Common use of Transaction Payments Clause in Contracts

Transaction Payments. (a) By the execution and delivery of this Agreement and the execution of a separate Assumption Agreement between the Company and the Seller dated as of June 9, 2005, in each case prior to the transfer of the Shares to the Buyer, the Company hereby and thereby declares and confirms (and shall take any other steps required to confirm) its obligations to pay certain employee bonuses and other compensation amounts as a result of the transactions contemplated by this Agreement to the recipients and in the amounts identified in the last two columns in the table on Schedule 4.26 (the “Employee Obligations”). The amount of the Employee Obligations plus 1.95% thereof is equal to the Transaction Payments. (b) Pursuant to Section 1.2(b)(ii) above, at the Closing, the Buyer will contribute $1,225,157.67 to the Company by way of loan or contribution to share capital (as a reduction against the Closing Payment as set forth in Section 1.1), such amount being equal to the aggregate of the Employee Obligations and the liability of the Company under the Employer Health Tax Act (Ontario) arising from its payment of the Employee Obligations (the “Transaction Payments”). At or promptly after the Closing (and in no event later than the Company’s next regular payroll date after the date hereof), the Company shall (and the Buyer shall cause the Company to) pay amounts equal in the aggregate to the Employee Obligations, net of withholdings for employee (but not employer) income or other payroll Taxes, which the Buyer shall cause to be remitted forthwith to the appropriate governmental authorities, to those individuals so entitled, with reference to the amounts set forth in the last two columns of the table attached to Schedule 4.26, in satisfaction of the Employee Obligations. In addition, the Company shall (and the Buyer shall cause the Company to) remit, to the appropriate governmental or other authority in accordance with applicable law, all employer payroll Taxes with respect to the Employee Obligations. The Buyer and the Company acknowledge and agree that the Transaction Payments shall include an amount sufficient to allow the Company to satisfy the Employee Obligations and its obligations under the Employer Health Tax Act (Ontario) with respect to the Employee Obligations, but shall exclude any other amounts, including any amount required to satisfy the Company’s employer obligations for Canada pension plan and employment insurance obligations with respect to the Employee Obligations, which excluded amounts shall be borne by the Company without recourse against the Seller or the Holder notwithstanding any other provision of this Agreement.