SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 30, 1996
STEWART ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
LOUISIANA 0-19508
72-0693290
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
110 Veterans Memorial Boulevard
Metairie, Louisiana 70005
(Address of principal executive offices) (Zip Code)
(504) 837-5880
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
Pursuant to an Amended and Restated Share Purchase Agreement dated
September 30, 1996 among 3295796 Canada Inc., Societe Financiere Bourgie
(1996) Inc., Gestion Pierre Bourgie Inc., Gestion Claude Bourgie Inc., Pierre
Bourgie, Marc Bourgie and Claude Bourgie (collectively "Sellers"), Stewart
Enterprises, Inc. (the "Company") and Stewart Group Inc., a subsidiary of the
Company, Stewart Group Inc. purchased from 3295796 Canada Inc. all of its
share holdings in 9041-3139 Quebec Inc., formerly Societe Financiere Bourgie
(1991) Ltee. The businesses acquired ("Urgel Bourgie" or the "Assets")
include 77 funeral homes and five cemeteries in Montreal and Quebec, Canada.
The consideration for the Assets, which was determined by arms' length
negotiation, consisted of approximately C$124.7 million (U.S.$91.7 million)
paid in cash at closing to the Sellers plus the assumption of a C$10.0 million
(US$7.3 million) note payable. The acquisition of Urgel Bourgie was financed
by borrowings under a new revolving credit facility with NationsBank and a
credit agreement with the Bank of Montreal. The acquisition will be accounted
for as a purchase.
Prior to the execution of the Share Purchase Agreement, there were no
material relationships between the Sellers and the Company or any of its
affiliates, directors or officers, or any associate of any such director or
officer.
<PAGE>
Item 5. Other Events
On October 1, 1996, the Company issued the following press release
regarding its acquisition of Urgel Bourgie.
CONTACT: Joseph P. Henican, III
Stewart Enterprises, Inc.
110 Veterans Boulevard
Metairie, LA 70005
504/837-5880
FOR IMMEDIATE RELEASE
STEWART COMPLETES ACQUISITION OF CANADIAN FIRM
New Orleans, Louisiana, October 1, 1996 ... Stewart Enterprises, Inc.
(NASDAQ:STEI) today announced that the transaction to acquire Urgel
Bourgie, Quebec Province's largest funeral home and cemetery firm, has been
completed. This acquisition includes 77 funeral homes and 5 cemeteries
located in the metropolitan Montreal area and the Quebec City area.
"We are pleased that the Urgel Bourgie family chose Stewart to continue its
fine business and outstanding reputation. This acquisition, the largest in
our history, establishes Stewart Enterprises as a major death care provider
in Canada," said Joseph P. Henican, III, Stewart's vice chairman and chief
executive officer.
Stewart Enterprises, founded in 1910, is the third largest provider of
products and services in the death care industry in North America. The
Company currently owns 288 funeral homes and 119 cemeteries in 21 states,
Puerto Rico, Mexico, Australia, New Zealand and Canada.
# # #
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired
In connection with the acquisition of Urgel Bourgie described in Item 2.,
the financial statements required by Regulation S-X, Rule 3-05(b) are provided
herein pursuant to Item 7(a) of Form 8-K. The financial statements are
prepared in accordance with accounting principles generally accepted in Canada
and are expressed in Canadian dollars.
SOCIETE FINANCIERE BOURGIE (1991) LTEE
CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Canadian dollars)
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Canadian dollars)
Page
Auditors' Report 1
Consolidated Balance Sheet 2
Consolidated Statement of Retained Earnings 3
Consolidated Statement of Income 4
Consolidated Statement of Funeral Revenues 5
Consolidated Statement of Cemetery Revenues 6
Consolidated Statement of Revenues from Prearrangements 7
Consolidated Statement of Changes in Financial Position 8
Notes to Consolidated Financial Statements 9
<PAGE>
AUDITORS' REPORT
To the shareholders of
"SOCIETE FINANCIERE BOURGIE (1991) LTEE"
We have audited the consolidated balance sheet of "SOCIETE
FINANCIERE BOURGIE (1991) LTEE" as at December 31, 1995 and the
consolidated statements of income, retained earnings and changes
in financial position for the year then ended. These financial
statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.
In our opinion, these consolidated financial statements present
fairly, in all material respects, the financial position of the
company as at December 31, 1995 and the results of its operations
and the changes in its financial position for the year then ended
in accordance with generally accepted accounting principles in
Canada.
The consolidated financial statements as at December 31, 1994 and
for the year then ended were audited by other auditors who
expressed an opinion without reservation on those statements in
their report dated March 24, 1995.
/s/ Grou, La Salle + Associes
S.E.N.C.
Chartered Accountants
St-Laurent
March 21, 1996
SOCIETE FINANCIERE BOURGIE (1991) LTEE
<PAGE>
CONSOLIDATED BALANCE SHEET
(Amounts in Canadian dollars)
Year ended
December 31 June 30
1995 1996
___________ ____________
(unaudited)
ASSETS
CURRENT ASSETS
Cash $ 10,080,276 $ 9,308,332
Short-term investments 7,619,295 -
Receivables and accrued interest 5,664,314 6,046,177
Income taxes recoverable - 1,004,794
Inventories 1,144,147 1,093,723
Spaces for resale 2,191,056 2,121,810
Prepaid expenses 289,248 952,021
Payments receivable on 911,471 865,380
prearrangements _______________ ______________
27,899,807 21,392,237
PAYMENTS RECEIVABLE ON
PREARRANGEMENTS
To be retained by the Company 589,500 717,436
To be deposited in trust 4,687,387 4,968,541
DEPOSITS IN TRUST 47,763,866 48,035,375
INVESTMENTS (note 3) 1,672,813 21,666,264
FIXED ASSETS (note 4) 33,038,838 33,029,628
GOODWILL, AT UNAMORTIZED COST 12,641,969 12,212,932
_________________ ______________
$ 128,294,180 $142,022,413
============== ============
<PAGE>
Year ended
December 31 June 30
1995 1996
_____________ _____________
(unaudited)
LIABILITIES
CURRENT LIABILITIES
Bank loan (note 5) $ - $ 10,000,000
Accounts payable and accrued 2,866,099 3,213,315
liabilities
Income taxes 103,467 -
Advances of affiliated companies 12,830 16,624
Current portion of long-term debt 36,917 34,028
_____________ _____________
3,019,313 13,263,967
BORROWINGS OF AFFILIATED 9,500,000 9,500,000
COMPANIES
LONG-TERM DEBT (note 6) 2,340,513 2,320,979
DEFERRED INCOME - -
PROVISION WITH RESPECT TO 49,078,412 49,893,175
PREARRANGEMENTS (note 7)
PROVISION FOR PERPETUAL 9,899,870 10,018,093
MAINTENANCE
ACTUARIAL COMMITMENTS ON 756,312 756,312
FUNERAL INSURANCE CONTRACTS
DEFERRED INCOME TAXES 739,815 745,839
______________ _____________
75,334,235 86,498,365
______________ _____________
SHAREHOLDERS' EQUITY
CAPITAL STOCK (note 8) 22,210,000 22,210,000
RETAINED EARNINGS 30,749,945 33,314,048
_______________ ______________
52,959,945 55,524,048
______________ ______________
$ 128,294,180 $142,022,413
============== ==============
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
(Amounts in Canadian dollars)
Year ended
December 31 June 30
1995 1996
______________ _____________
(unaudited)
BALANCE, BEGINNING OF YEAR $ 25,937,507 $ 30,749,945
NET INCOME 4,820,944 2,564,103
________________ ______________
30,758,451 33,314,048
REFUNDABLE INCOME ( 8,506 ) -
TAXES (note 9)
________________ ______________
BALANCE, END OF YEAR $ 30,749,945 $ 33,314,048
=============== ===============
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
CONSOLIDATED STATEMENT OF INCOME
(Amounts in Canadian dollars)
Year ended Six months ended
December 31 June 30 June 30
1995 1996 1995
______________ _____________ _____________
(unaudited) (unaudited)
REVENUES
Funeral $ 27,190,988 $ 14,233,261 $ 14,235,417
Cemetery 4,163,863 2,021,305 2,130,227
Prearrangements 2,156,769 939,201 1,066,940
________________ _______________ _____________
33,511,620 17,193,767 17,432,584
________________ _______________ _____________
COST OF MERCHANDISE AND SERVICES
Funeral 16,760,317 8,864,571 8,545,488
Cemetery 2,786,600 1,386,002 1,393,552
________________ _______________ ______________
19,546,917 10,250,573 9,939,040
________________ _______________ ______________
GROSS PROFIT 13,964,703 6,943,194 7,493,544
ADMINISTRATIVE EXPENSES 6,301,113 3,152,928 3,237,111
________________ _______________ _______________
OPERATING INCOME 7,663,590 3,790,266 4,256,433
OTHER REVENUES
Investments - net of
interest on borrowing 408,537 149,738 223,529
Funeral insurance revenues 72,152 21,246 21,661
Other 67,631 141,353 34,707
________________ _______________ ______________
INCOME BEFORE INCOME TAXES 8,211,910 4,102,603 4,536,330
INCOME TAXES 3,390,966 1,538,500 1,587,700
________________ _______________ _______________
NET INCOME $ 4,820,944 $ 2,564,103 $ 2,948,630
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
CONSOLIDATED STATEMENT OF FUNERAL REVENUES
(Amounts in Canadian dollars)
Year ended Six months ended
December 31 June 30 June 30
1995 1996 1995
______________ __________ ______________
(unaudited) (unaudited)
REVENUES
From contracts
Merchandise $ 12,072,496 $ 6,660,240 $ 6,318,273
Services 13,462,952 6,832,253 7,065,668
Additional services 1,770,922 897,336 949,303
Other 65,325 - -
_______________ ______________ _______________
27,371,695 14,389,829 14,333,244
Adjustments with respect
to prearranged funeral
contracts performed
during the year
Reversal of investment
income and inflationary
increase 346,513 223,952 180,665
Portion of income already
recognized upon
signature of contracts (527,220) (380,520) (278,492)
______________ ______________ ______________
27,190,988 14,233,261 14,235,417
______________ ______________ ______________
COST OF MERCHANDISE AND
SERVICES
Merchandise 3,554,823 2,034,031 1,827,018
Services 7,402,604 3,846,735 3,764,734
Use of vehicles 1,377,321 755,109 711,424
Use of funeral homes 4,425,569 2,228,696 2,242,312
_______________ ______________ ______________
16,760,317 8,864,571 8,545,488
_______________ ______________ ______________
GROSS FUNERAL INCOME $ 10,430,671 $ 5,368,690 $5,689,929
=============== ============== ==============
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
CONSOLIDATED STATEMENT OF CEMETERY REVENUES
(Amounts in Canadian dollars)
Year ended Six months ended
December 31 June 30 June 30
1995 1996 1995
______________ _______________________
(unaudited) (unaudited)
REVENUES
From contracts
Merchandise $ 2,710,558 $ 1,303,121 $ 1,348,740
Services 1,556,723 750,173 832,969
_____________ ___________ ____________
4,267,281 2,053,294 2,181,709
Adjustments with respect to prearranged
cemetery contracts performed during the
year
Reversal of investment income
and inflationary increase 60,197 30,639 27,375
Portion of income already
recognized upon signature
of contracts (163,615) (62,628) (78,857)
_____________ ___________ ___________
4,163,863 2,021,305 2,130,227
_____________ ___________ ____________
COST OF MERCHANDISE AND SERVICES
Maintenance of cemeteries 1,123,722 564,427 564,014
Merchandise 665,540 320,099 307,762
Services 230,258 83,762 136,561
Selling expenses 532,047 299,646 266,940
Contribution to provision
for perpetual maintenance 235,033 118,068 118,275
_____________ ___________ ___________
2,786,600 1,386,002 1,393,552
_____________ ___________ ___________
GROSS CEMETERY INCOME $ 1,377,263 $ 635,303 $ 736,675
============= =========== ===========
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
CONSOLIDATED STATEMENT OF REVENUES FROM PREARRANGEMENTS
(Amounts in Canadian dollars)
Year ended Six months ended
December 31 June 30 June 30
1995 1996 1995
______________ ____________ ____________
(unaudited) (unaudited)
SALE PRICE OF CONTRACTS $ 5,825,445 $ 3,304,295 $2,804,210
SELLING EXPENSES
Salaries and commissions 953,278 517,309 486,000
Advertising 331,727 155,190 189,841
Telephone 6,086 4,662 3,809
Office expenses 34,829 26,709 15,441
Entertainment expenses 10,671 3,104 3,500
Rent 70,158 33,546 15,485
Administration 42,900 - -
_________________ _____________ _____________
1,449,649 740,520 714,076
_________________ _____________ _____________
MARGIN BEFORE TRANSFER 4,375,796 2,563,775 2,090,134
TRANSFER TO PROVISION WITH
RESPECT TO PREARRANGEMENTS 4,375,796 2,563,775 2,090,134
_______________ _____________ ______________
MARGIN UPON SIGNATURE OF
CONTRACTS - - -
_______________ ______________ ______________
INVESTMENT INCOME FROM 2,727,445 1,171,904 1,268,002
TRUST FUNDS
INFLATION OF PROVISION WITH
RESPECT TO PREARRANGEMENTS (570,676) (232,703) (201,062)
_______________ ______________ _______________
REVENUES FROM PREARRANGEMENT
CONTRACTS $ 2,156,769 $ 939,201 $ 1,066,940
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
(Amounts in Canadian dollars)
Year ended Six months ended
December 31 June 30 June 30
1995 1996 1995
______________ ____________ _______________
(unaudited) (unaudited)
OPERATIONS
Net income $ 4,820,944 $ 2,564,103 $ 2,948,630
Items not affecting cash:
Depreciation of fixed assets 1,706,736 832,483 812,090
Amortization of goodwill 820,980 429,037 418,965
Amortization of discount on bonds (107) (58) -
Deferred income taxes 5,355 6,024 (25,740)
Gain on disposal of fixed assets (325) - -
Provision with respect to
prearrangements and
deferred income 1,743,831 814,763 976,674
Provision for perpetual
maintenance 234,948 118,223 118,232
Actuarial commitments on funeral
insurance contracts (20,425) - -
____________ ____________ _____________
9,311,937 4,764,575 5,248,851
Payments receivable on
prearrangements 469,740 (362,999) 194,587
Deposits in trust (3,192,471) (271,509) (1,321,807)
Impact of net change in other
working-capital items (note 12) (1,774,698) (1,682,217) (2,417,292)
____________ ___________ _____________
4,814,508 2,447,850 1,704,339
____________ __________ ______________
FINANCING
Reduction of long-term debt (36,235) (22,423) (16,134)
Refundable income taxes (8,506) - -
_____________ ___________ _____________
(44,741) (22,423) (16,134)
_____________ ___________ _____________
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
(continued)
(Amounts in Canadian dollars)
Year ended Six months ended
December 31 June 30 June 30
1995 1996 1995
______________ ____________ ______________
(unaudited) (unaudited)
INVESTMENTS
Purchases of investments $ (545,075) $(20,303,393) $ (500,390)
Disposal of investments - 310,000 -
Additions to fixed assets (1,908,815) (868,786) (1,947,095)
Disposition of fixed assets 49,631 45,513 13,217
______________ ______________ ______________
(2,404,259) (20,816,666) (2,434,268)
______________ ______________ ______________
NET INCREASE IN CASH 2,365,508 (18,391,239) (746,063)
CASH, BEGINNING OF YEAR 15,334,063 17,699,571 15,334,063
_______________ ______________ _____________
CASH, END OF YEAR $ 17,699,571 $ (691,668) $14,588,000
=============== ============== =============
CASH INCLUDES:
Cash $ 10,080,276 $ 9,308,332 $ 9,108,111
Short-term investments 7,619,295 - 5,479,889
Bank loan - (10,000,000) -
______________ _______________ _____________
$ 17,699,571 $ (691,668) $ 14,588,000
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Canadian dollars)
DECEMBER 31, 1995
____________________________________________________________________
NOTE 1 - INCORPORATION AND NATURE OF OPERATIONS
_______________________________________
"SOCIETE FINANCIERE BOURGIE (1991) LTEE" is a company
incorporated under Part 1A of the Quebec Companies Act.
The Company offers merchandise and services in the
funeral sector.
NOTE 2 - ACCOUNTING POLICIES AND BASIS OF PRESENTATION
______________________________________________
a) Basis of presentation
The accompanying financial statements are prepared in
accordance with accounting principles generally accepted
in Canada. Amounts presented are in Canadian dollars,
the functional currency.
b) Interim Financial Statements
The accompanying financial information as of June 30,
1996 and 1995, and for the periods then ended is
unaudited, but in the opinion of management, reflects all
adjustments which are of a normal recurring nature
necessary for a fair presentation of financial position
and results of operations for the interim periods.
The results of operations for the periods ended June 30,
1996 and 1995 are not necessarily indicative of the
results to be expected for the years ended December 31,
1996 and 1995, respectively.
c) Principles of consolidation
The consolidated financial statements include the
accounts of all the subsidiaries since their date of
acquisition. Intercompany balances and transactions have
been eliminated.
d) Inventories
Inventories are stated at the lower of cost or net
realizable value. Cost is established using the first-
in, first-out method.
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in Canadian dollars)
DECEMBER 31, 1995
____________________________________________________________________
NOTE 2 - ACCOUNTING POLICIES (continued)
___________________
e) Spaces for resale
Land, niches and crypts are carried at the lower of cost
or net realizable value, determined using the average
cost method, and the probable net realizable value.
f) Investments
Investments are stated at cost. Premiums and discounts
on bonds are amortized over the period from the purchase
date to the maturity of the bonds. Gains and losses on
the disposal of investments are recognized in the year in
which they occur.
g) Fixed assets
Fixed assets are carried at cost and depreciated using
the declining method, at rates based on their useful
life, as follows:
Category Rate
_________ ______
Buildings and leasehold improvements 0.9% to 10%
Paving 4% to 8%
Furniture and equipment 20% to 30%
Vehicles 30%
h) Goodwill
The Company amortizes over 20 years the excess of
acquisition cost of subsidiaries over the value of net
assets acquired on the dates of acquisition, as well as
goodwill resulting from the acquisition of funeral
businesses.
i) Provision with respect to prearrangements
The provision with respect to prearrangements represents
the revenues equivalent to the merchandise and services
which the Company must deliver in the future under the
terms of prearrangement contracts.
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in Canadian dollars)
DECEMBER 31, 1995
____________________________________________________________________
NOTE 2 - ACCOUNTING POLICIES
____________________
i) Provision with respect to prearrangements (continued)
The provision is set up using the price of the contract,
net of an amount equivalent to selling expenses and a
portion of investment income earned on deposits in trust
for contracts signed after March 1988. The provision for
contracts signed prior to March 1988 is based on the sale
price and is increased annually to reflect inflation.
Revenue accumulated in the provision with respect to
prearrangements is recorded as revenue in the period in
which the contracts are performed.
j) Provision for perpetual maintenance
Sales of land, niches and crypts generally include the
service for the perpetual maintenance of cemeteries.
The provision for perpetual maintenance is created with a
portion of the proceeds of the sale price of land, niches
and crypts so that the Company can fulfill its commitment
for perpetual maintenance.
k) Actuarial commitments on funeral insurance contracts
Actuarial commitments on funeral insurance contracts in
effect are established by the consulting actuary using
the so-called "commercial premium method".
NOTE 3 - INVESTMENTS
_____________ 1995
______________
Shares of public companies $ 1,010,925
Bonds 656,968
Other 4,920
______________
$ 1,672,813
The market value of shares and bonds currently amounts to
$ 879,518 and $ 729,702 respectively.
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in Canadian dollars)
DECEMBER 31, 1995
____________________________________________________________________
NOTE 4 - FIXED ASSETS
_____________
1995
____________________________________________
Accumulated Net
Cost depreciation value
_____________________________________________
Land $ 10,680,618 $ - $ 10,680,618
Buildings and leasehold 29,397,454 9,918,107 19,479,347
improvements
Paving 1,180,448 443,790 736,658
Furniture and equipment 5,423,751 4,354,602 1,069,149
Vehicles 3,864,014 2,790,948 1,073,066
_______________ _______________ _______________
$ 50,546,285 $ 17,507,447 $ 33,038,838
=============== =============== ===============
Depreciation expense is included in the statement of
income in the following captions:
Funeral:
Use of vehicles $ 431,711
Use of funeral homes 975,225
Cemetery:
Maintenance of cemeteries 156,137
Services 2,175
Administrative expenses 141,488
__________
$1,706,736
===========
NOTE 5 - BANK LOAN
__________
June 30
1996
_________
Special revolving credit facility of up to $10,000,000
$ 15,000,000, for investment purposes, bea- ============
ring interest at floating rates and secured
by receivables.
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in Canadian dollars)
DECEMBER 31, 1995
____________________________________________________________
NOTE 6 - LONG-TERM DEBT
_______________
1995
______
Mortgage loan, bearing interest at 9.75%, $ 2,363,980
maturing in 1997, payable in monthly
installments of $ 22,028, (including
interest), secured by a trust deed with
a senior mortgage bond.
Note payable, bearing interest at 19%, 13,450
maturing in 2000, payable in monthly
installments of $ 379.10, (including
interest), secured by the telephone
system.
______________
2,377,430
Current portion (36,917)
______________
$ 2,340,513
==============
The payments required to reimburse the principal portion
of long-term debt are as follows:
Year ending: 1996 $ 36,917
1997 37,313
1998 41,060
1999 45,247
2000 49,861
Thereafter 2,167,032
_____________
$ 2,377,430
=============
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in Canadian dollars)
DECEMBER 31, 1995
______________________________________________________________
NOTE 7 - PROVISION WITH RESPECT TO PREARRANGEMENTS
__________________________________________
1995
___________
Provision on contracts signed since $ 28,884,004
the March 1, 1988 effective date of
legislation concerning prearrangements
Provision on contracts signed prior to
March 1, 1988 20,194,408
_________________
$ 49,078,412
=================
NOTE 8 - CAPITAL STOCK
______________
Authorized:
An unlimited number of shares of each of the classes
described below, all without par value.
"A": voting and participating.
"B": non-voting, non-cumulative annual dividend of
8%, redeemable at the holder's discretion in
the amount of paid-up capital.
"C": non-voting, non-cumulative monthly dividend
of 1%, redeemable at the holders' discretion
in the amount of paid-up capital.
"D": non-voting, non-cumulative dividend of 1%,
redeemable at the Company's discretion in the
amount of paid-up capital.
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in Canadian dollars)
DECEMBER 31, 1995
____________________________________________________________________
NOTE 8 - CAPITAL STOCK (continued)
______________
Issued and paid:
1995
_________________________
Number
Class of shares Amount
__________________________
"A" 10,000 $ 10,000
"B" 4,600,000 4,600,000
"C" 10,000,000 10,000,000
"D" 7,600,000 7,600,000
______________
$22,210,000
==============
NOTE 9 - REFUNDABLE DIVIDEND TAX CREDIT
_______________________________
The Company is a private company under the terms of the
Income Tax Act, and as such, certain taxes payable on
investment income may qualify for a refund which is
generally made in proportion of one dollar for every
three dollars of taxable dividends paid. Since these
taxes may be refunded, they are deducted from retained
earnings instead of being deducted from the year's
income. When a portion of the taxes does become
refundable as a result of dividend payments, the
appropriate amount is credited to retained earnings.
Should the Company one day no longer be considered a
private company, the right to a refund will be cancelled.
The cumulative amount of refundable dividend tax credits
as at December 31, 1995 amounts to approximately $
349,895.
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in Canadian dollars)
DECEMBER 31, 1995
____________________________________________________________________
NOTE 10- COMMITMENTS
____________
The Company has committed to pay $ 2,162,424 under long-
term lease agreements. Commitments over the next five
years are as follows:
Year ending: 1996 $ 475,926
1997 471,077
1998 425,243
1999 414,505
2000 375,673
______________
$ 2,162,424
==============
"LES RESIDENCES FUNERAIRES ASSOCIEES DU QUEBEC INC." has
signed an emphyteutic lease for a period of 50 years,
which expires on June 30, 2040 with an option to renew
for 49 years. The annual lease payments are:
Year Amount
_______ ____________
1994 to 2000 $ 134,857
2001 to 2040 110,000
The lease includes an indexation clause corresponding to
the consumer price index as of the sixth year.
NOTE 11- RELATED PARTY TRANSACTIONS
___________________________
The Company conducted the following transactions with
affiliated companies and related parties:
1995
_________
Interest on loans $ 412,579
Rental expenses 144,400
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in Canadian dollars)
DECEMBER 31, 1995
____________________________________________________________________
NOTE 12- IMPACT OF NET CHANGE IN
OTHER WORKING-CAPITAL ITEMS
____________________________
1995
_______
Receivables and accrued interest $ 439,436
Income taxes 137,659
Inventories ( 306,562 )
Spaces for resale ( 580,565 )
Prepaid expenses ( 213,224 )
Accounts payable and accrued liabilities ( 1,025,542 )
Advances of affiliated companies ( 225,900 )
______________
$ ( 1,774,698 )
==============
NOTE 13- RECONCILIATION TO U.S. GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES (GAAP)
______________________________________
The consolidated financial statements have been prepared
in accordance with generally accepted accounting
principles ("GAAP") in Canada. These principles differ
in the following material respects from those in the
United States as summarized below:
a) Refundable dividend tax credit
In Canada, income taxes payable on investment income
qualify for a refund when taxable dividends are paid.
These taxes are deducted from retained earnings instead
of being deducted from income.
In the past three years, the average amount deducted per
year, for these taxes has been of $ 7,361, and the
cumulative amount of refundable dividend tax credits as
at December 31, 1995, amounts to approximately $ 349,895,
as shown in note 9.
<PAGE>
SOCIETE FINANCIERE BOURGIE (1991) LTEE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in Canadian dollars)
DECEMBER 31, 1995
____________________________________________________________________
NOTE 13- RECONCILIATION TO U.S. GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued)
______________________________________
b) Capital stock
As at December 31, 1995, the Company shows its' non-
voting class "B" and "C" shares, redeemable at the
holders' discretion, as part of capital stock, and not,
as a liability, as required in the United States. In
1996, these particular shares will be shown as
liabilities, in accordance with chapter 3860 of the CICA
Handbook on "Financial Instruments". The amount of
liability for December 31, 1995 would be $ 14,600,000,
reducing the capital stock at $ 7,610,000 instead of
$ 22,210,000.
c) Long-term investments
Investments are stated at cost, where in the United
States they are valued at market. Gains and losses on
the disposal of investments are recognized in the year in
which they occur. If the company was to use market
value, the investments would be reduced by $ 58,673, on
December 31, 1995 and the counterpart would affect
shareholders' equity.
d) Allowance for sales cancellations
The Company does not set up an allowance for sales
cancellations. Historic sales cancellations are between
3%-7%.
Taking into consideration that only the portion
representing selling expenses is recorded as income, (the
year the P.A contract is sold) the allowance for sales
cancellations for the past three years would have been
approximately $ 70,000 per year.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(b) Pro Forma Financial Information
The accompanying unaudited pro forma consolidated financial information has
been prepared in accordance with accounting principles generally accepted in
the United States. Amounts are expressed in U.S. dollars. The purchase price
allocation for Urgel Bourgie is based on preliminary information.
During the period from November 1, 1994 through September 30, 1996, the
Company acquired 183 funeral homes and 29 cemeteries, including 77 funeral
homes and five cemeteries acquired in the Urgel Bourgie transaction on
September 30, 1996. In addition, the Company currently has outstanding
letters of intent for the acquisition of eight funeral homes and two
cemeteries. The accompanying unaudited pro forma consolidated statement of
earnings for the year ended October 31, 1995 has been prepared assuming these
acquisitions occurred on November 1, 1994.
The unaudited pro forma statement of earnings should be read in conjunction
with the related notes thereto. The pro forma statement of earnings has been
prepared for comparative purposes only and does not purport to be indicative
of the results of operations that would have resulted had the combinations
been in effect on the date indicated, that have resulted since the dates of
acquisition or that may result in the future.
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
for the year ended October 31, 1995
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Businesses Acquired Pro Forma Adjustments (Note 3)
All Other
Urgel Bourgie Businesses All Other Pro Forma
Historical (Note 1) (Note 2) Urgel Bourgie Businesses Total
_____________ _____________ ______________ ________________ ___________ ____________
<S> <C> <C> <C> <C> <C> <C>
Revenues $368,822 $ 24,418 $ 53,797 - - $447,037
Operating expenses 290,192 18,834 47,312 1,336 (a) 3,396 (e) 361,070
______________ ______________ _____________ _______________ ___________ ___________
Operating earnings 78,630 5,584 6,485 (1,336) (3,396) 85,967
before performance-
based stock options
Performance-based
stock options (17,252) - - - - (17,252)
______________ _____________ _______________ _______________ ____________ ___________
Operating earnings 61,378 5,584 6,485 (1,336) (3,396) 68,715
Interest expense (22,815) - (1,799) (6,827) (b) (8,199) (f) (39,640)
Other income 2,937 399 830 (298) (c) (203) (g) 3,665
_______________ _____________ ______________ ______________ ____________ ___________
Earnings before income
taxes 41,500 5,983 5,516 (8,461) (11,798) 32,740
Income taxes 15,355 2,214 2,041 (3,131) (d) (4,365) (d) 12,114
______________ _____________ ______________ ______________ ____________ ____________
Net earnings $ 26,145 $ 3,769 $ 3,475 $ (5,330) $ (7,433) $ 20,626
============== ============= ============== ============== ============ ============
Earnings per common
share $ .72 $ .54
============== ===========
Weighted average common
shares outstanding 36,386 37,875
============== ===========
</TABLE>
See accompanying notes to pro forma consolidated statement of earnings.
<PAGE>
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
for the year ended October 31, 1995
(Unaudited)
1. On September 30, 1996, the Company acquired Urgel Bourgie, consisting of
77 funeral homes and five cemeteries in Canada, for a total purchase price of
$99.0 million, including the assumption of a $7.3 million note payable. The
Company has accounted for this acquisition using the purchase method of
accounting whereby the purchase price is allocated to assets and liabilities
based on fair market value, with the remainder allocated to goodwill, which is
amortized over 40 years.
2. In addition to the acquisition of Urgel Bourgie discussed above, during
the period from November 1, 1994 through September 30, 1996, the Company
acquired 106 funeral homes and 24 cemeteries for an aggregate purchase price
of approximately $240.7 million, including the issuance of approximately
1,907,000 shares of Class A Common Stock. Additionally, the Company currently
has outstanding letters of intent to purchase eight funeral homes and two
cemeteries for an aggregate purchase price of approximately $14.3 million.
The Company has accounted for these acquisitions using the purchase method of
accounting. The results of operations for the businesses acquired have been
included in the Company's historical results from the dates of acquisition.
3. The pro forma consolidated statement of earnings reflects the following
adjustments in order to present the historical results of operations of the
acquired businesses and pending acquisitions for periods prior to their
inclusion in the consolidated financial statements:
a) reflects a net increase in depreciation and amortization expense of
$1,336,000 resulting from applying the purchase method of accounting to the
Urgel Bourgie acquisition;
b) primarily additional interest expense associated with debt incurred to
purchase Urgel Bourgie at an average rate of 7.2%. Total debt incurred to
purchase the business was $91.7 million; a 1/8% change in the interest rate
would have resulted in a $72,000 effect on net earnings for the year;
c) elimination of investment income on assets not acquired by the
Company;
d) adjustment to income tax expense using the effective tax rate for the
year ended October 31, 1995;
e) reflects (i) a net increase in compensation expense of $1,189,000 as
a result of certain non-compete agreements, (ii) an increase in
depreciation and amortization expense of $3,267,000 resulting from applying
the purchase method of accounting, and (iii) a net decrease, primarily in
historical rental expense, of $1,060,000 for assets purchased;
f) additional interest expense associated with debt incurred to purchase
the acquired businesses at an average rate of 7.2%. Total debt incurred to
purchase the acquired businesses, excluding Urgel Bourgie, was $189.8
million; a 1/8 % change in the interest rate would have resulted in a
$149,000 effect on net earnings for the year; and
g) elimination of gains on assets sold.
During the period from November 1, 1995 through September 30, 1996, the
Company acquired 128 funeral homes and 14 cemeteries, including 77 funeral
homes and five cemeteries acquired in the Urgel Bourgie transaction on
September 30, 1996. In addition, the Company currently has outstanding
letters of intent for the acquisition of eight funeral homes and two
cemeteries. The accompanying unaudited pro forma consolidated statement of
earnings for the nine months ended July 31, 1996 has been prepared assuming
these acquisitions occurred on November 1, 1995.
The unaudited pro forma statement of earnings should be read in conjunction
with the related notes thereto. The pro forma statement of earnings has been
prepared for comparative purposes only and does not purport to be indicative
of the results of operations that would have resulted had the combinations
been in effect on the date indicated, that have resulted since the dates of
acquisition or that may result in the future.
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
for the nine months ended July 31, 1996
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Businesses Acquired Pro Forma Adjustments (Note 3)
All Other
Urgel Bourgie Businesses All Other Pro Forma
Historical (Note 1) (Note 2) Urgel Bourgie Businesses Total
_____________ _____________ ______________ ________________ ___________ ____________
<S> <C> <C> <C> <C> <C> <C>
Revenues $320,114 $18,666 $15,466 - - $354,246
Operating expenses 241,218 14,696 14,125 1,002 (a) 853 (e) 271,894
_____________ _____________ ______________ ______________ ______________ ___________
Operating earnings 78,896 3,970 1,341 (1,002) (853) 82,352
Interest expense (18,580) - (483) (4,495) (b) (2,234) (f) (25,792)
Other income 1,804 332 274 (110) (c) (60) (g) 2,240
_____________ _____________ ______________ ______________ ______________ ___________
Earnings before income
taxes 62,120 4,302 1,132 (5,607) (3,147) 58,800
Income taxes 23,295 1,613 425 (2,103) (d) (1,180) (d) 22,050
_____________ ______________ _____________ _____________ _______________ ___________
Net earnings $ 38,825 $ 2,689 $ 707 $(3,504) $(1,967) $ 36,750
============= ============== ============= ============= =============== ===========
Earnings per common
share $ .94 $ .88
============= ===========
Weighted average common
shares outstanding 41,315 41,532
============= ============
</TABLE>
See accompanying notes to pro forma consolidated statement of earnings.
<PAGE>
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
for the nine months ended July 31, 1996
(Unaudited)
1. On September 30, 1996, the Company acquired Urgel Bourgie, consisting of
77 funeral homes and five cemeteries in Canada, for a total purchase price of
$99.0 million, including the assumption of a $7.3 million note payable. The
Company has accounted for this acquisition using the purchase method of
accounting whereby the purchase price is allocated to assets and liabilities
based on fair market value, with the remainder allocated to goodwill, which is
amortized over 40 years.
2. In addition to the acquisition of Urgel Bourgie discussed above, during
the period from November 1, 1995 through September 30, 1996, the Company
acquired 51 funeral homes and nine cemeteries for an aggregate purchase price
of approximately $86.3 million, including the issuance of approximately
448,000 shares of Class A Common Stock. Additionally, the Company currently
has outstanding letters of intent to purchase eight funeral homes and two
cemeteries for an aggregate purchase price of approximately $14.3 million.
The Company has accounted for these acquisitions using the purchase method of
accounting. The results of operations for the businesses acquired have been
included in the Company's historical results from the dates of acquisition.
3. The pro forma consolidated statement of earnings reflects the following
adjustments in order to present the historical results of operations of the
acquired businesses and pending acquisitions for periods prior to their
inclusion in the consolidated financial statements:
a) reflects a net increase in depreciation and amortization expense of
$1,002,000 resulting from applying the purchase method of accounting to the
Urgel Bourgie acquisition;
b) primarily additional interest expense associated with debt incurred to
purchase Urgel Bourgie at an average rate of 6.3%. Total debt incurred to
purchase the business was $91.7 million; a 1/8% change in the interest rate
would have resulted in a $54,000 effect on net earnings for the nine-month
period;
c) elimination of investment income on assets not acquired by the
Company;
d) adjustment to income tax expense using the effective tax rate for the
nine months ended July 31, 1996;
e) reflects (i) a net increase in compensation expense of $332,000 as a
result of certain non-compete agreements, (ii) an increase in depreciation
and amortization expense of $772,000 resulting from applying the purchase
method of accounting, and (iii) a decrease, primarily in historical rental
expense, of $251,000 for assets purchased;
f) additional interest expense associated with debt incurred to purchase
the acquired businesses at an average rate of 6.3%. Total debt incurred to
purchase the acquired businesses, excluding Urgel Bourgie, was $65.5
million; a 1/8 % change in the interest rate would have resulted in a
$38,000 effect on net earnings for the nine-month period; and
g) elimination of gains on assets sold.
The following unaudited pro forma condensed consolidated balance sheet as
of July 31, 1996 has been prepared assuming the acquisition of Urgel Bourgie
occurred on July 31, 1996. All other acquisitions completed subsequent to
July 31, 1996 and currently pending acquisitions are immaterial to the
Company's consolidated financial condition and are therefore excluded from
this pro forma presentation.
<PAGE>
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
July 31, 1996
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Historical
Urgel Pro Forma Pro Forma
Assets Historical Bourgie Adjustments Total
_______ __________ _________ _____________ __________
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalent investments $ 17,907 $ 6,819 $ 24,726
Receivables, net of allowances 95,487 4,429 99,916
Other current assets 38,456 4,423 (634)(a) 42,245
__________ __________ ______________ __________
Total current assets 151,850 15,671 (634) 166,887
Receivables due beyond one year, net of
allowances 164,338 4,165 (4,165)(a) 164,338
Intangible assets 247,769 8,946 31,762 (b) 288,477
Cemetery property, at cost 282,405 - 20,072 (b) 302,477
Property and equipment, net 228,638 24,196 10,988 (b) 263,822
Other assets 113,585 51,060 (44,345)(a)(b) 120,300
__________ __________ _____________ ___________
$ 1,188,585 $ 104,038 $ 13,678 $1,306,301
========== ========== ============= ===========
Liabilities and Shareholders' Equity
_____________________________________
Current liabilities:
Current maturities of long-term debt $ 4,693 $ 25 $ 4,718
Other current liabilities 61,002 2,366 63,368
____________ ____________ __________ _____________
Total current liabilities 65,695 2,391 68,086
Long-term debt, less current maturities 395,302 15,985 77,042 (b) 488,329
Deferred revenue 129,150 36,549 (34,493)(a)(b) 131,206
Other liabilities 66,352 8,439 11,803 (c) 86,594
____________ ___________ __________ _____________
656,499 63,364 54,352 774,215
____________ ___________ __________ _____________
Shareholders' equity 532,086 40,674 (40,674)(b) 532,086
____________ __________ __________ _____________
$1,188,585 $104,038 $ 13,678 $1,306,301
============ ========== ========== =============
________________
(a) To adjust Urgel Bourgie's accounting policies and presentation to that
of the Company.
(b) To allocate the purchase price to assets and liabilities based on fair
market value, in accordance with purchase accounting principles.
(c) To record the deferred tax effect of step-ups to fair market value.
</TABLE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
2.1 Amended and Restated Share Purchase Agreement dated September 30,
1996 among 3295796 Canada Inc., Societe Financiere Bourgie (1996)
Inc., Gestion Pierre Bourgie Inc., Gestion Claude Bourgie Inc.,
Pierre Bourgie, Marc Bourgie, Claude Bourgie, Stewart Group Inc. and
Stewart Enterprises, Inc. (In accordance with Regulation S-K Item
601(b)(2), the schedules to this agreement have been omitted, but a
detailed list of those schedules is included with this filing. The
Registrant agrees to provide such schedules to the Commission upon
request.)
23.1 Consent of Grou, La Salle + Associes
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
Dundersigned thereunto duly authorized.
STEWART ENTERPRISES, INC.
October 9, 1996 /s/ KENNETH C. BUDDE
______________________________
Kenneth C. Budde
Senior Vice President-Finance
Secretary and Treasurer
(Principal Accounting Officer)
<PAGE>
EXHIBIT INDEX
2.1 Amended and Restated Share Purchase Agreement dated September 30,
1996 among 3295796 Canada Inc., Societe Financiere Bourgie (1996)
Inc., Gestion Pierre Bourgie Inc., Gestion Claude Bourgie Inc.,
Pierre Bourgie, Marc Bourgie, Claude Bourgie, Stewart Group Inc. and
Stewart Enterprises, Inc. (In accordance with Regulation S-K Item
601(b)(2), the schedules to this agreement have been omitted, but a
detailed list of those schedules is included with this filing. The
Registrant agrees to provide such schedules to the Commission upon
request.)
23.1 Consent of Grou, La Salle + Associes
AMENDED AND RESTATED
SHARE PURCHASE AGREEMENT
BETWEEN
3295796 CANADA INC.
AND
SOCIETE FINANCIERE BOURGIE (1996) INC.
GESTION PIERRE BOURGIE INC.
GESTION CLAUDE BOURGIE INC.
PIERRE BOURGIE
MARC BOURGIE
CLAUDE BOURGIE
AND
STEWART GROUP INC.
STEWART ENTERPRISES, INC.
September 30, 1996
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINED TERMS 2
1.1 Definitions 2
1.2 Currency 6
1.3 Interpretation Not Affected by Headings 6
1.4 Number and Gender 6
1.5 Schedules 6
1.6 Accounting Principles 7
ARTICLE 2. PURCHASED SHARES 7
2.1 Sale and Purchase 7
2.2 As a going concern 8
ARTICLE 3. PURCHASE PRICE 8
3.1 Price 8
3.2 Adjustment 8
3.3 Closing Financial Statements 9
3.4 Disputes Concerning Closing Financial Statements 9
3.5 Adjustment payment 10
ARTICLE 4. REPRESENTATIONS & WARRANTIES OF THE VENDOR AND THE
GUARANTORS 11
4.1 Enforceability of the Agreement 11
4.2 Corporate Status 12
4.3 No Violation of Any Instrument 12
4.4 Subsidiaries 12
4.5 Capital Stock & Records 13
4.6 Business of the Corporation 14
4.7 Assets and Liabilities 15
4.8 Immovable Property 17
4.9 Litigation 19
4.10 Loans and Investment 20
4.11 Accounts Receivable 20
4.12 Absence of Material Change 22
4.13 Business Records 23
4.14 Contracts 24
4.15 Inventory of Unsold and Available Merchandise;
Pre-Need Contracts 25
4.16 Trust Accounts; Bank Accounts; Pre-Need Insurance 26
4.17 Insurance 27
4.18 Taxes 27
4.19 Intellectual Property 28
4.20 Environmental Matters 28
4.21 Labour Relations and Treatment 31
4.22 Pension and Other Benefit Plans 32
4.23 Conflicting Interests 33
4.24 No Finder's or Broker's Fee 33
4.25 Residence of Vendor 34
4.26 Full Disclosure 34
4.27 Necessary Approvals and Consents 35
4.28 Reliance 35
ARTICLE 5. REPRESENTATIONS & WARRANTIES OF THE PURCHASER AND
STEWART 35
5.1 Enforceability of the Agreement 35
5.2 No Violation 35
5.3 No Legal Proceedings 35
5.4 No Finder's Fee 36
5.5 Purchaser's Residence 36
5.6 Necessary Approvals and Consents 36
ARTICLE 6. COVENANTS OF THE VENDOR AND THE GUARANTORS 36
6.1 Best Efforts to Maintain & Preserve 36
6.2 Notice of Cessation in Ordinary Course 37
6.3 Access for Purchaser 37
6.4 Certain Prohibited Transactions 37
6.5 Maintain Insurance 38
6.6 Replacement and Release of Officers and Directors 38
ARTICLE 7. PURCHASER'S CONDITIONS OF CLOSING 38
7.1 Representations & Warranties Remain Correct 38
7.2 Compliance with Covenants 39
7.3 Permits, Consents and Approvals 39
7.4 Due Diligence 39
7.5 No Actions or Proceedings 39
7.6 Opinion of Counsel for the Vendor 40
7.7 Corporate and Other Proceedings 40
7.8 Bourgie Family Properties 40
7.9 Non-arm's length Agreements 40
7.10 Resignations of Certain Employees 40
7.11 Replacement and Release of Officers & Directors 40
7.12 Non-Competition Agreements 41
7.13 Employment Agreements 41
7.14 No Material Adverse Change 41
7.15 Release by Vendor and Guarantors 41
7.16 Title Matters 41
7.17 Permits and Licenses 42
7.18 Remediation Work 42
7.19 Inventory Lists 42
7.20 Rescission on Failure to Fulfill 42
ARTICLE 8. VENDOR'S AND GUARANTORS' CONDITIONS OF CLOSING 43
8.1 Representations & Warranties Remain Correct 43
8.2 Compliance with Covenants 43
8.3 Permits and Approvals 43
8.4 No Actions or Proceedings 44
8.5 Opinions of Counsel for the Purchaser 44
8.6 Change of Name 44
8.7 Rescission on Failure to Fulfill 44
ARTICLE 9. CLOSING AND TERMINATION 45
9.1 Vendor and Guarantors' deliveries 45
9.2 Purchaser deliveries 45
9.3 Termination 45
ARTICLE 10. SURVIVAL & RELIANCE ON REPRESENTATIONS & WARRANTIES &
INDEMNIFICATION 46
10.1 Survival Notwithstanding Investigation 46
10.2 Indemnification by Vendor and Guarantors 46
10.3 Indemnification by Purchaser and Stewart 46
10.4 Notice of Claim 47
10.5 Indemnification procedure for Direct Claim. 47
10.6 Indemnification against Third Party Claims 48
10.7 Sale of Enterprise Indemnification 49
10.8 Indemnification to be After Tax and Insurance 49
10.9 Expiry of Liability 49
10.10 Equitable Remedies 51
ARTICLE 11. MISCELLANEOUS 51
11.1 Notices 51
11.2 Governing Law 53
11.3 Time of the Essence 53
11.4 Public Announcement 53
11.5 Attornment 53
11.6 Expenses 53
11.7 Successors & Assigns 54
11.8 References to Schedules 54
11.9 Further Assurances 54
11.10 Severability 54
11.11 Entire Agreement 55
11.12 Counterparts 55
11.13 Language 55
<PAGE>
THIS AMENDED AND RESTATED SHARE PURCHASE AGREEMENT made as of the 30th day
of September, 1996
B E T W E E N: 3295796 Canada Inc., a corporation incorporated under the
laws of Canada and having its registered office at 130 Adelaide Street West,
Suite 510, Toronto, Ontario,
(the "Vendor")
A N D: Societe financiere Bourgie (1996) Inc., a corporation incorporated
under the laws of Canada and having its registered office at 1980
Rene-Levesque Blvd. West, Montreal, Quebec,
Gestion Pierre Bourgie Inc., a corporation incorporated under Part
IA of the Companies Act (Quebec) and having its head office at 160
Graham Blvd., Town of Mount Royal, Quebec,
Gestion Claude Bourgie Inc., a corporation incorporated under Part IA of
the Companies Act (Quebec) and having its head office at 160 Graham Blvd.,
Town of Mount Royal, Quebec,
Pierre Bourgie, a businessman domiciled and residing at 1 Chemin
le Roussin, Laval-surle-Lac, Quebec,
Marc Bourgie, a businessman domiciled and residing at 3, Chemin le Roussin,
Laval-sur-le-Lac, Quebec,
Claude Bourgie, a businesswoman domiciled and residing at 51 Les Bouleaux,
Laval-sur-le-Lac, Quebec,
(collectively, the "Guarantors")
OF THE FIRST PART,
A N D: Stewart Group Inc., a corporation incorporated under the laws of the
Province of Quebec, formerly known as Stewart Enterprises (Canada)
Inc., and having its head office at 160 Graham Blvd., Town of Mount
Royal, Quebec,
(the "Purchaser")
A N D: Stewart Enterprises, Inc., a corporation incorporated under the laws
of Louisiana and having its head office at 110 Veterans Memorial
Blvd, Metairie, Louisiana,
("Stewart")
OF THE SECOND PART.
THIS AGREEMENT WITNESSETH that in consideration of the mutual covenants and
agreements herein set out and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
covenant and agree as follows:
ARTICLE 1. DEFINED TERMS
1.1 Definitions
Where used herein, except where the context otherwise requires, the following
terms shall have the following meanings respectively:
(a) "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
(a-1) "Affiliated Entities" shall have the meaning attributed thereto in
Section 4.6.7 hereof.
(b) "Agreement in Principle" means the agreement dated June 21, 1996 between
the Gestion Pierre Bourgie Inc., Gestion Claude Bourgie Inc., Pierre Bourgie,
Marc Bourgie, Claude Bourgie, the Corporation and Stewart.
(c) "Audit Date" means December 31, 1995, being the date of the most recent
balance sheet of the Corporation included in the Audited Financial Statements.
(d) "Audited Financial Statements" means the financial statements of the
Corporation consolidated with those of its Subsidiaries reported on by the
auditors of the Corporation for the twelve (12) month period ended December 31,
1995, such statements attached at Schedule 1.1(d) hereto.
(e) "Bourgie Family Properties" means the immovable property formerly owned
by the Guarantors or by Relatives which have been transferred by the Guarantors
or by Relatives to Societe Immobiliere Bourgie Inc., an exhaustive list of such
property being contained at Schedule 1.1(e) hereto.
(f) "Business of the Corporation" means the business currently and heretofore
conducted by the Corporation and its Subsidiaries, as the case may be, including
but not limited to the funeral and burial services business, the operations of
cemeteries and pre-arrangement funeral and burial services described in Schedule
1.1(f) hereto.
(g) "Closing" means the consummation and completion of the sale and purchase
of the Purchased Shares as provided for in Article 9 hereof.
(h) "Closing Date" has the meaning attributed thereto at Article 9 hereof.
(i) "Closing Place" means the principal office of Ogilvy Renault at 1981
McGill College, Montreal, Quebec, H3A 3C1.
(j) "Corporation" means 9041-3139 Quebec Inc., formerly known as Societe
Financiere Bourgie (1991) Ltee, a corporation incorporated under Part IA of the
Companies Act (Quebec), pursuant to a Certificate of Incorporation dated
December 17, 1947.
(k) "Counsel for the Vendor" means Byers Casgrain, S.E.N.C., Montreal, Canada.
(l) "Counsel for the Purchaser" means Ogilvy Renault, S.E.N.C., Montreal,
Canada.
(m) "Due Diligence" has the meaning given thereto in Section 6.3.1.
(n) "Excluded Assets" means the assets of the Corporation and of the
Subsidiaries which the parties have agreed shall be retained by the Guarantors,
an exhaustive list of which is contained at Schedule 1.1(n) hereto.
(o) "Indemnitee" and "Indemnitor" have the respective meanings attributed to
such terms in Section 10.4. or Section 10.6, as the case may be.
(p) "Intellectual Property" means and includes all rights held in virtue of
any copyright, design,trade mark, trade name or patent or any application
therefor.
(q) "Law" means all applicable federal, provincial and local laws, codes,
constitutions, treaties, statutes, regulations, decrees, directives, ordinances,
rules, common law, judgments, injunctions,arbitration awards, orders, writs,
permits, licences and certificates, approvals, consents and notices of competent
governmental authorities.
(r) "Lien" means any hypothec, mortgage, pledge, lien, resolutory clause, prior
claim, priorities, notice of expropriation, notice of reserve, charge,
encumbrance, easement, servitude, licence, lease, security interest, title
retention agreement, conditional sale agreement, right of first refusal or
option or claim or right of another or ownership.
(s) "Louisiana Counsel for the Purchaser" means Henican, James & Cleveland,
L.L.P., New Orleans, Louisiana.
(t) "Net Working Capital" means cash, plus receivables, investments and
pre-need funeral trust funds less liabilities (exclusive of the principal
amount of the Notes), established in accordance with Schedule 3.2 hereto, less
for greater certainty, to the extent not already deducted, the amount of
mutation duties payable by Societe Immobiliere Bourgie Inc. upon the transfer
of the Bourgie Family Properties and by Laurentide Memorial Gardens Inc. and by
Remembrance Park (1976) Inc. upon the retransfer of the St-Hubert and Laval
cemeteries thereto, respectively, and less, on an after tax basis, the amount
of the retirement indemnity payable to Pierre Bourgie pursuant to the
employment agreement referred to in Section 7.13 hereof and the retirement
indemnity of $10,000 payable to Claude Bourgie upon the termination of her
employment.
(u) "Purchased Notes" means the following notes:
<TABLE>
<CAPTION>
Amount Payer Date Payee Endorsed to
<S> <C> <C> <C> <C>
$3,000,000 Corporation December 9, 1988 Gestion Marc Bourgie (1991)Inc. Vendor
$4,500,000 Urgel Bourgie Ltee December 12, 1990 Gestion Claude Bourgie Inc. Vendor
$2,000,000 Societe Immobiliere August 5, 1993 Gestion Marc Bourgie (1991)Inc. Vendor
Bourgie, Inc.
$33,815,568 Corporation September 18, 1996 Societe financiere Bourgie Vendor
(1996) Inc.
copies of which are attached hereto as Schedule 1.1(u).
(v) "Permitted Encumbrances" means the encumbrances referred to in
Schedule 1.1(v).
(w) "Person" means an individual, partnership, joint venture, association,
corporation, trust, or a government or any department or agency thereof.
(x) "Property" means all immovable property used in connection with the
Business of the Corporation, including but not limited to the immovable property
owned by the Corporation or by any of the Subsidiaries and any immovable where
the Corporation or any of the Subsidiaries is an emphyteutic lessee or a
superficiary and includes the Bourgie Family Properties.
(y) "Purchase Price" means the price payable by the Purchaser to the
Vendor for the Purchased Shares and the Purchased Notes as determined in
accordance with the provisions of Article 3 hereof.
(z) "Purchased Shares" means all the issued and outstanding shares of the
Corporation described at Schedule 1.1(z).
(aa) "Relative" means any brother, sister, cousin, niece, nephew, uncle, aunt,
spouse (whether by marriage or by common law), ascendant or descendent of any of
the Guarantors.
(bb) "Subsidiaries" means all corporations more than 50% of whose shares of
stock having general voting power under ordinary circumstances to elect a
majority of the board of directors, managers, or trustees of such corporations,
irrespective of whether or not at the time stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency, is owned or controlled directly or indirectly by the Corporation
or by any other Subsidiary of the Corporation and all Affiliated Entities, such
Subsidiaries being listed at Schedule 1.1(bb) hereto.
(cc) "Third Party Claim" means any demand or statement or any notice thereof
which has been made on or communicated to the Vendor or the Purchaser or Stewart
or the Corporation or any of the Subsidiaries by or on behalf of any Person
other than the foregoing and which, if maintained or enforced, will or might
result in a loss, liability or expense of the nature described in either Section
10.4 or Section 10.6.
(dd) "1994 Reorganization" shall have the meaning set forth in Section 4.18.3
hereof.
(ee) "This Agreement", "herein", "hereby", "hereunder" and similar
expressions refer to this Share Purchase Agreement and the accompanying
schedules.
1.2 Currency
All amounts of money which are referred to in this Agreement are
expressed in Canadian dollars.
1.3
Interpretation Not Affected by Headings The division of this Agreement
into Articles, Sections, Subsections, Paragraphs and Subparagraphs and the
insertion of headings and a table of contents are for convenience of reference
only and shall not affect the construction or interpretation of this Agreement.
1.4
Number and Gender Unless the context otherwise requires, words importing
the singular number only shall include the plural and vice versa and words
importing gender shall include the masculine, feminine and neuter genders.
1.5 Schedules
The following are the Schedules attached to the Agreement
which are referred to herein, form a part of this Agreement to the same extent
as if specifically included herein and are hereby incorporated by reference
without further provision:
Schedule 1.1(d) Audited Financial Statements
Schedule 1.1(e) Bourgie Family Properties
Schedule 1.1(f) Description of the Business of the Corporation
Schedule 1.1(n) Excluded Assets
Schedule 1.1(u) Purchased Notes
Schedule 1.1(v) Permitted Encumbrances
Schedule 1.1(z) Purchased Shares
Schedule 1.1(bb) Subsidiaries
Schedule 3.2 Net Working Capital Calculation
Schedule 4.5.1 Capital Stock of Corporation
Schedule 4.5.4 Corporate Records
Schedule 4.6.3 Conduct of Business
Schedule 4.6.8 Corporate Names and Tradenames
Schedule 4.7.3 Leased Properties and Equipment
Schedule 4.8.1 List of Leased Properties
Schedule 4.8.3 Contracts for Improvements
Schedule 4.8.11 Unused Property
Schedule 4.8.12 List of Properties
Schedule 4.9.1 Litigation
Schedule 4.10 Loans and Investments
Schedule 4.12.1 Corporate Reorganization and Special Dividends
Schedule 4.13.1 Business Records
Schedule 4.14.1 Material Contracts
Schedule 4.14.4 Restrictive Covenants
Schedule 4.15.1 Inventory of Unsold and Available Merchandise
Schedule 4.15.2 Pre-Need Contracts
Schedule 4.16.2 Trust Accounts
Schedule 4.16.3 Bank Accounts
Schedule 4.17.1 Insurance
Schedule 4.19.1 Intellectual Property
Schedule 4.20.2 Environmental Matters
Schedule 4.21.1 Labour Relations and Treatment
Schedule 4.21.5 Contracts of employment
Schedule 4.22.1 Benefits Plans and Pension Plans
Schedule 4.22.4 Commitments to Employees
Schedule 7.10 Resignations
Schedule 7.11 Replacement and releases of Officers and Directors
Schedule 7.13 Non-Competition Agreements
Schedule 7.16 Title Matters
1.6 Accounting Principles
Any reference in this Agreement to generally accepted accounting principles
refers to generally accepted accounting principles adopted as of the date
hereof by the Canadian Institute of Chartered Accountants or any successor
institute.
ARTICLE 2. PURCHASED SHARES
2.1 Sale and Purchase
The Vendor covenants and agrees to sell, assign and transfer to the Purchaser
and the Purchaser agrees to acquire from the Vendor on the Closing Date the
Purchased Shares and the Purchased Notes, the whole for the Purchase Price
and upon the terms and conditions herein provided.
2.2 As a going concern
It is the intention of the parties that the Business of the Corporation as a
going concern, its goodwill and all properties (movable and immovable, including
without limitation the Bourgie Family Properties), assets (excluding the name
"Societe Financiere Bourgie" and the Excluded Assets) and rights wheresoever
located,including those reflected in the Audited Financial Statements, those
subsequently acquired prior to the Closing Date (subject, however, to the right
of the Vendor to dispose of the Excluded Assets and to dispose of other assets
not necessary for the operation of the Business of the Corporation to the extent
that the Net Working Capital as at the Closing Date shall not be less than the
Net Working Capital as at December 31, 1995) and those used in the conduct of
the Business of the Corporation, excluding the Excluded Assets, shall be
transferred, as part of the Purchased Shares to Purchaser as provided herein
above as of the Closing Date.
ARTICLE 3. PURCHASE PRICE
3.1 Price
The Purchase Price shall be payable by the Purchaser
and by Stewart solidarily to the Vendor. Such Purchase Price shall be
the sum of $134,670,000
(i) of which the sum of $43,315,568 shall be payable at the Closing
Place on the Closing Date for the Purchased Notes by wire transfer to
the order of the Vendor; and
(ii) of which the sum of $10,000,000 shall be payable by the assumption
by the Purchaser of the note in the amount of $10,000,000 dated September 25,
1996 payable by the Vendor to the Corporation; and
(iii) of which the balance in the amount of $81,354,432 shall be payable
at the Closing Place on the Closing Date for the Purchased Shares by wire
transfer to the order of the Vendor.
3.2 Adjustment
In the event that the Net Working Capital as of the Closing Date,
based on the Closing Balance Sheet (subject to Section 3.4 hereof),
is less than the Net Working Capital as of December 31, 1995,
based on the Audited Financial Statements, amounting to $13,443,935
as calculated in the manner as set forth in Schedule 3.2 hereof
(less for greater certainty, to the extent not already deducted,
the amount of mutation duties payable by
Societe Immobiliere Bourgie Inc. upon the transfer of the Bourgie
Family Properties and by Laurentide Memorial Gardens Inc. and by
Remembrance Park (1976) Inc. upon the retransfer of the St-Hubert
and Laval cemeteries thereto, respectively, and less, on an after
tax basis, the amount of the retirement indemnity payable to
Pierre Bourgie pursuant to the employment agreement referred to
in Section 7.13 hereof and the retirement indemnity of $10,000
payable to Claude Bourgie upon the termination of her
employment), the Purchase Price shall be reduced dollar for
dollar in an amount equal to the amount by which the Net Working
Capital as of the Closing Date is less than the Net Working
Capital as of December 31, 1995.
3.3 Closing Financial Statements
As soon as practicable, and in any event not later than 75
calendar days following the Closing Date, the Vendor shall cause,
at Vendor's expense, Grou, LaSalle & Associes, Chartered
Accountants to deliver to the Purchaser a consolidated audited
balance sheet for the Corporation as of the close of business on
the Closing Date (the "Closing Balance Sheet") and a consolidated
audited income statement for the Corporation for the period from
January 1, 1996 to the Closing Date (the "Closing Income
Statement") each of which shall be reported on without
qualification by Grou, La Salle & Associes, Chartered
Accountants. Concurrently with the delivery of such statements
to the Purchaser, the Vendor shall cause Grou, LaSalle and
Associes, chartered accountants, and the respective chartered
accountants of the Subsidiaries of the Corporation, to give
access to the Purchaser or their designated auditors to their
working papers in connection with such financial statements. The
Closing Balance Sheet and the Closing Income Statement
(collectively, the "Closing Financial Statements") shall be
prepared in accordance with generally accepted accounting
principles applied on a basis consistent with, and using the same
accounting methods, procedures and practices as applied and used
by the Corporation and its auditors in the preparation of the
Audited Financial Statements (which methods, procedures and
practices have been reviewed by the Purchaser) and shall present
fairly the consolidated financial position of the Corporation as
at the Closing Date and the consolidated sales, earnings and
results of operations for the period from January 1, 1996 to the
Closing Date. The Closing Financial Statements shall also be
accompanied with a certificate from the Vendor stating the amount
of the Net Working Capital as of the Closing Date and that it has
been established in accordance with the method at Schedule 3.2
hereto and the amount of any adjustment to the Purchase Price,
required pursuant to Section 3.2 herein.
3.4 Disputes Concerning Closing Financial Statements
The Purchaser may dispute any aspect of the Closing Financial
Statements including the Net Working Capital by notice in writing
given to the Vendor within forty five (45) days following the
delivery of the Closing Financial Statements to the Purchaser.
If no such notice is given by the Purchaser within such 45 day
period, the Closing Financial Statements and the Net Working
Capital shall be deemed to be accepted by the Purchaser and by
Stewart and any adjustment to the Purchase Price required
pursuant to Section 3.2 herein, shall be made in accordance with
Section 3.5 herein. Unless such dispute is not resolved promptly
by agreement, the Vendor and the Purchaser shall select jointly
one of Price Waterhouse or KPMG Peat Marwick to determine the
matter in dispute. If the Vendor and the Purchaser are unable to
agree as to the firm that will determine the matter in dispute,
one of the two firms proposed above shall be chosen by lot by
Counsel for the Purchaser in the presence of Counsel for the
Vendor. The firm chosen shall designate a partner of such firm
(the "Independent Auditor") to determine the matter in dispute as
a single expert. The decision of the Independent Auditor with
respect to any matter in dispute (including as to all procedural
matters and any decision as to costs), who shall be acting as an
expert and not as an arbitrator, shall be final and binding on
the Vendor, the Guarantors, the Purchaser and Stewart and shall
not be subject to appeal by any party. The Independent Auditor
will render his decision in writing within 30 days of his
appointment. In determining the matter in dispute, the
Independent Auditor shall rely on generally accepted accounting
principles applied in a manner consistent with, and using the
same methods, procedures and practices as applied and used in
connection with the Audited Financial Statements. The fees and
expenses of the Independent Auditor shall be borne equally by the
Vendor and the Purchasers. Upon agreement with respect to all
matters in dispute, or upon a decision of the Independent Auditor
with respect to all matters in dispute, such amendments shall be
made to the Closing Financial Statements including the Net
Working Capital as may be necessary to reflect such agreement or
such decision, as the case may be. In such event, references in
this Agreement to the Closing Financial Statements, Closing
Balance Sheet and Closing Income Statement shall refer to the
Closing Financial Statements, as so amended and any adjustment to
the Purchase Price required under Section3.2 herein as a result
of such agreement or such decision shall be made in accordance
with Section 3.5 herein.
3.5 Adjustment payment
In the event that an adjustment in the
Purchase Price pursuant to this Section 3 shall occur, such
amount shall be paid by the Vendor to the Purchaser, or by the
Purchaser and Stewart solidarily to the Vendor, as the case may
be, within thirty (30) days of a determination that such an
adjustment is necessary by wire transfer, certified cheque or
banker's draft to or to the order of the Purchaser or the Vendor,
as the case may be. In the event that such adjustment consists
in a reduction of the Purchase Price payable by the Vendor to the
Purchaser in an amount in excess of $100,000, interest at an
annual rate of 8% shall be payable along with such reduction,
such interest to be calculated on the basis of the number of days
elapsed from the Closing Date to the date of payment of such a
reduction, divided by 365 days.
ARTICLE 4.REPRESENTATIONS & WARRANTIES OF THE VENDOR AND THE
GUARANTORS
The Vendor and the Guarantors represent and warrant to the Purchaser
as follows.
4.1 Enforceability of the Agreement
4.1.1 The Vendor is the sole and absolute owner of the Purchased
Shares and the Purchased Notes with good and marketable title
thereto free and clear of all Liens with full power and authority
to sell, assign and transfer the Purchased Shares and the
Purchased Notes as herein provided.
4.1.2 The Vendor has been duly authorized to execute this
Agreement and to consummate the transactions herein provided.
4.1.3 Neither the entering into of this Agreement nor the
consummation of any of the transactions contemplated hereby will
4.1.3.1 (a) result in the violation of any of the terms or
provisions of the constating documents or by-laws of any of the
Vendor or the Corporation or the Subsidiaries or of any
agreement, written or oral, to which any of the Vendor or the
Corporation or the Subsidiaries is a party; or (b) result in a
violation by the Vendor or the Guarantors of any law or
regulation of any jurisdiction to which any of the Vendor, the
Corporation or the Subsidiaries is subject,
4.1.3.2 subject the Corporation or the Subsidiaries to any
penalty or liability, or
4.1.3.3 have the effect of giving rise to or permitting the
exercise of any right of first refusal or option to purchase in
favour of any third party with respect to the Purchased Shares or
the Purchased Notes, the Property or any of the assets used in
the Business of the Corporation.
4.1.4 This Agreement and the other documents executed or required
to be executed by the Vendor and the Guarantors in connection
with this Agreement are, or will be, when delivered, legal, valid
and binding obligations of the Vendor and the Guarantors,
enforceable in accordance with their terms, subject to
bankruptcy, insolvency and other similar laws of general
application affecting the rights of creditors generally and
subject to the availability of equitable remedies being in the
discretion of a court of competent jurisdiction.
4.2 Corporate Status
4.2.1 The Corporation and each of the Subsidiaries
4.2.1.1 has been duly incorporated and organized and is validly
subsisting and in good standing under the laws of the
jurisdiction in which it was incorporated;
4.2.1.2 has the corporate power to own, lease, occupy or
otherwise hold the Property and rights now owned, leased,
occupied or otherwise held by it and to conduct the Business of
the Corporation, and each is duly qualified as a corporation to
do business in, and is in good standing, in each jurisdiction in
which the nature of the Business of the Corporation or the
Property or rights owned, leased, occupied or otherwise held by
it makes such qualification necessary.
4.3 No Violation of Any Instrument
4.3.1 Neither the Corporation nor any Subsidiary is in violation
of or default under, nor has any event occurred that, with or
without the giving of notice, lapse of time or the occurrence of
any other event, would constitute a violation of or default
under, or permit the termination or the acceleration of maturity
of, any of the material contracts to which the Corporation or a
Subsidiary is a party.
4.3.2 Neither the Corporation nor any Subsidiary is in violation
of or in default under any material agreement or instrument to
which it is a party, by which it is bound, or to which any of its
assets are subject, or is subject to any law, judgment, order,
injunction or decree, which may result in the imposition of a
Lien, claim, or encumbrance upon any of the assets of the
Corporation or a Subsidiary.
4.4 Subsidiaries
4.4.1 The only Subsidiaries are those Persons listed in
Schedule1.1(bb) hereof.
4.4.2 The Corporation and the Subsidiaries are the sole and
absolute owners respectively of the shares of the capital stock
of each class of each of the Subsidiaries as set out in
Schedule1.1(bb) hereof, in each case by a good and marketable
title free and clear of all Liens.
4.4.3 The respective jurisdictions in which each Subsidiary has
been incorporated and their respective authorized and outstanding
shares of capital stock are as set out in Schedule1.1(bb) hereof.
4.5 Capital Stock & Records
4.5.1 The number of shares issued, classification thereof and par
value of each share of each class is as set forth in Schedule
4.5.1. All of the outstanding shares of every class have been
duly allotted and issued and are fully paid and non-assessable.
4.5.2 The authorized capital stock of each Subsidiary and the
number of shares of each Subsidiary presently outstanding has
been duly allotted and issued and is fully paid and non-
assessable.
4.5.3 No Person has any agreement or option or any right or
privilege whether by law or by contract capable of becoming an
agreement or option
4.5.3.1 to acquire any of the Purchased Shares, any of the
Purchased Notes or any of the issued shares of any Subsidiary;
4.5.3.2 to subscribe for or otherwise acquire any of the
unissued shares of the capital stock of the Corporation or of any
of the Subsidiaries.
4.5.4 Except as disclosed in Schedule 4.5.4, the corporate
records and minute books of the Corporation and of each of the
Subsidiaries contain complete and accurate minutes of all
meetings of the directors and shareholders of the Corporation or
of such Subsidiary held since the respective dates of the
incorporation of the Corporation or of such Subsidiary, and all
such meetings were duly called and held. The share certificate
books, registers of shareholders, registers of transfers and
registers of directors of the Corporation and each of the
Subsidiaries are complete and accurate. None of the matters set
forth in Schedule 4.5.4 hereto have or are susceptible of having
a material adverse effect on the authorized, issued and
outstanding share capital of the Corporation and each of its
Subsidiaries, on the ownership of such shares or on the ownership
of the Properties.
4.5.5 Neither the Corporation nor any of the Subsidiaries exists
as a result or incident of any amalgamation or merger between the
Corporation or such Subsidiary and any other Person or between
other Persons pursuant to which the properties or rights of the
Corporation or of such Subsidiary became or remained subject to
the rights of the creditors of such previously existing Person.
4.6 Business of the Corporation
4.6.1 The Business of the Corporation is substantially as
described in Schedule 1.1(f) and save as stated in such Schedule
the Corporation and the Subsidiaries have conducted their
business substantially as so described continuously during the
period of 3 years preceding the Audit Date and during said period
neither the Corporation nor any of the Subsidiaries has conducted
any other business.
4.6.2 The respective locations or jurisdictions where the
Corporation and each of the Subsidiaries presently conducts and
has, during the 3 years preceding the Audit Date, conducted its
business are as set out in Schedule 1.1(f) and, save as therein
specified, neither the Corporation nor any of the Subsidiaries
has, during the said 3 year period, conducted business in any
other location or jurisdiction.
4.6.3 Each of the Corporation and the Subsidiaries is not
conducting the Business of the Corporation in contravention with
any applicable laws, rules and regulations of each jurisdiction
in which the Business of the Corporation is being carried on
including, without limitation, the provisions of the Act
respecting prearranged funeral services and sepultures (Quebec),
the Consumer Protection Act (Quebec), the Public Health
Protection Act (Quebec), the Non-Catholic Cemeteries Act
(Quebec), the Burial Act (Quebec) and the Act to preserve
agricultural land (Quebec) together with the provisions of the
regulations enacted under such Acts, except for such
contraventions which severally or in the aggregate do not have a
material adverse effect on the operations of the Corporation or
Subsidiaries and except as set forth in Schedule 4.6.3 is not in
breach of any such laws, rules or regulations, except for
breaches which severally or in the aggregate are immaterial for
either the Corporation or any of its Subsidiaries; is duly
licensed, registered or qualified in each jurisdiction in which
it owns or leases property or conducts the Business of the
Corporation to enable such business to be conducted as now
conducted, and its properties and assets to be owned, leased and
operated, and all such licences, registrations and qualifications
are valid, subsisting and in good standing, and none of the same
contains any burdensome term, provision, condition or limitation
which has a material adverse effects on the operations of the
Corporation or Subsidiaries. The professional services rendered
as part of the Business of the Corporation, including without
limitation the handling of mortal remains, is being conducted and
has been conducted in accordance with reasonable standards of
care applicable in the market in which the Business of the
Corporation is conducted.
4.6.4 All permits, authorizations, consents and approvals by any
federal, provincial or local authority, as the case may be,
including, without limitation, all permits issued pursuant to the
Public Health Protection Act (Quebec) and to all by-laws,
regulations and orders in council enacted pursuant to that Act,
necessary or advisable for the conduct of the Business of the
Corporation, are in good standing and have been duly and validly
issued.
4.6.5 To the Vendor's knowledge, the Corporation, each of the
Subsidiaries and each of their directors and officers, have not
been found guilty of any offence under the Public Health
Protection Act (Quebec) or under any regulation enacted pursuant
to such Act.
4.6.6 To the Vendor's knowledge, no director or officer of the
Corporation or of any of the Subsidiaries has been found guilty
of theft or fraud, attempted theft or fraud or an offence under
paragraph (e) of subsection 1 of section 189 of the Criminal Code
(Canada).
4.6.7 No cemetery, of which the Corporation, any of the
Subsidiaries or any other entity with which the Guarantors or a
Relative is associated in connection with the conduct of the
Business of the Corporation and which owns cemetery Property
("Affiliated Entities") is the owner or the emphyteotic lessee,
has, at any time, been condemned by any federal, provincial or
local authority as dangerous to public health (such
representation being subject to the knowledge of the Vendor for
periods prior to the ownership or control by the Corporation or
the Subsidiaries by the Guarantors or the Relatives).
4.6.8 Neither the Corporation nor any of the Subsidiaries is now
conducting or has conducted any business under any name other
than its corporate name or tradenames set forth in Schedule 4.6.8
hereto.
4.7 Assets and Liabilities
4.7.1 The balance sheet included in the Audited Financial
Statements fairly present the consolidated financial position of
the Corporation and Subsidiaries as at the respective dates
specified therein and the related statements of earnings,
retained earnings and changes in financial position for each of
the periods then ended fairly present the results of the
consolidated operations and the changes in financial position for
the periods then ended of the Corporation and the Subsidiaries
and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout
the periods specified therein.
4.7.2 Except to the extent reflected or reserved against in the
consolidated balance sheet of the Corporation included in the
Audited Financial Statements, neither the Corporation nor any of
the Subsidiaries had at the Audit Date any liabilities or
obligations (except for liabilities and obligations which in the
aggregate are immaterial) whether accrued, absolute, contingent
or otherwise (including without limitation liabilities for taxes,
dues or other impositions) and whether due or to become due.
Since the Audit Date, the Corporation has not incurred any
liabilities or obligations, except in the normal course of
business. Notwithstanding the foregoing, the Purchaser and
Stewart acknowledge having been advised, and accept, that there
is an estimated reserve deficiency amounting to approximately one
million six hundred thousand dollars ($1,600,000) in connection
with the obligations of Parc Commemoratif de Montreal Inc.
relating to pre-arrangements contracts entered into before the
Corporation acquired such Subsidiary. The Purchaser acknowledges
that it shall have no claim for indemnification in respect of
this representation to the extent of $1,600,000 of estimated
reserve deficiency.
4.7.3 The Corporation and each of the Subsidiaries has good and
marketable title, validly published where required, to all its
properties and assets used in the Business of the Corporation and
all those referred to in the balance sheets included in the
Audited Financial Statements (other than any thereof which have
been disposed of in the ordinary course of business) free and
clear of any Liens, except for Liens specifically referred to in
the said Audited Financial Statements and Permitted Encumbrances,
and are free of latent or hidden defects which render them unfit
for the use for which they were intended or which so diminish
their usefulness that the Purchaser would not have bought them or
paid so high a price if he had been aware of them. All
properties, equipment and machinery and all other tangible
personal property either owned or leased by the Corporation or
any of the Subsidiaries are in good operating condition and
repair, except for normal wear and tear and normal usage and are
in each case adequate for the conduct of the Business of the
Corporation or of such Subsidiary in the ordinary course. The
Corporation and each of the Subsidiaries has valid leasehold
interests in all the properties, equipment and machinery shown in
Schedule 4.7.3 hereto or reflected in the Audited Financial
Statements as being leased by it free and clear of any Liens
except for Permitted Encumbrances and except for the Excluded
Assets. All such leases (complete and correct copies of which
have been made available to the Purchaser) are valid, subsisting
and effective in accordance with their respective terms and are
in good standing, and no event or condition exists (including the
consummation of the transactions contemplated herein) which
constitutes or after notice or lapse of time or both would
constitute a default thereunder.
4.8 Immovable Property
With regard to the Property:
4.8.1 At Closing, the Purchaser, directly or through the
Corporation and the Subsidiaries, shall be entitled to immediate,
complete and unrestricted possession of the Property, free of all
Liens, except for and save Permitted Encumbrances and other
rights of possession by third parties, except for right of
possession of tenants pursuant to leases listed in Schedule 4.8.1
hereto.
4.8.2 There is no condemnation, suit, action or other proceeding
or judgment, injunction, order, decree, inquiry, investigation or
special assessment pending or, to the best of the Vendor's
knowledge, threatened against or affecting all or any portion of
the Property, and no inquiry, investigation or special assessment
at law or before or by any court, public body or administrative
agency is pending or, to the best of the Vendor's knowledge,
threatened that will adversely affect the Property or the
Vendor's obligations under this Agreement.
4.8.3 Except as disclosed in Schedule 4.8.3, at Closing, there
shall be no outstanding contract made by the Corporation or the
Subsidiaries for any improvements to the Property which have not
been fully paid for or reflected as a current liability in the
Net Working Capital as at Closing established pursuant to Section
3.2 hereof, and the Corporation or the Subsidiaries and the
Vendor shall cause to be discharged all liens arising from any
labour or materials furnished prior to Closing which pertain to
the Property.
4.8.4 Adequate and usable public sanitary and storm sewers, if
any, and adequate and usable public water facilities, and
electrical facilities necessary to the current operation of the
Property (save and except for such facilities or utilities the
absence of which does not materially adversely affect the
operations of the Corporation or Subsidiaries), are installed in
and are connected to the Property, and can be used without charge
except for normal or customary charges of public utility
companies, if any.
4.8.5 The improvements which are part of the Property are
completely within the boundary lines of the Property, do not
violate any covenants, servitudes or other applicable requirement
except as disclosed in Schedule 7.16, and no structure of any
kind encroaches upon the Property other than for encroachments
referred to in Schedule 1.1(v) hereto.
4.8.6 There are no outstanding notices of any governmental
authority that have been issued upon the Property requiring or
calling attention to the need for any work, repairs,
construction, alterations or installations on or in connection
with the Property, because of violations of building, safety,
environmental or fire laws, orders, rules or regulations, or
otherwise, which have not been complied with. The Vendor shall
comply, and cause the Corporation and the Subsidiaries to comply
prior to Closing, with all such notices which may be issued at
any time prior to Closing, but Purchaser's failure to insist upon
compliance with such notices prior to Closing shall not affect
the obligation to affect such compliance after Closing. The
Vendor has no knowledge of any condition which would warrant the
issuance of such notice.
4.8.7 No notice has been given to and received by the Corporation
or the Subsidiaries or the Vendor from any insurance company
which has issued a policy with respect to the Property or any
other person claiming any defects or deficiencies or requesting
the performance of any repairs, alterations or other work, and
the Vendor will comply, and cause the Corporation and the
Subsidiaries to comply, with any such notice or requirement if
any such notice is received prior to the time of Closing.
4.8.8 The Property does not violate, contravene or breach, and is
used in compliance with the Laws and, without limiting the
generality of this subsection, the present use of the Property is
in compliance with all building codes and zoning and subdivision
laws, rules, regulations and orders and none of the buildings,
structures or improvements, including fences, if any, forming
part of the Property, encroaches on any real and immovable
property which is not part of the Property except as disclosed in
Schedule 7.16.
4.8.9 No portion of the Property is situated in an agricultural
zone pursuant to the Act to preserve agricultural land (Quebec),
except as specified in Schedule 4.8.12.
4.8.10 Except as disclosed in Schedule 4.8.12, no portion of the
Property is recognized or classified as cultural property
pursuant to the Cultural Property Act (Quebec) or located in an
area affected by said act.
4.8.11 Except for unused property as listed on Schedule 4.8.11
hereto, loans and investments as listed in Schedule 4.10 hereto,
and Excluded Assets, the Corporation nor any of the Subsidiaries
owns or possesses any property right or other asset having a
value in excess of $10,000.00 which is not so owned or possessed
solely for the purpose of conducting the Business of the
Corporation.
4.8.12 All of the Property is listed at Schedule 4.8.12 hereto.
4.9 Litigation
4.9.1 Except as set out in Schedule 4.9.1 hereof and as ade-
quately reflected or noted in the Audited Financial Statements,
there is not
4.9.1.1 any suit, action or other proceeding or governmental
investigation pending or threatened against the Corporation or
any of the Subsidiaries in or before or by any court, board or
administrative or other tribunal;
4.9.1.2 any order, decree, injunction or judgment of any court,
administrative agency or board or administrative or other
tribunal against or affecting the Corporation or any of the
Subsidiaries;
4.9.1.3 any legal impediment to the continued operation in the
ordinary course of the properties and businesses of the
Corporation or the Subsidiaries; or
4.9.1.4 any violation by the Corporation or any of the
Subsidiaries of any law, directive, or legislation; other than
any such of the foregoing referred to in this Subsection4.9.1,
which severally or in the aggregate will not have a material
effect on the condition (financial or otherwise), assets,
liabilities, business, operations or prospects of either the
Corporation or of any of the Subsidiaries.
4.9.2. The Vendor and the Guarantors are not aware of any legal
proceedings pending or threatened or of any circumstances which
may reasonably be expected to give rise to such proceedings which
in any way might interfere with the sale or delivery of the
Purchased Shares or the consummation of any of the transactions
herein contemplated.
4.10 Loans and Investment
Except as described in Note 3 of the Audited Financial Statements
and described at Schedules 4.10 and 4.14.1 hereto, neither the
Corporation nor any of the Subsidiaries holds any loan or advance
due by, or any stock, obligation or securities of, or any other
interest in, any Person that is not a Subsidiary of the
Corporation to an aggregate value in excess of $10,000.00.
4.11 Accounts Receivable
4.11.1 The accounts receivable ("Receivables") of the Corporation
and of each of the Subsidiaries reflected on the consolidated
balance sheet of the Corporation included in the Audited
Financial Statements are bona fide, have been properly recorded
and represent amounts due for goods or services duly sold or
rendered or to be rendered in the ordinary course of business,
and no claim has been made or threatened with respect to the
quality or warranty of such goods and services which has not been
disposed of, and the said Receivables are good and collectible,
free from any claim or right of set off or counterclaim, except
to the extent of any reserves for bad debts reflected in said
balance sheet, and all Receivables which have accrued to the
Corporation and to each of the Subsidiaries up to the date hereof
subsequent to the Audit Date comply with the foregoing in all
respects except to the extent of reserves for bad debts
maintained at substantially the same respective rates as
reflected in the said balance sheet.
4.11.2 All Receivables reflected in the Audited Financial
Statements or arising since the date thereof up to the Closing
Date arose in the ordinary course of business are good and
collectible and are not subject to any valid defence, offset or
credit.
4.11.3 For purposes of this Section, all Receivables will be
evaluated six (6) months following the Closing ("Evaluation
Date"). A Receivable, except for Receivables relating to
prearrangement contracts, shall be considered to be good and
collectible if (i) payment has been received in full on or before
the Evaluation Date; or (ii) four scheduled payments, or payments
totalling at least 13% of the contract price, have been received
within the 6 month period immediately preceding the Evaluation
Date. To the extent that a Receivable is not good and
collectible, the Purchase Price shall be reduced by an amount
equal to the excess of the balance of all such Receivables at
Evaluation Date over the allowance for doubtful accounts set up
by the Corporation and reflected in the Closing Financial
Statements. The allowance for doubtful accounts set up by the
Corporation as of the Closing shall be in accordance with its
policy in effect as of December 31, 1995. Notwithstanding
anything to the contrary in this Section 4.11.3, Receivables
which were guaranteed by the estate of a decedent shall be
evaluated twelve (12) months after the Closing, which date shall
be the Evaluation Date applicable to such Receivables. Any such
Receivable shall not be deemed good and collectible unless paid
in full at such time. A Receivable deemed not good and
collectible under this Section 4.11.3 shall be conveyed to Vendor
who may pursue legal collection efforts consistent with the
practices of the Corporation in effect as at December 31, 1995;
however, no legal action with respect to any such Receivable may
be instituted without the express written consent of Purchasers.
4.11.4 For purposes of this Section, all Receivables relating to
prearranged contracts will be evaluated on the Evaluation Date.
A Receivable relating to prearranged contracts shall be
considered good and collectible at the Evaluation Date if (i)
payments have up to the Evaluation Date been made in accordance
with the contract terms, or (ii) payments up to the Evaluation
Date have been made in accordance with a payment schedule revised
in accordance with the Corporation's credit policies in effect as
of the date hereof. To the extent that a Receivable is not good
and collectible at the Evaluation Date, the Purchase Price shall
be reduced by an amount equal to the amount of any income
previously recognized on the books of the Corporation in
connection with the sale relating to such Receivable which is in
excess of the funds kept by the Corporation in accordance with
applicable laws in connection with such sale.
4.11.5 On the Evaluation Date, the Purchase Price will be reduced
by the amount of the Receivables deemed not good and collectible
determined as set forth above and the procedures at Section 3.2
hereof with respect to the repayment of such reduction in the
Purchase Price to the Purchaser shall apply mutatis mutandis.
4.12 Absence of Material Changes
4.12.1 The Business of the Corporation has been conducted since
the Audit Date in the ordinary course, and (except for the
carving out of the Excluded Assets, the declaration of special
dividends by the Corporation and Subsidiaries and the disposition
of other assets not necessary to the operation of the Business of
the Corporation to the extent that the Net Working Capital as at
the Closing Date shall be not less than the Net Working Capital
as at December 31, 1995, all as set forth in Schedule 4.12.1
hereto) since the Audit Date neither the Corporation nor any of
the Subsidiaries has entered into any transaction other than in
the ordinary course of its business and, in particular, without
limiting the generality of the foregoing, neither the Corporation
nor any of the Subsidiaries has since the Audit Date
4.12.1.1 purchased or redeemed directly or indirectly any shares
of the capital stock of the Corporation or of any such
Subsidiary;
4.12.1.2 issued or sold or agreed to issue or sell any shares of
the capital stock of the Corporation or of any such Subsidiary or
any option, warrant, conversion or other right to acquire any
such share or any securities convertible into or exchangeable for
such shares, or amended its charter or by-laws except in
connection with the acquisition of the Bourgie Family Properties;
4.12.1.3 declared or paid any dividend or declared or made any
other distribution on any of the shares of any class of its
capital stock or on any other of its securities;
4.12.1.4 acquired or sold, assigned, transferred, licensed,
terminated, leased or disposed of any Intellectual Property;
4.12.1.5 suffered or incurred any damage, destruction, loss or
liability (whether or not covered by any insurance), any strike
or other labour trouble, or any loss of employees or customers
that, either by itself or in the aggregate has affected adversely
or may reasonably be expected to affect adversely, to a material
extent, the Corporation or any such Subsidiary or the respective
businesses being conducted by them;
4.12.1.6 made or authorized any payment to an officer, director,
former director, shareholder, employee or Affiliate of the
Corporation or any of the Subsidiaries, otherwise than at the
regular rates payable to them, by way of, salary, pension, bonus,
rent or other remuneration other than bonuses to employees to be
paid after consultation with the Purchaser;
4.12.1.7 authorized or made any capital expenditure other than
expenditures incurred for the acquisition of rolling stock,
office equipment and computer equipment in the normal course of
business and such other expenditures which in the aggregate do
not exceed $150,000.;
4.12.1.8 paid all or any of the Purchased Notes;
4.12.1.9 waived, cancelled or accelerated the collection of any
of its accounts receivable or claims or rights;
4.12.1.10 postponed or delayed the payment of any of its accounts
payable, debts, obligations or liabilities;
4.12.1.11 suffered any shortage or cessation or interruption of
materials, supplies or utilities;
4.12.1.12 made any change in its accounting policies, principles
and practices as utilized in the preparation of the Audited
Financial Statements;
4.12.1.13 granted to any customer any special allowance or
discount or changed its pricing, credit or payment policies,
except for the June increase in price to clients of approximately
21/2%;
4.12.1.14 incurred any indebtedness other than in the ordinary
course of and in a manner consistent with past practices for the
Business of the Corporation of the Corporation, except for
indebtedness incurred in connection with the investments
mentioned in Schedule 4.10.
4.13 Business Records
4.13.1 Each of the funeral homes performed the number of funeral
services during the three year period ended December 31, 1995 and
the period from January 1 to June 30, 1996, as set forth at
Schedule 4.13.1 hereto.
4.13.2 Each of the cemeteries performed the number of interments
during the three year period ended December 31, 1995 and the
period from January 1 to June 30, 1996, as set forth at Schedule
4.13.1 hereto.4.13.3
The books and records of the Corporation and the Subsidiaries
constitute a complete and accurate record of all interments made
and rights of burial or interments conveyed, the respective dates
the remains were received and remains were interred and the name
of each lot owner in the cemetery is properly recorded in a lot
ownership book maintained in a lot number sequence. Alphabetic
files of lot owners are also maintained with the appropriate
certificates of ownership, purchase contracts, burial
authorization forms for all burials and other pertinent
documents. All interments in each of the cemeteries have been
properly recorded in alphabetic sequence properly relating the
section, lot number and location within that lot. All interments
have been made at the locations shown on the books and records of
the Corporation and not more than one valid certificate of
ownership or instrument of conveyance has been issued and is
currently outstanding for any interment site. It is hereby
understood that this representation is limited to the knowledge
of the Vendor for periods prior to the ownership or control by
the Corporation, the Subsidiaries or the Affiliated Entities of
the cemeteries.
4.14 Contracts
4.14.1 Except as set out in Schedule 4.21.5 hereto, neither the
Corporation nor any of the Subsidiaries is a party to any
contract or agreement either written or oral, express or implied,
or arising solely by operation of law, involving a commitment,
whether contingent or otherwise, by the Corporation or by any
other Person, in excess of $50,000.00, other than any contract or
agreement which is terminable at the option of the Corporation or
of such Subsidiary without penalty upon not more than 90 days
notice, and the aggregate of such commitments by the Corporation
or by any such Subsidiary under all such terminable contracts or
agreements to the date of such termination will not be in excess
of $250,000.00.
4.14.2 Each of the contracts or agreements required to be set
out in Schedule 4.14.1 hereto has been duly authorized and
executed by or on behalf of the respective parties thereto, is a
valid and binding obligation of each of such parties, enforceable
against such parties in accordance with its terms, except as such
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, or other similar laws of general application and
subject to the availability of equitable remedies being in the
discretion of a Court of competent jurisdiction.
4.14.3 Neither the Corporation nor any of the Subsidiaries,
pursuant to any contract, agreement, franchise, licence, or
permit holds, possesses, uses or has access to, or has the right
to hold, possess, use or have access to, any property or right of
any nature belonging to any other Person which is necessary in
the conduct of the Business of the Corporation or of such
Subsidiary as such business is being customarily conducted, other
than any such property or right for which an alternative or
substitute property or right is reasonably expected to be
available to the Corporation or to such Subsidiary upon the
termination of any such contract, agreement, franchise, licence
or permit on terms and conditions substantially equivalent or
more favourable to the Corporation or such Subsidiary.
4.14.4 Except as disclosed in Schedule 4.14.4 hereto, neither
the Corporation nor any of the Subsidiaries is bound by any
contract or agreement purporting to constrain or limit the
Corporation or any such Subsidiary in the conduct of its business
and affairs.
4.15 Inventory of Unsold and Available Merchandise; Pre-Need
Contracts
4.15.1 As of the Audit Date, the Corporation and the
Subsidiaries had in inventory unsold and available burial spaces,
lawn crypts, niches, mausoleum crypts, other interment spaces,
undeveloped acreage, caskets and other merchandise, as shown in
Schedule 4.15.1 hereto. Any reductions in such items since such
date are as a result of sales in the ordinary course of business.
The Corporation and the Subsidiaries currently maintain inventory
levels consistent with past practices.
4.15.2 As of the Audit Date, neither the Corporation nor the
Subsidiaries had entered into any unfulfilled pre-need contract
for the future delivery of services or merchandise, except as set
forth in Schedule 4.15.2 hereto ("Pre-Need Contracts"). Any
additional Pre-Need Contracts since such date are as a result of
sales in the ordinary course of business. All Pre-Need Contracts
and contracts for the future delivery of services or merchandise
are in compliance with all laws, ordinances, rules, undertaking
and regulations applicable thereto. The Purchaser and Stewart
acknowledge that they have been provided with lists concerning
funds held in trust and that Schedule 4.15.2, setting forth
aggregate obligations of the Corporation in respect of pre-need
contracts, is satisfactory for its purposes.
4.16 Trust Accounts; Bank Accounts; Pre-Need Insurance
4.16.1 The Corporation and/or the Subsidiaries provide for and
maintain certain trust funds, and other trusts to provide for the
future delivery of services and merchandise. Subject to Section
4.7.2, such trust funds are in full compliance with the laws and
regulations of Quebec and Canada including, without limitation,
the provisions of the Act respecting prearranged funeral services
and sepultures (Quebec). From and after the Closing Date, the
Purchaser shall have the right and power to change the terms of
the trusts, trustees, depositories and investment counsellors for
trust funds serving the Corporation or the Subsidiaries, subject
only to compliance with applicable law as to the nature of those
persons or institutions which may serve as trustee, depository or
investment counsellor for such trust funds and subject only to
the terms, provisions, conditions and limitations of the trust
indentures or plans governing such funds.
4.16.2 Schedule 4.16.2 hereto sets out the complete list of
trust accounts, including the identity of the trustee and the
amount held in trust for all trusts related to the Business of
the Corporation.
4.16.3 Schedule 4.16.3 hereto sets out the name of:
4.16.3.1 each bank, trust company or other Person with which the
Corporation or any of the Subsidiaries has an account or
safekeeping arrangement or safety deposit box and the names of
each Person authorized to operate or have access to such account,
arrangement or box on behalf of the Corporation or of any of the
Subsidiaries; and
4.16.3.2 each Person holding a general or special power of
attorney from the Corporation or any of the Subsidiaries with a
summary of the terms thereof.
4.16.4 La Societe Cooperative de Frais Funeraires Inc. ("SCFF")
is in conformity with applicable laws, including An Act
respecting insurance (Quebec), and each outstanding policy
written by SCFF ("Policy") has been fully paid for (except as
reflected in the Audited Financial Statements), and all laws,
rules and regulations with regard to the contents, issuance and
delivery of each Policy, have been fully complied with. No
commission or other payment is owed by either the Corporation or
the Subsidiaries in connection with any such Policy.
4.17 Insurance
4.17.1 The Corporation and the Subsidiaries and their respective
businesses and the Property are, have been and as of the Closing
Date will be insured with financially sound and reputable
insurers against claims, losses and damages from all such
liabilities, hazards and risks, to such extent and in such
amounts and with such deductible amounts therefrom as is
customary for Persons operating like businesses and owning like
properties, all as provided for in and by the policies and
contracts of insurance described in Schedule 4.17.1 hereto. The
Purchaser and Stewart acknowledge and agree that they are
satisfied with such policies and contracts of insurance.
4.17.2 All such policies and contracts of insurance are in full
force and effect, and the Corporation and the Subsidiaries are in
good standing with respect to each such policy or contract to
which it is a party. No additional premiums shall be owed for
any policy period prior to the current policy period.
4.18 Taxes
4.18.1 The Corporation and each of the Subsidiaries has duly and
punctually filed all tax returns required to be filed by it and
has paid all taxes which are due and payable and has paid all
assessments and reassessments, and all other taxes, governmental
or municipal charges or levies, penalties, interest and fines due
and payable by it on or prior to the date hereof; adequate
provision has been made in the Audited Financial Statements and
adequate instalments have been paid, where and to the extent
required, for all such taxes, charges, levies, penalties,
interest and fines payable for the current year for which tax
returns are not yet required to be filed; there are no
agreements, waivers, or other arrangements providing for an
extension of time with respect to the filing of any tax return or
the payment of any tax, governmental charge, levy or deficiency
by the Corporation or any of the Subsidiaries; there are no
actions, suits, proceedings, investigations or claims, threatened
or pending against the Corporation or any of the Subsidiaries in
respect of taxes, governmental or municipal charges, levies or
assessments, nor are there any matters under discussion with any
governmental or municipal authority relating to taxes,
governmental or municipal charges, levies or assessments asserted
by any such authority.
4.18.2 The Corporation and each of the Subsidiaries has withheld
from each payment made to any of its officers, directors,
employees, shareholders or creditors, all amounts which it is
required by the laws to which it is subject to withhold or deduct
and has duly remitted all amounts so withheld or deducted to the
proper recipients thereof within the delays and in the manner
required by such laws.
4.18.3 The reorganization of the assets of various subsidiaries
of the Corporation and various liquidations, mergers and
dividends conducted in December 1994 (the "1994 Reorganization")
did not result in any taxes payable (other than as reflected in
the Audited Financial Statements and the relevant tax returns,
copies of which have been provided to the Purchaser).
4.19 Intellectual Property
4.19.1 The Corporation and each of its respective Subsidiaries
own or are licensed or otherwise have the right to use in the
manner that the same is now being used each of the Intellectual
Property presently used in the Business of the Corporation or of
such Subsidiary, all of which are as set out in Schedule 4.19.1
hereto, and neither the Corporation nor any of the Subsidiaries
has granted any licence, permit or right to use any such
Intellectual Property.
4.19.2 No other Person has made or threatened to make a claim to
the right to use any of such Intellectual Property or to deny to
the Corporation or any of the Subsidiaries the right to use the
same.
4.20 Environmental Matters 4.20.1 In this Section 4.20, the
following terms shall have the following meanings respectively:
"Environment" refers to the water, atmosphere and soil or a
combination of any of them or, generally, the ambient milieu with
which living species have dynamic relations;
"Environmental Approvals" means all approvals, authorizations,
permits, grants, licenses or ordinances issued by any government
authority of competent jurisdiction under Environmental Laws;
"Environmental Conditions" refers to any contamination or damage
to the Environment other than that effected in compliance with
Environmental Laws caused by or relating to the use, handling,
storage, treatment, recycling, generation, transportation,
release, spilling, leaking, pumping, pouring, emptying,
discharging, injection, escaping, leaching, disposal, dumping or
threatened release of Hazardous Materials by the Corporation, the
Subsidiaries or their respective predecessors in interest
pursuant to the 1994 Reorganization (the "Predecessors"),
material to the Corporation or any of the Subsidiaries; with
respect to claims or potential claims by employees,
"Environmental Condition" also includes the exposure of persons
to Hazardous Materials at a work place of the Corporation or any
of the Subsidiaries;
"Environmental Laws" means all applicable statutes, regulations
or bylaws dealing with the Environment presently in force in
Quebec (whether federal, provincial, municipal or other);
"Environmental Noncompliance" means any violation of any
Environmental Law material to the Corporation or any of the
Subsidiaries;
"Facilities" means any facility, land, property or location
owned, leased, operated or used or previously owned, leased,
operated or used in the last three years by the Corporation, any
of the Subsidiaries or the Predecessors, and
"Hazardous Materials" mean any substances, constituents,
contaminants, wastes (including used water and used oil) subject
to regulation under any Environmental Law.
4.20.2 Except as set forth in Schedule 4.20.2 hereto,
4.20.2.1 there are no investigations, inquiries,
administrative proceedings, actions, suits, claims, legal
proceedings or any other proceeding pending or, to the Vendor's
knowledge, threatened against the Corporation or any of the
Subsidiaries which involve, or relate to, Environmental
Conditions or Environmental Noncompliance;
4.20.2.2 there are no conditions, activities, procedures or
other facts or circumstances at any Facility which constitute or,
could, to the Vendor's knowledge, be reasonably expected to
constitute in the future an Environmental Noncompliance or an
Environmental Condition that would be material to the operations
of the Facilities;
4.20.2.3 the operations and activities of the Corporation and
each of the Subsidiaries and the use of the Facilities of the
Corporation and of each of the Subsidiaries and the erection,
modification and use of the structures thereon have been effected
and continue to be effected in compliance with Environmental
laws;
4.20.2.4 on the Facilities, there are no structures,
improvements, equipment, activities or fixtures which are
constructed with, use or otherwise contain friable asbestos-
containing construction materials or urea formaldehyde foam
insulation;
4.20.2.5 no polychlorinated biphenals have been used by the
Corporation or any of the Subsidiaries or are present at or in
any Facility;
4.20.2.6 there are no processes, operations, equipment or any
other activity at or on any Facility or in the course of
transportation from or to any Facility which currently contribute
to Environmental Conditions;
4.20.2.7 there are no underground storage tanks, or
underground piping associated with tanks, used for the
containment or management of Hazardous Materials at any Facility
which do not have a full secondary containment system in place,
and there are no abandoned underground storage tanks at any
Facility which have not been either abandoned in place or removed
otherwise than in accordance with Environmental Laws;
4.20.2.8 the Corporation and the Subsidiaries have obtained
all Environmental Approvals required for the operation of their
business and said Environmental Approvals are valid and in full
force and effect; the Corporation and the Subsidiaries are in
material compliance with the terms and conditions of all the
Environmental Approvals and the validity of all Environmental
Approvals are not in any way adversely affected by, terminated or
lapsed by reason of the transactions contemplated hereby;
4.20.2.9 the Corporation and the Subsidiaries have complied
with all material reporting, notification and inspection
requirements imposed by the Environmental Laws, and all
operating, monitoring and reporting records have been maintained,
in all material respects, in accordance with all applicable
Environmental Laws and Environmental Approvals;
4.20.2.10 all Hazardous Materials generated or used by the
Corporation or any of the Subsidiaries have been properly
registered with government authorities when required by any
Environmental Laws, have always been disposed of in accordance
with Environmental Laws;
4.20.2.11 all material engineering and environmental data and
studies with respect to the Corporation or any of the
Subsidiaries or the Facilities which have been prepared within
the last five years have been delivered or made available to the
Purchaser; and
4.20.2.12 the Vendor, the Corporation and the Subsidiaries
have complied in all material respects with all contracts and
agreements entered into with government authorities and relating
to the Environmental.
4.21 Labour Relations and Treatment
4.21.1 Except as set out in Schedule 4.21.1 hereto, there is no
collective agreement governing the labour relations of the
Corporation or any of the Subsidiaries and their respective
employees, and no union has been certified in respect thereof,
nor is any proceeding in process for obtaining a union
certification or the conclusion of a collective agreement with
respect to such employees.
4.21.2 Each of the Corporation and the Subsidiaries has observed
in all respects the provisions of all applicable laws and
regulations respecting employment, including, but not limited to,
labour standards legislation and regulations and legislation and
regulations prohibiting discrimination, and there is no
complaint, civil action or other proceeding in process alleging a
violation of any such law or regulation except as set out in
Schedule 4.21.1.
4.21.3 Neither the Corporation nor any of the Subsidiaries has
received any remedial order or notice of offence under (a) the
Act Respecting Occupational Health and Safety (Quebec), (b) the
Workmen Compensation Act (Quebec) or (c) the Act Respecting
Industrial Accidents and Occupational Diseases (Quebec) or under
equivalent statutes or regulations in other jurisdictions, and
each of the Corporation and the Subsidiaries has performed all
its financial or monetary obligations under such statutes or
regulations towards its employees and towards the Commission or
equivalent body having jurisdiction in respect thereof, and, to
the knowledge of the Vendor, except as set out in Schedule 4.9.1,
there are no facts which may give rise to a claim for which the
Corporation or any of the Subsidiaries might be held liable under
the provisions of the said statutes or regulations.
4.21.4 Since the date of the Audited Financial Statements, there
has not been any loan or advance, nor has there been any material
increase in the compensation payable to or to become payable by
the Corporation or the Subsidiaries to any officer, employee or
agent, nor has there been any bonus, deferred compensation,
profit-sharing or other like benefits granted, made or accrued to
any of the officers, employees or agents of the Corporation or
the Subsidiaries, or any pension, retirement or similar payment
arrangements made or agreed to by the Corporation or the
Subsidiaries.
4.21.5 Except as set out at Schedule 4.21.5 hereto, there are no
written contracts of employment between the Corporation or the
Subsidiaries and any officer, director, agent or other employee
of either of the Corporation or the Subsidiaries.
4.22Pension and Other Benefit Plans
4.22.1Except for the group or individual benefit plans and
pension plans for the employees of the Corporation or any of the
Subsidiaries which are listed in the Schedule 4.22.1 hereto,
there are no written or unwritten pension, profit sharing,
retirement or other group or individual employment benefit plans
or incentive compensation arrangements, whether funded or
unfunded, established by or for the Corporation of any of the
Subsidiaries for or in respect of any employees.
4.22.2The texts of such benefit plans and pension plans as they
apply to the employees of the Corporation or any of the
Subsidiaries as amended to date, together with all relevant
employee communications in respect of the employees of the
Corporation or any of the Subsidiaries (copies of which have been
delivered to the Purchaser prior to the date hereof), are true
and complete copies of such documents and the texts of the such
pension plans are those most recently filed when required with
applicable pension authorities as of the date hereof.
4.22.3 Said pension plans are duly registered where required by,
and are in good standing under, all applicable legislation
including, without limitation, the Income Tax Act (Canada) and
the Supplemental Pension Plans Act (Quebec) and all other
applicable provincial pension legislation and regulations
thereunder.
4.22.4 Except as set out in Schedule 4.22.4, neither the Vendor
nor any of the Subsidiaries with respect to the Business of the
Corporation has made any promises or commitments to its employees
regarding said benefit plans or pension plans that are not
reflected in said plans.
4.22.5All required employer and employee contributions and
premiums under the said benefit plans and pension plans to the
date hereof have been made up to and including the date hereof
and no contribution holidays have been taken by the employers
under any such benefit plans and pension plans.
4.22.6None of said benefit plans and pension plans provided
benefit increases that are contingent upon or that will be
triggered by the entering into of the transactions contemplated
by this Agreement.
4.22.7There are no actions or claims pending in connection with
any of said benefit plans or pension plans, including a
proceeding against the Vendor, the Corporation or any of the
Subsidiaries, or the directors, officers or employees of the
Corporation, or any of the Subsidiaries.
4.23Conflicting Interests
With the exception of the Bourgie Family Properties, neither the
Vendor nor the Guarantors nor the Subsidiaries, nor any officer,
director, or shareholder thereof, nor any Relative has a
substantial ownership interest, or during the last 3 years has
had a substantial ownership interest in any business which is a
party to, or in any property which is the subject of, business
arrangements with the Corporation or any of the Subsidiaries or
which is competitive with the Business of the Corporation.
4.24 No Finder's or Broker's Fee
No Person has, or as a result of any of the transactions
contemplated hereby will have, as a result of any commitment of
the Vendor, of the Guarantors or of the Corporation or of any of
the Subsidiaries towards such Person any right, interest or valid
claim against or upon the Purchaser, Stewart or the Corporation
or any of the Subsidiaries or any of the Property for any
commission, fee, or other compensation as broker or finder or for
services in any similar capacity.
4.25 Residence of Vendor The Vendor is domiciled in Canada and is
not a non-resident within the meaning of that term as used in the
Income Tax Act of Canada. The Vendor has no operations and
conducts no sales in the United States.
4.26 Full Disclosure
4.26.1 The Vendor, by its duly appointed officers, and the
Guarantors, either personally or through their duly appointed
officers, have made or caused to be made due enquiry with respect
to each of their respective representations, warranties, and
statements contained in this Agreement and in each of the
Schedules, certificates, documents and other writings referred to
herein or furnished to the Purchaser hereunder, and none of the
same contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained
herein and therein not misleading.
4.26.2 Except as set out herein, there is no fact or circumstance
known to the Vendor or the Guarantors
4.26.2.1 which materially adversely or in the future may (so far
as the Vendor can now reasonably foresee) materially adversely
affect the condition (financial or otherwise), property, assets,
liabilities, business, operations, or prospects of either the
Corporation or of any of the Subsidiaries or the ability of the
Vendor to perform its obligations hereunder, or
4.26.2.2 relating to the Business of the Corporation which, if
known to the Purchaser, might reasonably be expected to deter the
Purchaser from consummating the transactions hereby contemplated.
For more certainty, it is understood and agreed that no
representation is being made herein as to facts or circumstances
which relate to the funeral and cemetery business in general in
whatever market or as to facts or circumstances which are not
directly relevant to the Business of the Corporation and the
Subsidiaries.
4.27 Necessary Approvals and Consents
No authorization, consent, permit or license or approval of, or
declaration, registration or filing with, any governmental or
regulatory authority or agency is necessary for the execution and
delivery by the Vendor or the Guarantors of this Agreement and of
the other agreements executed or required to be executed by the
Vendor or the Guarantors pursuant to this Agreement other than
the authorizations required pursuant to An Act respecting
insurance (Quebec).
4.28 Reliance
The foregoing representations and warranties are made by the
Vendor with the knowledge and expectation that the Purchaser and
Stewart are placing complete reliance thereon.
ARTICLE 5.REPRESENTATIONS & WARRANTIES OF THE PURCHASER AND
STEWART
The Purchaser and Stewart represent and warrant to the Vendor and
the Guarantors as follows:
5.1 Enforceability of the Agreement
The Purchaser has full power and authority to purchase and
acquire the Purchased Shares as herein provided and has been duly
authorized to execute and become a party to this Agreement and to
consummate the transactions herein provided.
5.2 No Violation
Neither the entering into of this Agreement nor the consummation
of any of the transactions contemplated hereby will result in the
violation of any of the terms or provisions of the constating
documents or by-laws of the Purchaser or of any agreement,
written or oral, to which the Purchaser is a party or any law or
regulation of any jurisdiction to which the Purchaser is subject.
5.3 No Legal ProceedingsNeither the Purchaser nor Stewart is aware
of any legal proceedings pending or threatened or of any
circumstances which may reasonably be expected to give rise to
such proceedings which in any way might interfere with the
purchase of or payment for the Purchased Shares or the
consummation of any of the transactions herein contemplated.
5.4 No Finder's Fee
No Person has, or as a result of any of the transactions
contemplated hereby will have, by reason of any commitment of the
Purchaser towards such Person, any right, interest, or valid
claim against or upon the Vendor or the Guarantors or any
property of the Vendor or the Guarantors for any commission, fee,
or other compensation as broker or finder or for services in any
similar capacity.
5.5 Purchaser's Residence
The Purchaser is an "American" within the meaning of that term as
ascribed to it in the Investment Canada Act.
5.6 Necessary Approvals and Consents
No authorization, consent, permit or license or approval of, or
declaration, registration or filing with, any governmental or
regulatory authority or agency is necessary for the execution and
delivery by the Purchaser or Stewart of this Agreement and the
other agreements executed or required to be executed by the
Purchaser or Stewart pursuant to this Agreement other than the
authorizations required pursuant to An Act Respecting Insurance
(Quebec).
ARTICLE 6.COVENANTS OF THE VENDOR AND THE GUARANTORS The Vendor
and the Guarantors covenant and agree as follows:
6.1 Best Efforts to Maintain & Preserve
The Vendor will exercise its best efforts with due diligence to
ensure that, from the date hereof until the Closing Date,
6.1.1 the Businesses of the Corporation will be conducted, except
as otherwise herein provided or approved in writing by the
Purchaser, only in the ordinary course in substantially the same
manner as heretofore and in such manner that each of the
representations and warranties made by the Vendor or the
Guarantors herein as of the date hereof will, on the Closing
Date, be true and correct;
6.1.2 the respective business organizations of the Corporation and
of each of the Subsidiaries will be maintained intact, the
services of their respective competent officers and employees
will be retained, and their relationships with and the goodwill
of their customers, suppliers and others having business
relations with them will be preserved, the whole so as to
maintain the goodwill and on-going Business of the Corporation.
6.2 Notice of Cessation in Ordinary Course
The Vendor will promptly notify the Purchaser of the happening or
existence or apprehended happening or existence of any event or
circumstance on or prior to the Closing Date by reason of which
the Business of the Corporation has ceased or may cease to be
conducted in the ordinary course as heretofore or by reason of
which the representations and warranties made by the Vendor or
the Guarantors herein may cease to be true and correct in a
material respect in connection with the operations of the
Corporation or the Subsidiaries.
6.3 Access for Purchaser
6.3.1 The Vendor will cause the Corporation and each of the
Subsidiaries to permit the Purchaser to conduct an investigation
("Due Diligence"), that is to permit the Purchaser by its duly
appointed officers, employees and representatives at any time and
from time to time prior to the Closing Date, during reasonable
business hours, to make such investigation of the businesses,
properties and rights of the Corporation and of each of the
Subsidiaries and of their financial and legal condition as the
Purchaser may deem necessary or advisable in order to become
familiar with such businesses, properties and assets and other
matters including, without limitation, full access to all
premises at which the Business of the Corporation is carried on
or by any of the Subsidiaries; and produce or cause to be
produced for inspection by the Purchaser, its officers, employees
and representatives, all leases, licences, contracts, title
documents, insurance policies, pension plans, guarantees, lists
of salaries (management and others), management contracts,
documents relating to pending lawsuits, title deeds and share
certificate books, share registers, constating documents of the
Corporation and of each of the Subsidiaries and all other
corporate documents, and all books, records, accounts and other
statements, and all other data which in the opinion of the
Purchaser or its said officers, employees or representatives are
required to make an examination of the Corporation and each of
the Subsidiaries and their respective businesses, properties and
rights.
6.4 Certain Prohibited Transactions
Prior to the Closing Date (except for the carving out of the
Excluded Assets, the declaration of special dividends by the
Corporation and Subsidiaries and the disposition of other assets
not necessary for the operation of the Business of the
Corporation to the extent that the Net Working Capital as at the
Closing Date shall be not less than the Net Working Capital as at
December 31, 1995, all as set forth in Schedule 4.12.1 hereto),
neither the Corporation nor any of the Subsidiaries will:
6.4.1 Increase the compensation of or pay bonuses or severance pay
to its employees other than in the ordinary course of business
and consistent with practices in existence on the date of this
Agreement other than as provided under Section 4.12.1.6 hereof;
6.4.2 Declare or pay any dividends or other payments or
distributions of any kind on its capital stock or otherwise
change its capital structure or impair its working capital; or
6.4.3 Take any action that would cause or permit the
representations or warranties made herein to be inaccurate at the
time of Closing.
6.5 Maintain Insurance
The Vendor will cause the Corporation and each of the
Subsidiaries to continue to maintain in full force and effect all
policies of insurance now in effect or duly renew the same upon
substantially the same terms and conditions.
6.6 Replacement and Release of Officers and Directors
Prior to the Closing Date, the Vendor will cause the directors
and officers of the Corporation and of each of the Subsidiaries
to resign as directors and/or officers thereof, as the case may
be, and to release and discharge the Corporation and the
Subsidiaries from all of their claims as directors and/or
officers thereof and to be replaced at by such nominees.
ARTICLE 7.PURCHASER'S CONDITIONS OF CLOSING
The purchase and sale of the Purchased Shares and the Purchased
Notes is subject to the following terms and conditions for the
exclusive benefit of the Purchaser to be fulfilled and performed
on or prior to the Closing Date:
7.1 Representations & Warranties Remain Correct
Each of the representations and warranties of the Vendor and the
Guarantors contained in this Agreement or in any certificate or
other document delivered to the Purchaser pursuant hereto shall
be true and correct on and as of the Closing Date with the same
force and effect as though such representations and warranties
had been made on and as of such date and the Purchaser shall have
received on the Closing Date a certificate or certificates dated
the Closing Date, in form satisfactory to counsel for the
Purchaser, signed by duly authorized officers of the Vendor and
of the Guarantors to the effect that such representations and
warranties referred to above are true and correct on and as of
the Closing Date with the same force and effect as though made on
and as of such date.
7.2 Compliance with Covenants
The Vendor and the Guarantors shall have complied with all
covenants and agreements herein agreed to be performed or caused
to be performed by each of them on or prior to the Closing Date.
7.3 Permits, Consents and Approvals
On or before the Closing Date, there shall have been obtained
from all appropriate Persons, including without limiting the
generality thereof, all federal, provincial, state, municipal or
other governmental or administrative bodies, all such
authorizations, permits, approvals and consents, in form and
terms satisfactory to Counsel for the Purchaser, and such notices
shall be given, as may be required in order to permit the change
of ownership of the Purchased Shares herein provided for to be
completed without affecting or resulting in the cancellation or
termination of any licence, permit, franchise, contract or other
right held by the Corporation or any of the Subsidiaries, and
without thereby imposing on the Purchaser or the Corporation or
any Subsidiary of the Corporation any additional expense,
liability, constraint, penalty or other liability which permits,
approvals and consents shall include, without limiting the
generality of the foregoing, the authorizations referred to at
Section 4.27 hereof
7.4 Due Diligence
The Purchaser shall be satisfied, acting reasonably, that the
results of its Due Diligence have not revealed the inaccuracy of
a representation contained herein or the breach of warranty made
herein on the part of the Vendor which is material to the
operations of the Corporation or the Subsidiaries.
7.5 No Actions or Proceedings
No action or proceeding at law or in equity shall be pending or
threatened by any Person, including without limiting the
generality thereof any governmental authority, regulatory body or
agency to enjoin or prohibit:
7.5.1 the purchase and sale of the Purchased Shares contemplated
hereby or the right of the Purchaser to own the Purchased Shares;
and
7.5.2 the right of the Corporation and of the Subsidiaries to
conduct the Business of the Corporation in the normal course.
7.6 Opinion of Counsel for the Vendor
The Purchaser shall have received from Counsel for the Vendor a
favourable opinion addressed to the Purchaser, dated the Closing
Date in form and content reasonably satisfactory to the Purchaser
covering such matters contemplated hereby as the Purchaser or its
Counsel may reasonably request, including matters referred to at
Sections 4.1.1 (as to ownership of record), 4.1.2, 4.1.3.1 (by
reference to a list of identified material contracts), 4.1.4,
4.2, 4.3.1 (by reference to a list of identified material
contracts), 4.4.2 (as to ownership of record), 4.4.3, 4.5.1
(other than full payment and non-assessibility), 4.5.2 (other
than full payment and non-assessibility) and 4.27.
7.7 Corporate and Other Proceedings
All corporate and other proceedings of the Corporation and of
each of the Subsidiaries in connection with the transactions
contemplated hereby, and all documents and instruments incident
hereto, shall have been duly authorized and executed, shall be in
form and substance to the satisfaction of the Purchaser and its
Counsel, and the Purchaser and its Counsel shall have received
all such documents and instruments, or duly certified copies
thereof, as may be reasonably requested.
7.8 Bourgie Family Properties
The Bourgie Family Properties shall have been duly transferred
by the Guarantors to the Corporation or to the Subsidiaries at
terms and conditions reasonably satisfactory to the Purchaser
and pursuant to deeds of transfer containing customary warranties
as to title and fitness.
7.9 Non-arm's length Agreements
All agreements between the Corporation or a Subsidiary, on one
hand, and the Guarantors or Affiliates of the Guarantors or
Relatives or Affiliates of Relatives on the other hand, shall be
terminated on terms and conditions satisfactory to the Purchaser,
acting reasonably.
7.10 Resignations of Certain Employees
All Guarantors who are individuals and all Relatives shall have
resigned their positions as employees of the Corporation and
shall have executed and delivered, at the Closing Date, releases
in favour of the Corporation in the form set out in Schedule 7.10
hereto.
7.11 Replacement and Release of Officers & Directors
Each of the officers and directors of the Corporation and of each of
the Subsidiaries to be replaced in accordance with the notice
referred to in Section 6.6 shall have resigned as a director
and/or officer thereof, as the case may be, and shall have
released and discharged the Corporation and the Subsidiaries from
all of their claims as directors and/or officers thereof
substantially in the form of the resignation and release set out
in Schedule 7.11 hereof and shall have been replaced by the
nominee of the Purchaser named in such notice, and each such
nominee shall have been duly appointed or elected to the office
or post designated in such notice.
7.12 Non-Competition Agreements
Each of the Vendor and the Guarantors shall enter into non-
competition agreements covering the Province of Quebec
substantially in the form of the non-competition agreements set
out at Schedule 7.13 hereto.
7.13 Employment Agreements
An employment agreement shall have been concluded between the
Corporation and Pierre Bourgie in form and substance satisfactory
to the Purchaser providing for his employment to December 31,
1996.
7.14 No Material Adverse Change
Since the date of the Audited Financial Statements, there has
been no material adverse change in the business, affairs or
financial condition of the Corporation or its Subsidiaries.
7.15 Release by Vendor and Guarantors
The Vendor and the Guarantors shall have executed and delivered,
at the Closing Date, releases in favour of the Corporation, the
Subsidiaries and the Purchaser in the form annexed hereto as
Schedule 7.10.
7.16 Title Matters
The Purchaser, acting reasonably, shall be satisfied with all
title opinions and certificates of locations requested by the
Purchaser in connection with Property which are material for the
Business. The Vendor shall have remedied to the reasonable
satisfaction of the Purchaser, at Vendor's cost, all title
defects referred to in Schedule 7.16. The Vendor shall have
provided authorizations from the Commission under the Act to
Preserve Agricultural Land (Quebec) with respect to the use of
the St-Augustin-Desmaures, the 2500 Perron Blvd., Laval, Quebec
cemetery and the 301 Rang Ste-Anne, Ste-Foy, Quebec cemetery, or
have provided satisfactory evidence or representations to
Purchaser of acquired rights to use of all surface of such
cemeteries as cemeteries prior to November 1978.
The Vendor shall have arranged for the registrations of deeds
retransferring parts of the 8165 Chemin Chambly, St-Hubert
cemetery and 2500 Perron Blvd., Laval cemetery back to
respectively, Laurentide Memorial Gardens Inc. and Remembrance
Park (1976) Inc.
The Vendor shall have arranged, to the satisfaction of the
Purchaser, for the resignation of all current members and
directors and officers of Laurentide Memorial Gardens Inc. and
Remembrance Park (1976) Inc. and their replacement with
designated representatives of the Purchaser.
The Vendor has provided the Purchaser with satisfactory evidence
of resolution between the Repos St-Francois d'Assise ("Le Repos")
and Residences Funeraires Associees du Quebec Inc. ("RFAQ") of
the issues pertaining to Section 2 of the exchange of services
agreement between Le Repos and RFAQ by way of a letter agreement
dated September 4, 1996 between Le Repos and RFAQ setting forth
such agreement. Based on financial information presented to the
Purchaser by Grou, LaSalle & Associes by way of memorandum dated
September 20, 1996, the Parties have agreed to a reduction of
$230,000 in the Purchase Price from that originally provided for,
with the final Purchase Price being that price reflected in
Section 3.1 hereof.
7.17 Permits and Licenses
The Vendor shall have provided the Purchaser with copies of all
required missing site approvals under Section 1 of the Non-
Catholic Cemeteries Act, certificate of authorization under
Section 22 of the Environment Quality Act pertaining to
cemeteries and other facilities requiring such permitting.
7.18 Remediation Work
The Vendor shall have completed, at Vendor's expense, to the
reasonable satisfaction of the Purchaser, environmental
remediation work (including removal of underground storage tanks
and secondary containment for aboveground storage tanks) and
correction work with respect to code compliance of premises
(including second means of egress for public spaces and
residential units) outlined in the preliminary report of SNC-
Lavalin Inc. to the Purchaser dated August 2, 1996 and on letters
of SNC-Lavalin Inc. to the Purchaser dated August 7, 1996, August
8, 1996 and August 9, 1996, copies of which have been
communicated to the Vendor.
7.19Inventory Lists
[Intentionally deleted]
7.20Rescission on Failure to Fulfill
In case any of the foregoing conditions shall not be fulfilled
and performed at or before the Closing Date to the reasonable
satisfaction of the Purchaser and its Counsel, the Purchaser may
rescind this Agreement by notice to the Vendor and the Guarantors
and in such event, the Purchaser shall be released from all
obligations hereunder and unless the Purchaser can show that the
conditions for the non-fulfilment or non-performance of which the
Purchaser has rescinded this Agreement are reasonably capable of
being fulfilled or performed by the Vendor and the Guarantors in
the manner contemplated above, then the Vendor and the Guarantors
shall also be released from all obligations under this Agreement.
The conditions set out in this Article 7 are for the exclusive
benefit of the Purchaser and may be waived by it in whole or in
part by instrument in writing.
ARTICLE 8.VENDOR'S AND GUARANTORS' CONDITIONS OF CLOSING
The purchase and sale of the Purchased Shares and the Purchased Notes is subject
to the following terms and conditions for the exclusive benefit of the Vendor
and Guarantors to be fulfilled and performed on or prior to the Closing Date:
8.1 Representations & Warranties Remain Correct
Each of the representations and warranties of the Purchaser and Stewart
contained in this Agreement or in any certificate or other document delivered
to the Purchaser pursuant hereto shall be true and correct on and as of the
Closing Date with the same force and effect as though such representations and
warranties had been made on and as of such date and the Vendor and Guarantors
shall have received on the Closing Date a certificate or certificates dated
the Closing Date, in form satisfactory to counsel for the Vendor and
Guarantors, signed by duly authorized officers of the Purchaser and Stewart
to the effect that such representations and warranties referred to above are
true and correct on and as of the Closing Date with the same force and effect
as though made on and as of such date;
8.2 Compliance with Covenants
The Purchaser and Stewart shall have complied with all covenants and agreements
herein agreed to be performed or caused to be performed by it on or prior to
the Closing Date;
8.3 Permits and Approvals
On or before the Closing Date, there shall have been obtained from all
appropriate Persons, including without limiting the generality thereof, all
federal, provincial, state, municipal or other governmental or administrative
bodies, all such authorizations, permits, approvals and consents, in form and
terms satisfactory to Counsel for the Vendor, and such notices shall be given,
as may be required in order to permit the change of ownership of the Purchased
Shares herein provided for to be completed without affecting or resulting in
the cancellation or termination of any licence, permit, franchise, contract or
other right held by the Corporation or any of the Subsidiaries, and without
thereby imposing on the Vendor or the Guarantors any additional expense,
liability, constraint, penalty or other liability which permits, approvals and
consents shall include, without limiting the generality of the foregoing, the
authorizations set forth at Section 4.27 hereof;
8.4 No Actions or Proceedings
No action or proceeding at law or in equity shall be pending or threatened by
any Person, including without limiting the generality thereof any governmental
authority, regulatory body or agency to enjoin or prohibit:
8.4.1 the purchase and sale of the Purchased Shares
contemplated hereby or the right of the Purchaser to
own the Purchased Shares; and
8.4.2 the right of the Corporation and of the Subsidiaries to
conduct the Business of the Corporation in the normal course.
8.5 Opinions of Counsel for the Purchaser
The Vendor shall have received from Counsel for the Purchaser a favourable
opinion addressed to the Vendor, dated the Closing Date in form and contents
reasonably satisfactory to the Vendor covering such matters contemplated hereby
as the Vendor or its Counsel may reasonably request, including matters
referred to at Sections 5.1, 5.2 and 5.6.
8.6 Change of Name
[Intentionally deleted]
8.7 Rescission on Failure to Fulfill
In case any of the foregoing conditions shall not be fulfilled and performed at
or before the Closing Date to the reasonable satisfaction of the Vendor and the
Guarantors and their Counsel, the Vendor and the Guarantors may rescind this
Agreement by notice to the Purchaser and Stewart and in such event, the Vendor
and the Guarantors shall be released from all obligations hereunder, and,
unless the Vendor and the Guarantors can show that the conditions for the
non-fulfilment or non-performance for which the Vendor and the Guarantors have
rescinded this Agreement are reasonably capable of being fulfilled or performed
by the Purchaser and Stewart in the manner contemplated above, then the
Purchaser and Stewart shall also be released from all obligations under this
Agreement. The conditions set out in this Article 8 are for the exclusive
benefit of the Vendor and may be waived by it in whole or in part by instrument
in writing.
ARTICLE 9. CLOSING AND TERMINATION
The sale and purchase of the Purchased Shares herein provided for shall be
consummated and completed at the Closing Place and shall be effective as of
September 30, 1996 (the "Closing Date"), with the payment of the Purchase
Price to be effected before the close of business on October 1, 1996.
9.1 Vendor and Guarantors' deliveries
At the Closing, the Vendor and the Guarantors shall deliver or cause to be
delivered to the Purchaser free and clear of all Liens:
9.1.1 a duly executed certificate or certificates
for the Purchased Shares, registered in the name of
the Purchaser or its duly appointed nominee;
9.1.2 the Purchased Notes duly endorsed for transfer to
the Purchaser; and
9.1.3 all such other agreements (including without
limitation the Non-Competition Agreements set forth
in Section 7.12 hereof), contracts, certificates,
opinions, consents, approvals, and other documents
herein required to be delivered by the Vendor at or
prior to the Closing Date and not theretofore
received by the Purchaser.
9.2 Purchaser deliveries
The Purchaser shall deliver or cause to be delivered to or to the order of the
Vendor the Purchase Price in the form herein required to be so delivered.
9.3 Termination
This Agreement and the transactions contemplated hereby may be terminated at
any time on or before the Closing Date by the mutual consent of the Purchaser,
Stewart, the Vendor and the Guarantors.
ARTICLE 10. SURVIVAL & RELIANCE ON REPRESENTATIONS & WARRANTIES &
INDEMNIFICATION
10.1 Survival Notwithstanding Investigation
Notwithstanding any investigation conducted before or after the Closing Date
and notwithstanding any actual or implied knowledge or notice of any fact or
circumstance which any Person may have as a result of such investigation or
otherwise, the parties hereto shall be entitled to rely upon the
representations and warranties set forth herein and the obligations of the
parties hereto with respect thereto shall survive the Closing Date and shall
continue in full force and effect in accordance with the terms of this
Article 10.
10.2 Indemnification by Vendor and Guarantors
Each of the Vendor and the Guarantors shall be solidarily liable to the
Purchaser, Stewart and to the Corporation and to each of the Subsidiaries and
shall defend, indemnify and hold harmless the Purchaser, Stewart and the
Corporation and each such Subsidiary against any and all loss, liability or
expense, including reasonable attorney's fees, arising directly or indirectly
out of
10.2.1 the breach or non-fulfilment of any
agreement, covenant, representation or warranty of
the Vendor or the Guarantors contained in this
Agreement or in any document required to be
furnished by the Vendor or the Guarantors to the
Purchaser or Stewart hereunder or required to be
entered into by the Vendor or the Guarantors
pursuant hereto to the extent not waived in writing
by the Purchaser or Stewart; and
10.2.2 the corporate reorganization, the acquisition by
the Corporation or its Subsidiaries of the Bourgie
Family Properties and the special dividends and
carve out of assets referred to in Schedule 4.12.1
hereto.
10.3 Indemnification by Purchaser and Stewart
The Purchaser and Stewart shall be solidarily liable to the Vendor and the
Guarantors and shall defend, indemnify and hold harmless the Vendor and the
Guarantors against any and all loss, liability or expense, including reasonable
attorney's fees, arising directly or indirectly out of the breach of any
agreement, covenant, representation or warrranty by the Purchaser or Stewart
contained in this Agreement or in any document required to be furnished by
the Purchaser or Stewart to the Vendor or the Guarantors hereunder or
required to be entered into by the Purchaser or Stewart pursuant hereto to
the extent not waived in writing by the Vendor or the Guarantors.
10.4 Notice of Claim
A party to this agreement who is entitled to an indemnity provided under
Sections 10.2 or 10.3, as the case may be, (herein referred to as the
"Indemnitee") shall promptly give notice in writing to the indemnifying party
(herein referred to as "Indemnitor") of any claim or demand for indemnification
pursuant to Section 10.2 or 10.3, as the case may be. Such notice shall
specify whether the claim originates with the Vendor and the Guarantors or
the Purchaser and Stewart (herein referred to as a "Direct Claim") or arises
as a result of a Third Party Claim. Such notice, which shall be accompanied
by all documents relating to the claim, shall also specify with reasonable
particularity (subject to the availability of such information):
10.4.1 the factual basis for the claim; and
10.4.2 the amount of the claim or, if an amount is not
determinable, a reasonable estimate of the likely
amount of the claim.
10.5 Indemnification procedure for Direct Claim.
With respect to a Direct Claim, following receipt of notice from the Indemnitee
to the effect that it has a claim, the Indemnitor shall have thirty (30) days
to make such investigation of the claim as the Indemnitor considers necessary
or desirable. For the purpose of such investigation, the Indemnitee shall make
available to the Indemnitor and its authorized representatives the information
relied upon by the Indemnitee to substantiate the claim. If the Indemnitee
and the Indemnitor agree at or prior to the expiry of such thirty (30) day
period (or any mutually agreed upon extension thereof) to the validity and
amount of such claim, the Indemnitor shall immediately pay to the Indemnitee
the full agreed upon amount of the claim, subject, however, to the provisions
of Sections 10.8 and 10.10. If the Indemnitee and the Indemnitor do not agree
within such period ( or any mututally agreed upon extension thereof), the
Indemnitee and the Indemnitor agree that the dispute shall be submitted to
the mediation in accordance with the procedures set forth in the following
paragraphs:
The Indemnitee shall notify the Indemnitor in writing within seven (7) days
following the date of the end of the 30 days period mentioned above, such
notice to include the name of a suggested mediator. Within five (5) days
following receipt of the notice of mediation, the Indemnitor shall notify
the Indemnitee of its acceptance or rejection of the proposed mediator.
Failure by the Indemnitor to reply within such period shall be deemed to
mean acceptance of the proposed mediator. Where the parties agree or are
deemed to have agreed on the choice of mediator, the Indemnitee shall
accordingly inform the person concerned, who may then begin mediating
using such procedure as he may communicate to the parties. Where the
Indemnitor rejects the proposed mediator or where the mediator chosen
by the parties refuses to accept his mandate, the Indemnitor shall, by
written notice to the Indemnitee, propose the name of another mediator
and the provisions hereinabove shall apply, mutatis mutandis. If the
Indemnitee rejects the mediator proposed by the Indemnitor or if such
mediator refuses to accept his mandate, the two (2) mediators whose
names were initially put forward shall select the mediator. If the
mediators whose names were initially put forward refuse to select a
mediator or if the mediator they select refuses to accept his mandate,
the provisions of this section shall apply again and so on until a
mediator is designated. In the course of carrying out his mandate,
the mediator may make recommendations which shall not be binding on
the parties unless they agree otherwise in writing. The fees and
disbursements of the mediator shall be borne equally by the parties.
10.6 Indemnification against Third Party Claims
10.6.1 Promptly upon receipt by either the Purchaser,
Stewart or any of the Vendor, the Guarantors, or the
Corporation or any of the Subsidiaries (referred to
in Section 10.6 as the "Indemnitee") of notice of
any Third Party Claim in respect of which Indemnitee
proposes to demand indemnification from a party to
this Agreement (referred to in Section 10.6 as the
"Indemnitor"), the Indemnitee shall give notice to
that effect to the Indemnitor with reasonable
promptness.
10.6.2 The Indemnitor shall have the right by notice to
the Indemnitee not later than 30 days after receipt
of the notice described in Section 10.6.1 to assume
the control of the defence, compromise or settlement
of the Third Party Claim, provided that
10.6.2.1 such assumption shall, by its terms,
be without cost to the Indemnitee; and
10.6.2.2 the Indemnitor shall at the
Indemnitee's request furnish it with
reasonable security against any costs or
other liabilities to which it may be or
become exposed by reason of such defence,
compromise or settlement.
10.6.3 Upon the assumption of control by the Indemnitor
as aforesaid, the Indemnitor shall, at its expense,
diligently proceed with the defence, compromise or
settlement of the Third Party Claim at Indemnitor's
sole expense, including employment of counsel
reasonably satisfactory to the Indemnitee and, in
connection therewith, the Indemnitee shall co-
operate fully, but at the expense of the Indemnitor,
to make available to the Indemnitor all pertinent
information and witnesses under the Indemnitee's
control, make such assignments and take such other
steps as in the opinion of counsel for the
Indemnitor are necessary to enable the Indemnitor to
conduct such defence, provided always that the
Indemnitee shall be entitled to reasonable security
from the Indemnitor for any expense, costs or other
liabilities to which it may be or may become exposed
by reason of such co-operation.
10.6.4 The final determination of any such Third Party
Claim, including all related costs and expenses,
will be binding and conclusive upon the parties
hereto and the Corporation and the Subsidiaries as
to the validity or invalidity, as the case may be,
of such Third Party Claim against the Indemnitor
hereunder.
10.6.5 Should the Indemnitor fail to give notice to the
Indemnitee as provided in Section 10.6.2, the
Indemnitee shall be entitled to make such settlement
of the Third Party Claim as in its sole discretion
may appear advisable, and such settlement or any
other final determination of the Third Party Claim
shall be binding upon the Indemnitor.
10.7 Sale of Enterprise Indemnification
Notwithstanding any other provision of this Agreement, the Vendor and the
Guarantors hereby covenant and agree, solidarily, to indemnify and save the
Purchaser, Stewart and the Corporation harmless from and against any Losses
which the Purchaser, Stewart or the Corporation may suffer or incur, directly
or indirectly, as a result of non-compliance, in whole or in part, by the
Vendor, the Purchaser or the Corporation, with the formalities prescribed by
the Civil Code of Quebec with respect to the sale of an enterprise, if
applicable, or by such other bulk sales or other comparable legislation as
may be applicable to the transaction of purchase and sale contemplated by
this Agreement. In particular, the Vendor and the Guarantors shall be
solidarily liable for payment of the amount of such claim and shall furnish
the Purchaser with proof of payment within ten (10) days following receipt
of the notice of claim which the Purchaser is required to give to the
Vendor.
10.8 Indemnification to be After Tax and Insurance
The amount of the indemnification for any loss, liability or expense which the
Vendor, the Guarantors, the Purchaser, Stewart, the Corporation or any of the
Subsidiaries shall be entitled to receive from any party hereto pursuant to
this Agreement shall be payable on demand and shall be determined after giving
effect to any insurance recoveries and tax savings, and recoveries from third
parties other than the Corporation or any of the Subsidiaries.
10.9 Expiry of Liability
10.9.1 The representations and warranties of the Vendor
and the Guarantors set forth in Section 4 hereof
shall survive the completion of the sale and
purchase of the Purchased Shares and the Purchased
Notes provided for herein and notwithstanding such
completion:
10.9.1.1 the representations and warranties
of the Vendor relating to the tax liability
of the Corporation shall, unless such
representations and warranties prove to be
false as a result of any misrepresentation
made or fraud committed in filing a return
or supplying information for the purposes of
the Income Tax Act (Canada) or any other
legislation imposing tax on the Corporation,
continue in full force and effect for the
benefit of the Purchaser until the
expiration of the last of the limitation
periods contained in the Income Tax Act
(Canada) and any other legislation imposing
tax on the Corporation subsequent to the
expiration of which an assessment,
reassessment or other form or recognized
document assessing liability for tax,
interest or penalties thereunder for the
period ended on the Closing Date cannot be
issued to the Corporation;
10.9.1.2 the representations and warranties
of the Vendor relating to the tax liability
of the Corporation which prove to be false
as a result of any misrepresentation made or
fraud committed in filing a return or
supplying information for the purposes of
the Income Tax Act (Canada) or any other
legislation imposing tax on the Corporation,
continue in full force and effect for the
benefit of the Purchaser and shall be
unlimited as to duration;
10.9.1.3 the representations and warranties
of the Vendor relating to authorized capital
of the Corporation, the beneficial ownership
and registration of the Shares, options
relating to the Corporation's Shares, the
power, authority and right of the Vendor to
transfer legal and beneficial title and
ownership of the Shares to the Purchaser
free and clear of any Liens, continue in
full force and effect for the benefit of the
Purchaser and shall be unlimited as to
duration;
10.9.1.4 the representations and warranties
of the Vendor and the Guarantors set forth
in Section 4 hereof (other than those
specifically referred to at Sections
10.9.1.1, 10.9.1.2 and 10.9.13 hereof) shall
continue in full force and effect for the
benefit of Purchaser (and, in the event the
transaction contemplated herein is
completed, for the benefit of the
Corporation and its Subsidiaries) for a
period of two (2) years after Closing and,
with respect to claims by and obligations to
third parties other than Purchaser or
Stewart, for the applicable prescriptive
period for such claim;
10.9.2 The representations and warranties of the
Purchaser and Stewart set forth in Section 5 hereof
shall survive the completion of the sale and
purchase of the Purchased Shares and Purchased Notes
provided for herein for a period of two (2) years
from the Closing Date.
10.9.3 The representations and warranties of Vendor and
Guarantors, on the one hand, and Purchaser and
Stewart on the other hand, which prove to be false
as a result of any intentional deceit or fraud shall
continue in full force and effect and shall be
unlimited as to duration.
10.10 Equitable Remedies
Each party hereto acknowledges that a refusal without just cause by such party
to consummate the transactions contemplated hereby will cause irreparable harm
to the other party. A party not in default at the time of such refusal shall
therefore be entitled, in addition to other remedies, to specific performance
of this Agreement by the party that so refused to consummate the transactions
contemplated hereby.
ARTICLE 11. MISCELLANEOUS
11.1 Notices
Any notice, demand or other communication (herein a "Notice") required or
permitted to be given or made hereunder, shall be in writing in the English
Language and shall, unless otherwise indicated herein, be well and sufficiently
given or made if:
11.1.1 enclosed in a sealed envelope and delivered
during normal business hours on a normal business
day and left with a receptionist or other
responsible employee at the relevant address set
forth below;
11.1.2 sent by prepaid registered mail deposited in a
post office within Canada or the United States; or
11.1.3 telexed, telecopied or sent by other means of
recorded electronic communication and confirmed by
mail as aforesaid:
If to the Vendor to:
130 Adelaide Street West,
Suite 510,
Toronto, Ontario
Attention: Mr. Rick Annaert
If to the Guarantors to:
1980 Rene-Levesque Blvd. West
Montreal, Quebec
Attention: Mr. Pierre Bourgie
with a copy in both cases (which shall not constitute
notice) to:
Byers Casgrain, S.E.N.C.
1, Place Ville Marie
Suite 3900
Montreal, Quebec
H3B 4M7
Attention: Mr. Michel Brunet, Esq.
Fax: (514)866-2241
If to the Purchaser and Stewart:
110 Veterans Boulevard
Metairie, Louisiana 70005
Attention: William E. Rowe
Fax: (504) 849-2308
with a copy (which shall not constitute notice) to:
Henican, James & Cleveland, L.L.P.
P.O. Box 19300
New Orleans, Louisiana 70179
Attention: Edward N. George, Esq.
and Shawn M. Bridgewater, Esq.
Fax: (504) 833-0863
and
Ogilvy Renault, S.E.N.C.
1981 McGill College Avenue
Suite 1100
Montreal, Quebec
H3A 3C1
Attention: Paul Raymond, Esq.
Fax: (514) 286-5474
Each party may designate by notice in writing a new address
to which any communication may thereafter be so given,
served or sent.
11.2 Governing Law
This Agreement shall in all respects be governed by and construed in accordance
with the laws of the Province of Quebec and the laws of Canada applicable
therein, including all matters of construction, validity and performance.
11.3 Time of the Essence
Time shall be of the essence of this Agreement.
11.4 Public Announcement
No public announcement with respect to this Agreement or any transaction
contemplated hereby shall be made by the parties hereto unless and until the
text of the announcement and the time and manner of its release have been
approved by the other parties hereto, provided that, if at any time, any
party hereto shall be bound by appplicable law to make any such public
announcement, such party shall be at liberty to do so, notwithstanding
the failure of the other party to approve same if the latter has received
prior notice of the intention to make such announcement. For greater
certainty, the Vendor shall not disclose particulars of this Agreement
except after having obtained the prior written consent of the Purchaser.
11.5 Attornment
For the purpose of all legal proceedings, if any, which may be instituted by the
Purchaser or Stewart against the Vendor or the Guarantors in connection with
this Agreement, this Agreement shall be deemed to have been performed in the
Province of Quebec and the courts of the Province of Quebec shall have
exclusive jurisdiction to entertain any such action.
11.6 Expenses
Each party shall pay its own expenses incurred in connection with the
authorization, preparation, execution and performance of this Agreement,
including, without limitation, all fees and expenses of its counsel, employees,
agents and representatives. In any litigation to enforce the terms of this
Agreement, the successful party shall be entitled to recover its reasonable
attorney's fees from the party who refused to perform this Agreement.
11.7 Successors & Assigns
This Agreement shall enure to the benefit of and be binding upon:
11.7.1 the parties hereto and their respective
successors, heirs and representatives;
11.7.2 the assigns of the Purchaser without the need for
the Purchaser to obtain the prior consent of the
Vendor or the Guarantors to the assignment of this
Agreement or any benefit hereunder provided that the
Purchaser and Stewart shall remain liable hereunder;
and
11.7.3 the assigns of the Vendor, provided that neither
this Agreement nor any benefit hereunder may be
assigned by the Vendor, provided that the Vendor and
the Guarantors shall remain liable hereunder,
without the prior written consent of the Purchaser.
11.8 References to Schedules
Any matter declared in any numbered section of this Agreement to be set out,
stated, described or reflected in a Schedule shall be deemed to have been
sufficiently disclosed to the parties hereto for all purposes of this Agreement
if, in a section of the Schedule bearing the same number, such matter has been
fully and plainly described or there is a cross reference to another section
of the Schedule containing such full and plain description.
11.9 Further Assurances
Each of the parties agrees all other parties, at the written request of such
other party, to execute and deliver all such further and other agreements,
deeds, instruments and other documents and to do all such acts and things as
are reasonably required by the requesting party to carry out effectively the
provisions and intentions of this Agreement.
11.10 Severability
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
11.11 Entire Agreement
The Parties hereby acknowledge that this agreement reflects amendments to a
Share Purchase Agreement entered into among Gestion Pierre Bourgie Inc.,
Gestion Claude Bourgie Inc., Marc Bourgie, Pierre Bourgie, Stewart and the
Purchaser on August 16, 1996 and that said agreement, as amended and restated
hereby, embodies the entire agreement and understanding among the parties
hereto and supersedes all prior agreements, including the Agreement in
Principle, between such parties. Neither this Agreement nor any of the terms
hereof may be changed, waived, discharged or terminated otherwise than by an
instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or modification is sought. Any waiver of any
term or condition or any breach of any covenant of this Agreement shall not
operate as a waiver of any other such term or condition or breach, nor shall
any failure to enforce any provision hereof operate as a waiver of such
provision or of any other provision hereof.
11.12 Counterparts
This Agreement may be executed by the parties hereto in several counterparts,
each of which when so executed and delivered shall be an original, but all such
counterparts shall constitute but one and the same instrument.
each of which when so executed and delivered shall be an original, but all
such counterparts shall constitute but one and the same instrument.
11.13 Language
The parties hereto confirm that it is their wish that this Agreement as well as
all other documents relating hereto including communications have been and shall
be drawn up in English only. Les parties aux presentes confirment leur volonte
que cette convention de meme que tous les documents, y compris tous avis s'y
rattachant, soient rediges en anglais seulement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first hereinbefore written.
3295796 CANADA INC.
by: /s/ Rick Annaert
RICK ANNAERT
by: /s/ Claude Bourgie Bovet
CLAUDE BOURGIE BOVET
SOCIETE FINANCIERE BOURGIE (1996)
INC.
by: /s/ Pierre Bourgie
PIERRE BOURGIE
/s/ Pierre Bourgie GESTION PIERRE BOURGIE INC.
Pierre Bourgie
/s/ Marc Bourgie by: /s/ Pierre Bourgie
Marc Bourgie
/s/ Claude Bourgie
Claude Bourgie GESTION CLAUDE BOURGIE INC.
by: /s/ Claude Bourgie
STEWART GROUP INC.
by: /s/ Joseph P. Henican, III
JOSEPH P. HENICAN, III
Chief Executive Officer
STEWART ENTERPRISES, INC.
by: /s/ Joseph P. Henican, III
JOSEPH P. HENICAN, III
Chief Executive Officer
Omitted Schedules
The following schedules, which form a part of the Amended and Restated
Share Purchase Agreement, are omitted pursuant to Regulation S-K Item
601(b)(2). The Registrant agrees to provide these omitted schedules to the
Commission upon request.
Schedule 1.1(d) Audited Financial Statements
Schedule 1.1(e) Bourgie Family Properties
Schedule 1.1(f) Description of the Business of the Corporation
Schedule 1.1(n) Excluded Assets
Schedule 1.1(u) Purchased Notes
Schedule 1.1(v) Permitted Encumbrances
Schedule 1.1(z) Purchased Shares
Schedule 1.1(bb) Subsidiaries
Schedule 3.2 Net Working Capital Calculation
Schedule 4.5.1 Capital Stock of Corporation
Schedule 4.5.4 Corporate Records
Schedule 4.6.3 Conduct of Business
Schedule 4.6.8 Corporate Names and Tradenames
Schedule 4.7.3 Leased Properties and Equipment
Schedule 4.8.1 List of Leased Properties
Schedule 4.8.3 Contracts for Improvements
Schedule 4.8.11 Unused Property
Schedule 4.8.12 List of Properties
Schedule 4.9.1 Litigation
Schedule 4.10 Loans and Investments
Schedule 4.12.1 Corporate Reorganization and Special Dividends
Schedule 4.13.1 Business Records
Schedule 4.14.1 Material Contracts
Schedule 4.14.4 Restrictive Covenants
Schedule 4.15.1 Inventory of Unsold and Available Merchandise
Schedule 4.15.2 Pre-Need Contracts
Schedule 4.16.2 Trust Accounts
Schedule 4.16.3 Bank Accounts
Schedule 4.17.1 Insurance
Schedule 4.19.1 Intellectual Property
Schedule 4.20.2 Environmental Matters
Schedule 4.21.1 Labour Relations and Treatment
Schedule 4.21.5 Contracts of Employment
Schedule 4.22.1 Benefits Plans and Pension Plans
Schedule 4.22.4 Commitments to employees
Schedule 7.10 Resignations
Schedule 7.11 Replacement and releases of Officers and Directors
Schedule 7.13 Non-Competition Agreements
Schedule 7.16 Title Matters
</TABLE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the
registration statements of Stewart Enterprises, Inc. on
Forms S-3 and S-4 of our report dated March 21, 1996 on
our audits of the consolidated financial statements of
"Societe Financiere Bourgie (1991) Ltee" as of December
31, 1995 and for the year then ended which report is
incorporated therein by reference from the Stewart
Enterprises, Inc. filing on Form 8-K.
/s/Grou, La Salle + Associes
S.E.N.C.
Chartered Accountants
St.Laurent, Quebec
October 3,1996
