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EXHIBIT 10.78
MARCH 26, 2001
SALE AND PURCHASE AGREEMENT
BY AND AMONG
WCS, INC.,
AND
▇▇▇▇▇▇▇▇ COMMUNICATIONS, LLC
AND
TELUS COMMUNICATIONS INC.
DATED AS OF MARCH 26, 2001
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ARTICLE 1.
DEFINITIONS
SECTION 1.1 CERTAIN DEFINED TERMS.............................................................1
ARTICLE 2.
PURCHASE AND SALE
SECTION 2.1 PURCHASE AND SALE OF THE PURCHASED SHARES.........................................8
SECTION 2.2 PURCHASE PRICE....................................................................8
SECTION 2.3 CLOSING...........................................................................9
SECTION 2.4 CLOSING DELIVERIES................................................................9
SECTION 2.5 SALE OF ASSETS BY, DISTRIBUTIONS FROM AND CONTRIBUTIONS TO THE
CORPORATION PRIOR TO THE CLOSING DATE............................................11
SECTION 2.6 SECTION 116 CERTIFICATE..........................................................11
SECTION 2.7 ADJUSTMENT OF PURCHASER'S CLOSING PAYMENT........................................13
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE CORPORATION
SECTION 3.1 ORGANIZATION AND AUTHORITY.......................................................15
SECTION 3.2 STATUS OF THE CORPORATION........................................................15
SECTION 3.3 PURCHASED SHARES.................................................................16
SECTION 3.4 SUBSIDIARIES.....................................................................16
SECTION 3.5 NO CONFLICT......................................................................16
SECTION 3.6 CONSENTS AND APPROVALS...........................................................16
SECTION 3.7 FINANCIAL INFORMATION............................................................17
SECTION 3.8 ABSENCE OF CERTAIN CHANGES, CONDITIONS AND EVENTS................................17
SECTION 3.9 CONTRACTS........................................................................18
SECTION 3.10 LITIGATION.......................................................................18
SECTION 3.11 TAXES............................................................................18
SECTION 3.12 LICENSES, PERMITS, AUTHORIZATIONS, ETC. .........................................19
SECTION 3.13 EMPLOYEES AND EMPLOYEE BENEFIT MATTERS...........................................19
SECTION 3.14 ENVIRONMENTAL MATTERS............................................................22
SECTION 3.15 REAL PROPERTY....................................................................22
SECTION 3.16 INSURANCE........................................................................22
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SECTION 3.17 LEGAL COMPLIANCE.................................................................22
SECTION 3.18 INTELLECTUAL PROPERTY............................................................23
SECTION 3.19 BROKERS..........................................................................25
SECTION 3.20 EXTENT OF REPRESENTATIONS AND WARRANTIES.........................................25
SECTION 3.21 CERTIFICATES.....................................................................25
SECTION 3.22 BOOKS AND RECORDS................................................................25
SECTION 3.23 FULL DISCLOSURE..................................................................25
SECTION 3.24 CNG..............................................................................25
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 4.1 ORGANIZATION AND AUTHORITY.......................................................26
SECTION 4.2 NO CONFLICT......................................................................26
SECTION 4.3 CONSENTS AND APPROVALS...........................................................26
SECTION 4.4 LITIGATION.......................................................................26
SECTION 4.5 FINANCING........................................................................27
SECTION 4.6 BROKERS..........................................................................27
SECTION 4.7 EMPLOYEE BENEFITS................................................................27
ARTICLE 5.
COVENANTS AND ADDITIONAL AGREEMENTS
SECTION 5.1 CONDUCT OF BUSINESS PRIOR TO THE CLOSING.........................................27
SECTION 5.2 ACCESS TO INFORMATION............................................................28
SECTION 5.3 CONFIDENTIALITY..................................................................28
SECTION 5.4 REGULATORY AND OTHER AUTHORIZATIONS AND CONSENTS.................................28
SECTION 5.5 TAX MATTERS......................................................................29
SECTION 5.6 NOTICE OF BREACHES...............................................................34
SECTION 5.7 ▇▇▇▇▇▇▇▇ MARKS...................................................................34
SECTION 5.8 ENTERPRISE SOFTWARE..............................................................34
SECTION 5.9 CROSS LICENSE AGREEMENT..........................................................35
SECTION 5.10 TRANSITION SERVICES AGREEMENT....................................................36
SECTION 5.11 DISTRIBUTION AGREEMENT...........................................................36
SECTION 5.12 ASSETS TO BE PROVIDED BEFORE CLOSING.............................................36
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ARTICLE 6.
CONDITIONS TO CLOSING
SECTION 6.1 CONDITIONS TO OBLIGATIONS OF SELLER..............................................36
SECTION 6.2 CONDITIONS TO OBLIGATIONS OF THE PURCHASER.......................................38
SECTION 6.3 REASONABLE EFFORTS...............................................................39
SECTION 6.4 NON-COMPETITION, CONFIDENTIALITY AND NON-SOLICITATION............................40
ARTICLE 7.
INDEMNIFICATION
SECTION 7.1 SURVIVAL.........................................................................44
SECTION 7.2 INDEMNIFICATION..................................................................44
SECTION 7.3 TAX MATTERS......................................................................47
ARTICLE 8.
TERMINATION AND WAIVER
SECTION 8.1 TERMINATION......................................................................47
SECTION 8.2 EFFECT OF TERMINATION............................................................48
SECTION 8.3 WAIVER...........................................................................48
ARTICLE 9.
MISCELLANEOUS
SECTION 9.1 EXPENSES.........................................................................48
SECTION 9.2 NOTICES..........................................................................49
SECTION 9.3 PUBLIC ANNOUNCEMENTS.............................................................49
SECTION 9.4 HEADINGS.........................................................................50
SECTION 9.5 SEVERABILITY.....................................................................50
SECTION 9.6 ENTIRE AGREEMENT.................................................................50
SECTION 9.7 ASSIGNMENT.......................................................................50
SECTION 9.8 NO THIRD PARTY BENEFICIARIES.....................................................50
SECTION 9.9 AMENDMENT........................................................................50
SECTION 9.10 GOVERNING LAW....................................................................51
SECTION 9.11 COUNTERPARTS.....................................................................51
SECTION 9.12 FACSIMILE SIGNATURES.............................................................51
SECTION 9.13 NO PRESUMPTION...................................................................51
SECTION 9.14 RULES OF INTERPRETATION..........................................................51
SECTION 9.15 SCHEDULES........................................................................52
SECTION 9.16 FURTHER ASSURANCES...............................................................53
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SALE AND PURCHASE AGREEMENT
This
SALE AND PURCHASE AGREEMENT (this "Agreement"), dated as of March
26, 2001, is made by and among:
WCS, INC., a Delaware corporation ("Seller"), and
▇▇▇▇▇▇▇▇ COMMUNICATIONS, LLC, a Delaware limited liability
company ("Seller's Parent"), and
TELUS COMMUNICATIONS INC., a Canadian corporation
("Purchaser").
WITNESSETH:
WHEREAS, Seller is the owner of sixteen (16) common shares of ▇▇▇▇▇▇▇▇
Communications Canada, Inc., a Canada corporation (the "Corporation"), which
represents all of the issued and outstanding shares in the capital of the
Corporation (the "Purchased Shares");
WHEREAS, the Corporation has agreed to sell the CNG Business (as
defined in the Agreement) to Milgo Solutions Canada Company;
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, the Purchased Shares, upon completion of the sale of the
CNG Business and upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
Section 1.1 CERTAIN DEFINED TERMS.
As used in this Agreement, the following terms shall have the meanings
set forth below:
"Accounts Payable" means all amounts in connection with the Business
due and owing by the Corporation to traders, suppliers and other persons in the
ordinary course of business.
"Accounts Receivable" means any and 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 Corporation
including any refunds (other than refundable income taxes of Seller) and rebates
receivable in connection with the Business, and the benefit of all security
(including Cash deposits), guarantees and other collateral held by the
Corporation in connection with the Business.
"Affiliate" has the meaning given in the Business Corporations Act
(
Ontario), as amended from time to time.
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"Agreement" means this
Sale and Purchase Agreement, including all
schedules, and all instruments supplementing or amending or confirming this
Agreement and references to "Article" or "Section" or "Schedule" mean or refer
to the specified Article, Section or Schedule to this Agreement.
"Applicable Laws" means, in relation to any other person, transaction
or event, whether or not having the force of law, all applicable provisions of
laws, statutes, regulations, rules, guidelines, by-laws, treaties, orders,
policies, judgments, decrees and official directives of any Governmental Entity
or Person acting under the authority of a Governmental Entity.
"Balance Sheet" has the meaning set forth in Section 3.7.
"Benefit Plan(s)" has the meaning set forth in Section 3.13(b).
"Books and Records" means all books and records of the Corporation,
including financial, corporate, operations and sales books, records, books of
account, sales and purchase records, lists of suppliers and customers, formulae,
business reports, plans and projections and all other documents, surveys, plans,
files, Tax Returns, correspondence, and other data and information, financial or
otherwise, including all data and information stored on computer-related or
other electronic media relating solely and exclusively to the Business.
"Business" means the business of the Corporation as conducted as of the
date hereof excluding the CNG Business.
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇.
"Cash" means funds and/or monies held at the Corporation's financial
institutions, including deposit accounts, chequing accounts, payroll accounts,
investments in highly liquid securities, such as guaranteed investment
certificates, bankers' acceptances and treasury bills, and funds and/or monies
that are held at the Corporation's premises or are under the unrestricted
control of the Corporation net of any current bank indebtedness.
"Claims" means all claims, demands, actions, suits, causes of action,
damages, losses, charges, judgements, debts, costs, liabilities or expenses,
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.
"Claim Notice" has the meaning set forth in Section 7.2(d).
"Closing" has the meaning set forth in Section 2.3.
"Closing Date" has the meaning set forth in Section 2.3.
"Closing Date Financial Certificate" means the certificate delivered
pursuant to Section 2.4(a)(ii).
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"Closing Date Financial Statement" means the unaudited,
internally-prepared balance sheet of Corporation as at the Closing Date, showing
all of the assets and liabilities of the Corporation in connection with the
Business, after giving effect to the proposed disposition of CNG Business, and
the unaudited internally-prepared statement of income for the period January 1,
2001 to the Closing Date, also giving effect to the proposed disposition of CNG
Business, and a statement of the Net Working Capital as at the Closing Date.
"CNG Assets" means the assets, property, agreements, commitments, other
contracts and liabilities which form the subject matter of the pro forma
financial balance sheet for the CNG Business Sale Agreement, the benefit and the
burden of the agreements listed in Schedule 2.5(a) and the Excluded Employees.
"CNG Business" means the portion of the Corporation's business to be
sold to Milgo Solutions Canada Company pursuant to the CNG Business Sale
Agreement.
"CNG Business Sale Agreement" means the
Sale and Purchase Agreement
between the Corporation as vendor, Milgo Solutions Canada Company as purchaser,
and Seller's Parent, a copy of which is attached as Schedule 2.5(a).
"Competition Act Approval" means (a) the issuance of an advance ruling
certificate pursuant to section 102 of the Competition Act by the Commissioner
of Competition appointed under the Competition Act (the "Commissioner") to the
effect that he is satisfied that he would not have sufficient grounds upon which
to apply to the Competition Tribunal for an order under section 92 of such Act
with respect to the transactions contemplated by this Agreement; or (b) that the
waiting period under section 123 of the Competition Act shall have expired and
(i) the Purchaser and the Seller shall have been advised in writing by the
Commissioner that the Commissioner has determined not to make an application for
an order under section 92 of the Competition Act in respect of the transactions
contemplated by this Agreement and that any terms and conditions attached to any
such advice shall be acceptable to the Purchaser and the Seller; and (ii) the
Commissioner shall not have made an application for an order under section 100
or section 104 of the Competition Act in respect of the transactions
contemplated by this Agreement.
"Contest" has the meaning set forth in Section 5.5.3(b).
"Contracts" means all contracts, arrangements, licenses, Leases,
understandings, purchase orders, invoices and other agreements, whether written
or oral, relating to the Business to which Seller or the Corporation is a party,
or by which Seller or the Corporation is bound.
"Current Assets" includes all Accounts Receivable net of reserves,
costs in excess of ▇▇▇▇▇▇▇▇, Inventories net of reserves, prepaid expenses and
other current assets of the Business generated in the ordinary course of
business, but excludes Cash and Deferred or Future Income Taxes.
"Current Liabilities" includes all trade accounts payable, ▇▇▇▇▇▇▇▇ in
excess of cost and earnings, deferred maintenance revenue, Taxes payable and
accrued liabilities, including but not limited to, accruals for vacation pay,
customer rebates and allowances for product returns and
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any other obligations of the Business incurred in the ordinary course of
business but excludes Deferred or Future Income Taxes.
"Deferred or Future Income Taxes" means any income tax assets or
liabilities that arise on the temporary differences between the tax basis of an
asset or liability and its carrying value on the Corporation's Financial
Statements and Closing Date Financial Statements, as calculated in accordance
with GAAP.
"Distributed Assets" means the assets, property, agreements,
commitments, other contracts and liabilities distributed from the Corporation to
the Seller pursuant to Section 2.5(b) and more particularly described on
Schedule 2.5(b).
"Employees" means all employees, save and except the Excluded
Employees, of the Corporation as more particularly described in Schedule
3.13(c).
"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, right of
others or restriction (whether on voting, sale, transfer, disposition or
otherwise) or encumbrance whether imposed by agreement, understanding, law,
equity or otherwise against the assets of the Corporation of any kind or
character whatsoever.
"Enterprise Software" means "off-the-shelf" or enterprise software
licensed from third parties that is used in or related to the Business and which
is set out in Schedule 5.8.
"Excluded Assets" means the CNG Assets and the Distributed Assets.
"Excluded Employees" means all employees or contract employees of the
Corporation who will be transferred to another company in connection with the
sale of the Excluded Assets as described on Schedule 2.5(a).
"Financial Statements" means the unaudited, internally prepared balance
sheet of Corporation as at December 31, 2000 and the related statement of income
for the year then ended prepared, in the opinion of the Corporation's
management, in accordance with GAAP.
"GAAP" means generally accepted accounting principles in Canada, as in
effect from time to time.
"Governmental Entity" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government, whether federal, provincial,
territorial or local, domestic or foreign, including without limitation the
Canada Customs and Revenue Agency.
"Indemnified Party" has the meaning set forth in Section 7.2(d).
"Indemnifying Party" has the meaning set forth in Section 7.2(d).
"Independent Auditor" means PricewaterhouseCoopers.
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"Intellectual Property" means all the intellectual property of the
Corporation, other than that which are CNG Assets or Distribution Assets, and
all intellectual property necessary to carry on the Business as it is currently
being carried on by the Corporation as at the date hereof and will be all that
is required to carry on the Business as it is currently being carried on at the
Closing Date, including but not limited to:
(a) any and all inventions, improvements and discoveries, whether
or not reduced to practice and whether or not patentable or
made the subject of a patent application or applications;
(b) any invention disclosures, whether or not reduced to practice
and whether or not yet made the subject of a patent
application;
(c) national and multinational statutory invention registrations,
patents, patent registrations and patent applications
(including, without limitation, all reissues, divisions,
continuations, continuations in part, extensions and
reexaminations of the foregoing) and all rights therein
provided by international treaties or conventions and all
improvements to the inventions disclosed in each such
registration, patent or application;
(d) trademarks, service marks, logos and brand names, whether or
not registered, all applications and registrations including,
without limitation, all marks registered in the Canadian trade
▇▇▇▇ office and all rights in the foregoing provided by
international treaties and conventions;
(e) copyrights (registered or otherwise) and registrations and
applications for registration thereof, and all rights therein
provided by international treaties or conventions;
(f) trade secrets and confidential, technical and business
information (including, without limitation, formulas,
compositions, inventions and conceptions of inventions whether
patentable or unpatentable and whether or not reduced to
practice);
(g) all rights to obtain and rights to apply for patents and
trademark and copyright registrations and all other
intellectual property registrations, whether currently
existing or which will arise in the future;
(h) any and all rights and benefits under any license arrangements
or agreements which the Corporation has with any Other Parties
whether express, implied or by reason of conduct or nature of
trade;
(i) any and all rights whether arising at law, in equity or by
course of conduct or under any agreement under which the
Corporation may make any claim or demand in relation to any
right, title or interest in any intellectual property or
related possessory or other proprietary right of any Other
Party;
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(j) any and all rights to obtain injunctive relief for present and
past infringement of any intellectual property;
(k) any and all rights to any Encumbrances in or to or relating to
any intellectual property of any Other Party;
(l) any and all goodwill and reputation arising in or relating to
the intellectual property of the Corporation or the Business;
(m) any and all other intellectual property including industrial
designs and integrated circuit topographies;
and shall include, but not be limited to, any and all intellectual property and
any and all other proprietary rights and interests that may exist or arise in:
(n) the content of the Corporation's website located at
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇ including, web pages,
source code, interfaces, specifications, data, databases,
files, documentation and any and all other materials (the
Corporation shall change the same such that it does not have
the same look and feel as the ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
website) related thereto and already in existence; and
(o) source code, interfaces, specifications, data models, data,
databases, files, documentation and any and all other
materials relating to those items set forth in Schedule
3.18(a) and already in existence;
but shall exclude:
(p) the ▇▇▇▇▇▇▇▇ Marks.
"Inventories" means all inventories of every kind and nature and
wheresoever situate owned by the Corporation and pertaining to the Business
including all inventories of raw materials, work-in-progress, finished goods and
by-products, spare parts, operating supplies and packaging materials.
"Knowledge of Seller" or any like phrase means the knowledge of
Seller's and/or the Seller's Parent's management after diligent inquiry into the
subject matter of the particular representation and/or warranty set out herein.
"Leases" means all leases, subleases, licenses and other lease
agreements with respect to the Business, together with all amendments,
supplements and non-disturbance agreements pertaining thereto, under which the
Seller or the Corporation leases, subleases, licenses or uses any real or
personal property used in the conduct of the Business other than those which are
part of the Excluded Assets.
"Loss" and "Losses" have the meanings set forth in Section 7.2(a).
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"Material Adverse Effect" means any change in, or effect on, the
Business that is materially adverse to the results, in isolation or in the
aggregate, of operations, financial condition or prospects of the Corporation.
"Net Working Capital" means:
(a) the value of all Current Assets;
less
(b) the value of all Current Liabilities;
the whole as determined in a manner consistent with the Corporation's
Financial Statements and accounting principles reflected therein,
consistently applied.
"Other Party" means any Person other than the Purchaser and the
Corporation.
"PEH" means Platinum Equity, LLC.
"Permits" means all franchises, permits, licenses, qualifications,
rights-of-way, easements, municipal and other approvals, authorizations, orders,
consents and other rights from, and filings with, any Governmental Entity of any
jurisdiction that are necessary for the lawful conduct of the Business.
"Person" means an individual, a corporation, partnership, limited
liability company, trust, unincorporated organization or a government or any
agency or political subdivision thereof.
"Prime Interest Rate" means the annual rate of interest announced from
time to time by the Royal Bank of Canada as a reference rate then in effect for
determining interest rates on United States dollar commercial loans in Canada.
"Pro Forma Financial Statements" means the unaudited,
internally-prepared pro forma balance sheet of Corporation as at December 31,
2000 and the related pro forma statement of income for the year then ended,
prepared, in the opinion of the Corporation's management, in accordance with
GAAP, giving pro forma effect to the proposed disposition of CNG Business.
"Purchase Price" has the meaning set forth in Section 2.2.
"Purchased Shares" has the meaning set forth in the recitals to this
Agreement.
"Purchaser" has the meaning set forth in the preamble to this
Agreement.
"Purchaser Indemnitees" means Purchaser, the Corporation, Purchaser's
Representatives and Purchaser's Affiliates, and each of such Affiliates'
Representatives and Affiliates.
"Representative" means any officer, director, principal, parent,
partner, attorney, accountant, advisor, lender, agent, trustee, duly authorized
employee or other representative of a party.
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"Seller" has the meaning set forth in the preamble to this Agreement.
"Seller Indemnitees" means Seller and Seller's Representatives and
Affiliates, and each of Seller's Affiliates' Representatives and Affiliates.
"Seller's Parent" has the meaning set forth in the preamble to this
Agreement.
"Tax Return" means any return, report, information return or other
similar document or statement (including any related or supporting information)
filed or required to be filed with or submitted to any Governmental Entity with
respect to Taxes, including, without limitation, any claim for refund, amended
return or declaration of estimated Taxes and all federal, provincial, municipal,
territorial, local and foreign returns, reports and similar statements.
"Taxes" means all federal, provincial, municipal, territorial, foreign
or other taxes, imposts, withholdings, rates, levies, assessments, fees,
charges, dues, fines, interest or penalties lawfully levied, assessed or imposed
by any Governmental Entity, including, without limitation, all income, capital
gains, sales, withholding, excise, use, property, capital, goods and services,
business transfer, value added, employment, compensation, social security,
payroll, privilege, franchise, licence and school taxes and custom and import
duties and includes any transferee, secondary or joint liability with respect
thereto.
"Third Party" means any Person other than the Purchaser and an
Affiliate of the Purchaser and the Seller and an Affiliate of the Seller.
"Threshold" has the meaning set forth in Section 7.2(e).
"▇▇▇▇▇▇▇▇ Marks" means any and all trade marks and service marks,
whether registered or common law, and trade names and associated good will,
slogans, domain names and other like property owned or used by the Corporation
or any Affiliate thereof in which the name "▇▇▇▇▇▇▇▇" or any derivative or
variation thereof is used, including the Seller's logos and any derivatives and
variations thereof.
ARTICLE 2.
PURCHASE AND SALE
Section 2.1 PURCHASE AND SALE OF THE PURCHASED SHARES.
Subject to and upon the terms and conditions of this Agreement, Seller
agrees to sell, transfer, assign, convey and deliver to Purchaser, and Purchaser
agrees to purchase, acquire and accept from Seller, the Purchased Shares.
Section 2.2 PURCHASE PRICE.
The aggregate purchase price (the "Purchase Price") to be paid by
Purchaser to Seller for the Purchased Shares shall be THIRTY THREE MILLION
Dollars ($33,000,000), subject to adjustments as provided in this Agreement.
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Section 2.3 CLOSING.
Subject to and upon the terms and conditions of this Agreement, the
sale and purchase of the Purchased Shares contemplated by this Agreement shall
take place at a closing (the "Closing") to be held at the offices of ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Suite 4700, Toronto Dominion Bank Tower, Toronto,
Ontario on the later
of: (i) May 31, 2001, or (ii) the day which is five (5) Business Days following
receipt of the Competition Act Approval provided it is not later than July 31,
2001; at 10:00 a.m., Toronto time (the "Closing Time") or at such other time or
on such other date or at such other place as Seller and Purchaser may mutually
agree upon in writing (the day on which the Closing takes place being the
"Closing Date").
Section 2.4 CLOSING DELIVERIES.
(a) At Closing, the Seller will tender and cause and procure to be
tendered:
(i) a certificate signed by an officer of each of the
Seller and the Seller's Parent as to the accuracy as
of the Closing Date of the representations and
warranties of the Seller set forth in Article 3
hereof and the fulfillment at Closing of the
covenants of the Seller set forth in Article 5
hereof;
(ii) a certificate signed by an officer of the Corporation
and the Seller as to the financial condition of the
Corporation on the Closing Date (the "Closing Date
Financial Certificate"), which certificate shall
include Financial Statements together with unaudited,
internally-prepared pro forma balance sheet of the
Corporation as at the Closing Date and the related
pro forma statements of income to the Closing Date,
giving effect to the proposed disposition of the CNG
Business, describing, in detail, all changes from the
December 31, 2000 unaudited financial statements;
(iii) resignations in writing of all of the directors and
officers of the Corporation, in their capacity as
directors and officers of the Corporation and not as
Employees, unless otherwise directed by Purchaser;
(iv) certified copies of resolutions of the directors of
the Corporation authorizing the transfer of the
Purchased Shares and the registration of the
Purchased Shares in the name of the Purchaser and
authorizing the issuance of new share certificates
representing the Purchased Shares in the name of the
Purchaser;
(v) the Books and Records of the Corporation;
(vi) every common seal of the Corporation;
(vii) share certificates in the name of the Seller
representing the Purchased Shares duly endorsed for
transfer and duly executed share certificates in the
name of the Purchaser representing the Purchased
Shares;
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(viii) a certificate from an officer of each of the Seller
and the Seller's Parent that the CNG Business has
been sold pursuant to the CNG Business Sale Agreement
and all filings and remittances have been made by the
Corporation;
(ix) an opinion reasonably satisfactory to the Purchaser
from Messrs. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, solicitors for the
Seller and the Seller's parent, as to the validity of
the incorporation of the Corporation, as to the good
standing of the Corporation, as to the number of
issued, the validity of the issue, full payment and
non-assessability of the outstanding shares in the
capital of the Corporation, as to the validity of the
sale and transfer to the Purchaser of the Purchased
Shares and as to all other legal matters of a like
nature pertaining to the Corporation and to the
transactions provided for in this Agreement as the
Purchaser may reasonably require;
(x) an opinion reasonably satisfactory to the Purchaser
from Messrs. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, solicitors for the
Seller and the Seller's parent, as to the
enforceability of the Agreement on the Seller and the
Seller's Parent;
(xi) copies of all Schedules updated and accurate to the
Closing Date;
(xii) executed copies of all agreements required to be
delivered by the Seller pursuant to this Agreement,
including without limitation, the Ancillary
Agreements and the Canadian Customer Agreement.
(b) At the Closing, Purchaser shall tender and cause and procure
to be tendered:
(i) subject to any withholding under Section 2.6, the
Purchase Price, such payment to be made by wire
transfer in immediately available funds to Seller's
account (which account shall be designated in writing
by Seller to Purchaser at least two Business Days
prior to the Closing Date);
(ii) an opinion reasonably satisfactory to the Seller from
Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇, solicitors for the Purchaser,
as to the validity of the incorporation of the
Purchaser, as to the good standing of the Purchaser,
as to the validity of the sale and transfer to the
Purchaser of the Purchased Shares, as to the
enforceability of the Agreement on the Purchaser and
as to all other legal matters of a like nature
pertaining to the Purchaser and to the transactions
provided for in this Agreement as the Seller may
reasonably require; and
(iii) executed copies of all agreements required to be
delivered by the Purchaser pursuant to this
Agreement, including without limitation, the
Ancillary Agreements.
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Section 2.5 SALE OF ASSETS BY, DISTRIBUTIONS FROM AND CONTRIBUTIONS TO THE
CORPORATION PRIOR TO THE CLOSING DATE.
(a) Prior to the Closing Date, the Seller shall cause the
Corporation to complete the sale of the undertakings,
property, agreements, commitments, contracts and liabilities
of the CNG Business as contemplated in the CNG Business Sale
Agreement and more particularly described on Schedule 2.5(a).
(b) Prior to the Closing Date, the Seller shall cause the
Corporation to distribute to Seller the Distributed Assets
more particularly described on Schedule 2.5(b).
(c) Purchaser specifically acknowledges and consents to the
distributions contemplated by this Section 2.5 and such
distributions do not constitute a breach under this Agreement.
(d) Seller shall contribute to the Corporation or shall cause one
or more of its Affiliates to contribute to the Corporation,
the assets listed on Schedule 2.5(d) at no cost or expense to
the Corporation (such assets are collectively referred to as
the "Additional Assets").
(e) All distributions of Distributed Assets, contributions of
Additional Assets and other transfers of assets contemplated
hereby shall be effected by a form of assignment and
assumption agreement in form and substance mutually acceptable
to the parties hereto pursuant to which the transferees of the
assets being assigned shall assume the obligations,
liabilities, commitments and responsibilities related thereto
except as specifically agreed to the contrary.
(f) By written assignment to Seller's Parent, the Corporation
shall transfer all ▇▇▇▇▇▇▇▇ Marks to The ▇▇▇▇▇▇▇▇ Companies,
Inc. ("TWC") or its nominee.
Section 2.6 SECTION 116 CERTIFICATE.
(a) Seller shall on or before the Closing Date, deliver to the
Purchaser a certificate issued by the Minister of National
Revenue of Canada pursuant to subsection 116(2) of the Income
Tax Act (Canada) (a "Section 116 Certificate") in respect of
the proposed disposition by Seller of the Purchased Shares.
The Section 116 Certificate delivered by Seller shall specify
a "certificate limit" in an amount not less than the Purchase
Price.
(b) In the event that the Section 116 Certificate required under
Section 2.6(a) has not been delivered by Seller on or before
the Closing Date, or in the event that a Section 116
Certificate contains a "certificate limit" that is less than
the Purchase Price, the Purchaser shall withhold from the
Purchase Price an amount equal to 33 1/3% of the Purchase
Price, or, if a Section 116 Certificate has been delivered by
Seller, an amount equal to 33 1/3% of the amount by which the
Purchase Price exceeds the "certificate" limit specified in
the Section 116 Certificate (the "Withheld Amount"). The
Withheld Amount shall be paid over to the Purchaser's counsel
pursuant to an irrevocable direction of the Purchaser for
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deposit in an interest bearing trust account at a bank located
in
Ontario to be held for the benefit of Seller to be disposed
of as set out herein. The Withheld Amount shall be remitted by
the Purchaser's counsel to the Receiver General of Canada on
the day that the Withheld Amount is required to be so remitted
pursuant to subsection 116(5) of the Income Tax Act (Canada)
(the "Remittance Date"). All interest earned on the Withheld
Amount shall be for the account of Seller and the full amount
of such interest less any Taxes required to be withheld from
such interest shall be paid by the Purchaser's counsel to the
Seller on the Remittance Date.
(c) Notwithstanding the foregoing, if Seller delivers a Section
116 Certificate to the Purchaser's counsel at any time after
the Closing Date and prior to the day that is two Business
Days before the Remittance Date that exonerates the Purchaser
from liability under Section 116 of the Income Tax Act
(Canada) in respect of any payment on account of the Purchase
Price up to the amount of the "certificate limit" specified in
such Section 116 Certificate, Purchaser's counsel shall pay to
the Seller on account of the Purchase Price an amount equal to
the amount, if any, by which
(i) the aggregate of
(A) the Withheld Amount; and
(B) the amount, if any, by which
(A) the amount of interest received by
Purchaser's counsel on the Withheld
Amount
exceeds
(B) the amount of any Taxes payable by
the Purchaser in respect of any
interest on the Withheld Amount or
which the Purchaser is required to
withhold or deduct in respect of
such interest
exceeds
(ii) 33 1/3% of the amount, if any, by which
(A) the Purchase Price
exceeds
(B) the "certificate limit" specified in the
Section 116 Certificate.
(d) The parties agree that any upward adjustments in the Purchase
Price after Closing under this Agreement which result in the
adjusted Purchase Price being in excess of the certificate
limit set out in any Section 116 Certificate previously
delivered
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by Seller in accordance with this Section 2.6 shall result in
additional withholding obligations in accordance with Section
2.6(b).
Section 2.7 ADJUSTMENT OF PURCHASER'S CLOSING PAYMENT.
(a) Purchaser's Closing Payment shall be adjusted to the extent
that the Net Working Capital of Corporation as of the Closing
Date differs from the target amount of Net Working Capital of
Corporation set forth in Schedule 2.7 hereof (the "Target
Amount"), as determined pursuant to and as provided in
Schedule 2.7. The amount of such adjustment, if any, shall be
referred to as the "Net Working Capital Adjustment." For the
purposes of calculating the adjustment pursuant to this
Section 2.7, any conversion of funds from Canadian dollars to
U.S. dollars shall be made at the exchange rate of 1.49779
Canadian dollars for every U.S. dollar.
(b) No later than five (5) Business Days prior to the Closing
Date, Seller shall prepare and deliver to Purchaser, a written
estimate of the Net Working Capital of Corporation as of the
Closing Date (the "Estimated Net Working Capital"), signed by
the chief financial officer of Seller, who shall certify that
such estimate was prepared on a consistent basis as the Target
Amount in good faith from the books and records of Corporation
and represents his or her best estimate of the Net Working
Capital of Corporation as of the Closing Date. Purchaser shall
review such written estimate and the parties shall resolve in
good faith any disagreements concerning such estimate no later
than two (2) Business Days prior to the Closing Date. To the
extent that the Estimated Net Working Capital of Corporation
is less than the Target Amount, Purchaser's Closing Payment
shall be reduced by the amount of such difference. To the
extent that the Estimated Net Working Capital of Corporation
is greater than the Target Amount, Purchaser's Closing Payment
shall be increased by the amount of such difference, such
increase not to exceed $5,000,000.
(c) No later than sixty (60) days following the Closing Date,
Purchaser shall prepare and deliver to Seller a final
statement of the Net Working Capital of Corporation as of the
Closing Date. Seller shall have sixty (60) days from receipt
of such statement of the Net Working Capital of Corporation as
of the Closing Date, (the "Review Period") to review such
statement. If as a result of such review, Seller disagrees
with Purchaser's final statement of the Net Working Capital of
Corporation as of the Closing Date, Seller shall deliver to
Purchaser a written notice of disagreement (a "Dispute
Notice") prior to the expiration of the Review Period, setting
forth the basis for such dispute in reasonable detail. If
Seller does not deliver a Dispute Notice within such Review
Period, then the Net Working Capital of Corporation as of the
Closing Date as shown on Purchaser's statement shall be final
and binding on Seller and Purchaser and shall provide the
basis for computing the amount of the Net Working Capital
Adjustment.
(d) If Seller delivers a Dispute Notice to Purchaser in a timely
manner, then Seller and Purchaser shall attempt in good faith
to resolve such dispute within thirty (30)
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days from the date of such Dispute Notice. If Seller and
Purchaser cannot reach agreement within such thirty (30) day
period, then the dispute shall be promptly referred to the
Independent Auditor for binding resolution. The Independent
Auditor shall resolve such dispute as promptly as may be
reasonably practicable and shall endeavor to complete such
process within a period of no more than sixty (60) days. The
Independent Auditor may conduct such proceedings as the
Independent Auditor may determine, in its sole discretion,
will assist in the resolution of the dispute and shall deliver
a written opinion setting forth a final determination of the
Net Working Capital of Corporation as of the Closing Date
calculated in accordance with the provisions of this
Agreement. The determination of the Independent Auditor shall
be final and binding on Seller and Purchaser and shall be used
in computing the amount of the Net Working Capital Adjustment.
Sellers, on the one hand, and Purchaser, on the other hand,
shall each be responsible for fifty percent (50%) of the costs
and expenses of the Independent Auditor and Seller and
Purchaser shall each bear their own legal, accounting and
other fees and expenses of participating in such dispute
resolution procedure.
(e) If, pursuant to clause (c) or (d) of this Section 2.7, it is
finally determined that the Net Working Capital of Corporation
as of the Closing Date was less than the Estimated Net Working
Capital, then the Seller shall, within five (5) Business Days
from the date of such final determination, pay to Purchaser
the difference between the Net Working Capital as of the
Closing Date and the Estimated Net Working Capital, together
with interest thereon at the Prime Interest Rate from the
Closing Date to the date of payment, such cash payment to be
made by wire transfer of immediately available funds to such
bank account as Purchaser may designate (or, in the absence of
any such designation, by corporate check mailed to Purchaser).
(f) If, pursuant to clause (c) or (d) of this Section 2.7, it is
finally determined that the Net Working Capital of Corporation
as of the Closing Date was greater than the Estimated Net
Working Capital, then the Purchaser shall pay to the Seller
the difference between the Net Working Capital at Closing and
the Estimated Net Working Capital. For greater certainty, the
difference between the Net Working Capital at Closing and the
Estimated Net Working Capital plus the amount paid pursuant to
Section 2.7 (b) above shall not exceed $5,000,000 or (ii) if
the Net Working Capital as of the Closing Date is less than
the Estimated Net Working Capital, then the Seller shall pay
to the Purchaser an amount such that the total net amount paid
by the Purchaser under Section 2.7 is equal to the difference
between the Net Working Capital as of Closing and the Target
Amount, such difference not to exceed $5,000,000. All payments
hereunder shall be made within five (5) Business Days from the
date of such final determination, together with interest
thereon at the Prime Interest Rate from the Closing Date to
the date of payment, such cash payment to be made by wire
transfer of immediately available funds to such bank account
as Purchaser or Seller, as the case may be, may designate (or,
in the absence of any such designation, by corporate check
mailed to Purchaser or Seller, as the case may be).
19
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(g) The Purchaser will pay at Closing to the Seller an amount
equal to the Cash balance on the Closing Date Financial
Statement, up to a maximum of $5,000,000. In no event shall
the Purchase Price exceed $38,000,000.
(h) The amounts payable by the Purchaser under Section 2.7 (b) or
Section 2.7 (f) shall be reduced by the amount paid under
Section 2.7 (g). For greater certainty, the amounts paid by
the Purchaser under Section 2.7 (g) plus the amounts paid
under either Section 2.7 (b) or Section 2.7 (f) shall not
exceed $5,000,000.
(i) To the extent that the Cash balance on the Closing Date
Financial Statements exceed $5,000,000 and the Net Working
Capital as at the Closing Date is less than the Target Amount,
then the amount of Cash in excess of $5,000,000 will be added
to the Net Working Capital as of the Closing Date for the
purposes of Sections 2.7 (e) and (f).
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE CORPORATION
Seller and the Seller's Parent, jointly and severally, hereby represent
and warrant to Purchaser as follows:
Section 3.1 ORGANIZATION AND AUTHORITY.
Seller and the Corporation are each corporations, duly organized,
validly existing and in good standing under the laws of Delaware and Canada,
respectively. Seller has all necessary power and authority to enter into this
Agreement and to carry out its respective obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery by
Seller of this Agreement, the performance by Seller and by the Corporation of
each of its respective obligations hereunder, and the consummation by Seller and
by the Corporation of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of Seller and the Corporation.
This Agreement has been duly executed and delivered by Seller and the
Corporation and (assuming due authorization, execution and delivery by
Purchaser) constitutes a legal, valid and binding obligation of Seller,
enforceable against Seller and the Corporation in accordance with its terms
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
or similar laws affecting the enforcement of creditors' rights generally and the
fact that equitable remedies such as specific performance and injunction, may
only be granted in the discretion of the court.
Section 3.2 STATUS OF THE CORPORATION.
The Corporation has all necessary power and authority to own, operate
or lease the properties and assets now owned, operated or leased by it and to
carry on its Business as now conducted. The Corporation is qualified to do
business as an extra-provincial or foreign corporation in all jurisdictions in
which the nature of the business conducted or the properties and assets owned,
leased or operated, requires such qualification except to the extent that the
failure to be so qualified in any jurisdiction has not caused or is not
reasonably expected to have a Material Adverse Effect.
20
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Section 3.3 PURCHASED SHARES
The Purchased Shares constitute all of the issued and outstanding
ownership interests of the Corporation. The Purchased Shares have been duly and
validly issued and are fully paid and non-assessable. No options, warrants,
conversion or other rights, agreements or commitments of any kind obligating the
Corporation, contingently or otherwise, to issue or sell any ownership interests
in the Corporation of any class, or any securities convertible into or
exchangeable for any such ownership interests, are outstanding, and no
authorization therefor has been given. Seller owns the Purchased Shares free and
clear of all Encumbrances except for any Encumbrances arising out of, under or
in connection with this Agreement.
Section 3.4 SUBSIDIARIES.
The Corporation does not have any subsidiaries or own any interest in
any other entity.
Section 3.5 NO CONFLICT.
Except as otherwise set forth in Schedule 3.5, the execution, delivery
and performance by Seller, the Seller's Parent and the Corporation of this
Agreement do not and will not (a) conflict with or violate any provision of the
respective charter documents of Seller, the Seller's Parent or the Corporation
or of any subscription, shareholders' or similar agreement or understanding to
which Seller, the Seller's Parent or the Corporation is a party or by which any
of them is bound; (b) constitute or result in a breach of, or a default (or an
event which, with notice or lapse of time or both would constitute a default)
under, or result in the termination of, or accelerate the performance required
by, or create a right of termination or acceleration under, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement relating to the Seller's, the
Seller's Parent or the Corporation's assets or properties and to which the
Seller, the Seller's Parent or the Corporation is a party except to the extent
that such breach, default, right of termination or acceleration has not caused
or is not reasonably expected to have a Material Adverse Effect; (c) constitute
a material violation by either Seller, Seller's Parent or the Corporation of any
applicable law or Permit; (d) constitute a violation by either Seller, the
Seller's Parent or the Corporation of any order, judgment, writ, injunction
decree or award to which it is a party or by which it is bound or affected
except to the extent that such violation has not caused or is not reasonably
expected to have a Material Adverse Effect or (e) result in the imposition of an
Encumbrance on any assets or properties of the Corporation or the Purchased
Shares.
Section 3.6 CONSENTS AND APPROVALS.
The execution, delivery and performance of this Agreement by Seller
does not and will not require any consent, approval, authorization or other
order of, action by, filing with or notification to any Governmental Entity
except (a) as described in Schedule 3.6, (b) the notification requirements of
the Competition Act (Canada), (c) where failure to obtain such consent,
approval, authorization or action, or to make such filing or notification, would
not prevent Seller from performing any of Seller's obligations under this
Agreement and has not caused or is not reasonably expected to have a Material
Adverse Effect, and (d) as may be necessary as a result of any facts or
circumstances relating solely to Purchaser. If a consent or
21
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approval is required due to subsection (c) above, Seller shall promptly inform
Purchaser and shall cooperate with Purchaser to attain the required consent or
approval.
Section 3.7 FINANCIAL INFORMATION.
The Corporation has delivered to Purchaser the following financial
statements of the Corporation (collectively, the "Financial Information"): (i)
the unaudited financial statements for the year ended December 31, 1999, (ii)
the Financial Statements for the year ended December 31, 2000, and (iii) Pro
Forma Financial Statements as of and for the year ended December 31, 2000. The
Financial Statements and Pro Forma Financial Statements are set forth in
Schedule 3.7(a). Except as set forth in Schedule 3.7(b) or as otherwise
disclosed in this Agreement, the Financial Information were, in the opinion of
the Corporation's management, prepared in accordance with GAAP, consistently
applied, and fairly present in all material respects the financial condition and
results of operations of the Corporation as of such dates or for the periods
covered thereby. Except as set forth in the Financial Statements or as otherwise
disclosed in this Agreement, the Corporation does not have any material
liabilities or obligations (absolute, accrued, contingent or otherwise) other
than (i) immaterial liabilities or obligations not required to be included in
the Financial Information under GAAP in the reasonable opinion of the
Corporation's management, and (ii) liabilities incurred since the date of the
Balance Sheet in the ordinary course of business. Seller makes no representation
or warranty with respect to any projections, forecasts, business plans or
budgets provided to Purchaser in connection with their evaluation of the
purchase of the Purchased Shares.
Section 3.8 ABSENCE OF CERTAIN CHANGES, CONDITIONS AND EVENTS.
Except as set forth in Schedule 3.8 or as otherwise disclosed in this
Agreement, since December 31, 2000, there has been no event, occurrence, fact,
condition, change, or effect that has caused or is reasonably expected to make
any representation in this Agreement inaccurate or has not caused or is not
reasonably expected to have a Material Adverse Effect and, without limiting the
generality of the foregoing:
(a) no dividends or other distribution of any kind have been
declared or paid by the Corporation;
(b) no capital expenditures or commitments have been made by the
Corporation in the aggregate in excess of $350,000;
(c) the Corporation has carried on the Business in the ordinary
course in a prudent, businesslike and efficient manner and
substantially in accordance with the procedures and practice
in effect on the date of the Financial Statements;
(d) there has been no material adverse change in the financial
position of the Corporation and no damage, loss or destruction
materially affecting the Business or the property of the
Corporation and its right or capacity to carry on business;
(e) except as reflected in Schedule 3.13(c) the Corporation has
not paid or agreed to pay any compensation, pension, bonus,
share of profits or other benefit to, or for the benefit of,
any employee, director, or officer of the Corporation except
in the
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normal course of business and as of the date of such Schedule
3.13(c) has not increased the compensation paid or payable to
any director, officer and senior management employee;
(f) the Corporation has not waived or surrendered any right except
to the extent that such waiver or surrender has not caused or
is not reasonably expected to have a Material Adverse Effect;
(g) the Corporation has not settled any accounts receivable at
materially less than face value net of reserve for that
account; and
(h) the Corporation has not discharged or satisfied any
Encumbrance or paid any obligation or liability of any of the
Corporation other than the current liabilities in the ordinary
course of business.
Section 3.9 CONTRACTS.
Schedule 3.9 sets forth a complete list of all customer contracts
contributing in excess of Cdn$500,000 in revenues for 2000 or likely to
contribute in excess of Cdn$500,000 in revenues for 2001 and all Corporation
obligations in excess of Cdn$250,000 to which the Corporation is a party or by
which the Corporation is bound and all (i) credit agreements, pledge agreements
and security agreements; (ii) agreements or commitments to make capital
expenditures; (iii) agreements to sell, lease or otherwise dispose of any
material assets or properties other than in the ordinary course of business;
(iv) agreements limiting the freedom of the Corporation to compete in any line
of business or in any geographic area or with any person; (v) Leases; and (vi)
joint venture agreements, development agreements and partnership agreements.
Except as disclosed on Schedule 3.9, the Corporation is not in default under any
contract, agreement, indenture, mortgage, lease, insurance policy or other
instrument to which it is a party or by which its properties or assets may be
bound or subject except to the extent that such default has not caused or is not
reasonably expected to have a Material Adverse Effect. The entire interest of
the Corporation under each of the Contracts is held by it free and clear of any
Encumbrances other than those which are the subject matter of the applicable
Contract itself.
Section 3.10 LITIGATION.
Except as disclosed in Schedule 3.10, to the Knowledge of the Seller
there are no claims, actions, proceedings or investigations pending or
threatened against the Corporation which seek to have a Material Adverse Effect
on the Corporation or which seek to delay or prevent the consummation of, or
which would adversely affect Seller's ability to consummate the transactions
contemplated by this Agreement.
Section 3.11 TAXES.
Except as set forth in Schedule 3.11,
(a) the Corporation has timely filed or will timely file all Tax
Returns required to be filed by it in respect of all Taxes for
any taxation period or portion thereof ending on or before the
Closing Date, all such Tax Returns are complete and correct,
and
23
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no adjustment relating to such Tax Returns has been proposed
formally or informally by any Governmental Entity and no basis
exists for any such adjustments;
(b) all Taxes due and payable by the Corporation on or before the
Closing Date, including, without limitation, all Taxes that
the Corporation is required to withhold or collect, have been
paid or remitted to the proper Governmental Entity on a timely
basis;
(c) all Taxes that the Corporation is required to withhold or
collect on or before the Closing Date which are not due or
payable until after the Closing Date have been withheld and
collected;
(d) the Corporation is not a party to any action by any
Governmental Entity and no claim has been asserted, threatened
or proposed against it for assessment or collection of any
Taxes;
(e) the Corporation has not executed or filed with any
Governmental Entity any agreement extending the period of
assessment or collection of any Taxes; and
(f) there are no outstanding rulings, requests for rulings, or
other elections, designations, waivers, consents or agreements
with any Governmental Entity in respect of Taxes that are, or
if issued, would be, binding on the Corporation or which would
have an impact on the Corporation's Taxes for any future
taxation periods or for completed taxation periods for which
Tax Returns have not yet been filed.
Section 3.12 LICENSES, PERMITS, AUTHORIZATIONS, ETC.
The Corporation has all Permits, licenses, approvals and other
authorizations of Governmental Entities necessary to operate the Business except
to the extent that the failure to obtain such Permits, licenses, approvals of
other authorizations of Governmental Authorities has not caused or is not
reasonably expected to have a Material Adverse Effect.
Section 3.13 EMPLOYEES AND EMPLOYEE BENEFIT MATTERS.
(a) Except as prohibited by Applicable Laws, there are no
agreements for the employment of any Employees that cannot be
terminated on reasonable notice, other than those described in
Schedule 3.13(a).
(b) There are no agreements for the payment of any bonus, deferred
compensation, incentive compensation, savings, pension, profit
sharing, retirement allowance, share purchase, share option,
severance or termination pay (other than as required by
statute), vacation pay (other than as required by statute),
insurance, hospitalization or any other benefits for any of
the Employees (the "Benefit Plans") in addition to salaries,
wages or commissions other than as described in Schedule
3.13(b).
24
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(c) Schedule 3.13(c) shows all of the names, positions, starting
dates and base compensation of the Employees, other than the
Excluded Employees, and is accurate up to February 28, 2001.
(d) Without limiting the generality of Section 3.17 of this
Agreement, the Corporation is in compliance with all
applicable labour and employment related statutes in Canada,
except to the extent that the failure to be in compliance with
all applicable labour and employment related statutes in
Canada has not caused or is not reasonably expected to have a
Material Adverse Effect.
(e) No promises or commitments have been made by the Corporation
to amend any Benefit Plan or to provide increased benefits
thereunder to any Employee, except as required by Applicable
Laws and except to the extent that such promises to amend any
Benefit Plan or to provide any increased benefits has not
caused or is not reasonably expected to have a Material
Adverse Effect.
(f) Except as disclosed on Schedule 3.13(f), all of the Benefit
Plans are, and have been since their establishment, duly
registered where required by legislation (including
registration with the relevant tax authorities where such
registration is required to qualify for tax exemption or other
beneficial tax status) and are in good standing under, and are
in compliance with, all Applicable Laws and administrative
guidelines issued by the regulatory authorities except to the
extent that such non-compliance, failure to register or
failure to be in good standing has not caused or is not
reasonably expected to have a Material Adverse Effect.
(g) Except as permitted by the Benefit Plans and Applicable Laws,
there has been no withdrawal of any amounts from any of the
Benefit Plans other than proper payments of benefits to
eligible beneficiaries, refunds of over-contributions to plan
members and permitted payments of reasonable expenses incurred
by or in respect of such Benefit Plan.
(h) All Benefit Plans have been administered in accordance with
their terms, there are no outstanding defaults or violations
by the Corporation of any obligation required to be performed
by it in connection with any Benefit Plan and no order has
been made or notice given pursuant to any Applicable Laws
requiring (or proposing to require) the Corporation to take
(or refrain from taking) any action in respect of any Benefit
Plan, except to the extent that such failure to administer the
Benefit Plans in accordance with their terms or such defaults
or violations of obligations or such orders or notices given
have not caused, or are not reasonably expected to have, a
Material Adverse Effect.
(i) All employer and, if applicable, employee contributions under
the Benefit Plans have been remitted in a timely manner (other
than current contributions not in arrears) and the Benefit
Plans have been funded in accordance with their terms and any
generally accepted actuarial principles and practices which
are applicable.
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(j) To the Knowledge of the Seller, all returns, filings, reports
and disclosures relating to the Benefit Plans required
pursuant to the terms of the Benefit Plans, Applicable Laws or
any regulatory authority, have been filed or distributed in
accordance with all requirements, all filing fees and levies
imposed on the Benefit Plans by the regulatory authorities or
Applicable Laws have been made on a timely basis and the funds
of the Benefit Plans are not exposed to any late filing fees
that have not been remitted.
(k) To the Knowledge of the Seller, there are no actions, suits,
claims, trials, demands, arbitrations, investigations or
proceedings pending or threatened with respect to the Benefit
Plans against the Corporation, the funding agent, the insurers
or the fund of such Benefit Plans, other than claims for
benefits in the ordinary course or as disclosed in writing by
the Seller to the Purchaser, which seek to have a Material
Adverse Effect on the Corporation or other proceedings pending
or threatened.
(l) The Corporation has never provided a defined benefit
registered or unregistered pension plan to its Employees or
the Excluded Employees.
(m) No event has occurred and there has been no failure to act on
the part of the Corporation, any funding agent or any
administrator of any of the Benefit Plans that could subject
the Corporation or the fund of any Benefit Plan to the
imposition of any tax, penalty or other disability with
respect to any Benefit Plans, whether by way of indemnity or
otherwise except to the extent that any of such taxes, penalty
or other disability has not caused or is not reasonably
expected to have a Material Adverse Effect.
(n) The contribution obligations, if any, of the Corporation to
any of the Benefit Plans that are multi-employer pension plans
or multi-employer benefit plans are accurately set out in
Schedule 3.13(b).
(o) Neither the execution, delivery or performance of this
Agreement, nor the consummation of any of the other
transactions contemplated by this Agreement, will result in
any bonus, golden parachute, severance or other payment or
obligation by or of the Corporation to any current or former
employee or director of the Corporation (whether or not under
any Benefit Plan), or materially increase the benefits payable
or provided under any Benefit Plan provided by the
Corporation, or result in any acceleration of the time of
payment or vesting of any such benefits.
(p) Except as set forth in Schedule 3.13(p), there are no
independent contractor arrangements.
(q) There are no independent contractor arrangements, whether
written or oral, under which Applicable Laws would require any
such independent contractor to be re-classified as an
Employee.
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(r) There are no union Employees and neither the Corporation nor
the Seller are aware of any initiatives to unionize any of the
Employees.
Section 3.14 ENVIRONMENTAL MATTERS.
The Corporation is in compliance in all respects with all federal,
provincial, state, local and other statutes, ordinances, rules and regulations
relating to the environment or to the protection of public health, except to the
extent that the failure to be in compliance with all applicable federal,
provincial, state, local and other statutes, ordinances, rules and regulations
relating to the environment or to the protection of public health has not caused
or is not reasonably expected to have a Material Adverse Effect. Except as
disclosed in Schedule 3.14 and in this Section 3.14, there are no facts,
circumstances, or conditions that directly or indirectly related to the assets
owned, leased by or otherwise in control of the Corporation or the past or
present conduct of the Business with respect to environmental, health or safety
matters that have existed or now exist and already have had or may have a
Material Adverse Effect on the operation of the Business or use of the assets
owned, leased by or otherwise in control of the Corporation or that may give
rise to any liability on the Purchaser or the Corporation concerning the
protection, preservation or remediation of the natural environment, whether air,
land, surface water or groundwater.
Section 3.15 REAL PROPERTY.
The Corporation does not own any real property that is used in the
Business. Schedule 3.15 sets forth a complete and correct list of all real
property used in the Business that is subject to any Lease, and the business
terms of such Lease including rent, maturity date and square footage of the
premises leased thereunder, and that is not part of the Excluded Assets. All of
the Leases are in good standing and there is no condition or circumstance which
could result in an event of default under such Leases.
Section 3.16 INSURANCE.
Schedule 3.16 contains a general description of all current policies of
insurance maintained with respect to the Corporation and the Business, and
contains a general description of the current policies and the coverage thereof.
Except for health insurance and other insurance carried or maintained in
connection with providing benefits under Benefit Plans, all of such insurance
has been maintained by Seller or its parent companies and will terminate with
respect to the Corporation and its operations as of the Closing.
Section 3.17 LEGAL COMPLIANCE.
The conduct and operations of the Business are in compliance with each
applicable law of any Governmental Entity except to the extent that the failure
to be in compliance with each applicable law of any Governmental Authority has
not caused or is not reasonably expected to have a Material Adverse Effect.
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Section 3.18 INTELLECTUAL PROPERTY.
(a) The Intellectual Property is all the intellectual property
necessary to carry on the Business as currently being carried
on by the Corporation as at the date hereof and will be all
that is required to carry on the Business, as currently being
carried on, as at the Closing Date;
(b) the Corporation has good and valid legal and beneficial title
to and/or right to use all of the Intellectual Property
(except Enterprise Software), free and clear of any
Encumbrances of any nature;
(c) the Seller and Corporation have no knowledge or information of
any facts which would affect the validity, enforceability,
scope or registrability of any of the Intellectual Property;
(d) to the knowledge of the Seller and to the knowledge of the
Corporation all patent, trademark and copyright registrations
in the Intellectual Property are valid, subsisting and
enforceable, and such patents, registered trademarks and
registered copyrights are duly recorded in the name of the
Corporation, with the exception of the three (3) TTS
trademarks, and the Corporation and Seller has no knowledge of
any reason as to why the same cannot be recorded in the name
of the Purchaser;
(e) To the Knowledge of Seller and to the knowledge of the
corporation all statements contained in all applications for
registration of the Intellectual Property were correct and
complete as of the date of such applications and are still
true;
(f) the Corporation has, and after the Closing will have, the sole
and exclusive ownership and right, free from any claims or
demands or Encumbrances to fully use and exploit the
Intellectual Property to the full extent of the rights granted
in intellectual property and the consummation of the
transactions contemplated hereby will not alter or impair any
such rights;
(g) no material claims have been asserted by any Other Party with
respect to, or challenging or questioning, the ownership,
validity, enforceability or use of the Intellectual Property
and the Corporation and Seller have no knowledge of any valid
basis for any such claim;
(h) to the Knowledge of the Seller, the Corporation has not
received any notice, complaint, threat, claim or demand
alleging infringement of and the conduct by the Corporation of
the Business and the use by the Corporation of the
Intellectual Property does not infringe any patent, trademark,
trade name, trade secret, domain name, obligation of
confidence or other proprietary, contract or intellectual
property right of any Other Party except to the extent that
such infringement has not caused or is not reasonably expected
to have a Material Adverse Effect.;
(i) To the knowledge of the Seller and Corporation no Other Party
is infringing the rights of the Corporation with respect to
the Intellectual Property;
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(j) the Corporation has not received any notice, information,
threat, claim or demand suggesting that it does not own all
right, title and interest in the Intellectual Property or that
the Corporation does not have the sole and exclusive right to
exploit the Intellectual Property in any manner whatsoever;
(k) Except as set forth in Schedule 3.18(k), complete and correct
copies of all material agreements relating to or affecting the
Intellectual Property have been provided to the Purchaser and
no such agreements contains a provision relating to a change
of control;
(l) The Corporation owns all Intellectual Property in its own name
except for Enterprise Software and Software subject to the
Cross License Agreement, in which case the Intellectual
Property has been licensed from a Other Party;
(m) no royalty, payment or other fee is required to be paid by the
Corporation to any Other Party in respect of the use or any
other exploitation of any of the Intellectual Property except
as set out in the agreements listed on Schedule 3.18(m) and
except as required to maintain or renew the applications and
registrations;
(n) the Corporation is not in breach of any agreement under which
it acquires or has acquired any right or interest in any
Intellectual Property;
(o) the Intellectual Property is used exclusively in connection
with the Business of and is not used in a manner likely to
cause confusion in the marketplace;
(p) all trade secrets used by the Corporation are the unencumbered
property of the Corporation, do not infringe upon the rights
of any third party, were developed by the Corporation and its
respective employees with appropriate secrecy and ownership
safeguards and have been maintained by the Corporation in
strict confidence and no such trade secrets have been
disclosed directly or indirectly to any Other Party;
(q) all confidential information of any Other Party held by the
Corporation under any obligations of confidentiality has been
kept strictly confidential and not used, disclosed,
disseminated or published unless otherwise permitted pursuant
to such agreement;
(r) the Corporation and no Other Party with whom the Corporation
has an agreement relating to any Intellectual Property or any
intellectual property of such Other Party are in breach of
such an agreement or will be as a result of the Corporation
entering this Agreement; and
(s) Notwithstanding the foregoing, no representation or warranty
is made that the Corporation will obtain any rights in the
Enterprise Software or that the Enterprise Software can be
transferred to the Corporation.
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Section 3.19 BROKERS.
Except as to The Blackstone Group, whose fees and expenses are payable
by Seller, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Seller, the Corporation or a Subsidiary.
Section 3.20 EXTENT OF REPRESENTATIONS AND WARRANTIES.
The Seller makes no representations or warranties to the Purchaser
except as specifically set forth in this Article 3 and this Agreement contains
all representations and warranties of the Seller relating to the transactions
contemplated hereby. All disclosure contained in a particular representation and
warranty set forth in this Agreement (or any Schedule referred to therein) shall
be deemed for the purposes of this Agreement to have been made with respect to
all of the representations and warranties in this Article 3 to which such
disclosure might be applicable.
Section 3.21 CERTIFICATES.
All certificates of the Seller and the Corporation delivered to the
Purchaser and its representatives pursuant to this Agreement and the information
contained in each such certificate will be deemed to be part of the
representations and warranties of the Sellers and the Corporation contained in
this Article 3.
Section 3.22 BOOKS AND RECORDS.
Seller has made available to the Purchaser all Books and Records of the
Corporation. Such Books and Records fairly and correctly set out and disclose in
all material respects the financial position of the Business and all financial
transactions relating to the Business have been accurately recorded in such
Books and Records.
Section 3.23 FULL DISCLOSURE.
All information, which has been provided to the Purchaser relating to
the Business is true and correct in all material respects and no material fact
or facts have been omitted therefrom which would make such information
misleading.
Section 3.24 CNG
None of the CNG Assets have been used by the Corporation to carry on
its customer premise telecommunications equipment sales, procurement,
installation, support and maintenance business as it is currently being carried
on.
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ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to Seller as follows:
Section 4.1 ORGANIZATION AND AUTHORITY.
The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of Canada and has all necessary power and authority
to enter into this Agreement, to carry out its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby. The
execution and delivery by the Purchaser of this Agreement, its performance of
its obligations hereunder, and its consummation of the transactions contemplated
hereby have been duly authorized by all requisite action on the part of the
Purchaser. This Agreement has been duly executed and delivered by the Purchaser
and (assuming due authorization, execution and delivery by Seller) this
Agreement constitutes a legal, valid and binding obligation of the Purchaser,
enforceable against Purchaser in accordance with its terms except as enforcement
may be limited by bankruptcy, insolvency, reorganization, or similar laws
affecting the enforcement of creditors' rights generally and the fact that
equitable remedies such as specific performance and injunction, may only be
granted in the discretion of the court.
Section 4.2 NO CONFLICT.
The execution, delivery and performance by the Purchaser of this
Agreement does not (a) conflict with or violate any provision of the charter
documents of the Purchaser or of any subscription, members' or similar agreement
or understanding to which the Purchaser is a party or by which it is bound or
(b) constitute or result in a breach of, or a default (or an event which, with
notice or lapse of time or both would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or create a right
of termination or acceleration under any note, bond, mortgage or indenture,
contract, agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement relating to the Purchaser's assets or properties and
to which the Purchaser is a party, (c) constitute or result in a violation by
the Purchaser of any applicable law or (d) constitute or result in a violation
by the Purchaser of any order, judgment, writ, injunction decree or award to
which it is a party or by which it is bound or affected; to the extent that each
of the foregoing would be reasonably likely to materially adversely affect the
Purchaser's ability to consummate the transactions contemplated by this
Agreement or carry out the Purchaser's obligations pursuant to this Agreement.
Section 4.3 CONSENTS AND APPROVALS.
The execution, delivery and performance by Purchaser of this Agreement
does not and will not require any consent, approval, authorization or other
order of, action by, filing with or notification to any third party, including
without limitation, any Governmental Entity except the notification requirements
of the Competition Act (Canada).
Section 4.4 LITIGATION.
There are no actions, suits, claims, proceedings, investigations or
governmental inquiries ongoing, pending or threatened against the Purchaser or
any of its assets or properties which seek
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to delay or prevent the consummation of, or which would be reasonably likely to
materially adversely affect the Purchaser's ability to consummate the
transactions contemplated by this Agreement.
Section 4.5 FINANCING.
As of the date hereof, Purchaser has sufficient funds, or has obtained
binding commitments from responsible financial institutions to enable it to
borrow such funds, as are needed to pay the Purchase Price in cash on the
Closing Date, and Purchaser will maintain such funds or commitments until the
Closing.
Section 4.6 BROKERS.
Except as to RBC Dominion Securities Inc., whose fees and expenses are
payable by the Purchaser, no broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Purchaser.
Section 4.7 EMPLOYEE BENEFITS.
The Employees shall be offered employee benefits which are, in the
aggregate, comparable to the employee benefits they enjoy as of February 28,
2001.
ARTICLE 5.
COVENANTS AND ADDITIONAL AGREEMENTS
Section 5.1 CONDUCT OF BUSINESS PRIOR TO THE CLOSING.
Unless Purchaser otherwise agrees in writing and except as otherwise
set forth herein (including, without limitation in all Schedules hereto) between
the date of this Agreement and the Closing Date, Seller shall cause the
Corporation to conduct the Business in the ordinary course and in material
compliance with all applicable laws and regulations. Seller shall not and shall
not permit the Corporation to:
(a) take any action with respect to any inter-company receivable
or inter-company payable other than in the ordinary course of
business;
(b) except in the ordinary course of Business, purchase or sell,
consume or otherwise dispose of the assets of the Corporation;
(c) settle any accounts receivable of the Corporation at less than
face value net of reserve for that account;
(d) waive or surrender any material right of the Corporation;
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(e) subject to Section 5.1(f), incur, discharge, satisfy or pay
any Encumbrance, obligation or liability in connection with
the Business other than in the ordinary course of business;
(f) make any capital expenditure or commitment in connection with
the Business in the aggregate in excess of $350,000;
(g) issue any shares in the capital of the Corporation; or
(h) except in the ordinary course of business pay or agree to pay
any increase in compensation, pension, bonus, share of profits
or other benefit to, or for the benefit of, any employee,
director, or officer of the Corporation.
Section 5.2 ACCESS TO INFORMATION.
From the date hereof until the Closing, upon reasonable notice, Seller
and the Corporation shall, and shall cause their respective officers, directors,
employees, auditors and agents and such other officers, directors and employees
of any Affiliate of the Seller as Purchaser reasonably requires, to (a) afford
the officers, employees and authorized agents and representatives of Purchaser
reasonable access, during normal business hours, to the offices, properties,
books and records of the Corporation and (b) furnish to the officers, employees
and authorized agents and representatives of Purchaser such additional financial
and operating data and other information regarding the Business as Purchaser may
from time to time reasonably request; provided, however, that such investigation
shall not unreasonably interfere with any of the businesses or operations of
Seller or its Affiliates.
Section 5.3 CONFIDENTIALITY.
The terms of the Non-Disclosure Agreement dated as of September 14,
2000 (the "Non-Disclosure Agreement"), between ▇▇▇▇▇▇▇▇ Communications
Solutions, LLC and TELUS Corporation are hereby incorporated herein by reference
and shall continue in full force and effect pursuant to the terms thereof. If
this Agreement is, for any reason, terminated prior to the Closing, the
Non-Disclosure Agreement shall continue in full force and effect.
Notwithstanding the foregoing, if the Purchaser is required to disclose the
terms of this Agreement to any Governmental Entity or any creditor of the
Purchaser, such disclosure shall not be a contravention of the Non-Disclosure
Agreement. Upon Closing, the Non-Disclosure Agreement shall merge and shall
cease to be effective against either party thereto or the parties to this
Agreement and shall be replaced by the terms of Section 6.4 hereof.
Section 5.4 REGULATORY AND OTHER AUTHORIZATIONS AND CONSENTS.
(a) Each party hereto shall use reasonable commercial efforts to
obtain all authorizations, consents, orders and approvals of
all Governmental Entities that may be or become necessary for
its execution and delivery of, and the performance of its
obligations pursuant to, this Agreement and will cooperate
fully with the other parties in promptly seeking to obtain all
such authorizations, consents, orders and approvals. Each
party hereto agrees to cooperate to make all commercially
reasonable efforts and diligently pursue obtaining Competition
Act
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Approval and make all appropriate filings pursuant to the
Competition Act (Canada) and the Investment Canada Act with
respect to the transactions contemplated hereby and to supply
promptly any additional information and documentary material
that may be requested pursuant to such legislation. No party
hereto shall take any action that is reasonably expected to
have the effect of delaying, impairing or impeding the receipt
of any required authorization, consent, order or approval
unless such action is reasonably believed to be required in
order to comply with any applicable law or regulation.
(b) Each party hereto agrees to cooperate in obtaining any other
consents and approvals which may be required in connection
with the transactions contemplated by this Agreement.
(c) Subject to the rights of termination under the provisions of
Section 8.1 of this Agreement, each party hereto shall use
reasonable commercial efforts to perform and fulfill all
conditions and obligations on its part to be performed and
fulfilled under this Agreement, and to cause the transactions
contemplated by this Agreement to be fully carried out.
Section 5.5 TAX MATTERS.
5.5.1 Tax Indemnities.
(a) Notwithstanding anything in this Agreement to the contrary,
Seller and the Seller's Parent shall jointly and severally
indemnify, defend and hold the Purchaser Indemnitees harmless
from and against, and shall reimburse them for (i) any and all
Losses sustained or incurred by a Purchaser Indemnitee
resulting or arising from any inaccuracy in or breach of any
of the Seller's representations and warranties set forth in
Section 3.11 or any breach of any covenant, obligation or
agreement of Seller contained in this Agreement concerning
Taxes, and (ii) any and all Taxes imposed on or payable by the
Corporation or any predecessor of the Corporation with respect
to any taxation period or portion thereof that ends on or
before the Closing Date, in excess of the amount reserved for
current Taxes payable on the Closing Date Financial
Statements, including, without limitation, any such excess
Taxes relating to:
(A) the sale or distribution of the Excluded
Assets in accordance with this Agreement;
(B) the amalgamation of the Corporation and CNG
Computer Networking Group, Inc. ("CNG") on
January 1, 1999 to form Wiltel
Communications (Canada), Inc. and any Taxes
resulting from any assessments or
reassessments, if any, of the CNG Tax
Returns;
(C) the amalgamation of Wiltel Communications
(Canada), Inc. (formerly TTS Meridian
Systems, Inc.) and Wiltel Holdings, Inc. on
November 1, 1997 to form Wiltel
Communications (Canada),
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Inc. and any Taxes resulting from any
assessments or reassessments, if any, of the
Wiltel Communications (Canada), Inc.
(formerly TTS Meridian Systems, Inc.) Tax
Returns; and
(D) any transactions the Corporation has
undertaken with related non-residents;
provided, however, that no indemnity shall be provided by
Seller under this Section 5.5.1 for any reduction in any net
operating loss, capital loss or tax credit carryover allocable
to the Corporation on or after the Closing Date.
(b) Payment by the Seller of any amount due under this Section
5.5.1 shall be made within thirty (30) days following written
notice by the Purchaser or the Corporation that payment of
such amounts to the appropriate Governmental Entity is due,
provided that the Seller shall not be required to make any
payment earlier than two (2) days before it is due to the
appropriate Governmental Entity. In the case of any Taxes
being contested in accordance with the provisions of Section
5.5.3, payment of such Taxes to the appropriate Governmental
Entity will not be considered to be due earlier than the date
a final determination to such effect is made by the
appropriate Governmental Entity or a court or as required by
any prevailing legislation in respect of Taxes if earlier.
(c) For purposes of this Agreement, in the case of any Tax (other
than a Tax based upon or measured by income, a Tax based upon
or measured by capital or a sales tax) that is imposed on a
periodic basis and is payable for a period that begins before
the Closing Date and ends after the Closing Date, the portion
of such Taxes payable for the period ending on the Closing
Date by Seller shall be the amount of such Tax for the entire
period multiplied by a fraction, the numerator of which is the
number of days in the period ending on the Closing Date and
the denominator of which is the number of days in the entire
period.
(d) Any amount otherwise payable by Seller under this Section
5.5.1 shall be reduced by the present value of any Tax benefit
to Purchaser or the Corporation for a period or portion
thereof beginning after the Closing Date (a "Post-Closing Date
Tax Benefit").
5.5.2 Refunds.
(a) Purchaser shall promptly pay to Seller, any refund or credit
(including any interest paid or credited with respect thereto
net of any Taxes paid or payable in respect of such interest
or any Taxes that would have been payable in respect of such
interest but for the use of deductions otherwise available to
shelter the payment of Taxes on such interest) received by
Purchaser or the Corporation of Taxes (i) relating to taxation
periods or portions thereof ending on or before the Closing
Date, or (ii) attributable to an amount paid by Seller under
Section 5.5.1 hereof.
(b) Purchaser shall, if Seller so requests and at the expense of
Seller, cause the Corporation to file for and obtain any
refund to which Seller is entitled under this
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Section 5.5.2. Purchaser shall permit Seller to exercise
reasonable control (at the expense of Seller) over the
procedure related to such refund claim, and shall cause the
Corporation to authorize by appropriate power of attorney such
persons as Seller shall designate to represent the Corporation
with respect to such refund claim. Purchaser shall provide
Seller with reasonable access to all relevant records, books
and files of the Corporation as necessary or appropriate to
review and consider the existence and extent of any such
claims and the procedures and other actions that may be
necessary or appropriate to obtain such refunds.
(c) Purchaser and the Corporation shall have the right and shall
be given the opportunity to consult with Seller with respect
to any claim made to obtain any refund pursuant to this
Section 5.5.2, and, in respect of any such claim, to
participate in conferences with counsel, to receive copies of
all relevant documentation as it becomes available, and to
meet with representatives of Seller at all reasonable times to
discuss the claim.
(d) Seller and the Seller's Parent shall jointly and severally
indemnify, defend and hold the Purchaser Indemnitees harmless
from and against, and shall reimburse them for the present
value of any liability for Taxes imposed on or payable by the
Corporation in respect of a taxation period ending after the
Closing Date resulting directly from any attempt made by the
Seller, or the Corporation at the request of the Seller, to
obtain any refund under this Section 5.5.2.
5.5.3 Contests.
(a) After the Closing Date, Purchaser or the Corporation shall
notify Seller in writing within twenty (20) Business Days of
the commencement of any Tax audit or administrative or
judicial proceeding in respect of a taxation period or portion
thereof of the Corporation ending on or before the Closing
Date. Such notice shall contain factual information (to the
extent known to Purchaser or the Corporation) describing any
asserted liability for Taxes in reasonable detail and shall
include copies of any notice or other document received from
any Governmental Entity in respect of any such asserted
liability for Taxes. The failure to give any notice required
by this Section 5.5.3(a) in a timely manner shall not limit
the obligation of Seller under Section 5.5.1 except to the
extent that Seller is prejudiced by such failure.
(b) Seller may, upon written acknowledgement of the obligation to
provide indemnification with respect thereto, elect to direct,
through counsel of its own choosing and at the expense of
Seller, any audit, claim for refund and administrative or
judicial proceeding involving any asserted Tax liability with
respect to which indemnity may be sought under Section 5.5.1
(any such audit, claim for refund or proceeding relating to an
asserted Tax liability is referred to herein as a "Contest").
If Seller elects to direct a Contest, it shall within thirty
(30) calendar days of receipt of the notice of the
commencement of a Contest, notify Purchaser of its intent to
do so, and Purchaser shall cooperate and shall cause the
Corporation or its successor to cooperate, at the expense of
Seller
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(which shall not include the cost of the Corporation
personnel), in each phase of such Contest. If Seller elects
not to direct the Contest, Purchaser or the Corporation may
pay, compromise or contest such asserted liability; provided,
however, that in such case, neither Purchaser nor the
Corporation may settle or compromise any asserted liability
without the consent of Seller, which consent shall not be
unreasonably withheld. In any event, Seller may participate,
at the expense of Seller, in the Contest. If Seller chooses to
direct the Contest, Purchaser shall promptly empower and shall
cause the Corporation or its successor promptly to empower (by
power of attorney and such other documentation as may be
appropriate) such representatives of Seller, as it may
designate to represent Purchaser or the Corporation or its
successor in the Contest in so far as the Contest involves an
asserted Tax liability for which Seller would be liable under
Section 5.5.1.
(c) If Seller chooses to direct the Contest, Purchaser or the
Corporation shall have the right and shall be given the
opportunity to consult with Seller with respect to the
Contest, to participate in conferences with counsel, to
receive copies of all relevant documentation as it becomes
available, and to meet with representatives of Seller at all
reasonable times to discuss the Contest.
(d) If Seller chooses to direct the Contest, Seller may not settle
or compromise the Contest or any asserted liability for Taxes
related thereto except with the prior written consent of
Purchaser or the Corporation provided if Purchaser or the
Corporation withholds its consent to a settlement or
compromise of any such Contest or asserted liability for Taxes
which Seller is willing to accept liability for and pay the
cost of, then Seller shall only be liable to indemnify
Purchaser Indemnitees with respect to such Contest or asserted
liability for Taxes to the extent that the amount payable on
the ultimate disposition thereof is no greater than the amount
Seller was willing to accept liability for pursuant to the
settlement or compromise in respect of which the consent of
Purchaser or the Corporation was withheld.
(e) If Seller elects not to direct the Contest or fails to notify
Purchaser of its election as herein provided or fails to
acknowledge its indemnification obligation with respect
thereto, neither the Purchaser nor the Corporation shall be
held responsible for any liability for Taxes or other costs
paid or payable by the Seller as a result of any good faith
action taken by the Purchaser or the Corporation, or by the
failure of the Purchaser or the Corporation to take any
action, to settle or compromise the Contest.
5.5.4 Preparation of Tax Returns.
Seller shall prepare and timely file Tax Returns and schedules relating
to the Corporation for any taxation period or portion thereof ending on or prior
to the Closing Date. Purchaser shall prepare and timely file or cause the
Corporation to prepare and timely file all Tax Returns for which Seller is not
responsible pursuant to this Section 5.5.4 (the "Post-Closing Tax Returns"). If
a Post-Closing Tax Return includes a change in reporting (other than a change in
reporting that
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is required by applicable law) that results in a Contest and if Seller's
reporting of items in prior years was reasonable based on professional advice
and was permitted by the relevant tax legislation, then Seller shall have no
indemnification obligations under Section 5.5.1 for liabilities resulting
directly from such reporting change. Seller shall deliver to the Purchaser or
the Corporation a complete and accurate copy of each Tax Return required to be
filed by Seller under this Section 5.5.4 and any amendment to such Tax Return,
within ten days of the date such Tax Return is filed with the appropriate
Governmental Entity.
5.5.5 Cooperation and Exchange of Information.
Seller and Purchaser will provide each other with such cooperation and
information as any of them reasonably may request of the other in filing any Tax
Return, amended Tax Return or claim for refund or tax indemnification,
determining a liability for Taxes or a right to a refund of Taxes or
participating in or conducting any audit or other proceeding in respect of Taxes
including all matters described in Section 5.5.3. Such cooperation and
information shall include providing copies of relevant Tax Returns or portions
thereof, together with accompanying schedules and related work papers and
documents relating to rulings or other determinations by Governmental Entities.
Each party shall make its employees available at no cost to the other on a
mutually convenient basis to provide explanations of any documents or
information provided hereunder. The Corporation will retain all Tax Returns,
schedules, work papers and material records or other documents relating to Tax
matters of the Corporation for all taxation periods or portions thereof ending
on or before the Closing Date, which were delivered by the Seller pursuant to
its obligations under this Agreement, until the later of (a) the expiration of
the statute of limitations of the taxation periods to which such Tax Returns and
other documents relate, including extensions for such taxation periods, or (b)
eight years following the due date (including extensions) for such Tax Returns.
The Seller shall be entitled to retain copies of all Tax Returns of the
Corporation relating to any taxation period or portion thereof ending on or
before the Closing Date. Any information obtained or retained under this Section
5.5.5 shall be kept confidential, except as may be otherwise necessary in
connection with the filing of Tax Returns or claims for refund or in conducting
an audit or other proceeding.
5.5.6 Survival of Obligations in respect of Taxes.
The obligations of the parties under this Section 5.5 shall survive the
Closing and shall terminate upon the expiration of ninety days following the
period, including any extensions thereof, during which an assessment,
reassessment, or other form of recognized document assessing liability for Taxes
could be issued with respect to Taxes for which the Seller may be liable
pursuant to its obligation to indemnify Purchaser Indemnitees under Section
5.5.1 or in the event of any liability for Taxes concerning any such assessment
or reassessment, until the assessment or reassessment is finally concluded.
5.5.7 Miscellaneous.
(a) All payments made under this Section 5.5 shall be treated as
adjustments to the Purchase Price. However, if at any time and
for any reason the recipient of a payment under this Section
5.5 (other than Section 5.5.2) becomes liable for any Taxes in
respect of such payment, the payor shall indemnify and hold
harmless
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the recipient from any such liability for Taxes attributable
to such payment and for any further Taxes attributable to
payments made pursuant to the payor's obligation described in
this sentence.
(b) Except as expressly provided otherwise herein and except for
the representations contained in Section 3.11 of this
Agreement, this Section 5.5 shall be the sole provision
governing Taxes and indemnities therefor under this Agreement.
(c) For purposes of this Section 5.5, all references to Seller,
Purchaser, the Corporation and their respective Affiliates
include successors and assigns thereto.
Section 5.6 NOTICE OF BREACHES.
(a) Seller shall promptly deliver to Purchaser written notice of
any event or development that would (i) render any statement,
representation or warranty of Seller or the Corporation in
this Agreement (including all Schedules) inaccurate or
incomplete in any material respect, or (ii) constitute or
result in a breach by Seller or the Corporation of, or a
failure by Seller or the Corporation to comply with, any
agreement or covenant in this Agreement applicable to Seller
or the Corporation, as the case may be.
(b) Purchaser shall promptly deliver to Seller written notice of
any event or development that would (i) render any statement,
representation or warranty of the Purchaser in this Agreement
inaccurate or incomplete in any material respect, or (ii)
constitute or result in a breach by the Purchaser of, or a
failure by the Purchaser to comply with, any agreement or
covenant in this Agreement applicable to the Purchaser.
(c) No disclosure under this Section 5.6 shall be deemed to avoid
or cure any misrepresentation or breach of any party herein.
(d) If the information disclosed pursuant to a notice under
Section 5.6(a) constitutes a Material Adverse Effect, the
Purchaser shall be entitled to terminate this Agreement
without the Seller having any cause of action or recourse
against the Purchaser.
Section 5.7 ▇▇▇▇▇▇▇▇ MARKS.
The Corporation shall enter into a license (the "Trademark License")
with the Seller and such other parties as are necessary to allow the Corporation
to use and reproduce the ▇▇▇▇▇▇▇▇ Marks on the terms and conditions of the
license attached hereto as Schedule 5.7.
Section 5.8 ENTERPRISE SOFTWARE.
(a) Seller shall seek to obtain the consent of any licensors of
Enterprise Software to the transfer thereof to Corporation as
of the Closing Date on commercially reasonable and customary
terms. Seller's Parent and Purchaser shall (i) identify any
Enterprise Software that Purchaser believes will not be
required by
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Corporation as of the Closing Date or thereafter or that
Purchaser intends to replace with software from other vendors,
and (ii) develop a mutually acceptable transition plan to
ensure that, as of the Closing Date, Corporation will have the
rights to operate its business without limitation or
restriction and without violating any law or the proprietary
rights of any licensor of any Enterprise Software.
(b) To the extent that any Enterprise Software cannot be
transferred to Corporation on or prior to the Closing Date or
that the use of such Enterprise Software from and after the
Closing Date will violate any law or the terms of any
applicable license agreement, Seller's Parent shall obtain the
consent of the licensor to allow Corporation temporary
continued use of the Enterprise Software until the transfer of
the license rights or shall make the Enterprise Software
available to Corporation through the Transition Services
Agreement, without materially diminishing the functionality or
performance of same. To the extent that the Seller and
Purchaser determine that any Enterprise Software cannot be
assigned to Corporation on or prior to the Closing Date and
cannot be used or made available to Corporation through the
Transition Services Agreement without violating any law or
applicable license agreement, the parties shall determine
whether other software can be licensed or otherwise acquired
by Corporation in lieu of such Enterprise Software and shall
use commercially reasonable efforts to license or acquire such
alternate software for Corporation.
(c) The parties acknowledge and agree that it is their intent to
work together to ensure that Corporation (i) is not limited in
its operations in any way due to the failure to transfer or
otherwise make available to Corporation all necessary
Enterprise Software, (ii) is not required to violate any law
or license agreement as the result of using any Enterprise
Software as of the Closing Date or thereafter, and (iii) can
license or acquire, no later than 90 days after the Closing
Date (or such longer period as Purchaser may agree in
writing), in their own name and not through the Transition
Services Agreement, the rights to the Enterprise Software or
alternate software acceptable to Purchaser.
(d) The Seller's Parent shall reimburse the Purchaser and the
Corporation for any incremental costs and expenses that they
incur to use or acquire any Enterprise Software or alternative
pursuant to the terms of this Article, except the Purchaser
and the Corporation shall bear their own costs and expenses of
its efforts to evaluate Enterprise Software or any
alternatives.
Section 5.9 CROSS LICENSE AGREEMENT.
Software owned by Seller's Parent, The ▇▇▇▇▇▇▇▇ Companies, Inc., and
Enterprise or a subsidiary of The ▇▇▇▇▇▇▇▇ Companies, Inc., or ▇▇▇▇▇▇▇▇
Communications Solutions, LLC, which is used in the Business by the Corporation,
shall be licensed to Corporation pursuant to cross license agreements (the
"Cross License Agreement") substantially in the form attached as Schedule 5.9.
In the event that PEH succeeds to any such ownership in the above-described
software, the Seller and the Seller's Parent shall use commercially reasonable
efforts to cause PEH to settle the terms of and to sign a cross license
agreement in respect of such software.
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Section 5.10 TRANSITION SERVICES AGREEMENT.
Support services provided by Seller's Parent, The ▇▇▇▇▇▇▇▇ Companies,
Inc., and Enterprise or a subsidiary of The ▇▇▇▇▇▇▇▇ Companies, Inc., or
▇▇▇▇▇▇▇▇ Communications Solutions, LLC, which is used in the Business by the
Corporation, shall be provided to Corporation pursuant to transition services
agreements (the "Transition Services Agreement") substantially in the form
attached as Schedule 5.10. In the event that PEH acquires the means to provide
the above-described support services, the Seller and the Seller's Parent shall
use commercially reasonable efforts to cause PEH to sign a Transition Services
Agreement.
Section 5.11 DISTRIBUTION AGREEMENT.
Software applications owned by Seller's Parent, The ▇▇▇▇▇▇▇▇ Companies,
Inc., and Enterprise or a subsidiary of The ▇▇▇▇▇▇▇▇ Companies, Inc., or
▇▇▇▇▇▇▇▇ Communications Solutions, LLC, which is used in the Business by the
Corporation, shall be licensed to Corporation and the Corporation shall be
entitled to sublicense such software applications to its customers pursuant to a
distribution agreement (the "Distribution Agreement") substantially in the form
attached as Schedule 5.11. In the event that PEH succeeds to any such ownership
in the above-described software, the Seller and the Seller's Parent shall use
commercially reasonable efforts to cause PEH to settle the terms and sign a
distribution agreement in respect of such software.
Section 5.12 ASSETS TO BE PROVIDED BEFORE CLOSING.
Seller's Parent, The ▇▇▇▇▇▇▇▇ Companies, Inc. or a subsidiary of The
▇▇▇▇▇▇▇▇ Companies, Inc., or ▇▇▇▇▇▇▇▇ Communications Solutions, LLC and their
successors and assigns, which include without limitation PEH, shall provide the
assets listed in Schedule 2.5(d) to the Corporation prior to the Closing Date.
ARTICLE 6.
CONDITIONS TO CLOSING
Section 6.1 CONDITIONS TO OBLIGATIONS OF SELLER.
The obligations of Seller to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment or waiver by the Seller,
at or prior to the Closing, of each of the following conditions:
(a) Representations and Warranties; Covenants. The representations
and warranties of the Purchaser contained in this Agreement
shall be true and correct in all material respects as of the
Closing, with the same force and effect as if made as of the
Closing, other than such representations and warranties as are
made as of another date which shall be true and correct in all
material respects as of such date. The covenants contained in
this Agreement to be complied with by the Purchaser on or
before the Closing shall have been complied with in all
material respects, and Seller shall have received a
certificate of the Purchaser to such effect signed by a duly
authorized officer thereof.
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(b) Approvals. Any required consent, approval or waiting period
(and any extension thereof) applicable to the purchase of the
Purchased Shares contemplated hereby shall have been received,
expired or shall have been terminated, as appropriate. Without
limiting the generality of the foregoing, (i) either (a) the
Commissioner of Competition (the "Commissioner") shall have
issued an advance ruling certificate (an "ARC") under section
102 of the Competition Act in respect of the transaction
contemplated in this Agreement and shall not have subsequently
withdrawn or purported to have withdrawn such ARC prior to the
acquisition by the Purchaser of the Purchased Shares pursuant
to this Agreement or have stated or otherwise indicated that
he has obtained new information as a result of which he is no
longer satisfied that he would not have sufficient grounds on
which to apply to the Competition Tribunal under section 92 of
the Competition Act with respect to the transaction
contemplated in this Agreement; or (b) the applicable time
period under section 123 of the Competition Act shall have
expired, and the Commissioner or his authorized representative
shall have advised the Seller (on terms and in a form
satisfactory to the Seller) that the Commissioner does not
intend to make an application under section 92 of the
Competition Act in respect of the transaction contemplated in
this Agreement and neither the Commissioner nor any of his
representatives shall have rescinded or amended such advice;
and (ii) any applicable waiting period under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, and any
other applicable foreign competition laws, shall have expired.
(c) No Order. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule,
regulation, injunction or other order which is in effect and
has the effect of making the transactions contemplated by this
Agreement illegal or otherwise restraining or prohibiting
consummation of such transactions; provided, however, that the
parties hereto shall use their reasonable efforts to have any
such order or injunction vacated.
(d) The Excluded Assets. All actions shall have been taken to
distribute to Seller (or otherwise dispose of) all of the
assets and liabilities included in and as contemplated by
Section 2.5.
(e) Execution of the Ancillary Agreements. The Corporation and PEH
shall have entered into the Transition Services Agreement, the
Distribution Agreement and the cross license agreement between
the Corporation and PEH referred to in Section 5.9; and the
Corporation and TWC or its Affiliates shall have entered into
the Transition Services Agreement, the Trademark License and
the Cross License Agreement, all of which are referred to
collectively as the "Ancillary Agreements".
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Section 6.2 CONDITIONS TO OBLIGATIONS OF THE PURCHASER.
The obligations of the Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment or waiver by
the Purchaser, at or prior to the Closing, of each of the following conditions
precedent:
(a) The representations and warranties of the Seller, the Seller's
Parent and the Corporation contained in this Agreement, or in
any certificate or other document delivered to the Purchaser
pursuant hereto, shall be true and correct in all material
respects on or as of the Closing Date, with the same force and
effect as if made as of the Closing, other than such
representations and warranties as are made as of another date
which shall be true and correct in all material respects as of
such date. The covenants contained in this Agreement to be
complied with by Seller, the Seller's Parent or the
Corporation on or before the Closing shall have been complied
with in all material respects, and Purchaser shall have
received certificates from Seller to such effect signed by a
duly authorized officer thereof.
(b) Since December 31, 2000, except for the sale of the CNG
Business pursuant to the CNG Business Sale Agreement, no
change shall have occurred in the business, operations,
results of operations, assets, liabilities, capitalization or
condition (financial or otherwise), of the Corporation,
whether or not in the ordinary course of business, whether
separately or in aggregate with other occurrences or
developments, and whether insured against or not, which could
be reasonably expected to have a Material Adverse Effect on
the Corporation.
(c) At or before the Closing Date, there will have been obtained
from all appropriate federal, provincial, state, municipal and
other governmental or administrative bodies or any other
person all such approvals and consents in form and on terms
satisfactory to counsel for the Purchaser as may be required
in order to permit the change in ownership of the Purchased
Shares as herein contemplated without affecting or resulting
in any cancellation or termination of or reduction of any
right under any material permit, license, contract, agreement
or lease held by the Corporation.
(d) Without limiting the generality of Sub-section 6.2(c): (i)
either (a) the Commissioner of Competition (the
"Commissioner") shall have issued an advance ruling
certificate (an "ARC") under section 102 of the Competition
Act in respect of the transaction contemplated in this
Agreement and shall not have subsequently withdrawn or
purported to have withdrawn such ARC prior to the acquisition
by the Purchaser of the Purchased Shares pursuant to this
Agreement or have stated or otherwise indicated that he has
obtained new information as a result of which he is no longer
satisfied that he would not have sufficient grounds on which
to apply to the Competition Tribunal under section 92 of the
Competition Act with respect to the transaction contemplated
in this Agreement; or (b) the applicable time period under
section 123 of the Competition Act shall have expired, and the
Commissioner or his authorized representative shall have
advised the Purchaser (on terms and in a form satisfactory to
the Purchaser) that
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the Commissioner does not intend to make an application under
section 92 of the Competition Act in respect of the
transaction contemplated in this Agreement and neither the
Commissioner nor any of his representatives shall have
rescinded or amended such advice; and (ii) any applicable
waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, and any other applicable foreign
competition laws, shall have expired.
(e) No action or proceeding by law or in equity will be pending or
threatened by any person to enjoin or prohibit: (i) the
purchase and sale of the Purchased Shares contemplated hereby
or the right of the Purchaser to own the Purchased Shares, or
(ii) the right of each the Corporation to carry on the
Business.
(f) All actions shall have been taken to distribute to Seller (or
otherwise dispose of) all of the assets and liabilities,
included in and as contemplated by Section 2.5 and a
certificate from an officer of each of the Seller and the
Seller's Parent that the CNG Business has been sold pursuant
to the CNG Business Sale Agreement and all filings and
remittances have been made by the Corporation.
(g) No legislation (whether by statute, by-law, regulation or
otherwise) shall have been enacted, introduced or announced
which, in the reasonable opinion of the Purchaser, adversely
affects or may adversely affect the operations of the
Business.
(h) Any obligations or agreements of the Corporation which will or
may in any way materially inhibit the current or future
operations and businesses of the Purchaser and its
subsidiaries (including without limitation the Corporation, if
acquired), including without limitation, the supply agreement
between ATT Canada and the Corporation, effective upon Closing
Date, being cancelled or amended upon terms and conditions
satisfactory to the Purchaser.
(i) Execution and delivery of the Ancillary Agreements.
(j) The Seller and the Purchaser shall work co-operatively and in
good faith to cause PEH to enter into agreement(s) (the
"Canadian Customers Agreement") with the Purchaser, on terms
and conditions mutually satisfactory to the Purchaser and PEH
or otherwise effect the assignment of the Canadian portion of
the those agreements listed in Schedule 6.2(j) such that after
Closing, the Corporation will continue to serve such customers
in Canada, and receive revenues in Canada which relate to any
goods and services relating to the Business purchased by such
customers in Canada.
Section 6.3 REASONABLE EFFORTS.
Seller shall cause the conditions in Section 6.2 to be satisfied
provided that where such conditions are dependant upon third party performance,
the Seller shall use its reasonable efforts to obtain satisfaction of such
conditions. Purchaser shall cause the conditions referred to in Section 6.1 to
be satisfied provided that where such conditions are dependant upon third party
performance, the Purchaser shall use its reasonable efforts to obtain
satisfaction of such
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conditions. Except as expressly provided in this Agreement, each of the parties
agrees to use its reasonable efforts to assist and co-operate with the other
part hereto in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, including (i) the fulfilling of the conditions
of Closing, including the execution and delivery of all agreements or other
documents contemplated hereunder to be so executed and delivered, (ii) the
obtaining of all necessary waivers, consents and approvals from governmental or
regulatory agencies or authorities and the making of all necessary registrations
and filings (including filings with governmental or regulatory agencies or
authorities, if any) and the taking of all reasonable steps as may be necessary
to obtain any approval or waiver from, or to avoid any action or proceeding by,
any governmental agency or authority, (iii) the obtaining of all necessary
consents, approvals or waivers from third parties, and (iv) the defending of any
suits, actions or any other legal proceedings challenging this Agreement or the
consummation of the transactions contemplated hereby.
Section 6.4 NON-COMPETITION, CONFIDENTIALITY AND NON-SOLICITATION
(a) Confidentiality
(i) Seller and Seller's Parent
Up to and following completion of the transactions
contemplated by the
Sale and Purchase Agreement, each of the
Seller and the Seller's Parent shall hold in strict confidence
and shall not use, or disclose to any Third Party, any
confidential or proprietary information or material of any
kind relating to the Business, including financial data,
business plans, customer names and lists, products, services,
Intellectual Property, trade practices and know-how pertaining
to any of the Corporation, the Purchase Price and the terms of
this Agreement. The Seller and the Seller's Parent agree that
all restrictions contained in this Section 6.4(a) are
reasonable and valid and all defences to the strict
enforcement thereof by the Corporation and the Purchaser are
hereby waived by them.
Obligations of the Seller and the Seller's Parent arising
under this Section 6.4(a) do not apply to any information
that:
(A) is or becomes publicly available through no
act or omission of the Seller and the
Seller's Parent intending to use or disclose
such information;
(B) is furnished in good faith to the Seller and
the Seller's Parent by a Third Party
lawfully in possession of the information
and not in breach of any confidentiality
obligation;
(C) is reasonably required to be disclosed:
(A) to, or pursuant to the order of, a
court, tribunal or a governmental
authority (including Canada Customs
Revenue Agency or a regulated stock
exchange) where the
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Seller and the Seller's Parent are
required to make such disclosure
pursuant to any applicable laws; or
(B) by Seller and the Seller's Parent
in pursuing or defending Claims;
provided that prior to any such disclosure
in (i) or (ii) above, the Seller and the
Seller's Parent shall notify the Corporation
and the Purchaser promptly of such
requirement so that the Corporation and the
Purchaser may seek a protective order or
other appropriate remedy. If no such
protective order or other remedy is
obtained, the Seller and the Seller's Parent
will furnish or disclose only that
information that they are advised by their
legal counsel is required to be released by
such Applicable Laws, or in order to
properly pursue or defend any Claims, and
only to the Persons and to the extent
reasonably required, and the Seller and the
Seller's Parent will exercise their
commercial best efforts to obtain assurances
from such court, tribunal, or governmental
authority that confidential treatment will
be given to such information so disclosed;
or
(D) is disclosed to the Seller's and the
Seller's Parent's professional legal or
financial advisor provided such legal or
financial advisor is required to hold such
information in confidence on terms and
conditions substantially similar to the
terms and conditions imposed on the Seller
and the Seller's Parent by this Section.
(ii) Purchaser
Up to and following completion of the transactions
contemplated by the
Sale and Purchase Agreement, the Purchaser
shall hold in strict confidence and shall not use, or disclose
to any Third Party, any confidential or proprietary
information or material of any kind relating to the Seller and
the Seller's Parent, including financial data, business plans,
customer names and lists, products, services, Intellectual
Property, trade practices and know-how pertaining to any of
the Seller or the Seller's Parent, the Purchase Price and the
terms of this Agreement. The Purchaser agrees that all
restrictions contained in this Section 6.4(a) are reasonable
and valid and all defences to the strict enforcement thereof
by the Seller and the Seller's Parent are hereby waived by the
Purchaser.
Obligations of the Purchaser arising under this Section 6.4(a)
do not apply to any information that:
(A) is or becomes publicly available through no
act or omission of the Purchaser intending
to use or disclose such information;
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(B) is furnished in good faith to the Purchaser
by a Third Party lawfully in possession of
the information and not in breach of any
confidentiality obligation;
(C) is reasonably required to be disclosed:
(A) to, or pursuant to the order of, a
court, tribunal or a governmental
authority (including Canada Customs
Revenue Agency or a regulated stock
exchange) where the Purchaser is
required to make such disclosure
pursuant to any applicable laws; or
(B) by Purchaser in pursuing or
defending Claims;
provided that prior to any such disclosure
in (A) or (B) above, the Purchaser shall
notify the Seller and the Seller's Parent
and the Purchaser promptly of such
requirement so that the Seller and the
Seller's Parent may seek a protective order
or other appropriate remedy. If no such
protective order or other remedy is
obtained, the Purchaser will furnish or
disclose only that information that they are
advised by their legal counsel is required
to be released by such Applicable Laws, or
in order to properly pursue or defend any
Claims, and only to the Persons and to the
extent reasonably required, and the
Purchaser will exercise their commercial
best efforts to obtain assurances from such
court, tribunal, or governmental authority
that confidential treatment will be given to
such information so disclosed; or
(D) is disclosed to the Seller's and the
Seller's Parent's professional legal or
financial advisor provided such legal or
financial advisor is required to hold such
information in confidence on terms and
conditions substantially similar to the
terms and conditions imposed on the
Purchaser by this Section.
(b) Non-Competition and Non-Solicitation
(i) Except as specifically provided for herein, none of
the Seller and the Seller's Parent shall, directly or
indirectly (through one or more of the Seller or the
Seller's Affiliates), for a period following the
Closing Date until December 31, 2002:
(A) Compete with the Corporation in the business
of sales, procurement, installation, support
and/or maintenance activities in relation to
telecommunication equipment located on
enterprise customers' premises, excluding
any such sales, installation, support and/or
maintenance activities as are carried out in
support of the network and broadband media
businesses carried out by Seller's Parent.
(the "Restricted Business") within Canada;
or
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(B) enter into, invest, sponsor, promote, ▇▇▇▇▇▇
or otherwise participate in the ownership,
conduct, operation or management of any
person (including in the capacity of an
employee of or consultant to such person)
engaged primarily in a business similar to,
or the same as, the Restricted Business in
Canada in competition with Corporation,
provided that nothing herein shall prohibit
the acquisition by the Seller and the
Seller's Parent collectively of not more
than five percent (5%) of the total voting
power of any publicly traded person.
(ii) All parties to this Agreement, including the Seller
and the Seller's Parent, agree that if any part of
Section is held unenforceable at law or in equity,
then the foregoing covenant shall be reduced in scope
or limited as to term, geographical area or otherwise
to the extent deemed necessary, as determined by the
Corporation, acting in its absolute discretion, so
that the foregoing, as so reduced or limited, is
enforceable at law and in equity and the
unenforceable part shall be deemed to be severed from
the balance, which balance shall survive and be of
full of force and effect as among the parties to this
Agreement.
(iii) None of the Seller and the Seller's Parent shall,
directly or indirectly, for a period of one year
following the Closing Date, (a) solicit, directly or
indirectly, trade in the Restricted Business in
Canada, or (b) intentionally interfere with the
customer relationships of Corporation.
(iv) None of the Seller and the Seller's Parent shall,
directly or indirectly, for a period of one year
following the Closing Date, solicit or induce, or
attempt to solicit or induce, any Employee to leave
employment with the Corporation for any reason
whatsoever. For the purposes of this section, the
publication or advertisement by Seller and the
Seller's Parent of a general solicitation for
employment in a newspaper, trade journal or other
publication or media of general interest, and the
employment of any Employee who responds to a general
solicitation for employment not targeted at a
specific employee, shall not be a breach hereof. In
addition to the foregoing, neither the Seller nor the
Seller's Parent shall hire the employees listed in
Schedule 6.4(b)(iv) for a period of one year
following the Closing Date.
(v) The Purchaser shall not, directly or indirectly, for
a period of one year following the Closing Date,
solicit or induce, or attempt to solicit or induce,
any employee of Seller or any of its Affiliates that
the Purchaser has been introduced to in connection
with the transaction contemplated in this Agreement,
save and except the Employees, to leave such employ
for any reason whatsoever. For the purposes of this
section, the publication or advertisement by the
Purchaser of a general solicitation for employment in
a newspaper, trade journal or other publication or
media of general interest, and the employment of any
employee of Seller or any of its
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Affiliates who responds to a general solicitation for
employment not targeted at a specific employee, shall
not be a breach hereof.
ARTICLE 7.
INDEMNIFICATION
Section 7.1 SURVIVAL.
Subject to Section 7.2 and except as otherwise provided in Section
5.5.6, the representations, warranties, covenants and agreements contained in
this Agreement or any schedule, certificate, document or statement delivered
hereto or thereto shall survive the Closing. Notwithstanding the foregoing, the
representations and warranties contained in or made pursuant to this Agreement
or any schedule, certificate, document or statement delivered hereto or thereto
and the related indemnity obligations set forth in Section 7.2 shall terminate
on, and no claim or action with respect thereto may be brought after, the second
anniversary of the Closing Date, except that (i) the representations and
warranties with respect to Seller's title to the Purchased Shares set forth in
Section 3.3 and any claims arising from the sale of the CNG Business shall
survive until the expiration of the applicable statute of limitations, including
any extension thereof and except that (ii) the representations and warranties
set out in Section 3.18 as they apply to ownership and rights in intellectual
property embodied in those items set out in Schedule 7.1 shall survive for a
period of five (5) years following the Closing Date, which shall be reduced to
two (2) years to the extent that proof of the Corporation's ownership or rights
to use (and modify as the case may be) such software is provided to the
Purchaser. The expiration of any representation and warranty shall not affect
any Claim made prior to the date of such expiration, but shall extinguish a
party's rights under Claims not made prior to such date.
Section 7.2 INDEMNIFICATION.
(a) From and after the Closing Date, Seller and Seller's Parent
shall jointly and severally indemnify, defend, and hold the
Purchaser Indemnitees harmless from and against, and shall
reimburse them for, any and all demands, claims, losses,
liabilities, damages, costs, and expenses whatsoever
(including without limitation, any fines, penalties,
reasonable fees and disbursements of counsel incurred in
investigating or defending any of the foregoing, and other
reasonable expenses incurred investigating or defending any of
the foregoing or enforcing this Agreement) (individually a
"Loss" and collectively "Losses") sustained or incurred by a
Purchaser Indemnitee resulting or arising from (i) any
inaccuracy in or breach of any of Seller's representations and
warranties set forth in this Agreement or in any agreement
contemplated hereby or executed in connection herewith, or in
any Schedule or Exhibit hereto or thereto, or in any
certificate or other instrument delivered or to be delivered
by or on behalf of a Seller pursuant hereto or thereto, (ii)
any breach of any covenant, obligation or agreement of Seller
contained in this Agreement or in any agreement contemplated
hereby or executed in connection herewith, or in any Schedule
or Exhibit hereto or thereto, or in any certificate or other
instrument delivered or to be delivered by or on behalf of
Seller pursuant hereto or thereto, or (iii) any liabilities
and obligations
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related to the CNG Business and the Excluded Assets including,
without limitation, the assumption and satisfaction of
obligations by Milgo Solutions Canada Company under the terms
of the CNG Business Sale Agreement.
(b) From and after the Closing Date, the Purchaser and the
Corporation shall jointly and severally indemnify, defend, and
hold the Seller Indemnitees harmless from and against, and
shall reimburse them for, any and all Losses sustained or
incurred by a Seller Indemnitee resulting or arising from (i)
any inaccuracy in or breach of any of Purchaser's
representations or warranties set forth in this Agreement or
in any agreement contemplated hereby or executed in connection
herewith, or in any Schedule or Exhibit hereto or thereto, or
in any certificate or other instrument delivered or to be
delivered by or on behalf of Purchaser pursuant hereto or
thereto, or (ii) any breach of any covenant, obligation or
agreement of Purchaser contained in this or in any agreement
contemplated hereby or executed in connection herewith, or in
any Schedule or Exhibit hereto or thereto, or in any
certificate or other instrument delivered or to be delivered
by or on behalf of Purchaser pursuant hereto or thereto.
(c) Losses shall be computed net of payments received by the
Indemnified Party under any insurance policy or collected from
third parties with respect to such Losses. All Losses paid
pursuant to this Article 7 will be treated as adjustments to
the Purchase Price. However, if at any time and for any reason
the recipient of a payment on account of Losses becomes liable
for any Taxes in respect of such payment, the payor shall
indemnify and hold harmless the recipient from any such
liability for Taxes attributable to such payment and for any
further Taxes attributable to payments made pursuant to the
payor's obligation described in this sentence.
(d) The party making a claim (except for a claim for Taxes) under
this Section 7 is referred to as the "Indemnified Party" and
the party against whom such claims are asserted under this
Section 7 is referred to as the "Indemnifying Party". All
claims by any Indemnified Party under this Section 7 shall be
asserted and resolved as follows:
(i) in the event that any claim or demand for which an
Indemnifying Party would be liable to an Indemnified
Party hereunder is asserted against or sought to be
collected from such Indemnified Party by a third
party, the Indemnified Party shall with reasonable
promptness notify in writing the Indemnifying Party
of such claim or demand, specifying the nature of the
specific basis for such claim or demand, and the
amount or the estimated amount thereof to the extent
then feasible (which estimate shall not be conclusive
of the final amount of such claim and demand; the
"Claim Notice"); provided, however, that any failure
to give such Claim Notice will not be deemed a waiver
of any rights of the Indemnified Party except to the
extent the rights of the Indemnifying Party are
actually prejudiced by such failure. At the request
of any Indemnifying Party, the Indemnified Party
shall cooperate with the Indemnifying Party to make
claims under
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any insurance policies which may partially or wholly
reimburse the Indemnified or Indemnifying Party for
any Losses resulting from the claims or demands
specified in the Claim Notice and to make claims
against any third parties which may be wholly or
partially responsible for such Losses, and use
reasonable efforts to collect under such insurance
policies or from such third parties. The Indemnifying
Party, upon request of the Indemnified Party, shall
retain counsel (who shall be reasonably acceptable to
the Indemnified Party) to represent the Indemnified
Party and shall pay the fees and disbursements of
such counsel with regard thereto; provided, however,
that any Indemnified Party is hereby authorized prior
to the date on which it receives written notice from
the Indemnifying Party designating such counsel, to
retain counsel, whose fees and expenses shall be at
the expense of the Indemnifying Party, to file any
motion, answer or other pleading and take such other
action which it reasonably shall deem necessary to
protect its interests or those of the Indemnifying
Party until the date on which the Indemnified Party
receives such notice from the Indemnifying Party.
After the Indemnifying Party shall retain such
counsel, the Indemnified Party shall have the right
to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such
Indemnified Party unless (x) the Indemnifying Party
and the Indemnified Party shall have mutually agreed
to the retention of such counsel, or (y) the named
parties of any such proceeding (including any
impleaded parties) include both the Indemnifying
Party and the Indemnified Party and representation of
both parties by the same counsel would be
inappropriate due to actual or potential differing
interests between them. The Indemnifying Party shall
not, in connection with any proceedings or related
proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one such firm for
the Indemnified Party (except to the extent the
Indemnified Party retained counsel to protect its (or
the Indemnifying Party's) rights prior to the
selection of counsel by the Indemnifying Party). If
requested by the Indemnifying Party, the Indemnified
Party agrees to cooperate with the Indemnifying Party
and its counsel in contesting any claim or demand
which the Indemnifying Party defends. A claim or
demand may not be settled by the Indemnifying Party
without the prior written consent of the Indemnified
Party unless, as part of such settlement, the
Indemnified Party shall receive a full and
unconditional release reasonably satisfactory to the
Indemnified Party;
(ii) so long as any right to indemnification exists
pursuant to this Article 7, the affected parties each
agree to retain all books and records related to the
Claim Notice. In each instance, the Indemnified Party
shall have the right (subject to the attorney/client
privilege) to be kept fully informed by the
Indemnifying Party and its legal counsel with respect
to any legal proceedings. Any information or
documents made available to any party hereunder and
designated as confidential by the party providing
such information or documents and which is not
otherwise generally available
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to the public and not already within the knowledge of
the party to whom the information is provided (unless
otherwise covered by the confidentiality provisions
of any other agreement among the parties hereto, or
any of them), and except as may be required by
applicable law, shall not be disclosed to any third
Person (except for the representatives of the party
being provided with the information, in which event
the party being provided with the information shall
request its representatives not to disclose any such
information which is otherwise required hereunder to
be kept confidential).
(e) Anything contained in this Agreement to the contrary
notwithstanding, (i) Seller shall not be liable for any
amounts for which Purchaser is entitled to indemnification
unless and until the aggregate amount for which Purchaser is
entitled to indemnification from Seller pursuant to this
Agreement exceeds the threshold amount of One Million Dollars
($1,000,000) (the "Threshold"), at which ▇▇▇▇ ▇▇▇▇▇▇ shall be
liable for all amounts for which the Purchaser Indemnitees are
entitled to indemnification; and (ii) neither the Seller or
the Seller's Parent on the one hand, nor the Purchaser or the
Corporation on the other hand, shall be required to make
indemnification payments pursuant to this Section 7.2 that
exceed in the aggregate Nineteen Million Dollars
($19,000,000). In determining whether the foregoing Threshold
amount has been exceeded and in otherwise determining the
amount to which the Indemnified Party is entitled to assert a
claim for indemnification pursuant to this Section 7.2, only
actual, and not consequential or other special losses, shall
be indemnifiable.
Section 7.3 TAX MATTERS.
The rights and obligations of the parties with respect to
indemnification for any and all Taxes shall be governed by Section 5.5 except
that any amounts for which Purchaser is entitled to indemnification under
Section 5.5 shall form part of the aggregate amount for which Purchaser is
entitled to indemnification from Seller pursuant to this Agreement for the
purposes of Section 7.2(e) and will therefore be subject to the Threshold
provisions therein.
ARTICLE 8.
TERMINATION AND WAIVER
Section 8.1 TERMINATION.
This Agreement may be terminated at any time prior to the Closing:
(a) by the mutual written consent of Seller and Purchaser;
(b) by Purchaser, if any of the conditions set forth in Section
6.2 are not satisfied on or prior to, or, in the reasonable,
good faith determination of Purchaser, not capable of being
satisfied on or prior to the Closing Date, and shall not have
been waived by Purchaser;
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(c) by Seller, if any of the conditions set forth in Section 6.1
are not satisfied on or prior to, or, in the reasonable, good
faith determination of Seller, not capable of being satisfied
on or prior to the Closing Date, and shall not have been
waived by Seller;
(d) by the Purchaser if the sale of the CNG Business is not
completed, as provided in Section 2.5 of this Agreement;
(e) by any party if the Closing has not taken place by July
31,2001;
provided, however, that the party seeking termination pursuant to clause (b),
(c), (d) or (e) is not in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement.
Section 8.2 EFFECT OF TERMINATION.
In the event of termination of this Agreement as provided in Section
8.1, this Agreement shall forthwith become void and there shall be no liability
on the part of any party hereto except as set forth in, Section 5.3, Section
7.2, Section 9.1 and Section 9.3, and nothing herein shall relieve either party
from liability for any willful breach hereof.
Section 8.3 WAIVER.
At any time prior to the Closing, any party may (a) extend the time for
the performance of any of the obligations or other acts of any other party
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, or (c) waive
compliance with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party to be bound thereby or its solicitors on behalf of the party
to be bound. Any waiver of any term or condition shall not be construed as a
waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition, of this Agreement. The
failure of any party to assert any of its rights hereunder shall not constitute
a waiver of any of such rights.
ARTICLE 9.
MISCELLANEOUS
Section 9.1 EXPENSES.
Except as otherwise may be agreed in writing or as otherwise expressly
provided in this Agreement, all costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses, with the understanding that the legal fees and expenses and other
costs and expenses incurred by the Corporation are expenses of, and shall be
paid by, the Seller and not by the Corporation.
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Section 9.2 NOTICES.
All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been given or made when
delivered personally or three Business Days after having been sent by registered
or certified mail, postage prepaid, return receipt requested, or one Business
Day after having been sent by facsimile transmission or by Federal Express or
other comparable nationally recognized overnight courier service (receipt
requested), to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section):
If to Seller or Seller's Parent to:
▇▇▇▇▇▇▇▇ Communications, LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
P. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr., General Counsel
▇▇▇▇▇▇▇▇ Communications Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
A Professional Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Tower
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser to:
▇▇ - ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President,
Corporate Development and General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.3 PUBLIC ANNOUNCEMENTS.
Except as required by law, rules or regulations of any stock exchange
or Governmental Entity, from the date hereof through the Closing Date, no party
to this Agreement shall make, or cause to be made, any press release or public
announcement in respect of this Agreement or the transactions contemplated
hereby or otherwise communicate with any news media without the prior written
consent of the other party, and the parties shall cooperate as to the timing and
contents of any such press release or public announcement.
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Section 9.4 HEADINGS.
The descriptive headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 9.5 SEVERABILITY.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.
Section 9.6 ENTIRE AGREEMENT.
This Agreement (including the Schedules and the other documents and
instruments referred to herein) constitute the entire agreement of the parties
hereto with respect to the subject matter hereof and thereof and supersede all
prior agreements and undertakings, both written and oral, between the parties
hereto with respect to the subject matter hereof and thereof.
Section 9.7 ASSIGNMENT.
Neither this Agreement nor any of the parties' rights, interests or
obligations hereunder shall be assignable by operation of law or otherwise by
either party hereto without the prior written consent of the other parties
hereto, which consent may not be unreasonably withheld. Notwithstanding the
foregoing, Purchaser shall be entitled to assign this Agreement and it's rights,
interests and obligations under this Agreement to an Affiliate, provided however
that such assignment shall not relieve the Purchaser from its obligation to
complete the transaction and perform the Purchaser's obligations contemplated in
this Agreement on the terms described herein. Any attempted assignment of this
Agreement in breach of this provision shall be void and of no effect.
Section 9.8 NO THIRD PARTY BENEFICIARIES.
This Agreement shall be binding upon and inure solely to the benefit of
the parties hereto and their permitted assigns and nothing herein, express or
implied, is intended to or shall confer upon any Person other than the parties
hereto or their respective successors or assigns, any legal or equitable right,
benefit or remedy or any nature whatsoever under or by reason of this Agreement,
including without limitation any rights of employment.
Section 9.9 AMENDMENT.
This Agreement may not be amended or modified except by an instrument
in writing signed by, or on behalf of, Seller and Purchaser.
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Section 9.10 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the Province of
Ontario and the Federal laws of Canada applicable
therein.
Section 9.11 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
Section 9.12 FACSIMILE SIGNATURES.
This Agreement and any other document or agreement executed in
connection herewith (other than any document for which an originally executed
signature page is required by law) may be executed by delivery of a facsimile
copy of an executed signature page with the same force and effect as the
delivery of an originally executed signature page. In the event any party
delivers a facsimile copy of a signature page to this Agreement or any other
document or agreement executed in connection herewith, such party shall deliver
an originally executed signature page within three Business Days of delivering
such facsimile signature page or at any time thereafter upon request; provided,
however, that the failure to deliver any such originally executed signature page
shall not affect the validity of the signature page delivered by facsimile,
which has and shall continue to have the same force and effect as the originally
executed signature page.
Section 9.13 NO PRESUMPTION.
With regard to each and every term and condition of this Agreement and
any and all agreements and instruments subject to the terms hereof, the parties
hereto understand and agree that the same have or has been mutually negotiated,
prepared and drafted and if at any time the parties hereto desire or are
requested to interpret or construe any such term or condition or any agreement
on instrument subject hereto, no consideration shall be given to the issue of
which party hereto actually prepared, drafted or requested any term or condition
of this Agreement or any agreement or instrument subject hereto.
Section 9.14 RULES OF INTERPRETATION
In this Agreement and the Schedules:
TIME - time is of the essence in the performance of the Parties'
respective obligations;
CURRENCY - unless otherwise specified, all references to money amounts
are to lawful currency of the United States of America;
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;
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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;
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, or within any extension of the time agreed to by the Parties,
then, unless otherwise specified, the Party whose consent or approval
is required shall be conclusively deemed to have withheld its approval
or consent;
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;
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 or action taken on the
next Business Day following such day; and
INCLUSION - where the word "including" or "includes" appears in this
Agreement, it means "including (or includes) without limitation".
Section 9.15 SCHEDULES
The schedules to this Agreement, as listed below, are an integral part
of this Agreement:
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Section 9.16 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.
IN WITNESS WHEREOF, this Agreement has been duly executed by or on
behalf of each of the parties hereto as of the date first above written.
WCS, INC.
[SEAL]
Per: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
▇▇▇▇▇▇▇▇ COMMUNICATIONS, LLC
[SEAL]
Per: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and CEO
TELUS COMMUNICATIONS INC.
Per: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President, Corporate
Development and General Counsel
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EXHIBITS AND SCHEDULES
SCHEDULES: [TO BE PROVIDED]