2025-04-01_sspeirs_Due Diligence Template Surge Home Support_Orofresh.docx

DUE DILIGENCE REQUEST LIST

CONSENT REQUEST RE: SALE/ASSIGNMENT/CHANGE OF CONTROL (the “Transaction”)

The information below is requested in connection with the due diligence to be conducted by Vancouver Coastal Health Authority (“VCH”) with respect to the request by Orofresh Enterprises Inc. (the “Current Service Provider”) for consent in respect of the Transaction.

RESPONSE INSTRUCTIONS:

Please provide your responses and supporting information and/or documents in one comprehensive package (the “Response Package”).

The Response Package should be organized so as to correspond with the order and numbering of this Request List.

The Response Package should include information addressing each request on this Request List. Please consider each request carefully and advise in your response of any further information you feel is applicable.

Please send the Response Package electronically to Costanza Testino, Acting Senior Director, Contract Advisory: costanza.testino@vch.ca.

Information and/or documents that are unavailable at the time of the submission of the initial Response Package (the “Unavailable Information”) may be provided at a later date if necessary. However, to the greatest extent possible, all information and/or documents should be included in the Response Package, including information and/or documents that have been previously provided to VCH or VCH’s legal counsel. For all Unavailable Information, please state why it is currently unavailable and when you expect to be able to provide it.

VCH will require, in connection with any consent documentation issued in respect of the Transaction, a representation and warranty that the information provided in response to this Request List is complete and accurate.

Please be advised that VCH may make additional or supplemental requests as it continues its due diligence process.

Please note that VCH may require up to, or more than, 90 days to complete its due diligence process following receipt of the complete Response Package.

REQUEST | REQUEST | RESPONSE

LEGAL EXPENSES | LEGAL EXPENSES

Please provide a letter confirming that the legal fees incurred by VCH in relation to this consent request to the Transaction will be paid by the Current Service Provider or another entity.

ORGANIZATION AND BUSINESS STRUCTURE | ORGANIZATION AND BUSINESS STRUCTURE

Please provide the name and contact particulars for a contact person in respect of the Transaction for each organization involved in the Transaction.

Please provide a detailed description of the Transaction and specific items for which consent is sought under the applicable VCH service agreements.

Please identify any important dates relevant to the Transaction. This may include targeted dates for removal of conditions, closing, VCH consent, etc. Please note that VCH does not provide any guarantee that it will meet any suggested timelines and may require up to, or more than, 90 days to complete its due diligence process following receipt of the complete Response Package.

Please provide copies of the following:
any purchase agreements related to the Transaction;
any partnership, shareholder, joint venture or similar agreements related to the Current Service Provider, or if a new service provider is proposed as a result of the Transaction (the “Proposed Service Provider”), then related to the Proposed Service Provider (the Current Service Provider or Proposed Service Provider, as applicable, is hereinafter referred to as the “Service Provider”);
any lease, license or operating agreements in respect of the use of the Facilities that will come into effect or continue post-Transaction and a summary of the parties, term and any termination rights; 
any management or operating agreements in respect of the provision of the services; and
any other applicable agreements in respect of the Service Provider or the services provided therein.

Please identify and briefly describe any sub-contracts for the services provided therein and whether such will be assigned in connection with the Transaction.

Please provide a description of the proposed new operating and ownership structure of the Proposed Service Provider following the Transaction, including percentage interests held (in real estate and such entities), including all direct and indirect parent and subsidiary entities, partners, etc. (the “Service Provider Affiliates”) tracing up to individuals, identifying any specific roles such as bare trustee/nominee, general or managing partner, etc. Please provide an organizational chart showing the same.

Please provide certificates of incorporation/registration, corporate registry searches (BC and home jurisdiction if applicable), central securities registers, and registers of partners of all Service Provider Affiliates and any parent/performance guarantors (once determined if not already included).

If the Transaction involves two or more arm’s length organizations, please identify and provide a brief description of the nature of any current and past business relationships between those organizations.

Please confirm whether any of the Service Provider Affiliates that are not currently public entities have plans to go public or issue an IPO.

Please provide details regarding the roles and responsibilities of each of the partners/shareholders/owners/affiliates of the Service Provider involved in the operations/services. This should include: (i) ownership interest; (ii) an explanation of the structuring (for e.g. limited and general partners); and (iii) their contribution to providing the services, as applicable.

For each partner/shareholder/owner of the Service Provider, please identify the circumstances in which that partner/shareholder/owner can resign or transfer its interest or be replaced and describe the applicable process and any timelines for such resignation, transfer or replacement.  Please describe any dispute resolution processes between such parties.

Please provide the proposed organizational structure of the entity(ies) that will be providing staffing, operations and management, including the job descriptions and experience of senior management, and the reporting structure for each department.

Please identify if there will be any change in trade name, branding, etc. for any entities providing the services, and if so, provide relevant details including the timelines on which these changes are projected to be implemented.

Please provide a detailed staffing transition plan that outlines what changes staff members will face including when this communication will take place and what processes will occur to transition from pre-Transaction to post-Transaction. Please be sure to address:
status of current staff members and whether they will be provided an opportunity to remain employed post-Transaction;
pre-Transaction and Post-Transaction staffing numbers, by position area, collective agreement, etc. with particular attention paid to expected job losses;
any expected changes in staff wages, benefits, job descriptions and hours; and
any other material impacts to any current staff members that are expected as a result of the Transaction.

Please list any experience that any Proposed Service Provider and new partner/shareholder/owner under the proposed Transaction has in providing home support care services.

Please identify the risks arising from the Transaction and how the parties will work to mitigate these risks. In particular, please identify any such risks with respect to the care of and services for VCH Clients.

Please identify how the Transaction will benefit VCH and improve the quality of care for VCH Clients.

Please identify how the Transaction benefits any seller.

Please provide the plans and goals of all organizations involved post-Transaction for the Facilities in the next 3-5 years.

FINANCIAL | FINANCIAL

Please provide a letter of reference from a financial institution for any purchasing entity.

Please provide the Proposed Service Provider’s credit score.

Please provide a description of the nature of the business carried on by any buyer/new owner/operator.

Please provide a letter of reference for any buyer/new owner/operator from an organization that carries on business in Canada with that organization.

Please provide the following for the Proposed Service Provider:
audited financial statements for the last three years; and 
the two most recent internal quarterly financial statements or similar information.

Please provide three years of audited annual financial statements for the Proposed Service Provider.

If applicable, please advise as to which entity you suggest to provide a parent/performance guarantee on behalf of the Service Provider (from each organization if ownership is held by arm’s length parties) and provide the following for the proposed parent/performance guarantors:
audited financial statements for the last three years; and 
the two most recent internal quarterly financial statements or similar information.

Please provide a business plan with regard to revenue growth, inflation, operating efficiencies including pro forma cash flow (or financial statements) for the next three years.

Please provide details of any off-balance sheet financing that may impact the financial statements requested above for the Proposed Service Provider and/or proposed parent/performance guarantors.

Please provide details on any changes to accounts payable in relation to payments from VCH for the services. Provide a contact person within the buyer/new owner/operator that will manage the transition to ensure that payments are made to the correct parties during and after the transition. If available, please provide updated banking information. Please be aware that, during this transition process, VCH may alter its payment schedule.

Please identify the strategy for minimizing financial risks from the Transaction. In particular, identify any material cost pressures and plans to address any such cost pressures.

LEGAL AND REGULATORY MATTERS | LEGAL AND REGULATORY MATTERS

Please advise as to any consents or filings required with governmental authorities and regulatory bodies in connection with the Transaction and the status of same. Please provide copies of any consents received (excepting delivery of those consents obtained from other provincial or regional health authorities).

Please identify any relationships (e.g. business, professional, personal or family) that the Service Provider Affiliates or the employees thereof have with VCH or its employees.

Please provide written confirmation from your insurer that the insurance criteria set out in the applicable VCH service agreements is in place and which entities it provides coverage for.

Please identify and briefly describe the nature of any legal actions or claims for the last five years in Canada brought by or against any Service Provider Affiliates and how they were resolved.

Please provide copies of titles searches and the declarations of trust regarding beneficial ownership for each of the Facilities. Please advise as to any changes that will be made to these arrangements post-Transaction.

PHILOSOPHY, CARE MODEL AND SERVICE PROVISION | PHILOSOPHY, CARE MODEL AND SERVICE PROVISION

Please describe the mission, values, care philosophy and service model regarding the provision of home support services (the “Policies”). In particular,  
Explain how the Policies address the following:
the needs of clients;
how will you provide person-centred care; and
Identify any differences in the Policies between the current owners and purchasing entity.
Identify the extent to which the entities can make changes to the Policies and the process regarding any such changes.

Please confirm that the use of performance metrics to analyze, evaluate and improve the quality of care for the residents will be the same as currently used by the Current Service Provider, and if any improvements will be made post-Transaction please identify and describe.

Please confirm whether risk management policies will be the same as those used by the Current Service Provider, and if any improvements will be made post-Transaction please identify and describe.

Please describe how the organization will respond to significant trends in home support care, the extent to which its approach will be the same as that used by the Current Service Provider, and if any changes will be made post-Transaction please identify and describe.

Please outline and provide documentation of the Proposed Service Provider’s COVID-19 response practices and policies, including WorkSafe BC Safety Plans.

Please provide an explanation of the Proposed Service Provider’s approach and philosophy related to salary and compensation.

Please provide a history of the Proposed Service Provider’s workers compensation claims.

Please provide a listing and explanation of what systems and software are used to provide and manage the services, including matters related to client care, finances, bed inventories, or other relevant systems and software. Along with this listing, please provide confirmation that the Proposed Service Provider will meet the requirements outlined in the Privacy Schedules of the VCH service agreements.

TRANSITION | TRANSITION

Please explain your current plan as to when and how the Transaction will be communicated. Please confirm that you will work with and consult VCH regarding such communications and amend your plan as reasonably required by VCH.

Please provide details of the impact, if any, of the Transaction on labour agreements or other contracts material to the performance of the VCH service agreements. If any of these contracts or agreements will change in a material way, please provide the nature of these changes.