Exhibit (D)(xi)
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT is made at the Effective Time on the [*] day
of April, 2004,
BETWEEN:
MDS INC.,
a corporation existing under the laws of Canada,
(hereinafter referred to as the "VENDOR"),
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MDS LABORATORY SERVICES, L.P.,
a limited partnership existing under the laws of the Province of
Ontario, by its general partner, MDS LABORATORY SERVICES INC.,
a corporation existing under the laws of Canada,
(hereinafter referred to as the "PURCHASER").
WHEREAS the Vendor is reorganizing the Labs Business (as defined below)
pursuant to a plan of arrangement (the "ARRANGEMENT") involving Hemosol Inc.,
its securityholders and the Vendor under Section 182 of the Business
Corporations Act (Ontario) (the "OBCA") effected through the filing of articles
of arrangement dated the date hereof with the Director under the OBCA;
AND WHEREAS the Vendor carries on the Labs Business and is the owner of
the Purchased Assets (as defined below);
AND WHEREAS, as one of the steps in the Arrangement, the Vendor will sell
and the Purchaser will purchase the Purchased Assets in consideration for the
issuance to the Vendor by the Purchaser of the Consideration Units (as defined
below) and the assumption by the Purchaser of the Assumed Liabilities (as
defined below), all in accordance with the provisions hereof;
THIS AGREEMENT WITNESSES THAT in consideration of the respective
covenants, representations and warranties of the Parties hereinafter contained
and for other good and valuable consideration (the receipt and sufficiency of
which are hereby acknowledged by each Party), the Parties covenant and agree as
follows:
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ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
Where used in this Agreement, unless the context requires otherwise,
the following terms shall have the respective meanings set out below and
grammatical variations of such terms shall have corresponding meanings:
"ARRANGEMENT AGREEMENT" means the arrangement agreement dated as of
February 11, 2004 between Hemosol Inc. and the Vendor;
"ASSUMED CONTRACTS" means all contracts (written or otherwise) that the
Vendor is party to immediately prior to the Effective Time which are
related solely and exclusively to the Labs Business, in each case together
with all rights, benefits, privileges and obligations of the Vendor
thereunder;
"ASSUMED LIABILITIES" has the meaning set out in subsection 3.3(a);
"CONSIDERATION UNITS" means 9,999 partnership units of the Purchaser;
"EFFECTIVE TIME" means that time after 12:01 a.m. (Toronto time) on the
date hereof at which the transfer of the Purchased Assets contemplated by
this Agreement is deemed to occur in accordance with the Arrangement;
"EXCISE TAX ACT" means Part IX of the Excise Tax Act (Canada);
"EXCLUDED ASSETS" means:
(a) accounts receivable, trade accounts, notes receivable, book debts
and other debts due or accruing due to the Vendor and the benefit of
securities for such accounts, notes and debts; and
(b) cash on hand or in bank accounts (including cheques held for
deposit);
"EXCLUDED BUSINESSES" means the following businesses and/or investments
carried on or held by the Vendor immediately prior to the Effective Time:
(i) diagnostic imaging;
(ii) water testing;
(iii) real estate investments;
(iv) the Executive Health Clinics;
(v) the Vendor's joint venture with University Health Network
called Toronto Medical Laboratories; and
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(vi) the Vendor's financial interest in Windsor Medical
Laboratories;
"LABS BUSINESS" means the clinical laboratory services business carried on
by the Vendor in the Province of Ontario immediately prior to the
Effective Time which, for greater certainty, excludes the Excluded
Businesses;
"PARTIES" means the Vendor and the Purchaser and "PARTY" means either one
of the Vendor or the Purchaser;
"PURCHASED ASSETS" means all the property and assets whether real or
personal, tangible or intangible, of every kind and description, in which
the Vendor has any right, title or interest immediately prior to the
Effective Time and used solely and exclusively in the Labs Business
immediately prior to the Effective Time, including the Assumed Contracts,
but for greater certainty, excluding the Excluded Assets; and
"TAX ACT" means the Income Tax Act (Canada).
Capitalized terms used and not otherwise defined herein shall have the
meaning given to such terms in the Arrangement Agreement.
1.2 RULES OF CONSTRUCTION
Unless the context otherwise requires, in this Agreement:
(a) "AGREEMENT", "THIS AGREEMENT", "THE AGREEMENT", "HERETO", "HEREOF",
"HEREIN", "HEREBY", "HEREUNDER" and similar expressions mean or
refer to this Agreement as amended, restated, modified, replaced or
supplemented from time to time, including any amendment to this
Agreement, and any agreement or instrument supplemental hereto and
the expressions "ARTICLE", "SECTION" and "SCHEDULE" followed by a
number or letter mean and refer to the specified Article, Section or
Schedule herein;
(b) the division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation thereof;
(c) "INCLUDE", "INCLUDES" and "INCLUDING" shall mean "INCLUDING WITHOUT
LIMITATION" and "INCLUDING WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING";
(d) words importing the singular number only shall include the plural
and vice versa and words importing the use of any gender shall
include all genders;
(e) reference to any agreement, indenture or other instrument in writing
means such agreement, indenture or other instrument in writing, as
amended, restated, modified, replaced or supplemented form time to
time;
(f) reference to any statute shall be deemed to be a reference to such
statute as amended, re-enacted or replaced from time to time; and
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(g) time is of the essence of each provision of this Agreement.
1.3 SCHEDULES
The following schedules are annexed to and are incorporated by
reference in this Agreement:
Schedule A - Allocation of Purchase Price
1.4 ENTIRE AGREEMENT; AMENDMENT; CONFLICT
This Agreement, together with the Arrangement Agreement and all
agreements, documents and instruments contemplated thereby, constitutes the
entire agreement between the Parties with respect to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether written or oral. There are no conditions, covenants,
agreements, representations, warranties or other provisions, express or implied,
collateral, statutory or otherwise, relating to the subject matter hereof except
as herein and therein provided. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
Parties in the same manner as the execution of this Agreement. In the event of
any conflict between the terms of this Agreement and the Arrangement, the terms
of the Arrangement shall prevail.
1.5 GOVERNING LAW
This Agreement shall be construed, interpreted and enforced in
accordance with, and the respective rights and obligations of the Parties shall
be governed by, the laws of the Province of Ontario and the federal laws of
Canada applicable in that province, and each Party irrevocably and
unconditionally submits to the non-exclusive jurisdiction of the courts of the
Province of Ontario and all courts competent to hear appeals therefrom.
1.6 SUCCESSORS AND ASSIGNS
This Agreement shall enure to the benefit of and shall be binding on
and enforceable by the Parties and their respective successors and permitted
assigns. Neither Party may assign any of its rights or obligations hereunder
without the prior written consent of the other Party.
ARTICLE 2
PURCHASE AND SALE OF PURCHASED ASSETS
2.1 TRANSFER OF PURCHASED ASSETS
At the Effective Time, the Vendor hereby sells, assigns and
transfers to the Purchaser and the Purchaser hereby purchases from the Vendor
all right, title and interest of the Vendor in and to the Purchased Assets.
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2.2 ASSIGNMENT AND ASSUMPTION OF ASSUMED CONTRACTS
(a) At the Effective Time, the Vendor hereby assigns to the Purchaser
and the Purchaser hereby assumes the Vendor's rights and obligations
under the Assumed Contracts arising on and after or in respect of
the period after the Effective Time and hereby agrees to perform and
fulfil all of the Vendor's obligations thereunder and to indemnify
and save harmless the Vendor against all liabilities, commitments
and obligations thereunder arising on and after or in respect of the
period after the Effective Time.
(b) From and after the Effective Time, the Vendor shall remain solely
responsible for:
(i) all rights and obligations under the Assumed Contracts arising
prior to or in respect of the period prior to the Effective
Time; and
(ii) all other obligations and liabilities of the Vendor, including
all accounts payable and accrued liabilities in connection
with the Labs Business (collectively, the "EXCLUDED
LIABILITIES").
The Vendor shall perform and fulfil, and indemnify and save harmless
the Vendor against all Excluded Liabilities.
2.3 RIGHTS HELD IN TRUST
Anything contained in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an assignment of any
contract (including any Assumed Contract), licence, lease, commitment or any
claim or right or any benefit arising thereunder or resulting therefrom, if an
attempted assignment thereof, without the consent of a third party thereto,
would constitute a breach thereof or in any material adverse way affect the
rights of the Vendor. The Vendor shall co-operate with the Purchaser in
obtaining the consent of the other party or parties to any of the foregoing to
the assignment thereof to the Purchaser in all cases in which such consent is
required for assignment or transfer and has not been obtained prior to the date
hereof. The Vendor agrees to hold the benefit thereof in trust for the Purchaser
and to co-operate with the Purchaser in any arrangements designed to provide to
the Purchaser the benefits thereunder, including enforcement for the benefit of
the Purchaser of any and all rights of the Vendor against the other party or
parties thereto arising out of the cancellation by such other party or parties
or otherwise.
2.4 ASSETS HELD IN TRUST
With respect to any asset or interest of the Vendor intended to be
sold, conveyed, assigned and transferred to the Purchaser on the date hereof and
the title to which may not have passed to the Purchaser by virtue hereof or any
agreement or instrument executed pursuant hereto, the Vendor shall hold the same
in trust for the Purchaser to sell, convey, assign and transfer the same as the
Purchaser may from time to time direct and the Vendor shall account to the
Purchaser for all receipts, monies, profits, benefits and advantages derived by
or accruing to the Vendor from any such asset or interest after the date hereof.
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ARTICLE 3
PURCHASE PRICE AND ALLOCATION THEREOF
3.1 AGGREGATE PURCHASE PRICE
The aggregate purchase price payable by the Purchaser to the Vendor
for the Purchased Assets shall be the sum of $499,950,000 and the amount of the
Assumed Liabilities, such sum being the fair market value thereof on the date
hereof (the "PURCHASE PRICE").
3.2 ALLOCATION OF PURCHASE PRICE
The aggregate consideration for the Purchased Assets, as set out in
Section 3.3, shall be allocated among, and shall be applied in payment and
satisfaction of the Purchase Price for, the categories of Purchased Assets as
set out in Schedule B.
3.3 PAYMENT OF PURCHASE PRICE
In full payment and satisfaction of the Purchase Price, the
Purchaser, as of the Effective Time, hereby:
(a) assumes and agrees to perform and fulfill all obligations
(contingent or otherwise) of the Vendor under the Assumed Contracts
arising on and after or in respect of the period after the Effective
Time in accordance with Section 2.2 (collectively, the "ASSUMED
LIABILITIES"); and
(b) issues to the Vendor, in accordance with the Arrangement, the
Consideration Units.
3.4 TRANSFER TAXES
The Purchaser shall be liable for and shall pay any and all federal,
provincial and other sales, goods and services, value added, land transfer and
other transfer taxes which are incurred in connection with the transfer of the
Purchased Assets by the Vendor to the Purchaser, together with all duties,
registration fees or other charges incurred upon or in connection with the
conveyance or transfer of the Purchased Assets.
ARTICLE 4
TAX ELECTIONS
4.1 SECTION 97(2) OF THE TAX ACT
The Parties hereby agree to elect jointly under subsection 97(2) of
the Tax Act in respect of the transfer of the Purchased Assets, in the
prescribed form and within the prescribed time for purposes of the Tax Act, and
shall therein specify that the Vendor's proceeds of disposition and the
Purchaser's cost of acquiring the relevant categories of Purchased Assets are
the amounts as set out in Schedule B subject to the limitations of subsection
85(1) of the Tax Act. For the purposes of subsection 97(2) and paragraph
85(1)(e.1) of the Tax Act, the properties shall be deemed to be disposed of in
the order designated by the Purchaser. The
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Parties agree to jointly file corresponding elections under the provisions of
applicable provincial tax legislation, upon request of the Vendor. All elections
shall be prepared and filed by the Vendor.
4.2 SECTION 167 OF THE EXCISE TAX ACT
The Parties hereby agree to elect jointly under Section 167 of the
Excise Tax Act, in the prescribed form and within the prescribed time for
purposes of the Excise Tax Act in respect of the purchase and sale of the
Purchased Assets hereunder.
ARTICLE 5
GENERAL
5.1 BULK SALES ACT
The Purchaser hereby waives compliance by the Vendor under any
applicable bulk sales legislation in connection with the sale by the Vendor to
the Purchaser of the Purchased Assets. 5.2 SURVIVAL OF COVENANTS
The covenants of the Purchaser and the Vendor contained in this
agreement shall survive the purchase and sale of the Purchased Assets at the
Effective Time herein provided for until such covenants are performed or, by
their respective terms, terminate.
5.3 NOTICES
Any notice required or permitted to be given to any Party hereto
shall be in writing and shall be validly given if delivered personally,
telecopied or mailed by prepaid registered mail to that Party at the following
address:
(a) if to the Purchaser:
000 Xxxxxxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: General Manager
Fax No.: (000) 000-0000
(b) if to the Vendor:
000 Xxxxxxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: General Counsel
Fax No.: (000) 000-0000
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Any notice or other document delivered personally or telecopied as
aforesaid shall be deemed to have been received by and given to the addressee on
the day of delivery of such delivery or telecopy (or, if such day is not a
business day, on the next following business day) and any such notice or other
document mailed as aforesaid, shall, except in cases of postal interruption, be
deemed to have been received five business days after mailing.
Either Party may, at any time, give notice to the other Party of any
change in address pursuant to the provisions of this Section 5.3.
5.4 FURTHER ASSURANCES
Each Party shall take such actions and execute all such transfers,
assignments, notices and other documents and use its commercially reasonable
efforts to secure all such consents and approvals as any Party may in writing at
any time from time to time reasonably request in order to give full effect to
the provisions of this Agreement.
5.5 COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall
constitute an original and both of which taken together shall constitute one and
the same instrument.
IN WITNESS WHEREOF the Parties have executed this Agreement on the
day and year first above written.
MDS LABORATORY SERVICES INC., IN ITS
CAPACITY AS GENERAL PARTNER OF MDS
LABORATORY SERVICES, L.P.
by
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Name:
Title:
MDS INC.
by
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Name:
Title:
SCHEDULE B
ALLOCATION OF PURCHASE PRICE
