EXHIBIT 2
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MAY 18, 2001
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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THE OMNI PARTNERS, INC.
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OMNI PARTNERS WEST, INC.
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OMNI PARTNERS MID-ATLANTIC, INC.
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▇-▇▇▇▇▇▇▇.▇▇▇ INC.
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SHARE PURCHASE AGREEMENT
May 18, 2001
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Zebersky and Associates, solicitors for the Vendors
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, solicitors for the Purchaser
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THIS SHARE PURCHASE AGREEMENT is made as of May 18, 2001
BETWEEN:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, of the City of Weston, Fl ("▇▇▇▇▇▇"),
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, of the City of Weston, Fl ("▇▇▇▇▇▇▇▇"),
(▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall be collectively referred to as the
"Vendors")
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THE OMNI PARTNERS, INC., a corporation incorporated pursuant
to the laws of the state of Florida ("Omni Partners")
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OMNI PARTNERS MID-ATLANTIC, INC., a corporation incorporated
pursuant to the laws of the state of Pennsylvania ("Omni
Mid-Atlantic")
OMNI PARTNERS WEST, INC., a corporation incorporated pursuant
to the laws of the state of Nevada ("Omni West")
(Omni Partners, Omni Partners West and Omni Mid-Atlantic shall
be collectively referred to as the "Corporations")
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▇-▇▇▇▇▇▇▇.▇▇▇ INC., a corporation incorporated pursuant to the
laws of Canada (the "Purchaser")
RECITALS:
A. The Vendors own and control all of the issued and outstanding shares of
the Corporations.
B. The Vendors have agreed to sell to the Purchaser, and the Purchaser has
agreed to purchase, the Purchased Shares (as defined below), and the
Vendors have agreed to cause the Corporations to fulfil all of their
obligations under this Agreement.
THEREFORE, in consideration of the foregoing recitals and the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
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ARTICLE 1
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 Definitions
Whenever used in this Agreement, the following words and terms shall have the
meanings set out below:
"Accounts Receivable" means all accounts receivable, bills receivable,
trade accounts, book debts and insurance claims recorded as receivable
in the Books and Records and any other amount due to the Corporations,
including any refunds and rebates, and the benefit of all security
(including cash deposits), guarantees and other collateral held by the
Corporations;
"Accredited Investor" has the meaning ascribed thereto in Rule 501 of
Regulation 1 of the United States Securities Act of 1933, as amended;
"Affiliate" shall have the meaning given in the Canada Business
Corporations Act as amended;
"Agreement" means this Share Purchase Agreement, including all
schedules, and all instruments supplementing or amending or confirming
this Agreement, and references to "Article" or "Section" mean and refer
to the specified Article or Section of this Agreement;
"Associate" shall have the meaning given in the Canada Business
Corporations Act as amended;
"Benefit Plans" means all plans, arrangements, agreements, programs,
policies, practices or undertakings, whether oral or written, formal or
informal, funded or unfunded, registered or unregistered to which the
Corporations are or have been a party or by which any of them is or has
been bound or under which the Corporations have, or will have, any
liability or contingent liability, relating to:
(a) Pension Plans;
(b) Insurance Plans; or
(c) Compensation Plans,
with respect to any of the Employees or former employees (or any
dependants or beneficiaries of any such Employees or former employees),
directors or shareholders of the Corporations, individuals working on
contract with the Corporations or other individuals providing services
to any of them of a kind normally provided by employees or eligible
dependants of such person;
"Books and Records" means all books and records of the Corporations, or
any of their respective Affiliates or Associates, relating to the
Corporations, including financial, corporate, operations, sales and
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purchase books and records, lists of suppliers and customers, business
reports, plans and projections and all other documents, surveys, plans,
files, records, correspondence, and other data and information,
financial or otherwise, including all data and information stored on
computer-related or other electronic media;
"Business" means human resources recruitment research and development
carried on by the Corporations, and the term "Business" shall include
any part of the businesses held or carried on by the Corporations;
"Business Day" means a day, other than a Saturday or Sunday, on which
the principal commercial banks located in Ottawa, Ontario are open for
business during normal banking hours;
"Claims" means any claim, demand, action, assessment or reassessment,
suit, cause of action, damage, loss, charge, judgment, debt, costs,
liability or expense, including reasonable professional fees and all
costs incurred in investigating or pursuing any of the foregoing or any
proceeding relating to any of the foregoing;
"Closing" means the completion of the sale to and purchase by the
Purchaser of the Purchased Shares under this Agreement;
"Closing Date" means the * day of *, 2001 or such other date as the
Parties may agree in writing as the date upon which the Closing shall
take place, provided that the Closing Date shall not be later than *,
2001;
"Closing Time" means 2 o'clock p.m. Ottawa time on the Closing Date, or
such other time on such date as the Parties may agree in writing as the
time at which the Closing shall take place;
"Code" means the United States Internal Revenue Code of 1986, as
amended;
"Compensation Plans" means all employment benefits relating to bonus,
incentive pay or compensation, performance compensation, deferred
compensation, profit sharing or deferred profit sharing, share
purchase, share option, stock appreciation, phantom stock, vacation or
vacation pay, sick pay, severance or termination pay, employee loans or
separation from service benefits, or any other type of arrangement
providing for compensation or benefits additional to base pay or
salary;
"Contracts" means all contracts, licences, leases, agreements,
commitments, entitlements and engagements to which the Corporations are
a party or by which any of them are bound or under which the
Corporations have, or will have, any liability or contingent liability,
and includes all quotations, orders or tenders for contracts which
remain open for acceptance and any warranties, guarantees or
commitments (express or implied);
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"Employees" means all persons employed or retained by the Corporations,
including for greater certainty, those employees on disability leave,
parental leave or other absence;
"Encumbrances" means any pledge, lien, charge, security interest,
lease, title retention agreement, mortgage, restriction, development or
similar agreement, easement, right-of-way, title defect, option,
adverse claim or encumbrance of any kind or character whatsoever;
"Environment" means the environment or natural environment as defined
in any Environmental Laws and includes air, surface, water, ground
water, land surface, soil, subsurface strata, any sewer system and the
environment in the workplace and disposal of Hazardous Substances;
"Environmental Approvals" means all approvals, permits, certificates,
licences, authorizations, consents, agreements, instructions or
directions having the force of law, registrations or approvals issued
or required by any Governmental Authority pursuant to Environmental
Laws with respect to the operations, business or assets of the
Corporations;
"Environmental Laws" means all Laws relating in full or in part to the
Environment or employee or public health or safety, and includes those
Environmental Laws relating to the storage, generation, use, handling,
manufacture, processing, labelling, advertising, sale, display,
transportation, treatment, Release and disposal of Hazardous
Substances;
"Equipment Contracts" means all motor vehicle leases, equipment leases,
conditional sales contracts, title retention agreements and other
similar agreements relating to equipment used by the Corporations;
"Governmental Authority" means any government, regulatory authority,
governmental department, agency, commission, board, tribunal or court
or other law, rule or regulation-making entity having or purporting to
have jurisdiction on behalf of any nation, or any province, state or
other geographic or political subdivision of any nation;
"Governmental Authorizations" means all authorizations, approvals,
including Environmental Approvals, orders, consents, directions,
notices, licences, permits, variances, registration or similar rights
issued to or by or required by any Governmental Authority;
"Hazardous Substance" means any pollutant, contaminant, waste of any
nature, hazardous substance, hazardous material, toxic substance,
prohibited substance, dangerous substance or dangerous good as defined,
judicially interpreted or identified in any Environmental Laws,
including any asbestos or asbestos-containing materials;
"Independent Auditors" means PricewaterhouseCoopers LLP or such other
independent auditing firm as the Parties may otherwise agree;
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"Insurance Plans" means all employment benefits relating to disability
or wage continuation during period of absence from work (including
short term disability, long term disability and workers compensation),
hospitalization, health, medical or dental treatments or expenses, life
insurance, death or survivor's benefits and supplementary employment
insurance, in each case regardless of whether or not such benefits are
insured or self-insured;
"Intellectual Property" means registered and unregistered trade-marks
(including the Trade-marks), copyright, and other intellectual property
rights and all rights (proprietary, contractual or otherwise) in or
relating to all trade secrets, confidential and proprietary
information, methods, procedures, know-how and information;
"Laws" means all applicable laws (including common law), statutes,
by-laws, rules, regulations, orders, ordinances, protocols, codes,
guidelines, tax treaties, policies, notices, directions and judgments
or other requirements of any Governmental Authority;
"Leased Real Property" means all premises which are leased, subleased,
licensed or otherwise occupied by the Corporations, and the interest of
the Corporations in all plants, buildings, structures, fixtures,
erections, improvements, easements, rights-of-way and other
appurtenances situate on or forming part of such premises, all of which
is listed in Schedule 1.1(a);
"Marketing Inventories" means all inventories of every kind and nature
and wheresoever situate owned by the Corporations and pertaining to the
Business, including all inventories of operating supplies, marketing
and promotional materials and other materials of or pertaining to the
Business;
"Material Contract" means any Contract: (i) involving aggregate
payments to or by the Corporations in excess of $50,000; (ii) involving
rights or obligations of the Corporations that may reasonably extend
beyond one year; (iii) which is outside the ordinary course of
business; (iv) which does not or cannot be terminated without penalty
on less than six months notice; or (iv) which restricts in whole or in
part in any material way the scope of the business or activities of the
Corporations or which restricts in anyway the scope of the business or
activities of any of their Affiliates or Associates;
"Notice" shall have the meaning given in Section 11.3;
"Owned Real Property" means all freehold lands which are owned or
purported to be owned, in fee simple, by the Corporations including all
plants, buildings, structures, fixtures, erections, improvements,
easements, rights-of-way and other appurtenances situate on or forming
part of such lands all of which is listed in Schedule 1.1(b);
"Parties" means all of the parties to this Agreement;
"Pension Plans" means all benefits relating to retirement or retirement
savings including pension plans, pensions or supplemental pensions,
registered retirement savings plans, registered pension plans and
retirement compensation arrangements;
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"Permitted Encumbrances" means the Encumbrances listed in Schedule
1.1(c);
"Person" means any individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, corporation, limited liability company, unlimited
liability company, Governmental Authority, and a natural person in such
person's capacity as trustee, executor, administrator or other legal
representative;
"Purchase Price" shall have the meaning given in Section 3.1;
"Purchased Shares" means all of the issued and outstanding shares in
the capital of the Corporations;
"Real Property" means the Owned Real Property and the Leased Real
Property;
"Real Property Leases" means those agreements to lease, leases,
subleases or licences or other occupancy rights pursuant to which the
Corporations use or occupy the Leased Real Property;
"Release" has the meaning prescribed in any Environmental Laws and
includes any release, spill, leak, pumping, pouring, addition,
emission, emptying, discharge, injection, escape, leaching, disposal,
dumping, deposit, spraying, burial, abandonment, incineration, seepage,
or placement;
"Remedial Order" means any administrative complaint, direction, order
or sanction issued, filed, imposed or threatened by any Governmental
Authority pursuant to any Environmental Laws and includes any order
requiring any remediation or clean-up of any Hazardous Substance, or
requiring that any Release or any other activity be reduced, modified
or eliminated or requiring a payment to be made to any Governmental
Authority;
"Required Approvals" means those Governmental Authorizations,
shareholder approval and third Person approvals, consents and notices
referred to in Schedule 1.1(e);
"subsidiary" shall have the meaning given to it in the Canada Business
Corporations Act as amended;
"Tax Returns" includes all returns, reports, declarations, elections,
notices, filings, information returns and statements filed or required
to be filed in respect of Taxes;
"Taxes" includes all taxes, duties, fees, premiums, assessments,
imposts, levies and other charges of any kind whatsoever imposed by any
Governmental Authority, together with all interest, penalties, fines,
additions to tax or other additional amounts imposed by any
Governmental Authority in respect thereof, including those levied on,
or measured by, or in respect of income, gross receipts, profits,
capital, gains, capital gains, transfer, land transfer, sales, goods
and services, harmonized sales, use, value-added, excise, stamp,
withholding, business, franchising, property, employer health, payroll,
employment, health, social services, education and social security
taxes, all surtaxes, all customs duties and import and export taxes,
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all license, franchise and registration fees and all employment
insurance, health insurance and other government pension plan premiums
or contributions;
"Trade-marks" means all trade-marks, trade names, brands, trade dress,
business names, Uniform Resource Locators ("URL"), domain names, tag
lines, designs, graphics, logos and other commercial symbols and
indicia of origin, whether registered or not, owned by, licensed to or
used by the Corporations and any goodwill associated with any of them,
including trade-marks, trade names, brands, trade dress, business
names, URL, domain names, tag lines, designs, graphics, logos and other
commercial symbols and indicia of origin owned by, licensed to or used
by the Corporations listed and described in Schedule 4.22;
1.2 Certain Rules of Interpretation
In this Agreement and the schedules:
(a) Time - time is of the essence in the performance of the
Parties' respective obligations;
(b) Currency - unless otherwise specified, all references to money
amounts are to lawful currency of the United States of
America;
(c) Headings - descriptive headings of Articles and Sections are
inserted solely for convenience of reference and are not
intended as complete or accurate descriptions of the content
of such Articles or Sections;
(d) Singular, etc. - use of words in the singular or plural, or
with a particular gender, shall not limit the scope or exclude
the application of any provision of this Agreement to such
person or persons or circumstances as the context otherwise
permits;
(e) Consent - whenever a provision of this Agreement requires an
approval or consent by a Party to this Agreement and
notification of such approval or consent is not delivered
within the applicable time limited, then, unless otherwise
specified, the Party whose consent or approval is required
shall be conclusively deemed to have withheld its approval or
consent;
(f) Calculation of Time - unless otherwise specified, time periods
within or following which any payment is to be made or act is
to be done shall be calculated by excluding the day on which
the period commences and including the day on which the period
ends and by extending the period to the next Business Day
following if the last day of the period is not a Business Day;
(g) Business Day - whenever any payment is to be made or action to
be taken under this Agreement is required to be made or taken
on a day other than a Business Day, such payment shall be made
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or action taken on the next Business Day following such day;
and
(h) Inclusion - where the words "including" or "includes" appear
in this Agreement, they mean "including (or includes) without
limitation".
1.3 Knowledge
Except as specified otherwise in this Agreement, any reference to the knowledge
of any Person shall mean to the best of the knowledge, information and belief of
such Person after reviewing all relevant records available to such person and
making due inquiries regarding the relevant matter of all relevant directors,
officers and employees of the Person and its Affiliates and Associates.
1.4 Entire Agreement
This Agreement, together with the agreements and other documents to be delivered
pursuant to this Agreement, constitute the entire agreement between the Parties
pertaining to the subject matter of this Agreement and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties pertaining to that subject matter, including the letter
of intent entered into between the Parties dated May 18, 2001, and there are no
warranties, representations or other agreements between the Parties in
connection with the subject matter of this Agreement except as specifically set
forth in this Agreement and any document delivered pursuant to this Agreement.
No supplement, modification or waiver or termination of this Agreement shall be
binding unless executed in writing by the Party to be bound thereby.
1.5 Applicable Law
This Agreement shall be governed and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable in the
Province of Ontario, and without regard to the conflict of laws principles
applicable in such jurisdiction.
1.6 Accounting Principles
All references to generally accepted accounting principles mean generally
accepted accounting principles in Canada as at the Closing Date, applied on a
consistent basis.
1.7 Schedules and Exhibits
The schedules and exhibits to this Agreement, are an integral part of this
Agreement.
ARTICLE 2
PURCHASE AND SALE
2.1 Action by Vendors and Purchaser
Subject to the provisions of this Agreement, at the Closing Time:
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(a) Purchase and Sale of Purchased Shares - the Vendors shall sell
and the Purchaser shall purchase the Purchased Shares for the
Purchase Price payable as provided in this Agreement;
(b) Payment of Purchase Price - the Purchaser shall deliver to the
Vendors the Purchase Price as provided in Section 3.3;
(c) Transfer and Delivery of the Purchased Shares - the Vendors
shall transfer and deliver to the Purchaser the share
certificates representing the Purchased Shares, in each case
duly endorsed in blank for transfer, or accompanied by
irrevocable security transfer powers of attorney duly executed
in blank, in either case by the holders of record, and shall
take such steps as shall be necessary to cause the
Corporations to enter the Purchaser or its nominee(s) upon the
books of the Corporations as the holder of the Purchased
Shares and to issue share certificates to the Purchaser or its
nominee(s) representing the Purchased Shares; and
(d) Other Documents - each of the Vendors and the Purchaser shall
deliver such other documents as may be necessary to complete
the transactions contemplated by this Agreement.
2.2 Place of Closing
The Closing shall take place at the Closing Time at the offices of
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP located at ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, or at such other place as may be agreed upon in
writing by the Parties.
2.3 Tender
Any tender of documents or money under this Agreement may be made upon the
Parties or their respective counsel and money shall be tendered in U.S. dollars
by official bank certified cheque, bank draft or by such other method as the
Parties agree in writing.
ARTICLE 3
PURCHASE PRICE
3.1 Purchase Price
The aggregate amount payable by the Purchaser for the Purchased Shares (the
"Purchase Price") shall, subject to any adjustment, be determined as of the
Closing Time.
3.2 Adjustments
The Purchase Price shall be subject to adjustment pursuant to paragraph 3.4
herein and the Escrow Agreement (as herein later defined).
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3.3 Satisfaction of Purchase Price
Subject to the provisions of this Agreement and the Escrow Agreement as defined
below, at the Closing Time the Purchaser shall satisfy the Purchase Price as
follows:
(a) By delivery to the Vendors, the number of common shares of the
Purchaser that is equal to $1,000,000 U.S. as at the date of
this Agreement; and
(b) by delivery to the Vendors, subject to section 3.4 herein, the
number of common shares of the Purchaser that is equal to
$2,000,000 U.S. as at the date of Closing (the "Escrow
Shares") and
(c) by delivery to the Vendors, $501,000 U.S. as full and complete
payment of any and all debt owed to the Vendors by the
Corporations.
3.4 Delivery of the E-Cruiter Shares
3.4.1 At the Closing Time the Parties shall enter into the escrow
agreement as set out in Schedule 3.4.1 (the "Escrow
Agreement").
3.4.2 Pursuant to this Agreement and the Escrow Agreement, the
Escrowed Shares shall be placed in escrow and released to the
Vendors pending the meeting of revenue targets as set forth in
Schedule 3.4.2 or at any other time at the discretion of the
board of directors of the Purchaser.
3.5 Allocation of the Purchase Price
The Purchase Price shall be allocated among the Purchased Shares in accordance
with the provisions of Schedule 3.5. Each of the Vendors and the Purchaser agree
to report the purchase and sale of the Purchased Shares in any Tax Returns
required to be filed in accordance with the provisions of Schedule 3.5.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE VENDORS
The Vendors and the Corporations hereby jointly and severally represent and
warrant to the Purchaser the matters set out below.
4.1 Incorporation and Registration
Each of the Corporations is a corporation duly incorporated and validly existing
under the laws of its jurisdiction of incorporation and has all necessary
corporate power, authority and capacity to enter into this Agreement and to
carry out its obligations under this Agreement, to own its property and assets
and to carry on its business as presently conducted. Neither the nature of its
business nor the location or character of the property owned or leased by any of
the Corporations requires it to be registered, licensed or otherwise qualified
as an out-of-province or foreign corporation in any other jurisdiction other
than those listed opposite its name in Schedule 4.1, where it is duly
registered, licensed or otherwise qualified for such purpose.
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4.2 Right to Sell
The Vendors are the sole registered and beneficial owners of the Purchased
Shares free and clear of all Encumbrances. The Vendors have the exclusive right
to dispose of the Purchased Shares as provided in this Agreement and such
disposition will not violate, contravene, breach or offend against or result in
any default under any indenture, mortgage, lease, agreement, obligation,
instrument, charter or by-law provision, statute, regulation, order, judgement,
decree, licence, permit or Laws to which any of the Vendors is a party or
subject or by which any of the Vendors is bound or affected. The Purchased
Shares are not subject to the terms of any agreement between or among any of the
shareholders of the Corporation other than this Agreement.
4.3 Capitalization
The authorized and issued share capital of the Corporations is as set forth in
Schedule 4.3, together with a corporate structure diagram illustrating the
issued share capital and shareholders of the Corporations. All of the shares in
the capital of the Corporations have been duly and validly issued and are
outstanding as fully paid and non-assessable shares of the Corporations, as the
case may be. No options, warrants or other rights to purchase shares or other
securities of the Corporations, and no securities or obligations convertible
into or exchangeable for shares or other securities of the Corporations, have
been authorized or agreed to be issued or are outstanding.
4.4 Title to Assets
The Corporations are the sole beneficial and legal owner of all of its assets
and interests in assets, real and personal, including all of the assets used in
the Business, with good and valid title, free and clear of all Encumbrances,
other than Permitted Encumbrances. In particular, without limiting the
generality of the foregoing, there has been no assignment, subletting or
granting of any licence (of occupation or otherwise) of or in respect of any of
the assets of the Corporations or any granting of any agreement or right capable
of becoming an agreement or option for the purchase of any of such assets. All
of the assets of the Corporations are located on the Owned Real Property or the
Leased Real Property.
4.5 Due Authorization and Enforceability
The execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been, or will prior to the
Closing Date be, duly authorized by all necessary corporate action on the part
of each of the Corporations. This Agreement constitutes a valid and binding
obligation of each of the Vendors enforceable against each of them in accordance
with its terms.
4.6 Absence of Conflicting Agreements
Neither the Corporations nor any of the Vendors is a party to, bound or affected
by or subject to any indenture, mortgage, lease, agreement, obligation,
instrument, charter or by-law provision, Law or Governmental Authorization which
would be violated, contravened, breached by, or under which default would occur
or an Encumbrance would be created as a result of the execution and delivery of
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this Agreement or any other documents or agreements to be delivered or entered
into under the terms of this Agreement, or the performance by any of the
Corporations or the Vendors of any of their obligations provided for under this
Agreement or any other documents or agreements to be delivered or entered into
under this Agreement.
4.7 Approvals
(a) Except as disclosed in Schedule 4.7, no approval, order or
consent of or notice to or filing with any Governmental
Authority or other Person is required on the part of the
Corporations or any of the Vendors in connection with the
execution, delivery and performance of this Agreement or any
other documents or agreements to be delivered under this
Agreement or the performance of the obligations of the Vendors
or the Corporations under this Agreement or any other
documents or agreements to be delivered or entered into under
this Agreement.
(b) Schedule 4.7 sets out a complete list of all notifications,
approvals and consents required to be made or obtained by the
Corporations and the Vendors in connection with the execution,
delivery and performance of this Agreement or any other
documents and agreements to be delivered under this Agreement.
4.8 Financial Statements
Schedule 4.9 attached hereto sets forth the reviewed balance sheets of the
Corporations as of December 31,2000 and the unaudited balance sheets of
Corporations as of April 30,2001, and the related statements of income and
retained earnings for the periods ending on those respective dates. The
financial statements in Schedule 4.9 are hereinafter collectively referred to as
the "Company Financial Statements". The Company Financial Statements have been
prepared in accordance with generally accepted accounting principles
consistently followed by the Corporations throughout the periods indicated, and
fairly present the financial position of the Corporations as of the respective
dates of the balance sheets included in the Company Financial Statements, and
the results of its operations for the respective periods indicated. As of the
Closing Date the Corporations shall not have any material liability or
obligation of any nature, except for liabilities or obligations that are
reflected on Company Financial Statements as of April 30, 2001.
4.9 Absence of Undisclosed Liabilities
Since the date of the Company Financial Statements, the Corporations have not
incurred any liabilities or obligations (whether accrued, absolute, contingent
or otherwise) which continue to be outstanding, except those incurred in the
ordinary and usual course of business and which were not, individually or in the
aggregate, materially adverse. The reserves and accrued liabilities disclosed on
or reflected in the Company Financial Statements and the Books and Records are
sufficient in all respects to provide for the liabilities in respect of which
they have been established.
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4.10 Absence of Changes and Unusual Transactions
Except as described in Schedule 4.10, or except as consented to in advance in
writing by the Purchaser, since the date of the Company Financial Statements:
(i) there has not been any material change in the
financial condition, operations or prospects of the
Corporations other than changes in the ordinary and
usual course of business, none of which has been
materially adverse;
(ii) there has not been any damage, destruction, loss,
labour dispute, organizing drive, application for
certification or other event, development or
condition of any character (whether or not covered by
insurance) materially and adversely affecting the
business, assets, properties or future prospects of
any of the Corporations;
(iii) the Corporations have not transferred, assigned, sold
or otherwise disposed of any of the assets shown or
reflected in the Company Financial Statements or
cancelled any debts or entitlements except, in each
case, in the ordinary and usual course of business;
(iv) the Corporations have not incurred or assumed any
obligation or liability (fixed or contingent) except
unsecured current obligations and liabilities
incurred in the ordinary and usual course of
business, none of which has been materially adverse;
(v) the Corporations have not discharged or satisfied any
Encumbrance, or paid any obligation or liability
(fixed or contingent) other than liabilities included
in the Company Financial Statements and liabilities
incurred since the date of the Company Financial
Statements in the ordinary and usual course of
business;
(vi) the Corporations have not suffered any cumulative
operating loss or any extraordinary loss, waived or
omitted to take any action in respect of any rights
of substantial value, or entered into any commitment
or transaction not in the ordinary and usual course
of business where such loss, rights, commitment or
transaction is or would be material in relation to
the Corporations, as the case may be;
(vii) the Corporations have not granted any bonuses,
whether monetary or otherwise, or made any general
wage, salary or Benefit Plan increases in respect of
its Employees or changed the terms of employment for
any Employee except in the ordinary and usual course
of business and consistent with past practice;
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(viii) the Corporations have not hired or dismissed any
senior Employees or hired or dismissed any other
Employees other than in ordinary and usual course of
business;
(ix) the Corporations have not mortgaged, pledged,
subjected to lien, granted a security interest in or
otherwise encumbered any of its assets or property,
whether tangible or intangible;
(x) the Corporations have not, directly or indirectly,
declared or paid any dividends or declared or made
any other payments or distributions on or in respect
of any of its shares or, directly or indirectly,
purchased or otherwise acquired any of its shares;
(xi) the Corporations have not, directly or indirectly,
has paid any management fees or other amounts (other
than salaries and benefits of employees, the terms of
which are disclosed in Schedule 4.27) to any of the
Vendors; and
(xii) the Corporations have not authorized, agreed or
otherwise become committed to do any of the
foregoing.
4.11 Non-Arm's Length Transactions
Except as disclosed in Schedule 4.11, no director or officer, former director or
officer, shareholder or Employee of the Corporations, or any other person not
dealing at arm's length (within the meaning of the Code) with the Corporations
or any of the Vendors, has any indebtedness, liability or obligation to the
Corporations, and none of the Corporations are indebted or otherwise obligated
to or is party to any Contract with any such person, except for employment
arrangements with Employees, the terms of which are disclosed in Schedule 4.27.
4.12 Absence of Guarantees
Except as described in Schedule 4.12, the Corporations have not given or agreed
to give, or is a party to or bound by, any guarantee, surety or indemnity in
respect of any indebtedness or other obligation of any Person, or any other
commitment by which the Corporations are, or are contingently, responsible for
any such indebtedness or other obligation.
4.13 Operating Businesses
The Business is carried on exclusively by the Corporations. All assets used in
or necessary to carry on the Business are owned by the Corporations, or leased
or licensed by the Corporations from Persons acting at arm's length from the
Vendors and the Corporations.
4.14 Major Suppliers
(a) A comprehensive listing of all suppliers of goods and services
to the Corporations (including suppliers of goods and services
to their respective customers, which are arranged for by the
Corporations), where the value of the goods or services
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supplied exceeded $50,000, in each case individually or in the
aggregate, during the 12 month period ending January 31, 2001
is attached as Schedule 4.14.
(b) True and complete copies of all Contracts with those suppliers
of goods and services for the Business (or for customers of
the Business) referred to in subsection 4.14(a) have been made
available to the Purchaser. None of the Vendors or the
Corporations have any reason to believe that any of such
Contracts will not be honoured in the ordinary and usual
course of business consistent with the past experience of the
Business.
(c) Except as disclosed in Schedule 4.14, the Corporations are not
subject to any Contract under which any of them has made any
commitment or is subject to any obligation or would suffer any
penalty (financial or otherwise) as a result of a failure to
acquire, or arrange for the acquisition of, a specified
minimum volume of products or services.
(d) Except as disclosed in Schedule 4.14, the Corporations are not
subject to any Contract involving a commitment of exclusivity
whereby its ability, or the ability of its Affiliates, to
acquire goods or services from any Person would be restricted
in any manner.
(e) To the knowledge of the Corporations and each of the Vendors,
none of the suppliers included in the list referred to in
subsection 4.14(a) has any intention to change its
relationship or the terms upon which it conducts business with
the Corporations, including as a result of the transactions
contemplated by this Agreement.
4.15 Condition of Assets
The fixed assets, machinery, equipment, fixtures, furniture, furnishings and
vehicles owned or used or held by the Corporations, including any of the
foregoing which are in storage or in transit, and other tangible property and
facilities used by the Corporations, whether located in or on the premises of
the Corporations or elsewhere, are in good condition, repair and (where
applicable) proper working order, having regard to their use and age and such
assets have been properly and regularly maintained.
4.16 Marketing Inventories
All Marketing Inventories are valued on the books of the Corporations at cost,
amortized over the applicable season. All Marketing Inventories are merchantable
or usable and in quantities usable or saleable in the ordinary and usual course
of business.
4.17 Accounts Receivable
The Accounts Receivable are good and collectible at the aggregate recorded
amounts, except to the extent of any reserves provided for such accounts in the
Company Financial Statements, and are not subject to any defence, counterclaim
or set off.
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4.18 Business in Compliance with Law
In all material respects, the business and operations of the Corporations have
been and are now conducted in compliance with all Laws of each jurisdiction in
which the Corporations carry on or have carried on business and none of the
Corporations have received any notice of any alleged violation of any such Laws.
4.19 Governmental Authorizations
Schedule 4.19 sets forth a complete list of the Governmental Authorizations
issued to or required by the Corporations to enable them to carry on business in
compliance, in all material respects, with all Laws. The Governmental
Authorizations listed in Schedule 4.19 are, in all material respects, in full
force and effect in accordance with their terms, and there have been no material
violations of them and no proceedings are pending or, to the knowledge of the
Corporations, threatened, which could result in their revocation or limitation.
4.20 Governmental Assistance
Except as disclosed in Schedule 4.20, the Corporations have not received any
grants or other forms of assistance, including loans with interest below market
rates or guarantees of any loans, from any Governmental Authority that have not
been fully repaid or reimbursed and satisfied, and the Corporations are not a
party to any Contract or understanding with respect to any such grant or form of
assistance.
4.21 Restrictive Covenants
Except as disclosed in Schedule 4.21, the Corporations are not party to or bound
or affected by any Contract or document limiting the freedom of the Corporations
to compete in any line of business, acquire goods and services from any
supplier, sell goods and services to any customer, or transfer or move any of
its assets or operations, or which would materially adversely affect the
business practices, operations or conditions of the Corporations, or, to the
knowledge of the Vendors, materially adversely affect the Purchaser, or the
continued operation of their businesses, after the Closing.
4.22 Intellectual Property
(a) Schedule 4.22 sets forth a complete list and brief description
of all Intellectual Property owned by the Corporations
(including Trade-marks) that have been registered or for which
applications for registration have been filed by or on behalf
of the Corporations.
(b) Except as disclosed in Schedule 4.22, the Corporations have
the exclusive right to use and are the exclusive owners of all
right, title and interest in and to all Intellectual Property
used in or necessary to carry on the Business (with no breaks
in the chain of title). Any Intellectual Property used in or
necessary to carry on the Business that is not owned by the
Corporations is being used by the Corporations solely in
accordance with a licence from or the express consent of the
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rightful owner of such Intellectual Property, and all such
licences and consents are in full force and effect.
(c) All Intellectual Property owned or licensed by the
Corporations is in full force and effect and has not been
used, enforced or licensed or failed to be used, enforced or
licensed in a manner that would result in the abandonment,
cancellation or unenforceability of or any loss of rights in
any of such Intellectual Property.
(d) Except as disclosed in Schedule 4.22, neither the Corporations
nor any of the Vendors has any knowledge of any claim of
adverse ownership, invalidity or other opposition to or
conflict with any Intellectual Property owned or licensed by
the Corporations nor of any pending or threatened action,
litigation, investigation, claim, opposition, complaint,
grievance or proceeding of any nature or kind against any of
them relating to such Intellectual Property.
(e) Except as disclosed in Schedule 4.22, to the knowledge of the
Corporations, and Vendors:
(i) the use of any of the Intellectual Property owned or
licensed by the Corporations;
(ii) any activity in which the Corporations are or have
been engaged;
(iii) any product or service which the Corporations sell,
provide, produce or use, or has sold, provided,
produced or used; and
(iv) any process, method, advertising, or material that
the Corporations employ or have employed in the
marketing or sale of any such product or service,
does not breach, violate, infringe or interfere with any
proprietary, contractual or other rights of any Person
relating to Intellectual Property.
(f) Except as disclosed in Schedule 4.22, neither the Corporations
nor any of the Vendors has any knowledge of any breach,
violation, infringement or interference with the Intellectual
Property owned or licensed by the Corporations.
4.23 Equipment Contracts
Schedule 4.23 sets forth a complete list of all Equipment Contracts involving
aggregate payments in excess of $10,000 per annum, together with a description
of the assets to which the Equipment Contracts relate. The Equipment Contracts
listed in Schedule 4.23 are all those used to earn the revenue shown on the
Company Financial Statements. All of the Equipment Contracts are in full force
and effect and no default exists on the part of the Corporations, or, to the
knowledge of the Corporations and the Vendors, on the part of any of the other
parties thereto. The entire interest of the Corporations under each of the
Equipment Contracts is held by them free and clear of any Encumbrances, other
than Permitted Encumbrances, and all payments due under the Equipment Contracts
have been duly and punctually paid. To the extent any rights under the Equipment
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Contracts are not used directly in the Business, the Corporations have legally
enforceable commitments from Franchisees which are at arm's length from the
Vendors and the Corporations, to reimburse the Corporations for the costs of
those rights.
4.24 Owned Real Property
(a) Schedule 4.24 sets forth a complete list of the Owned Real
Property (in each case by reference to the owner, municipal
address and legal description) which is used or is reasonably
required for the Business.
(b) Except as set out in Schedule 4.24, the Corporations are the
legal and beneficial owner of the Owned Real Property in fee
simple, with good and marketable title to the Owned Real
Property, free and clear of all Encumbrances other than
Permitted Encumbrances.
(c) There are no agreements, undertakings or other documents which
affect or relate to the title to, or ownership of, such Owned
Real Property except as set forth in Schedule 4.24. None of
the Corporations are a party to or bound by any Contracts or
other documents or undertakings to acquire any freehold or fee
simple title, right or interest in any real property.
(d) The plant, buildings, structures, erections, improvements and
fixtures situate on or used in connection with the Owned Real
Property are in good condition, repair and proper working
order, having regard to their use and age, and such assets
have been properly and regularly maintained.
(e) The Corporations have such rights of entry and exit to and
from the Owned Real Property as are reasonably necessary to
carry on the Business upon the Owned Real Property.
(f) No Person has any right to purchase any of the Owned Real
Property, and no person other than the Corporations is using
or has any right to use, as tenant, or is in possession or
occupancy of, any part of the Owned Real Property.
(g) None of the Corporations have granted any option, right of
first refusal or other contractual rights with respect to any
of the Owned Real Property. None of the Corporations have
entered into any agreement to sell, transfer, encumber, or
otherwise dispose of or impair the right, title and interest
in and to the Owned Real Property or the air, density or
easement rights relating to the Owned Real Property.
(h) The most up-to-date surveys, prepared by licensed land
surveyors, relating to the Owned Real Property which are
available have been delivered or made available to the
Purchaser.
(i) None of the Vendors or the Corporations has received any
notification of or has any knowledge of, any outstanding or
incomplete work orders in respect of any of the buildings,
improvements or other structures constructed on the Owned Real
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Property or of any current non-compliance (other than
non-compliances which are legal non-conforming under relevant
zoning by-laws) with applicable statutes and regulations or
building and zoning by-laws and regulations. The current uses
of the Owned Real Property are permitted under current zoning
regulations. None of the Corporations have made application
for a rezoning of any of the Owned Real Property and none of
them or the Vendors has any knowledge of any proposed or
pending change to any zoning affecting the Owned Real
Property.
(j) No part of the Owned Real Property is subject to any building
or use restriction that would restrict or prevent the use and
operation of the Owned Real Property after the Closing for the
Business. No improvements constituting a part of the Owned
Real Property encroach on real property not forming part of
the Owned Real Property.
(k) None of the Vendors or the Corporations has any knowledge of
any expropriation or condemnation or similar proceeding
pending or threatened against the Owned Real Property or any
part of the Owned Real Property. All accounts for work and
services performed or materials placed or furnished upon or in
respect of the construction and completion of any of the
buildings, improvements or other structures constructed on the
Owned Real Property have been fully paid and no one is
entitled to claim a lien under the Construction Lien Act
(Ontario) or other similar legislation for such work performed
by or on behalf of the Corporations.
(l) The Owned Real Property is fully serviced to permit the
operations of the Business. All municipal levies, local
improvements, imposts and permit fees due and payable prior to
the Closing Date have been or will as at the Closing Date have
been paid by the Corporations.
(m) All easements, rights-of-way and other similar appurtenant
interests necessary for the continued use and operation of the
Owned Real Property for the Business are listed in Schedule
4.24 and none of such easements, rights-of-way or other
interests requires the consent of any other party in
connection with the transactions contemplated by this
Agreement.
(n) There are no matters affecting the right, title and interest
of the Corporations in and to the Owned Real Property which,
in the aggregate, could materially and adversely affect the
ability of the Corporations to carry on the business of the
Corporations upon the Owned Real Property as it has been
carried on in the ordinary course in the past.
4.25 Leased Real Property
(a) Schedule 4.25 sets forth a complete list of the Leased Real
Property (by reference to municipal address) and Real Property
Leases (by reference to all relevant documents including
details of parties to the Real Property Leases and dates of
documents as well as details of annual rent payable, any
discounts or associated premiums, current terms, renewal
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rights, security deposits or prepaid rent, and area of
premises). True copies of all the Real Property Leases have
been provided or made available to the Purchaser. The terms of
the Real Property Leases as summarized in Schedule 4.25 are
true and accurate in all respects. The Real Property Leases
have not been altered or amended and are in full force and
effect.
(b) There are no agreements or understandings between the landlord
and tenant, or sublandlord and subtenant, in respect of any
Leased Real Property other than as contained in the Real
Property Leases, pertaining to the rights and obligations of
the parties to the Real Property Leases relating to the use
and occupation of the Leased Real Property.
(c) Except for the Real Property Leases listed in Schedule 4.25,
none of the Corporations is a party to or bound by any other
leases, subleases, agreements to lease, licenses or occupancy
agreements pertaining to real property.
(d) All interests held by the Corporations as lessee or occupant
under the Real Property Leases are free and clear of all
Encumbrances other than Permitted Encumbrances.
(e) All payments required to be made by the Corporations pursuant
to the Real Property Leases have been duly paid and none of
the Corporations is otherwise in default in meeting any of its
obligations under any of the Real Property Leases.
(f) None of the landlords and sublandlords, and to the knowledge
of the Vendors and the Corporations, none of the tenants or
subtenants under any of the Real Property Leases, is in
default in meeting any of its obligations under Real Property
Leases to which it is a party.
(g) None of the Corporations has any option, right of first
refusal or other contractual right relating to the Leased Real
Property which is not provided under the Real Property Leases.
(h) To the knowledge of the Vendors and the Corporations, no event
exists which, but for the passing of time or the giving of
notice, or both, would constitute a default by any party to
any of the Real Property Leases and no party to any Real
Property Lease is claiming any such default or taking any
action purportedly based upon any such default.
4.26 Environmental Matters
(a) There are no Environmental Approvals.
(b) All operations of the Corporations have been and are now in
compliance with all Environmental Laws. There has been no
Release by the Corporations of any Hazardous Substance into
the Environment.
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(c) None of the Corporations nor any of their operations has been
or is now the subject of any Remedial Order, nor do any of the
Vendors and the Corporations have any knowledge of any
investigation or evaluation commenced as to whether any such
Remedial Order is necessary nor, to their knowledge, has any
threat of any such Remedial Order been made nor, to their
knowledge, are there any circumstances which could reasonably
result in the issuance of any such Remedial Order.
(d) None of the Corporations have ever been prosecuted for or
convicted of any offence under Environmental Laws, nor have
the Corporations been found liable in any proceeding to pay
any fine, penalty, damages, amount or judgment to any person
as a result of any Release or threatened Release of any
Hazardous Substance into the Environment or as the result of
the breach of any Environmental Law and to the knowledge of
the Vendors and the Corporations, there is no basis for any
such proceeding or action.
(e) None of the Vendors or the Corporations has any knowledge of
any Hazardous Substance in, on or under the Leased Real
Property or any other assets of the Corporations.
(f) No part of the Owned Real Property has ever been used as a
landfill or for the disposal of waste.
(g) Except as disclosed in Schedule 4.26, no asbestos or asbestos
containing materials are used, stored or otherwise present in
or on the Owned Real Property. No equipment, waste or other
material containing polychlorinated biphenyls (PCBs) are used,
stored or otherwise present in or on the Owned Real Property.
(h) All material environmental data and studies (including the
results of any environmental audit) relating to the Real
Property, the Corporations have been delivered or made
available to the Purchaser.
(i) There has been no Release of any Hazardous Substance which is
now present in, on or under any of the Owned Real Property
(including underlying soils and substrata, surface water and
groundwater) at levels which exceed decommissioning or
remediation standards under any Environmental Laws or
standards published or administered by those Governmental
Authorities responsible for establishing or applying such
standards.
(j) There are no underground storage tanks on the Owned Real
Property and any underground storage tanks formerly on the
Owned Real Property have been removed and any affected soil,
surface water or ground water has been remediated in
compliance with all Laws.
(k) None of the Vendors or the Corporations have any knowledge of
any Hazardous Substance originating from any neighbouring or
adjoining properties which has migrated onto, or is migrating
towards any of the Owned Real Property.
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4.27 Employment Matters
(a) Schedule 4.27 (Part A) sets forth a complete list of all
Employees, whose current wages, salaries or hourly rates of
pay, and bonus (whether monetary or otherwise) exceed $40,000
U.S., together with their titles, service dates and material
terms of employment, including current wages, salaries or
hourly rates of pay, and bonus (whether monetary or otherwise)
paid since the beginning of the most recently completed fiscal
year (including the date of payment if paid since *, 2001) or
payable to each such Employee, the date upon which such wage,
salary, rate or bonus became effective and the date upon which
each such Employee was first hired by the Corporations. Except
as disclosed in Schedule 4.27, no Employee is on disability
leave, pregnancy or parental leave, extended leave of absence
or receiving benefits pursuant to the Laws.
(b) Except for those written employment contracts with salaried
Employees identified in Schedule 4.27 (Part B), there are no
written contracts of employment entered into with any
Employees or any oral contracts of employment which are not
terminable on the giving of reasonable notice in accordance
with applicable law.
(c) There are no written or oral change of control provisions or
Contracts with any of the Employees which provide for any
rights of Employees contingent upon or affected by a change of
control of the Corporations or the sale of any or all of their
assets.
(d) Schedule 4.27 (Part C) sets out a complete list of all
independent contractors with whom the Corporations has entered
into any Contract, together with the material terms of all
Contracts with them.
(e) Except for the Benefit Plans, there are no employment policies
or plans which are binding upon the Corporations.
(f) The Corporations have been and are being operated in full
compliance with all Laws relating to employees, including
employment standards, occupational health and safety, human
rights, labour relations and pay equity.
(g) There are no Claims or complaints nor, to the knowledge of the
Vendors or the Corporations, are there any threatened Claims
or complaints, against the Corporations pursuant to any Laws
relating to employees, including employment standards, human
rights, labour relations, occupational health and safety,
worker's compensation or pay equity. To the knowledge of the
Vendors and the Corporations, nothing has occurred which might
lead to a Claim or complaint against the Corporations under
any such Laws. There are no outstanding decisions or
settlements or pending settlements which place any obligation
upon the Corporations to do or refrain from doing any act.
(h) All current assessments under workers' compensation
legislation in relation to the Corporations have been paid or
accrued and the Corporations have not been subject to any
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special or penalty assessment under such legislation which has
not been paid.
4.28 Collective Agreements
(a) None of the Corporations is a party, either directly or by
operation of law, to any collective agreement, letters of
understanding, letters of intent or other written
communication with any trade union or association which may
qualify as a trade union, which would cover any of the
Employees or any dependent contractors of the Corporations.
(b) There are no outstanding or, to the knowledge of the Vendors
and the Corporations, threatened labour tribunal proceedings
of any kind, including any proceedings which could result in
certification of a trade union as bargaining agent for
Employees or dependent contractors of the Corporations, and
there have not been any such proceedings within the last two
years.
(c) To the knowledge of the Vendors and the Corporations, there
are no threatened or apparent union organizing activities
involving any Employees or dependent contractors of the
Corporations.
(d) None of the Corporations has any serious labour problems that
might materially affect the value of the Corporations or lead
to an interruption of its operations at any location.
4.29 Benefit Plans
(a) Schedule 4.29 sets forth a complete list of the Benefit Plans.
(b) Current and complete copies of all written Benefit Plans or,
where oral, written summaries of the material terms of them,
have been provided or made available to the Purchaser together
with current and complete copies of all documents relating to
the Benefit Plans, including: all documents establishing,
creating or amending any of the Benefit Plans; all trust
agreements, funding agreements; insurance contracts, and the
most recent financial statements and accounting statements and
reports; all booklets, summaries, manuals and written
communications of a general nature distributed or made
available to any Employees or former employees concerning any
Benefit Plans.
(c) Each Benefit Plan is, and has been, established, registered
(where required), qualified, administered and invested, in
compliance with (i) the terms thereof, and (ii) all Laws; and
the Corporations have not received, in the last six years, any
notice from any Person questioning or challenging such
compliance (other than in respect of any claim related solely
to that Person).
(d) All obligations to or under the Benefit Plans (whether
pursuant to their terms or any Laws) have been satisfied, and
there are no outstanding defaults or violations under the
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Benefits Plans by the Corporations nor do the Vendors or the
Corporations have any actual knowledge, without further
enquiry or investigation, of any default or violation by any
other party to any Benefit Plan.
(e) There have been no improvements, increases or changes to, or
promised improvements, increases or changes to, the benefits
provided under any Benefit Plan. None of the Benefit Plans
provides for benefit increases or the acceleration of or an
increase in funding obligations that are contingent upon or
will be triggered by the entering into of this Agreement or
the completion of the transactions contemplated by this
Agreement.
(f) All employer or employee payments, contributions or premiums
required to be remitted, paid to or in respect of each Benefit
Plan have been paid or remitted in a timely fashion in
accordance with the terms of that Benefit Plan and all Laws,
and no Taxes, penalties or fees are owing or exigible under
any Benefit Plan, and there are no liabilities or contingent
liabilities in respect of any Benefit Plans that have been
discontinued.
(g) There is no proceeding, action, investigation, suit or claim
(other than routine claims for payment of benefits) pending
or, to the knowledge of the Vendors and the Corporations,
threatened involving any Benefit Plan or its assets, and no
facts exist which could reasonably be expected to give rise to
any such proceeding, action, suit or Claim (other than routine
claims for benefits).
(h) No event has occurred respecting any registered Benefit Plan
which would entitle any person (without the consent of the
Corporations) to wind-up or terminate any Benefit Plan, in
whole or in part, or which could otherwise reasonably be
expected to adversely affect the tax status of any such plan.
(i) The Corporations have not received, or applied for, any
payment of surplus or any payments as a result of the
demutalization of the insurer of any Benefit Plan out of or in
respect of any Benefit Plan.
(j) The Corporations have not taken any contribution or premium
holidays under any Benefit Plan and there have been no
withdrawals or transfers of assets from any Benefit Plan.
(k) All employee data necessary to administer each Benefit Plan is
in the possession of the Corporations and is complete, correct
and in a form which is sufficient for the proper
administration of the Benefit Plan in accordance with its
terms and all Laws.
(l) None of the Benefit Plans provide benefits beyond retirement
or other termination of service to Employees or former
employees or to the beneficiaries or dependants of such
employees.
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(m) None of the Benefit Plans require or permit a retroactive
increase in premiums or payments, or require additional
payments or premiums on the termination of any Benefit Plan or
insurance contract in respect thereof, and the level of
insurance reserves, if any, under any insured Benefit Plan is
reasonable and sufficient to provide for all incurred but
unreported claims.
4.30 Insurance
The Corporations each maintain such policies of insurance, issued by responsible
insurers, as are appropriate to its respective business, operations, property
and assets, in such amounts and against such risks as are customarily carried
and insured against by owners of comparable businesses, properties and assets.
All such policies of insurance are in full force and effect and each of the
Corporations is not in default, as to the payment of premium or otherwise, under
the terms of any such policy. Schedule 4.30 sets forth a complete list of all
policies of insurance which the Corporations maintain and the particulars of
such policies, including the name of the insurer, the risk insured against, the
amount of coverage and the amount of any deductible.
4.31 Material Contracts
Schedule 4.31 sets forth a complete list of the Material Contracts. The Material
Contracts are all in full force and effect unamended and no default exists under
any of the Material Contracts on the part of the Corporations or, to the
knowledge of the Vendors and the Corporations, on the part of any other party to
such Contracts. The Corporations have the capacity, including the necessary
personnel, equipment and supplies, to perform all of their respective
obligations under the Material Contracts. Current and complete copies of the
Material Contracts have been delivered or made available to the Purchaser and
there are no current or pending negotiations with respect to the renewal,
repudiation or amendment of any such Contract.
4.32 Litigation
Except as disclosed in Schedule 4.32, there is no action, suit, litigation,
investigation, claim, complaint, grievance or proceeding, including appeals and
applications for review, in progress or, to the knowledge of the Vendors and the
Corporations, pending or threatened against or relating to the Corporations
before any court, Governmental Authority, commission, board, bureau, agency or
arbitration panel which, if determined adversely to the Corporations, would,
(a) materially and adversely affect the properties, business,
future prospects or financial condition of the Corporations;
(b) enjoin, restrict or prohibit the transfer of all or any part
of the Purchased Shares or any of the other transactions
contemplated by this Agreement; or
(c) prevent the Vendors from fulfilling all of their obligations
set out in this Agreement or arising from this Agreement,
and the Vendors and the Corporations have no knowledge of any existing ground on
which any such action, suit, litigation or proceeding might be commenced with
any reasonable likelihood of success. Except as disclosed in such Schedule 4.32,
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there is not presently outstanding against the Corporations any judgment,
decree, injunction, rule or order of any court, Governmental Authority,
commission, board, bureau, agency or arbitrator.
4.33 Tax Matters
Except as disclosed in Schedule 4.33:
(a) The Corporations are not, and have never been, members of an
affiliated group, within the meaning of Section 1504(a) of the
Code, and neither the Corporations nor any entity whose
liabilities the Corporations has succeeded has ever filed a
consolidated United States federal income tax return with (or
been included in a consolidated return or) an affiliated
group;
(b) The Corporations have filed or caused to be filed all tax
returns and reports required to have been filed by or for them
on or before the Closing Date, and all information set forth
in such returns or reports is accurate and complete in all
material respect
(c) No tax return or report of the Corporations contains any
position which is, or could be subject to, penalties under the
Code Section 6662 or corresponding provision of state, local
or foreign Tax law;
(d) The Corporations have paid all taxes due and payable by them;
(e) The Corporations are in material compliance with, and their
records contain all information and documents (including,
without limitation, properly completed United States Internal
Revenue Services Forms W-9) necessary to comply with, all
applicable information tax reporting and tax withholding
requirements;
(f) There are no unpaid taxes, additions to tax, penalties, or
interest payable by the Corporations or any other person that
are or could become a lien on any assets, or otherwise
adversely affect the business, properties, or financial
condition of the Corporations;
(g) The Corporations have collected or withheld all amounts
required to be collected or withheld by them for any taxes,
and all such amounts have been paid to the appropriate
governmental agencies or set aside in appropriate accounts for
future payment when due;
(h) The balance sheets of the Corporations fully and properly
reflect, as of the Closing Date, the liabilities of the
Corporations for all accrued taxes for all periods ending on
or before the Closing Date;
(i) The Corporations have not granted (nor is subject to) any
waiver currently in effect of the period of limitations for
the assessment or collection of tax, no unpaid tax deficiency
has been asserted against or with respect to the Corporations
by any taxing authority, and there is no pending examination,
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administrative or judicial proceeding, or deficiency or refund
litigation with respect to any taxes or tax returns of the
Corporations;
(j) The Corporations have not made or entered into, nor hold any
assets subject to, a consent filed pursuant to Section 341(f)
of the Code and the regulations there under or a "safe harbour
lease" subject to former Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended before the Tax Reform Act of
1984, and the regulations thereunder;
(k) The Corporations are not required to include in income any
amount from an adjustment pursuant to Section 481 of the Code
or the regulations thereunder or any similar provision of
state law;
(l) The Corporations are not a party to, nor obligated under, any
agreement or other arrangement providing for the payment of
any amount that is or would be non-deductible under Section
280G or the Code;
(m) The Corporations have not distributed to their stockholders or
security holders stock or securities of a controlled
corporation in a transaction to which Section 355(a) of the
Code applies;
(n) There are no outstanding rulings or requests for rulings from
any taxing authority that are, or if issued would be, binding
on the Corporations;
(o) The Corporations are not, nor have they been at any time
within the last five years, a "United States real property
holding corporation" for the purposes of Section 897 of the
Code;
(p) The Corporations do not have and have not had any permanent
establishment, nor are otherwise subject to taxation, in any
country other than the United States;
(q) All accounts, books, ledgers, tax returns and reports,
financial and other similar records (or, where applicable,
true and accurate copies thereof) of or including the
Corporations; and
(r) Schedule 4.33 attached hereto describes all material tax
elections, consents, and agreements made by or affecting the
Corporations that would be effective after the Closing, lists
all material types of taxes paid and tax returns filed by or
on behalf of the Corporations, expressly indicates each tax
with respect to which the Corporations are or have been
included in a consolidated, unitary, or combined return and
describes the status of all examinations, administrative or
judicial proceedings, and litigation with respect to taxes of
the Corporations.
4.34 Books and Records
All Books and Records have been delivered or made available to the Purchaser.
Such Books and Records fairly and correctly set out and disclose in all respects
the financial position of the Corporations and all financial transactions to
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which the Corporations is or was a party have been accurately recorded in such
Books and Records.
4.35 Corporate Records
(a) The articles and by-laws for each of the Corporations,
including any and all amendments, have been delivered or made
available to the Purchaser and such articles and by-laws as so
amended are in full force and effect unamended.
(b) The corporate records and minute books for each of the
Corporations have been delivered or made available to the
Purchaser. The minute books include complete and accurate
minutes of all meetings of the directors and shareholders for
each of the Corporations held to date and resolutions passed
by the directors or shareholders on consent. The share
certificate books, registers of shareholders, registers of
transfers and registers of directors of each of the
Corporations are complete and accurate.
4.36 Management Recommendation Letters
The Purchaser has been provided with copies of all management recommendation
letters received by the Corporations or their boards of directors from any
auditor of the Corporations during the last three years.
4.37 Trade Allowances
No customers of the Corporations are entitled to or customarily receive
discounts, allowances, volume rebates, customer vouchers or coupons,
preferential terms, customer credits or similar reductions in price or other
trade terms arising from any agreements or understandings (whether written or
oral) with or concessions granted to any customer other than in the usual course
of the Business. All such discounts, allowances, volume rebates, customer
vouchers and coupons, preferential terms or customer credits are at the same
levels as have been in existence for the three immediately preceding financial
years. There are no material marketing or pricing policies, including promotions
and trade allowances relating to the Business, which are currently in effect or
which have been in effect during any of the last three years. For the avoidance
of doubt, the representations in this Section 4.37 do not apply to arrangements
between a Franchisee and a customer of that Franchisee to which none of the
Corporations are a party, directly or indirectly.
4.38 Bank Accounts, etc.
Schedule 4.38 sets forth a complete list of every financial institution in which
the Corporations maintain any depository account, trust account or safe deposit
box, details of all such accounts and safe deposit boxes and the names of all
persons authorized to draw on or who have access to such accounts or safe
deposit boxes.
4.39 No Broker
Each of the Vendors has carried on all negotiations relating to this Agreement
and the transactions contemplated by this Agreement directly and without
intervention on his, her or its behalf of any other party in such manner as to
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give rise to any valid claim for a brokerage commission, finder's fee or other
like payment against the Purchaser or the Corporations.
4.40 Antitrust
Any waiting period applicable to the transactions contemplated herein under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, shall have
been terminated or shall have expired.
4.43 Full Disclosure
The Vendors have made available to the Purchaser all information, including
financial, marketing, sales and operational information on a historical basis,
relating to the Corporations which would be material to a purchaser of the
Corporations. All information which has been provided to the Purchaser is true
and correct in all material respects and no material fact or facts have been
omitted from that information which would make such information misleading.
Without limiting the generality of the foregoing, the Vendors have not failed to
disclose to the Purchaser any fact or information which would be material to a
purchaser of the Corporations.
4.44 Federal Securities Act - Unregistered Shares
The Vendors acknowledge that the Purchaser's shares (the "E-Cruiter Shares") to
be delivered to them pursuant to this Agreement have not and are not being
registered under the Securities Act of 1933 as amended (the "1933 Act"), and
that accordingly the E-Cruiter Shares are not fully transferable except as
permitted under the various exemptions contained in the 1933 Act and the rules
of the Securities and Exchange Commission interpreting the 1933 Act. The
provisions contained in this paragraph 4.44 are intended to ensure compliance
with the 1933 Act.
4.45 No Transfers in Violation of 1933 Act
The Vendors covenant, warrant and represent that none of the E-Cruiter Shares
that will be issued to them pursuant to this Agreement will be offered, sold,
assigned, pledged, hypothecated, transferred, or otherwise disposed of except
after full compliance with all of the applicable provisions of the 1933 Act and
the rules and regulations of the Securities and Exchange Commission under the
▇▇▇▇ ▇▇▇.
4.46 No Distribution of E-Cruiter Shares to Public
The Vendors represent and warrant to the Purchaser that they are acquiring the
E-Cruiter Shares for their own account, for investment, and not with a view to
their resale or other distribution; that they currently have no intention of
selling, transferring, hypothecating, or otherwise disposing of all or any part
of the E-Cruiter Shares at any particular time, for any particular price, or on
the happening of any particular event or circumstances; and that the Purchaser
is relying on the truth and accuracy of these covenants, warranties, and
representations in issuing the E-Cruiter Shares without first registering them
under the 1933 Act.
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4.47 Investment Legend on Certificates
The Vendors agree not to sell, transfer, hypothecate or otherwise dispose of any
of the E-Cruiter Shares received pursuant to this Agreement unless and until
they have: presented the Purchaser with a written legal opinion in form and
substance satisfactory to the solicitors for the Purchaser to the effect that
the disposition is permissible under the terms of the 1933 Act and regulations
interpreting the 1933 Act; have complied with the registration and prospectus
requirements of the 1933 Act relating to the disposition ,or; have presented the
Purchaser satisfactory evidence that the transfer will comply with Rule 144
under the 1933 Act and therefore will be exempt from registration under section
4(2) of the 1933 Act. The Vendors further agree that the certificates evidencing
the E-Cruiter Shares they will receive shall contain the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, HAVE BEEN TAKEN FOR INVESTMENT AND
MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A REGISTRATION STATEMENT
UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED WITH RESPECT TO
THESE SHARES, IS THEN IN EFFECT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT IS THEN IN FACT APPLICABLE TO THE OFFER OR
SALE."
The Purchaser shall also place a "stop transfer" order against any transfer of
the E-Cruiter Shares until one of the conditions set forth above has been met.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Vendors the matters set out
below.
5.1 Incorporation
The Purchaser is a corporation duly incorporated and validly existing under the
laws of Canada.
5.2 Due Authorization
The Purchaser has all necessary corporate power, authority and capacity to enter
into this Agreement and to carry out its obligations under this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of the Purchaser.
5.3 Enforceability of Obligations
This Agreement constitutes a valid and binding obligation of the Purchaser
enforceable against it in accordance with its terms.
5.4 Absence of Conflicting Agreements
The Purchaser is not a party to, bound or affected by or subject to any
indenture, mortgage, lease, agreement, obligation, instrument, charter or by-law
provision, Law or Governmental Authorization which would be violated,
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contravened, breached by, or under which any default would occur or an
Encumbrance would be created as a result of the execution and delivery by it of
this Agreement or the performance by it of any of its obligations provided for
under this Agreement.
5.5 Approvals
Except for the notifications required to be filed by the Purchaser pursuant to
the Investment Canada Act and applicable security commissions, no approval,
order or consent of or filing with any Governmental Authority is required on the
part of the Purchaser in connection with the execution, delivery and performance
of this Agreement or any other documents or agreements to be delivered under
this Agreement or the performance of the Purchasers' obligations under this
Agreement or any other documents or agreements to be delivered or entered into
under this Agreement.
5.6 Litigation
There is no action, suit, litigation, investigation, claim, complaint, grievance
or proceeding, including appeals and applications for review, in progress or, to
the knowledge of the Purchaser pending or threatened against or relating to the
Purchaser before any court, Governmental Authority, commission, board, bureau,
agency or arbitration panel, which, if determined adversely to the Purchaser
would:
(a) prevent the Purchaser from paying to the Vendors the Purchase
Price;
(b) enjoin, restrict or prohibit the transfer of all or any part
of the Purchased Shares contemplated by this Agreement; or
(c) prevent the Purchaser from fulfilling all of its obligations
set out in this Agreement or arising from this Agreement,
and the Purchaser has no knowledge of any existing ground on which any such
action, suit, litigation or proceeding might be commenced with any reasonable
likelihood of success.
5.7 No Broker
The Purchaser has carried on all negotiations relating to this Agreement and the
transactions contemplated by this Agreement directly and without the
intervention on their behalf of any other party in such manner as to give rise
to any valid claim for a brokerage commission, finder's fee or other like
payment against any of the Vendors.
ARTICLE 6
NON-WAIVER; SURVIVAL
6.1 Non-Waiver
No investigations made by or on behalf of the Purchaser at any time shall have
the effect of waiving, diminishing the scope of or otherwise affecting any
representation or warranty made by any of the Vendors in or pursuant to this
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Agreement. No waiver of any condition or other provision, in whole or in part,
shall constitute as a waiver of any other condition or provision (whether or not
similar) nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
6.2 Nature and Survival
(a) All representations, warranties and covenants contained in
this Agreement on the part of each of the Parties shall
survive the Closing, the execution and delivery under this
Agreement of any share or security transfer instruments or
other documents of title to any of the Purchased Shares and
the payment of the consideration for the Purchased Shares.
(b) The representations and warranties of the Vendors contained in
Article 4 shall survive the Closing as follows:
(i) the representations and warranties contained in
Sections 4.1, 4.2, 4.3, 4.4 and 4.5 shall survive
indefinitely;
(ii) all representations and warranties relating to Taxes,
including Section 4.33, shall survive until the date
which is 90 days following the expiration of all
periods allowed for objecting or appealing the
determination of any proceedings relating to any
assessment or reassessment of the Corporations, as
the case may be, by any taxing authority in respect
of any taxation period ending on or prior to the
Closing or in which the Closing occurs unless a bona
fide notice of a Claim shall have been made in
writing before the expiry of such period, in which
case the representation and warranty to which such
notice applies shall survive in respect of that Claim
until the final determination or settlement of the
Claim;
(iii) all representations and warranties relating to
environmental matters, including Section 4.26, shall
survive until the expiry of seven years after the
Closing Date, unless a bona fide notice of a Claim
shall have been given in writing before the expiry of
such period, in which case the representation and
warranty to which such notice relates shall survive
in respect of that Claim until final determination or
settlement of such Claim; and
(iv) representations and warranties as to all other
matters shall survive until April 30, 2006, unless a
bona fide notice of a Claim shall have been given in
writing before the expiry of such period, in which
case the representation and warranty to which such
notice relates shall survive in respect of that Claim
until final determination or settlement of such
Claim.
(c) The representations and warranties of the Purchaser contained in
Article 5 shall survive the Closing as follows:
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(i) the representations and warranties contained in
Sections 5.1, 5.2 and 5.3 shall survive indefinitely;
(ii) all other representations and warranties shall
survive until April 30, 2006, unless a bona fide
notice of a Claim shall have been given in writing
before the expiry of that period, in which case the
representation and warranty to which such notice
relates shall survive in respect of that Claim until
final determination or settlement of such Claim.
ARTICLE 7
PURCHASER'S CONDITIONS PRECEDENT
The obligation of the Purchaser to complete the purchase of the Purchased Shares
under this Agreement shall be subject to the satisfaction of, or compliance
with, at or before the Closing Time, each of the following conditions precedent
(each of which is acknowledged to be inserted for the exclusive benefit of the
Purchaser and may be waived by it in whole or in part).
7.1 Truth and Accuracy of Representations of Vendors at the Closing Time
All of the representations and warranties of the Vendors made in or pursuant to
this Agreement shall be true and correct in all material respects as at the
Closing Time and with the same effect as if made at and as of the Closing Time
and the Purchaser shall have received a certificate from each of the Vendors
confirming, to the best of his or her knowledge, information and belief, the
truth and correctness in all material respects of such representations and
warranties.
7.2 Performance of Obligations
The Vendors shall have performed or complied with, in all respects, all their
obligations and covenants under this Agreement.
7.3 Receipt of Closing Documentation
All documentation relating to the due authorization and completion of the sale
and purchase of the Purchased Shares under this Agreement and all actions and
proceedings taken on or prior to the Closing in connection with the performance
by each of the Vendors of their obligations under this Agreement, shall be
satisfactory to the Purchaser, acting reasonably, and the Purchaser shall have
received copies of all such documentation or other evidence as it may reasonably
request in order to establish the consummation of the transactions contemplated
by this Agreement and the taking of all corporate proceedings in connection with
such transactions in compliance with these conditions, in form (as to
certification and otherwise) and substance satisfactory to the Purchaser.
7.4 Releases
Each of the Vendors shall have executed and delivered comprehensive releases of
the Corporations substantially in the form of Schedule 7.4.
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7.5 Opinion of Counsel for Vendors
The Purchaser shall have received an opinion dated the Closing Date from counsel
for the Vendors, *, in form and substance acceptable to the Purchaser and its
counsel, acting reasonably.
7.6 Consents, Authorizations and Registrations
The Required Approvals shall have been obtained at or before the Closing Time on
terms acceptable to the Purchaser, acting reasonably.
7.7 No Proceedings
There shall be no injunction or restraining order issued preventing, and no
claim, action, suit, litigation or proceeding, judicial or administrative, or
investigation against any Party pending by any Person, or pending or threatened
by any Governmental Authority, for the purpose of enjoining or preventing, the
consummation of the transactions contemplated by this Agreement or otherwise
claiming that this Agreement or the consummation of those transactions is
improper or would give rise to proceedings under any Laws.
7.8 Substantial Damage
No substantial damage by fire or other hazard to the assets or business of the
Corporations shall have occurred prior to the Closing Time.
7.9 No Laws
No Laws shall have been enacted, introduced or announced which would be
reasonably likely to materially and adversely affect the Corporations or the
Business carried on by any of them.
7.10 No Material Change
There shall have been no material adverse change in the assets (tangible or
otherwise), business, financial condition or prospects of the Corporations since
the date of this Agreement.
7.11 Directors and Officers of the Corporations
There shall have been delivered to the Purchaser on or before the Closing Time,
the resignations of all individuals who are currently directors or officers of
the Corporations (except to the extent that the Vendors have been notified to
the contrary by the Purchaser) and duly executed comprehensive releases from
each such individual in favour of the Corporations.
7.12 Employment Agreements
▇▇▇▇▇▇ shall have executed and delivered an employment agreement with Omni
Partners and successors to assigns in substantially the form attached as
Schedule 7.12.
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7.13 Transfer and Delivery of the Purchased Shares
The Vendors shall have provided the Purchaser with the share certificates
representing the Purchased Shares, in each case duly endorsed in blank for
transfer, or accompanied by irrevocable security transfer powers of attorney
duly executed in blank, in either case by the holders of record, and shall take
such steps as shall be necessary to cause the Corporations to enter the
Purchaser or its nominee(s) upon the books of the Corporations as the holder of
the Purchased Shares and to issue share certificates to the Purchaser or its
nominee(s) representing the Purchased Shares, free and clear of all
encumbrances.
7.14 The Form and Legality of Matters
The form and legality of all matters incidental to this Agreement shall be
subject to the reasonable approval of the solicitors of the Purchaser.
7.15 Audits
An audit of the Corporations shall be conducted by the Purchaser's auditors,
PriceWaterhouseCoopers, to the satisfaction of the Purchaser.
7.16 Contracts Affected by Change of Control
Any consents required by any outstanding contract or commitment of the
Corporations which requires prior approval of any change of control of the
Corporations resulting from the consummation of this Agreement, shall be
delivered to the Purchaser.
7.17 Corporate Records
The Vendors shall have delivered to the Purchaser all corporate records of the
Corporations including, but not limited to all financial statements, books,
records, contracts and facilities.
If any of the foregoing conditions in this Article has not been fulfilled by
Closing, the Purchaser may terminate this Agreement by notice in writing to the
Vendors, in which event the Purchaser will be released from all obligations
under this Agreement, and unless the Purchaser can show that the condition
relied upon could reasonably have been performed by the Vendors, the Vendors
will also be released from all obligations under this Agreement. The Purchaser
may, however, waive compliance with any condition in whole or in part if it sees
fit to do so, without prejudice to its rights of termination in the event of
non-fulfilment of any other condition, in whole or in part, or to its rights to
recover damages for the breach of any representation, warranty, covenant or
condition contained in this Agreement.
ARTICLE 8
VENDORS' CONDITIONS PRECEDENT
The obligations of the Vendors to complete the sale of the Purchased Shares and
under this Agreement shall be subject to the satisfaction of or compliance with,
at or before the Closing Time, each of the following conditions precedent (each
of which is acknowledged to be inserted for the exclusive benefit of the Vendors
and may be waived by the Vendors, in whole or in part).
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8.1 Truth and Accuracy of Representations of the Purchaser at the Closing
Time
All of the representations and warranties of the Purchaser made in or pursuant
to this Agreement shall be true and correct in all material respects as at the
Closing Time and with the same effect as if made at and as of the Closing Time
and the Vendors shall have received a certificate from an officer of the
Purchaser confirming to the best of his or her knowledge, information and
belief, the truth and correctness in all material respects of such
representations and warranties.
8.2 Performance of Obligations
The Purchaser shall have performed or complied with, in all respects, all its
obligations and covenants under this Agreement.
8.3 Receipt of Closing Documentation
All documentation relating to the due authorization and completion of the sale
and purchase of the Purchased Shares under this Agreement and all actions and
proceedings taken on or prior to the Closing in connection with the performance
by the Purchaser of its obligations under this Agreement, shall be satisfactory
to the Vendors, acting reasonably, and the Vendors shall have received copies of
all extra documentation or other evidence as they may reasonably request in
order to establish the consummation of the transactions contemplated by this
Agreement and the taking of all corporate proceedings in connection with such
transactions in compliance with these conditions in form (as to certification
and otherwise) and substance satisfactory to the Vendors.
8.4 Consents, Authorizations and Registrations
The Required Approvals shall have been obtained at or before the Closing Time on
terms acceptable to the Vendors, acting reasonably.
8.5 No Proceedings
There shall be no injunction or restraining order issued preventing, and no
pending or threatened claim, action, suit, litigation or proceeding, judicial or
administrative, or investigation against any Party by any Person, for the
purpose of enjoining or preventing, the consummation of the transactions
contemplated by this Agreement or otherwise claiming that this Agreement or the
consummation of those transactions is improper or would give rise to proceedings
under any Laws.
8.6 Opinion of Counsel for Purchaser
The Vendors shall have received an opinion dated as of the Closing Date from
counsel to the Purchaser, ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, in form and
substance acceptable to the Vendors and their counsel, acting reasonably.
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ARTICLE 9
OTHER COVENANTS OF THE PARTIES
9.1 Conduct of Business Prior to Closing
During the period from the date of this Agreement to the Closing Time, the
Vendors will cause the Corporations to do the following:
(a) Conduct Business in the Ordinary Course - Except as otherwise
expressly contemplated under this Agreement, conduct its
business in the ordinary and usual course, consistent with
past practice and regular customer service and business
policies and not, without the prior written consent of the
Purchaser, enter into any transaction or Contract which, if
effected before the date of this Agreement, would constitute a
breach of the representations, warranties or covenants of the
Vendors contained in this Agreement.
(b) Maintain Good Relations - Use all reasonable efforts to
maintain good relations with the Employees, its customers and
suppliers.
(c) Continue Insurance - Continue in force all policies of
insurance maintained by or for the benefit of the Corporations
and give all notices and present claims under all insurance
policies in a timely fashion.
(d) Perform Obligations - Comply with all Laws affecting the
operation of the Corporations.
(e) Prevent Certain Changes - Not, without the prior written
consent of the Purchaser, take any of the actions, do any of
the things or perform any of the acts described in Section
4.10.
(f) Approvals - Co-operate with the Purchaser and use all
reasonable efforts and diligently pursue obtaining the
Required Approvals.
9.2 Access for Investigation
(a) The Vendors shall permit the Purchaser and its
representatives, on reasonable notice to the Vendors, between
the date of this Agreement and the Closing Time, without
interference to the ordinary conduct of the Business, to have
free and unrestricted access during normal business hours to
(i) the Real Property; (ii) all other locations where Books
and Records or other material relevant to the Business are
stored; (iii) all the Books and Records; and (iv) the
properties and assets used in the Business. The Vendors shall
furnish to the Purchaser copies of Books and Records (subject
to any confidentiality agreements or covenants relating to any
Books and Records) as the Purchaser shall from time to time
reasonably request to enable confirmation of the matters
warranted in Article 4. Without limiting the generality of the
foregoing, it is agreed that the accounting representatives of
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the Purchaser shall be afforded ample opportunity to make a
full investigation of all aspects of the financial affairs of
the Corporations.
(b) Notwithstanding subsection (a), the Vendors shall not be
required to disclose any information, records, files or other
data to the Purchaser where prohibited by Laws. If any consent
of any Person is required to permit any of the Vendors to
release or cause to be released any information to the
Purchaser, each of the Vendors shall make all reasonable
efforts to obtain such consent.
9.3 Confidentiality
(a) Prior to the Closing, the Purchaser shall keep confidential
all information disclosed to it by the Vendors or their agents
relating to the Corporations, except information which:
(i) is or becomes generally available to the public;
(ii) the Purchaser received from an independent third
Person, who had obtained the information lawfully and
was under no obligation of secrecy, or
(iii) the Purchaser can show was in its possession before
receipt of such information from the Vendors or their
agents.
If this Agreement is terminated without completion of the
transactions contemplated by this Agreement, the Purchaser
shall promptly return all documents, work papers and other
written material (including all copies) obtained from the
Vendors or their agents in connection with this Agreement and
not previously made public, and shall continue to maintain the
confidence of all such information.
(b) After the Closing, the Vendors shall, and shall cause their
Affiliates, Associates and agents to, keep confidential all
information relating to the Business, the Corporations and
each of the Vendors and the Purchaser shall, and shall cause
their Affiliates, Associates and agents to, keep confidential
all information relating to this Agreement and the
transactions contemplated by this Agreement, except
information which:
(i) is or becomes generally available to the public; or
(ii) the Vendors received after Closing from an
independent third Person, who had obtained the
information lawfully and was under no obligation of
secrecy.
9.4 Actions to Satisfy Closing Conditions
Each of the Parties shall take all such actions as are within its power to
control, and shall use its reasonable efforts to cause other actions to be taken
which are not within its power to control, so as to ensure compliance with each
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of the conditions and covenants set forth in Articles 7, 8 and 9 which are for
the benefit of any other Party.
9.5 Investment Canada Notification
The Purchaser shall file the notification required to be filed by the Purchaser
under the Investment Canada Act in respect of the transaction contemplated under
this Agreement within 30 days following the Closing.
9.6 Stub Period Returns
The Purchaser shall cause to be prepared and filed on a timely basis all Tax
Returns for the Corporations for any period which ends on or before the Closing
Date and for which Tax Returns have not been filed as of such date. The
Purchaser shall also cause to be prepared and filed on a timely basis all Tax
Returns of the Corporations for periods beginning before and ending after the
Closing Date. Each of the Vendors and the Purchaser shall co-operate fully with
each other and make available to each other in a timely fashion such data and
other information as may reasonably be required for the preparation of any Tax
Return of the Corporations for a period ending on, prior to or including the
Closing Date and shall preserve such data and other information until the
expiration of any applicable limitation period under any applicable law with
respect to Taxes.
9.7 Investment Letters
The Vendors shall have delivered to the Purchaser an executed written statement
that they are acquiring the E-Cruiter Shares for investment purposes as
indicated in this Agreement, in a form and substance acceptable to the
solicitors for the Purchaser.
9.8 Securities Acts
It is understood and agreed that the Closing is subject to any and all
requirements of any and all applicable securities laws applying to the issuance
and transfer of the E-Cruiter Shares in exchange for the Purchased Shares. In no
event shall the Purchaser be liable to anyone for failure to sell or issue any
of the E-Cruiter Shares unless and until all applicable requirements of any and
all applicable securities laws relating to the sale and issuance have been met.
ARTICLE 10
INDEMNIFICATION
10.1 Mutual Indemnification for Breaches of Covenants and Warranty, etc.
The Vendors jointly and severally covenant and agree with the Purchaser, and the
Purchaser covenants and agrees with each of the Vendors (the Party or Parties so
covenanting and agreeing to indemnify another Party being referred to as the
"Indemnifying Party" and the Party so to be indemnified being referred to as the
"Indemnified Party") to indemnify and save harmless, on an after-tax basis, the
Indemnified Party effective as and from the Closing Time, from and against all
Claims that may be made or brought against the Indemnified Party, or that it may
suffer or incur, directly or indirectly as a result of or in connection with any
non-fulfilment of any covenant or agreement on the part of the Indemnifying
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Party under this Agreement or any incorrectness in or breach of any
representation or warranty of the Indemnifying Party contained in this Agreement
or in any certificate or other document furnished by the Indemnifying Party
pursuant to this Agreement. The foregoing obligation of indemnification shall be
subject to:
(a) the requirement that the Indemnifying Party shall, in respect
of any Claim made by any third person, be afforded an
opportunity at its sole expense to resist, defend and
compromise such Claim;
(b) the limitation that, for Claims made in connection with any
representation or warranty contained in Article 4 or 5, the
Indemnifying Party shall not be required to pay any such
amount until the aggregate amount of such Claims exceeds
$10,000 and upon the aggregate amount of such Claims exceeding
$10,000, the Indemnifying Party shall be required to pay the
amount owing in respect of all such Claims including the
$10,000; and
(c) the limitation that, for Claims made in connection with any
representation or warranty contained in Article 4 or 5, the
Vendors in the aggregate, on the one hand, and the Purchaser,
on the other hand, shall not be required to pay any amount in
excess of the Purchase Price.
10.2 Liability to Customers
(a) All liability to third persons in respect of trips of the
Business departing on or prior to the Closing Date, other than
liability in respect of Ordinary Course Claims, shall remain
the sole responsibility of the Vendors, and each of the
Vendors agrees to indemnify and save harmless, on an after-tax
basis, the Purchaser from and against all Claims in respect of
such liability. For purposes of this paragraph (a), "Ordinary
Course Claims" means claims arising from customer service
issues in the ordinary course of business, where such
liability can be resolved for less than $500 in the aggregate
(in any combination of gift certificates, travel vouchers and
cash) in respect of any one such customer service issue or
series of related issues.
(b) All liability to third persons in respect of trips of the
Business departing after the Closing Date shall be the sole
responsibility of the Purchaser and the Purchaser agrees to
indemnify and save harmless, on an after-tax basis, each of
the Vendors from and against all Claims in respect of such
liability, subject to any other rights the Purchaser may have
pursuant to this Agreement.
10.3 Other Specific Indemnities
(a) The Vendors jointly and severally covenant and agree to
indemnify and save harmless, on an after-tax basis, the
Purchaser and the Corporations (each an "Indemnified Party")
effective as and from the Closing Time, from and against all
Claims that may be made or brought against an Indemnified
Party, or that it may suffer or incur, directly or indirectly
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as a result of or in connection with each of the matters
identified in Schedule 10.3.
10.4 Indemnification Procedures for Third Person Claims
(a) In the case of Claims made by a third Person with respect to
which indemnification is sought, the Party seeking
indemnification shall give Notice promptly, and in any event
within 20 days, to the other Party of any such Claims made
upon it. In the event of a failure to give such notice, such
failure shall not preclude the Party seeking indemnification
from obtaining such indemnification but its right to
indemnification may be reduced to the extent that such delay
prejudiced the defence of the Claim or increased the amount of
liability or cost of defence and provided that,
notwithstanding anything else contained in this Agreement, no
Claim for indemnity in respect of the breach of any
representation or warranty contained in this Agreement may be
made unless Notice of such Claim has been given prior to the
expiry of the survival period applicable to such
representation and warranty pursuant to Section 6.2.
(b) The Indemnifying Party shall have the right, by Notice to the
Indemnified Party given not later than 30 days after receipt
of the Notice described in subsection (a), to assume the
control of the defence, compromise or settlement of the Claim,
provided that such assumption shall, by its terms, be without
cost to the Indemnified Party and provided the Indemnifying
Party acknowledges in writing its obligation to indemnify the
Indemnified Party in accordance with the terms contained in
this Article 10 in respect of that Claim.
(c) Upon the assumption of control of any Claim by the
Indemnifying Party as set out in subsection (b), the
Indemnifying Party shall diligently proceed with the defence,
compromise or settlement of the Claim at its sole expense,
including if necessary, employment of counsel reasonably
satisfactory to the Indemnified Party and, in connection
therewith, the Indemnified Party shall co-operate fully, but
at the expense of the Indemnifying Party with respect to any
out-of-pocket expenses incurred, to make available to the
Indemnifying Party all pertinent information and witnesses
under the Indemnified Party's control, make such assignments
and take such other steps as in the opinion of counsel for the
Indemnifying Party are reasonably necessary to enable the
Indemnifying Party to conduct such defence. The Indemnified
Party shall also have the right to participate in the
negotiation, settlement or defence of any Claim at its own
expense.
(d) The final determination of any Claim pursuant to this Section,
including all related costs and expenses, will be binding and
conclusive upon the parties as to the validity or invalidity,
as the case may be, of such Claim against the Indemnifying
Party.
(e) If the Indemnifying Party does not assume control of a Claim
as permitted in subsection (b), the Indemnified Party shall be
entitled to make such settlement of the Claim as in its sole
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discretion may appear advisable, and such settlement or any
other final determination of the Claim shall be binding upon
the Indemnifying Party.
ARTICLE 11
GENERAL
11.1 Public Notices
All public notices to third Persons and all other publicity concerning the
transactions contemplated by this Agreement shall be jointly planned and
co-ordinated by the Vendors, on the one hand, and the Purchaser, on the other
hand, and no Party shall act unilaterally in this regard without the prior
approval of the other Parties, such approval not to be unreasonably withheld,
except where required to do so by law or by the applicable regulations or
policies of any Governmental Authority or any stock exchange in circumstances
where prior consultation with the other Parties is not practicable.
11.2 Expenses
Each Party shall be responsible for and pay their own respective legal,
accounting, and other professional advisory fees, costs and expenses incurred in
connection with the purchase and sale of the Purchased Shares and the
preparation, execution and delivery of this Agreement and all documents and
instruments executed pursuant to this Agreement and any other costs and expenses
incurred. In particular, each of the Vendors shall be responsible for any fees
and expenses of any accountants, lawyers, brokers or investment advisors
retained by any of the Vendors or the Corporations in connection with the sale
of the Purchased Shares and such fees and expenses shall not constitute an
obligation of the Corporations or the Purchaser. The Purchaser shall be
responsible for any fees and expenses of any accountants, lawyers, brokers or
investment advisors retained by the Purchaser in connection with the purchase of
the Purchased Shares and such fees and expenses shall not constitute an
obligation of the Vendors.
11.3 Notices
Any notice or other writing required or permitted to be given under this
Agreement or for the purposes of this Agreement (a "Notice") shall be in writing
and shall be sufficiently given if delivered, or if sent by prepaid registered
mail or if transmitted by facsimile or other form of recorded communication
tested prior to transmission to such Party:
(a) in the case of a Notice to the Vendors:
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
--------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) in the case of a Notice to the The Omni Partners, Inc. at:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
--------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(c) in the case of a Notice to the The Omni Partners Mid-Atlantic,
Inc. at:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
--------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(d) in the case of a Notice to the Purchaser at:
▇-▇▇▇▇▇▇▇.▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
--------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇, Hill & ▇▇▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the Party to whom such Notice is to be given shall
have last notified the Party giving the Notice in the manner provided in this
Section. Any Notice delivered to the Party to whom it is addressed as provided
above shall be deemed to have been given and received on the day it is so
delivered at such address, provided that if such day is not a Business Day then
-44-
the Notice shall be deemed to have been given and received on the next Business
Day. Any Notice sent by prepaid registered mail shall be deemed to have been
given and received on the fifth Business Day following the date of its mailing.
Any Notice transmitted by facsimile or other form of recorded communication
shall be deemed to have been given and received on the first Business Day after
its transmission.
11.4 Guarantee of Corporations
The Vendors hereby jointly and severally, irrevocably and unconditionally,
guarantee to the Purchaser the performance by each of the Corporations of their
obligations pursuant to this Agreement. The Vendors shall jointly and severally
cause each of the Corporations to perform all of its obligations under this
Agreement and shall be liable for the failure of any of the Corporations to
discharge any of its obligations under this Agreement and for the fulfilment of
all of the representations, warranties, indemnities and other obligations of
each of the Corporations to the Purchaser under this Agreement or arising in
connection with the transactions contemplated by this Agreement.
11.5 Assignment
The Purchaser shall be entitled, upon giving written notice to the Vendors, to
assign all of its rights and obligations under this Agreement to any Affiliate
of the Purchaser. In such case, such assignee shall have and may exercise all
the rights, and shall assume all of the obligations, of the Purchaser under this
Agreement, and any reference to the Purchaser in this Agreement shall be deemed
to refer to such assignee. In the event of such an assignment, each of the
Vendors and such assignee shall execute an agreement confirming such assignment
and such assumption of obligations and no such assignment shall release the
Purchaser from liability for its obligations under this Agreement. Except as
otherwise provided in this Section, neither this Agreement nor any benefits or
burdens under this Agreement may be assigned by any Party without the prior
written consent of each of the other Parties. Subject to the foregoing, this
Agreement shall enure to the benefit of and be binding upon the Parties and
their respective successors (including any successor by reason of amalgamation
or merger of any Party) and permitted assigns.
11.6 Further Assurances
The Parties shall, with reasonable diligence, do all such things and provide all
such reasonable assurances as may be required to consummate the transactions
contemplated by this Agreement, and each Party shall provide such further
documents or instruments required by any other Party as may be reasonably
necessary or desirable to effect the purpose of this Agreement and carry out its
provisions, whether before or after the Closing.
11.7 Counterparts
This Agreement may be executed by the Parties in separate counterparts each of
which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.
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11.8 Enurement
This Agreement shall enure to the benefit of and be binding upon the Parties
hereto and their respective personal representatives, heirs, successors,
executors, administrators and permitted assigns.
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IN WITNESS OF WHICH the Parties have duly executed this Agreement.
SIGNED, SEALED & DELIVERED
In the presence of:
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- --------------------------------------------
Witness ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- --------------------------------------------
Witness ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
THE OMNI PARTNERS, INC.
Per: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
OMNI PARTNERS MID-ATLANTIC, INC.
Per: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
OMNI PARTNERS WEST, INC.
Per: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
▇-▇▇▇▇▇▇▇.▇▇▇ INC.
Per: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: CEO and President
