
the protection of human health, safety, the environment or
natural resources (including ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation) and under common law;
(ll) "Environmental Liabilities" means, with respect to any Person,
all liabilities, obligations, responsibilities, response,
remedial and removal costs, investigation costs, capital costs,
operation and maintenance costs, losses, damages, property
damages, natural resource damages, costs and expenses, fines,
penalties and sanctions incurred as a result of or related to any
claim, suit, action, administrative order, investigation,
proceeding or demand by any Person, whether based in contract,
tort, implied or express warranty, strict liability, criminal or
civil statute or common law, relating to any environmental matter
arising under or related to any Environmental Laws, Environmental
Permits, or in connection with any Release or threatened Release
or presence of a Hazardous Material whether on, at, in, under,
from or about or in the vicinity of any real or personal
property;
(mm) "Environmental Permits" means all permits, licenses, written
authorizations, certificates, approvals, program participation
requirements, sign-offs or registrations required by or available
with or from any Governmental Entity under any Environmental
Laws;
(nn) "Equity Securities" means any shares of a corporation,
partnership units or interests or similar securities;
(oo) "Escrow Agent" is defined in Section 2.03(1);
(pp) "Escrow Amount" is defined in Section 2.03(1);
(qq) "Excess Cash" is defined in Section 2.02(2);
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(rr) "Excluded Employee Severance Payment Indemnity" is defined in
Section 7.04;
(ss) "Excluded Employee Severance Payments" means payments made by the
Purchaser, the Corporation or any Subsidiary, as the case may be,
to the Excluded Employees for severance pay, termination pay or
pay in lieu of notice of termination as set out in the Disclosure
Letter in relation to the termination of the employment of any of
the Excluded Employees by the Purchaser, the Corporation or any
Subsidiary, as the case may be, without cause at any time during
the forty-five (45) day period following the Closing Date for
which the Purchaser is eligible to be indemnified by the Vendor
in accordance with and subject to Section 7.04;
(tt) "Excluded Employees" means the Business Employees referenced in
the Disclosure Letter;
(uu) "Expert" is defined in Section 2.01(6);
(vv) "Filing" is defined in Section 4.02(1);
(ww) "Final Statements" is defined in Section 2.01(3);
(xx) "Financial Statements" is defined in Section 3.01(1)(p);
(yy) "Funding Determination" means a determination made by the
Government of Canada that any Subsidiary is required to repay to
the Government of Canada the amount of any Government of Canada
Funding, only to the extent that such Government of Canada
Funding was received prior to the Time of Closing and relates to
a period ending on or prior to the Time of Closing and only to
the extent that any Subsidiary is, at any time, required by the
Government of Canada to repay such amount because the
publications to which the funding relates were determined not to
meet the relevant Canadian ownership and control requirements
during such period;
(zz) "GAAP" means generally accepted accounting principles in Canada,
applicable as of date hereof and, in respect of the financial
statements of any Person, applied on a basis consistent with
those applied in previous periods of such Person unless otherwise
required under GAAP;
(aaa) "Glacier Disabled Employees" is defined in the Pension and
Benefits Agreement;
(bbb) "Glacier Pre-Closing Reorganization Steps" mean the transactions
referred to in Schedule 4.10;
(ccc) "Glacier Securities Law Indemnity" is defined in Section 7.08;
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(ddd) "Government of Canada Funding" means financial support that has
been provided by the Government of Canada to any Subsidiary
pursuant to the Department of Canadian Heritage's Canada Magazine
Fund or Publications Assistance Program;
(eee) "Governmental Entity" means any domestic or foreign government,
whether federal, provincial, state, territorial, local, regional,
municipal, or other political jurisdiction, and any agency,
authority, instrumentality, court, tribunal, board, commission,
bureau, arbitrator, arbitration tribunal or other tribunal, or
any quasi-governmental or other entity, insofar as it exercises a
legislative, judicial, regulatory, administrative, expropriation
or taxing power or function of or pertaining to government, as
well as any stock exchange;
(fff) "Hazardous Material" means any substance, material or waste
which is regulated by, or forms the basis of liability under, any
Environmental Laws, including any material or substance which is
defined as a "solid waste", "hazardous waste", "hazardous
material", "hazardous substance", "dangerous good", "extremely
hazardous waste", "restricted hazardous waste", "pollutant",
"contaminant", "hazardous constituent", "special waste", "toxic
substance" or other similar term or phrase under any
Environmental Laws, or petroleum or any fraction or by-product
thereof, asbestos, substances used for dry-cleaning and the waste
and breakdown products thereof, polychlorinated biphenyls
(PCB's), or any radioactive substance
(ggg) "HCPH" means HCPH Canadian Newspaper Holding Co., and any
successor in interest thereto;
(hhh) "HCN GP" means Xxxxxxxxx Canadian Newspapers G.P. Inc., the
general partner of HCNLP;
(iii) "HCNLP" means Xxxxxxxxx Canadian Newspapers, Limited
Partnership;
(jjj) "HCNLP Agreement" means the Limited Partnership Agreement dated
as of April 28, 1999 governing HCNLP;
(kkk) "HCNLP Cash" means cash in the bank accounts of HCNLP, HCN
Publications Company and 3050944 Nova Scotia ULC at the Time of
Closing net of any claims for outstanding cheques;
(lll) "HCNLP Securities Law Indemnity" is defined in Section 7.06;
(mmm) "HCNLP Units" means the units of HCNLP;
(nnn) "Xxxxxxxxx Disabled Employees" is defined in the Pension and
Benefits Agreement;
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(ooo) "Xxxxxxxxx Pre-Closing Reorganization Steps" mean the
transactions referred to in Schedule 4.11;
(ppp) "Income", of a Person in respect of any period, means the income
of the Person as determined for purposes of the ITA for such
period;
(qqq) "Included Employees" means the Business Employees referenced in
the Disclosure Letter;
(rrr) "Indemnification Event" means an event, occurrence or state of
affairs for which a Party is entitled to be indemnified
hereunder;
(sss) "Indemnification Notice" means a written notice in reasonable
detail delivered by the Vendor to the Purchaser, or by the
Purchaser to the Vendor, as applicable, stating a demand for
indemnification in accordance with Section 6.01 or in connection
with the Special Indemnities;
(ttt) "Indemnified Party" is defined in Section 6.01(7);
(uuu) "Indemnifying Party" is defined in Section 6.01(7);
(vvv) "Indemnity Cooperation Agreement" is defined in Section 4.08;
(www) "Insurance Benefits" is defined in Section 6.01(10);
(xxx) "Intellectual Property" means: (i) any trade marks, trade names,
business names, brand names, mastheads, service marks, computer
software, computer programs, copyrights and works of authorship,
designs, inventions, patents, franchises, formulae, processes,
know-how, technology; (ii) any issued patents or analogous
rights; and (iii) any other intellectual or industrial property;
(yyy) "Intercompany Indebtedness" means any indebtedness by, from or
between on the one hand any of the Corporation, the Subsidiaries
or the Real Estate Companies, and on the other hand Xxxxxxxxx
International and any Affiliate, including the Vendor, but
excluding the Corporation, the Subsidiaries or the Real Estate
Companies;
(zzz) "ITA" means the Income Tax Act (Canada), R.S.C. 1985 (5th Supp.)
c. 1, and the regulations promulgated thereunder, as amended from
time to time;
(aaaa) "KCN" means KCN Capital News Company;
(bbbb) "Kodiak" means the operations carried on by HCN Publications
Company known as Kodiak Press, located at 0000 Xxxxxxxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx;
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(cccc) "Leases" is defined in Section 3.01(1)(dd);
(dddd) "Litigation" is defined in Section 7.05;
(eeee) "Litigation Indemnity" is defined in Section 7.05;
(ffff) "Losses" means any and all financial losses, damages,
liabilities, obligations, penalties, encumbrances, assessments,
costs and expenses sustained, suffered or incurred by the Party
seeking indemnification as a direct result of any Indemnification
Event; provided, however, that Losses shall not include any
indirect or consequential or punitive losses or damages
(including, for greater certainty, any Taxes payable by the
Indemnified Party as a consequence of the receipt of an amount
pursuant to Article 6 or 7 hereof), lost profits or lost revenue
and further provided that a Loss shall not be deemed an indirect
loss solely because the Loss is incurred by the Purchaser through
a diminution in the value of its direct or indirect investment in
a Subsidiary or in any Person who becomes a successor in interest
to such Subsidiary;
(gggg) "Material Adverse Change" or "Material Adverse Effect" means
any change or effect, excluding a general change in political,
economic or social conditions or a change in market conditions
applicable to the Business and similar businesses, that has or
could reasonably be expected to have a material and adverse
effect on the business, assets or financial condition of the
Subsidiaries and the Real Estate Companies, taken as a whole, and
"Materially Adversely Effect" has a corresponding meaning;
(hhhh) "Material Contract" means a written Contract that would
reasonably be expected to result in annual revenues or
expenditures of $150,000 or more, except contracts in relation to
commercially available off-the-shelf-software;
(iiii) "Non-Competition Agreement" means the non-competition agreement
to be entered into at Closing among Xxxxxxxxx International, the
Vendor, the Purchaser and the Subsidiaries in the form agreed by
the relevant parties;
(jjjj) "Non-HCNLP Cash" means cash in the bank accounts of
Subsidiaries other than HCNLP, 3050944 Nova Scotia ULC and HCN
Publications Company at the Time of Closing net of any claims for
any outstanding cheques;
(kkkk) "Ordinary Course" means, with respect to an action taken by a
Person, that the action is consistent with the past practices of
the Person and is taken in the normal day-to-day operations of
the Person and, with respect to Xxxxxxxxx International and any
subsidiary of Xxxxxxxxx
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International including the Subsidiaries (other than the
Corporation), since January 17, 2004;
(llll) "Outstanding Indemnity Obligations" means the obligations of
Xxxxxxxxx International and related parties owing to CanWest
under the CanWest Agreement related solely to environmental
liabilities under representations and warranties and indemnities
contained therein;
(mmmm) "Outstanding Indemnity Obligations Indemnity" is defined in
Section 7.07;
(nnnn) "Owned Properties" is defined in Section 3.01(1)(ee);
(oooo) "Party" means the Vendor, Xxxxxxxxx International, Glacier or
the Purchaser, as the case may be;
(pppp) "Pension and Benefits Agreement" means the agreement in respect
of pension and employee benefit matters in the form set out in
Schedule 1.01(pppp) among the Vendor, Glacier, the Purchaser and
Xxxxxxxxx International;
(qqqq) "Permitted Encumbrance" means:
(i) servitudes, easements, restrictions, rights-of-way and other
similar rights in real property or any interest therein,
provided that those servitudes, easements, restrictions,
rights-of-way and other similar rights are not of such a
nature as to materially, individually or in the aggregate,
adversely affect the use by the Subsidiaries of the property
subject thereto;
(ii) Encumbrances in respect of Taxes the validity of which is
being contested in good faith by appropriate proceedings or
Encumbrances in respect of Taxes not yet due and payable
incurred in the Ordinary Course;
(iii) security given in the Ordinary Course to any public utility
or Government Entity in connection with the operations of
the Business, other than security for borrowed money,
provided that such security does not materially detract from
the value of the property concerned or materially impair its
use in the operation of the Business;
(iv) the reservations, limitations, provisos and conditions
contained in any original grants from the Crown of any real
property or interest therein and statutory exceptions to
title that do not materially detract from the value of the
real property concerned or materially impair its use in the
operation of the Business; and
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(v) minor imperfections of title and the Permitted Encumbrances
described in Schedule 1.01(qqqq);
(vi) subdivision agreements, site plan control agreements,
servicing or industrial agreements, utility agreements,
airport zoning regulations and other similar agreements with
governmental authorities or private or public utilities;
(vii) restrictive covenants, private deed restrictions and other
land use control agreements;
(viii) all unregistered easements and other unregistered rights
in favour of public or private utilities;
(ix) any right of expropriation conferred by any statute of
Canada or any Province; and
(x) any discrepancies, encroachments, unregistered easements,
by-law violations and/or violations of registered
restrictions/agreements which an up-to-date survey of the
Owned Properties might reveal.
(rrrr) "Person" means an individual, corporation, partnership, joint
venture, trust, limited liability company, unincorporated
organization or other entity, or a Governmental Entity;
(ssss) "Prime Rate" means the annual variable rate of interest quoted
or published from time to time by Canadian Imperial Bank of
Commerce (Main Branch) at its main branch in Toronto, Ontario as
the "prime rate" of interest charged by it for Canadian dollar
commercial loans made in Canada and for the purposes of this
Agreement the "Prime Rate" shall vary, upwards or downwards, as
the case may be, at the same time and in the same amount as the
said "prime rate" so varies;
(tttt) "Publication Status Indemnity" is defined in Section 7.01;
(uuuu) "Purchase Price" is defined in Section 2.01(1);
(vvvv) "Real Estate Companies" means 446065 B.C. Ltd. and 634854 B.C.
Ltd.;
(wwww) "Real Estate Company Shares " means all of the issued and
outstanding shares of each of the Real Estate Companies;
(xxxx) "Reference Balance Sheet" means the unaudited consolidated
balance sheet of HCNLP as at September 30, 2005;
(yyyy) "Reference Balance Sheet Date" means September 30, 2005;
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(zzzz) "Release" means any release, threatened release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escape,
injection, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Material in the indoor or
outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or
property;
(aaaaa) "Release Agreement" is defined in Section 4.07;
(bbbbb) "Representation and Warranty Losses" is defined in Section
6.01(3);
(ccccc) "Representatives", with respect to a Party, means its
directors, officers, employees, auditors, agents and other
representatives and advisors;
(ddddd) "Restricted Entities" is defined in Section 4.01(1);
(eeeee) "Safe Income" means the income earned or realized by a
Subsidiary for purposes of section 55 of the ITA for the period
ending at the safe-income determination time, as defined in
subsection 55(1) of the ITA, for the series of transactions that
includes the purchase of the Shares under this Agreement;
(fffff) "Section 19 Claim" means any claim, action, suit or proceeding
or other demand, whether at law or in equity, brought before a
court and asserted against any Subsidiary, or a Person affiliated
with the Purchaser which has acquired a right to publish a
newspaper from the Subsidiary, and: (i) arising solely from a
Section 19 Reassessment in respect of a Person, to the extent
that such Section 19 Reassessment relates to expenses incurred by
the Person prior to the Time of Closing; or (ii) arising from
damages suffered by a Person who publishes a newspaper in a
market in Canada, to the extent that such damages arose as a
direct result of the failure of a newspaper produced or published
by such Subsidiary to qualify as a Canadian newspaper, as defined
in subsection 19(5) of the ITA or an analogous provision of a
provincial taxing statute, during any period ending prior to the
Time of Closing;
(ggggg) "Section 19 Reassessment" means, in respect of a Person, an
assessment or a reassessment issued to the Person by the Canada
Revenue Agency or provincial taxing authority, solely on the
basis of subsection 19(1) of the ITA or an analogous provision of
a provincial taxing statute, from which no appeal lies
disallowing a deduction claimed by the Person for expenses
incurred for advertising space in an issue of a newspaper
produced and published by a Subsidiary or its predecessor;
(hhhhh) "Shares" means all of the issued and outstanding common shares
of the Corporation;
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(iiiii) "Special Committee Litigation" means any and all claims,
proceedings, actions, causes of action and court processes at any
time arising out of or in connection with, directly or
indirectly, matters raised by the Special Committee Report
whenever made including, without limitation, the proceedings
identified on Schedule 1.01(iiiii);
(jjjjj) "Special Committee Indemnity" is defined in Section 7.02;
(kkkkk) "Special Committee Report" means the Report of the Special
Committee of the Board of Directors of Xxxxxxxxx International
filed with the U.S. District Court for the Northern District of
Illinois on August 30, 2004 as corrected by an errata sheet dated
November 1, 2004;
(lllll) "Special Indemnities" mean the CanWest Arbitration Indemnity,
the Excluded Employee Severance Payment Indemnity, the
Publication Status Indemnity, the Litigation Indemnity, the
Special Committee Indemnity, the Outstanding Indemnity
Obligations Indemnity, the Glacier Securities Law Indemnity and
the HCNLP Securities Law Indemnity;
(mmmmm) "Subsidiaries" means, collectively, HCNLP, HCN GP, HCN
Publications Company, Eco Log, KCN and 3050944 Nova Scotia ULC;
(nnnnn) "Tax" or "Taxes" means all taxes, charges, fees, levies,
imposts and other assessments, including all income, sales, use,
goods and services, value added, capital, capital gains,
alternative, net worth, transfer, profits, withholding, payroll,
employer health, excise, franchise, real property and personal
property taxes, levies and/or any other taxes, customs duties,
fees, assessments, royalties, duties, deductions, compulsory
loans or similar charges in the nature of a tax, including Canada
Pension Plan and provincial pension plan contributions,
employment insurance payments and workers compensation premiums,
together with any installments, and any interest, fines and
penalties, imposed by any governmental authority (including
federal, state, provincial, municipal and foreign governmental
authorities), whether disputed or not;
(ooooo) "Tax Returns" means any return, declaration, report, schedule
or information statement with respect to Taxes required to be
filed with the Canada Revenue Agency or any other Governmental
Entity;
(ppppp) "Time of Closing" means 9:00 a.m. (Vancouver time) on the
Closing Date;
(qqqqq) "Units" means HCNLP Units;
(rrrrr) "Vendor Marks" is defined in Section 4.06;
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(sssss) "Vendor Obligations" is defined in Section 4.07;
(ttttt) Working Capital" means current assets, excluding Cash and
excluding any receivable from CanWest with respect to the CanWest
Arbitration, other than any receivable of Kodiak from CanWest in
the Ordinary Course and any inter-company receivables, less
current liabilities including any Taxes payable by the
Corporation in respect of income allocable to it by HCNLP as a
consequence of distributions made by HCNLP to the Corporation
prior to the Time of Closing but excluding: (i) any liability
under the CanWest Arbitration; (ii) Taxes arising from, or in any
way related to, the implementation of the Glacier Pre-Closing
Reorganization Transactions; (iii) the current portion of long
term debt and any Intercompany Indebtedness, adjusted for
minority interests, of the Corporation on a consolidated basis
determined as of the Closing Date; (iv) accrued expenses for
audit fees for 2003 and 2004; and (v) accrual for the Kodiak
lease termination, determined all in accordance with GAAP; and
(uuuuu) "Year End Financial Statements" is defined in Section
3.01(1)(q).
1.02 KNOWLEDGE
(1) Any reference to "of which the Vendor is aware", "knowledge of the
Vendor" or to phrases of similar import shall mean only the actual knowledge of
Xxxxxx Xxxxx, Xxxxx Xxx Xxxx, Xxxxx Xxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxx, Xxx Xxxx,
Xxxx Xxxxxxx, Xxx Xxxxx, Xxxx Xxxxx and Xxxxx Xxxxxxxx.
(2) Any reference to "of which the Purchaser is aware", "knowledge of the
Purchaser" or to phrases of similar import shall mean only the actual knowledge
of Xxxxxxxx Xxxxxxx, Xxxxx Smysnuik and Xxxxx Xxxxxx.
1.03 HEADINGS
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 of this Agreement. The terms "this Agreement",
"hereof", "hereunder" and similar expressions refer to this Agreement and not to
any particular Article, Section or other portion hereof and include any
agreement supplemental hereto. Unless something in the subject matter or context
is inconsistent therewith, references herein to Articles and Sections are to
Articles and Sections of this Agreement.
1.04 EXTENDED MEANINGS
In this Agreement words importing the singular number only shall include
the plural and vice versa, words importing the masculine gender shall include
the feminine and neuter genders and vice versa and words importing persons shall
include individuals, partnerships, associations, trusts, unincorporated
organizations and corporations.
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1.05 ACCOUNTING PRINCIPLES
Wherever in this Agreement reference is made to a calculation to be made in
accordance with generally accepted accounting principles, such reference shall
be deemed to be to GAAP.
1.06 CURRENCY
All references to currency herein are to lawful money of Canada.
1.07 SCHEDULES
The following are the Schedules annexed hereto and incorporated by
reference and deemed to be part hereof:
Schedule 1.01(pppp) - Pension and Benefits Agreement;
Schedule 1.01(qqqq) - Permitted Encumbrances;
Schedule 1.01(iiiii) - Special Committee Litigation;
Schedule 2.04(2)(j) - Encumbrances to be Released
Schedule 3.01(1)(m) - Information on Corporation and Subsidiaries;
Schedule 3.01(1)(p) - Financial Statements;
Schedule 3.01(1)(q) - Year End Financial Statements;
Schedule 3.01(1)(v) - Material Contracts;
Schedule 3.01(1)(dd) - Real Estate Leases;
Schedule 3.01(1)(ee) - Owned Real Estate;
Schedule 4.08 - Indemnity Cooperation Agreement;
Schedule 4.10 - Glacier Pre-Closing Reorganization Steps;
Schedule 4.11 - Xxxxxxxxx Pre-Closing Reorganization Steps;
Schedule 5.01(1)(c) - Consents and Filings; and
Schedule 7.05 - Litigation.
ARTICLE 2 - PURCHASE AND SALE
2.01 PURCHASE AND SALE AND PURCHASE PRICE
(1) Upon and subject to the terms and conditions contained herein and the
adjustment as herein set forth, the Vendor shall, at the Time of Closing, sell
the Shares and the Real Estate Company Shares to the Purchaser and the Purchaser
shall purchase the Shares and the Real Estate Company Shares from the Vendor for
a total purchase price of $121,686,979 (hereinafter referred to as the "Purchase
Price") allocated as follows:
(a) $117,021,976 in respect of the HCNLP Units held by the
Corporation;
(b) $1.00 in respect of the shares of HCN GP held by the Corporation;
(c) $4,049,000 in respect of the shares of Eco Log held by the
Corporation;
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(d) $1.00 in respect of the shares of KCN held by the Corporation;
(e) $1.00 in respect of the Real Estate Company Shares;
(f) $1,000 in respect of the Non-Competition Agreement; and
(g) $615,000 in respect of the real estate assets beneficially owned
by the Corporation.
(2) The Purchase Price shall be paid and satisfied by the Purchaser at the
Time of Closing by wire transfer of immediately available funds to an account or
accounts specified by the Vendor.
(3) Within ninety (90) days following the Closing Date, the Purchaser shall
deliver to the Vendor unaudited consolidated financial statements of the
Corporation as of the Closing Date prepared by the Purchaser's auditors in
accordance with GAAP and including notes thereon, and a statement of Working
Capital and a statement of Cash, which shall reflect HCNLP Cash and Non-HCNLP
Cash separately (collectively, the "Final Statements"), prepared in accordance
with GAAP. The cost of the preparation of the Final Statements will be borne by
the Vendor and the Purchaser equally. For the purpose of preparing the Final
Statements, the Vendor agrees to provide all reasonable cooperation to Glacier
and agrees to grant to Glacier and its Representatives reasonable access during
normal business hours to relevant records, facilities and personnel.
(4) The Vendor shall have a period (the "Review Period") of sixty (60) days
from the date it receives the Final Statements in which to review the same. For
the purpose of such review, the Purchaser shall permit the Vendor and its
Representatives to examine all accounting documentation used or prepared by the
Purchaser and its auditors in preparing the Final Statements including all
back-up material and ledgers. If no objection in writing to the Final Statement
is given to the Purchaser by the Vendor within the Review Period, the Final
Statements shall be deemed to have been approved as of the last day of such
Review Period.
(5) If the Vendor objects to any item or aspect of the Final Statements,
the Vendor shall give written notice to the Purchaser on or before the end of
the Review Period, setting out in reasonable detail the nature of such objection
and the related amount(s) in dispute and the Vendor and the Purchaser shall
attempt to resolve the matters in dispute within 30 days from the date the
Vendor gives such notice to the Purchaser. Without limitation, the Vendor shall
not be precluded from raising objections that are otherwise appropriate under
the terms hereof solely because under generally accepted accounting principles,
the amount involved would not be considered material for accounting purposes. If
all matters in dispute are resolved by the Vendor and the Purchaser, the Final
Statement shall be modified to the extent required to give effect to such
resolution and shall be deemed to have been approved as of the date of such
resolution.
(6) If the Vendor and the Purchaser cannot resolve all matters in dispute
within such thirty day period, all such unresolved matters shall be submitted to
BDO Dunwoody or, if they refuse or are unable to act, a nationally recognized
accounting firm acceptable to the Purchaser and the Vendor (the "Expert") for
resolution, as expert and not arbitrator. The Expert shall use its reasonable
efforts to render its written decision within 30 days of its appointment. The
Expert shall be given access to all materials and information reasonably
requested by it for such purpose. The rules and procedures to be followed in
such proceeding shall be determined by the Expert in its
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discretion. The Expert's determination of all such matters shall be final and
binding on both parties and shall not be subject to appeal by either party,
absent manifest error. The fees and expenses of the Expert shall be borne by the
Vendor and the Purchaser in the manner determined by the Expert based on the
relative success of the Vendor and the Purchaser in respect of such disputes.
The Final Statements including the statement of Working Capital and the
statement of Cash, as the case may be, shall be modified to the extent required
to give effect to the Expert's determination and shall be deemed to have been
approved as of the date of such determination.
2.02 ADJUSTMENT OF PURCHASE PRICE
(1) If: (i) the Working Capital is less than negative $2,000,000 (the
amount of such difference being the "Deficit") the Vendor shall, within five
Business Days after the Review Period, pay the Purchaser an amount equal to the
Deficit; or (ii) the Cash is less than $2,000,000 (the amount of such difference
being the "Cash Deficit"), the Vendor shall, within five Business Days after the
Review Period, pay the Purchaser an amount equal to the Cash Deficit, together
with, in each case, interest thereon at the Prime Rate as adjusted from time to
time plus 2% from and including the Closing Date to but excluding the date of
payment, provided that if the Vendor has objected to any part of the Final
Statements in accordance with Section 2.01 no payment shall be made until two
(2) Business Days after the same has been finally resolved by the parties or
pursuant to Section 2.01.
(2) If the Cash is more than $2,000,000 (the amount of such difference
being the "Excess Cash"), the Purchaser shall, within five Business Days after
the Review Period: (i) pay to the Vendor 86.883% of the Excess Cash attributable
to HCNLP Cash and shall pay the minority holders of HCNLP Units the balance of
the Excess Cash attributable to HCNLP Cash on a pro rata basis; and (ii) pay to
the Vendor 100% of the Excess Cash attributable to Non-HCNLP Cash together with,
in each case, interest thereon at the Prime Rate as adjusted from time to time
plus 2% from and including the Closing Date to but excluding the date of
payment, provided that if the Vendor has objected to any part of the Final
Statements in accordance with Section 2.01 no payment shall be made until two
(2) Business Days after the same has been finally resolved by the parties or
pursuant to Section 2.01.
(3) The Purchase Price shall be deemed adjusted by any amount payable under
Section 2.02(1)or 2.02(2).
2.03 ESCROW
(1) A portion of the Purchase Price in an amount equal to $20 million (the
"Escrow Amount"), shall be paid contemporaneously with Closing by the Vendor to
Bank of Montreal (the "Escrow Agent") to be held by the Escrow Agent in an
account in the joint name of the Vendor and the Purchaser. The Escrow Agent
shall, pursuant to an agreement between the Vendor, the Purchaser and the Escrow
Agent, the final terms of which shall be mutually agreed to by the parties
thereto (the "Escrow Agreement"), be directed by the Vendor and the Purchaser to
pay the appropriate portion of the Escrow Amount upon the events and in the
manner described below.
(2) Upon a final award, judgement or settlement being made under or in
respect of the CanWest Arbitration (the "Arbitration Award"), establishing an
amount being owed (the "Initial
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Xxxxxxxxx Arbitration Liability") by any one or more of the Subsidiaries to
CanWest and/or its related parties under the CanWest Agreement (collectively,
the "CanWest Group") and the earlier of:
(a) the lapse of all appeal periods or periods during which the
Arbitration Award may be varied by application to a court (the
"Court") of competent jurisdiction (the "Appeal Periods") in
respect of such Arbitration Award prior to the filing during such
Appeal Periods of any and all appeals or applications to vary (an
"Arbitration Appeal") in respect thereof without any member of
the CanWest Group making demand for payment against any
Subsidiary in respect of all or any portion of the Initial
Xxxxxxxxx Arbitration Liability (including, without limitation,
such demand being made by way of service on any one or more of
the Subsidiaries of the Arbitration Award) (a "CanWest Demand")
during such Appeal Periods;
(b) the making of a CanWest Demand during the Appeal Period where the
right of any one or more members of the CanWest Group to enforce
the Arbitration Award is not stayed pursuant to an order of the
Court within seven (7) days of the making of a CanWest Demand;
and
(c) the final, conclusive and unappealable determination or
settlement of all Arbitration Appeals, as the case may be, by a
Court, establishing an amount being owed (the "Final Xxxxxxxxx
Arbitration Liability") by any one or more of the Subsidiaries,
directly, or indirectly, to any one or more members of the
CanWest Group;
the Escrow Agent shall be directed by the Vendor, the Purchaser and the
applicable Subsidiary under the terms of the Escrow Agreement to forthwith pay
to the applicable members of the CanWest Group the lesser of the Escrow Amount
and the amount of the Initial Xxxxxxxxx Arbitration Liability or the Final
Xxxxxxxxx Arbitration Liability, as the case may be. Any amount so paid will be
deemed to be a payment under Section 7.03 which the Purchaser has irrevocably
directed be paid to the applicable Subsidiary as a capital contribution and
which the applicable Subsidiary, in turn, irrevocably directed be paid to the
applicable members of the CanWest Group. The liability of the Vendor, and the
ability of the Purchaser to claim, under the CanWest Arbitration Indemnity shall
be automatically reduced by the amount of any such payment.
(3) The Escrow Agent shall be directed by the Purchaser and the Vendor
under the terms of the Escrow Agreement to pay out of escrow to the Vendor the
Escrow Amount and all interest accrued thereon, less any amounts paid to any one
or more members of the CanWest Group as set out above, upon the termination,
withdrawal or final settlement of the CanWest Arbitration or the Arbitration
Appeal, as the case may be. In the event that the maximum potential exposure of
the Vendor in the CanWest Arbitration is determined by the Vendor, with the
consent of the Purchaser not to be unreasonably withheld, at any time, to be
less than the then remaining Escrow Amount, the Escrow Agent shall be directed
by the Vendor and the Purchaser under the terms of the Escrow Agreement to pay
out of escrow to the Vendor, from time to time, such portion of the Escrow
Amount and any interest accrued thereon that exceeds such maximum exposure.
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(4) In no event shall the escrow contemplated hereby continue beyond the
seventh anniversary of the Closing Date. If the escrow contemplated hereby
continues beyond the third anniversary of the Closing Date, the Purchaser shall
pay the Vendor the following amounts: (i) on the fourth and fifth anniversaries
of the Closing Date, an amount equal to two and a half percent (2.5%) per annum
of the balance of the Escrow Amount and interest accrued thereon, if any,
outstanding at the commencement of the one year period ended on each such
anniversary date; (ii) on the sixth anniversary of the Closing Date, an amount
equal to ten percent (10%) per annum of the balance of the Escrow Amount and
interest accrued thereon, if any, outstanding at the commencement of the one
year period ended on such anniversary date; and (iii) on the seventh anniversary
of the Closing Date, an amount equal to fifteen percent (15%) of the balance of
the Escrow Amount and interest accrued thereon, if any, outstanding at the
commencement of the one year period ended on such anniversary date. Xxxxxxxxx
International shall be entitled, at all times, to direct the investment of the
Escrow Amount within parameters to be agreed by Xxxxxxxxx International and
Glacier, acting reasonably, provided that such investments will be low risk,
conservative investments. For greater certainty, in all events, the Vendor shall
be entitled to all interest earned on the Escrow Amount.
2.04 CLOSING AND DELIVERABLES
(1) Subject to the terms and conditions contained herein, the Closing shall
take place as soon as practicable but, in any event, within five (5) Business
Days after satisfaction or waiver of the conditions set forth in Article 5
hereof (other than conditions which, by their terms, are to be satisfied at the
Closing) (the "Closing Date") at the offices of Farris, Vaughan, Xxxxx & Xxxxxx
LLP P.O. Box 10026, 000 X. Xxxxxxx Xxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx.
(2) At the Closing, the Vendor shall deliver to the Purchaser the
following:
(a) share certificates representing the Shares duly endorsed for
transfer to the Purchaser or accompanied by duly executed stock
transfer powers;
(b) share certificates representing all of the shares of the Real
Estate Companies duly endorsed for transfer to the Purchaser or
its nominee or accompanied by duly executed stock transfer
powers;
(c) resolutions of the directors of each of the Corporation and the
Real Estate Companies consenting to the transfer of the Shares
and the Real Estate Company Shares, respectively, to the
Purchaser or its nominee;
(d) resignations and releases of each of the directors and officers
of the Corporation, the Subsidiaries and the Real Estate
Companies;
(e) the minute books of the Corporation, the Subsidiaries and the
Real Estate Companies and by making the same available for
collection at the place in which they are situate;
(f) an officer's certificate in accordance with Section 5.02(1)(c);
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(g) a certificate of a duly authorized officer of the Corporation
attaching copies of: (i) the articles of incorporation or similar
documents of the Corporation, the Subsidiaries and the Real
Estate Companies; (ii) a certificate of good standing, status or
similar certificate in respect of the Corporation, the
Subsidiaries and the Real Estate Corporation dated within three
(3) Business Days of the Closing Date; and (iii) the by-laws of
the Corporation, the Subsidiaries and the Real Estate Companies;
(h) an executed counterpart of the Pension and Benefits Agreement
signed by the Vendor and Xxxxxxxxx International;
(i) an executed counterpart of the Non-Competition Agreement signed
by Xxxxxxxxx International and the Vendor;
(j) releases of the Encumbrances as set forth on Schedule 2.04(2)(j)
or undertakings, satisfactory to the Purchaser, agreeing to
release such Encumbrances;
(k) certificates representing the securities of the Subsidiaries
beneficially owned by the Corporation; and
(l) executed counterparts of the Indemnity Cooperation Agreement,
signed by the Vendor, Xxxxxxxxx International, HCNLP, HCN GP, HCN
Publications Company, KCN, Eco Log and 3050944 Nova Scotia ULC.
(3) At the Closing, the Purchaser shall deliver to the Vendor the
following:
(a) payment of the Purchase Price (less the Escrow Amount) in
Canadian dollars by wire transfer of immediately available funds
to an account or accounts specified by the Vendor and, at the
direction of the Vendor, payment of the Escrow Amount to the
Escrow Agent;
(b) an officer's certificate in accordance with Section 5.03(1)(c);
(c) an executed counterpart of the Pension and Benefits Agreement
signed by the Purchaser and Glacier;
(d) an executed counterpart of the Non-Competition Agreement signed
by the Purchaser and Glacier; and
(e) an executed counterpart of the Indemnity Cooperation Agreement
signed by the Purchaser and Glacier.
2.05 HOLLINGER INTERNATIONAL GUARANTEE
Xxxxxxxxx International hereby unconditionally and irrevocably guarantees
the due and punctual performance by the Vendor of its obligations under this
Agreement and the Ancillary Agreements, as the same may be amended, changed,
replaced, settled, compromised or otherwise
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modified from time to time, and irrespective of any bankruptcy, insolvency,
dissolution, winding-up, termination of the existence of or other matter
whatsoever respecting the Vendor or the Purchaser or any successor or permitted
assignee or any other event or circumstance involving the Purchaser or the
Vendor that would otherwise limit the obligations of the guarantor under this
guarantee and including, without limitation, the unconditional and irrevocable
guarantee of the payment of all indemnification claims for which the Vendor is
liable to the Purchaser pursuant to this Agreement and all obligations of the
Vendor under the Benefits Plans as described in the Pension and Benefits
Agreement. Xxxxxxxxx International shall be liable to the Purchaser if and only
to the extent that it is established that the Vendor is so liable. The Purchaser
is not required to exhaust all remedies against the Vendor prior to proceeding
against Xxxxxxxxx International under this guarantee. In no event shall the
liability of Xxxxxxxxx International to the Purchaser hereunder be greater than
that of the Vendor to the Purchaser hereunder.
2.06 GLACIER GUARANTEE
Glacier hereby unconditionally and irrevocably guarantees the due and
punctual performance by the Purchaser of its obligations under this Agreement
and the Ancillary Agreements, as the same may be amended, changed, replaced,
settled, compromised or otherwise modified from time to time, and irrespective
of any bankruptcy, insolvency, dissolution, winding-up, termination of the
existence of or other matter whatsoever respecting the Vendor or the Purchaser
or any successor or permitted assignee or any other event or circumstance
involving the Purchaser or the Vendor that would otherwise limit the obligations
of the guarantor under this guarantee and including, without limitation, the
unconditional and irrevocable guarantee of the payment of all indemnification
claims for which the Purchaser is liable to the Vendor pursuant to this
Agreement. Glacier shall be liable to the Vendor if and only to the extent that
it is established that the Purchaser is so liable. The Vendor is not required to
exhaust all remedies against the Purchaser prior to proceeding against Glacier
under this guarantee. In no event shall the liability of Glacier to the Vendor
hereunder be greater than that of the Purchaser to the Vendor hereunder.
2.07 TAXES
The Purchaser shall pay any sales, use, transfer, excise, stamp or other
similar taxes imposed by reason of the sale of the Shares, excluding, for
greater certainty, any income taxes, capital or capital gains taxes of the
Vendor, pursuant to this Agreement and any deficiency, interest or penalty with
respect to such taxes.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
3.01 VENDOR'S REPRESENTATIONS AND WARRANTIES
(1) The Vendor represents and warrants to the Purchaser that, except as
disclosed in the Disclosure Letter:
(a) The Vendor is the beneficial and registered owner of the Shares.
(b) The Vendor is a corporation duly incorporated and validly
subsisting under the Applicable Laws of its jurisdiction of
formation, with the corporate power to own its assets and to
carry on its business.
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(c) The Vendor has good and sufficient power, authority and right to
enter into, deliver and perform its obligations under this
Agreement and the Ancillary Agreements and the Vendor has the
power, authority and right to transfer the legal and beneficial
title and ownership of the Shares and the Real Estate Company
Shares to the Purchaser free and clear of all Encumbrances.
(d) The execution, delivery and performance of this Agreement and the
Ancillary Agreements has been duly authorized by all necessary
corporate action on the part of the Vendor, and each of this
Agreement and the Ancillary Agreements constitutes a valid and
legally binding obligation of the Vendor enforceable against the
Vendor in accordance with their terms subject to general
principles of equity and to applicable bankruptcy, insolvency,
reorganization and other laws of general application limiting the
enforcement of creditors' rights generally and to the fact that
specific performance is an equitable remedy available only in the
discretion of the court.
(e) There is no contract, option or any other right of another
binding upon the Vendor to sell, transfer, assign, pledge,
charge, mortgage or in any other way dispose of or encumber any
of the Shares or the Real Estate Company Shares other than
pursuant to the provisions of this Agreement.
(f) The entering into and the delivery of this Agreement and the
completion of the transactions contemplated hereby by the Vendor
will not result in the violation or breach of:
(i) any of the provisions of the constating documents of the
Vendor, the Corporation, any of the Subsidiaries or the Real
Estate Companies; or
(ii) any Contract to which the Vendor, the Corporation, any of
the Subsidiaries or the Real Estate Companies is a party
except where such violation would not have a Material
Adverse Effect.
(g) Other than Competition Act Compliance, no Authorizations of any
Governmental Entity are required to be obtained by the Vendor in
connection with the execution, delivery or performance by the
Vendor of the Agreement or the Ancillary Agreements except where
the failure to so obtain would not have a Material Adverse
Effect.
(h) The Vendor is not a non-resident Person within the meaning of
section 116 of the Income Tax Act (Canada).
(i) At Closing, the Corporation's sole assets will consist of (i)
158,909,495 HCNLP Units; (ii) 100 common shares of HCN GP; (iii)
100 common shares of Eco Log; (iv) 10,000 Class A common shares
and 400 Class B
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preferred shares of KCN; and (v) a beneficial interest in certain
real estate.
(j) At Closing, the Corporation will have no liabilities and will
have carried on no active business operations.
(k) The Corporation is a corporation incorporated and subsisting
under the laws of Nova Scotia, with the corporate power to own
its assets and to carry on its businesses. Each of the
Subsidiaries and Real Estate Companies is incorporated or formed
and subsisting under the Applicable Laws of its jurisdiction of
incorporation or formation, with the corporate or legal power, as
the case may be, to own its assets.
(l) The authorized share capital of the Corporation consists of
100,000 common shares without nominal or par value, of which only
the Shares are issued. The Shares are validly issued and
outstanding as fully paid and non-assessable.
(m) The name, jurisdiction of formation, jurisdictions in which they
carry on business, authorized capital, issued and outstanding
capital, the owners of record of Equity Securities (except for
the HCNLP Units held other than by the Corporation) of each of
the Subsidiaries and the Real Estate Companies is as set forth in
Schedule 3.01(1)(m). To the knowledge of the Vendor, the
outstanding Equity Securities of each of the Subsidiaries and the
Real Estate Companies are issued and outstanding as fully paid
and non-assessable. All of the Equity Securities of the
Subsidiaries held by the Corporation, and of the Real Estate
Companies held by the Vendor are owned free and clear of all
Encumbrances. There are no contractual obligations binding on the
Corporation, the Vendor, or any of the Subsidiaries with respect
to the voting of any outstanding Equity Securities of any of the
Subsidiaries or either of the Real Estate Companies. To the
knowledge of the Vendor, the Dormant Subsidiaries have no
material assets or liabilities.
(n) To the knowledge of the Vendor, the Subsidiaries and the Real
Estate Companies do not hold any Equity Securities, direct or
indirect, in any Person other than the Subsidiaries and the
Dormant Subsidiaries.
(o) There is no contract, option or any other right of any Person
binding upon any of the Subsidiaries or either of the Real Estate
Companies to: (i) issue any unissued Equity Securities; (ii)
create any additional class of Equity Securities; (iii) sell
transfer, assign, pledge, charge, mortgage or in any other way
dispose of or Encumber any of the Equity Interests of any of the
Subsidiaries; or (iv) repurchase, redeem or otherwise acquire any
Equity Securities.
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(p) The unaudited consolidated financial statements of HCNLP, KCN and
Eco Log, consisting of a balance sheet as at the Reference
Balance Sheet Date and statement of operations for the nine month
period ended on the Reference Balance Sheet Date (hereinafter
collectively referred to as the "Financial Statements") copies of
which are attached hereto as Schedule 3.01(1)(p), have been
prepared in accordance with GAAP, except that there are no notes
thereto or any prior year comparative financial statements, and
fairly present in all material respects the consolidated
financial condition of HCNLP, KCN and Eco Log, as the case may
be, as of the dates thereof and the consolidated results of
operations of HCNLP, KCN and Eco Log, as the case may be, for the
periods covered on a consolidated basis.
(q) The unaudited consolidated financial statements of HCNLP, KCN and
Eco Log, consisting of a balance sheet as at December 31, 2004
and statement of operations for the year ended December 31, 2004
(hereinafter collectively referred to as the "Year End Financial
Statements"), copies of which are attached hereto as Schedule
3.01(1)(q), have been prepared in accordance with GAAP, except
that there are no notes thereto or any prior year comparative
financial statements, and fairly present in all material respects
the consolidated financial condition of HCNLP, KCN and Eco Log,
as the case may be, as of the dates thereof and the consolidated
results of operation, of HCNLP, KCN and Eco Log, as the case may
be, for the periods covered on a consolidated basis.
(r) The only management fees paid or payable by any Subsidiary to
Persons other than the Subsidiaries are paid to Xxxxxxxxx
Canadian Publishing Holdings Co.
(s) The businesses of the Subsidiaries have been carried on in the
Ordinary Course in all material respects since the Reference
Balance Sheet Date and, since that date, no Subsidiary has
entered into any material transaction out of the Ordinary Course.
Without limited the generality of the foregoing, since the
Reference Balance Sheet Date:
(i) to the knowledge of the Vendor, there has been no Material
Adverse Change in the affairs, operations or condition of
each of the Subsidiaries;
(ii) no dividends have been declared or paid, and no other
distribution on any Equity Securities has been made, by any
of the Subsidiaries;
(iii) to the knowledge of the Vendor, no liability or obligation
of any nature (whether absolute, accrued, contingent or
otherwise) which is, either individually or in the
aggregate, material to the
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Subsidiaries on a consolidated basis, has been incurred
other than in the Ordinary Course;
(iv) there has been no material change in the accounting methods
of any Subsidiary;
(v) other than in the Ordinary Course, there has not been any
material increase in or modification of the compensation
payable or to become payable by any of the Subsidiaries to
any of their respective employees or independent
contractors, or any grant to any such employees or
independent contractors of any material increase in
severance or termination pay or any material increase or
modification of any bonus, pension, insurance or benefit
arrangement made to, for or with any of such employees or
independent contractors;
(vi) there has not been any material increase in management fees
paid by HCNLP to Xxxxxxxxx International or any Affiliate;
(vii) to the knowledge of the Vendor, none of the Subsidiaries or
Real Estate Companies has made any capital expenditures, in
the case of any single capital expenditure, in excess of
$100,000 and, in the case of all capital expenditures, in
excess of $500,000 in the aggregate;
(viii) to the knowledge of the Vendor, none of the Subsidiaries
or Real Estate Companies has sold or otherwise disposed of
any material fixed or capital assets;
(ix) none of the Subsidiaries or Real Estate Companies has
suffered or incurred any material damage, destruction or
loss, whether or not covered by insurance;
(x) none of the Subsidiaries has adopted or materially amended
any Benefit Plan;
(xi) none of the Subsidiaries or Real Estate Companies is
obligated to make any payments to (as salary or other
compensation) any director or officer, except to the extent
that such Person is an employee of the respective entity; or
(xii) to the knowledge of the Vendor, none of the Subsidiaries or
Real Estate Companies has agreed to do any of the foregoing.
(t) The Real Estate Companies carry on the business of holding Owned
Properties as bare trustee for the Corporation and the
Subsidiaries, and have no employees or other assets or
liabilities.
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(u) Each of the Subsidiaries and each of the Real Estate Companies
have filed or caused to be filed, within the times and in the
manner prescribed by Applicable Law, all material federal,
provincial, local and foreign Tax returns and Tax reports which
are required to be filed by or with respect to it. The
information contained in such returns and reports is materially
correct and complete and, to the knowledge of the Vendor, such
returns and reports are materially true and complete and reflect
accurately all material liability for taxes of each of the
Subsidiaries and each of the Real Estate Companies as the case
may be, for the periods covered thereby. Except for any Taxes
arising from implementation of the Glacier Pre-Closing
Reorganization Steps, the Subsidiaries and the Real Estate
Companies have no material liability, obligation or commitment
for the payment of Taxes, except such as are disclosed in the
Financial Statements or such Taxes not yet due as have arisen
since the date of the Reference Balance Sheet in the Ordinary
Course, and the Subsidiaries and the Real Estate Companies are
not in arrears with respect to any required withholdings or
instalment payments of any Tax and have not filed any waiver for
their respective taxation year under the ITA or any other
legislation imposing Tax on the Subsidiaries or the Real Estate
Companies, as the case may be. There are no outstanding
agreements or waivers extending the statutory period or providing
for an extension of time with respect to the assessment or
re-assessment of Tax or the filing of any Tax return by, or any
payment of any Tax by the Subsidiaries or either of the Real
Estate Companies and no notice of assessment or reassessment has
been received and to the knowledge of the Vendor, no examination
of any Tax return of any of the Subsidiaries or either of the
Real Estate Companies is currently in progress. There are no
claims, actions, suits or proceedings pending, or to the
knowledge of the Vendor, threatened against any of the
Subsidiaries or either of the Real Estate Companies relating to
Taxes and the Vendor knows of no valid basis for any such claim,
action, suit or proceeding. Each of the Subsidiaries and either
of the Real Estate Companies has withheld from each payment made
by it the amount of all material Taxes and other deductions
required to be withheld therefrom and has paid the same to the
proper taxing or other authority within the time prescribed under
Applicable Law.
(v) All Material Contracts of the Subsidiaries are identified in
Schedule 3.01(1)(v). To the knowledge of the Vendor, none of the
Subsidiaries or Real Estate Companies is in, or alleged to be in,
default or breach of any Material Contract to which it is a party
where such default or breach would constitute a Material Adverse
Effect.
(w) None of the Subsidiaries is a party to or bound by any guarantee,
support, indemnification, assumption, surety or similar
obligation with respect to the obligation, liabilities
(contingent or otherwise) or indebtedness of any Person of a
material nature as of the date hereof.
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(x) To the knowledge of the Vendor, no Subsidiary is as of the date
hereof indebted to, or has any outstanding loan to, any officer,
director, employee, shareholder or any other person with whom
such person is not dealing at arm's length (within the meaning of
the ITA) or any affiliate of any of the foregoing, except as
disclosed in the Financial Statements and except for usual
compensation paid in the Ordinary Course.
(y) To the knowledge of the Vendor, except for Contracts or
agreements made solely between Subsidiaries and except for
contracts of employment, as of the date hereof no Subsidiary is a
party to any contract or agreement with any officer, director,
employee, shareholder or any other Person with whom any
Subsidiary is not dealing at arm's length (within the meaning of
the ITA) or any Affiliate of any of the foregoing.
(z) To the knowledge of the Vendor, no Subsidiary is a party to or
bound by any confidentiality, secrecy or non-disclosure Contract
or any Contract materially limiting its freedom to engage in any
line of business or compete with any other Person.
(aa) To the knowledge of the Vendor, neither the Corporation nor any
Subsidiary has any commitment to acquire any Equity Securities of
any Person or to acquire or lease any business operations, real
property or assets, which assets would be considered material to
the Corporation or any Subsidiary.
(bb) To the knowledge of the Vendor, the assets of each of the
Subsidiaries include sufficient rights and property reasonably
necessary for the conduct of its business, as currently carried
on in the Ordinary Course, in all material respects.
(cc) The buildings, plants, structures, equipment and other tangible
personal property of each of the Subsidiaries and each of the
Real Estate Companies which comprise the Owned Properties are as
of the date hereof in satisfactory operating condition and repair
having regard to their use and age, normal wear and tear
excepted.
(dd) Schedule 3.01(1)(dd) contains a list of all leases, offers to
lease, agreements in the nature of a lease for real property to
which any of the Subsidiaries is a party as lessee, (the
"Leases") setting out, in respect of each Lease, a description of
the leased premises (by municipal address and proper legal
description, if available), the term of the Lease, the basic rent
payable under the Lease, the offers to lease, or any rights of
renewal and the term thereof, and any restrictions on assignment
or a change of control. To the knowledge of the Vendor, each
Lease is in good standing and is in full force and effect without
amendment, except as disclosed in Schedule 3.01(1)(dd). With
respect to each Lease, to the
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knowledge of the Vendor: (i) all rents and additional rents have
been paid in accordance with the provisions of the applicable
Lease; (ii) no waiver or postponement of the lessee's obligations
has been granted by the lessor; (iii) there exists no event of
default or event, occurrence, condition or act (including the
purchase of the Shares) which, with the giving of notice, the
lapse of time or the happening of any other event or condition,
would constitute a default by the lessee under the Lease; and
(iv) all of the covenants to be performed by the lessee under the
Lease have been performed in all material respects.
(ee) Schedule 3.01(1)(ee) contains a list, by owner, of all real
property and premises (the "Owned Properties") owned legally and
beneficially by any of the Corporation and the Subsidiaries and
either of the Real Estate Companies, including a description of
the owned real property or premises by municipal address and
legal description. Each of the Corporation and the Subsidiaries
and each of the Real Estate Companies has good and marketable
legal or beneficial title, as the case may be, to their
respective Owned Properties free and clear of all Encumbrances
except for Permitted Encumbrances. To the Vendor's knowledge, the
use of the Owned Properties do not violate any registered
restrictive covenant. The Vendor has not received written notice
of any condemnation or expropriation proceeding pending or
threatened against any of the Owned Properties. The Vendor has
not received written notice of any outstanding work orders from
any municipality, police department, fire department, sanitation,
health or safety authorities or from any other Person in respect
of any Owned Property.
(ff) There is no agreement, option, understanding or commitment, or
any right or privilege capable of becoming an agreement for the
purchase from any of the Subsidiaries or either of the Real
Estate Companies of its assets other than in the Ordinary Course.
(gg) Except in relation to commercially available
off-the-shelf-software, as of the date hereof none of the
Subsidiaries is a party to or bound by any contract or commitment
to pay any royalty, licence fee or management fee of a material
nature.
(hh) The Disclosure Letter contains a list of all employees of each of
the Subsidiaries as at November 21, 2005, identifying the
employer and the name of the employee.
(ii) To the knowledge of the Vendor, as of the date hereof, each of
the Subsidiaries is in compliance with Applicable Laws respecting
employment and employment practices, terms and conditions of
employment, pay equity and wages and hours of work, except where
non compliance would not have a Material Adverse Effect.
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(jj) To the knowledge of the Vendor, no Subsidiary is engaged in any
unfair labour practice. To the knowledge of the Vendor, as of the
date hereof no unfair labour practice complaint, grievance or
arbitration proceeding is pending or threatened against any of
the Subsidiaries.
(kk) The Disclosure Letter contains a list of all collective
agreements to which any of the Subsidiaries is subject with
respect to any of their respective employees and of all
collective bargaining agreements which are as of the date hereof
being negotiated by any of the Subsidiaries with respect to any
of their respective employees. To the knowledge of the Vendor, no
Subsidiary is subject to any application for certification or
threatened or apparent union organizing campaign for employees
not covered under a collective bargaining agreement nor any
current or pending labour strikes, work slowdowns or work
stoppages.
(ll) No employee of any of the Subsidiaries has any agreement as to
length of notice or severance payment required to terminate his
or her employment, other than such as results by Applicable Law
from the employment of an employee without an agreement as to
notice or severance.
(mm) The Disclosure Letter sets forth a list of agreements between any
of the Subsidiaries and any consultant or independent contractor
as of the date hereof who is entitled to annual compensation
greater than $100,000 or whose agreement can not be terminated
without pay upon a maximum of six months notice.
(nn) To the knowledge of the Vendor, there are no actions, suits,
proceedings, arbitrations or investigations (whether or not
purportedly on behalf of the any of the Subsidiaries) pending or
threatened against any of the Subsidiaries or their respective
business or assets, whether or not insured which, if determined
against the Subsidiary would have a Material Adverse Effect. To
the knowledge of the Vendor, no Subsidiary is subject to any
judgment, order or decree entered in any lawsuit or proceeding of
a material nature and no Subsidiary is the plaintiff or
complainant in any action, suit or proceeding of a material
nature.
(oo) Each of the Subsidiaries and each of the Real Property Companies
and their respective businesses, operations, and properties as of
the date hereof:
(i) is in material compliance with all Environmental Laws and is
not, to its knowledge, the subject of any outstanding
written order from any Governmental Entity alleging a
violation of any Environmental Law which would have a
Material Adverse Effect;
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(ii) has not received any order, request or notice from any
person alleging a material violation of any Environmental
Laws;
(iii) is not a party to any litigation or administrative
proceeding nor, to the knowledge of the Vendor, is any
litigation or administrative proceeding threatened against
it or its property or assets, which in either case asserts
or alleges a material violation of any Environmental Laws;
(pp) To the knowledge of the Vendor, each of the Subsidiaries is
conducting its business in compliance with their respective
constating documents and all Applicable Laws, except where
non-compliance would not have a Material Adverse Effect, and is
duly licensed, registered or qualified, and possesses all
permits, license registration qualifications and quotas to enable
its business to be carried on as now conducted and its assets to
be owned, leased and operated, and all such licences,
registrations, qualifications, permits and quotas are valid and
subsisting and in good standing except, in each case, where
failure to do so would not have a Material Adverse Effect.
(qq) Except where failure to do so would not have a Material Adverse
Effect, all Intellectual Property necessary and material for the
proper carrying on of the Business by the Subsidiaries as of the
date hereof is either: (i) validly and beneficially owned by the
Subsidiary free of all Encumbrances except Permitted
Encumbrances; or (ii) licensed to or otherwise in the lawful use
and possession of the Subsidiary, as the case may be. To the
knowledge of the Vendor, the conduct of the Subsidiaries does not
as of the date hereof infringe upon the Intellectual Property of
any other person where such infringement would have a Material
Adverse Effect. There has not been any claim in writing by any
Person challenging the right of any Subsidiary to use the
mastheads or names used in their respective publications as of
the date hereof.
(rr) The Disclosure Letter contains a list of all material unresolved
claims under the insurance policies of Xxxxxxxxx International in
respect of the Corporation and the Subsidiaries.
(2) Xxxxxxxxx International represents and warrants to the Purchaser that,
except as disclosed in the Disclosure Letter:
(a) Xxxxxxxxx International is incorporated, organized and existing
under the laws of the jurisdiction of its incorporation, and
Xxxxxxxxx International has good and sufficient power, authority
and right to enter into and deliver this Agreement.
(b) This Agreement has been duly authorized, executed and delivered
by, and constitutes a valid and legally binding obligation of,
Xxxxxxxxx International, enforceable against Xxxxxxxxx
International in accordance with its terms subject to
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general principles of equity and to applicable bankruptcy,
insolvency, reorganization and other laws of general application
limiting the enforcement of creditors' rights generally and to
the fact that specific performance is an equitable remedy
available only in the discretion of the court.
(c) Neither the entering into nor the delivery of this Agreement nor
the completion of the transactions contemplated hereby by
Xxxxxxxxx International will result in the violation of:
(i) any of the provisions of the constating documents or by-laws
of Xxxxxxxxx International; or
(ii) any Contract to which Xxxxxxxxx International is a party or
is bound except where such violation would not have a
material adverse effect on the ability of Xxxxxxxxx
International to carry out its obligations hereunder.
(d) Other than Competition Act Compliance, no Authorizations of any
Governmental Entity are required to be obtained by Xxxxxxxxx
International in connection with the execution and delivery or
performance by Xxxxxxxxx International of this Agreement or the
Ancillary Agreements except where the failure to so obtain would
not have a material adverse effect on the ability of Xxxxxxxxx
International to carry out its obligations hereunder.
3.02 SURVIVAL OF VENDOR'S AND XXXXXXXXX INTERNATIONAL'S REPRESENTATIONS,
WARRANTIES AND COVENANTS
(1) The representations and warranties of the Vendor and Xxxxxxxxx
International set forth in this Agreement shall survive the completion of the
sale and purchase of the Shares and the Real Estate Company Shares herein
provided for and, notwithstanding such completion, shall continue in full force
and effect for a period of 24 months from the Closing Date, except that:
(a) the representations and warranties of the Vendor relating to
Taxes set forth in Section 3.01(1)(u) shall continue in full
force and effect for the benefit of the Purchaser until 60 days
after the expiration of the period during which, in the absence
of any waiver or other document extending such period (other than
a waiver or other document that has been filed on or prior to the
Closing Date or filed after the Closing Date with the written
consent of the Vendor, such consent not to be unreasonably
withheld), an assessment, reassessment or other form of
recognized document assessing liability for Taxes under
applicable Tax laws in respect of such Tax issue could be issued
under such Tax laws; and
(b) the representations and warranties of the Vendor set out in
Sections 3.01(1)(a), 3.01(1)(c), 3.01(1)(d) and 3.01(1)(e) shall
continue in full force and effect for the benefit of the
Purchaser for a period of 60 months following the Closing Date.
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(2) The covenants of the Vendor set forth in this Agreement shall survive
the completion of the sale and purchase of the Shares herein provided for and,
notwithstanding such completion, shall continue in full force and effect for the
benefit of the Purchaser in accordance with the terms thereof.
3.03 PURCHASER'S REPRESENTATIONS AND WARRANTIES
(1) The Purchaser and Glacier represent and warrant to the Vendor that:
(a) Each of the Purchaser and Glacier is a corporation duly
incorporated and validly subsisting under the federal laws of
British Columbia (in the case of the Purchaser) and Canada (in
the case of Glacier).
(b) The Purchaser and Glacier have good and sufficient power,
authority and right to enter into, deliver and perform their
respective obligations under this Agreement and the Ancillary
Agreements.
(c) The execution, delivery and performance of this Agreement and the
Ancillary Agreements has been duly authorized by all necessary
corporate action on the part of the Purchaser and Glacier, and
this Agreement and the Ancillary Agreements constitute a valid
and legally binding obligation of each of the Purchaser and
Glacier, enforceable against the Purchaser and Glacier in
accordance with their terms subject to general principles of
equity and to applicable bankruptcy, insolvency, reorganization
and other laws of general application limiting the enforcement of
creditors' rights generally and to the fact that specific
performance is an equitable remedy available only in the
discretion of the court.
(d) The Purchaser and Glacier are Canadian within the meaning of the
Investment Canada Act (Canada).
(e) Other than Competition Act Compliance and certain orders of the
Toronto Stock Exchange and securities regulatory bodies in
Canada, the Purchaser and Glacier are not under any obligation,
contractual or otherwise, to request or obtain the consent of any
Person, and no Authorizations of, or notifications to, any
Governmental Entity are required to be obtained by the Purchaser
or Glacier in connection with the execution, delivery or
performance by the Purchaser or Glacier of this Agreement or the
Ancillary Agreements.
3.04 SURVIVAL OF PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
(1) The representations and warranties of the Purchaser set forth in this
Agreement shall survive the completion of the sale and purchase of the Shares
herein provided for and, notwithstanding such completion, shall continue in full
force and effect for the benefit of the Vendor for a period of 24 months from
the Closing Date.
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(2) The covenants of the Purchaser set forth in this Agreement shall
survive the completion of the sale and purchase of the Shares herein provided
for and, notwithstanding such completion, shall continue in full force and
effect for the benefit of the Vendor in accordance with the terms thereof.
3.05 INVESTIGATIONS
The Purchaser and Glacier are knowledgeable about the industries in which
the Subsidiaries operate and are experienced in the acquisition and management
of businesses. The Purchaser and Glacier and their Representatives have been
afforded reasonable access to the Books and Records, Material Contracts,
facilities and personnel of the Subsidiaries for purposes of conducting a due
diligence investigation of the Subsidiaries. The Purchaser and Glacier have
conducted a reasonable due diligence investigation of the Subsidiaries and their
respective businesses.
3.06 NO INDUCEMENT OR RELIANCE; INDEPENDENT ASSESSMENT
(1) The Purchaser and Glacier have not been induced by and have not relied
upon any representations, warranties or statements, whether express or implied,
made by the Vendor or Xxxxxxxxx International (or their Affiliates or
Representatives) that are not expressly set forth herein (including the
Disclosure Letter), whether or not any such representations, warranties or
statements were made in writing or orally.
(2) The Purchaser and Glacier acknowledge that none of Xxxxxxxxx
International, the Vendor or their Affiliates or Representatives has made any
representation or warranty, express or implied, as to the prospects of the
Corporation, the Subsidiaries, the Real Estate Companies or their respective
businesses for the Purchaser or Glacier or with respect to any forecasts,
projections or business plans made available to the Purchaser or Glacier in
connection with the Purchaser's or Glacier's review of the Subsidiaries and
their respective businesses.
3.07 RELEASE
From and after the expiry of the time periods referred to in Sections 3.02
and 3.04 (as applicable), each Party releases and forever discharges each other
Party from any and all claims, demands, causes of action, liabilities,
obligations, costs and damages of any nature whatsoever which the Party may have
in respect of or in any way arising out of any inaccuracy in or breach of any
representation or warranty contained in this Agreement, except for (and only to
the extent of) any claim in respect of which the Party making the claim has
provided notice to the Party making that representation and warranty in
accordance with Section 6.01(7) prior to the expiry of those time limits and in
respect of which any applicable limitation period imposed by Applicable Law has
not expired and, in that event, only on the terms and conditions of and to the
extent provided for in Article 6.
3.08 KODIAK AND REAL ESTATE WEEKLY
The Purchaser and Glacier have received knowledge of: (i) the potential for
CanWest to cease printing certain publications at Kodiak; and (ii) the potential
termination of the distribution arrangements in respect of Real Estate Weekly.
The representations and warranties of the Vendor and Xxxxxxxxx International
contained therein are qualified by such knowledge and the Purchaser and
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Glacier unconditionally and irrevocably waive any right to make any claim under
this Agreement or otherwise in respect of or in any way relating to such
matters.
ARTICLE 4 - COVENANTS RELATING TO CONDUCT OF BUSINESS
4.01 CONDUCT OF THE BUSINESS PRIOR TO CLOSING BY VENDOR
(1) The Vendor hereby covenants and agrees that, from the date hereof until
the Closing Date, unless otherwise contemplated hereby or consented to in
writing by the Purchaser (which consent will not be unreasonably withheld or
delayed, provided that the Purchaser shall be required to respond to the Vendor
within five Business Days after receipt of written notice requesting approval
from the Vendor with respect to any such action, and, if the Purchaser does not
respond within such time period, such lack of response shall be deemed to
constitute written approval of the Purchaser with respect to any such action),
the Vendor will cause the Corporation, the Subsidiaries and the Real Estate
Companies (collectively, the "Restricted Entities") to be operated in the
Ordinary Course. Without limiting the generality of the foregoing, the Vendor
shall not, and shall cause the Restricted Entities not to, except to the extent
required by Applicable Law:
(a) amend the constating documents of the Restricted Entities
(provided, that the Restricted Entities shall be permitted to
amend such documents for the purpose of removing the "Xxxxxxxxx"
name from the name of the Restricted Entities or for the purpose
of effecting the transactions contemplated by this Agreement);
(b) authorize for issuance, issue, grant, sell, pledge, dispose of
any Equity Securities, or any options, warrants, commitments,
subscriptions or rights of any kind to acquire or sell any Equity
Securities of the Restricted Entities including, but not limited
to, any securities convertible into or exchangeable for Equity
Shares of the Restricted Entities;
(c) split, combine or reclassify any Equity Securities of the
Restricted Entities or redeem, purchase or otherwise acquire or
offer to acquire any Equity Securities of the Restricted
Entities;
(d) permit the Restricted Entities to: (i) assume, guarantee,
endorse, support, indemnify or otherwise become liable or
responsible (whether directly, indirectly, contingently or
otherwise) for the material obligations of any Person; (ii) make
any capital expenditures or make any loans, or advances to any
other Person (other than for customary travel, relocation or
business advances or loans to employees in each case in the
ordinary course of business) in excess of $75,000 in any
individual transaction or in any series of related transactions;
(iii) lend money to, or borrow from, any current or former
officer, director, employee, shareholder or non-arm's length
person or any affiliate of the foregoing except for usual
compensation in the Ordinary Course; (iv) acquire or agree to
acquire by merging or consolidating with, or by purchasing the
assets of, or by any
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other manner, (A) any business or any corporation, limited
liability company, partnership, joint venture, association or
other business organization or division thereof or (B) any assets
that would be, individually or in the aggregate, material to the
Restricted Entities, other than in the Ordinary Course; or (v)
divest, sell, transfer, mortgage, pledge or otherwise dispose of,
or encumber, or agree to divest, sell, transfer, mortgage, pledge
or otherwise dispose of or encumber, any assets other than (A) in
the Ordinary Course, and (B) Permitted Encumbrances and (C)
transfers of assets as part of the Glacier Pre-Closing
Reorganization Steps or the Xxxxxxxxx Pre-Closing Reorganization
Steps;
(e) increase in any material respect the remuneration or employee
benefits of any current or former consultants, independent
contractors and employees of the Restricted Entities, and the
beneficiaries and dependants thereof, other than increases made
in the Ordinary Course or as required by any agreement or any
Benefit Plan in effect on the date hereof or as required by
Applicable Law;
(f) other than as specified herein, and other than in the Ordinary
Course, enter into or propose to enter into any Contract (or any
series of related Contracts), or amend any Material Contract: (i)
to create an obligation for a term of over one year; or (ii) to
create an obligation involving an aggregate value of more than
$75,000 over a twelve (12) month period;
(g) enter into any collective bargaining agreement relating to any
employees of the Restricted Entities;
(h) repay or prepay any liability or obligation in excess of $75,000
prior to its stated maturity except for those required hereunder;
(i) waive any material claims or rights relating to any of the assets
of the Restricted Entities;
(j) declare or pay any dividend or similar distribution except to the
extent contemplated by the Xxxxxxxxx Pre-Closing Reorganization
Steps; or
(k) authorize, or commit or agree to take any of the foregoing
prohibited actions.
(2) For greater certainty, nothing contained in this Article 4 including,
without limitation, the restrictions in Section 4.01(1), shall in any way
restrict or prevent the Vendor or the Restricted Entities from taking or
refraining to take any action considered reasonably necessary, in the sole
judgement of the Vendor or any Restricted Entity to, from time to time: (i)
comply with any duties owed to the holders of any interest in any of the
Subsidiaries or Persons in which the Corporation or any Subsidiary has an
investment; (ii) comply with any term or condition of any Contract to which any
of the Vendor, the Corporation or any Subsidiary is a party other than with
respect to any right of first refusal under the CanWest Agreement or any other
agreement; (iii) address emergency
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situations where capital or other expenditures are reasonably required in order
to mitigate loss or potential loss to the Vendor, the Corporation or any
Subsidiary; (iv) declare or pay any dividend or other distribution contemplated
by the Xxxxxxxxx Pre-Completion Reorganization Steps; or (v) effect the
Xxxxxxxxx Pre-Closing Reorganization Steps. Furthermore, nothing contained
herein shall in any way restrict or prevent the termination or unwinding, in
each case, of any inter-company arrangements to which the Corporation or any
Subsidiary is a party and involving other members of the Xxxxxxxxx Group of
entities, and all transactions reasonably incidental thereto.
4.02 APPROPRIATE ACTION; CONSENTS; FILINGS
(1) Upon the terms and subject to the conditions set forth herein, from the
date hereof until the Closing Date, the Vendor and the Purchaser shall use their
respective commercially reasonable efforts to take, or cause to be taken, all
appropriate action, and do, or cause to be done, and to assist and cooperate
with the other Parties in doing all things necessary, proper or advisable under
Applicable Law or otherwise to consummate and make effective the transactions
contemplated herein as promptly as practicable, including: (i) executing and
delivering any additional instruments necessary, proper or advisable to
consummate the transactions contemplated herein, and to carry out fully the
purposes of this Agreement; (ii) identifying and making all necessary
registrations, declarations, notices or filings (each a "Filing") with any
Governmental Entity as is required in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated herein,
and thereafter making any other required submissions, with respect to the
transactions contemplated hereby including any Filing required under the
Competition Act, and any other Applicable Law; and (iii) obtaining all consents,
waivers, approvals, licenses, permits, orders or authorizations (each, a
"Consent") of any Governmental Entity necessary for the consummation of the
transactions contemplated herein; provided, however, that the Vendor shall not
be required to commence any litigation or offer or grant any accommodation
(financial or otherwise) to any third-party. In addition to the foregoing, the
Purchaser agrees to provide such information and assurances as to financial
capability, resources and creditworthiness as may be reasonably requested by any
Governmental Entity or other third party whose consent or approval is sought in
connection with the transactions contemplated herein. The Purchaser and the
Vendor shall cooperate with each other in connection with the making of any
Filings in accordance with this Section 4.02(1), including providing copies of
all such documents to the non-filing Party and its advisors prior to filing and
implementing all reasonable additions, deletions or changes suggested in
connection therewith. All reasonable fees and costs incurred in connection with
the Filings pursuant to this Section 4.02 shall be paid by the Purchaser
(including fees for any Competition Act filings) and all reasonable fees and
costs incurred for obtaining the Consents should be borne by the Vendor. The
Vendor and the Purchaser shall furnish to each other all information required
for any application or other Filing to be made pursuant to any Applicable Law in
connection with the transactions contemplated hereby.
(2) In furtherance of and not in limitation of the provisions of Section
4.02(1) the Purchaser and the Vendor will as soon as practicable following the
execution and delivery of this Agreement, to the extent required, prepare and
provide submissions to the Commissioner of Competition, including a request for
a no-action letter and an application for an Advance Ruling Certificate and
promptly furnish any additional information requested by either the Purchaser,
the Vendor or the Commissioner of Competition. In addition, if requested by the
Purchaser, the Vendor or the Commissioner, the Purchaser and the Vendor shall
file a short-form pre-merger notification
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(or, if requested by the Commissioner, a long-form pre-merger notification)
pursuant to the Competition Act. Each of the Vendor and the Purchaser will
advise the other of any communications it has with the Competition Bureau in
connection with the Competition Act and will permit the other to participate in
or review any such communication. The Purchaser shall give to the Vendor notice
of Competition Act Compliance promptly (and in any event within two Business
Days) following receipt by the Purchaser of evidence thereof.
(3) Prior to Closing, the Vendor shall, and shall cause the Corporation to,
use commercially reasonable efforts to obtain all consents and waivers from
third parties in respect of contracts and other obligations, in each case, of
the Corporation, any Subsidiary or the Real Estate Companies to the extent such
contracts and other obligations require such consents and waivers as a result of
the transactions contemplated hereby. The Vendor shall be responsible for all
costs and expenses in connection with the foregoing and the Purchaser shall use
its reasonable efforts to provide cooperation and assistance in this regard
including providing to any such third party all necessary evidence (including
financial information) and agreeing to enter into guarantees or similar
arrangements in favour of any such third party, in each case, as required by any
such third party in order to secure the necessary consents and waivers, but only
to the extent that such guarantees or arrangements were provided by Vendor to
the beneficiary thereunder under the applicable Contract. From and after the
Closing, the Purchaser shall be responsible for obtaining all consents and
waivers referred to above at its expense and the Vendor will use reasonable
efforts to assist the Purchaser with respect thereto.
(4) From the date hereof until the Closing Date, the Vendor and the
Purchaser shall promptly notify each other in writing of any pending or, to the
knowledge of the Vendor or the Purchaser, as applicable, threatened action,
proceeding or investigation by any Governmental Entity or any other Person: (i)
challenging or seeking damages in connection with the transactions contemplated
hereby; or (ii) seeking to restrain or prohibit the consummation of the
transactions contemplated hereby or otherwise limit the right of the Purchaser
to own all or any portion of the Shares or the Real Estate Company Shares. The
Vendor and the Purchaser shall cooperate with each other in defending any such
action, proceeding or investigation, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed.
(5) From and after the date hereof, and at all times following Closing, the
Purchaser and Glacier shall, and shall cause the Corporation and the
Subsidiaries to, provide all necessary cooperation and assistance to the Vendor
and make available all personnel requested by the Vendor in connection with any
proceeding or enquiry by or before any Governmental Entity in connection with
the operation of the Business or the activities of the Corporation and any
Subsidiary or in connection with any third party claim including, without
limitation, any claim in respect of the Special Indemnities, brought against or
involving the Corporation, the Purchaser, Glacier or any Subsidiary. The Vendor
shall reimburse the Purchaser for its reasonable out-of-pocket expenses in
connection with the foregoing.
4.03 PRESERVATION OF BOOKS AND RECORDS
(1) Promptly after Closing, the Vendor shall deliver or cause to be
delivered to the Purchaser all material Books and Records in its possession,
provided that the Vendor shall be
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entitled to retain copies thereof. To the extent that such information is held
in electronic form, the Vendor does not hereby convey any rights to the
Purchaser in any underlying software.
(2) For a period of six (6) years from the Closing Date, Glacier and the
Purchaser shall use its reasonable efforts to preserve and retain, or cause the
Corporation, the Real Estate Company and the Subsidiaries to preserve and
retain, all material Books and Records relating to the Corporation and the
Subsidiaries and the conduct of the Business prior to the Closing. The Purchaser
and Glacier shall not, at any time, dispose of or destroy any of the material
Books and Records without first offering to turn over possession thereof to the
Vendor by written notice to the Vendor at least sixty (60) days prior to the
proposed date of such disposition or destruction provided that the Vendor shall
pay all costs with respect thereto and to the extent that such information is in
electronic form, the Purchaser will not convey any rights to the Vendor in any
underlying software.
(3) At any time for a period of six (6) years from the Closing Date and
thereafter in the event that either Party has issued an Indemnification Notice
to the other Party, or the Vendor requires access to such Books and Records in
connection with any aspect of the Special Indemnities, any request or enquiry by
any Governmental Entity:
(a) the Purchaser and Glacier shall allow the Vendor and its
Representatives access to all Books and Records at the Vendor's
request and on reasonable notice and at reasonable times at
Glacier's principal place of business or at any location where
any Books and Records are stored, and the Vendor and its
Representatives shall have the right at its own expense to make
copies of any Books and Records; provided, however, that any such
access or copying shall be had or done in such a manner so as not
to unduly interfere with the normal conduct of the business of
the Corporation or the Subsidiaries; and
(b) the Purchaser and Glacier shall, or shall cause the Corporation
and/or the Subsidiaries to, make available to the Vendor at the
Vendor's request and cost and upon reasonable notice and at
reasonable times and upon written request: (i) the Corporation's
and the Subsidiaries' personnel to assist the Vendor in locating
and obtaining any Books and Records; and (ii) any of the
Corporation's and the Subsidiaries' personnel whose assistance or
participation (including as witnesses) is reasonably required by
the Vendor or any of its Affiliates in anticipation of, or
preparation for, existing or future litigation or other matters
in which the Vendor or any of its Affiliates are involved,
including in connection with the preparation of any report or Tax
Return to be filed by the Vendor under Applicable Law or
otherwise or for the purposes of responding to or defending
against any action, suit, proceeding, audit, investigation or
claim in respect of any Taxes arising prior to the Closing Date
relating to the Corporation or the Subsidiaries.
(4) The Vendor and Xxxxxxxxx International shall maintain the
confidentiality of any information (other than information that is already in
the public domain) received from the Purchaser as a result of its access to the
Books and Records under this Section 4.03 and, except as otherwise
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authorized by the Purchaser, will not disclose to any third party (except as may
be required by Applicable Law or in any suit, action or proceeding involving the
Vendor or Xxxxxxxxx International) any such information.
4.04 TAX MATTERS
(1) The Vendor shall timely prepare and file or cause the Corporation and
the Subsidiaries to timely prepare and file all Tax Returns of the Corporation
and the Subsidiaries that are required to be filed on or before the Closing
Date. The Vendor shall prepare all Tax Returns of the Corporation and the
Subsidiaries that are required to be filed after the Closing Date in respect of
periods beginning before and ending before or on the Closing Date. The Purchaser
shall prepare any Tax Return of HCNLP for a period beginning January 1, 2006 and
the Vendor shall provide the Purchaser with such assistance as the Purchaser
reasonably requests in the connection with the preparation of such Tax Returns.
Except to the extent otherwise required by Applicable Law, all such Tax Returns
shall be prepared in a manner consistent with prior practice with respect to the
treatment of specific items on the Tax Returns. The Vendor or the Purchaser, as
the case may be, shall provide the Purchaser or Vendor, as the case may be, with
a draft of all such Tax Returns that it prepared, or caused to be prepared, at
least twenty-one (21) days prior to the filing deadline(s) for such Tax Returns
for the review and approval of the Purchaser, the Corporation or the applicable
Subsidiary, or for the review and approval of the Vendor, as the case may be,
which approval shall not be unreasonably withheld. The Purchaser and Glacier
shall, and shall cause the Corporation and Subsidiaries to, not withhold
approval to the filing of a Tax Return prepared, or caused to be prepared, by
the Vendor if there is a reasonable basis for the filing positions implicitly or
expressly contained therein and shall cause an authorized person of the
Corporation or the applicable Subsidiary, as the case may be, to execute and
file all such approved Tax Returns, except where under Applicable Law, an
authorized person of the Vendor may execute and file such Tax Return. The Vendor
shall not withhold approval to the filing of a Tax Return of HCNLP prepared, or
caused to be prepared, by the Purchaser if there is a reasonable basis for the
filing positions implicitly or expressly contained therein.
(2) After the Closing, the Purchaser and Glacier shall provide, and cause
the Corporation and the Subsidiaries to provide, to the Vendor such information
and assistance as is reasonably requested by the Vendor for the purposes of
preparing the Tax Returns referred to in Section 4.04(1) and determining the
Vendor's (or its Affiliates) liability for Taxes, including the availability to
the Vendor (or its Affiliates) of any foreign tax credits in respect of the
Corporation and the Subsidiaries. Without limiting the generality of the
foregoing, the Purchaser and Glacier shall provide to the Vendor copies of any
Tax Returns of the Corporation and the Subsidiaries that are filed after the
Closing in respect of periods that end on or before the Closing Date or that
include the Closing Date no later than ten (10) days after the filing of such
Tax Returns.
(3) After the Closing, each Party shall provide to the other Parties, at
such other Parties' expense, such information and assistance as is reasonably
requested by the other Parties for the purpose of completing and filing any Tax
Returns, claiming any refunds or credits and responding to, defending against or
conducting any action, suit, proceeding, audit, investigation or claim in
respect of Taxes.
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(4) Except to the extent required by Applicable Law, the Purchaser and
Glacier shall not, and shall cause the Corporation, the Subsidiaries and the
Purchaser's Affiliates to not, without the prior written consent of the Vendor,
which shall not be unreasonably withheld, amend, rescind or refile any Tax
Return or election filed by or in connection with the Corporation or the
Subsidiaries, or settle any audit, examination or other proceeding in connection
with Taxes of or with respect to the Corporation or the Subsidiaries for any
period, or portion thereof, ending on or before the Closing Date or waive any
assessment periods.
(5) After the Closing Date the Vendor shall exercise at its expense,
complete control over the handling, disposition and settlement of any audit,
investigation or similar proceeding in respect of any Taxes due or payable by
the Corporation or any Subsidiary for which the Vendor may be liable or against
which the Vendor may be required to indemnify the Purchaser. The Purchaser and
Glacier shall notify the Vendor in writing promptly upon receiving written
notice of any such audit, investigation or similar proceeding and shall provide
to the Vendor, at the Vendor's expense, such information and assistance as is
reasonably requested by the Vendor in respect thereof. The Vendor shall promptly
notify the Purchaser if, in connection with any such audit, investigation or
similar proceeding, any Governmental Entity proposes in writing to make any
assessment, reassessment, determination or adjustment or to take any other
action in respect to Taxes due or payable by the Corporation or any Subsidiary
which could affect the Corporation or the Subsidiary following the Closing Date.
The Vendor shall not, without the written consent of the Purchaser which consent
shall not be unreasonably withheld, settle, compromise or otherwise dispose of
any audit, investigation or similar proceeding on terms that may affect Taxes of
the Corporation or any Subsidiary for a period ending after the Closing Date.
(6) The Purchaser and Glacier shall not initiate or cause the Subsidiaries
to initiate any Income or Tax adjustment, for any period ending on or before the
Closing Date, that would result in a reduction of Safe Income attributable to
any of the Shares without the prior written consent of the Vendor.
(7) The Purchaser and Glacier shall, and shall cause the Corporation and
the Subsidiaries to, provide all financial data and other information concerning
the Corporation and the Subsidiaries for the 2006 and earlier calendar years to
enable Xxxxxxxxx International and the Vendor to prepare and file any Tax
Returns required to be filed by them or to determine the Tax consequences
related to their direct or indirect ownership of the Corporation and the
Subsidiaries.
4.05 MAIL; PAYMENTS
(1) The Vendor shall promptly deliver to the Purchaser copies of any
correspondence or other communication received by the Vendor after the Closing
Date pertaining to the Corporation, the Real Estate Companies or any Subsidiary
and, where such correspondence or other communication relates exclusively to the
Corporation or any Subsidiary, originals thereof. The Purchaser and Glacier
shall and shall cause the Corporation, the Real Estate Companies, and the
Subsidiaries to promptly deliver to the Vendor any correspondence or other
communication received by the Purchaser and Glacier after the Closing Date
pertaining to the Vendor or its Affiliates and, where such correspondence
relates exclusively to the Vendor or its Affiliates, originals thereof.
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(2) The Vendor shall promptly pay or deliver to the Purchaser any monies or
cheques which have been mistakenly sent after the Closing Date by customers of
the Corporation and any Subsidiary to the Vendor and which should have been sent
to the Purchaser. The Purchaser and Glacier shall promptly pay or deliver to the
Vendor any monies or checks which have been mistakenly sent after the Closing
Date to the Purchaser and which should have been sent to the Vendor or its
Affiliates.
4.06 NAME CHANGE OF THE CORPORATION
(1) The Purchaser and Glacier acknowledge that neither the Purchaser,
Glacier nor the Corporation or any Subsidiary shall have the right, directly or
indirectly, to use: (i) the "Xxxxxxxxx" name, or any derivative thereof or any
logo related thereto or any other name, any derivative thereof or any logo
related thereto used by the Vendor or any of its Affiliates (other than those
used exclusively by the Corporation); or (ii) any of the Vendor's trade names,
trademarks, trade or service marks containing such names (collectively, together
with the items referenced in clause (1), the "Vendor Marks"). No later than
ninety (90) days after the Closing Date, the Purchaser and Glacier shall cause
the Corporation and Subsidiary to cease, and shall thereafter prohibit the
Corporation and each Subsidiary from, using the Vendor and the Subsidiaries
Marks. Without limiting the foregoing, as promptly as possible subsequent to the
Closing (and in any event, no later than ninety (90) days after the Closing
Date), the Purchaser and Glacier shall cause the Corporation and each Subsidiary
to: (x) remove the Vendor Marks from any premises or other objects on which such
Vendor Marks appear; and (y) destroy any unused materials, including, without
limitation, any stationery, employee manuals, handbooks and related material,
bearing the Vendor Marks.
(2) If at any time after the Closing Date, the Corporation, any Subsidiary
or the Real Estate Companies renews, amends, supplements or otherwise modifies
in any way any agreement entered into prior to the Closing Date, the Purchaser
and Glacier shall, and shall cause the Corporation, the Subsidiaries and the
Real Estate Companies to, in connection with such renewal, amendment, supplement
or modification, use commercially reasonable efforts to ensure that the
Agreement ceases to refer to "Xxxxxxxxx" in any way unless Xxxxxxxxx
International or an Affiliate (other than the Corporation and the Subsidiaries)
continues to be a party thereto or except to the extent that a recital to such
agreement contains a reference to Xxxxxxxxx for explanatory purposes only.
(3) In the event that the Purchaser, Glacier or any of their Affiliates
violates any of its obligations under Section 4.06(1), the Vendor may proceed
against it in law or in equity for such damages or other relief as a court may
deem appropriate. The Purchaser and Glacier acknowledge that a violation of
Section 4.06(1) may cause the Vendor irreparable harm which may not be
adequately compensated for by money damages. The Purchaser and Glacier therefore
agree that in the event of any actual or threatened violation of Section
4.06(1), the Vendor shall be entitled, in addition to other remedies that it may
have, to seek a temporary restraining order and to preliminary and final
injunctive relief against the Purchaser, Glacier or the relevant Affiliates to
prevent any violations of Section 4.06(1) without the necessity of posting a
bond or other security.
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4.07 RELEASE OF OBLIGATIONS
The Purchaser and Glacier shall cooperate with the Vendor to use their
commercially reasonable efforts to obtain a full and unconditional release of
all guarantees, letters of credit, performance bonds or other indebtedness, and
any and all other obligations of whatever nature of the Vendor or its Affiliates
relating to or in respect of the Corporation or the Subsidiaries except in
respect of those guarantees and obligations provided hereunder or entered into
in furtherance of this Agreement or an Ancillary Agreement, (collectively, the
"Vendor Obligations"), pursuant to one or more written release agreements, each
in a form reasonably satisfactory to the Vendor (each, a "Release Agreement")
and, if applicable, by agreeing to enter into a replacement guarantee or similar
arrangement in favor of any third party who is a beneficiary of such Vendor
Obligation, but only to the extent that it does not result in any change in the
material terms and conditions of the guarantee or similar arrangements which are
more onerous to the Purchaser or Glacier than those which existed under the
original agreement with the Vendor. Each Release Agreement shall provide for the
Corporation, the relevant Subsidiary and/or the Purchaser and Glacier, subject
as aforesaid, to assume and to become collectively or solely responsible for any
and all liabilities, guarantees, covenants, obligations, costs, or payments
associated with underlying agreement or obligation. In addition to the
foregoing, and not in limitation thereof, the Purchaser and Glacier shall
provide any beneficiary of such Vendor Obligation requiring the same in
connection with the aforementioned releases, a performance bond, payment bond,
note, letter of credit or similar guarantee or instrument in an aggregate
principal amount and with terms and conditions and from banks, other financial
institutions, or surety companies, in each case satisfactory to such beneficiary
to replace any performance bond, payment bond, letter of credit or similar
guarantee or instrument outstanding with respect to the Vendor Obligations
except to the extent that Glacier is precluded from doing so by credit
agreements to which it is a party. The Purchaser and Glacier shall provide all
necessary evidence required by such third parties in order to secure the
necessary releases and replacement guarantees. The Purchaser and Glacier shall
indemnify and hold harmless the Vendor from and against any and all Losses
incurred by the Vendor in connection with or arising from the enforcement
against the Vendor of any Vendor Obligation, which indemnity shall continue in
full force and effect for the benefit of the Vendor indefinitely.
4.08 INDEMNITY COOPERATION AGREEMENT
The Parties agree that, notwithstanding the Closing, the Vendor and
Xxxxxxxxx International shall be entitled, in their sole discretion and expense,
to control and direct all matters related to any CanWest Arbitration, any other
matters arising out of or in respect to the CanWest Agreement, the Special
Committee Litigation, the Litigation, any Section 19 Claims and any Government
of Canada Funding claims involving the Corporation, any of the Subsidiaries or
any Person affiliated with the Purchaser which has acquired a right to publish a
newspaper from a Subsidiary including, without limitation, the exclusive right
to retain and instruct counsel and to enter into any settlement or other
negotiations with respect thereto. In connection therewith, the Vendor,
Xxxxxxxxx International, the Purchaser, Glacier, the Corporation, HCNLP, HCN GP,
HCN Publications Company, Eco Log, KCN and 3050944 Nova Scotia ULC (such
Subsidiaries, the "Cooperating Subsidiaries") will, concurrently with the
Closing, enter into an agreement (the "Indemnity Cooperation Agreement") in the
form set out in Schedule 4.08. The Purchaser and Glacier covenant and agree to
cooperate and to cause the Cooperating Subsidiaries to cooperate, in all
respects, with the Vendor and Xxxxxxxxx International so as to assist the Vendor
and Xxxxxxxxx
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International in enjoying benefits of the Indemnity Cooperation Agreement and
not in any way impair or interfere with the rights of the Vendor or Xxxxxxxxx
International thereunder. The Indemnity Cooperation Agreement will provide that
the Purchaser and Glacier shall cause the Corporation and the Cooperating
Subsidiaries to hold all amounts received by them in connection with any award
or settlement in respect of the Special Committee Litigation, the Litigation, or
the CanWest Arbitration in trust for the sole and exclusive benefit of the
Vendor and Xxxxxxxxx International and promptly notify the Vendor and Xxxxxxxxx
International in writing as to the receipt thereof, subject as set forth below,
and the Purchaser shall promptly pay all such amounts, without set-off or
deduction of any kind, except as herein expressly provided, to the Vendor and
Xxxxxxxxx International, or as they may direct. The amount paid by the Purchaser
shall be reduced by any Taxes reasonably estimated to be payable by Glacier, the
Purchaser and any Cooperating Subsidiary in respect of the amount received.
Glacier and the Purchaser agree to, or to cause the relevant entity, as the case
may be, to, treat, for income tax purposes, any amount received in connection
with the CanWest Arbitration, the Special Committee Litigation or the Litigation
on the basis that results in the least amount of Taxes being payable by the
Purchaser, or relevant entity, as the case may be, provided that there is a
reasonable basis for doing so under Applicable Law and: (i) in the event that at
the time of filing of any Tax Return it is determined that the Taxes payable
exceed the amount previously estimated or any Governmental Entity assesses or
reassesses on a basis that results in additional Taxes being payable on such
amount, the Vendor agrees to pay forthwith such additional Taxes to the
Purchaser; and (ii) in the event that at the time of filing any Tax Return it is
determined that the Taxes payable are less than the amount previously estimated
or any Governmental Entity assesses or reassess on a basis that results in less
Taxes being payable on such amount, the Purchaser agrees to pay forthwith the
amount of such reduction to the Vendor. If any of the Purchaser, Glacier or any
Cooperating Subsidiary obtains any Tax benefit as a consequence of the CanWest
Arbitration, the Special Committee Litigation or the Litigation and, in a
circumstance where the Purchaser is seeking indemnification in respect of a Loss
as a consequence thereof, such Tax benefit does not reduce the amount of the
Purchaser's Loss, the Purchaser agrees to pay the Vendor the amount of such Tax
benefit.
4.09 EMPLOYEE MATTERS
(1) The Vendor shall be responsible for and shall discharge or cause to be
discharged all obligations and liabilities for wages, salaries, bonuses,
overtime, benefits, employee plans, Employment Insurance, workers' compensation,
occupational health and safety, human rights, Canada or Quebec Pension Plan,
severance pay, termination pay, notice of termination of employment or pay in
lieu of such notice, damages for wrongful dismissal or other actions, causes of
actions or claims which accrue up to the Closing Date, including, without
limitation, vacation pay accrued up to the Closing Date, in relation to the
Business Employees.
(2) The Purchaser and Glacier shall continue to cause the Subsidiaries to
employ the Excluded Employees on the same terms and conditions as are in effect
as of the Closing Date for a period of up to forty-five (45) days following the
Closing Date. The Purchaser and Glacier shall be responsible for and shall
discharge all obligations and liabilities for wages, salaries, bonuses,
overtime, vacation pay, benefits, employee plans, Employment Insurance, workers'
compensation, occupational health and safety, Canada or Quebec Pension Plan,
severance pay, termination pay, notice of termination of employment or pay in
lieu of such notice, damages for wrongful dismissal or other actions, causes of
actions or claims in respect of the Excluded Employees which accrue after
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the Closing Date. Subject to the Excluded Employee Severance Payment Indemnity,
the Purchaser and Glacier shall indemnify and hold harmless the Vendor from and
against any and all losses, damages, liability, costs or expenses directly or
indirectly suffered by the Vendor resulting from any breach of the Purchaser's
or Glacier's obligations and liabilities under this Section 4.09.
(3) Subject to the right to terminate the employment of the Included
Employees, and any Excluded Employees whose employment is not terminated within
forty-five (45) days following the Closing Date, at any time, either with or
without cause, the Purchaser, Glacier and any direct or indirect subsidiary
shall continue to employ the Included Employees, and any Excluded Employees
whose employment is not terminated within forty-five (45) days following the
Closing Date, on terms and conditions which are substantially similar, in the
aggregate, to the terms and conditions which are in effect as of the Closing
Date (including, without limitation, position, location of work, hours of work,
compensation, benefits and pension), and shall not otherwise change any terms
and conditions of employment in a manner which amounts to a constructive
dismissal. Subject to the provisions of the Pension and Benefits Agreement
regarding benefits payable to Business Employees who are disabled on the Closing
Date, the Purchaser and Glacier shall cause the applicable Subsidiary to be
responsible for and shall discharge all obligations and liabilities for wages,
salaries, bonuses, overtime, vacation pay, benefits, employee plans, Employment
Insurance, workers' compensation, occupational health and safety, Canada or
Quebec Pension Plan, severance pay, termination pay, notice of termination of
employment or pay in lieu of such notice, damages for constructive dismissal,
wrongful dismissal or other actions, causes of actions or claims in respect of
the Included Employees, and any Excluded Employees that are not terminated
within forty-five (45) days following the Closing Date, which accrue after the
Closing Date. In addition to any other provision for indemnification contained
within this Agreement, the Purchaser and Glacier shall indemnify and hold
harmless the Vendor from and against any and all losses, damages, liability,
costs or expenses directly or indirectly suffered by the Vendor resulting from
any breach of the Purchaser's or Glacier's obligations and liabilities under
this Section 4.09.
4.10 GLACIER PRE-CLOSING REORGANIZATION STEPS
Prior to the Time of Closing, at the Purchaser's option and upon notice
thereof being provided to the Vendor by the Purchaser, the Parties agree to
implement the Glacier Pre-Closing Reorganization Steps in accordance with
Schedule 4.10 hereof. Upon such notice being provided by Glacier to the Vendor,
the Parties agree to implement the Glacier Pre-Closing Reorganization Steps in
accordance with Schedule 4.10 hereof. Upon notice being provided hereunder, the
Purchaser and Glacier shall be deemed to waive the conditions under this
Agreement for their benefit set out in Sections 5.02(1)(a), (b), (c) and (e)
hereof. The Purchaser and Glacier shall be solely responsible for any and all
costs and expenses (including, without limitation, all Taxes, legal fees and
disbursements) incurred by the Purchaser, Glacier, the Vendor and its
Affiliates, Xxxxxxxxx International and its Affiliates, the Corporation, the
Subsidiaries and the Real Estate Companies, in connection with or in any way
related to implementation of the Glacier Pre-Closing Reorganization Steps and
the termination or unwinding of the Glacier Pre-Closing Reorganization Steps
should Closing not occur. The Purchaser and Glacier shall reimburse each of the
Vendor and its Affiliates, Xxxxxxxxx International and its Affiliates, the
Corporation, the Subsidiaries and the Real Estate Companies forthwith, on an as
incurred basis, for any and all costs and expenses so incurred. The Purchaser
and Glacier hereby indemnify and save harmless the Vendor and its Affiliates,
Xxxxxxxxx International and its Affiliates, the Corporation, the Subsidiaries
and the Real Estate Companies for
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any and all claims, demands, suits, actions, proceedings, obligations,
penalties, encumbrances, assessments (including, without limitation, assessments
of Taxes), Taxes, costs, fees (including, without limitation, legal fees and
disbursements) expenses, losses (including, without limitation, loss of profit
or revenue), liabilities, damages (including, without limitation, indirect,
special, consequential and punitive damages or damages for pure economic loss)
of any nature whatsoever, directly or indirectly incurred or suffered by any of
them as a result of, in connection with or arising from, directly or indirectly,
implementation of Glacier Pre-Closing Reorganization Steps or the unwinding or
termination of Glacier Pre-Closing Reorganization Steps should Closing not
occur. The obligations of the Purchaser and Glacier set forth in this Section
4.10 shall, notwithstanding any other provision of this Agreement to the
contrary, survive completion or termination of this Agreement and the
transactions contemplated hereby and shall continue in full force and effect for
the benefit of the Vendor and its Affiliates, Xxxxxxxxx International and its
Affiliates, the Corporation, the Subsidiaries and the Real Estate Companies
until 60 days after the expiration of the period during which, in the absence of
any waiver or other document extending such period an assessment, reassessment
or other form of recognized document assessing liability for Taxes under
applicable Tax laws in respect of such Tax could be issued under such Tax laws.
To the extent that any of Glacier Pre-Completion Reorganization Steps
contemplate or require the establishment of any corporate entity, those entities
shall be unlimited liability companies established under the laws of the
Province of Nova Scotia only.
4.11 XXXXXXXXX PRE-CLOSING REORGANIZATION STEPS
Notwithstanding any other provision of this Agreement, the Vendor and
Xxxxxxxxx International may, at any time prior to the Time of Closing, implement
the Xxxxxxxxx Pre-Closing Reorganization Steps set out in Schedule 4.11.
ARTICLE 5 - CONDITIONS
5.01 CONDITIONS TO OBLIGATIONS OF EACH PARTY
(1) The respective obligations of each Party to effect the transactions
contemplated hereby is subject to the following conditions, having been
satisfied or met or on prior to the Closing, any or all of which may be waived
by agreement of the Vendor and the Purchaser, in whole or in part, to the extent
permitted by Applicable Law:
(a) no court or Governmental Entity of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree, judgment,
injunction or other order (whether temporary, preliminary or
permanent), in any case which is in effect or be pending and
which prevents or prohibits, or will prevent or prohibit if then
pending, consummation of the transactions contemplated hereby;
provided, however, that each of the Parties shall use its
commercially reasonable efforts to cause any such executive
order, decree, judgment, injunction or other order to be vacated
or lifted;
(b) Competition Act Compliance, to the extent required, shall have
been obtained; and
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(c) other than with respect to the matters referred to in Section
5.01(1)(b) above, all Filings and Consents that are listed in
Schedule 5.01(1)(c) shall have been duly made or obtained.
5.02 CONDITIONS FOR THE BENEFIT OF THE PURCHASER
(1) The sale by the Vendor and the purchase by the Purchaser of the Shares
is subject to the following conditions which are for the exclusive benefit of
the Purchaser to be performed or complied with at or prior to the Time of
Closing:
(a) the representations and warranties of the Vendor and Xxxxxxxxx
International set forth in Section 3.01 shall be true and correct
at the Time of Closing with the same force and effect as if made
at and as of such time (except for representations and warranties
that are made as of a specific date, which shall be true and
correct as of that date), except to the extent that any breaches,
inaccuracies or failures of such representations and warranties
to be so true and correct would not individually, or in the
aggregate, have a Material Adverse Effect provided that this
clause shall not, where a specific representation is qualified as
to materiality, be deemed to result in a double-materiality
standard;
(b) the Vendor and Xxxxxxxxx International shall have performed or
complied with all of the terms, covenants and conditions of this
Agreement to be performed or complied with it at or prior to the
Time of Closing except to the extent that failure to perform or
comply would not individually, or in the aggregate, have a
Material Adverse Effect;
(c) the Vendor shall have delivered to the Purchaser a certificate
executed on its behalf by its duly authorized officer certifying
that the conditions set forth in Sections 5.02(1)(a) and (b)
hereof have been satisfied;
(d) the Purchaser shall have been furnished with the documents
referred to in Section 2.04(2) at or prior to the Time of
Closing;
(e) there shall not have occurred any Material Adverse Change from
the date hereof to the Time of Closing (it being acknowledged,
for such purpose, that the withdrawal of all or any portion of
any business provided by CanWest and related entities to HCN
Publications Company shall not constitute a Material Adverse
Change);
(f) the Intercompany Indebtedness shall have been repaid or
eliminated without giving rise to debt forgiveness for the
purposes of the ITA;
(g) all directors and officers of the Corporation, the Real Estate
Companies and the Subsidiaries shall resign at the Closing;
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(h) other than debt owing to or from another Subsidiary, no
Subsidiary shall have any outstanding bonds, debentures, notes,
mortgages or other indebtedness for borrowed money at Closing;
(i) all management agreements or services agreements payable by the
Corporation or the Subsidiaries to Xxxxxxxxx International or its
Affiliates will be terminated without any penalty, fee or costs
to the Corporation or any Subsidiaries; and
(j) all necessary corporate steps and proceedings shall have been
taken to permit the Shares and the Real Estate Company Shares to
be duly and transferred to and registered in the name of the
Purchaser.
5.03 CONDITIONS FOR THE BENEFIT OF THE VENDOR
(1) The sale by the Vendor and the purchase by the Purchaser of the Shares
is subject to the following conditions which are for the exclusive benefit of
the Vendor to be performed or complied with at or prior to the Time of Closing:
(a) the representations and warranties of the Purchaser and Glacier
set forth in Section 3.03 shall be true and correct at the Time
of Closing with the same force and effect as if made at and as of
such time (except for representations and warranties that are
made as of a specific date, which shall be true and correct as of
such date) except to the extent that any breaches, inaccuracies
or failures of such representations and warranties to be so true
and correct would not individually or in the aggregate be
material provided that this clause shall not, where a specific
representation is qualified as to materiality, be deemed to
result in a double-materiality standard;
(b) the Purchaser and Glacier shall have performed or complied, in
all material respects, with all of the terms, covenants and
conditions of this Agreement to be performed or complied with by
them at or prior to the Time of Closing;
(c) the Purchaser and Glacier shall have delivered to the Vendor
certificates executed on their behalf by duly authorized officers
certifying that the conditions set forth in Sections 5.03(1)(a)
and (b) have been satisfied;
(d) the Vendor shall have been furnished the documents referred to in
Section 2.04(3);
(e) completion of the sale by HCPH of all of the shares of 3120575
Nova Scotia Company owned by HCPH to Glacier; and
(f) completion of the sale by HCPH of all of the shares of Great West
Newspaper Group Ltd. owned by HCPH to 6490239 Canada Inc.
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ARTICLE 6 - INDEMNIFICATION
6.01 INDEMNIFICATION
(1) If the Closing shall occur, and subject to the provisions of this
Article 6, the Vendor hereby agrees to indemnify and hold harmless the Purchaser
against and from any and all Losses incurred by the Purchaser as a result of:
(a) the failure of any representation or warranty of the Vendor or
Xxxxxxxxx International contained in this Agreement or an
Ancillary Agreement to be true and correct as of the date made,
except that the Vendor shall not be required to indemnify or save
harmless the Purchaser in respect of any such failure unless the
Purchaser shall have provided notice to the Vendor in accordance
with Section 6.01(7) on or prior to the expiration of the
applicable time period related to that representation and
warranty set out in Section 3.02; and
(b) any breach or non-performance by the Vendor or Xxxxxxxxx
International of any covenant or other obligation to be performed
by it that is contained in this Agreement or any Ancillary
Agreement including, without limitation, obligations under the
Benefit Plans.
(2) If the Closing shall occur, and subject to the provisions of this
Article 6, the Purchaser shall indemnify, defend and save harmless the Vendor
from any and all Losses suffered or incurred by the Vendor as a result of:
(a) the failure of any representation or warranty of the Purchaser or
Glacier contained in this Agreement to be true and correct as of
the date made, except that the Purchaser shall not be required to
indemnify or save harmless the Vendor in respect of any such
failure unless the Vendor shall have provided notice to the
Purchaser in accordance with Section 6.01(7) on or prior to the
expiration of the applicable time period for that representation
and warranty set out in Section 3.04; and
(b) any breach or non-performance by the Purchaser or Glacier of any
covenant or other obligation to be performed by it that is
contained in this Agreement or any Ancillary Agreement.
(3) The Vendor shall not be required to indemnify the Purchaser, and
neither the Purchaser nor Glacier shall be entitled to recover from the Vendor
or Xxxxxxxxx International, any amount for any claims described in Section
6.01(1)(a) in respect of the representations and warranties of the Vendor or
Xxxxxxxxx International hereunder including any certificate delivered hereunder
in respect thereof (collectively, "Representation and Warranty Losses") or any
claims for Losses made under the Pension and Benefits Agreement ("PBA Losses"),
until and unless the amount which the Purchaser or Glacier is entitled to
recover in respect of the Representation and Warranty Losses and the PBA Losses
exceeds, in the aggregate, $500,000 (the "Deductible"), following which, subject
to this Article 6 (including paragraphs (4), (5) and (6) below), the entire
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amount which the Purchaser is entitled to recover in respect of such claims,
less the Deductible, shall be payable.
(4) Any Representation and Warranty Loss or PBA Loss that involves a Loss
of less than $15,000 shall not be entitled to indemnification under this Section
6.01 and shall not be counted toward satisfaction of the Deductible.
(5) Subject to the overall indemnification limitation set out in Section
6.01(6), the maximum amount recoverable by the Purchaser and Glacier together,
in the aggregate, for any and all:
(a) Representation and Warranty Losses (other than Representation and
Warranty Losses relating to breaches or inaccuracies of the
Vendor's representations and warranties in Section 3.01(1)(a),
(c), (d) and (e) (collectively, "Title Representation and
Warranty Losses")) shall (inclusive of all legal fees and
disbursements) not, in any event, exceed $3,000,000;
(b) Title Representation and Warranty Losses shall (inclusive of all
legal fees and disbursements) not, in any event, exceed an amount
equal to 100% of the Purchase Price;
(c) PBA Losses shall (inclusive of all legal fees and disbursements)
not, in any event, exceed $25 million; and
(d) Losses under the Litigation Indemnity shall (inclusive of all
legal fees and disbursements) not, in any event, exceed $5
million;
and in no event shall the Vendor or Xxxxxxxxx International, in any such case,
be liable for any amount in excess thereof.
The maximum amount recoverable by the Vendor and Xxxxxxxxx International
together, in the aggregate, for claims described in Section 6.01(2)(a) in
respect of the representations and warranties of the Purchaser or Glacier (other
than Losses relating to breaches or inaccuracies of the representations and
warranties in Section 3.03(1)(a) and (c)) hereunder including any certificates
delivered hereunder in respect thereof shall be limited to $3,000,000 (inclusive
of all legal fees and disbursements) and in no event shall the Purchaser or
Glacier be liable for any amount in excess thereof. The maximum amount
recoverable by the Vendor and Xxxxxxxxx International together, in the
aggregate, for Losses relating to breaches or inaccuracies of the
representations and warranties of the Purchaser and Glacier in Section
3.03(1)(a) and (c) shall not, in any event, exceed 100% of the Purchase Price
and in no event shall the Purchaser or Glacier be liable for any amount in
excess thereof.
(6) The maximum aggregate amount recoverable by the Purchaser and Glacier
together, in the aggregate, in respect of all Losses incurred by the Purchaser
and Glacier (including, without limitation, Representation and Warranty Losses,
Title Representation and Warranty Losses, PBA Losses, Losses under the Special
Indemnities other than the Glacier Securities Law Indemnity (with the sole
exception of the CanWest Arbitration Indemnity) and Losses under any other
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document or agreement contemplated hereby or otherwise) shall be an amount equal
to 100% of the Purchase Price (inclusive of all legal fees and disbursements)
and in no event shall the Vendor or Xxxxxxxxx International be liable for any
Losses in excess of such amount. The liability of the Vendor to the Purchaser
for Losses under the CanWest Arbitration Indemnity shall not be limited to 100%
of the Purchase Price.
(7) The following procedures shall apply to claims for indemnification
under this Article 6:
(a) In the event that a Party shall incur or suffer any Losses (or
shall reasonably anticipate that it shall suffer any Losses), in
respect of which indemnification may be sought by such Party (an
"Indemnified Party") pursuant to the provisions of this Article 6
from the other Party (each, an "Indemnifying Party"), the
Indemnified Party shall promptly submit to the Indemnifying Party
an Indemnification Notice stating the nature and basis of such
claim including, to the extent it is then known, a description in
reasonable detail of the facts giving rise to the claim for
indemnification hereunder and (if known) the amount or the method
of computation of the amount of such claim, and a reference to
the provisions of this Agreement upon which such claim is based;
provided, however, that the failure of the Indemnified Party to
give the Indemnification Notice promptly shall not relieve the
Indemnifying Party of any liability that the Indemnifying Party
may have to the Indemnified Party, except to the extent that the
Indemnifying Party is prejudiced thereby. In the case of Losses
arising by reason of any third-party claim, the Indemnification
Notice shall be given within thirty (30) days after receipt by
the Indemnified Party of the filing or other written assertion of
any such claim against the Indemnified Party, but the failure of
the Indemnified Party to give the Indemnification Notice within
such time period shall not relieve the Indemnifying Party of any
liability that the Indemnifying Party may have to the Indemnified
Party, except to the extent that the Indemnifying Party is
prejudiced thereby. Thereafter, the Indemnified Party shall
deliver to the Indemnifying Party, within fifteen (15) calendar
days after the Indemnified Party's receipt thereof, copies of all
notices and documents (including court papers) received by the
Indemnified Party relating to the third-party claim.
(b) The Indemnified Party shall provide to the Indemnifying Party on
request all information and documentation in the Indemnified
Party's possession: (i) that is not privileged and is reasonably
necessary; and (ii) that is critical (whether or not privileged),
in each case, to support and verify any Losses which the
Indemnified Party believes give rise to a claim for
indemnification hereunder and shall give the Indemnifying Party
access to all books, records and personnel in the possession or
under the control of the Indemnified Party which would have
bearing on such claim.
(c) In the case of third-party claims with respect to which an
Indemnification Notice is given, the Indemnifying Party shall
have the option at its own
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expense: (i) to conduct any proceedings or negotiations in
connection therewith; (ii) to take all other steps to settle or
defend any such claim; and (iii) to employ counsel of the
Indemnifying Party's choosing and approved by the Indemnified
Party, acting reasonably, to contest any such claim in the name
of the Indemnified Party or otherwise. The Indemnifying Party may
not compromise or settle any claim without the Indemnified
Party's prior written consent, which may not be unreasonably
withheld or delayed. Should the Indemnifying Party provide
written notice of its desire to settle any third party claim but
the Indemnified Party does not provide written consent within a
reasonable period of time, the Indemnified Party shall be
responsible for any incremental costs and expenses incurred
beyond the proposed settlement amount. The Indemnified Party
shall be entitled to participate at its own expense and by its
own counsel in any proceedings relating to any third-party claim
and the Indemnified Party shall be entitled to participate with
counsel of its own choice at the expense of the Indemnifying
Party (except in the case of the Publication Status Indemnity)
if, on the written advice of legal counsel, representation of
both Parties by the same counsel presents a conflict of interest
or is otherwise inappropriate under applicable standards of
professional conduct, provided that in no event shall the
Indemnifying Party be responsible for the expense of more than
one set of such counsel in all events. The Indemnifying Party
shall, within twenty (20) days of receipt of the Indemnification
Notice, notify the Indemnified Party of its intention to assume
the defense of any such claim. Until the Indemnified Party has
received notice of the Indemnifying Party's intention to defend
any such claim, the Indemnified Party shall take reasonable steps
to defend (but may not settle) such claim. If the Indemnifying
Party shall decline to assume the defense of any such claim, or
shall fail to notify the Indemnified Party within twenty (20)
days after receipt of the Indemnification Notice of the
Indemnifying Party's election to defend such claim or fails to
diligently defend such claim after electing to assume conduct,
the Indemnified Party shall defend such claim but may not settle
such claim without the prior written consent of the Indemnifying
Party (which consent shall not be unreasonably withheld or
delayed). Should the Indemnified Party provide notice of its
desire to settle such claim but the Indemnifying Party does not
provide written consent within a reasonable period of time, the
Indemnifying Party shall be responsible for any incremental costs
and expenses incurred beyond the proposed settlement amount. The
expenses of all proceedings, contests or lawsuits in respect of
any such claims (other than those incurred by the Indemnified
Party which are referred to in the third and fourth sentences of
this subparagraph (c)) shall be borne by the Indemnifying Party
but only if the Indemnifying Party is responsible pursuant hereto
to indemnify the Indemnified Party in respect of such claim and,
if applicable, only to the extent required by this Section
6.01(7). Regardless of which Party shall assume the defense of
the claim, the Parties agree to cooperate fully with one another
in connection therewith.
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(8) Nothing in this Section 6.01 shall be construed as a limitation on the
Indemnifying Party's right to contest in good faith whether the Indemnified
Party is entitled to indemnification pursuant to this Section 6.01 with respect
to a particular claim. The Indemnified Party shall have the burden of proof in
establishing the existence of a claim for indemnification under this Agreement
and the amount of Losses suffered by it.
(9) The indemnification provided for in this Section 6.01 shall be the sole
and exclusive remedy of the Indemnified Party (except in the case of fraud on
the part of the Indemnifying Party), whether in contract, tort or otherwise, for
all matters arising under or in connection with this Agreement and the
transactions contemplated hereby, including, without limitation, for any
inaccuracy or breach of any representation, warranty, covenant or agreement set
forth herein and the Indemnified Party hereby irrevocably waives and releases
any rights to take action, institute proceedings or make any claims of any
nature whatsoever against the Indemnifying Party or their respective Affiliates
except pursuant to such indemnification provisions.
(10) Notwithstanding anything contained herein to the contrary, the amount
of any Losses incurred or suffered by an Indemnified Party shall be calculated
after giving effect to: (i) any insurance proceeds received by or otherwise
payable to the Indemnified Party (or any of its Affiliates) with respect to such
Losses (collectively, "Insurance Benefits"); and (ii) any recoveries obtained by
the Indemnified Party (or any of its Affiliates) from any party other than the
Indemnifying Party. The Purchaser agrees to maintain the insurance coverage that
a prudent operator of a business similar to the Business would maintain
following Closing. Each Indemnified Party shall exercise commercially reasonable
efforts to obtain such proceeds, benefits and recoveries. If any such proceeds,
benefits or recoveries are received by an Indemnified Party (or any of its
Affiliates) with respect to any Losses after an Indemnifying Party has made a
payment to the Indemnified Party with respect thereto, the Indemnified Party (or
such Affiliate) shall pay to the Indemnifying Party the amount of such proceeds,
benefits or recoveries (up to the amount of the Indemnifying Party's payment).
(11) With respect to any Losses incurred or suffered by an Indemnified
Party, no liability shall attach to the Indemnifying Party in respect of any
Losses to the extent that the same Losses have been recovered by the Indemnified
Party from the Indemnifying Person, accordingly, the Indemnified Party may only
recover once in respect of the same Loss.
(12) Upon making any payment to an Indemnified Party in respect of any
Losses, the Indemnifying Party shall, to the extent of such payment, be
subrogated to all rights of the Indemnified Party (and its Affiliates) against
any third party in respect of the Losses to which such payment relates. Such
Indemnified Party (and its Affiliates) and Indemnifying Party shall execute upon
request all instruments reasonably necessary to evidence or further perfect such
subrogation rights. To the extent that any breach of any representation or
warranty contained in this Agreement or any other provision of this Agreement is
capable of remedy, the Indemnified Party shall afford the Indemnifying Party a
reasonable opportunity to remedy the matter complained of.
(13) The Indemnified Party shall use commercially reasonable efforts to
mitigate any Losses in respect of which indemnification under this Agreement or
any Ancillary Agreement may be sought, whether by asserting claims against a
third party or by otherwise qualifying for a benefit that would reduce or
eliminate Losses.
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(14) For greater certainty, the amount of any Losses shall be reduced by
the present value of the amount by which any Taxes for which any Subsidiary or
any Person affiliated with the Purchaser which has acquired a right to publish a
newspaper from a Subsidiary is now or in the future accountable or liable to be
assessed is reduced or extinguished as a result of the matter giving rise to
such liability, such reduction to be determined by the Parties acting
reasonably.
(15) From the date hereof through the Closing Date, the Vendor shall have
the right, from time to time, to modify, amend and/or supplement the Disclosure
Letter by delivering any such modifications, amendments and/or supplements to
the Purchaser in writing in accordance with the terms of this Agreement. No such
supplement, amendment or modification shall be evidence, in and of itself, that
the representations and warranties in the corresponding Section are no longer
true and correct in all material respects. It is specifically agreed that the
Disclosure Letter may be modified, amended and/or supplemented to add
immaterial, as well as material, items thereto. In the event that the Vendor
provides the Purchaser with an amendment, supplement, or modification to the
Disclosure Letter within three Business Days prior to the date that the parties
intend to close the transaction contemplated in this Agreement, the parties
agree to extend the Closing Date for a period of three Business Days from the
date of delivery of such information, or otherwise as the parties may agree. In
the event that the amendment, supplement or modification to the Disclosure
Letter constitutes a Material Adverse Effect, then the Purchaser may, at its
election within 3 Business Days of receipt, terminate its obligation to complete
the transactions contemplated hereby by notice in writing to the Vendor. For
purposes of determining whether the Vendor is subject to any claim for
indemnification under this Section 6.01 following the Closing Date for a breach
of any representation or warranty under this Agreement, the Disclosure Letter
shall be deemed to include the information contained therein on the date hereof
and such other information as may be set forth in any modification, amendment
and/or supplement to the Disclosure Letter delivered by the Vendor to the
Purchaser pursuant to this Section 6.01(15). Disclosure of any fact or item in
the Disclosure Letter shall be deemed to constitute disclosure with respect to
each reasonably related provision of this Agreement. Neither the specification
of any dollar amount in any representation or warranty contained in this
Agreement nor the inclusion of any specific item in the Disclosure Letter is
intended to imply that such amount, or higher or lower amounts, or the item so
included or other items, are or are not material, and no party shall use the
fact of the setting forth of any such amount or the inclusion of any such item
in any dispute or controversy between the parties as to whether any obligation,
item or matter not described herein or included in the Disclosure Letter is or
is not material for purposes of this Agreement. Unless this Agreement
specifically provides otherwise, neither the specification of any item or matter
in any representation or warranty contained in this Agreement nor the inclusion
of any specific item in the Disclosure Letter is intended to imply that such
item or matter, or other items or matters, are or are not in the Ordinary Course
of business. No party shall use the fact of the setting forth or the inclusion
of any such item or matter in any dispute or controversy between the parties as
to whether any obligation, item or matter not described herein or included in
the Disclosure Letter is or is not in the Ordinary Course for purposes of this
Agreement.
(16) In no event shall the Vendor be required to indemnify the Purchaser
and the Vendor shall have no liability to the Purchaser:
(a) to the extent the indemnification obligation or liability arises
or is increased as a result of any action taken or omitted to be
taken by the
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Purchaser or any of its Affiliates (including any action taken or
omitted to be taken by the Corporation or any Subsidiary on or
after the Closing Date);
(b) for any Loss or matter to the extent resulting from a change in
Applicable Law that becomes effective after the Closing Date;
(c) for any Loss or matter to the extent accrued, provided for or
reserved for, or otherwise taken into account in the Financial
Statements or the adjustment to the Purchase Price contemplated
by Section 2.01;
(d) for any Loss or matter to the extent arising from a change in the
accounting policies or practices of the Corporation or any
Subsidiary after the Closing; or
(e) to the extent that the Vendor is unable to challenge or dispute
any claim due to the loss or destruction, in each case by the
Purchaser or Glacier, of any relevant Books and Records.
(17) Notwithstanding anything contained herein to the contrary, the Vendor
shall have no liability for a breach of or inaccuracy in any representation or
warranty if the Purchaser was aware, at or before the Closing Date, of the facts
as a result of which such representation or warranty was breached or inaccurate.
ARTICLE 7 - SPECIAL INDEMNITIES
7.01 PUBLICATION STATUS INDEMNITY
(1) The Vendor shall, if the Closing occurs, indemnify, defend and save
harmless the Purchaser, effective as and from the Time of Closing, from and
against Losses suffered or incurred by the Purchaser as a result of
(collectively, the "Publication Status Indemnity"):
(a) any Funding Determination, except that the Vendor shall,
notwithstanding anything in Article 6 to the contrary, in no
event be responsible for any costs incurred by any Person in
responding to a potential or actual Funding Determination as long
as the Vendor is disputing such determination or pursuing a
settlement but if the Vendor ceases to do so and the affected
Subsidiary determines for bona fide reasons to dispute such
determination, the Vendor shall be responsible for the fees and
expenses of one set of counsel in respect of such claim;
(b) any Section 19 Claim, except that the Vendor shall,
notwithstanding anything in Article 6 to the contrary, in no
event be responsible for any costs incurred by any Person in
respect of the defence or settlement of any Section 19 Claim as
long as the Vendor is defending the claim or pursuing a
settlement but if the Vendor ceases to do so and the affected
Subsidiary determines for bona fide reasons to pursue the claim,
the Vendor shall be responsible for the fees and expenses of one
set of counsel in respect of such claim; and
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(c) claims specifically agreed in writing between Xxxxxxxxx
International and Glacier prior to the Time of Closing, except
that the Vendor shall, notwithstanding anything in Article 6 to
the contrary, in no event be responsible for any costs incurred
by the Purchaser in respect of the defence or settlement of any
such claims as long as the Vendor is defending the claim or
pursuing a settlement but if the Vendor ceases to do so and the
Purchaser determines for bona fide reasons to pursue the claim,
the Vendor shall be responsible for the fees and expenses of one
set of counsel in respect of such claim.
(2) The Publication Status Indemnity shall be the sole remedy of Glacier,
the Purchaser and any Subsidiary for any Losses in respect of any matter related
to the matters addressed by the Publication Status Indemnity and Glacier and the
Purchaser and each Subsidiary hereby irrevocably waive and release any rights to
take action, institute proceedings or make any claim of any nature whatsoever
against the Vendor or Xxxxxxxxx International or their Affiliates in connection
with the Publication Status Indemnity pursuant to any other provision of this
Agreement or otherwise. The Publication Status Indemnity will expire on the
sixth anniversary of the Closing Date.
7.02 SPECIAL COMMITTEE LITIGATION INDEMNITY
In addition to any other indemnification by the Vendor contained in this
Agreement, and subject as set forth herein, the Vendor, shall, if the Closing
occurs, indemnify, defend and save harmless the Purchaser, effective as of and
from the Time of Closing, from and against Losses suffered or incurred by the
Purchaser as a result of the Special Committee Litigation (the "Special
Committee Litigation Indemnity"). The Special Committee Litigation Indemnity
shall be the sole remedy of the Purchaser for any Losses incurred by it in
respect of any matter related to the Special Committee Litigation and the
Purchaser hereby irrevocably waives and releases any rights to take action,
institute proceedings or make any claim of any nature whatsoever against the
Vendor or Xxxxxxxxx International or their Affiliates in connection with the
Special Committee Litigation pursuant to any other provision of this Agreement
or otherwise.
7.03 CANWEST ARBITRATION INDEMNITY
(1) In addition to any other indemnification by the Vendor contained in
this Agreement, and subject as set forth herein, the Vendor and Xxxxxxxxx
International jointly and severally, shall, if the Closing occurs, indemnify,
defend and save harmless the Purchaser effective as of and from the Time of
Closing, from and against Losses suffered or incurred by the Purchaser, as a
result of the CanWest Arbitration (the "CanWest Arbitration Indemnity"). The
CanWest Arbitration Indemnity shall be the sole remedy of the Purchaser for any
Losses incurred by it in respect of any matter related to the CanWest
Arbitration and the Purchaser hereby irrevocably waives and releases any rights
to take action, institute proceedings or make any claim of any nature whatsoever
against the Vendor or Xxxxxxxxx International or their Affiliates in connection
with the CanWest Arbitration pursuant to any other provision of this Agreement
or otherwise.
(2) The provisions of Sections 6.01(7)(b), 6.01(9), 6.01(11) and 6.01(12)
shall apply mutatis mutandis to any claims under the CanWest Arbitration
Indemnity and the following shall apply:
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(a) in the event that the Purchaser shall incur or suffer any Losses
(or shall reasonably anticipate that it shall suffer any Losses),
in respect of which indemnification may be sought by the
Purchaser under the CanWest Arbitration Indemnity, the Purchaser
shall promptly submit to the Vendor an Indemnification Notice
stating the nature and basis of such claim including, to the
extent it is then known, a description in reasonable detail of
the facts giving rise to the claim for indemnification hereunder
and (if known) the amount or the method of computation of the
amount of such claim, and a reference to the provisions of this
Agreement upon which such claim is based; provided, however, that
the failure of the Purchaser to give the Indemnification Notice
promptly shall not relieve the Vendor or Xxxxxxxxx International
of any liability that the Vendor or Xxxxxxxxx International may
have to the Purchaser. The Indemnification Notice shall be given
within thirty (30) days after receipt by the Purchaser of the
filing or other written assertion of any such claim against the
Purchaser, but the failure of the Purchaser to give the
Indemnification Notice within such time period shall not relieve
the Vendor or Xxxxxxxxx International of any liability that the
Vendor or Xxxxxxxxx International may have to the Purchaser.
Thereafter, the Purchaser shall deliver to the Vendor within
fifteen (15) calendar days after the Purchaser's receipt thereof,
copies of all notices and documents(including court papers)
received by the Purchaser relating to the claim.
For greater certainty, the provisions of Sections 6.01(7)(a), 6.01(7)(c),
6.01(8), 6.01(10), 6.01(13), 6.01(14), 6.01(16) and 6.01(17) shall not apply to
the CanWest Arbitration Indemnity.
7.04 EXCLUDED EMPLOYEE SEVERANCE PAYMENT INDEMNITY
In addition to any other indemnification by the Vendor contained in this
Agreement, the Vendor, shall, if the Closing occurs, indemnify, defend and save
harmless the Purchaser, effective as of and from the Time of Closing, from and
against Losses suffered or incurred by the Purchaser as a result of Excluded
Employee Severance Payments (the "Excluded Employee Severance Payment
Indemnity"), following which the Purchaser shall have no right to claim, and the
Vendor shall have no liability, thereunder. The Excluded Employee Severance
Payment Indemnity shall be the sole remedy of the Purchaser for any Losses in
respect of any matter related to the Excluded Employee Severance Payments and
the Purchaser hereby irrevocably waives and releases any rights to take action,
institute proceedings or make any claim of any nature whatsoever against the
Vendor or Xxxxxxxxx International or their Affiliates in connection with the
Excluded Employee Severance Payments pursuant to any other provision of this
Agreement or otherwise.
7.05 LITIGATION INDEMNITY
In addition to any other indemnification by the Vendor contained in this
Agreement, and subject as set forth herein, the Vendor, shall, if the Closing
occurs, indemnify, defend and save harmless (the "Litigation Indemnity") the
Purchaser from and against Losses suffered or incurred by the Purchaser from and
after the Time of Closing, as a result of the litigation matters as set forth on
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Schedule 7.05 (the "Litigation"). The Litigation Indemnity shall be the sole
remedy of the Purchaser for any Losses incurred by it in respect of any matter
related to the Litigation and the Purchaser hereby irrevocably waives and
releases any rights to take action, institute proceedings or make any claim of
any nature whatsoever against the Vendor or Xxxxxxxxx International or their
Affiliates in connection with the Litigation pursuant to any other provision of
this Agreement or otherwise. The Litigation Indemnity will expire on the third
anniversary of the Closing Date.
7.06 HCNLP SECURITIES LAW INDEMNITY
In addition to any other indemnification by the Vendor contained in this
Agreement, and subject as set forth herein, the Vendor shall, if the Closing
occurs, indemnify, defend and save harmless (the "HCNLP Securities Law
Indemnity") the Purchaser from and against Losses suffered or incurred by the
Purchaser, from and after the Time of Closing, as a result of the failure of
HCNLP prior to the Time of Closing to file its continuous disclosure documents
in accordance with applicable Canadian securities laws, rules, regulations,
instruments, notices and published policy statements (collectively, "Canadian
Securities Laws") provided that the HCNLP Securities Law Indemnity shall not
apply to, and in no event shall the Vendor or Xxxxxxxxx International or their
respective Affiliates be responsible or liable in any way, in whole or in part,
for any allegations or claims for payment or otherwise made by any minority
holder of HCNLP Units as part of or pursuant to any appraisal right granted in
connection with any transaction that the Purchaser, Glacier and/or their
respective Affiliates implement to acquire or eliminate the interest of minority
holders of HCNLP Units. The HCNLP Securities Law Indemnity shall be the sole
remedy of the Purchaser for any Losses incurred by or in respect of the matters
covered by the HCNLP Securities Law Indemnity, and the Purchaser and Glacier
hereby irrevocably waive and release any rights to take action, institute
proceedings or make any claim of any nature whatsoever against the Vendor or
Xxxxxxxxx International or their Affiliates in connection with the HCNLP
Securities Law Indemnity pursuant to any other provision of this Agreement or
otherwise. The HCNLP Securities Law Indemnity will expire on the third
anniversary of the Closing Date.
7.07 OUTSTANDING INDEMNITY OBLIGATIONS INDEMNITY
In addition to any other indemnifications by the Vendor contained in this
Agreement, and subject as set forth herein, the Vendor shall, if the Closing
occurs, indemnify, defend and save harmless (the "Outstanding Indemnity
Obligations Indemnity") the Purchaser from and against Losses suffered or
incurred by the Purchaser from and after the Time of Closing as a result of any
claim made against the Purchaser in respect of the Outstanding Indemnity
Obligations. The Outstanding Indemnity Obligations Indemnity shall be the sole
remedy of the Purchaser for any Losses incurred by it in respect of any matter
related to the Outstanding Indemnity Obligations Indemnity and the Purchaser
hereby irrevocably waives and releases any rights to take action, institute
proceedings or make any claim of any nature whatsoever against the Vendor or
Xxxxxxxxx International or their Affiliates in connection with the Outstanding
Indemnity Obligations pursuant to any provision of this Agreement or otherwise.
The Outstanding Indemnity Obligations Indemnity will expire on the fifth
anniversary of the Closing Date.
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7.08 GLACIER SECURITIES LAW INDEMNITY
In addition to any other indemnification by the Purchaser and Glacier
contained in this Agreement, the Purchaser and Glacier shall, if the Closing
occurs, indemnify, defend and save harmless (the "Glacier Securities Law
Indemnity") the Vendor and Xxxxxxxxx International, effective as of and from the
Time of Closing, from and against any Losses suffered or incurred by the Vendor
or Xxxxxxxxx International as a result of: (i) any non-compliance with Canadian
Securities Laws by Glacier or the Purchaser in respect of the transactions
contemplated by this Agreement; and (ii) any non-compliance with Canadian
Securities Laws or the terms of the HCNLP Agreement of any transaction that the
Purchaser, Glacier, HCNLP, HCN GP or their respective Affiliates implement to
acquire or eliminate the interest of the minority holders of HCNLP Units
following the Closing.
7.09 CLAIMS PROCESS AND LIMITS
The provisions of Sections 6.01(7), 6.01(8), 6.01(9), 6.01(10), 6.01(11),
6.01(12), 6.01(13), 6.01(14) and 6.01(16) shall apply, mutatis mutandis, to the
Special Indemnities, other than the CanWest Arbitration Indemnity.
ARTICLE 8 - TERMINATION
8.01 TERMINATION
This Agreement may be terminated at any time prior to the Closing Date:
(1) by mutual written agreement of the Vendor and the Purchaser; or
(2) by written notice of either the Vendor or the Purchaser, to the other,
if:
(a) the transactions contemplated hereby shall not have been
consummated by 5:00 p.m., (Toronto time) on February 1, 2006 (the
"End Date") subject to the right of the Vendor, in its sole
discretion, to extend the End Date to such time on a date on or
prior to March 1, 2006 by notice in writing to the Purchaser, in
which case the End Date shall be such time on such date;
provided, however, that the right to terminate this Agreement
under this Section 8.01(2)(a)shall not be available to any Party
whose breach of any provision of this Agreement has resulted in
the failure of the transactions contemplated hereby to occur on
or before the End Date; or
(b) there shall be any Applicable Law that makes consummation of all
of the transactions contemplated hereby illegal or otherwise
prohibited or any judgment, injunction, order or decree of any
Governmental Entity having competent jurisdiction enjoining the
Purchaser or the Vendor from consummating all of the transactions
contemplated hereby is entered and such judgment, injunction,
order or decree shall have become final and non-appealable and,
prior to such termination, the Parties shall have used their
respective commercially reasonable best efforts to resist,
resolve or lift, as applicable, such judgment, injunction, order
or decree; or
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(3) by written notice from the Purchaser, if a breach of any
representation, warranty, covenant or agreement on the part of the Vendor set
forth herein shall have occurred, is not cured within the earlier of (i) thirty
(30) days after written notice thereof from the Purchaser to the Vendor; and
(ii) February 1, 2006, would cause the conditions set forth in Section (a) or
(b) hereof not to be satisfied, and such condition shall be incapable of being
satisfied by December 31, 2005; or
(4) by written notice from the Vendor, if a breach of any representation,
warranty, covenant or agreement on the part of the Purchaser set forth herein
shall have occurred, is not cured within the earlier of: (i) thirty (30) days
after written notice thereof from the Vendor to the Purchaser; and (ii) February
1, 2006, would cause the conditions set forth in Section 5.03(1)(a)or (b) hereof
not to be satisfied, and such condition shall be incapable of being satisfied by
December 31, 2005.
8.02 EFFECT OF TERMINATION
Termination of this Agreement pursuant to Section 8.01 hereof shall
terminate all rights and obligations of the Parties hereunder and this Agreement
shall become void and have no force or effect. Upon such termination, none of
the Parties shall have any liability to the other Parties hereunder.
Notwithstanding the foregoing, no Party shall be relieved from any liability for
any breach of any of its covenants or agreements in this Agreement prior to such
termination.
ARTICLE 9 - GENERAL
9.01 FURTHER ASSURANCES
Each of the Vendor and the Purchaser shall from time to time execute and
deliver all such further documents and instruments and do all acts and things as
the other party may, either before or after the Closing Date, reasonably require
to effectively carry out or better evidence or perfect the full intent and
meaning of this Agreement.
9.02 TIME OF THE ESSENCE
Time shall be of the essence of this Agreement.
9.03 COMMISSIONS
Each Party shall indemnify and save harmless the other from and against any
claims whatsoever for any commission, brokers fees, finders fees or other
similar remuneration payable or alleged to be payable to any Person by the Party
providing the indemnity in respect of the sale and purchase of the Shares.
9.04 CONFIDENTIALITY AND PUBLIC ANNOUNCEMENTS
Neither Party shall make any public announcement or press releases
concerning, or otherwise disclose the existence or the contents of, this
Agreement without the prior written consent of the other except as required by
Applicable Law or stock exchange regulation.
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9.05 BENEFIT OF THE AGREEMENT
This Agreement shall enure to the benefit of and be binding upon the
respective heirs, executors, administrators, successors and permitted assigns of
the Parties hereto. The Parties agree that the rights of the Purchaser under
this Agreement may be assigned by the Purchaser, in whole but not in part, to
Glacier's lenders, or any agent thereof, provided that no such assignment shall,
in any way, relieve, mitigate, modify, abrogate or change the obligations of the
Purchaser and Glacier to the Vendor and Xxxxxxxxx International hereunder and
further provided that no such arrangement shall, in any way, increase or expand
the liabilities or obligations of the Vendor or Xxxxxxxxx International
hereunder. To the extent that the Agreement creates obligations of the
Corporation or any Subsidiary and/or obligations of the Purchaser and/or Glacier
to cause the Corporation or any Subsidiary to take or refrain from taking any
action, those obligations shall apply, mutatis mutandis, to and in respect of
the successors in interest and permitted assigns of the Corporation, the
Subsidiaries, Glacier and the Purchaser.
9.06 ENTIRE AGREEMENT
This Agreement (together with the Schedules and the Disclosure Letter)
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and cancels and supersedes any prior understandings and
agreements between the parties hereto with respect thereto (including the Letter
of Intent). There are no representations, warranties, terms, conditions,
undertakings or collateral agreements, express, implied or statutory, between
the parties other than as expressly set forth in this Agreement.
9.07 AMENDMENTS AND WAIVER
No modification of or amendment to this Agreement shall be valid or binding
unless set forth in writing and duly executed by both of the parties hereto and
no waiver of any breach of any term or provision of this Agreement shall be
effective or binding unless made in writing and signed by the party purporting
to give the same and, unless otherwise provided, shall be limited to the
specific breach waived.
9.08 ASSIGNMENT
This Agreement may not be assigned by either the Vendor or the Purchaser
without the prior written consent of the other.
9.09 NOTICES
Any demand, notice or other communication to be given in connection with
this Agreement shall be given in writing and shall be given by personal
delivery, by registered mail or by electronic means of communication addressed
to the recipient as follows:
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To the Vendor:
c/x Xxxxxxxxx International Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Facsimile No.: (000) 000-0000
Attention: General Counsel
With a copy to:
XxXxxxxx Xxxxxxxx XXX
Xxxxx 0000, 00 Xxxxxxxxxx Xxxxxx West
TD Xxxx Xxxxx, XX Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
To the Purchaser:
c/o Glacier Ventures International Corp.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxx
With a copy to:
Farris, Vaughan, Xxxxx & Xxxxxx LLP
P.O. Box 10026, 000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxxxx
To Glacier:
Glacier Ventures International Corp.
-00-
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxx
With a copy to:
Farris, Vaughan, Xxxxx & Xxxxxx LLP
P.O. Box 10026, 000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxxxx
To Xxxxxxxxx International:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Facsimile No.: (000) 000-0000
Attention: General Counsel
With a copy to:
XxXxxxxx Xxxxxxxx XXX
Xxxxx 0000, 00 Xxxxxxxxxx Xxxxxx West
TD Xxxx Xxxxx, XX Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
or to such other address, individual or electronic communication number as may
be designated by notice given by either party to the other. Any demand, notice
or other communication given by personal delivery shall be conclusively deemed
to have been given on the day of actual delivery thereof and, if given by
registered mail, on the second Business Day following the deposit thereof in the
mail and, if given by electronic communication, on the day of transmittal
thereof if given during
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the normal business hours of the recipient and on the Business Day during which
such normal business hours next occur if not given during such hours on any day.
If the party giving any demand, notice or other communication knows or ought
reasonably to know of any difficulties with the postal system which might affect
the delivery of mail, any such demand, notice or other communication shall not
be mailed but shall be given by personal delivery or by electronic
communication.
9.10 SEVERABILITY
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
9.11 PARTIES IN INTEREST
This Agreement shall be binding upon, inure solely to the benefit of and be
enforceable by each Party and their respective successors and assigns hereto,
and nothing in this Agreement, express or implied, is intended to or shall
confer upon any other Person (including, without limitation, any lender to the
Purchaser or Glacier) other than the Parties any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
9.12 EXPENSES
Except as otherwise expressly set forth in this Agreement all fees and
expenses incurred in connection herewith and the transactions contemplated
hereby shall be paid by the Party incurring such expenses, whether or not the
transactions contemplated hereby are consummated. Notwithstanding the foregoing
or anything to the contrary contained herein, in the event that any dispute
among the Parties results in litigation, arbitration, mediation or any other
contest, the prevailing party in such dispute shall be entitled to recover from
the losing party all fees, costs and expenses of enforcing any right of such
prevailing party with respect to this Agreement, including, without limitation,
reasonable attorney's fees and expenses.
9.13 GOVERNING LAW; ATTORNMENT
This Agreement shall be governed by, and construed in accordance with, the
law of the Province of Ontario and the laws of Canada applicable therein. For
the purposes of all legal proceedings, this Agreement shall be deemed to have
been performed in the Province of Ontario and the courts of the Province of
Ontario shall have jurisdiction to entertain any action arising under this
Agreement. Each of the Parties hereby irrevocably and unconditionally attorn to
the exclusive jurisdiction of the courts of the Province of Ontario located in
the City of Toronto, for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby, and further agrees that
service of any process, summons, notice or document by Canadian registered mail
to its respective address set forth herein shall be effective service of process
for any litigation brought
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against it in any such court. It is understood and agreed that upon service of
an originating process by registered mail as provided herein, the solicitors for
the plaintiffs in the action may accept service of the Statement of Claim on
behalf of the solicitors for the defendants in the action, effective on the
fifth day following mailing of the Statement of Claim, and may thereafter take
whatever steps are permitted under the Ontario Rules of Civil Procedure in
respect of an originating process for which service has been accepted by a
solicitor. Each of the Parties hereby irrevocably and unconditionally waives any
objection to the laying of venue of any litigation arising out of this Agreement
and the transactions contemplated hereby in the courts of the Province of
Ontario, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such litigation brought in any
such court has been brought in an inconvenient forum.
9.14 COUNTERPARTS; FACSIMILE
This Agreement may be executed and delivered in one or more counterparts
and via facsimile, and by the Parties in separate counterparts, each of which
when executed and delivered shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
9.15 WAIVER
Subject to the limitations contained in this Agreement, the failure of a
party to require performance of any provision hereof shall not affect its right
at a later time to enforce the same. No waiver by a party of any term, covenant,
representation or warranty contained herein shall be effective unless in
writing. No such waiver in any one instance shall be deemed a further or
continuing waiver of any such term, covenant, representation or warranty in any
other instance.
9.16 DISCLAIMER
The Vendor disclaims any representations or warranties except as
specifically set forth in this Agreement. In particular, the Vendor disclaims
any representation or warranty, and the Purchaser agrees that the Vendor shall
not have any liability, with respect to any information concerning the Vendor,
the Corporation, and the Subsidiaries not expressly represented and warranted to
in this Agreement, including, without limitation, any information regarding the
Vendor, the Corporation, and the Subsidiaries provided at any management
presentation related to the transactions contemplated by this Agreement.
9.17 WAIVER OF JURY TRIAL
Each Party hereby waives to the fullest extent permitted by Applicable Law,
any right it may have to a trial by jury in respect of any litigation directly
or indirectly arising out of, under or in connection with this Agreement or any
transaction contemplated hereby.
IN WITNESS WHEREOF the parties have executed this Agreement.
0744062 B.C. LTD.
Per:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
Per:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
GLACIER VENTURES INTERNATIONAL CORP.
Per:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
Per:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXXXXX CANADIAN PUBLISHING
HOLDINGS CO.
Per:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXXXXX INTERNATIONAL INC.
Per:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
SCHEDULE 1.01(PPPP)
PENSION AND BENEFITS AGREEMENT
SCHEDULE 1.01(QQQQ)
PERMITTED ENCUMBRANCES
SCHEDULE 1.01(IIIII)
SPECIAL COMMITTEE LITIGATION
SCHEDULE 2.04(2)(J)
ENCUMBRANCES TO BE RELEASED
SCHEDULE 3.01(1)(M)
INFORMATION ON CORPORATION AND SUBSIDIARIES
SCHEDULE 3.01(1)(P)
FINANCIAL STATEMENTS
SCHEDULE 3.01(1)(Q)
YEAR END FINANCIAL STATEMENTS
SCHEDULE 3.01(1)(V)
MATERIAL CONTRACTS
SCHEDULE 3.01(1)(DD)
REAL ESTATE LEASES
SCHEDULE 3.01(1)(EE)
OWNED REAL ESTATE
SCHEDULE 4.08
INDEMNITY COOPERATION AGREEMENT
SCHEDULE 4.10
GLACIER PRE-CLOSING REORGANIZATION STEPS
SCHEDULE 4.11
XXXXXXXXX PRE-CLOSING REORGANIZATION STEPS
SCHEDULE 5.01(1)(C)
CONSENTS AND FILINGS
SCHEDULE 7.05
LITIGATION
