1
PUT/CALL AGREEMENT
THIS AGREEMENT made the 24th day of March, 2004.
B E T W E E N:
FAIRCOVE INVESTMENTS INC.,
a corporation incorporated under the
laws of the Province of Ontario,
(hereinafter called the "Vendor")
OF THE FIRST PART;
- and -
HAWKLANE DEVELOPMENTS INC.,
a corporation incorporated under the
laws of the Province of Ontario,
(hereinafter called the "Purchaser")
OF THE SECOND PART;
WHEREAS the Vendor is the registered and beneficial owner of that certain
real property municipally known as ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the
"Property");
AND WHEREAS the parties hereto have entered into this Agreement for the
purpose of providing for the circumstances in which the Vendor or the Purchaser
may compel the purchase by the Purchaser and sale by the Vendor of the Property
pursuant to the terms and conditions herein contained;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
premises and the mutual covenants herein contained, the parties hereto hereby
covenant and agree with each other as follows:
ARTICLE 1: ACKNOWLEDGEMENT
1.01 Acknowledgement. The parties hereto acknowledge and declare that the
statements contained in the foregoing recitals are true and correct in substance
and in fact and are hereby incorporated into and form part of this Agreement.
ARTICLE 2: TRANSFER RESTRICTIONS
2.01 Restriction on Transfer. The Vendor agrees that it will not in any way
further encumber, sell, agree to sell or otherwise dispose of or agree to
dispose of the Property or any interest therein to any third party without
giving thirty (30) days prior written notice of its intention to the Purchaser
during which time the Purchaser shall be free to exercise its rights under
paragraph 3.01 of this Agreement. In the event of sale or disposition by the
Vendor to a third party upon notice as aforesaid, such sale may only be
completed by the Vendor if the transferee agrees in writing to be bound by the
provisions of the Put/Call Agreement herein by executing a counterpart hereof.
ARTICLE 3: PUT/CALL ARRANGEMENTS
3.01 Notice of Purchase and Sale. In the event that either the Vendor or the
Purchaser elects, at any time on or before the 24th day of March, 2005, to
compel the sale by the Vendor and the purchase by the Purchaser of the Property,
then the party so electing shall notify the other party in writing (which notice
is hereinafter referred to as a "Notice of Purchase and Sale") and the purchase
and sale of the Property shall be completed in accordance with this Agreement.
3.02 Effect of Notice. In the event of delivery of a Notice of Purchase and Sale
by either party pursuant to paragraph 3.01,
(a) the Notice of Purchase and Sale shall not be revocable except with the
sanction of both parties; and
(b) the Vendor shall be bound to sell and the Purchaser shall be obligated
to purchase the Property in accordance with the provisions hereof.
3.03 Closing and Default. Any transaction between the Vendor and the Purchaser
effected pursuant to the provisions of this Article 3 shall be completed on the
30th day from the date of delivery of the Notice of Purchase and Sale (the
"Closing Date"). In the event the applicable Registry Office is not open to
public for business the Closing Date shall be the next day that the applicable
Registry Office is open to the public or such date as may be mutually agreed to
by the Vendor and Purchaser.
3.04 Purchase Price and Terms. The purchase price for the Property and the terms
and conditions of the purchase and sale transaction shall be upon the terms and
conditions pursuant to the form of purchase and sale agreement annexed hereto as
Schedule "A".
3.05 Environmental Remediation. The Purchaser shall be responsible for all
environmental remediation obligations upon the Property as required by law from
the Closing Date onwards. The Vendor agrees not to perform or cause to be
performed any environmental remediation work upon the Property without notice to
the Purchaser and the Purchaser having approved of such work, except if such
environmental remediation is required by law in which case, the Purchaser's
approval shall not be required.
3.06 Costs. Each party hereto shall be responsible for its own legal, accounting
and other professional costs in relation to the transaction of purchase and sale
herein.
ARTICLE 4: CONDITIONS
This Agreement is conditional for a period of thirty (30) days from the
date of execution upon the following:
(a) The Vendor obtaining all requisite Board of Directors approval for the
transaction contemplated in this Agreement; and
(b) The Vendor obtaining a formal appraisal of the Property satisfactory
to the Vendor in its sole and absolute discretion.
ARTICLE 5: GENERAL CONTRACT PROVISIONS
5.01 Time to be of the Essence. Time shall be of the essence of this Agreement
and of every part hereof.
5.02 Notice. Any notice required or permitted to be given hereunder shall be in
writing delivered or mailed by prepaid registered post to the parties as
follows:
to the vendor at: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
to the purchaser at: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: President
or to such other address or person as each party may from time to time specify.
Any notices aforesaid shall be deemed to have been received at the time and
upon the day and date of it being so delivered and any notice mailed as
aforesaid shall be deemed to have been received on the second business day next
following the posting thereof unless the party mailing the notice knows that
postal service to the addressee has been interrupted or suspended due to strike
or otherwise, in which case the notice shall be given by delivery only.
5.03 Gender and Number. All words and personal pronouns relating thereto shall
be read and contrued as the number and gender of the party or parties referred
to in each case require, and the verb agreeing with the required word and
pronoun.
5.04 Successors and Assigns. This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns.
5.05 Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the Province of Ontario.
5.06 Headings. The headings of the Articles of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
SIGNED, SEALED AND DELIVERED ) FAIRCOVE INVESTMENTS INC.
in the presence of: )
)
)
) Per: _________________________
)
)
) Per: _________________________
)
)
) HAWKLANE DEVELOPMENTS INC.
)
)
)
) Per: _________________________
)
)
) Per: _________________________
)
f:\users\▇▇▇▇▇▇\cantar-polyair\faircove\put call agreement cln mar24 04.doc
Schedule "A"
AGREEMENT OF PURCHASE AND SALE
BUYER, HAWKLANE DEVELOPMENTS INC. agrees of purchase from
SELLER, FAIRCOVE INVESTMENTS INC. , the following
REAL PROPERTY:
Address ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in the City of Toronto and legally described as
Part Lot 38, Concession 4 Fronting the Humber designated as Part 2 on Plan
64R-11839 being P.I.N. 07368-0040 (LT) and further described in the Survey
attached hereto as Schedule "C" and subject to the encroachments set forth on
the attached survey (the "Property")
PURCHASE PRICE: THREE MILLION Dollars (CDN$)3,000,000.00
DEPOSIT:
Buyer submits within 5 days of the Notice of Purchase and Sale ( as defined in
the agreement that this Schedule "A" is attached to) ONE HUNDRED THOUSAND
Dollars (CDN $100,000.00) by negotiable cheque payable to the Vendor's Solicitor
to be held in trust without interest pending completion or other termination of
this Agreement and to be credited toward the Purchase Price on completion. Buyer
agrees to pay the balance as follows:
See Schedule "A-1"
SCHEDULE(S) "A-1", "B-1", "C-1" and "D-1" attached hereto form(s) part of this
Agreement
1. CHATTELS INCLUDED: All Chattels located at the property that are not the
property of the tenant
2. FIXTURES EXCLUDED: Those that belong to the tenant
3. RENTAL ITEMS: The following equipment is rented and not included in the
Purchase Price. The Buyer agrees to assume the rental contract(s). if
assumable: ***
4. COMPLETION DATE: This Agreement shall be completed by no later than 6:00
p.m. on the date that is set forth in the Put/Call agreement to which this
schedule is attached. Upon completion, vacant possession of the property
shall be given to the Buyer unless otherwise provided for in this
Agreement.
5. GST: If this transaction is subject to Goods and Services Tax (G.S.T.),
then such tax shall bein addition to the purchase Price. If this
transaction is not subject to G.S.T., Seller agrees to certify on or before
closing, that the transaction is not subject to G.S.T.
6. TITLE SEARCH: Buyer shall be allowed until 6:00 p.m. on the date that is
five days prior to the Closing Date, (Requisition Date) to examine the
title to the property at his own expense and until the earlier of: (i)
thirty days from the later of the Requisition Date or the date on which the
conditions in this Agreement are fulfilled or otherwise waived or; (ii)
five days prior to completion, satisfy himself that there are no
outstanding work orders or deficiency notices affecting the property, that
its present use ( industrial ) may be lawfully continued and that the
principal building may be insured against risk of fire. Seller hereby
consents to the municipality or other governmental agencies releasing to
Buyer details of all outstanding work orders affecting the property, and
Seller agrees to execute and deliver such further authorizations in this
regard as Buyer may reasonably require.
7. FUTURE USE: Seller and Buyer agree that there is no representation or
warranty of any kind that the future intended use of the property by Buyer
is or will be lawful except as may be specifically provided for in this
Agreement.
8. TITLE: Provided that the title to the property is good and free from all
registered restrictions, charges, liens, and encumbrances except as
otherwise specifically provided in this Agreement and save and except for
(a) any registered restrictions or covenants that run with the land
providing that such are complied with; (b) any registered municipal
agreements and registered agreements with publicly regulated utilities
providing such have been complied with, or security has been posted to
ensure compliance and completion, as evidenced by a letter from the
relevant municipality or regulated utility; (c) any minor easements for the
supply of domestic utility or telephone services to the property or
adjacent properties; (d) any easements for drainage, storm or sanitary
sewers public utility lines, telephone lines, cable television lines or
other services which do not materially affect the present use of the
property; and (e) those items set forth on the parcel page attached hereto
as Schedule "B". If within the specified times referred to in paragraph 6
any valid objection to title or to any outstanding work order or deficiency
notice, or to the fact the said present use may not lawfully be continued,
or that the principal building may. not be insured against risk of fire is
made in writing to Seller and which Seller IS unable or unwilling to
remove, remedy or satisfy or obtain Insurance save and except against risk
of fire in favour of the Buyer and any mortgagee, (with all related costs
at the expense of the Seller). and which Buyer will not waive, this
Agreement not withstanding any intermediate acts or negotiations in respect
of such objections, shall be at an end and all monies paid shall be
returned without interest or deduction and Seller, listing Broker and
Co-operating Broker shall not be liable for any costs or damages. Save as
to any valid objection so made by such day and except for any objection
going to the root of the title, Buyer shall be conclusively deemed to have
accepted Seller's title to the property.
9. CLOSING ARRANGEMENTS: Where each of the Seller and Buyer retain a lawyer to
complete the Agreement of Purchase and Sale of the Property, and where the
transaction will be completed by electronic registration pursuant to Part
III of the land Registration Reform Act, R.S.O. 1990, Chapter L4 and the
Electronic Registration Act, S.O. 1991, Chapter 44, and any amendments
thereto, the Seller and Buyer acknowledge and agree that the exchange of
closing funds, non-registrable documents and other items (the "Requisite
Deliveries") and the release thereof to the Seller and Buyer will (a) not
occur at the same time as the registration of the transfer/deed (and any
other documents intended to be registered in connection with the completion
of this transaction) and (b) be subject to conditions whereby the lawyer(s)
receiving any of the Requisite Deliveries will be required to hold same in
trust and not release same except in accordance with the terms of a
document registration agreement between the said lawyers, the form of which
is as recommended from time to time by the law Society of Upper Canada.
Unless otherwise agreed to by the lawyers, such exchange of the Requisite
Deliveries will occur in the applicable land Titles Office or such other
location agreeable to both lawyers.
10. DOCUMENTS AND DISCHARGE: Buyer shall not call for the production of any
title deed, abstract, survey or other evidence of title to the property
except such as are in the possession or control of Seller. If requested by
Buyer, Seller will deliver any sketch or survey of the property within
Seller's control to Buyer as soon as possible and prior to the Requisition
Date. If a discharge of any Charge/Mortgage held by a corporation
incorporated pursuant to the Trust And loan Companies Act (Canada!,
Chartered Bank, Trust Company, Credit Union, Caisse Populaire or Insurance
Company and which is not to be assumed by Buyer on completion, is not
available in registrable form on completion, Buyer agrees to accept
Seller's lawyer's personal undertaking to obtain, out of the closing funds,
a discharge in registrable form and to register same on title within a
reasonable period of time after completion, provided that on or before
completion Seller shall provide to Buyer a mortgage statement prepared by
the mortgagee setting out the balance required to obtain the discharge,
together with a direction executed by Seller directing payment to the
mortgagee of the amount required to obtain the discharge out of the balance
due on completion.
11. INSPECTION: Buyer acknowledges having had the opportunity to inspect the
property and understands that upon acceptance of this Offer there shall be
a binding agreement of purchase and sale between Buyer and Seller.
12. INSURANCE: All buildings on the property and all other things being
purchased shall be and remain until completion at the risk of Seller.
Pending completion, Seller shall hold all insurance policies, if any, and
the proceeds thereof in trust for the parties as their interests may appear
and in the event of substantial damage, Buyer may either terminate this
Agreement and have all monies paid returned without interest or deduction
or else take the proceeds of any insurance and complete the purchase. No
insurance shall be transferred on completion. If Seller is taking back a
Charge/Mortgage, or Buyer is assuming a Charge/Mortgage, Buyer shall supply
Seller with reasonable evidence of adequate insurance to protect Seller's
or other mortgagee's interest on completion.
13. PLANNING ACT: This Agreement shall be effective to create an interest in
the property only if Seller complies with the subdivision control
provisions of the Planning Act by completion and Seller covenants to
proceed diligently at his expense to obtain any necessary consent by
completion.
14. DOCUMENT PREPARATION: The Transfer/Deed shall, save for the land Transfer
Tax Affidavit, be prepared in registrable farm at the expense of Seller,
and any Charge/Mortgage to be given back by the Buyer to Seller at the
expense of the Buyer. If requested by Buyer, Seller covenants that the
Transfer/Deed to be delivered on completion shall contain the statements
contemplated by Section 50(22) of the Planning Act, R.S.O. 1990.
15. RESIDENCY: Buyer shall be credited towards the Purchase Price with the
amount, if any, necessary for Buyer to pay to the Minister of National
Revenue to satisfy Buyer's liability in respect of tax payable by Seller
under the non-residency provisions of the Income Tax Act by reason of this
sale. Buyer shall not claim such credit if Seller delivers on completion
the prescribed certificate or a statutory declaration that Seller is not
then a non-resident of Canada.
16. ADJUSTMENTS: Any rents, mortgage interest, realty taxes including local
improvement rates and unmetered public or private utility charges and
unmetered cost of fuel, as applicable, shall be apportioned and allowed to
the day of completion, the day of completion itself to be apportioned to
Buyer.
17. TIME LIMITS: Time shall in all respects be of the essence hereof provided
that the time for doing or completing of any matter provided for herein may
be extended or abridged by an agreement in writing signed by Seller and
Buyer or by their respective lawyers who may be specifically authorized in
that regard.
18. TENDER: Any tender of documents or money hereunder may be made upon Seller
or Buyer or their respective lawyers on the day set for completion. Money
may be tendered by bank draft or cheque certified by a Chartered Bank,
Trust Company, Province of Ontario Savings Office, Credit Union or Caisse
Populaire.
19. FAMILY LAW ACT: Seller warrants that spousal consent is not necessary to
this transaction under the provisions of the Family law Act, R.S.O. 1990
unless Seller's spouse has executed the consent hereinafter provided.
20. AGREEMENT IN WRITING: If there is conflict or discrepancy between any
provision added to this Agreement (including any Schedule attached hereto)
and any provision in the standard pre-set portion hereof, the added
provision shall supersede the standard pre-set provision to the extent of
such conflict or discrepancy. This Agreement including any Schedule
attached hereto, shall constitute the entire Agreement between Buyer and
Seller. There is no representation, warranty, collateral agreement or
condition, which affects this Agreement other than as expressed herein. For
the purposes of this Agreement, Seller means vendor and Buyer means
purchaser. This Agreement shall be read with all changes of gender or
number required by the context.
21. SUCCESSORS AND ASSIGNS: The heirs, executors, administrators, successors
and assigns of the undersigned are bound by the terms herein.
DATED at Toronto this day of , 20
SIGNED, SEALED AND DELIVERED in the IN WITNESS whereof I have hereunto
presence of: set my hand and seal:
Date
(Witness) (Buyer) (Seal)
Date
(Witness) (Buyer) (Seal)
SCHEDULE "A-1"
1. (a) On closing the Buyer agrees to give and the Vendor agrees to take back
a first mortgage in the principal amount of FIVE HUNDRED THOUSAND CANADIAN
DOLLARS (CDN$500,000.00) bearing no interest and having a term and balance
due date of five (5) years from the closing date and having those
additional terms attached hereto on Schedule "D-1" (the "VTB Mortgage");
and
(a) The balance of the monies shall be paid in cash and/or by certified
cheque subject to the usual and any other adjustments set out herein.
2. Notwithstanding the provisions of section 1 above, the parties hereto agree
that the Buyer shall be given a credit in the sum of THREE HUNDRED THOUSAND
UNITED STATES DOLLARS (US$300,000.00) as compensation for the Purchaser
assuming any and all environmental contamination remediation obligations
that may be required at the subject property. The parties hereto agree that
the Canadian and United States dollar exchange rate is to be calculated on
the closing date.
3. Completion of this Agreement is conditional for a period of fifteen (15)
days following the date of acceptance of this Agreement (the "Conditional
Period"), upon the following:
(a) Upon the Buyer being able to enter into a lease for the property with
Cantar/Polyair Canada Limited and/or Atlantic Pool Products
Ltd./Produits De Piscines Atlantic Ltee. upon the following terms:
(i) the lease will have a term of ten (10) years, together with a
further option in favour of the Tenant or Landlord, to renew same
for a further five (5) years;
(ii) the lease shall be on a net/net/net carefree basis for the
Landlord. Without limiting the generality of the foregoing, the
Tenant shall be responsible for all property taxes, maintenance,
utilities and all other operational expenses;
(iii)the minimum initial rate during the lease term shall be as
follows:
(1) years 1 - 3: $2.00 per square foot per annum;
(2) years 4 - 5: $3.25 per square foot per annum;
(3) years 6 - 10: the then fair market value rate but in no
event not less then $3.75 per square foot. In the event the
parties are unable to agree as to the fair market value,
other party may refer this matter to arbitration pursuant to
the Arbitrations Act, R.S.O. or any successor legislation;
(4) the renewal term: fair market value. In the event the
parties are unable to agree as to the fair market value,
either party may refer this matter to arbitration pursuant
to the Arbitrations Act, R.S.O. or any successor
legislation.
(b) Upon the Vendor obtaining all requisite consents of ABN AMRO BANK
N.V., CANADA BRANCH and LASALLE BUSINESS CREDIT, LLC to this
transaction.
In the event any of the conditions set forth in Paragraph 2 of this
Schedule "A" are not satisfied on or before the expiration of the
Conditional Period then the party having the benefit of such condition may,
by written notice given to the other party on or before the expiration of
the Conditional Period, terminate this Agreement in which event this
agreement shall be at an end and all deposits shall be immediately returned
to the Purchaser without deduction. If by 6:00 p.m. (Toronto time) on the
expiration of the Conditional Period the party entitled to the benefit of
any condition set forth above has not given written notice to the other
party that the condition has not been satisfied or waived, such condition
shall be deemed for all purposes to have been satisfied or waived:
4. The Buyer acknowledges that it has been given copies of the environmental
reports prepared by URS DAMES & ▇▇▇▇▇ CANADA, dated January 13, 2003 as
well as a Limited Phase II report prepared by JFM Environmental (the
"Environmental Reports"). Provided the Closing hereunder takes place, the
Purchaser does hereby acknowledge, represent and warrant to the Vendor
that:
(a) the Purchaser has fully examined and inspected the Property and
conducted its own independent investigation of current and past uses
of the Property and searches, inspections, investigations and testing
for environmental integrity and in respect of all other matters
pertaining to the Property;
(b) the Purchaser has accepted and/or is fully satisfied in all respects
with the foregoing and with the physical condition, value, financing
status and expenses of the Property and compliance of the Property
with all applicable law, by-laws and regulations of all municipal and
other governmental authorities;
(c) the Property will be purchased and assumed by the Purchaser in their
present and "as is" condition and on Closing the Purchaser shall
assume responsibility for the physical conditions of the Property and
the Vendor shall have no obligations or responsibility for the
physical condition of the Property and the Vendor shall have no
obligations or responsibility to the Purchaser after Closing with
respect to the Property or the condition thereof, including any
environmental liability to the Purchaser relating thereto; and
(d) the Purchaser has decided to purchase the Property solely on the basis
of its own independent judgment, searches, inspections, investigations
and testing.
The aforesaid shall survive Closing.
5. With respect to goods and services tax ("GST") payable pursuant to the
Excise Tax Act Canada (the "Act") in connection with the transaction
contemplated by this Agreement, the parties covenant and agree as follows:
(a) Subject to clause (b) below, the Purchaser shall pay to the Vendor on
Closing by certified cheque all GST payable as a result of this
transaction in accordance with the Act, and the Vendor shall remit
such GST to the Receiver General for Canada when and to the extent
required by the Act;
(b) Notwithstanding clause (a), the Vendor shall not collect the GST from
the Purchaser if the Purchaser on Closing is registered under the Act,
and in that event the Purchaser shall file returns and remit such GST
to the government when and to the extent required by the Act;
(c) The Vendor and Purchaser shall each indemnify the other and hold the
other harmless from any liability of the other under the Act arising
because of breach of the obligations of the Vendor or Purchaser, as
the case may be, set out in this Section or arising under the Act,
together with all loss, costs and expenses resulting from such breach;
(d) The Purchaser shall provide the Vendor with a statutory declaration on
Closing confirming its GST registration number under the Act; and
(e) The Vendor's and Purchaser's obligations under this Section 4 shall
survive Closing.
6. Any notice, demand, approval, consent, information, agreement, offer,
payment, request or other communication (hereinafter referred to as a
"Notice") to be given under or in connection with this Agreement shall be
in writing and shall be sufficiently given by personal delivery or by
facsimile, addressed or sent as set out below or to such other address or
facsimile number as may from time to time be the subject of Notice:
(a) Vendor: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Purchaser: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any Notice, if personally delivered, shall be deemed to have been validly
and effectively given and received on the date of such delivery and if sent
by facsimile with confirmation of transmission on a day between the hours
of 9:00 a.m. and 6:00 p.m., shall be deemed to have been validly and
effectively given and received on the business Day it was sent. Any
Facsimile sent after 6:00 p.m. shall be deemed to have been delivered the
next day.
SCHEDULE "B-1"
(copy of parcel page)
SCHEDULE "C-1"
(copy of survey)
SCHEDULE "D-1"
(VTB Mortgage Terms)
The Chargor shall have the right to set off from the principal amount
outstanding under the VTB Mortgage at any time and from time to time the amount
in excess of THREE HUNDRED THOUSAND UNITED STATES DOLLARS (US$300,000.00) that
the Chargor may spend on environmental remediation of the property. The Chargor
shall provide to the Chargee with copies of any invoices evidencing the amount
of money spent by the Chargor on the environmental remediation of the property
together with a statutory declaration of a senior officer of the Chargor
attesting as to the amount of monies spent by the Chargor on account of the
environmental remediation of the property.