Exhibit 10.20
THIS AGREEMENT made as of the 30th day of September, 2004.
BETWEEN:
XXXXXX DISTRIBUTORS LTD.
(the "Vendor")
AND:
QUASAR PAGING LTD.
("Quasar")
AND'
XXXXX XXXXXXX
("Cameron")
(Quasar and Cameron are collectively referred to as the "Purchasers")
BACKGROUND
A. The Vendor is the registered and beneficial owner of all the issued and
outstanding shares in the capital of XXXXXX RECREATIONAL PRODUCTS LTD.
(the "Company"), being 200 Class "A" voting common shares (the "Shares").
B. The Company carries on business as a wholesale distributor of recreational
equipment, tools and products in western Canada (the "Business").
C. The Vendor, as the registered and beneficial owner of the Shares, has
agreed to sell, and the Purchasers have agreed to purchase, the Shares, on
the terms and conditions contained in this Agreement.
TERMS OF AGREEMENT
In consideration of the premises and the covenants and agreements contained in
this Agreement, the parties agree with each other as follows:
1. Interpretation
1.1 Definitions
In this Agreement:
(a) "Agreement" means this agreement and all amendments made hereto by
written agreement between the Vendor and the Purchasers;
(b) "Closing Date" means September 30, 2004 or such other date as may be
mutually agreed upon in writing by the parties;
(c) "Permitted Encumbrances" means
a. liens for taxes, assessments and governmental charges due and being
contested in good faith and diligently by appropriate proceedings
(and for the payment of which adequate provision has been made);
b. liens for taxes, assessments and governmental charges either not due
and payable or due but for which notice of assessment has not been
given;
c. undetermined or inchoate liens, charges and privileges incidental to
current construction or current operations and statutory liens,
charges, adverse claims, security interests or encumbrances of any
nature whatsoever claimed or held by any governmental authority
which have not at the time been filed or registered against the
title to the asset or served upon the relevant party pursuant to law
or which relate to obligations not due or delinquent;
d. security given in the ordinary course of business to any public
utility, municipality or government or to any statutory or public
authority in connection with the operations of the business, other
than security for borrowed money;
e. the reservations in any original grants from the Crown of any real
property or interest therein and statutory exceptions to title which
do not materially detract from the value of the real property
concerned or materially impair its use in the operation of the
relevant Party's business; and
f. easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges, encumbrances or non-consensual liens not, in any
material respect, impairing the use of the encumbered asset for its
intended purposes;
(d) "Shareholder Loans" means any and all amounts due or accruing due to
the Vendor by the Company; and
(e) "Time of Closing" means 1:00 p.m. PST on the Closing Date.
1.2 Headings
The division of this Agreement into Articles and sections and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement. The terms "this Agreement",
"hereof', "hereunder" and similar expressions refer to this Agreement and not to
any particular Article, section or other portion hereof and include any
agreement supplemental hereto. Unless something in the subject matter or context
is inconsistent therewith, references herein to Articles and sections are to
Articles and sections of the Agreement.
1.3 Extended Meanings
In this Agreement words importing the singular number only shall include the
plural and vice versa, wordings importing the masculine gender shall include the
feminine and neuter genders and vice versa and words importing persons shall
include individuals, partnerships, associations, trusts, unincorporated
organizations and companies.
1.4 Accounting Principles
Wherever in this Agreement reference is made to a calculation to be made in
accordance with generally accepted accounting principles, such reference shall
be deemed to be to the generally accepted accounting principles from time to
time approved by the Canadian Institute of calculation is made or required to be
made in accordance with generally accepted accounting principles applied on a
basis consistent with prior years.
1.5 Currency
All references to currency herein are to lawful money of Canada.
2. Schedules
The following schedules are attached to and incorporated in this Agreement by
reference and deemed to be part of this Agreement:
Schedule 1 - Assets
Schedule 2 - Promissory Note
Schedule 3 - Escrow Agreement
Schedule 4 - Financial Statements of the Company
3. Purchased Shares and Purchase Price
(a) Subject to the terms and conditions of this Agreement and based on
the representations and warranties of the Vendor set forth in this
Agreement, on the Closing Date the Vendor will sell, assign and
transfer to the Purchasers and the Purchasers will purchase from the
Vendor all (but not less than all) of the Shares and Shareholder
Loans for a total purchase price of $425,000.00 CDN (the "Purchase
Price"). The Purchase Price shall be allocated as follows:
(i) to the Shares: $1.00
(ii) to the Shareholder Loans: $424,999.00
(b) The Purchase Price will be paid and satisfied by the Purchasers at
the Time of Closing as follows:
(i) as to the sum of $225,000.00 by way of solicitor's trust
cheque, payable to the Vendor's solicitors, in trust, on the
Closing Date; and
(ii) as to the sum of $200,000.00, by delivery to the Vendor on the
Closing Date of a duly executed promissory note (the
"Promissory Note") in the form attached hereto as Schedule 2.
4. Vendor's Representations and Warranties
In order to induce the Purchasers to enter into and consummate this Agreement,
the Vendor represents and warrants to the Purchasers as follows:
4.1 Corporate and Share Representations
(a) The Company is a company duly incorporated, organized and subsisted
under the law of British Columbia, is not a reporting issuer (as
such term is defined in the Securities Act (British Columbia)) and
is in good standing with respect to the filing of annual reports
with the Office of the Registrar of Companies of British Columbia.
(b) The Company has the corporate power to own the assets owned by it
and to carry on the Business.
(c) The authorized capital of the Company is 10,000 Class "A" Common
Voting Shares without par value, 10,000 Class "B" Non-Voting Shares
without par value, and 10,000 Class "C" Non-Voting Redeemable
Preference Shares with a par value of $0.01 per share, of which the
Shares are the only shares of the Company issued and outstanding.
(d) The Shares are validly issued and outstanding as fully paid and
non-assessable shares in the capital of the Company.
(e) The Vendor owns the Shares as legal and beneficial owner, free and
clear of all liens, claims, charges and encumbrances.
(f) The Vendor has due and sufficient right and authority to enter into
this Agreement on the terms and conditions set forth in this
Agreement and to transfer the legal and beneficial title to and
ownership of the Shares to the Purchasers, free and clear of all
liens, claims, charges and encumbrances.
(g) No person, firm or corporation has any agreement or option or any
right capable at any time of becoming an agreement to:
(i) purchase or otherwise acquire the Shares or any of the
unissued shares in the capital of the Company; or
(ii) require the Vendor to sell, transfer, assign, pledge, charge,
mortgage or in any other way dispose of or encumber any of the
Shares other than under this Agreement.
(h) The Memorandum and Articles of the Company have not been altered or
changed
4.2 Financial and Tax Representations
(a) Other than as disclosed in the financial statements of the Company
dated August 31, 2004 (a copy of which is attached as Schedule 4 to
this Agreement) and other than liabilities incurred in the normal
course of the Business since August 31, 2004, there are no
liabilities, contingent or otherwise, of the Company which have not
been disclosed to the Purchasers and the Company has not guaranteed,
or agreed to guarantee, any debt, liability or other obligation of
any person, firm or corporation. There are no liabilities of any
other party capable of creating a lien, claim, encumbrance or charge
on any of the assets of the Company.
(b) Save and except for the Shareholder Loans and accounts payable of
the Company in the amount of $38,383.43 owing by the Company to the
Vendor and accounts receivable of the Company in the amount of
$1,129.81 owing by the Vendor to the Company, the Company is not
indebted to the Vendor or any affiliate, director, officer or
employee of the Company. The Vendor is lawfully entitled to be
repaid the Shareholder Loans and holds the Shareholder Loans free of
all encumbrances. The Vendor has not assigned the Shareholder Loans
or any right, title or interest therein to any other person. The
Shareholder Loans have not been forgiven, settled, waived or repaid,
is payable on demand and does not bear interest.
(c) Neither the Vendor nor any affiliate, officer, director or employee
of the Company is now indebted or under obligation to the Company on
any account.
(d) Since July 30, 2004, no dividend or other distribution on any shares
in the capital of
the Company has been made, declared or authorized and the Company
has neither purchased nor redeemed nor agreed to purchase or redeem
any of the Shares.
(e) Other than salary, wages, compensation, bonus, pension benefits and
reimbursement of expenses, no payment of any kind has been made or
authorized by the Company since July 30, 2004 to or on behalf of the
Vendor or to or on behalf of officers, directors or shareholders of
the Company. Since July 30, 2004, the Company has not paid or agreed
to pay any compensation, pension, bonus, share of profits or other
benefit to, or for the benefit of, any employee, director or officer
of the Company except in the ordinary course of business and has not
increased or agreed to increase the compensation of any director,
officer or management employee.
(1) Since July 30, 2004:
(i) [Intentionally deleted].
(ii) the Company has not waived or surrendered any right of material
value;
(iii) the Company has not discharged or satisfied or paid any lien, claim,
charge, encumbrance or obligation or liability except in the
ordinary course of business;
(iv) the Business has been carried on in the ordinary course; and
(v) no capital expenditures in excess of $5,000.00 have been authorized
or made.
(g) The Company is the owner with good and marketable title, free and
clear of all liens, charges, encumbrances and any other rights of
other persons other than Permitted Encumbrances, of all assets shown
on Schedule I hereto.
(h) All tax returns and reports of the Company required by law to be
filed before the date of this Agreement have been filed and are
true, complete and correct. All taxes and other government charges
for which tax returns are required to be filed prior to the date of
this Agreement have been paid by the Company when due.
(i) Adequate provision has been made for taxes payable for each current
period for which tax returns are not yet required to be filed, and
there are no waivers or other arrangements providing for an
extension of time for the filing of any tax return, or payment of
any tax, government charge or deficiency, by the Company.
(j) The Company has made all elections required to be made under the
Income Tax Act of Canada in connection with any distributions by the
Company and all such elections were true and correct.
(k) The Vendor is not a non-resident of Canada (as defined in the Income
Tax Act of Canada and the Income Tax Act of British Columbia).
(1) Under the Income Tax Act of Canada and the Income Tax Act of British
Columbia, Company has been since its incorporation and is now a
Canadian-controlled private corporation.
(m) The Company has not since July 30, 2004, disposed of anything to a
person with whom the Company was not dealing at arm's length for
proceeds less than the fair market value.
4.3 Property Representations
(a) Intentionally deleted.
(b) Other than the lease for the demised premises the Vendor does not
own any assets which are used by the Company or are necessary or
useful in the conduct of the Business.
4.4 Intentionally Deleted
4.5 General Vendor Representations
(a) There is no action, suit, judgment, investigation or proceeding
outstanding or pending or to the knowledge of the Vendor threatened
against or affecting the Company.
(b) The Company is not in material breach of any law, ordinance,
statute, regulation, bylaw, order, decree, covenant, restriction,
plan or permit to which it is subject or which applies to it and the
uses to which the assets of the Company have been put are not in
material breach of any law, ordinance, statute, regulation, bylaw,
order, decree, covenant, restriction, plan or permit, including
those regulating the discharge of material into the environment and
the storage, treatment and disposal of waste or otherwise relating
to the protection of the environment and the health and safety of
persons.
(c) [Intentionally deleted]
(d) The Company maintains such insurance against loss or damage to its
assets and with respect to public liability as is reasonably prudent
for a company such as the Company.
(e) The Company does not own, directly or indirectly, any shares or
interests in any other company or firm.
5. Purchasers' Representations and Warranties
5.1 Each of the Purchasers, jointly and severally, represents and warrants
that:
(a) Quasar is a company duly incorporated, organized and subsisting
under the Business Corporations Act of British Columbia, is not a
reporting issuer (as such term is defined in the Securities Act
(British Columbia)), and is in good standing with respect to the
filing of annual reports with the Office of the Registrar of
Companies of British Columbia;
(b) the execution an delivery by Quasar of the Agreement, the Promissory
Note and an Escrow Agreement (the "Escrow Agreement") substantially
in the form of the Schedule 3 to this Agreement and the other
agreements contemplated herein and therein to which it is a party
and compliance with the provisions hereof and thereof by Quasar have
been or will at Closing be duly authorized by all requisite
corporate action on the part of Quasar;
(c) Cameron is an individual of the age of majority and has the capacity
to enter into this Agreement;
(d) neither the making of this Agreement, the issuance of the Promissory
Note, the making of the Escrow Agreement, the completion of the
transactions contemplated by this Agreement, the Promissory Note or
the Escrow Agreement, nor the performance of or compliance with the
terms of this Agreement, the Promissory Note or the Escrow Agreement
will violate the Memorandum or Articles of Quasar or any agreement
to which the Purchasers are a party, and will not result in the
creation or imposition of any lien, claim, charge, encumbrance or
restriction of any nature in favour of a third party upon or against
the assets of the Company or the Shares or the violation of any law
or regulation of Canada or of any province or territory of Canada,
any municipal bylaw or ordinance or any order or decree of any court
or tribunal to which the Purchasers are subject which could prevent
the due and valid transfer of the Shares as provided in the
Agreement.
(e) the execution and delivery by the Purchasers of this Agreement, the
Promissory Note, the Escrow Agreement and the other agreements
contemplated herein and therein and the performance of their
obligations hereunder and thereunder by the Purchasers does not and
will not require the consent of, approval, authorization or other
action by, or filing with or notification to any person by the
Purchasers other than as has already been or will have been
obtained, taken or filed
(f) each of the Purchasers is not a non-Canadian as that term is defined
in the investment Canada Act;
(g) each of the Purchasers is not a non-resident of Canada (as defined
in the Income Tax Act of Canada and the Income Tax Act of British
Columbia);
(h) this Agreement, the Promissory Note, the Escrow Agreement and the
other agreements contemplated herein and therein to which the
Purchasers are a party constitute or will at Closing constitute
legal, valid and binding obligations of the Purchasers enforceable
against the Purchasers in accordance with its respective terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium, and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general
principles of equity;
(i) Quasar is at the date hereof, and shall be at the Time of Closing, a
"private issuer" as such term is defined in the Securities Act
(British Columbia);
(j) following the issuance of the Promissory Note:
(1) Quasar will be a "closely-held issuer" as such term is defined
in Ontario Securities Commission Rule 00-000 Xxxxxx
Distributions ("Rule 45-501");
(2) the aggregate proceeds received by Quasar and any other issuer
engaged in common enterprise with Quasar, in connection with
trades made in reliance upon section 2.1 of Rule 45-50 1 will
not exceed $3,000,000;
(3) no selling or promotional expenses have been paid or incurred
by Quasar in connection with the issuance of the Promissory
Note; and
(4) Quasar will not have more than 5 beneficial holders of its
securities.
6. Vendor's and Purchasers' Covenants
The Vendor covenants and agrees with the Purchasers as follows:
6.1 Consents
Both before and after the Closing Date, the Vendor will use its commercially
reasonable efforts to assist the Purchasers in obtaining from all appropriate
federal, provincial, state, municipal and other governmental or administrative
bodies and all other persons all such approvals and consents in form and terms
satisfactory to counsel for the Purchasers as are necessary or required in order
to permit the sale, transfer and assignment of all of the right, title and
interest of the Vendor in and to the Shares to the Purchasers.
6.2 Possession
At the Time of Closing, the Vendor will deliver to the Purchasers possession of
all books, records, books of accounts, lists of suppliers and customers of the
Company and all other documents, files, records and other data, financial or
otherwise, relating to the Business and the assets of the Company.
6.3 Books and Records
At any time up to the Closing Date, the Vendor will permit the. Purchasers, and
their auditors, solicitors and other authorized persons, to make such
investigation of the assets of the Company and of its financial and legal
condition as the Purchasers deems necessary or advisable to familiarize itself
with such assets and other matters and to have access during normal business
hours (and provided it does not disrupt the Business) to the Business premises
and to all records, documents and other information related to the Business and
the Company, including all working papers (internal and external) and details of
accounts and inventories prepared, obtained or used in connection with the
preparation of the Financial Statements.
6.4 Interim Management--Positive Covenants
From the date of this Agreement to the Closing Date, the Vendor will cause the
Company to:
(a) carry on the Business in the ordinary course, in a prudent,
businesslike and efficient manner and substantially in accordance
with the procedures and practices in effect on July 30, 2004;
(b) maintain insurance on the assets of the Company as they are insured
on the date of this Agreement;
(c) use its commercially all reasonable efforts to preserve and maintain
the goodwill of the Business; and
(d) do all necessary repairs and maintenance to the assets of the
Company and take reasonable care to protect and safeguard those
assets.
6.5 Interim Management--Negative Covenants
From the date of this Agreement to the Closing Date, the Vendor will not permit
the Company, without the prior consent in writing of the Purchasers to:
(a) purchase or sell, consume or otherwise dispose of any of its assets
except in the ordinary course of business;
(b) enter into any contract or assume or incur any liability except in
the ordinary course of
business and which is not material;
(c) settle any account receivable of a material nature at less than face
value net of the reserve for that account;
(d) waive or surrender any material right;
(e) discharge, satisfy or pay any mortgage, pledge, deed of trust, lien,
claim, encumbrance, charge, obligation or liability except in the
ordinary course of business; or
(f) make any capital expenditure or commitment for any capital
expenditure except in the ordinary course of business.
6.6 Bank Accounts
On Closing the Vendor will have performed all requisite acts and executed all
requisite documentation to ensure the signing authorities for all bank accounts,
trust accounts and safety deposit boxes of the Company have been transferred or
amended, as of the Closing Date, in a manner acceptable to the Purchasers.
6.7 Demised Premises
The Vendor and the Company currently share warehouse and office space at
premised leased by the Vendor at 10824 -- I 24~' Street, Surrey, British
Columbia (the "Demised Premises"). The Vendor covenants and agrees to permit the
Company to continue to use and occupy that portion of the Demised Premises
currently used and occupied by the Company, on substantially the same terms as
immediately prior to the Time of Closing, until the expiry of the present term
of the Vendor's lease thereof. After termination of the present term of the
Vendor's lease, the Vendor will permit the Purchasers to exercise any right
which the Vendor may have to renew the lease, subject to the consent and
agreement of the landlord.
6.8 Income Tax
The Vendor shall be responsible for any and all tax liability of the Company
relating to all fiscal periods of the Company commencing prior to and ending on
or before the Closing Date.
6.9 Dental Trust
The employees of the Company and the Vendor have contributed funds (the "Dental
Funds") to an account to be used for paying or reimbursing dental expenses
incurred by employees of the Company. To the extent that Dental Funds
attributable to the Company's employees are administered by the Vendor, the
Purchaser and the Vendor covenant and agree to take all reasonable steps
necessary to cause that share of the Dental Funds attributable to the Company's
employees to be assigned to and administered by the Company. To the extent that
Dental Funds attributable to the Vendor's employees are administered by the
Company, the Purchaser and the Vendor covenant and agree to take all reasonable
steps necessary to cause
that share of the Dental Funds attributable to the Vendor's employees to be
assigned to and administered by the Vendor.
6.10 Covenants of the Purchasers
(a) The Purchasers will cause the Company to maintain, store and keep the
Company's books and records at the Company's offices in Surrey, British
Columbia for such period of time as required in accordance with applicable
law and shall grant the Vendor, in connection with the affairs of the
Company relating to any taxes, workers' compensation or litigation
matters, access to and the right to make copies of (at the Vendor's cost)
such books and records at such facility during regular business hours for
such location.
(b) At the Time of Closing, the Purchasers shall deliver to the Vendor the
Promissory Note issued by the Purchasers, in substantially the form
attached as Schedule 2 to this Agreement.
(c) At the Time of Closing, the Purchasers shall execute and deliver in favour
of the Vendor the Escrow Agreement and the collateral documents
contemplated therein.
(d) Immediately after the Closing, the Purchasers shall deliver to the Vendor
a written confirmation pursuant to which the Company and the Purchasers
shall forgive and release the Vendor from the obligation to pay to the
Company the amount of $1,129.81 owing by the Vendor to the Company, and
reflected in the Company's books as an account receivable from the Vendor.
7. Purchasers' Conditions of Closing
7.1 The obligations of the Purchasers under this Agreement are subject to the
following conditions for the exclusive benefit of the Purchasers being
fulfilled in all material respects in the reasonable opinion of the
Purchasers at the Time of Closing or waived by the Purchasers at or before
the Time of Closing:
(a) the representations and warranties of the Vendor contained in this
Agreement will be true and correct in all material respects on and as of
the Closing Date;
(b) the Vendor will have complied in all material respects with all terms,
covenants and agreements in this Agreement agreed to be performed or
caused to be performed by it on or before the Closing Date;
(c) no material loss or destruction of or damage to any of the assets of the
Company will have occurred between the date of this Agreement and the Time
of Closing;
(d) no action or proceeding against the Company or the Vendor will be pending
or threatened by any person, company, firm, governmental authority,
regulatory body or agency to enjoin or prohibit:
(i) the purchase and sale of the Shares contemplated by this Agreement or the
right of the Purchasers to own the Shares; or
(ii) the right of the Company to conduct its operations and carry on the
Business in the ordinary course as the Business and its operations were
carried on at the date of this Agreement;
(e) all directors and officers of the Company specified by the Purchasers will
resign;
(f) the Vendor will tender to the Purchasers a closing certificate, in a form
acceptable to the Purchasers, signed by the Vendor certifying the truth
and correctness as at the Closing Date of the representations and
warranties of the Vendor contained in paragraph 4 of this Agreement, the
performance of all covenants and agreements of the Vendor, and that the
condition described in paragraph 7.1(d) does not exist as at the Closing
Date;
(g) the Vendor and all directors, officers and other shareholders of the
Company will have executed releases in favour of the Company, in a form
satisfactory to the Purchasers, from any and all possible claims against
the Company arising from any act, matter or thing arising at or before the
Time of Closing; and
(h) all necessary steps and proceedings will have been taken to permit the
Shares to be duly and regularly transferred to the Purchasers.
7.2 If any of the conditions in section 7.1 are not fulfilled or waived, the
Purchasers on the Closing Date may rescind this Agreement by notice in
writing to the Vendor. In such event, the Purchasers (provided it is not
in breach of any provisions of this Agreement) shall be released from all
obligations under this Agreement, and the Vendor will also be released
unless the Vendor was reasonably capable of causing such condition or
conditions to be fulfilled or the Vendor has breached any of its
representations, warranties, covenants or agreements in this Agreement.
7.3 The conditions in section 7.1 may be waived in whole or in part without
prejudice to any right of rescission or any other right in the event of
the non-fulfilment of any other condition or conditions. A waiver will be
binding only if it is in writing.
8. Vendor's Conditions of Closing
8.1 The obligations of the Vendor under this Agreement are subject to the
following conditions for the exclusive benefit of the Vendor being
fulfilled in all material respects in the reasonable opinion of the Vendor
at the Time of Closing or waived by the Vendor at or before the Time of
Closing:
(a) the representations and warranties of the Purchasers contained in this
Agreement will be true and correct on and as of the Closing Date;
(b) the Purchasers will have complied with all terms, covenants and agreements
in this Agreement, the Promissory Note, the Escrow Agreement and in all
other agreements contemplated herein or therein agreed to be performed or
caused to be performed by them on or before the Closing Date; and
(c) no action or proceeding against the one or more of the Purchasers will be
pending or threatened by any person, company, firm, governmental
authority, regulatory body or agency to enjoin or prohibit:
(i) the purchase and sale of the Shares contemplated by this Agreement or the
right of the Vendor to sell the Shares; or
(ii) the right of the Company to conduct its operations and carry on the
Business in the ordinary course as the Business and its operations have
been carried on in the past;
(d) the Company and the Purchasers will have executed releases in favour of
all directors, officers and other shareholders of the Company, in a form
satisfactory to the Vendor from any and all possible claims against such
directors, officers and shareholders of the Company arising from any act,
matter or thing arising at or before the Time of Closing, other than any
claim under this Agreement;
(e) the Purchasers shall have issued and delivered the Promissory Note to the
Vendor, substantially in the form of Schedule 2 to this Agreement;
(1) the Purchasers shall have executed and delivered the Escrow Agreement,
substantially in the form of Schedule 3 to this Agreement; and
(g) The Purchasers having executed and delivered all of the other agreements
which are to be executed and delivered by them pursuant to this Agreement,
the Promissory Note or the Escrow Agreement.
8.2 If any of the conditions in section 8.1 are not fulfilled or waived , the
Vendor on the Closing Date may rescind this Agreement by notice in writing
to the Purchasers. In such event, the Vendor shall be released from all
obligations under this Agreement, and the Purchasers will also be released
unless the Purchasers were reasonably capable of causing such condition or
conditions to be fulfilled or the Purchasers have breached any of their
representations, warranties, covenants or agreements in this Agreement.
8.3 The conditions in section 8.1 may be waived in whole or in part without
prejudice to any right of rescission or any other right in the event of
non-fulfillment of any other condition or conditions. A waiver will be
binding only if it is in writing.
9. Closing Arrangements
9.1 Closing Location
The closing of the purchase and sale and the other transactions contemplated by
this Agreement (the "Closing") will take place at the Time of Closing
concurrently at the offices of Hamilton, Duncan, Xxxxxxxxx and Xxxxxxx in
Surrey, British Columbia, and Xxxxxx Blaikie LLP in Toronto, Ontario (or at such
other place as may be agreed upon by the Vendor and the Purchasers) by way of
facsimile and/or .pdf transmissions over the Internet, and all closing documents
shall be held in escrow until all deliveries and payments have been completed.
9.2 Vendor's Closing Documents
At the Closing, the Vendor will tender to the Purchasers:
(a) resignations in writing of all directors and officers of the
Company;
(b) releases from each director, officer and shareholder of the
Company, releasing the Company from any and all possible
claims against the Company arising from any act, matter or
thing arising at or before the Time of Closing;
(c) certified copies of resolutions of the directors of the
Company in form satisfactory to the Purchasers, acting
reasonably, authorizing the transfer of the Shares and
Shareholder Loans to the Purchasers;
(d) a duly executed assignment of the Shareholder Loans to the
Purchasers;
(e) share certificates representing the Shares duly endorsed by
the Vendor in blank, or accompanied by appropriate stock
powers duly endorsed in blank;
(f) a written confirmation pursuant to which the Vendor shall
forgive and release the Company from the obligation to pay to
the Vendor the amount of $38,383.43 owing by the Company to
the Vendor, and reflected in the Company's books as an account
payable to the Vendor; and
(g) all corporate records and books of account of the Company
including minute books, share registers and annual reports,
and a certificate of good standing.
9.3 Purchasers' Closing Documents
At the Closing, the Purchasers will tender to the Vendor:
(a) a certified copy of a resolution of the directors of Quasar in form
satisfactory to the Vendor, acting reasonably, authorizing the
execution and delivery of this Agreement, the Promissory Note, the
Escrow Agreement, the purchase of the Shares and the escrow of the
Shares;
(b) a certificate, dated as of the Closing Date, executed by Cameron and
by an officer of Quasar certifying that: (i) all of the
representations and warranties made by the Purchasers in this
Agreement, the Promissory Note, the Escrow Agreement and in the
other agreements contemplated herein and therein to which the
Purchasers are a party are true on and as of the Closing Date; and
(ii) the Purchasers have performed and complied with all of their
obligations under this Agreement, the Promissory Note, the Escrow
Agreement and the other agreements contemplated herein and therein
to which the Purchasers are a party which are to be performed or
complied with at or prior to the Time of Closing;
(c) a solicitors trust cheque payable to the Vendor's solicitors in
trust, for the sum of $225,000.00;
(d) the duly executed Promissory Note in the form attached as Schedule 2
to this Agreement;
(e) the duly executed Escrow Agreement in the form attached hereto as
Schedule 3 to this Agreement; and
(f) a written confirmation pursuant to which the Company and the
Purchasers shall forgive and release the Vendor from the obligation
to pay to the Company the amount of $1,129.81 owing by the Vendor to
the Company, and reflected in the Company's books as an account
receivable from the Vendor.
10. General
10.1 Reliance
The Vendor acknowledges and agrees that the Purchasers have entered into this
Agreement relying on the representations, warranties, covenants and agreements
and other terms and conditions of this Agreement and the other agreements
contemplated in this Agreement to which the Purchasers are a party and that no
information which is now known, which may become known or which could upon
investigation have become known to the Purchasers or any of their present or
future officers, directors or professional advisors in any way limits or
extinguishes any rights the Purchasers may have against the Vendor, including
without limitation, any right to indemnity under section 10.3 of this Agreement.
10.2 Survival of Vendor's Representations
(a) Subject to section 10.2(b), the representations, warranties, covenants and
agreements of the Vendor contained in this Agreement and in any document
or certificate given under this Agreement will survive the closing of the
transactions contemplated by this Agreement and remain in full force and
effect notwithstanding any waiver by the Purchasers unless such waiver was
made after notice in writing by the Vendor to the Purchasers setting forth
the breach.
(b) All representations and warranties of the Vendor contained in this
Agreement and in any document or certificate given under this Agreement
shall survive for a period of one (1) year from the Closing Date. If no
claim shall have been made under this Agreement or any other such document
or certificate against the Vendor for any incorrectness in or breach of
any representation or warranty made in this Agreement or in any document
or certificate given under this Agreement prior to the expiry of such
survival periods, the Vendor shall have no further liability under this
Agreement with respect to such representations or warranties.
10.3 Indemnification by the Vendor
The Vendor covenants and agrees to indemnify and save harmless the Purchasers
from any loss, damage, liability, cost and expense (including without limitation
any tax liability) suffered by the Purchasers directly or indirectly as a result
of or arising out of any breach of representation, warranty, covenant or
agreement of the Vendor contained in this Agreement, the Vendor's Closing
Certificate or any document or certificate delivered under this Agreement. The
obligation of indemnification set out in this section 10.3 above shall be
subject to the limitation that the Vendor's total liability under this section
10.3 shall not exceed $425,000. The obligation of indemnification set out in
this section 10.3 above shall be subject to the further limitation that the
Vendor shall not be liable for any indirect, consequential, punitive or
aggravated damages, including damages for loss of profit.
10.4 Survival of Purchasers' Representations
(a) Subject to section 10.4(b), the representations, warranties, covenants and
agreements of the Purchasers contained in this Agreement, the Promissory
Note, the Escrow Agreement and in any document or certificate given
hereunder or thereunder shall survive the closing of the transactions
contemplated by this Agreement and remain in full force and effect
notwithstanding any waiver by the Vendor unless such waiver was made after
notice in writing by the Purchasers to the Vendor setting forth the
breach.
(b) All representations and warranties of the Purchasers contained in this
Agreement, the Promissory Note, the Escrow Agreement and in any document
or certificate given hereunder or thereunder shall survive for a period of
one (1) year from the Closing Date.
If no claim shall have been made under this Agreement or any other such
document or certificate against the Purchasers for any incorrectness in or
breach of any representation or warranty made in this Agreement, the
Promissory Note, the Escrow Agreement or in any document or certificate
given hereunder or thereunder prior to the expiry of such survival
periods, the Purchasers shall have no further liability under this
Agreement, the Promissory Note, the Escrow Agreement or in
any document or certificate given hereunder or thereunder with respect to
such representations or warranties.
10.5 Indemnification by the Purchasers
The Purchasers covenant and agree to jointly and severally indemnify and save
harmless the Vendor from any loss, damage, liability, cost and expense
(including without limitation any tax liability) suffered by the Vendor directly
or indirectly as a result of or arising out of any breach of representation,
warranty, covenant or agreement of the Purchasers contained in this Agreement,
the Promissory Note, the Escrow Agreement, the Purchasers' Closing Certificate
or any document or certificate delivered under hereunder or thereunder.
10.6 Commissions, Legal Fees
Each of the parties will bear the fees and disbursements of the respective
lawyers, accountants and consultants engaged by them respectively in connection
with this Agreement and will not cause or permit any such fees or disbursements
to be charged to the Company before the Closing Date.
10.7 Notices
Any notice, direction or other instrument required or permitted to be given
under this Agreement will be in writing and may be given by mailing the same
postage prepaid or delivering the same addressed as follows:
To the Vendor: Xxxxxx Distributors Ltd.
00000 Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxx
X0X lA3
Attn: Xxxx Xxxxxxxx
To Quasar: Quasar Paging Ltd
XX 0 Xxxx 0 Xxxx 00
Xxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attn: Xxxxxx Xxxxxxxx
To Cameron: Xxxxx Xxxxxxx
00000 Xxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxx Xxxxxxxx
or to such other address as a party may specify by notice and shall be deemed to
have been received, if delivered, on the date of delivery if it is a business
day and otherwise on the next succeeding business day and, if mailed, on the
fifth business day following the posting
of the notice except if there is a postal dispute, in which case all
communications shall be delivered.
10.8 Time of Essence
Time is of the essence of this Agreement.
10.9 Further Assurances
Each of the parties will execute and deliver such further documents and
instruments and do such acts and things as may, before or after the Closing
Date, be reasonably required by another party to carry out the intent and
meaning of this Agreement and to complete the transfer to the Purchasers of the
Shares, the escrow of the Shares by the Purchasers and the delivery of the
Promissory Note to the Vendor.
10.10 Proper Law
This Agreement will be construed and enforced in accordance with, and the rights
of the parties shall be governed by, the law of British Columbia.
10.11 Entire Agreement
This Agreement and the other agreements and documents contemplated herein
constitute the whole agreement between the Vendor and Purchasers pertaining to
the subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions between the parties and there are no
representations, warranties, covenants, conditions or other terms other than
expressly contained in this Agreement and such other agreements and documents.
10.12 Assignment
This Agreement may not be assigned by any party without the prior written
consent of the other party, which consent may be arbitrarily withheld.
10.13 Benefit and Binding Nature of the Agreement
This Agreement enures to the benefit of and is binding upon the parties and
their respective successors and permitted assigns.
10.14 Counterparts
This Agreement may be executed in any number of counterparts with the same
effect as if all parties had signed the same document. All counterparts shall be
construed together and shall constitute one and the same agreement.
10.15 Amendments and Waiver
No modification of or amendment to this Agreement will be valid or binding
unless set forth in writing and duly executed by both of the parties and no
waiver of any breach of any term or provision of this Agreement will be
effective or binding unless made in writing and signed by the party purporting
to give the same, and unless otherwise provided, will be limited to the specific
breach waived.
AS EVIDENCE OF THEIR AGREEMENT the parties have executed this Agreement as of
the date and year first above written.
XXXXXX DISTRIBUTORS LTD.
by its authorized signatory:
____________________________
Name: Xxxx Xxxxxxxx
Title: CFO
