Exhibit No. 99.1
May 28, 2003
▇▇▇▇ CANADA
- AND -
AMDOCS HOLDINGS ULC
SHARE PURCHASE AGREEMENT
TABLE OF CONTENTS
Article 1 INTERPRETATION........................................................................................ 1
1.1 DEFINITIONS................................................................................... 1
1.2 TIME OF THE ESSENCE........................................................................... 8
1.3 CALCULATION OF TIME........................................................................... 8
1.4 CURRENCY...................................................................................... 8
1.5 HEADINGS AND SECTION AND SCHEDULE REFERENCES.................................................. 8
1.6 PLURALS AND GENDER............................................................................ 9
1.7 STATUTORY REFERENCES.......................................................................... 9
1.8 CONSTRUCTION.................................................................................. 9
Article 2 Purchase and Sale of Purchased Shares................................................................. 9
2.1 PURCHASE AND SALE OF PURCHASED SHARES......................................................... 9
2.2 CONSIDERATION................................................................................. 10
Article 3 CLOSING ARRANGEMENTS.................................................................................. 10
3.1 PLACE OF CLOSING.............................................................................. 10
3.2 VENDOR'S DELIVERIES........................................................................... 10
3.3 PURCHASER'S DELIVERIES........................................................................ 10
Article 4 REPRESENTATIONS AND WARRANTIES........................................................................ 11
4.1 REPRESENTATIONS AND WARRANTIES OF THE VENDOR.................................................. 11
4.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............................................... 19
4.3 NATURE AND SURVIVAL OF VENDOR'S AND PURCHASER'S REPRESENTATIONS AND WARRANTIES................ 21
Article 5 INDEMNIFICATION....................................................................................... 22
5.1 INDEMNITY BY THE VENDOR....................................................................... 22
5.2 INDEMNITY BY THE PURCHASER.................................................................... 22
5.3 LIMITATIONS................................................................................... 22
5.4 NOTICE OF CLAIM............................................................................... 23
5.5 DIRECT CLAIMS................................................................................. 24
5.6 THIRD PARTY CLAIMS............................................................................ 24
5.7 SETTLEMENT OF THIRD PARTY CLAIMS.............................................................. 25
5.8 INTEREST ON CLAIMS............................................................................ 25
Article 6 COVENANTS OF THE PARTIES PRIOR TO CLOSING............................................................. 25
6.1 CORPORATION'S ACTIONS PRIOR TO CLOSING........................................................ 25
6.2 VENDOR'S ACTIONS PRIOR TO CLOSING............................................................. 26
6.3 PURCHASER'S ACTIONS PRIOR TO CLOSING.......................................................... 26
6.4 APPROVALS AND CONSENTS........................................................................ 26
6.5 ACCESS AND INFORMATION........................................................................ 27
6.6 COOPERATION ON TAX MATTERS.................................................................... 27
Article 7 CONDITIONS PRECEDENT TO THE PERFORMANCE BY THE PARTIES OF THEIR OBLIGTIONS UNDER THIS AGREEMENT....... 28
7.1 THE PURCHASER'S CONDITIONS.................................................................... 28
7.2 CONDITIONS OF THE VENDOR...................................................................... 30
7.3 WAIVER BY PURCHASER........................................................................... 32
7.4 WAIVER BY VENDOR.............................................................................. 33
Article 8 ADDITIONAL COVENTANTS................................................................................. 33
8.1 RELEASE OF THE CORPORATION AND THE PURCHASER.................................................. 33
8.2 RELEASE OF THE VENDOR......................................................................... 33
Article 9 TERMINATION........................................................................................... 34
9.1 TERMINATION................................................................................... 34
Article 10 GENERAL.............................................................................................. 34
10.1 PUBLIC NOTICES................................................................................ 34
10.2 EXPENSES...................................................................................... 35
10.3 FURTHER ASSURANCES............................................................................ 35
10.4 ASSIGNMENT AND ENUREMENT...................................................................... 35
10.5 ENTIRE AGREEMENT.............................................................................. 35
10.6 WAIVER........................................................................................ 36
10.7 NOTICES....................................................................................... 36
10.8 SEVERABILITY.................................................................................. 37
10.9 EXECUTION BY FACSIMILE........................................................................ 37
10.10 COUNTERPARTS.................................................................................. 37
10.11 GOVERNING LAW................................................................................. 37
10.12 RESOLUTION BY NEGOTIATION..................................................................... 37
-ii-
10.13 ARBITRATION................................................................................... 38
10.14 CONSENT....................................................................................... 39
10.15 LANGUAGE...................................................................................... 39
10.16 TENDER OF DOCUMENTS AND PAYMENT OF MONEY...................................................... 39
10.17 NON-MERGER.................................................................................... 40
-iii-
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of the 28th day of May, 2003.
B E T W E E N:
AMDOCS HOLDINGS ULC, an unlimited liability company
incorporated under the laws of Nova Scotia
(the "PURCHASER")
- and -
▇▇▇▇ CANADA, a corporation incorporated under the laws
of Canada
(the "VENDOR")
RECITALS:
1. The Vendor is the registered and beneficial owner of 918,500.99 918,500.99
Common Shares of the Corporation, which represent approximately 89.9% of the
issued and outstanding share capital of the Corporation (the "PURCHASED
SHARES"), and Amdocs Canada Inc. is the registered and beneficial owner of
103,190.42103,190.42 Common Shares of the Corporation, which, together with the
Purchased Shares, represent 100% of the issued and outstanding share capital of
the Corporation; and
2. The Vendor wishes to sell to the Purchaser and the Purchaser wishes to
purchase from the Vendor the Purchased Shares.
NOW THEREFORE in consideration of the mutual covenants in this Agreement
and for other consideration (the receipt and sufficiency of which are
acknowledged), the Parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Agreement, except as otherwise expressly provided, the following
words and expressions have the following meanings:
"AFFILIATE" has the meaning given to that term in the Canada Business
Corporations Act;
"AGREEMENT", "THIS AGREEMENT", "THE AGREEMENT", "HEREOF", "HEREIN",
"HERETO", "HEREBY", "HEREUNDER" and similar expressions mean this share
purchase agreement, including all of its Schedules, Exhibits and all
instruments supplementing, amending or confirming this Agreement. All
references to "ARTICLES" or "SECTIONS" refer to the specified Article or
Section of this Agreement;
"AMDOCS GUARANTEE" means the guarantee given by Amdocs Limited in favour
of the Vendor to be entered into concurrently with the Closing, in a form
satisfactory to the Vendor, acting reasonably;
"ARBITRATION AWARD" has the meaning attributed thereto in Section 10.13;
"ARBITRATOR" has the meaning attributed thereto in Section 10.13;
"ARM'S LENGTH" has the meaning attributed to that term in the Tax Act and
the related jurisprudence;
"AUTHORITY" means any federal, provincial, state, municipal, local or
district governmental or public department, court, commission, board,
bureau, agency, ministry, department, tribunal, or other representative or
political subdivision thereof or instrumentality or any law, rule, or
regulation making entity in Canada;
"BALANCE SHEETS" means the draft audited balance sheet of the Corporation
as at December 31, 2002 and the unaudited balance sheet of the Corporation
as at March 31, 2003 forming part of the Financial Statements;
"BUSINESS" means the business of the Corporation presently carried on by
the Corporation;
"BUSINESS DAY" means any day which is not a Saturday, a Sunday or a day
observed as a holiday under the laws of the Provinces of Ontario and
Quebec or the federal laws of Canada applicable to the Provinces of
Ontario and Quebec and on which the principal commercial banks located in
the relevant city are open for business during normal banking hours;
"CLAIM" has the meaning given in Section 5.1;
"CLOSING" means the completion of the purchase and sale of the Purchased
Shares contemplated by this Agreement;
"CLOSING DATE" or "DATE OF CLOSING" means the later of July 1, 2003, or
two Business Days after the Business Day in which all Regulatory Approvals
are received or such other date as the Purchaser and the Vendor may agree
upon in writing;
"COMMON SHARES" means the common shares in the capital of the Corporation,
as described in its articles of incorporation;
"CONSENT" means the consent or approval of any party to a Material
Contract with the Corporation to the completion of the sale of the
Purchased Shares contemplated by this Agreement, the execution of this
Agreement and the Closing, as required under the terms of such Material
Contract, without any change being made to the existing Material Contract,
in a form satisfactory to the Purchaser and the Vendor, acting reasonably;
"CORPORATION" means Certen Inc., a corporation incorporated under the laws
of Canada;
"CORPORATION RELEASEES" means the Corporation, the Purchaser, Amdocs
Software Systems Ltd., Amdocs Canada Inc. and their respective direct and
indirect shareholders, controlling persons, officers, directors,
subsidiaries, employees, agents, partners, representatives, advisors,
members, Affiliates, predecessors, successors and assigns;
"DISPUTE" has the meaning attributed thereto in Section 10.12;
"ENCUMBRANCE" means any mortgage, lien (including any construction lien or
certificate of action filed with respect thereto), pledge, charge,
security interest, any third party rights of any nature whatsoever, any
payment obligations, royalties, restriction, claim, set-off or encumbrance
of any nature whatsoever;
"ENVIRONMENTAL LAWS" means all federal, provincial, municipal or local
laws, statutes, regulations, by-laws, ordinances, rules, policies,
guidelines, orders, directives and other requirements of any government or
political subdivision, agency or instrumentality or of any court, tribunal
or other similar body, relating to environmental or health matters,
including legislation governing the labelling, use and storage of
Hazardous Substances;
"ENVIRONMENTAL ORDERS" means applicable orders, decisions, or the like
rendered by any Authority under or pursuant to any Environmental Laws;
"ETA" means the Excise Tax Act (Canada) as amended from time to time;
"FINANCIAL STATEMENTS" means the draft audited financial statements of the
Corporation for the fiscal year ended December 31, 2002, and the unaudited
financial statements of the Corporation for the fiscal quarter ended March
31, 2003 consisting of a balance sheet as of that date, a statement of
income (loss) and retained earnings (deficit) a statement of changes in
financial position, and in respect of the draft audited Financial
Statements of the Corporation for the fiscal year ended December 31, 2002,
the draft report of the auditors with all notes thereto, a copy of which
is attached as SCHEDULE 4.1(G)(II);
"GST" means all taxes payable under the ETA and any reference to a
specific provision of the ETA shall refer to any successor provision
thereto of like or similar effect;
"HAZARDOUS SUBSTANCES" means PCBs, asbestos, urea formaldehyde foam
insulation or any other substance or material that is prohibited,
controlled or regulated under any Environmental Laws;
"INTELLECTUAL PROPERTY" means any and all domestic and foreign inventions,
patents, trade-marks, proposed trade-marks, trade names, copyrights,
industrial designs, business names, certification marks, distinguishing
guises, business styles and other intellectual property, whether or not
registered, that are owned by or licensed to the Corporation, and all
applications in respect thereof;
"INDEMNIFIED PARTY" means a Person whom the Vendor or the Purchaser, as
the case may be, has agreed to indemnify under Article 5;
"INDEMNIFYING PARTY" means, in relation to an Indemnified Party, the Party
to this Agreement that has agreed to indemnify that Indemnified Party
under Article 5;
"LOCATION" means any premises utilized in the Business;
"MASTER OUTSOURCING AGREEMENT" means the Amended and Restated Master
Outsourcing Services Agreement, dated as of April 26, 2001, entered into
by and between the Corporation and ▇▇▇▇ Canada, as amended;
"MASTER LICENSE AGREEMENT" means the Master License and Services
Agreement, dated as of January 26, 2001, entered into by and between the
Corporation and Amdocs Software Systems Ltd., as amended;
"MATERIAL ADVERSE EFFECT" means, where used in relation to the
Corporation, a material adverse effect on the business, operations,
assets, financial condition or prospects of the Corporation;
"MATERIAL CONTRACTS" means the agreements listed in SCHEDULE 4.1(G)(VIII);
"NOTICE OF ARBITRATION" has the meaning attributed thereto in Section
10.13;
"OPERATIONAL CONSENTS" means those consents listed in Schedule 6.4(a);
"ORST" means tax imposed under the Retail Sales Tax Act (Ontario),
regulations thereto, orders, orders in council, by laws and similar laws
as applied by the Ontario Ministry of Finance;
"PARTIES" means, collectively, the Vendor and the Purchaser and "PARTY"
means any of them;
"PENSION AUTHORITIES" means the applicable federal and provincial pension
regulatory authorities, including Canada Customs and Revenue Agency;
"PENSION CONTRACTS" means Plan Terms and all texts and amendments to all
collective bargaining agreements, employment contracts, trust and funding
agreements and insurance contracts relating to the Plans;
"PENSION DOCUMENTS" means text and amendments to all Plans, trust and
funding agreements and amendments, applicable insurance contracts, the
most recent actuarial valuation and the most recent annual information
return relating to the Plans;
"PENSION LEGISLATION" means the applicable provincial or federal pension
benefits legislation and, where applicable, the Tax Act;
"PERSON" includes an individual, partnership, unincorporated association,
organization, syndicate, body corporate, joint venture, trust and a
trustee, executor, administrator or other legal or personal
representative, the Crown, any Environmental Authority and any other
entity recognized by law;
"PLANS" means a plan or plans registered under Pension Legislation and
which provide pensions for employees and former employees of the
Corporation and their beneficiaries and, where applicable, includes:
(i) the assets and funds maintained to provide benefits under the Plans;
and
(ii) Plan Terms;
"PLAN TERMS" means the terms and conditions of all Plan texts and
amendments thereto;
"PREDECESSORS" means any owner, occupier or Person with or who previously
had charge, management or control of any Real Property;
"PRIME RATE" means the rate of interest per annum quoted by Canadian
Imperial Bank of Commerce from time to time as its reference rate for
Canadian dollar demand loans made to its commercial customers in Canada
and which it refers to as its "prime rate", as such rate may be changed by
it from time to time;
"PURCHASE PRICE" has the meaning attributed thereto in Section 2.2;
"PURCHASED SHARES" means the 918,500.99 issued and outstanding Common
Shares of the Corporation owned by the Vendor, being the only securities
of the Corporation owned by the Vendor;
"PURCHASER'S KNOWLEDGE" means (i) actual knowledge of information which
has been communicated by the Vendor and/or the Corporation to the
Purchaser's
Representatives in writing within the Relevant Period, or (ii) actual
knowledge of information which has been communicated by the Vendor and/or
the Corporation to any of the Purchaser's representatives in Canada in
writing within the Relevant Period, and communicated in writing by such
representatives to the Purchaser's Representatives within the Relevant
Period;
"PURCHASER'S RELEASE" has the meaning attributed thereto in Section 8.1;
"PURCHASER'S REPRESENTATIVES" means any of the following individuals:
▇▇. ▇▇▇▇ ▇▇▇▇, Mr. Amiram ▇▇▇ and ▇▇. ▇▇▇ ▇▇▇▇;
"QST" means all taxes payable under the QSTA, as amended from time to
time;
"QSTA" means An Act respecting Quebec Sales Tax (Quebec) and any reference
to a specific provision of the QSTA shall refer to any successor provision
thereto of like or similar effect;
"REAL PROPERTY" means any real property, whether owned or leased, and used
for the conduct of the Business or previously used for such purpose;
"REGULATORY APPROVALS" means all necessary approvals, permits, sanctions,
rulings, orders or consents from any Authority or self-regulatory
organization within or outside of Canada with respect to the transactions
contemplated by this Agreement, including, but not limited to, the
regulatory approvals set forth in SCHEDULE 4.1(F);
"RELEVANT PERIOD" means the period of time commencing on March 25, 2003
and ending on May 28, 2003;
"SALES AND RELATED TAXES" means GST, QST, ORST, sales and use, land
transfer tax, customs or excise duty, excise tax, turnover or value added
tax, transfer tax, business transfer tax, telecommunications tax and
similar taxes, including any interest, fines, additions and penalties
thereon;
"TAX" means all Sales and Related Taxes and all governmental taxes,
levies, duties, assessments, reassessments and other charges of any nature
whatsoever, whether direct or indirect, including without limitation
income tax, profits tax, gross receipts tax, corporation tax, sales and
use tax, wage tax, payroll tax, worker's compensation levy, capital tax,
stamp duty, real and personal property tax, land transfer tax, customs or
excise duty, excise tax, turnover or value added tax on goods sold or
services rendered, withholding tax, social security and employment
insurance charges or retirement contributions, and any interest, fines,
additions to tax and penalties in connection therewith;
"TAX ACT" means the Income Tax Act (Canada);
"TAX RETURN" means any return, report, information return, election,
designation or other document (including any related or supporting
information) with respect to Taxes, each as amended;
"TERMINATION DATE" shall have the meaning as set forth in Section 9.1;
"THIRD PARTY CLAIM" has the meaning given in Section 5.4;
"TIME OF CLOSING" means 10:00 a.m. (Toronto time) on the Closing Date or
such other time as the Purchaser and the Vendor may agree upon;
"TRANSITION AGREEMENT" means the Transition Agreement, dated as of May 28,
2003, entered into by and between the Corporation and the Vendor;
"UNANIMOUS SHAREHOLDERS AGREEMENT" means the Unanimous Shareholders
Agreement, dated January 26, 2001, entered into by and between the Vendor,
the Corporation and Amdocs Canada Inc., as amended;
"UNANIMOUS SHAREHOLDERS AGREEMENT TERMINATION AGREEMENT" means the
agreement terminating the Unanimous Shareholders Agreement to be entered
into between the Corporation, the Vendor and Amdocs Canada Inc.
concurrently with the Closing, in the form agreed to by the Parties,
acting reasonably;
"VENDOR RELEASEES" means the Vendor, and its direct and indirect
shareholders, controlling persons, officers, directors, subsidiaries,
employees, agents, partners, representatives, advisors, members,
Affiliates, predecessors, successors and assigns;
"VENDOR'S KNOWLEDGE" means the knowledge of the Vendor after due inquiry
where such due inquiry is limited to the Chief Financial Officer of the
Corporation;
"VENDOR'S RELEASE" has the meaning attributed thereto in Section 8.2.
1.2 TIME OF THE ESSENCE
Time shall be of the essence of each provision of this Agreement. Any
extension, waiver or variation of any provision of this Agreement shall not be
deemed to affect this provision and there shall be no implied waiver of this
provision.
1.3 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. If the last day of any such time period is not a Business Day, such time
period shall be extended to the next Business Day following the day on which it
would otherwise end.
1.4 CURRENCY
Unless otherwise specified, all references to amounts of money in this
Agreement refer to Canadian currency.
1.5 HEADINGS AND SECTION AND SCHEDULE REFERENCES
(1) The descriptive headings preceding Articles and Sections of this
Agreement are inserted solely for convenience of reference and are not intended
as complete or accurate descriptions of the content of such Articles or
Sections. The division of this Agreement into Articles and Sections shall not
affect the interpretation of this Agreement.
(2) Unless the context requires otherwise, references in this Agreement to
Sections, Exhibits and Schedules are to Sections, Exhibits and Schedules of this
Agreement. The Exhibits and Schedules to this Agreement are as follows:
Exhibit A - Purchaser's Release
Exhibit B - Vendor's Release
Schedule 4.1(c) - Binding Agreement, Validity of Transaction
Schedule 4.1(d) - Capitalization
Schedule 4.1(f) - Consents and Regulatory Approvals
Schedule 4.1(g)(ii) - Financial Statements
Schedule 4.1(g)(v)(a) - Encumbrances
Schedule 4.1(g)(v)(b) - Leased Property and Licenses
Schedule 4.1(g)(v)(c) - Real Property Leases and Subleases
Schedule 4.1(g)(v)(d) - Assets
Schedule 4.1(g)(vi) - Litigation
Schedule 4.1(g)(viii) - Material Contracts
Schedule 4.1(g)(ix)(a) - Employees and Independent Contractors
Schedule 4.1(g)(ix)(c) - Collective Bargaining
Schedule 4.1(g)(ix)(d) - Outstanding Labour Claims
Schedule 4.1(g)(x) - List of Benefits/Pension Plans
Schedule 4.1(g)(xii) - Intellectual Property
1.6 PLURALS AND GENDER
The use of words in the singular or plural, or referring to a particular
gender, shall not limit the scope or exclude the application of any provision of
this Agreement to such persons or circumstances as the context otherwise
permits.
1.7 STATUTORY REFERENCES
Any reference to a statute shall mean the statute in force as at the date
of this Agreement (together with all regulations promulgated thereunder) as the
same may be amended, re-enacted, consolidated or replaced from time to time, and
any successor statute thereto, unless otherwise expressly provided.
1.8 CONSTRUCTION
The words "including", "include", and "includes" shall mean "including
without limitation", "include, without limitation" and "includes, without
limitation", respectively.
ARTICLE 2
PURCHASE AND SALE OF PURCHASED SHARES
2.1 PURCHASE AND SALE OF PURCHASED SHARES
Subject to the terms and conditions of this Agreement, at the Time of
Closing, the Vendor (as beneficial and registered owner) shall sell the
Purchased Shares to the Purchaser, free and clear of all Encumbrances, and the
Purchaser shall purchase the Purchased Shares. At the Closing hereunder, the
Purchaser shall receive good and valid title to such Purchased Shares, free and
clear of all Encumbrances.
2.2 CONSIDERATION
The consideration to be paid by the Purchaser for the Purchased Shares
shall be $89,145,280 (eight nine million, one hundred and forty five thousand,
two hundred eighty Canadian dollars) (the "PURCHASE PRICE").
ARTICLE 3
CLOSING ARRANGEMENTS
3.1 PLACE OF CLOSING
The Closing shall take place at the offices of BLAKE, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, SUITE 2300, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ at the Time of Closing or at
such other place and time as may be agreed upon by the Purchaser and the Vendor.
3.2 VENDOR'S DELIVERIES
(1) At the Time of Closing, the Vendor shall deliver or cause to be
delivered to the Purchaser the following documents:
(a) share certificates representing the Purchased Shares duly endorsed
in blank for transfer, or irrevocable transfer powers of attorney
with respect to the Purchased Shares, duly executed in blank, with
such signatures guaranteed to the satisfaction of the Purchaser,
acting reasonably;
(b) the minute books, share certificate books and corporate seals of the
Corporation;
(c) a resignation and release executed by each of the directors of the
Corporation which were designated by the Vendor in the form agreed
to by the Parties, acting reasonably;
(d) any documents or instruments required pursuant to the provisions of
Section 10.3.
(2) At the Time of Closing, the Vendor shall take such steps as shall be
necessary to cause the Corporation to enter the Purchaser upon the books of the
Corporation as the holder of the Purchased Shares and to issue a share
certificate to the Purchaser representing the Purchased Shares.
3.3 PURCHASER'S DELIVERIES
At the Time of Closing, the Purchaser shall deliver or cause to be
delivered to the Vendor the following documents and payments:
(a) the Purchase Price shall be paid by the Purchaser in cash or
immediately available funds;
(b) a release duly executed by the Corporation in favour of each of the
directors of the Corporation which were designated by the Vendor in
the form agreed to by the parties, acting reasonably;
(c) the Amdocs Guarantee, duly executed by Amdocs Limited; and
(d) any documents or instruments required pursuant to the provisions of
Section 10.3.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF THE VENDOR
The Vendor represents and warrants to the Purchaser, and acknowledges that
the Purchaser is relying on the representations and warranties in completing the
transactions contemplated by this Agreement (and the Purchaser acknowledges and
agrees that the Vendor is not providing any representations or warranties in
this Agreement with respect to the operations of the Corporation after the
Closing) that as of the date hereof:
(a) CORPORATE
The Corporation is a corporation duly incorporated and organized and
is validly existing under the laws of Canada. The Corporation has
the requisite corporate power and authority to own or lease its
properties and to carry on the Business as presently conducted. The
Corporation has no subsidiaries and has not agreed to acquire (i)
any of the outstanding shares or securities convertible into shares
of any Person, or (ii) any participating interest in any Person.
(b) EXECUTION AND DELIVERY
The Vendor has all necessary corporate power, authority and capacity
to enter into this Agreement and to perform its obligations
hereunder and the execution and
delivery of this Agreement and the performance by the Vendor of its
obligations hereunder has been duly authorized by all necessary
corporate action on the part of the Vendor and the Corporation.
(c) BINDING AGREEMENT, VALIDITY OF TRANSACTIONS
This Agreement constitutes a legal, valid, and binding obligation of
the Vendor, enforceable against the Vendor in accordance with its
terms (subject, as to the enforcement of remedies, to bankruptcy,
reorganization and insolvency laws relating to or affecting
creditors' rights generally and subject to the availability of
equitable remedies). Except as set out in SCHEDULE 4.1(C), neither
the execution and delivery of this Agreement by the Vendor nor the
performance or consummation of the transactions contemplated hereby
by the Vendor conflict materially with, result in the material
breach (with or without the giving of notice or lapse of time, or
both) or violation of, or result in the acceleration or change of
any material obligations of the Corporation, cause the expiration,
termination, loss or change in terms or costs, or cancellation of
any material right or privilege and will not cause the creation of
any material right or material interest of any third party with
respect to the Corporation or the Purchased Shares under (i) any
applicable law, rule or regulation, judgment, order, writ, decree,
permit or license to which the Vendor is bound, or (ii) any Material
Contract.
(d) CAPITALIZATION
The authorized share capital of the Corporation is (i) an unlimited
number of Common Shares, of which Common Shares are issued and
outstanding, and (ii) an unlimited number of Non Voting Preference
Shares, none of which are issued or outstanding. The issued and
outstanding share capital has been duly and validly issued and is
outstanding as fully paid and non-assessable shares in the capital
of the Corporation. Except as set forth in SCHEDULE 4.1(D) attached
hereto, there are no outstanding securities convertible into or
exchangeable or exercisable for any shares of the capital stock of
the Corporation, nor does the Corporation have outstanding any
rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance of, any
shares of its capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital stock.
(e) OWNERSHIP OF PURCHASED SHARES
The Purchased Shares constitute approximately % of the issued and
outstanding shares in the capital of the Corporation. The Vendor is,
and at the Time of Closing will be, the only registered and
beneficial owner of the Purchased Shares, free and clear of any
Encumbrances or rights of others (other than the rights of the
Purchaser hereunder). Following the execution of the Unanimous
Shareholders Agreement Termination Agreement, there will be no
binding contract, option or other right of another to sell,
transfer, assign, pledge, charge, mortgage or in any
other way dispose of or encumber any of the Purchased Shares (or any
rights thereof) other than pursuant to this Agreement. Immediately
following the Closing and the execution of the Unanimous
Shareholders Agreement Termination Agreement, the Vendor shall not
(i) own or have any rights in any shares of capital stock of the
Corporation, (ii) own or have any rights in any securities
convertible into or exchangeable or exercisable for any shares of
the capital stock of the Corporation, or (iii) have any rights to
subscribe for or to purchase, or any options for the purchase of, or
any agreements providing for the issuance of, any shares of capital
stock or any securities convertible into or exchangeable or
exercisable for any shares of its capital stock of the Corporation.
(f) CONSENTS
Except as set out in SCHEDULE 4.1(F), no Consent, Regulatory
Approval, or declaration, filing (other than administrative filings
with tax authorities, companies registries and the like) or
registration with, any third party or any Authority is required to
be made or obtained by the Vendor and/or the Corporation in order to
complete the sale of the Purchased Shares as contemplated by this
Agreement.
(g) REPRESENTATION RELATING TO THE CORPORATION
(I) LICENSES, PERMITS AND AUTHORIZATIONS
The Corporation has conducted the Business in material compliance
with, and the Corporation has made all material filings and
registrations and holds all material licenses, permits and
authorizations necessary for the lawful operation of the Business
pursuant to, all applicable statutes, laws, ordinances, rules and
regulations of all Authorities having jurisdiction over the
Corporation or over any part of the Business, all of which licenses,
permits and authorizations are in good standing with no violations
in respect thereof as of the date of this Agreement. Without
limitation to the aforementioned, the Business and the Corporation
are not subject to, the Telecommunications Act (Canada), the
Radiocommunication Act (Canada), the ▇▇▇▇ Canada Act (Canada) and
any decisions, orders, rulings or regulations made pursuant thereto.
(II) FINANCIAL STATEMENTS
The Financial Statements present fairly and accurately the financial
position of the Corporation as of December 31, 2002 and of March 31,
2003, and the results of operation, cash flows and changes in
financial position for the period then ended, in all material
respects and have been prepared in accordance with Canadian
generally accepted accounting principles, consistently applied with
prior fiscal years of the Corporation. The Balance Sheets present
fairly and accurately a true and complete statement of the assets,
liabilities (whether accrued, absolute, contingent or otherwise) and
financial condition of the Corporation as at
December 31, 2002 and March 31, 2003, respectively, and the
statement of income (loss) and retained earnings (deficit) and
statement of changes in financial position forming a part of the
Financial Statements accurately set forth the results of the
operations of the Corporation and the source and application of the
funds thereof throughout the periods covered thereby. The
Corporation has not produced nor has it had prepared financial
statements for any period ending, or as at a date, after nor is the
Vendor in possession of such financial statements.
(III) ABSENCE OF UNDISCLOSED LIABILITIES
Except to the extent reflected or reserved against in the Balance
Sheets (including the notes thereto) or incurred subsequent to the
date of the Balance Sheet and disclosed as a liability in any of the
Schedules attached hereto and except normal trade creditors payable
in the ordinary and normal course of business consistent with past
practices, the Corporation does not have any outstanding liabilities
(whether accrued, absolute or contingent) of the type required to be
reflected as liabilities on a balance sheet prepared in accordance
with Canadian generally accepted accounting principles.
(IV) TAX MATTERS
(a) The tax liability of the Corporation for previous taxation periods
is as indicated in its Tax Returns. All Taxes shown as due on such
Tax Returns or otherwise due or claimed to be due by any
governmental entity have been paid. All installments, assessments
and reassessments of which the Corporation is aware of or has
received notice of and all other Taxes which are due and payable by
it have been paid in full. Adequate provision in accordance with
Canadian generally accepted accounting principles has been made by
the Corporation in the Balance Sheets for any Taxes accrued but not
yet due at the date of the Balance Sheets, or for the payment of any
Tax installments due in respect of the current taxation year of the
Corporation. Except to the extent reflected or reserved against in
the Balance Sheets, the Corporation is not liable for any Taxes. No
deficiencies for Taxes have been proposed, asserted or assessed
against the Corporation that are not adequately reserved against;
(b) The Corporation has on a timely basis filed all Tax Returns required
to be filed by it. All such Tax Returns are true, correct and
complete in all material respects;
(c) The Corporation has properly withheld and remitted to the proper
authority on a timely basis and in a form required under the
appropriate legislation, all Tax (including income tax, Canada
Pension Plan contributions and employment insurance premiums and any
other deductions) required to be withheld and remitted by it;
(d) The Vendor is not a non-resident of Canada within the meaning of the
Tax Act;
(e) The Corporation has charged, collected, remitted, paid and/or
self-assessed all applicable Sales and Related Taxes to the
appropriate Authority and/or in the manner and as required by the
applicable Sales and Related Taxes legislation. The Corporation has
not claimed any input tax credit, input tax refund, refund, rebate,
credit or other tax recovery pursuant to the ETA, QSTA or other
Sales and Related Taxes legislation to which it is not entitled;
(f) The Vendor and/or ▇▇▇▇ Mobility Inc., as applicable, have charged
and collected from the Corporation all applicable Sales and Related
Taxes in respect of supplies made by the Vendor and/or ▇▇▇▇ Mobility
Inc. to the Corporation and remitted such Sales and Related Taxes to
the appropriate Authority in the manner and as required by the ETA,
QSTA and other Sales and Related Taxes legislation; and
(g) The Vendor and/or ▇▇▇▇ Mobility Inc., as applicable, has paid all
applicable Sales and Related Taxes on services and tangible personal
property provided by the Corporation to the Vendor and ▇▇▇▇ Mobility
Inc.
(V) PROPERTY
(a) Except as disclosed in the Financial Statements or in SCHEDULE
4.1(G)(V)(A), the Corporation has good and marketable title to all
of its properties, interests in properties and assets, real and
personal, including those reflected on the Financial Statements or
acquired since the date of the Financial Statements (except as since
transferred, sold or otherwise disposed of in the ordinary and
normal course of business), free and clear of all Encumbrances of
any kind or character.
(b) SCHEDULE 4.1(G)(V)(B) sets forth a true and complete list of all
leases under which material respects of all equipment, other
personal property and fixtures in the possession or custody of the
Corporation which, as of the date hereof, is leased or held under
license or similar arrangement and of the leases, licenses,
agreements, or other documentation relating thereto.
(c) Other than the leases and subleases referred to in SCHEDULE
4.1(G)(V)(C), the Corporation is not a party to or bound by any
lease, sublease, license or other instrument relating to real
property and the Corporation has not entered into any other
instrument relating to real property. All interests held by the
Corporation under such leases or subleases are free and clear of any
and all Encumbrances of any nature and kind whatsoever. The
Corporation does not own any interest in real property (except for
the leases referred to in SCHEDULE 4.1(G)(V)(C)).
(d) All of the tangible assets, machinery, equipment, vehicles,
furniture, office equipment, computer hardware and software wherever
situated and owned by the Corporation is set out in SCHEDULE
4.1(G)(V)(D) and, except as set out in SCHEDULE 4.1(G)(V)(D), all of
the foregoing assets are in good condition, repair and (where
applicable) proper working order, having regard to the use and age
thereof,
except only for reasonable wear and tear and are owned free and
clear of all Encumbrances.
(VI) LITIGATION
Except as disclosed in SCHEDULE 4.1(G)(VI) there are no Claims
pending or, to the best of the Vendor's Knowledge, threatened
against the Corporation or affecting any of its assets or
properties or the Business. There are no facts or
circumstances to the Vendor's Knowledge which are likely to
give rise to any such Claims. Except as disclosed in SCHEDULE
4.1(G)(VI), there is not presently outstanding against the
Corporation any judgment, execution, decree, injunction, rule
or order of any court, Authority, administrative agency or
arbitrator.
(VII) ABSENCE OF CHANGES
Neither the execution and delivery of this Agreement by the
Vendor nor the performance or consummation of the transactions
contemplated hereby by the Vendor nor will the change of
control in the Corporation due to the sale of the Purchased
Shares to the Purchaser cause any material adverse change in
any of the assets, business, financial condition, results of
operation or prospects of the Corporation or in the ability of
the Corporation to carry on the Business substantially the
same as the Business was being conducted immediately prior to
signing this Agreement.
(VIII) MATERIAL CONTRACTS
Except for the contracts and agreements referred to in
SCHEDULE 4.1(G)(VIII) (collectively, the "MATERIAL
CONTRACTS"), the Corporation is not a party to or bound by any
material contract or commitment either now or in the future,
whether oral or written (including all contracts with the
Vendor and any affiliates and subsidiaries of the Vendor). The
Material Contracts are all in full force and effect unamended
and no material default exists in respect thereof on the part
of any of the parties thereto. The Corporation is not in
material default or breach of any Material Contract and there
exists no condition, event or act which, with the giving of
notice or lapse of time or both would constitute such a
default or breach and all Contracts are in good standing and
in full force and effect and the Corporation is entitled to
all benefits thereunder.
(IX) EMPLOYMENT MATTERS
(a) SCHEDULE 4.1(G)(IX)(A) lists all of the independent contractors and
the employees of the Corporation and the birthdate, position, length
of service and compensation of each such employee.
(b) There are no outstanding, pending, to the Corporation's knowledge
threatened or anticipated assessments, actions, causes of action,
claims, complaints, demands, orders, prosecutions or suits against
the Corporation or its respective directors, officers or agents
pursuant to or under any applicable rules, regulations, orders or
laws, including Canada Pension Plan, employment insurance, Tax,
employer health tax, employment standards, labour relations,
occupational health and safety, human rights, workers' compensation
and pay equity laws.
(c) Except as disclosed and detailed in Schedule 4.1(g)(ix)(c): and
except with respect to the decision, dated March 26, 2003, of the
Canada Industrial Relation Board wherein it determined that the
Corporation was a federal undertaking and that a partial sale of
business from the Vendor to the Corporation had taken place and that
the Vendor and the Corporation are a single employer within the
meaning of the Canada Labour Code, no trade union or other similar
entity has any bargaining rights acquired by either certification or
voluntary recognition with respect to the employees of the
Corporation; and the Corporation has not made any agreements with
any labour union or other similar entity or made commitments to or
conducted negotiations with any labour union or similar entity with
respect to any future agreements.
(d) Except as disclosed and detailed in SCHEDULE 4.1(G)(IX)(D), the
Corporation is not in breach of any of the provisions of its
collective agreements and there are no outstanding labour or
employment proceedings of any kind (including unfair labour
complaints, grievances, arbitrations or applications for declaration
of successor employer) in respect of the Corporation.
(e) all vacation pay, bonuses, commissions and other emoluments relating
to the employees of the Corporation are accurately reflected in all
respects and have been accrued in the financial records of the
Corporation, and all liabilities in respect of employees, have or
shall have been paid in full on the Closing Date.
(X) PENSION AND BENEFIT MATTERS
(a) SCHEDULE 4.1(G)(X) contains a complete and accurate list of all
Plans. True, correct, complete and, where applicable, up-to-date
copies of Pension Documents have been provided to the Purchaser.
(b) All Plans are duly registered and in good standing under the
applicable Pension Legislation and the Corporation has made all
filings required by the Pension Authorities and Pension Legislation
and to the Vendor's Knowledge no events have occurred which would
affect the registered status of the Plans. The Plans and all
investments held by such Plans comply in all material respects with
all applicable Pension Legislation and Pension Contracts and have
been maintained and administered in material compliance with the
Plan Terms.
(c) All required contributions or premiums to be paid under the terms of
the Plans have been fully paid to the date hereof in accordance with
the applicable Pension Legislation and Pension Contracts.
(d) To the Vendor's Knowledge, no improvements to the Plans have been
promised and no improvements will be made or promised prior to
Closing except as may be required by applicable Pension Legislation
and Pension Contracts and any such
promises of benefit improvements shall be communicated to the
Purchaser in writing prior to Closing.
(e) To the Vendor's Knowledge, there have been no withdrawals or
transfers of assets from the Plans except to a member or a
beneficiary in accordance with the Plan Terms or in accordance with
an approval granted by the Pension Authorities or in accordance with
Pension Legislation.
(f) To the Vendor's Knowledge, there are no outstanding actions or
claims with respect to the Plans, other than claims for benefits
submitted by members or beneficiaries in the normal course; and, to
the Vendor's Knowledge, there is no litigation, legal action, suit,
investigation, claim, counterclaim or proceeding pending or
threatened against or affecting any Plan which could have a material
adverse effect on the Vendor, the Corporation or on any Plan
maintained as of the Closing Date.
(g) Except as disclosed in SCHEDULE 4.1(G)(X), there is not now and on
the Closing Date there will not be any benefit plans established by
or for the Corporation for its employees.
(XI) INSURANCE
The Corporation is not in default, whether as to the payment
of premium or otherwise, under the terms of any insurance
policy maintained by the Corporation (or under which the
Corporation enjoys certain rights) with respect to its assets,
property and undertaking and the Business as of the date
hereof. The Corporation has not failed to give any notice or
present any claim under any such policy in due and timely
fashion. Nothing has been done or omitted to be done by the
Corporation which could make any policy of insurance void or
voidable.
(XII) INTELLECTUAL PROPERTY
SCHEDULE 4.1(G)(XII) lists all the registered Intellectual
Property of the Corporation. Except as set forth in SCHEDULE
4.1(G)(XII), the Intellectual Property is free and clear of
any claims and Encumbrances. To the Vendor's Knowledge, except
as disclosed in SCHEDULE 4.1(G)(XII), there has been no claim
of adverse ownership, invalidity or other opposition to or
conflict with any of the Intellectual Property. To the
Vendor's Knowledge, the Corporation is not currently, nor has
it engaged in any activity that violates or infringes any
intellectual property rights of any Person (except that the
Vendor is not giving this representation with respect to any
Intellectual Property that was developed by the Purchaser or
any Affiliate of the Purchaser).
(XIII) COMPLIANCE WITH LAWS
The Corporation is in compliance in all material respects
with, and will at the Closing Date have filed all reports or
returns required under, all laws, regulations, orders,
judgments or decrees applicable to it (including without
limitation of the generality of the above with all
Environmental Laws and Environmental Orders). Without
limitation to any of the above, the Corporation is in full
compliance with, if applicable, the Personal Information
Protection and Electronic Documents Act (Canada).
(XIV) FULL DISCLOSURE
To the Vendor's Knowledge, none of the foregoing
representations and statements of fact contains any untrue
statement of a material fact or omits to state any material
fact necessary to make any such statement or representation
not misleading to a prospective purchaser of the Purchased
Shares seeking full information as to the Corporation and its
properties, businesses and affairs.
4.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Vendor (and
acknowledges that the Vendor is relying on the representations and warranties in
completing the transactions contemplated hereby) that as of the date hereof:
(a) CORPORATE
The Purchaser is an unlimited liability company duly incorporated
and organized and is validly existing under the laws of Nova Scotia.
(b) AUTHORITY
The Purchaser has all necessary corporate power, authority and
capacity to enter into this Agreement and to perform its obligations
hereunder and the execution and delivery of this Agreement and the
performance by the Purchaser of its obligations hereunder has been
duly authorized by all necessary corporate action on the part of the
Purchaser.
(c) ENFORCEABILITY
This Agreement constitutes a legal, valid and binding obligation of
the Purchaser, enforceable against the Purchaser in accordance with
its terms (subject, as to the enforcement of remedies, to
bankruptcy, reorganization and insolvency laws relating to or
affecting creditors' rights generally and subject to the
availability of equitable remedies). The execution and delivery of
this Agreement by the Purchaser, the consummation of the
transactions contemplated hereby and the fulfillment by the
Purchaser of the terms, conditions and provisions hereof will not
contravene or violate or result in the breach (with or without the
giving of
notice or lapse of time, or both) or acceleration of any obligations
of the Purchaser under:
(A) any judgment, order, writ, injunction or decree of any
court or of any Authority which is presently applicable
to the Purchaser;
(B) the articles, by-laws or any resolutions of the
Purchaser or any amendments thereto or restatements
thereof; or
(C) the provisions of any agreement, arrangement or
understanding to which the Purchaser is a party or by
which it is bound.
(d) ACCREDITED INVESTOR
The Purchaser is an "accredited investor" as defined in Ontario
Securities Commission Rule 45-501 - Exempt Distributions promulgated
under the Securities Act (Ontario), and shall deliver to the Vendor
prior to Closing a certificate addressed to Vendor in a form
satisfactory to the Vendor.
4.3 NATURE AND SURVIVAL OF VENDOR'S AND PURCHASER'S REPRESENTATIONS AND
WARRANTIES
(1) The Vendor's representations and warranties shall survive
the Closing and shall remain in full force and effect for the following periods:
(i) the representations and warranties of the Vendor contained in Section 4.1(e)
(Ownership of Purchased Shares) shall survive the Closing and, notwithstanding
the Closing and any inspections or inquiries made by or on behalf of the
Purchaser, shall continue in full force and effect for the benefit of the
Purchaser, until the expiration of the applicable statute of limitation, (ii)
the representations and warranties of the Vendor contained in Section 4.1(g)(iv)
(Tax Matters) shall survive the Closing and, notwithstanding the Closing and any
inspections or inquiries made by or on behalf of the Purchaser, shall continue
in full force and effect for the benefit of the Purchaser, for the entire period
during which an assessment or reassessment may be made with respect to any
matter contemplated in Section 4.1(g)(iv), and (iii) subject to Sections
4.3(1)(i) and 4.3(1)(ii), the representations and warranties of the Vendor
contained in Section 4.1 shall survive the Closing and, notwithstanding the
Closing and any inspection or inquiries made by or on behalf of the Purchaser,
shall continue in full force and effect for the benefit of the Purchaser until
the earlier of (A) April 30, 2004, and (B) such time as the audited financial
statements of the Corporation for the fiscal year ended December 31, 2003
(including a statement of income, retained earnings, and changes in financial
position and the report of the auditors with all notes thereto) have been
approved by the Corporation's Board of Directors (the "FINANCIAL STATEMENTS
DATE"), after which time the Vendor shall be released from all obligations in
respect of such representations and warranties unless a notice of Claim (setting
out in reasonable detail the nature of the Claim and the approximate amount of
such Claim, if known) shall have been delivered by the Purchaser in accordance
with Section 5.4 before the expiry of each of the respective periods of time set
forth above, as the case may be, in which case the representation
and warranty to which such notice applies shall survive in respect to that Claim
until the final determination or settlement of that Claim.
(2) The representations and warranties of the Purchaser contained in
Section 4.2 shall survive the Closing and notwithstanding the Closing and any
inspections or inquiries made by or on behalf of the Vendor, shall continue in
full force and effect for the benefit of the Vendor until the earlier of (A)
April 30, 2004 and (B) the Financial Statements Date, after which time the
Purchaser shall be released from all obligations in respect of such
representations and warranties, unless a notice of Claim (setting out in
reasonable detail the nature of the Claim and the appropriate amount thereof, if
known) shall have been delivered by the Vendor in accordance with Section 5.4
before the expiry of such period, in which case the representation and warranty
to which such notice applies shall survive in respect to that Claim until the
final determination or settlement of that Claim.
ARTICLE 5
INDEMNIFICATION
5.1 INDEMNITY BY THE VENDOR
Subject to Section 5.3, the Vendor shall indemnify and hold the
Purchaser, its directors, officers, employees, agents, representatives and the
Purchaser's Affiliates and their respective directors, officers, employees,
agents, representatives, harmless in respect of any claim, demand, action, cause
of action, damage, loss, cost, liability or expense (hereinafter referred to as
a "CLAIM") which may be made or brought against an Indemnified Party or which it
may suffer or incur directly or indirectly as a result of, in respect of or
arising out of:
(1) any incorrectness in or breach of any representation or warranty of
the Vendor contained in this Agreement or under any other agreement, certificate
or instrument executed and delivered pursuant to this Agreement; or
(2) any breach or non-fulfillment of any covenant or agreement on the part
of the Vendor under this Agreement or under any other agreement, certificate or
instrument executed and delivered pursuant to this Agreement.
5.2 INDEMNITY BY THE PURCHASER
Subject to Section 5.3, the Purchaser shall indemnify and hold the
Vendor, its directors, officers, employees, agents, representatives and the
Vendor's Affiliates and their respective directors, officers and employees
harmless in respect of any Claim which may be made or brought against an
Indemnified Party or which it may suffer or incur directly or indirectly as a
result of, in respect of or arising out of:
(1) any incorrectness in or breach of any representation or warranty of
the Purchaser contained in this Agreement or under any other agreement,
certificate or instrument executed and delivered pursuant to this Agreement; or
(2) any breach or non-fulfillment of any covenant or agreement on the part
of the Purchaser under this Agreement or under any other agreement, certificate
or instrument executed and delivered pursuant to this Agreement.
5.3 LIMITATIONS
Notwithstanding any other provision in this Agreement to the
contrary:
(a) subject to Section 5.3(d), the Vendor's liability with respect to
any Claim for incorrectness in or breach of any representation or
warranty contained in Section 4.1 (with the exception of the
representations and warranties contained in Section 4.1(g)(iv)(g))
shall not exceed the amount of the Claim multiplied by 50%; and
(b) subject to Section 5.3(d), the Vendor's liability with respect to
each separate Claim arising hereunder (except for Claims with
respect to the Vendor's obligation to sell and deliver the Purchased
Shares to the Purchaser in accordance with the terms and conditions
of this Agreement) shall not exceed $5,000,000 (five million
Canadian dollars), and the total aggregate liability for all Claims
(except for Claims with respect to the Vendor's obligation to sell
and deliver the Purchased Shares to the Purchaser in accordance with
the terms of this Agreement) shall not exceed $8,000,000 (eight
million Canadian dollars) excluding any liability for Claims under
Section 5.3(d); and
(c) subject to Section 5.3(d) no Claim arising hereunder (except for
Claims with respect to the Vendor's obligation to sell and deliver
the Purchased Shares to the Purchaser in accordance with the terms
and conditions of this Agreement) shall be brought unless the amount
of each such Claim exceeds $1,000,000 (one million Canadian
dollars), in which case such Claim shall be recoverable as provided
in this Agreement (from the first dollar and not only on the amount
exceeding $1,000,000 (one million Canadian dollars)); and
(d) Notwithstanding any other provision of this Section, the liability
of the Vendor for any breach of the representations and warranties
contained in Section 4.1(g)(iv)(g) shall, where such breach is in
respect of the non-payment of Sales and Related Taxes on services or
tangible personal property provided by the Corporation to the Vendor
and/or ▇▇▇▇ Mobility Inc. and where such breach benefits or has
benefited the Vendor and/or ▇▇▇▇ Mobility Inc. shall be unlimited in
amount. For greater certainty it is acknowledged that none of the
other Sub-Sections in this Section 5.3 shall apply with respect to
Claims under this Sub-Section 5.3(d); and
(e) the Vendor shall not be liable for any Claim arising hereunder
relating to any incorrectness in or breach of any representation or
warranty of the Purchaser contained in this Agreement (excluding
under Section 4.1(g)(iv)(g)), if, within 30 Business Days following
the written notice of such Claim by the Purchaser to the Vendor, the
Vendor can prove that the Purchaser had Purchaser's Knowledge of the
material facts relating to such Claim; and
(f) the amount of the Vendor's liability for Direct Claims (as defined
below) with respect to any payments made by the Corporation to its
Affiliates shall be limited to the Corporation's reasonable costs
incurred with respect thereto; and
(g) the Purchaser's total aggregate liability with respect to each
separate Claim arising hereunder (except for Claims with respect to
the Purchaser's obligation to purchase the Purchased Shares in
accordance with the terms and conditions of this Agreement) shall
not exceed $5,000,000 (five million Canadian dollars) and the total
aggregate liability for all Claims (except for Claims with respect
to the Purchaser's obligation to purchase the Purchased Shares in
accordance with the terms and conditions of this Agreement) arising
hereunder made or brought against the Purchaser by the Vendor shall
not exceed $8,000,000 (eight million Canadian dollars). No Claim
arising hereunder shall be brought unless the amount of such Claim
exceeds $1,000,000 (one million Canadian dollars), in which case
such Claim shall be recoverable as provided in this Agreement (from
the first dollar and not only on the amount exceeding $1,000,000
(one million Canadian dollars)).
5.4 NOTICE OF CLAIM
If an Indemnified Party becomes aware of a Claim in respect of which
indemnification is provided for pursuant to either of Section 5.1 or 5.2, as the
case may be, the Indemnified Party shall promptly give written notice of the
Claim to the Indemnifying Party. Such notice shall specify whether the Claim
arises as a result of a claim by a Person against the Indemnified Party (a
"THIRD PARTY CLAIM") or whether the Claim does not so arise (a "DIRECT CLAIM"),
and shall also specify with reasonable particularity (to the extent that the
information is available):
(a) the factual basis for the Claim; and
(b) the amount of the Claim, if known.
If, through the fault of the Indemnified Party after becoming aware of a
Claim, the Indemnifying Party does not receive notice of any Claim in time
effectively to contest the determination of any liability susceptible of being
contested, then the liability of the Indemnifying Party to the Indemnified Party
under this Article shall be reduced by the amount of any losses incurred by the
Indemnifying Party resulting from the Indemnified Party's failure to give such
notice on a timely basis.
5.5 DIRECT CLAIMS
In the case of a Direct Claim, the Indemnifying Party shall have 60 days
from receipt of notice of the Claim within which to make such investigation of
the Claim as the Indemnifying Party considers necessary or desirable. For the
purpose of such investigation, the Indemnified Party shall make available to the
Indemnifying Party the information relied upon by the Indemnified Party to
substantiate the Claim, together with all such other information as the
Indemnifying Party may reasonably request. If both parties agree at or before
the expiration of
such 60 day period (or any mutually agreed upon extension thereof) to the
validity and amount of such Claim, the Indemnifying Party shall immediately pay
to the Indemnified Party the full agreed upon amount of the Claim, failing which
the matter shall be referred to the settlement provisions set forth in Sections
10.12 and 10.13 below.
5.6 THIRD PARTY CLAIMS
In the case of a Third Party Claim, the Indemnifying Party shall have the
right, at its expense, to participate in or assume control of the negotiation,
settlement or defence of the Claim. If the Indemnifying Party elects to assume
such control, the Indemnifying Party shall reimburse the Indemnified Party for
all of the Indemnified Party's out-of-pocket expenses incurred as a result of
such participation or assumption. Subject to Section 6.6, the Indemnified Party
shall have the right to participate in the negotiation, settlement or defence of
such Third Party Claim and to retain counsel to act on its behalf, provided that
the fees and disbursements of such counsel shall be paid by the Indemnified
Party unless the Indemnifying Party consents to the retention of such counsel at
its expense or unless a representation of both the Indemnifying Party and the
Indemnified Party by the same counsel would be inappropriate due to the actual
or potential differing interests between them (such as the availability of
different defences). The Indemnified Party shall cooperate with the Indemnifying
Party so as to permit the Indemnifying Party to conduct such negotiation,
settlement and defence and for this purpose shall preserve all relevant
documents in relation to the Third Party Claim, allow the Indemnifying Party
access on reasonable notice to inspect and take copies of all such documents and
require its personnel to provide such statements as the Indemnifying Party may
reasonably require and to attend and give evidence at any trial or hearing in
respect of the Third Party Claim. If, having elected to assume control of the
negotiation, settlement or defence of the Third Party Claim, the Indemnifying
Party thereafter fails to conduct such negotiation, settlement or defence with
reasonable diligence, then the Indemnified Party shall be entitled to assume
such control and the Indemnifying Party shall be bound by the results obtained
by the Indemnified Party with respect to such Third Party Claim.
5.7 SETTLEMENT OF THIRD PARTY CLAIMS
If the Indemnifying Party fails to assume control of the defence of any
Third Party Claim, the Indemnified Party shall have the exclusive right to
contest, settle or pay the amount claimed. Whether or not the Indemnifying Party
assumes control of the negotiation, settlement or defence of any Third Party
Claim, the Indemnifying Party shall not settle any Third Party Claim without the
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed; provided, however, that the liability of the
Indemnifying Party shall be limited to the proposed settlement amount if it is
determined that the final settlement or judgement is less favourable taken as a
whole than the proposed settlement taken as a whole and any such consent to such
proposed settlement is not obtained for any reason within a reasonable time
after the request therefor.
5.8 INTEREST ON CLAIMS
The amount of any Claim submitted under Section 5.1 or Section 5.2 as
damages or by way of indemnification shall bear interest from and including the
date any Indemnified Party is required to make payment in respect thereof at the
Prime Rate calculated from and including such date to but excluding the date
reimbursement of such Claim by the Indemnifying Party is made, and the amount of
such interest shall be deemed to be part of such Claim.
ARTICLE 6
COVENANTS OF THE PARTIES
6.1 CORPORATION'S ACTIONS PRIOR TO CLOSING
The Parties shall take all actions required in order to ensure that the
Corporation, during the period from the date of this Agreement to the Time of
Closing, continues and operates its Business in the ordinary and normal course
of business, consistent with the way its business has been conducted prior to
the date of this Agreement, including, without limitation, that the Corporation
shall: (i) continue to pay all payables and collect all receivables in a timely
manner in the ordinary course of business consistent with past practice, (ii)
not enter into commitments, initiate new business, assume commitments, dispose
of material assets or discharge or satisfy any lien or encumbrance, other than
changes in the ordinary and normal course of business, none of which might have,
either by itself or in the aggregate, a Material Adverse Effect, (iii) not take
or initiate any action, procedure, claim, amendment, waive any rights, terminate
and/or enter into any agreements or instruments which are material to the
Corporation or which may materially affect the Business or the Purchased Shares
or Intellectual Property or which are in conflict or inconsistent with the
transaction contemplated in this Agreement, (iv) not make any general wage or
salary increase, pay any bonuses or extraordinary payments or enter into any
employment agreements in respect of personnel which it employs, (v) not initiate
or settle any litigation or claim to which the Corporation and/or the Purchaser
or any of its Affiliates (except for litigation under this Agreement) may be or
may become a party, (vi) take all actions necessary to promote the interest and
maintain the goodwill of the Corporation, and of all persons having business
relations with the Corporation, and (vii) take any action or exercise any option
under the Unanimous Shareholders Agreement.
6.2 VENDOR'S ACTIONS PRIOR TO CLOSING
Except as otherwise contemplated or permitted by this Agreement, during
the period from the date of this Agreement to the Time of Closing, the Vendor
shall not, without the prior written consent of the Purchaser, take any action
or exercise any option under the Unanimous Shareholders Agreement.
6.3 PURCHASER'S ACTIONS PRIOR TO CLOSING
Except as otherwise contemplated or permitted by this Agreement, during
the period from the date of this Agreement to the Time of Closing, the Purchaser
shall not, without the prior written consent of the Vendor, take any action or
exercise any option under the Unanimous Shareholders Agreement.
6.4 APPROVALS AND CONSENTS
(a) The Vendor agrees to use its commercially reasonable efforts
promptly to do or cause to be done all things necessary, proper or
advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement.
Without limiting the foregoing, the Vendor shall forthwith take all
steps reasonably necessary and in the Vendor's control and use its
commercially reasonable efforts to obtain as of the Time of Closing
all Operational Consents and Regulatory Approvals, all on behalf of,
and as required for the consummation of the transactions
contemplated hereby, by the Vendor and the Corporation, and shall
comply with any conditions thereof, which are required in connection
with the completion of the transactions contemplated by this
Agreement, the execution of this Agreement, and the Closing or the
performance of any of the terms and conditions hereof; provided that
the Vendor shall not be required to incur any costs except as
provided for in the Further Amended and Restated Master Outsourcing
Agreement as such agreement will be executed between the Parties
prior to Closing. Without derogating from the provisions of the
Further Amended and Restated Master Outsourcing Agreement as such
agreement will be executed between the Parties prior to Closing, to
the extent that any Operational Consents are not obtained prior to
the Time of Closing, the Vendor agrees to continue to use its
commercially reasonable efforts to obtain all Operational Consents
for a period not to exceed 90 days following the Date of Closing.
(b) The Purchaser agrees to use its commercially reasonable efforts
promptly to do or cause to be done all things necessary, proper or
advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement.
Without limiting the foregoing, the Purchaser shall forthwith take
all steps reasonably necessary and in the Purchaser's control and
use its commercially reasonable efforts to ensure that the purchase
and sale of the Purchased Shares and the completion of the
transactions contemplated by this Agreement are allowed under the
Investment Canada Act (Canada) and shall make all filings required
to be made by the Purchaser under the Competition Act (Canada), and
shall comply with any conditions thereof, which are required in
connection with the completion of the transactions contemplated by
this Agreement, the execution of this Agreement, and the Closing or
the performance of any of the terms and conditions hereof provided
that the Purchaser shall not be required to incur any costs (other
than those expenses incurred in preparing such filings).
(c) Both Parties agree to use their commercially reasonable efforts
promptly to cause the Corporation to take all actions necessary for
the completion of the transactions contemplated herein.
6.5 ACCESS AND INFORMATION
The Vendor shall at all times during the period from the date of
this Agreement until the Time of Closing make available to the Purchaser and its
representatives and advisers for examination all books and records of the
Corporation (including minute books and accounting ledgers) in its possession or
under its control. The Vendor shall provide copies of the foregoing when
reasonably requested by the Purchaser. The Vendor shall at all times during the
period from the date of Agreement until the Time of Closing give the Purchaser
and its representatives and advisers unrestricted access to the premises of the
Corporation in order to make such investigations as the Purchaser shall deem
advisable. The Vendor shall give such Persons all means necessary to effect such
examinations and investigations and shall cause its agents, employees, officers
and directors to use their best efforts to aid such Persons in such examinations
and investigations. The Vendor shall provide the Purchaser and its
representatives and advisers at all times during the period from the date of
this Agreement to the Time of Closing with an opportunity to meet with the
auditors and any employees, advisers or personnel of the Corporation.
6.6 COOPERATION ON TAX MATTERS
During the time period following Closing specified in Section
4.3(1)(ii), the Vendor agrees that it shall, and the Purchaser agrees that it
shall cause the Corporation to, fully cooperate with each other to:
(a) enable the Vendor and the Corporation to more accurately determine
their respective Transfer Tax liability in respect of the amounts
that were payable by the Vendor prior to Closing, and to minimize
such liability to the extent legally permissible;
(b) without restricting the generality of paragraph (a), the Purchaser
shall (1) cause the Corporation to provide to the Vendor copies of
any interpretations or rulings, if any, obtained from any Sales and
Related Taxes authority to substantiate the Sales and Related Taxes
treatment in respect of the amounts payable by the Vendor to the
Corporation prior to Closing, and (2) use its best efforts to cause
the Corporation to provide to the Vendor any other information or
document with respect to any amounts payable by the Vendor to the
Corporation prior to Closing, which reasonably may be requested by
the Vendor, including but not limited to the information or
documents specified in the Input Tax Credit (GST/HST) Information
Regulations;
(c) the Purchaser further agrees to notify the Vendor promptly, but no
later than five days following, the receipt by the Corporation of
notification of an audit by a Sales and Related Taxes authority in
respect of any amounts payable by the Vendor to the Corporation in
the time period prior to Closing; and
(d) in the event of any assessment against the Corporation in respect of
any amounts payable by the Vendor to the Corporation in the time
period prior to Closing, the
Purchaser agrees that the Vendor has the right, at its option and at
its expense, to be actively involved in any appeal of the
assessment, including the right to file a notice of objection,
correspond with relevant government officials and appeal any
resulting decision to the appropriate court or courts. For purposes
of this section, the phrase "be actively involved in" means that the
Corporation will cooperate with Vendor with a view to minimizing the
amount of the assessment and, in this connection, the Vendor and the
Corporation will agree by consensus on the strategies and positions
to be taken. In the case of disagreement, the Purchaser shall cause
the Corporation to select, together with the Vendor, a professional
accounting firm or law firm not then acting as auditors or principal
external counsel for any of the Vendor (or an Affiliate of the
Vendor), Purchaser or Corporation, for an independent opinion on the
strategies and positions to be taken in respect of any matter in
respect of an assessment in connection with any amounts payable by
the Vendor to the Corporation in the time period prior to Closing.
The fees and costs associated with the appointment of such
professional accounting or law firm shall be borne equally by the
Vendor and Purchaser, provided that the Vendor and Purchaser agree
on the scope of work to be performed and the budget to be charged by
such professional accounting or law firm.
6.7 POST RETIREMENT BENEFITS DISPUTE
The Parties acknowledge that in the event that the Closing does not
occur then the Purchaser reserves the right to renew its claim as to
the proper treatment and payment into the Corporation of post
retirement benefits, which claim the Purchaser shall desist upon
Closing.
6.8 VENDOR'S RELEASE
Prior to the Closing the Vendor and the Purchaser shall take all
actions necessary and cause the Corporation to sign the Vendor's
Release and the director's release in accordance with Section
3.3(b).
6.9 COOPERATION ON PREPARATION OF FINANCIAL STATEMENTS
Prior to the Closing Date, the Vendor agrees that it shall, and the
Purchaser agrees that it shall cause the Corporation to, fully
cooperate with each other to prepare and deliver to the Purchaser,
at no cost to the Vendor, the following:
(a) financial statements of the Corporation, prepared in accordance
with United States generally accepted accounting principles or in
accordance with Canadian generally accepted accounting principles,
including a note adjusting results to United States generally
accepted accounting principles:
(i) Audited financial statements for the fiscal year ended December
31, 2002,
(ii) Financial statements, reviewed by the Corporation's auditors,
for the last interim period ended before the Closing Date,
(b) financial statements of the Corporation, reviewed by the
Corporation's auditors, prepared in accordance with United States
generally accepted accounting principles and translated to the
United States dollar, for the following periods:
(i) Three months ended December 31, 2001.
(ii) Nine months ended September 30, 2002.
(iii) Three months ended December 31, 2002.
(iv) Three months ended March 31, 2003.
(v) Three months ended June 30, 2003.
(vi) Six months ended June 30, 2003.
(c) The financial statements of the Corporation for the Closing
Date, reviewed by the Corporation's auditors, prepared in accordance
with United States generally accepted accounting principles and
translated to the United States dollar. The financial statements
will include a balance sheet as of the closing date and a statement
of income (loss) for the period from the beginning of the quarter in
which the Closing Date fall and ending at the Closing Date.
(d) The auditors consent letter regarding the Corporation's audited
financial statements for the fiscal year ended December 31, 2002,
and the audit letter for the same period.
ARTICLE 7
CONDITIONS PRECEDENT TO THE PERFORMANCE
BY THE PARTIES OF THEIR OBLIGATIONS UNDER THIS AGREEMENT
7.1 THE PURCHASER'S CONDITIONS
The obligation of the Purchaser to complete the purchase of the
Purchased Shares hereunder shall be subject to the satisfaction of, or
compliance with, at or before the Time of Closing, each of the following
conditions (each of which is hereby acknowledged to be inserted for the
exclusive benefit of the Purchaser):
(a) REPRESENTATIONS AND WARRANTIES
All representations and warranties of the Vendor made pursuant to
this Agreement shall be true and correct in all material respects
with the same force and effect as if made at and as of the Time of
Closing, and the Vendor shall have delivered to the Purchaser at the
Time of Closing a certificate dated the Closing Date under corporate
seal, duly executed by an officer of the Vendor acceptable to the
Purchaser, to such effect. The receipt of such certificate and the
closing of the transaction of purchase and sale provided for in this
Agreement shall not be nor deemed to be a waiver of the
representations and warranties of the Vendor contained in this
Agreement, which representations and warranties shall continue in
full force and effect for the benefit of the Purchaser as provided
in Article 4.3.
(b) PERFORMANCE OF OBLIGATIONS
The Vendor shall have performed or complied with, in all material
respects, all of its obligations, covenants and agreements in this
Agreement which are to be performed or complied with by the Vendor
at or prior to the Time of Closing, and the Vendor shall have
delivered to the Purchaser at the Time of Closing a certificate
dated the Closing Date under corporate seal, duly executed by an
officer of the Vendor acceptable to the Purchaser, to such effect.
(c) RECEIPT OF CLOSING DOCUMENTATION
All documentation relating to the due authorization and completion
of the purchase and sale of the Purchased Shares and all actions and
proceedings taken on or prior to the Closing Date in connection with
the performance by the Vendor of its obligations under this
Agreement shall be satisfactory to the Purchaser and its counsel,
acting reasonably, and the Purchaser shall have received copies of
all
such documentation or other evidence as it may reasonably request in
order to establish the consummation of the transactions contemplated
hereby and the taking of all corporate proceedings in connection
therewith in compliance with these conditions, in form and substance
satisfactory to the Purchaser and its counsel, acting reasonably.
(d) BOARD APPROVAL
The board of directors of the Vendor shall have authorized and
approved the execution and delivery of this Agreement and the
performance by the Vendor of its obligations hereunder.
(e) COMPETITION ACT
The Purchaser shall have obtained an advance ruling certificate
pursuant to Section 102 of the Competition Act (Canada) to the
effect that the Director of Investigation and Research under that
Act is satisfied that there would not be sufficient grounds upon
which to apply to the Competition Tribunal under Section 92 of such
Act with respect to the transactions contemplated by this Agreement.
(f) INVESTMENT CANADA ACT
Either:
(i) the Purchaser shall have received written confirmation
that the Minister responsible for the Investment Canada
Act (Canada) is satisfied that the purchase of the
Purchased Shares by the Purchaser is likely to be of net
benefit to Canada; or
(ii) the time within which the Minister is required to advise
the Purchaser whether the Minister is satisfied that the
purchase of the Purchased Shares is likely to be of net
benefit to Canada has expired (unless within that time
the Minister has sent a notice to the Purchaser
confirming that the Minister is not satisfied that the
purchase of the Purchased Shares is likely to be of net
benefit to Canada).
(g) NO ACTION TO RESTRAIN
No action or proceeding shall be pending or threatened by any
Authority or any other Person (including a Party other than the
Purchaser or its Affiliates) to restrain or prohibit the completion
of the transactions contemplated by this Agreement or to prevent or
restrain the Corporation from carrying on the Business as presently
carried on.
(h) CORPORATION'S COMPLIANCE
The Corporation shall have performed or complied with, in all
material respects, all of the obligations agreed to be imposed on it
under the provisions of Section 6.1 which are to be performed or
complied with at or prior to the Time of Closing.
(i) PURCHASER'S RELEASES
The Purchaser shall have received the executed Purchaser's Release.
(j) OTHER CLOSING CONDITIONS
Any other conditions to Closing agreed to between the Parties in
writing.
7.2 CONDITIONS OF THE VENDOR
The obligation of the Vendor to complete the sale of the Purchased
Shares hereunder shall be subject to the satisfaction of or compliance with, at
or before the Time of Closing, of each of the following conditions (each of
which is hereby acknowledged to be inserted for the exclusive benefit of the
Vendor):
(a) REPRESENTATIONS AND WARRANTIES
All representations and warranties of the Purchaser made pursuant to
this Agreement shall be true and correct in all material respects
with the same force and effect as if made at and as of the Time of
Closing, and the Purchaser shall have delivered to the Vendor at the
Time of Closing its certificate dated the Closing Date under
corporate seal, duly executed by a senior officer of the Purchaser
acceptable to the Vendor, to such effect. The receipt of such
certificate and the Closing of the transaction of purchase and sale
provided for in this Agreement shall not be nor be deemed to be a
waiver of the representations and warranties of the Purchaser
contained in this Agreement, which representations and warranties
shall continue in full force and effect for the benefit of the
Vendor as provided in Section 4.3.
(b) PERFORMANCE OF AGREEMENT
The Purchaser shall have performed or complied with, in all respects
all of its obligations, covenants and agreements in this Agreement
which are to be performed or complied with by the Purchaser at or
prior to the Time of Closing and shall have delivered to the Vendor
at the time of Closing a certificate dated the Closing Date under
corporate seal, duly executed by a senior officer of the Purchaser
acceptable to the Vendor, to such effect.
(c) RECEIPT OF CLOSING DOCUMENTATION
All documentation relating to the due authorization and completion
of the purchase and sale of the Purchased Shares and all actions and
proceedings taken on or prior to the Closing Date in connection with
the performance by the Purchaser of its obligations under this
Agreement shall be satisfactory to the Vendor and its counsel,
acting reasonably, and the Vendor shall have received copies of all
such documentation or other evidence as it may reasonably request in
order to establish the consummation of the transactions contemplated
hereby and the taking of all corporate proceedings in connection
therewith in compliance with these conditions, in form and substance
satisfactory to the Vendor and its counsel, acting reasonably.
(d) NO ACTION TO RESTRAIN
No action or proceeding shall be pending or threatened by any
Authority or any other Person (including a Party other than the
Corporation, the Vendor or its Affiliates) to restrain or prohibit
the completion of the transactions contemplated by this Agreement or
to prevent or restrain the Corporation from carrying on the Business
as presently carried on.
(e) BOARD APPROVAL
The board of directors of the Purchaser shall have authorized and
approved the execution and delivery of this Agreement and the
performance by the Purchaser of its obligations hereunder.
(f) COMPETITION ACT
The Purchaser shall have obtained an advance ruling certificate
pursuant to Section 102 of the Competition Act (Canada) to the
effect that the Director of Investigation and Research under that
Act is satisfied that there would not be sufficient grounds upon
which to apply to the Competition Tribunal under Section 92 of such
Act with respect to the transactions contemplated by this Agreement.
(g) INVESTMENT CANADA ACT
Either:
(i) the Purchaser shall have received written confirmation
that the Minister responsible for the Investment Canada
Act (Canada) is satisfied that the purchase of the
Purchased Shares by the Purchaser is likely to be of net
benefit to Canada; or
(ii) the time within which the Minister is required to advise
the Purchaser whether the Minister is satisfied that the
purchase of the Purchased Shares
is likely to be of net benefit to Canada has expired
(unless within that time the Minister has sent a notice
to the Purchaser confirming that the Minister is not
satisfied that the purchase of the Purchased Shares is
likely to be of net benefit to Canada).
(h) HP GUARANTEE
The Vendor shall be fully released from all of its obligations under
the guarantee provided by the Vendor, with respect to certain
agreements between the Corporation and Hewlett-Packard (Canada) Ltd.
dated January 31, 2002 (the "Guarantee"), in form and substance
satisfactory to the Vendor, acting reasonably, or, in the event that
such a release is not obtained prior to the Time of Closing after
making commercially reasonable efforts to obtain such a release, the
Purchaser shall execute an undertaking to indemnify the Vendor for
any liability arising under the Guarantee, in form and substance
satisfactory to the Vendor, acting reasonably.
(i) VENDOR'S RELEASES
The Vendor shall have received the executed Vendor's Releases.
(j) OTHER CLOSING CONDITIONS
Any other conditions to Closing agreed to between the Parties in
writing.
7.3 WAIVER BY PURCHASER
Subject to Article 9 below, if any of the conditions set forth in
Section 7.1 have not been fulfilled, performed or satisfied at or prior to
October 1, 2003, the Purchaser may, by written notice to the Vendor terminate
all of its obligations hereunder and the Purchaser shall be released from all
its obligations under this Agreement. Any of such conditions may be waived in
whole or in part by the Purchaser by instrument in writing given to the Vendor
without prejudice to any of the Purchaser's rights of termination in the event
of non-performance of any other condition, obligation or covenant in whole or in
part, and without prejudice to its right to complete the transaction of purchase
and sale contemplated by this Agreement and claim damages for breach of
representation, warranty or covenant.
7.4 WAIVER BY VENDOR
Subject to Article 9 below, if any of the conditions set forth in
Section 7.2 have not been fulfilled, performed or satisfied at or prior to
October 1, 2003, the Vendor may, by written notice given to the Purchaser,
terminate all of its obligations hereunder and the Vendor shall be released from
all its obligations under this Agreement. Any of such conditions may be waived
in whole or in part by the Vendor by instrument in writing given to the
Purchaser, without prejudice to any of the Vendor's rights of termination in the
event of non-performance of any other condition, obligation or covenant in whole
or in part, and without prejudice to its right to complete the transaction of
purchase and sale contemplated by this Agreement and claim damages for breach of
representation, warranty or covenant.
ARTICLE 8
ADDITIONAL COVENANTS
8.1 RELEASE OF THE CORPORATION AND THE PURCHASER
In consideration of the transactions contemplated by this Agreement and
the covenants and agreements of the Purchaser contained herein, effective as the
Vendor shall release the Corporation Releasees in the form attached hereto as
Exhibit A, (the "Purchaser's Release").
8.2 RELEASE OF THE VENDOR
In consideration of the transactions contemplated by this Agreement and
the covenants and agreements of the Vendor contained herein, effective as of the
Closing, the Purchaser, Amdocs Canada Inc., Amdocs Software Systems Ltd. and the
Corporation shall each release the Vendor Releasees in the form attached hereto
as Exhibit B, (the "Vendor Release").
ARTICLE 9
TERMINATION
9.1 TERMINATION
This Agreement may be terminated prior to the Closing as follows:
(a) at any time on or prior to the Closing Date, by mutual written
consent of the Vendor and the Purchaser;
(b) by either Purchaser or Vendor, if all conditions to consummation of
the transactions contemplated herein have not been satisfied or
waived on or before October 1, 2003 (the "TERMINATION DATE");
provided that the right to terminate this Agreement under this
clause (b) shall not be available to any Party whose failure to
fulfill any obligation of such Party under this Agreement has been
the primary cause of, or resulted in, the failure of the Closing to
occur on or before the Termination Date.
ARTICLE 10
GENERAL
10.1 PUBLIC NOTICES
All public notices to third parties and all other publicity
concerning the matters contemplated by this Agreement shall be jointly planned
and co-ordinated by the Parties and no Party shall act unilaterally in this
regard without the prior approval of the other Parties, except where the Party
making such notice is required to do so by law or by the applicable regulations
or policies of any regulatory agency of competent jurisdiction or any stock
exchange, provided that such Party will use reasonable efforts to notify the
other Party in advance of such disclosure so as to permit the other Parties to
seek a protective order or otherwise contest such disclosure.
10.2 EXPENSES
Each Party to this Agreement shall pay its respective legal,
accounting and other professional advisory fees, costs and expenses incurred in
connection with the negotiation, preparation or execution of this Agreement and
all documents and instruments executed or delivered pursuant to this Agreement,
as well as any other costs and expenses incurred and, for greater certainty, no
costs shall be incurred by the Corporation. The Vendor shall pay any and all
income tax payable by the Vendor, if any, as a result of the transfer and sale
of the Purchased Shares to the Purchaser.
10.3 FURTHER ASSURANCES
The Parties shall do all such things and actions (including voting)
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 Closing.
10.4 ASSIGNMENT AND ENUREMENT
Neither this Agreement nor any benefits or duties accruing under
this Agreement shall be assignable by the Vendor without the prior written
consent of the Purchaser, acting reasonably. The Purchaser may, in its sole
discretion without the consent of the Vendor, assign this Agreement, in whole or
in part, to any Affiliate of the Purchaser (whose ultimate parent is Amdocs
Limited) at any time before or after the Closing; provided that reasonable prior
notice of such assignment is delivered to the Vendor. This Agreement shall enure
to the benefit of and be binding upon the Parties and their respective
successors (including any successor by reason of amalgamation of any Party) and
permitted assigns. Notwithstanding the foregoing, following an assignment as
contemplated herein, the Vendor shall continue to be liable for its duties
accruing hereunder.
10.5 ENTIRE AGREEMENT
This Agreement, together with any Schedules and Exhibits attached
hereto and any documents delivered pursuant to this Agreement, constitutes the
entire agreement between the Parties with respect to the matters herein and
supersedes all prior agreements, understandings, negotiations, discussions,
representations, promises or statements, whether oral or written, relating to
the subject matter hereof. This Agreement shall not be amended, altered or
qualified except by written agreement signed by all of the Parties.
10.6 WAIVER
Except as otherwise expressly set out herein, no waiver of any
provision of this Agreement shall be binding unless it is in writing. No
indulgence or forbearance by a Party shall constitute a waiver of such Party's
right to insist on performance in full and in a timely manner of all covenants
in this Agreement. Waiver of any provision shall not be deemed to waive the same
provision thereafter, or any other provision of this Agreement at any time.
10.7 NOTICES
All payments and communications which may be or are required to be
given by any Party to any other Party, shall be in writing and (i) delivered
personally, (ii) sent by prepaid
courier service or mail, or (iii) sent by prepaid telecopier or other similar
means of electronic communication to the Parties at their following respective
addresses:
For the Purchaser:
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
For the Vendor:
▇▇▇▇ Canada
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇ Canada
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Vice President, Law Department, Toronto
Any such notice so given shall be deemed conclusively to have been given and
received when so personally delivered or delivered, by courier or on the day on
which termination is confirmed if sent by telecopier or other electronic
communication or on the fifth day following the sending thereof by mail. Any
Party may from time to time change its address hereinbefore set forth by notice
to the other Parties in accordance with this Section.
10.8 SEVERABILITY
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such prohibition or enforceability and shall be severed from the balance of
this Agreement, all without affecting the remaining provisions of this Agreement
or affecting the validity or enforceability of such provisions in any other
jurisdiction.
10.9 EXECUTION BY FACSIMILE
The signature of any of the Parties hereto may be evidenced by a
facsimile copy of this Agreement bearing such signature.
10.10 COUNTERPARTS
This Agreement may be signed in one or more counterparts, each of
which so signed shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument. Notwithstanding the date
of execution of any counterpart, each counterpart shall be deemed to bear the
effective date set forth below.
10.11 GOVERNING LAW
The construction, interpretation and performance of this Agreement
and all transactions under it shall be governed by the laws of the Province of
Ontario (without regard to its rules on conflicts of laws) and the laws of
Canada applicable therein. For the purposes of and solely where court action is
expressly permitted under this Agreement, the Parties each submit to the
exclusive jurisdiction of the courts of the Province of Ontario.
10.12 RESOLUTION BY NEGOTIATION
(a) Except as set forth below, the Vendor and the Purchaser agree to
promptly utilize all reasonable efforts to resolve any controversy,
claim or dispute relating to the interpretation, validity,
construction, meaning, performance or effect of this Agreement or
the rights or liabilities of the Parties or any matter arising out
of or in connection with this Agreement (a "DISPUTE").
(b) If a Dispute prior to Closing cannot be resolved by mutual agreement
within a five (5) Business Day period from receipt of written
notification by one Party to the other (which notice shall set forth
full details of the matter in dispute), either Party may refer the
Dispute to resolution by the Chief Executive Officers of the
Parties, such resolution to occur within a further five (5) Business
Day period of the referral of the matter to these two executives
(c) If a post Closing Dispute cannot be resolved by mutual agreement
within a thirty (30) Business Day period from receipt of written
notification by one Party to the other (which notice shall set forth
full details of the matter in dispute), either Party may refer the
Dispute to resolution by the Chief Executive Officers of the
Parties, such resolution to occur within a further thirty (30)
Business Day period of the referral of the matter to these two
executives.
10.13 ARBITRATION
Any Dispute that has not been resolved within the second five (5) Business
Day or thirty (30) Business Day period, as applicable, described in
Section 10.12, shall be submitted for arbitration in accordance with the
laws of Ontario then in effect and the provisions
contained herein, it being understood that such forum shall have exclusive
jurisdiction to deal with such matters.
(a) The arbitration procedure shall be instituted by any Party by the
sending of a written notice to that effect to the other Party
setting forth a description of the Dispute and, if appropriate, the
provision of this Agreement as to which such matter relates (the
"NOTICE OF ARBITRATION"). Any arbitration to be conducted under this
Section 10.13 shall be conducted by a single arbitrator (the
"ARBITRATOR") chosen by the Parties to the arbitration within Five
Business Days with respect to pre-Closing Disputes and thirty (30)
Business days with respect to post Closing Disputes, following the
Notice of Arbitration. In the event that the Parties fail to agree
upon the appointment of the Arbitrator within the stipulated delay,
then the Arbitrator shall be selected and appointed at the request
of either Party in accordance with the Arbitration Act (Ontario).
The arbitration shall be conducted in the English language.
(b) As soon as practicable after his/her appointment, the Arbitrator
shall convene a meeting or a telephone conference call with the
Vendor and the Purchaser or their representatives to determine the
procedure to be followed in the arbitration. If the Parties cannot
agree on the procedure to be followed, the Arbitrator shall, subject
to the other provisions of this Section 10.13, determine his/her own
procedure, which may or may not require the submission of written
arguments by the Parties or the holding of hearings. In any event,
the Parties agree that any arbitration hearing shall take place in
the Province of Ontario.
(c) The Parties to the arbitration shall be entitled to be represented
at any arbitration hearing by legal counsel and to be accompanied by
an interpreter.
(d) Notwithstanding the provisions of this Section 10.13, if either of
the Parties hereto believes that it is entitled to any provisional
measure or injunctive relief, such Party shall be entitled to seek
such measure or injunctive relief through civil action before any
court having jurisdiction.
(e) The Arbitrator shall be entitled to appoint an expert, if necessary,
subject to agreement of the Parties. Any costs or fees charged by
experts shall form part of the costs of the arbitration and be paid
in the manner hereinafter contemplated.
(f) The Arbitrator shall endeavour to render his/her decision (the
"ARBITRATION AWARD"), within thirty (30) days following the date of
commencement of the deliberation, but shall not lose jurisdiction by
reason of his/her failure to respect this delay. The Arbitration
Award must be made in writing stating the reasons upon which it is
based and a copy thereof must be delivered to each Party to the
arbitration. The Arbitrator, in the Arbitration Award, shall
apportion costs and expenses in the manner he sees fit, taking into
consideration the intent of the Parties as set forth in paragraph
(g) below.
(g) The intent of the Parties is to have the Party who is most at fault
and most responsible for the time and cost of arbitration to be
required to pay for the costs thereof in order that each Party has
significant economic incentive to work together to resolve any
differences that may arise between them.
(h) The Arbitration Award shall be final and binding upon the Parties to
the arbitration for all purposes and shall preclude, in respect of
the subject matter in dispute, any further or other recourse to any
Court otherwise having jurisdiction.
10.14 CONSENT
Where a provision of this Agreement requires an approval or consent
by a Party to this Agreement and written notification of such approval or
consent is not delivered within the applicable time in accordance with this
Agreement, then the Party whose consent or approval is required shall be
conclusively deemed to have withheld its approval or consent.
10.15 LANGUAGE
The Parties confirm that it is their wish that this Agreement, as
well as any other documents relating to this Agreement, including notices,
Schedules, Exhibits and authorizations, have been and shall be drawn up in the
English language only. Les Parties aux presentes confirment leur volonte que
cette convention, de meme que tous les documents, y compris tous avis, decules
et autorisations s'y rattachant, soient rediges en anglais seulement.
10.16 TENDER OF DOCUMENTS AND PAYMENT OF MONEY
Any tender of documents or money under this Agreement may be made
upon the Parties or their respective counsel and money shall be tendered by wire
transfer or other method that provides immediately available funds.
10.17 NON-MERGER
Each Party hereby agrees that all provisions of this Agreement,
other than (a) the conditions in Article 6 and (b) the representations and
warranties contained in Article 4 and the related indemnities in Article 5
hereof (which shall be subject to the special arrangements provided in such
Articles) shall forever survive the execution, delivery and performance of this
Agreement, Closing and the execution, delivery and performance of any and all
documents delivered in connection with this Agreement.
- Signature Pages to Follow -
IN WITNESS WHEREOF the Parties have hereunto duly executed this
Agreement on the date first above written.
AMDOCS HOLDINGS ULC
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Authorized Signing Officer
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GROUP PRESIDENT - SYSTEMS AND TECHNOLOGY
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GROUP PRESIDENT - BUSINESS MARKETS