Exhibit 10.1
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (the "Agreement") is effective May 6, 2010,
BETWEEN: WINCHESTER INTERNATIONAL RESORTS INC. (the "Purchaser"), a
corporation existing under the laws of the United States of America
registered in the state of Nevada, with its physical address
located at:
0000 Xxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
AND: XXXXX AND XXXXXX XXXXXXXXX (the "Vendor"), individuals residing and
existing under the laws of Alberta of Canada, with their head
office located at:
80010 - 000 XXX X.
Xxxx Xxxxx XX, X0X-0X0
WHEREAS the Vendor, through their Company; is in the Trailer Dealership
business;
With Xxxxx Xxxxxxx, acting as a representative for Winchester International
Resorts Inc.
AND WHEREAS the Vendor desires to sell 51% of Company shares, and the Purchaser
desires to purchase 51% of Company shares, and expertise of its management as a
going concern including, but not limited to, the assets and liabilities upon and
subject to the terms and conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the covenants and agreements herein contained the parties hereto agree as
follows:
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement, unless something in the subject matter or context is
inconsistent therewith:
"Company" means Factory Outlet Trailers Inc.
"Accounting Records" means all books of account, accounting records and other
financial data and information of the Vendor relating to the Business for the
current fiscal year and the seven preceding fiscal years, including, without
limitation, all records, data or information which are material to the operation
of the Business, as well as all production, inventory, sales and customer
records in respect of such fiscal years. "Accounting Records" shall expressly
exclude any records relating to Taxes of the Vendor;
"Agreement" means this Share Purchase Agreement and all attached schedules as
supplemented, amended, restated or replaced from time to time;
"Assumed Liabilities" means the liabilities, debts and obligations of the
Company pertaining to the Business and the Purchased Shares which are
outstanding at time of closing.
"Assumed Contracts" means the contracts (other than the Leases, the Equipment
Leases and the Excluded Warehouse Lease) pertaining to the Business and the
assets which are being assumed by the Purchaser at time of closing;
"Applicable Canadian Law means any domestic or foreign statute, Canada,
ordinance, rule, regulation, restriction or regulatory policy having the force
of Canada, by-law (zoning or otherwise), or Order that applies to the Company,
any of its predecessor corporations, the Business, the way the Business is
carried on or to any of the Purchased Shares;
"Business" means the business currently carried on by the Company of the Vendor
including, without limitation, the operation of retail establishments for the
sale of Trailer retail customers;
"Business Day" means a day other than a Saturday, Sunday or statutory holiday
Alberta, Canada;
"Closing" means the completion of the sale and all funds paid in full to, and
purchased by, the Purchaser of the Purchased Shares and the completion of all
other transactions contemplated by this Agreement which are to occur
contemporaneously with the purchase and sale of the Purchased Shares;
"Closing Date" means June 15, 2011 or such date when purchaser makes full and
final payment, or other Business Day as may be agreed to in writing between the
Vendor and the Purchaser as the date that the Closing shall take place;
"Closing Document" means any document, agreement, assignment or undertaking
delivered in relation to the Closing as provided in this Agreement except for
the Non Competition Agreement;
"Contractual Rights" means the full benefit of all unfilled customer purchase
orders, sales contracts and engagements relating to the Business, to which the
Vendor is entitled at the Closing Date, whether written or oral, including any
deposits made in connection therewith, and all forward commitments of the
Company for supplies or merchandise entered into in the ordinary course for use
in the Business, excluding however, any and all forward commitments for supplies
or merchandise which are at prices materially in excess of current market prices
or are not terminable without penalty on 60 days notice or less or are in excess
of the normal business requirements of the Business for the period ending 60
days after the Closing Date in respect of minilab supplies and consumables or in
excess of the normal business requirements of the Business for the period ending
60 days after the Closing Date in respect of merchandise for resale.
"Documents" means all title documents, advertising, promotional and marketing
materials, files, correspondence, technical information, agreements and other
documents in the possession or control of the Company relating to the Business
or the Purchased Shares;
"Employees" means those individuals in place at time of closing who are employed
by the Company in the Business at the Time of Closing on a full-time or
part-time basis (including any such individuals who are absent from work due to
short-term disability, pregnancy, maternity or parental leave, sick leave,
vacation, or any other reasonable cause);
"Encumbrance" means any encumbrance of any kind whatever and includes, without
limitation, a security interest, mortgage, lien, hypothec, pledge,
hypothecation, assignment, charge, trust or deemed trust (whether contractual,
statutory or otherwise arising), any easement, right of way (registered or
unregistered), restriction, encroachment or any other right or claim of others
of any kind whatever affecting the Purchased Shares, any covenant or other
agreement, restriction or limitation on the use or transfer of the Purchased
Shares;
"Equipment" means all fixed assets and tangible movable or personal property
owned by the Company and used in connection with the Business (other than an
Excluded Asset) and, without limiting the generality of the foregoing, include
all machines, machinery, trucks and other mobile equipment, fixtures, tools,
furniture, furnishings, vehicles, material handling equipment, typewriters,
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computers, photocopiers, office equipment, implements, tools and spare parts
owned by the Company and used in the Business (other than an Excluded Asset;
"Equipment Leases" means the lease of movable or personal property;
"Excluded Assets" means:
a) All cash, bank balances, monies securities in possession of personal
bank accounts, trusts, investments and other depositories, term
deposits and similar cash property of, owned or held by or for the
account of the Vendor at the Closing Date;
b) the corporate and Tax records of the Vendor;
c) the interest of the Vendor in any Benefit Plans or any insurance
policies covering the Purchased Shares or protecting the Business;
d) The following are personal assets of Vendor, which have been in
personal possession of vendor and registered and insured under the
corporation.
a. 2006 Mercedes Benz CLK 320
b. 2006 Lincoln Navigator
c. Chapparell Boat
d. Polaris Snow Mobile
e. Polaris Quad ATV
f. 2007 Travel Supreme Xxxxx
x. 0000 XX 0000XXX0, Cargo Trailer
h. 2006 Ford Dually Truck
"Excluded Liabilities" means all the liabilities, debts or obligations of the
Vendor, other than the Assumed Liabilities and the Post Closing Liabilities,
whether present or future, whether pertaining to the Business, the Purchased
Shares or otherwise, including, without limiting the generality of the
foregoing:
i) liabilities under any services, management or other contract
(including any Non-Assignable Lease) entered into by the Vendor but
excluding those liabilities relating to the Assumed Contracts, the
Contractual Rights, Leases (other than the Non-Assignable Leases) and
the Equipment Leases;
ii) liabilities to the Employees up to the Time of Closing for wages,
accrued bonuses, earned vacations, vacation pay (accrued or
otherwise), sick leave, and for notice of termination or pay in lieu
of notice or severance pay (in each case, if the Employee is not
offered employment ;
iii)liabilities of the Vendor or related to the Purchased Shares, arising
prior to the Closing Date, for any federal, provincial, local or
foreign taxes, assessments, rates, charges or levies (including
interest and penalties);
iv) Liabilities to the Vendor or any Affiliate or Associate of the
Company, other than the Assumed Intracompany Payable;
"Execution Date" means the date on which both Vendor and Purchaser have executed
by the signing of this Agreement;
"Indemnified Party" means a Party to the Agreement who is the beneficiary under
the Agreement of an indemnity from another Party to the Agreement;
"Indemnifying Party" means a Party to the Agreement who has agreed herein to
indemnify another Party to the Agreement;
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"Intellectual Property Rights" means:
a) all intellectual property rights of or pertaining exclusively to the
Business including, without limitation,
i) all trade marks, trade xxxx registrations, trade xxxx
applications, rights under registered user applications, trade
names and other trade xxxx rights;
ii) All copyrights and industrial designs and registrations thereof
and applications therefore;
iii) all inventions, patents, patent applications and patent rights
(including any patents issuing on such applications or rights);
iv) All licenses and sublicenses.
v) all trade secrets and confidential information;
vi) all computer software and rights related thereto; and
vii) all renewals, modifications and extensions of any of items (i)
through (vi),
"Interim Period" means the period from the Execution Date to the Time of
Closing;
"Inventories" means all inventories of goods of every kind and nature and
wheresoever situate owned by the Vendor on the Closing Date relating to the
Business including without limitation, all finished goods.
"Leased Premises," means all premises leased by the Company under the Leases and
all fixtures and improvements thereon;
"Leases" means the leases or agreements in the nature of a lease of real
property to which the Vendor is a party, whether as lessor or lessee, which
relate to the Business, including the existing for retail location.
"Non-Competition Agreement" means the non-competition agreement to be entered
into between the Vendor and the Purchaser at the Time of Closing. Vendor agrees
not to own, manage, invest or otherwise affiliate himself with similar business
(other than together in joint efforts with Purchaser) for a term set forth of 5
years.
"Order" means any final and enforceable order or any judgment, injunction,
decree, award or writ of any court, tribunal, arbitrator or Governmental Agency;
"Parties" means the Purchaser and the Vendor collectively, and "Party" means any
one of them;
"Person" shall be broadly interpreted and includes, without limitation, an
individual, body corporate, partnership, joint venture, trust, association,
unincorporated organization, the Crown, any Governmental Agency or any other
entity recognized by Canada;
"Post Closing Liabilities" means
i) the liabilities of the Business which arise after the Closing Date and
are incurred by the Purchaser as a consequence of the operation of the
Business by the Purchaser and
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ii) the liabilities of the Business which arise after the Closing Date and
are exhaustively detailed hereafter:
a) all liabilities and obligations of the Vendor under each of the
Assumed Contracts and the Equipment Leases;
b) All liabilities and obligations of the Company under each of the
Leases assigned to and assumed by the Purchaser hereunder;
c) All liabilities and obligations of the Company in respect of the
Contractual Rights;
d) All liabilities and obligations of the Company in respect of
processing, including any reserves or allowances therefore;
e) All liabilities and obligations of the Company in respect of
warranties or repair contracts, including any reserves or allowances
therefore;
The Post Closing Liabilities exclude any and all liabilities, which are
expressly described herein as being Excluded Liabilities.
"Provincial Legislation" means the Retail Sales Canada Revenue, the Workers'
Canada 2011, the Workers' Compensation Alberta Canada, the GST Canada the Retail
Sales Tax
"Purchase Price" means the purchase price to be paid by the Purchaser to the
Vendor for the Shares;
"Assets" means all of the assets, property and undertaking, other than the
Excluded Assets, owned and used by the Company or held by it for use in, or in
respect of the operation of, the Business, including the following:
a) All right, title and interest of the Company in, to and under the
Leases and the Leased Premises (other than the Non-Assignable Leases
and the relevant Leased Premises), all tenant allowances payable to
the Company after the Closing Date, all leasehold improvements
pertaining to the Leases and the Leased Premises, all fixtures located
in, on or about the Leased Premises and all appurtenances thereto;
b) the Accounts Receivable;
c) the Inventories;
d) the Contractual Rights to the extent they are assignable;
e) to the extent they are assignable, all right, title and interest of
the Company in, to and under, and the full benefit of, the Assumed
Contracts and the Equipment Leases and all options, including options
to purchase, thereunder;
f) the Equipment;
g) All right, title and interest of the Company in and to the
Intellectual Property Rights;
h) The goodwill of the Business, including the exclusive right of the
Purchaser to represent itself as carrying on the Business in
succession to the Company and all right, title and interest of the
Company in, to and in respect of the trade name of the Company and
variations thereof used in association with the Business (which trade
name and variations thereof shall not be amended without the prior
written consent of the Vendor, acting reasonably) and all records and
information relating to the suppliers, customers and Hired Employees
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of the Business and all pertinent files, catalogues and promotional
materials relating to the Business and the Purchased Shares;
i) To the extent the same are transferable, all deposits and prepaid
expenses with any public utility or any municipal, governmental or
other public authority relating to the Business or other deposits and
prepaid expenses relating to the Business;
j) to the extent same are transferrable, the Warranty Rights; the
Transferable Licenses;
k) All other rights, properties and assets (other than any Excluded
Assets) owned by the Company and used or useful in the Business, of
whatever nature or kind and wherever situated;
"Taxes" means all federal, provincial, municipal, territorial, foreign or other
taxes, imposts, rates, levies, assessments and government fees, license fees,
charges or dues lawfully levied, assessed or imposed in respect of the Business,
including, without limitation, all income, capital gains, sales, excise, use,
property, capital, goods and services, business transfer and value added taxes
and custom and import duties and includes all interest, fines and penalties with
respect thereto;
"Time of Closing" means Alberta Canada time, 12:00PM on the Closing Date;
"Transferable Licenses" means all rights and interest in and to all licenses,
permits and approvals issued to the Vendor by any Governmental Agency which are
transferable, with or without the consent of such Governmental Agency; and
"Warranty Rights" means the full benefit of all unexpired warranties, warranty
rights, guarantees, indemnities, undertakings and similar covenants (implied,
express or otherwise) against manufacturers or sellers which apply to any of the
Purchased Shares or to any products or services of the Business acquired by the
Company for resale and previously sold by the Company to third parties and all
security received by the Company therefore.
1.2 CURRENCY
All statements of or references to amounts in this Agreement are to lawful money
of Canada unless otherwise stated.
1.3 TENDER
Any tender of documents or money hereunder may be made upon the Vendor or their
respective counsel and money shall be tendered by official bank draft drawn upon
a Canadian chartered bank or by negotiable check payable in Canadian funds and
certified by a Canadian chartered bank.
1.4 PERFORMANCE ON HOLIDAYS
If any action is required to be taken pursuant to this Agreement on or by a
specified date which is not a Business Day, then such action shall be valid if
taken on or by the next succeeding Business Day.
1.5 CALCULATION OF TIME
In this Agreement, a period of days shall be deemed to begin on the first day
after the event which began the period and to end 12:00PM Alberta, Canada time
on the last day of the period. If, however, the last day of the period does not
fall on a Business Day, the period shall terminate at 12:00 PM (Alberta, Canada
time) on the next Business Day.
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1.6 ORDINARY COURSE
For the purposes of this Agreement a transaction or activity shall be considered
to be in the ordinary or normal course of business if it constitutes either (a)
an ordinary day-to-day or regular business activity of the Company pertaining to
the Business or (b) a business activity undertaken with the consent of the
Purchaser in contemplation of the Closing or which is an obligation of the
Company under this Agreement, conducted in a commercially reasonable and
business-like manner and, in the case of activities described in clause (a),
consistent with past practices of the Company in respect of the Business.
2. PURCHASE AND SALE
2.1 PURCHASE AND SALE AND PURCHASE PRICE
2.1.1 TERM AND CONDITIONS
Subject to the terms and conditions hereof, the Vendor agrees to sell, assign
and transfer to the Purchaser, the Purchased Shares as a going concern and the
Purchaser agrees to purchase them from the Vendor on the Closing Date. Purchase
price for the Purchased Shares (the "Purchase Price") shall be the amount, which
is equal to:
a. $4,400,000.00, to include 51% shares of the Company
b) The Final Net Worth of the Business at time of closing.
2.1.2 THE PURCHASE PRICE SHALL BE PAID AND SATISFIED AS FOLLOWS:
a) as to an amount (the "Closing Payment") equal to (i) $4,400,000.00
plus (ii) to be paid out in the following schedule:
a. $50,000.00, Due within 1 week of executed contract
(NON-REFUNDABLE)
b. $50,000.00 Due June 15, 2010 (NON-REFUNDABLE)
c. $75,000.00 Due July 15, 2010 (NON-REFUNDABLE)
d. $100,000.00 Due August 15, 2010 (NON-REFUNDABLE)
e. $125,000.00 Due September 15, 2010 (NON-REFUNDABLE)
f. $150,000.00 Due October 15, 2010 (NON-REFUNDABLE)
g. $500,000.00 Due November 15, 2010
h. $500,000.00 Due December 15, 2010
i. $500,000.00 Due January 15, 2011
j. $500,000.00 Due February 15, 2011
k. $500,000.00 Due March 15, 2011
l. $500,000.00 Due April 15, 2011
a. $500,000.00 Due May 15, 2011
b. $350,000.00 Due June 15, 2011
b) Purchaser has right to prepay monies outside of above schedule. In the
event of early payment in full, closing date will be adjusted
accordingly. At any time in the event a payment is missed after final
non-refundable deposit on October 15, 2010; Vendor has option to make
contract null and void. In the event that Vendor makes contract null
and void all Refundable deposits are returned to purchaser. Vendor
agrees to provide Balance sheet upon execution of contract and provide
comparable financial position to purchaser on June 15, 2011 upon
closing.
c) First "Re-Fundable deposit" of $500,000.00 to be made within 30 days
of last "Non-Refundable" payment
d) Early payment of Non-Refundable deposits will be dealt with
accordingly; each day of early payment will be given as grace period
for the next payment;
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a. All refundable deposits to be held in "Trust", in interest
bearing account (Interest is non-refundable and payable to
Vendor) until such time of closing, or Vendor exercising
cancelation of contract, held in "Trust" refundable to purchaser.
e) Vendor will provide a 10 Day Grace period, in which Vendor will advise
purchaser to make payment within "Grace Period". If purchaser does not
satisfy, Vendor has option to make contract null and void.
f) Vendor shall execute separate "Share Purchase Agreement" with Xxx
Xxxxxxxx and Xxxxxxx Willows for remaining 49% shares of the Company.
a. Vendor to remain on staff with Company until such time that
"Share Purchase Agreement" purchase price, between vendor and Xxx
Xxxxxxxx with Crystal Willows is 50% satisfied. Vendor's
remuneration to be $10,000.00 per month. During such time until
Vendor's "Share Purchase Agreement" with Xxx Xxxxxxxx and Xxxxxxx
Willows is fully satisfied, vendor shall have full software
privileges and access to financial information deemed necessary
by vendor to protect interest.
b. Xxx Xxxxxxxx with Crystal Willows will not sell her 49% shares of
the Company until such time that "Share Purchase Agreement" is
fully satisfied;
g) Vendor shall execute separate agreement for (1) Vendor (2) Winchester
(3) Xxx Xxxxxxxx and Xxxxxxx Willows regarding Arkansas Dealership to
begin.
h) Vendor, purchaser and Xxx Xxxxxxxx with Crystal Willows agree to
`First Right of Refusal". Any and all potential dealings relating to
the sale of any party's interest in Company will be subject to `First
Right of Refusal".
2.2 CLOSING
The sale and purchase of the Purchased Shares shall be completed at the Time of
Closing at the offices of Vendors Attorney.
2.3 ALLOCATION OF PURCHASE PRICE
The Purchase Price shall be allocated among the Purchased Shares as provided in
Schedule of a flat fee purchase.
The Vendor agrees to indemnify and save harmless the Purchaser, and the
Purchaser agrees to indemnify and save harmless the Vendor, in respect of any
liability, loss, cost, expense, additional tax, interest, penalty or legal or
accounting fees paid or incurred by the indemnified party as a result of the
failure of the Vendor or the Purchaser (as the case may be) to perform its
respective obligations pursuant to this Section.
2.4 ACCOUNTS RECEIVABLE
After the Time of Closing, the Purchaser shall assume accounts receivable and
all rights herein.
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2.5 NON-ASSIGNABLE CONTRACTS
Neither this Agreement nor any Closing Document shall constitute an assignment
or an attempted assignment of any Non-Assignable Contract. To the extent
permitted by Applicable Canadian Law; each Non-Assignable Contract shall be held
by the Vendor in trust for the Purchaser and the covenants and obligations
thereunder shall be performed by the Purchaser in the name of the Company and
all benefits and obligations existing thereunder shall be for the account of the
Purchaser.
The Vendor shall take or cause to be taken such action in its name or otherwise
as the Purchaser may reasonably require so as to provide the Purchaser with the
benefits thereof and to effect collection of money to become due and payable
under the Non-Assignable Contracts and the Vendor shall promptly pay over to the
Purchaser all money received by it in respect of all Non-Assignable Contracts.
Upon the Closing, the Vendor authorizes the Purchaser, to the extent permitted
by Applicable Canadian Law and the terms of the Non-Assignable Contracts, at the
Purchaser's expense, to perform all of the Vendor's obligations under the
Non-Assignable Contracts and constitutes the Purchaser's attorney to act in its
name and on its behalf with respect thereto.
After the Closing Date, the Vendor agrees to assign Non-Assignable Contracts to
the Purchaser when such assignment is permitted and as the Purchaser may direct.
The Vendor shall use its commercially reasonable efforts to obtain all consents
required for the assignment of the Non-Assignable Contracts. The Vendor shall
not, however, be obliged to make any payments to any Person or to pay any other
charge or fee (except a payment to a contracting party to cover its expenses
associated with the consent in question) or make additional payments, guarantees
or financial contributions or arrangements (other than as remaining a party to
the Non-Assignable Contracts) or to institute legal or arbitration or other
proceedings to obtain such consents.
3. REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES OF THE VENDOR
The Vendor represents and warrants to the Purchaser as set out in the following
subsections of this Section and acknowledges that the Purchaser is relying upon
such representations and warranties in entering into this Agreement.
3.1.1 CORPORATE MATTERS
a) The Company is a corporation duly incorporated, organized and
subsisting under the Canadian Law and has sufficient power, authority
and right to enter into and deliver, and to observe and perform its
covenants and obligations under this Agreement, the Closing Documents
to which it is a party and under the Non Competition Agreement. The
Vendor has taken all corporate action necessary to authorize the
execution and delivery of, and the observance and performance of its
covenants and obligations under this Agreement, the Closing Documents
to which it is a party and under the Non-Competition Agreement.
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b) The Vendor has all necessary power and authority to own or lease the
Purchased Shares and to carry on the Business as at present carried
on. The Vendor possesses all Licenses material to the conduct of the
Business. Neither the nature of the Business nor the location or
character of any of the Purchased Shares requires the Company to be
registered, licensed or otherwise qualified as an extra-provincial or
foreign corporation or to be in good standing in any jurisdiction
other than jurisdictions where it is duly registered, licensed or
otherwise qualified and in good standing for such purpose.
c) This Agreement has been duly executed and delivered by the Vendor, and
this Agreement constitutes a valid and binding obligation of the
Vendor enforceable against the Vendor in accordance with its terms.
3.1.2 TITLE TO PURCHASED SHARES
Immediately prior to the Closing the Vendor shall be and, on Closing, the
Purchaser shall become, the beneficial owner of the Purchased Shares, with good
and marketable title thereto, free and clear of any title defects or
Encumbrances other than the Permitted Encumbrances. The Vendor is exclusively
entitled to possess and dispose of the Purchased Shares (subject only to the
necessity for obtaining any necessary consents to transfer in the case of the
Leases, Equipment Leases, Contractual Rights, Warranty Rights, Transferable
Licenses and the Assumed Contracts).
3.1.3 NO OPTIONS
No Person, other than the Purchaser, has any oral or written agreement, option,
or right, or any other right capable of becoming an agreement or option for the
purchase from the Company of the Business or any of the Purchased Shares.
3.1.4 THE FINANCIAL STATEMENTS
The Financial Statements have been prepared from the books and records of the
Company and, in the case of the financial statements for the year ended 2011,
such financial statements served as the basis for the consolidation of the
accounts of the Business with the other accounts of the Company as at such date
as presented in the audited financial statements of the Company as at June 15,
2011, and in accordance with the Statement of Accounting Principles.
THE FINANCIAL STATEMENTS:
a) Accurately disclose and present fairly the assets, liabilities
(whether accrued, absolute, contingent or otherwise) and financial
condition of the Company in respect of the Business and the results of
the operations of the Company in respect of the Business, as at the
dates thereof and for the periods covered thereby except that the
Financial Statements do not have any notes attached thereto, and do
not disclose liabilities required by General Accepted Accounting
Principles to be disclosed in such notes; and
b) Reflect all proper accruals (except as noted in the Statement of
Accounting Principles annexed as attached, as at the dates thereof and
for the periods covered thereby, of all amounts under employment
arrangements or the Benefit Plans for employees of the Company in
respect of the Business (including management fees and employee
incentives) which, though not payable until a time after the end of
the relevant period, are attributable to activities undertaken during
that period.
3.1.5 UNDISCLOSED LIABILITIES
The Company has no liabilities with respect to the Business (whether accrued,
absolute, contingent or otherwise, matured or unmatured) of any kind except:
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a) liabilities disclosed or provided for in the Financial Statements;
3.1.6 ABSENCE OF CHANGES
Since May 2000, except as disclosed:
a) The Company has conducted the Business in the ordinary course, has not
incurred any debt, obligation or liability out of the ordinary course
of business or of an unusual or extraordinary nature and has used its
commercially reasonable efforts to preserve the Business and the
Purchased Shares;
b) there has not been any change in the condition of the Purchased Shares
or affairs, operations or condition (financial or otherwise) of the
Business other than changes in the ordinary course of business, and
such changes have not, either individually or in the aggregate, been
materially adverse or have had or may be reasonably expected to have,
either before or after the Time of Closing, a material adverse effect
on the Business,
c) the Purchased Shares or the condition (financial or otherwise) of the
Business except that operating losses have been incurred in the
ordinary course of the Business as reflected on the 2010 financial
statements of the Business which have been provided to the Purchaser
and operating losses in the ordinary course of the Business have
continued to be incurred after May 6, 2010; and
d) except for those contemplated by this Agreement, there has not been
any termination, amendment or revocation of any License or any damage,
destruction, loss, labor dispute or other event, development or
condition of any character (whether or not covered by insurance) which
has had, or could have, a material adverse effect on the Business or
the Purchased Shares except for the operating losses referred to in
(b) above or events or developments reflecting the seasonality of the
Business or political, general economic or general retail industry
conditions in Canada.
3.1.7 ABSENCE OF UNUSUAL TRANSACTIONS
Except as disclosed, since May 6, 2010, the Company has not with respect to the
Business:
a) transferred, assigned, sold or otherwise disposed of any of the
Purchased Shares or cancelled any debts or claims of material value
except in the ordinary course of business;
b) paid or incurred any material obligation or liability (fixed or
contingent) other than obligations or liabilities included in the
Financial Statements and obligations and liabilities incurred since
the date thereof in the ordinary course of business or disclosed in
this Agreement;
c) Settled any liability, claim, dispute, proceedings, suit or appeal
pending against it, the Business or against any of the Purchased
Shares.
d) suffered any extraordinary loss, or waived or settled any rights of
material value, or entered into any commitment or transaction not in
the ordinary course of business, where such loss, rights, commitment
or transaction is material in relation to the Business;
e) except in the ordinary course of business, increased the compensation
paid or payable to its existing employees or increased the benefits to
which such employees are entitled under any Benefit Plan or created
any new benefit or pension plan for any such employees;
f) except for Permitted Encumbrances and Encumbrances discharged at or
prior to the Closing, created any Encumbrance on the Purchased Shares
or suffered or permitted any such Encumbrance that has arisen on the
Purchased Shares since that date to remain;
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g) changed in any material respect its accounting practices or policies,
including without limitation, any material change or reduction in any
reserves or accruals for liabilities below levels consistent with its
past practices as reflected in the Financial Statements;
h) Become aware as of the date hereof (without having made any enquiry)
of the passing of any Applicable Canadian law that might reasonably be
expected to have a material adverse effect on the Business, the
Purchased Shares or the future prospects of the Business;
i) Entered into or become bound by any contract, agreement or
arrangement, written or oral, not in the ordinary course of its
business and involving or which may result in the payment of money by
the Company with respect to all such transactions;
j) modified, amended or terminated any contract, agreement or arrangement
to which it is or was a party, or waived or released any right of
material value which it has or had, other than in the ordinary course
of its business, other than those contracts to be cancelled on or
before Closing;
k) incurred any debt, liability or obligation for borrowed money, or
incurred any other debt, liability or obligation except in the
ordinary course of its business;
l) Entered into any agreement (other than the Assumed Intracompany
Payable) with a Person who does not deal at arm's length (within the
meaning of the Canada's Income tax law with the Company (other than
employment agreements with its officers and directors) or paid any
bonus or consulting or management fees or any similar fees to any such
Persons;
m) Made any capital expenditures in the aggregate; or authorized or
agreed or otherwise become committed to do any of the foregoing.
3.1.8 TAX MATTERS
a) The Company is not liable for any Taxes due and unpaid which might
result in a lien or Encumbrance affecting any of the Purchased Shares.
b) The Company has withheld from each payment made to any of its present
or former employees, officers and directors, and to all persons who
are non residents of Canada for the purposes of Canada's Income tax
Law all amounts required by Canadian Law, and has remitted such
withheld amounts within the prescribed periods to the appropriate
Governmental Agency.
c) The Company is a registrant for the purposes of the goods and services
tax provided for under Canada GST and provide its registration number.
d) The Company has paid all Taxes due under the Retail Sales Tax (GST) on
the acquisition of its tangible personal property (as defined in the
Retail Sales Tax GST Alberta Canada constituting Purchased Shares. The
foregoing is accurate, mutatis mutandis, with respect to all sales or
transfer taxes imposed under comparable legislation of other
provinces.
e) The Company has never acquired or had the use of any of the Purchased
Shares from a Person ("a Related Person") with whom the Company was
not dealing at arm's length, as determined under Canada's Income Tax
law. The Vendor shall neither acquire nor dispose of any of the
Purchased Shares from or to any Related Person prior to the Time of
Closing.
f) The Vendor is not a party to or bound by any agreement with, is not
indebted to, and no amount is owing to the Vendor by any Person, not
dealing at arm's length, within the meaning of Canada's Income Tax law
with the Vendor except for oral contracts of employment with the
officers of the Company and the Assumed Intracompany Payable.
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3.1.9 BOOKS AND RECORDS
The Accounting Records are complete and accurate in all material respects and
the Companies books and records provide for all Taxes (other than income taxes,
capital gains taxes, capital taxes or similar taxes) that have become or may
become due and payable by the Company in respect of the Business on or before
the Time of Closing or are in respect of a period ending prior to the Time of
Closing.
The computer and other systems used in the Business, function properly and
provide information, which is accurate in all material respects as to the normal
transactions of the Business. The Company owns or holds valid licenses for all
software required to carry out its data processing requirements in relation to
the Business. The Documents are complete and accurate in all material respects.
3.1.10 LEASES, MATERIAL CONTRACTS, ETC.
a) Except for the Assumed Contracts, the contracts and Contractual Rights
listed, the Equipment Leases, the Leases and the Contractual Rights,
the Company is not a party to or bound by any material contract or
commitment, whether oral or written, which relates to the Business.
True and correct copies of the Assumed Contracts, the Equipment
Leases, the Leases [and the Contractual Rights] have been made
available for inspection by the Purchaser or its agents prior to the
date hereof.
b) With respect to the Leases,
i) The lease of property with a physical address of 00000 000xx XXX
XX Xxxx Xxxxx XX, X0X 0X0 and all other required payments under
each Lease which have become due have been duly paid and the
covenants, obligations and conditions contained in each Lease
have been duly observed and performed in all material respects by
the Company,
ii) subject to obtaining any necessary consents from J5 Investments
to assign the Lease and the fulfillment of any other conditions
set forth in such Lease to assign the Lease, the Vendor has the
full right, power and authority to assign each such Lease and its
interest in the Leased Premises related thereto to the Purchaser;
and
iii) Subject to obtaining any necessary consents of J5 Investments to
assign the Lease and the fulfillment of any other conditions set
forth in such Lease to assign the Lease, and subject to payment
of rent and other amounts payable by the Purchaser and
performance by the Purchaser of the Company covenants contained
in each Lease upon assignment,
iv) The Purchaser may enter into and upon and hold the Leased
Premises subject to and demised by that Lease for its own use and
benefit for the residue of the term granted by such Lease and any
renewals thereof, without interruption by the Vendor or any other
person claiming through or under the Vendor.
c) The Assumed Contracts, Leases, Equipment Leases and Contractual Rights
are all in good standing and in full force and effect with no
amendments and are enforceable in accordance with their terms. The
Vendor has complied with all material terms thereof and has not waived
any material rights thereunder and no material default or breach
exists in respect thereof on the part of any of the Company thereto
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and no event has occurred which, after the giving of notice or the
lapse of time or both, would constitute such a material default or
breach.
d) The Vendor has not permitted any other party to terminate, suspend or
amend any Assumed Contract, Lease, Equipment Lease and Contractual
Right. There has been no assignment, subletting or granting of any
license (or occupation or otherwise) of or in respect of any of the
Assumed Contracts, Leases, Equipment Leases and Contractual Rights.
e) All amounts payable to the Company after the Closing Date under the
Assumed Contracts, Leases, Equipment Leases and the Contractual Rights
are still due and owing to the Company without any right of set off.
There are no quotations, orders or tenders for contracts which remain
open for acceptance. The Company is not a party to any Assumed
Contract or Contractual Right, which it does not have the capacity to
perform, including the necessary personnel, equipment and supplies.
3.1.11 ACCOUNTS RECEIVABLE
a) The Vendor has the full right and authority to assign to the Purchaser
the Accounts Receivable and the security held by the Company, which is
related to such Accounts Receivable.
b) Each Account Receivable and the security related thereto shall be
valid and subsisting at the Time of Closing.
c) The rights of the Vendor in respect of each Account Receivable and
under the security related thereto will have been enforced by the
Vendor up to the Time of Closing in accordance with the Companies
customary business practices and will not have been waived, modified
or compromised in any manner which will affect the Purchaser's ability
to benefit from or enforce its rights under an Account Receivable or
its related security.
d) The amounts remaining to be paid under each Account Receivable at the
Time of Closing will be inherited by the purchaser as part of the flat
fee purchase.
3.1.12 CONSENTS, APPROVALS, ETC.
Except as set out in the Leases, the Assumed Contracts, the Equipment Leases,
the Contractual Rights and the Transferable Licenses (or the Applicable Canadian
law related to such Transferable Licenses), no consent, approval, License, Order
or authorization, registration, declaration or filing with any Governmental
Agency or other Person is required to be obtained or made by the Vendor in
connection with (a) the Closing, (b) the execution and delivery by the Vendor of
this Agreement, the Closing Documents to which it is a party or the Non
Competition Agreement or (c) the observance and performance by the Vendor of its
obligations under this Agreement, the Closing Documents to which it is a party
and the Non Competition Agreement except pursuant to the Competition Act Canada,
the Bulk Sales Legislation, the Provincial Legislation or as required by the
Applicable Canadian law to perfect the assignment of the Accounts Receivable.
There is no requirement under any Transferable License, Assumed Contract,
Equipment Lease, Lease or Contractual Right to give any notice to, or to obtain
the consent of, any party to such a contract or license in connection with the
Closing except as required by the terms thereof (or the Applicable Canadian law
related to such Transferable Licenses). The Vendor is not aware of any reason
why any of the landlords of the Leased Premises would refuse to give such
consent except by reason of a potential breach of the radius clauses which may
be contained in such Leases or in a lease of one of Purchaser's retail outlets.
3.1.13 ABSENCE OF GUARANTEES
In respect of the Business, the Vendor has not given nor agreed to give, or is a
party to or bound by, any indemnification or guarantee of indebtedness or other
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obligations of third parties or any other commitment by which the Business is,
or is contingently, responsible for such indebtedness or other obligations.
3.1.14 RESTRICTIONS ON BUSINESS
The Vendor is not a party to any agreement, lease, mortgage, security document,
obligation or instrument, or subject to any restriction imposed by any
Governmental Agency or subject to any Applicable Canadian law or Order which
restricts or interferes with the conduct of the Business as currently conducted
or its current use of the Purchased Shares or which limits or restricts or
otherwise materially adversely affects the Purchased Shares or the financial
condition of the Business, other than Applicable Canadian law or Orders or
restrictions of general application to the Business and any restrictions which
may be contained in the Leases or the Equipment Leases.
3.1.15 ABSENCE OF CONFLICTING AGREEMENTS
Neither the execution nor delivery of this Agreement or any Closing Document by
the Vendor nor the consummation of the transactions contemplated hereby will:
a) contravene or violate in any material respect or result in any
material breach of (with or without the giving of notice or lapse of
time, or both) or acceleration of any obligation under:
i) subject to giving the requisite notice of the proposed
transaction under the Competition Act (Canada), any Applicable
Canadian Law;
ii) Any License, permit, concession or franchise of the Company;
iii) The articles, by-laws, directors or shareholders resolutions of
the Company;
iv) except for the Leases, the Equipment Leases, Contractual Rights,
Warranty Rights and the Assumed Contracts the consent to the
assignment or transfer of which may be required from landlords
v) Or other third parties thereunder in connection with the Closing,
the provisions of any material indenture, mortgage, lease,
agreement, instrument, arrangement or understanding to which the
Company is a party or is bound;
b) relieve any other party to any Lease, Equipment Lease, Assumed
Contract, Contractual Right or Warranty Right, of that party's
obligations thereunder or enable it to terminate its obligations
thereunder except as described in such Lease, Equipment Lease,
Contractual Rights, Warranty Rights or Assumed Contract; or
c) Result in the creation or imposition of any material Encumbrance on
the Business or any of the Purchased Shares other than the Permitted
Encumbrances.
3.1.16 COMPLIANCE WITH APPLICABLE CANADIAN LAW
Prior to May 6, 2010, the Company has conducted the Business in compliance in
all material respects with all Applicable Canadian law and not in breach of any
Applicable Canadian law except for breaches which in the aggregate are
immaterial or which are described in the Phase I Assessment. Since May 6, 2010,
the Company is conducting the Business currently carried on by it in compliance
in all material respects with all Applicable Canadian law, and not in breach of
any Applicable Canadian law except for breaches which in the aggregate are
immaterial.
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The Vendor has received no orders, notices, complaints or similar requirements
relating to the Business or the Company relating to the Business issued by any
building, environmental, fire, health, labour or police authorities or by any
other Governmental Agency which have not been resolved to the satisfaction of
the issuing body and there are no matters under discussion by the Company or its
agents with any Governmental Agency relating to orders, notices or similar
requirements.
3.1.17 COLLECTIVE AGREEMENTS
There is no collective agreement to which the Vendor is a party in respect of
the Business or which relates to the Business. No trade union, council of trade
unions, employee bargaining agency or affiliated bargaining agent holds
bargaining rights with respect to any Employees of the Business by way of
certification, interim certification, voluntary recognition, related employer or
successor rights, or has applied or, to the knowledge of the Vendor, threatened
to apply to be certified as the bargaining agent of any of such Employees. No
work stoppage or other labour dispute in respect of the Business is pending or,
to the knowledge of the Vendor, threatened.
3.1.18 INSURANCE
The Company has the assets insured by reputable insurers against loss or damage
as is appropriate to the Business and the assets in such amounts and against
such risks as are customarily carried and insured against by owners of
comparable businesses, properties and assets, and such insurance coverage will
be continued in full force and effect to and including the Closing Date.
3.1.19 LEASES
The Company is not a party to or bound by any leases of real property other than
the Leases and the Excluded Warehouse Lease in respect of the Business and all
interests held by the Company as lessee under the Leases are free and clear of
all Encumbrances other than the Permitted Encumbrances. Each of the Leases
permits the Company to carry on the Business as presently carried on.
3.1.20 NO EXPROPRIATION
The Company has not received any notice of expropriation of all or any of the
Leased Premises or the assets. The Vendor is not aware of any expropriation
proceeding pending or threatened against or affecting any of the Leased Premises
or the assets.
3.1.21 LICENSES
The only Licenses held by the Vendor which are material or necessary for the
operation of the Business and the ownership of the Purchased Shares and said
Licenses are in full force and effect unamended. The Company is in compliance in
all material respects with all provisions of the Licenses and there are no
proceedings in progress, or to the best of the knowledge of the Vendor, pending
or threatened, which may result in revocation, cancellation, suspension or any
adverse modification of any of the Licenses.
3.2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Vendor as set out in the following
subsections of this Section and acknowledges that the Vendor is relying upon
such representations and warranties in entering into this Agreement.
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3.2.1 INCORPORATION
The Purchaser is a corporation duly continued, organized and subsisting under
the laws of the United States of America.
3.2.2 CORPORATE POWER AND DUE AUTHORIZATION
The Purchaser has good and sufficient power, authority and right to enter into
and deliver, and to observe and perform its covenants and obligations under,
this Agreement and the Closing Documents to which it is a party. The Purchaser
has taken all corporate action necessary to authorize the execution and delivery
of, and the observance and performance of its covenants and obligations under,
this Agreement and the Closing Documents to which it is a party.
3.2.3 ENFORCEABILITY OF OBLIGATIONS
This Agreement has been duly executed and delivered by the Purchaser and this
Agreement constitutes a valid and binding obligation of the Purchaser
enforceable against it in accordance with its terms.
3.2.4 ABSENCE OF CONFLICTING AGREEMENTS
None of the execution and delivery of, or the observance and performance by the
Purchaser of any covenant or obligation under, this Agreement or any Closing
Document to which it is a party or the Closing contravenes or results in (with
or without the giving of notice or lapse of time, or both) or will contravene or
violate in any material respect or result in any material breach or default of,
or acceleration of any obligation under:
a) Subject to giving the requisite notice of the proposed transaction
under the Competition Act Canada and any Applicable Canadian Law.
b) any License of the Purchaser;
c) the articles, by-laws, directors' or shareholders' resolutions of the
Purchaser;
3.2.5 CONSENTS AND APPROVALS
a) No consent, approval, License, Order or authorization, registration,
declaration or filing with any Governmental Agency is required by the
Purchaser in connection with (a) the Closing or (b) the execution and
delivery by the Purchaser of this Agreement and the Closing Documents
to which it is a party, or (c) the observance and performance by the
Purchaser of its obligations under this Agreement and the Closing
Documents to which it is a party except pursuant to the Competition
Act Canada and except for those consents under certain leases required
to be obtained .
b) The Purchaser is not aware of any reason why any of the landlords of
the Leased Premises would refuse to give such consent except by reason
of a potential breach of the radius clauses which may be contained in
such Leases or in a lease for one of the Purchaser's retail outlets.
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3.3. INTERPRETATION
Each representation and warranty made by a Party in this Agreement shall be
treated as a separate representation and warranty in respect of each statement
made and, except in the event of inconsistency, the interpretation of any
statement made shall not be restricted by reference to or inference from any
other statement made in a representation and warranty of such Party.
3.4. QUALIFICATION OF REPRESENTATIONS AND WARRANTIES
Any representation or warranty made by a Party as to the enforceability of this
Agreement or any Closing Document or any other agreement or contract is subject
to the following qualifications:
a) Specific performance, injunction and other equitable remedies are
discretionary and, in particular, may not be available where damages
are considered an adequate remedy;
b) Enforcement may be limited by bankruptcy, insolvency, liquidation,
reorganization, reconstruction and other Canadian law generally
affecting enforceability of creditors' rights.
3.5. NON-WAIVER
No investigations made by or on behalf of the Purchaser at any time shall waive,
diminish the scope of or otherwise affect any representation or warranty made by
the Vendor in this Agreement or in any Closing Document. No waiver by the
Purchaser of any condition, in whole or in part, shall operate as a waiver of
any other condition.
3.6. KNOWLEDGE OF THE VENDOR
Where any representation or warranty contained in this Agreement is expressly
qualified by reference to the "knowledge" of the Vendor, it shall be deemed to
refer to the knowledge of each of the senior officers of the Company, and the
Vendor confirms that at least one of its senior officers has made due and
diligent inquiry of such Persons (including appropriate officers of the Company)
as it considers necessary as to the matters that are the subject of such
representations and warranties.
4. OTHER COVENANTS OF THE COMPANY
4.1. CONDUCT OF BUSINESS PRIOR TO CLOSING
During the Interim Period, except as otherwise contemplated by the terms of this
Agreement, the Vendor shall act as follows.
4.2. CONDUCT BUSINESS IN ORDINARY COURSE
The Vendor shall:
a) use commercially reasonable efforts to preserve and protect the
Business and its income, the goodwill and the reputation of the
Business, and retain at its service the employees necessary to the
operation of the Business, and maintain good business relationships
with its customers, suppliers and distributors, except in respect of
the contracts, commitments and arrangements;
b) carry on the Business with reasonable diligence and in the ordinary
course, keep accurate Accounting Records and not make any modification
in its usual sales, purchasing, accounting or management practices,
except in respect of the contracts, commitments and arrangements
hereof and, without limiting the generality of the foregoing, ensure
that all accruals or reservations, taken or made, are consistent with
prior years' practices; and
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c) Without the prior written consent of the Purchaser (not to be
unreasonably withheld), not enter into any transaction which, if
entered into before the date of this Agreement, could cause any
representation or warranty of the Company contained herein to be
incorrect in any material respect or constitute a material breach of
any covenant or agreement of the Company contained herein.
4.3. CONTRACTS
Without the prior written consent of the Purchaser (not to be unreasonably
withheld), the Vendor shall not enter into any new contracts, agreements,
leases, obligations, or commitments relating to the Business or the Leased
Premises which are not in the ordinary course of business nor shall it renew,
cancel, or exercise rights or options in respect of, any Leases, Equipment
Leases, Assumed Contracts or Contractual Rights. The Vendor shall observe and
perform in all material respects in a timely manner all of its covenants and
obligations under each Lease, Equipment Lease, Assumed Contract or Contractual
Right up to the Time of Closing. The Vendor shall enforce all of its rights
under each Lease, Equipment Lease, Assumed Contract or Contractual Right up to
the Time of Closing if there is a material default by another party thereto.
4.4. CONTINUE INSURANCE
The Vendor shall ensure that until the Closing Date all policies of insurance
maintained by the Vendor relating to the Business continue in force and good
standing and that all claims under such policies are presented in a due and
timely manner.
4.5. COMPLY WITH CANADIAN LAW
The Company shall comply in all material respects with all Applicable Canadian
law affecting the operation of the Business.
4.6. CONDUCT OF BUSINESS PRIOR TO CLOSING
During the Interim Period, except as otherwise contemplated by the terms of this
Agreement, the Vendor shall act as follows.
4.7. CONDUCT BUSINESS IN ORDINARY COURSE
4.8. COOPERATION
The Purchaser shall cooperate with the Vendor during the Interim Period in order
to permit the Closing to be consummated. In particular but without limiting the
generality of the foregoing, the Purchaser shall provide to the lessors under
the Leases all such information relating to the Purchaser [including financial
information], information relating to its business experience and the business
experience of the individuals who ultimately control and operate the Purchaser
and with respect to their ability to perform their obligations under the Leases
and operate the Business.
4.9. DISCLOSURE
Each Party shall immediately disclose in writing to the other Party any matter,
which becomes known to it prior to the Closing Date, which is inconsistent in
any material respect with any of the representations or warranties of either
Party contained herein. No such disclosure, however, shall cure any
misrepresentation or breach of warranty;
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4.10.INJUNCTIONS
If any court having jurisdiction over either or both of the Company or the
Business issues any injunction, decree or similar order before the Time of
Closing which would prohibit or materially restrict or hinder the Closing, the
Company shall use their respective reasonable efforts to have such injunction,
decree or order dissolved or otherwise eliminated as promptly as possible and,
in any event, prior to the Time of Closing.
4.11.ACTION BY THE VENDOR
During the Interim Period, the Vendor shall at its expense take all commercially
reasonable action which may be necessary and which is in its control to ensure
that its representations and warranties contained herein shall be true and
correct in all material respects at the Time of Closing.
4.12.COMPETITION ACT
The Purchaser and the Vendor shall jointly give the requisite notice of the
proposed transaction under the Competition Act of Canada within 60 Business Days
following the execution date hereof.
5. INDEMNIFICATION
5.1 DEFINITIONS
"Claim" means any act, omission or statement of facts and any demand, action,
suit, proceeding, claim, assessment, judgment or settlement or compromise
relating thereto which may give rise to a right to indemnification;
"Direct Claim" means any Claim by an Indemnified Party against an Indemnifier,
which does not result from a Third Party Claim;
"Indemnifier" means any Party obligated to provide indemnification under this
Agreement;
"Indemnified Party" means any Person entitled to indemnification under this
Agreement;
"Indemnity Payment" means any amount of Loss required to be paid;
"Loss" means any and all loss, liability, damage, cost, expense, charge, fine,
penalty or assessment, resulting from or arising out of any Claim, including the
out-of-pocket costs and expenses of any action, suit, proceeding, demand,
assessment, judgment, settlement or compromise relating thereto and all
interest, punitive damages, fines and penalties and reasonable legal fees and
expenses incurred in connection therewith; and
"Third Party Claim" means any Claim asserted against an Indemnified Party by any
Person who is not a Party or an Affiliate of such a Party and includes any
assessment or reassessment of Taxes by any applicable taxing authority.
5.2 INDEMNIFICATION BY THE VENDOR
Vendor shall indemnify, defend and save harmless the Purchaser and each of its
directors, officers and employees from and against any and all Loss suffered or
incurred by any one or more of them, as a direct or indirect result of, or
arising in connection with:
a) any misrepresentation or breach of warranty made or given by the
Vendor in any Closing Document;
b) Any failure by the Vendor to observe or perform any covenant or
obligation contained in this Agreement or any Closing Document to be
observed or performed by it.
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5.3 INDEMNIFICATION BY THE PURCHASER
Subject to the limits set forth in Section 5.10, the Purchaser shall indemnify,
defend and save harmless the Vendor and the Companies directors, officers and
employees from and against any and all Loss suffered or incurred by any one or
more of them, as a direct or indirect result of, or arising in connection with:
a) Any misrepresentation or breach of any warranty made or given by the
Purchaser in this Agreement;
b) Any misrepresentation or breach of warranty made or given by the
Purchaser in any Closing Document; or
c) Any failure by the Purchaser to observe or perform any covenant or
obligation contained in this Agreement or any Closing Document to be
observed or performed by it.
6.1 LITIGATION
No court order shall have been entered that enjoins, restrains, prohibits or
restricts the Closing. Neither of the Vendor or Purchaser, nor any of their
respective directors, officers, employees or agents, shall be a defendant or
third party to or threatened with any litigation or proceedings before any court
or Governmental Agency which, in the opinion of the Purchaser, acting
reasonably, could prevent or restrict that Party from performing in any material
respect any of its obligations in this Agreement, any of the Closing Documents
or the Non-Competition Agreement or which could expose that Party to material
damages.
6.2 NON-COMPETITION AGREEMENT
The Vendor shall have executed and delivered to the Purchaser, a Non-Competition
Agreement.
7.1 RELEASE OF VENDOR FROM LEASE COVENANTS
The Purchaser agrees that if, after the Closing, it exercises any option to
extend the term of or to renew any Lease, it will use its commercially
reasonable efforts to obtain the landlord's release of the Vendor from all
obligations under such Lease in respect of the extension or renewal term
provided that the refusal of the Purchaser to provide economic incentives or
guarantees other than as required by the terms of Lease to or in favor of the
other parties to the Lease will not be deemed to be unreasonable. The Vendor
shall be entitled to participate with the Purchaser in the latter's efforts to
obtain such releases.
6. GENERAL
8.1 FURTHER ASSURANCES
Each of the Vendor and the Purchaser shall from time to time execute and deliver
all such further documents and instruments and do all acts and things as the
other Party may, either before or after the Closing Date, reasonably require to
effectively carry out or better evidence or perfect the full intent and meaning
of this Agreement, the Closing Documents and the Non-Competition Agreement.
8.2 TIME OF THE ESSENCE
Time shall be of the essence of this Agreement.
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8.3 EXPENSES
Each of the Vendor/Purchaser hereto shall pay its respective legal and
accounting costs and expenses incurred in connection with the preparation,
execution and delivery of this Agreement and all documents and instruments
executed pursuant hereto and any other costs and expenses whatsoever and
howsoever incurred.
8.4 ENTIRE AGREEMENT
This Agreement, together with the Closing Documents and the Non-Competition
Agreement constitutes the entire agreement between the vendor with respect to
the subject matter hereof and cancels and supersedes any prior understandings
and agreements between the Purchaser with respect thereto. There are no other
representations, warranties, terms, conditions, undertakings or collateral
agreements, express, implied or statutory, between the Vendor and the Purchaser
other than as expressly set forth in this Agreement, in the Closing Documents or
in the Non-Competition Agreement.
8.5 CONFIDENTIALITY
Except to the extent required by Canadian Law or by the rules of any stock
exchange, the Vendor hereto agree that no disclosure or public announcement with
respect to this Agreement or the transactions herein contemplated shall be made
by any Party hereto prior to the Closing without the prior written consent of
the other Party. Where either Party intends to make such disclosure or public
announcement, it shall only do so after consulting with the other Party.
8.6 GOVERNING CANADIAN LAW
This Agreement shall be governed by and construed in accordance with the laws of
Canada and of the Province of Alberta and the applicable laws herein.
8.7 ATTORNMENT
For the purpose of all legal proceedings this Agreement shall be deemed to have
been performed in the Province of Alberta and the courts of the Province of
Alberta shall have jurisdiction to entertain any action arising under this
Agreement. The Vendor and the Purchaser each hereby attorns to the jurisdiction
of the courts of the Province of Alberta.
8.8 COUNTERPARTS
This Agreement may be executed in any number of counterparts. Each executed
counterpart shall be deemed to be an original. All executed counterparts taken
together shall constitute one agreement.
IN WITNESS WHEREOF, each party to this agreement has caused it to be executed at
[place of execution] on the date indicated above.
PURCHASER VENDOR
----------------------------------- -----------------------------------
Authorized Signature Authorized Signature
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Print Name and Title Print Name and Title
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