Exhibit 10.3
AMENDING AGREEMENT
THIS AGREEMENT made as of the 17th day of March, 2005.
B E T W E E N:
XXXXX XXXXXX
(the "Vendor")
- and -
1523813 ONTARIO LIMITED d.b.a. FREEDOM PHONE LINES
(the "Corporation")
- and -
TELEPLUS CONNECT CORP.
(the "Purchaser")
- and -
TELEPLUS ENTERPRISES INC.
("Teleplus Enterprises")
WHEREAS pursuant to a share purchase agreement (the "Purchase
Agreement") dated as of December 9th, 2004, between the Vendor, the Corporation,
the Purchaser and Teleplus Enterprises, the Purchaser, agreed, among other
things, subject to the provisions of the Purchase Agreement, to purchase and the
Vendor agreed to sell all of the issued and outstanding shares of the
Corporation;
AND WHEREAS the Purchaser, formerly Keda Consulting Corp., has
changed its name to Teleplus Connect Corp.;
AND WHEREAS it is proposed that the Purchase Agreement be amended;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual provisions and covenants herein, the sufficiency of which is hereby
acknowledged, the parties hereto agree to the following:
1. The Purchase Agreement is hereby amended as follows:
(a) the following is hereby deleted from section 1.01 of the Purchase
Agreement:
""Adjustment Amount" has the meaning ascribed thereto in Section 2.04;"
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""Business" means the sale of prepaid residential telecommunication
services (local line, long distance, internet) presently and heretofore
carried on by the Corporation;"
""Closing Date" means March 7, 2005, subject to extension in accordance
with the provisions of Section 5.06, or such other date as the parties may
agree in writing, provided that such date is no later than 15 days after
the delivery of the Audited Financial Statements;"
""Final Balance Sheet" has the meaning ascribed thereto in Section 2.04;"
""Financial Thresholds" has the meaning ascribed thereto in Section 2.04."
""Shareholders' Equity" means the total assets of the Corporation minus
the total liabilities of the Corporation;"
(b) the following is hereby added in alphabetical order to section 1.01
of the Purchase Agreement:
""Business" means the sale of prepaid residential wire-line
telecommunication services (local line, long distance, internet) presently
and heretofore carried on by the Corporation;"
""Closing Date" means March 31, 2005 or such other date as the Parties may
agree in writing;"
""Escrow Agreement" means the escrow agreement to be entered into by the
Vendor on the Closing Date, substantially in the form attached hereto as
Exhibit F;"
""Subsidiary" means 6200281 Canada Ltd., a corporation owned by the
Vendor;"
""Working Capital" means the current assets of the Corporation minus the
current liabilities of the Corporation in the ordinary course of business,
provided, that, "Working Capital" in this Agreement shall not include
loans to and from affiliates of the Corporation or loans to and from
shareholders of the Corporation;"
(c) the following schedule references are hereby deleted from section
1.12 of the Purchase Agreement:
"Schedule 2.04 - Financial Thresholds"
"Schedule 6.02(5) - Form of Employment Agreement"
(d) the following is hereby added to section 2.01 of the Purchase
Agreement after the last sentence in that section but shall be
included as part of the same paragraph:
"The Purchased Shares sold, assigned and transferred to the Purchaser
shall include all of the issued and outstanding shares in the capital of
the Subsidiary."
(e) the dollar amount of "$1,600,000" is hereby deleted from the third
line of section 2.02 of the Purchase Agreement and inserted in its
place is the dollar amount of "$1,000,000".
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(f) section 2.03(c) of the Purchase Agreement is hereby deleted;
(g) the following is hereby added to section 2.03 of the Purchase
Agreement in a separate paragraph after the last sentence in that
section:
"In accordance with the provisions of the Escrow Agreement to be entered
into by the Vendor at the Time of Closing, the Vendor agrees and
acknowledges that it shall place that portion of the Purchase Price
stipulated in Section 2.03(b) hereof in escrow from and including the
Closing Date until the first Business Day immediately following the first
anniversary of the Closing Date, subject to the terms of such Escrow
Agreement.";
(h) section 2.04 of the Purchase Agreement is hereby deleted in its
entirety and inserted in its place is the following:
"(1) Following the Closing, the Purchaser will cause to be prepared and
will deliver to the Vendor within 30 days following the Closing Date draft
financial statements (the "Draft Closing Financials") for the Corporation for
the period ending at the Closing Date, which Draft Closing Financials shall
include a balance sheet and an income statement of the Corporation. The Draft
Closing Financials shall be prepared in accordance with GAAP and shall take into
account any liabilities (including tax liabilities) arising as a result of the
Pre-Closing Reorganization and tax liabilities for the period ending at the
Closing Date. The Vendor will have 2 Business Days after receipt of the Draft
Closing Financials in which to review the Draft Closing Financials and advise
the Purchaser in writing as to any disagreement regarding such Draft Closing
Financials, provided that there shall be deemed to be no disagreement over the
Draft Closing Financials unless the aggregate amount in dispute exceeds $25,000.
The Purchaser will provide access, upon every reasonable request, to the Vendor
and its accountants and advisors to all work papers of the Corporation and its
accountants to verify the accuracy, presentation and other matters relating to
the preparation of the Draft Closing Financials and the Vendor and the Purchaser
shall otherwise fully cooperate with each other in the preparation of the Draft
Closing Financials. The Vendor and the Purchaser shall each bear their own costs
and expenses in preparing and reviewing the Draft Closing Financials. Any
disagreement with respect to the Draft Closing Financials that cannot be settled
by the Parties shall be referred to Xxxxx and Partners, Chartered Accountants,
for final resolution. The costs incurred in connection with such final
resolution will be shared equally by the Purchaser and the Vendor. Immediately
following the 2 Business Day review period referred to above, or the resolution
of any dispute in accordance with the foregoing, the Purchaser shall cause to be
prepared and delivered to the Vendor financials for the Corporation as at the
Closing Date in final form (the "Final Closing Financials"). Such Final Closing
Financials shall be binding upon the Parties and not subject to appeal.
(2) Within two Business Days after receipt by the Vendor of the Final
Closing Financials, the Vendor shall pay the Purchaser any amount by which
Working Capital is less than $0 as at the Closing Date. Such payment, if any,
shall be a decrease in the Purchase Price. The requirement of the Vendor to make
such payment to the Purchaser, if any, shall be satisfied by way of a set-off
against that portion of the Purchase Price stipulated in Section 2.03(b) hereof,
and subject to Section 8.05 hereof as applicable.";
(i) section 2.05(3) of the Purchase Agreement is hereby amended by
deleting all references to the term "Financial Balance Sheet"
therein and replacing such deletion with the term "Final Closing
Financials";
(j) section 2.05(3) of the Purchase Agreement is hereby amended by
deleting the reference in the sixth line thereof to "Section 2.05"
and replacing such deletion with "Section 2.04";
(k) the following is hereby added to the Purchase Agreement as section
5.01(4):
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"the Vendor shall cause the Corporation, and the Corporation shall take
all necessary measures, to have a Working Capital balance of not less than
$0 as determined as at the Closing Date.";
(l) the number "30" in the last line of Section 5.06 of the Purchase
Agreement is hereby deleted and inserted in its place is the number
"60";
(m) Section 6.01(4) is hereby deleted in its entirety and inserted in
its place is the following:
"(4) Due Diligence. The Purchaser shall have completed its due diligence
investigations in accordance with Section 5.02 to its satisfaction, in its
sole and absolute discretion, on or before March 25, 2005; provided,
however, that, satisfactory completion of such due diligence
investigations by the Purchaser is conditional upon (a) the Vendor
submitting to the Purchaser the Audited Financial Statements, and (b) the
Purchaser being satisfied with the contents of such Audited Financial
Statements in its sole and absolute discretion."
(n) Section 6.01(5) is hereby deleted in its entirety and inserted in
its place is the following:
"The Vendor shall have entered into a non-competition and non-solicitation
agreement with the Purchaser and Corporation whereby the Vendor covenants
and agrees with the Purchaser and the Corporation that he will not,
directly or indirectly, for a period of 24 months from and after the
Closing Date, either individually or in partnership or jointly or in
conjunction with any person or persons, firm, association, syndicate,
company or corporation (except the Purchaser or the Corporation), as
principal, shareholder or employee, (a) carry on, be engaged in, be
interested in, be concerned with or be connected in any manner with the
ownership, management or control of, any business enterprise which is
competitive with the Business of the Corporation as now carried on or as
now proposed to be carried on, other than a business enterprise that is
operating exclusively and is concerned only with the wireless
telecommunication products and services, and (b) solicit or otherwise
engage for the purpose of offering any business or service persons that
are now, have ever been or will be as at the Closing Date customers of the
Corporation or the Subsidiary."
(o) the following shall be added to the Purchase Agreement as section
6.01(6)(l):
"(l) evidence that all necessary steps and proceedings as approved by
counsel to the Purchaser have been taken by the Corporation and the
Vendor, effective as at the Closing Date, to (i) cancel all credit cards
registered in the name of the Corporation, and (ii) remove the authority
of all those persons identified in Schedule 3.34 to draw on or have access
to accounts or safety deposit boxes identified in such Schedule 3.34."
(p) the following shall be added to the Purchase Agreement as section
6.01(6)(m):
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"(m) evidence that all necessary steps and proceedings as approved by
counsel to the Purchaser have been taken by the Vendor, effective as at
the Closing Date, to transfer all of the issued and outstanding shares in
the capital of the Subsidiary from the Vendor to the Corporation."
(q) section 6.02(5) of the Purchase Agreement is hereby deleted;
(r) section 6.02(6)(e) of the Purchase Agreement is hereby deleted;
(s) the dollar amount of "$50,000" is hereby deleted from the third line
of section 8.05 of the Purchase Agreement and inserted in its place
is the dollar amount of "$25,000";
(t) section 9.04 of the Purchase Agreement is hereby deleted;
(u) all other amendments, deletions and additions necessary to give
effect to the foregoing are hereby deemed made to the Purchase
Agreement without in any way prejudicing any other provisions of the
Purchase Agreement.
2. In all other respects the terms and conditions set forth in the Purchase
Agreement shall remain unamended, and time shall remain of the essence.
IN WITNESS WHEREOF the parties hereto have executed these presents
the day and year first above written.
TELEPLUS CONNECT CORP.
Per: /s/ Marius Silvasan
___________________________________ /s/ Xxxxx Xxxxxx
Witness: Xxxxx Xxxxxx
TELEPLUS ENTERPRISES INC.
Per: /s/ Marius Silvasan
1523813 ONTARIO LIMITED
Per: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx, President
