EXHIBIT 10.6
ASSET PURCHASE AGREEMENT
THIS AGREEMENT made as of the 20th day of September, 1999.
AMONG:
▇▇▇▇ AUCTIONEERS & APPRAISERS LTD., a company incorporated
under the laws of British Columbia and having its head office
at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Vendor")
OF THE FIRST PART
AND:
ABLE AUCTIONS (1991) LTD., a company incorporated under the
laws of British Columbia and having its head office at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Purchaser")
OF THE SECOND PART
AND:
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC., a company incorporated under the laws
of Florida and having its head office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Parent Company")
OF THE THIRD PART
WHEREAS:
A. The Vendor carries on the business of the auction of tools, vehicles,
industrial equipment, government surplus equipment, and police seized goods;
B. The Vendor has agreed to sell, and the Purchaser has agreed to purchase,
subject to certain exceptions, all of the property, assets, and undertaking of
the Vendor's business, as a going concern;
C. The Purchaser is a wholly owned subsidiary of the Parent Company;
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NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the premises
and the covenants, agreements, representations, warranties, and payments set
forth in this Agreement, the parties covenant and agree as follows:
1. INTERPRETATION
1.1 Where used in this Agreement, each of the following words will have
the following meanings:
(a) "Assets" means all properties and assets normally and necessarily used in
the Business, as a going concern, including without limitation:
(i) the Goodwill;
(ii) the Equipment;
(iii) the Material Contracts;
(iv) the Intangible Property; and
(v) all of the Vendor's right, title, and interest in and to all
other property and assets, real or personal, tangible or
intangible, used by the Vendor or to which the Vendor is entitled
in connection with the Business,
irrespective of whether these properties and assets are located on the
Premises, but does not include:
(vi) cash on hand or in banks before the Effective Date; and
(vii) the Receivables;
(b) "Business" means the business currently carried on by the Vendor for the
auction of tools, vehicles, industrial equipment, government surplus
equipment, and police seized goods;
(c) "Closing" means the completion of the sale and purchase of the Assets by
transfer and conveyance and the payment of or provision for the Purchase
Price, all as provided in this Agreement;
(d) "Closing Date" means on or before October 15, 1999;
(e) "Effective Date" means September 20, 1999;
(f) "Equipment" means all machinery, equipment, office inventory for resale,
automobiles, trucks, office equipment, furniture, furnishings, tools,
stores, and supplies of all kinds used in connection with the Business and
leased or owned by the Vendor, including without limitation the machinery,
equipment, and other property described in Schedule "A";
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(g) "Goodwill" means the goodwill of the Business, together with the
Purchaser's exclusive right to represent itself as carrying on the business
in continuation of and in succession to the Vendor and the right to use any
words indicating that the Business is so carried on, including the right to
use the Names as part of the name of or in connection with the Business or
any part thereof carried on or to be carried on by the Purchaser and all
lists of customers, documents, records, correspondence, and other
information related to the Business;
(h) "Indebtedness" means any and all of the Vendor's trade accounts, debts,
duties, endorsements, guarantees, liabilities, obligations,
responsibilities, and undertakings assumed, created, incurred, or made,
whether voluntary or involuntary, however incurred or made or arising,
whether due or not due (except accrued employees' salaries which are not
yet due and obligations of the Vendor under Material Contracts), absolute,
inchoate, or contingent, liquidated or unliquidated, determined or
undetermined, direct or indirect, express or implied, and whether the
Vendor may be liable individually or jointly with others;
(i) "Intangible Property" means all of the Vendor's right and interest to all
registered and unregistered trade marks, trade or brand names including the
Names, copyrights, designs, inventions, patents, licenses, authorities,
restrictive covenants, and other rights used in connection with the
Business;
(j) "Lease" means the lease between Ancor Enterprises Inc. and the Vendor dated
for reference January 28, 1998 regarding the Premises;
(k) "Material Contracts" means the benefit of all unfilled orders received by
the Vendor and forward commitments to purchase made by the Vendor in
connection with the Business, and all other contracts, engagements, or
commitments, whether written or oral, to which the Vendor is entitled in
connection with the Business including without limitation its right, title,
and interest in, to, and under the material agreements and contracts
described in Schedule "B";
(l) "Names" means the name "▇▇▇▇ Auctioneers" or any variation;
(m) "Person" means an individual, corporation, body corporate, partnership,
joint venture, society, association, trust, or unincorporated organization,
or any trustee, executor, administrator, or other legal representative;
(n) "Premises" means that portion of the leasehold lands and premises situated
at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, used by the Vendor for the
Business and more particularly described in the Lease;
(o) "Purchase Price" means the purchase price for the Assets set forth in
section 3.1;
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(p) "Receivables" means all accounts receivable, trade accounts, notes
receivable, and other debts owing to the Vendor as of the Closing Date in
connection with or arising out of the Business or otherwise, and the full
benefit of all securities for these accounts, notes, or debts; and
(q) "Regulatory Approval" means the approval of the transaction contemplated by
this Agreement by any securities regulatory authority having authority over
the affairs of the Parent Company and the Purchaser.
1.2 In this Agreement, except as otherwise expressly provided:
(a) "Agreement" means this Agreement, including the preamble and the Schedules,
as supplemented or amended from time to time;
(b) the headings are for convenience only and do not form a part of this
Agreement and are not intended to interpret, define, or limit the scope,
extent, or intent of this Agreement or any provision hereof;
(c) the singular of any term includes the plural and vice versa, the use of any
term is equally applicable to any gender and, where applicable, a body
corporate, the word "or" is not exclusive and the word "including" is not
limited (whether or not non-limited language, such as "without limitation"
or "but not limited" to words of similar import, is used with reference
thereto);
(d) any accounting term not otherwise defined has the meanings assigned to it
in accordance with generally accepted accounting principles applicable in
Canada;
(e) any reference to a statute includes and is a reference to that statute and
to the regulations made under that statute, with all amendments made to
that statute and in force from time to time, and to any statute or
regulations that may be passed which has the effect of supplementing or
superseding that statute or those regulations;
(f) except as otherwise provided, any dollar amount referred to in this
Agreement is in Canadian funds; and
(g) any other term defined within the text of this Agreement has the meaning so
ascribed.
1.3 The following are the Schedules to this Agreement:
Schedule Description
-------- -----------
A List of Equipment
B List of Material Contracts
C Terms of Employment
D Employment Agreements
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2. PURCHASE AND SALE
2.1 On the terms and subject to the conditions of and based on the
representations and warranties contained in this Agreement, the Vendor agrees to
sell and the Purchaser agrees to purchase the Assets belonging to or used in the
Business, as a going concern, as and from the Effective Date.
2.2 The parties acknowledge that the purchase and sale provided for in
section 2.1 is restricted to the Assets only and without limiting the generality
of the foregoing, the Purchaser is not acquiring any assets other than the
Assets nor is the Purchaser purchasing any business of the Vendor other than the
Business.
3. PURCHASE PRICE
3.1 The Purchase Price will be the sum of CDN$250,000 plus applicable
goods and services tax and provincial social services tax, to be allocated as
follows:
(a) Equipment: $25,000;
(b) Goodwill, Intangible Property,
and Material Contracts: $225,000.
3.2 In consideration of the sale of the Assets, the Purchaser also agrees
to reimburse to the Vendor, on a monthly basis, all rent payments under the
Lease.
3.3 The Purchaser will pay and satisfy the Purchase Price on the Closing
Date by issuing to the Vendor or its nominee 60,000 shares of common stock of
the Parent Company (the "Shares") at a deemed price of US$2.80 per Share.
3.4 The Vendor acknowledges that:
(a) the issuance of the Shares has not been approved or disapproved by the
United States Securities and Exchange Commission, any state securities
agency, or any foreign securities agency;
(b) the Purchaser is not registered under the Securities Exchange Act of ▇▇▇▇
(▇▇▇▇▇▇ ▇▇▇▇▇▇);
(c) the Shares will, when issued, be validly issued as fully paid and
non-assessable, will be issued pursuant to exemptions from registration and
prospectus requirements available under applicable securities laws, and
will be subject to resale restrictions imposed pursuant to applicable
securities laws;
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(d) the certificates representing the Shares will bear a legend stating that
they have not been registered under the Securities Act of 1933 (United
States) (the "1933 Act") or the securities laws of any state of the United
States and may not be offered for sale or sold in the United States unless
registered under the 1933 Act and the securities laws of all applicable
states of the United States or an exemption from such registration
requirements is available; and
(e) the Vendor has been cautioned to seek its own legal advice as to the resale
restrictions applicable to the Shares.
4. VENDOR'S REPRESENTATIONS AND WARRANTIES
The Vendor represents and warrants to the Purchaser as follows, with the intent
that the Purchaser will rely on these representations and warranties in entering
into this Agreement, and in concluding the purchase and sale contemplated by
this Agreement:
4.1 Status of Vendor. The Vendor is a corporation duly incorporated under
the Company Act (British Columbia), is validly existing and in good standing
regarding the filing of annual returns until 1998, and has the power and
capacity to own and dispose of the Assets, to carry on the Business now being
conducted by it, to enter into this Agreement, and carry out its terms to the
full extent.
4.2 Authority to Sell. All necessary corporate action on the Vendor's part
has duly and validly authorized the signing and delivery of this Agreement and
the completion of the transaction contemplated by this Agreement, and this
Agreement constitutes a legal, valid, and binding obligation of the Vendor
enforceable against the Vendor in accordance with its terms except as may be
limited by laws of general application affecting the rights of creditors.
4.3 Sale will Not Cause Default. Neither the signing nor delivery of this
Agreement, nor the completion of the purchase and sale contemplated in this
Agreement, will:
(a) violate any of the terms and provisions of the Vendor's Memorandum or
Articles, or any judgment, order, decree, statute, by-law, regulation,
covenant, restriction, or any Material Contract or agreement applicable to
the Vendor or any of the Assets (subject to the obligation to obtain
consents, if any, in the Material Contracts);
(b) give any person the right to terminate, cancel, or remove any of the
Assets, save to the extent that the consent of third parties is required to
assign the Material Contracts; or
(c) result in any fees, duties, taxes, assessments, or other amounts relating
to any of the Assets becoming due or payable other than provincial social
services tax and goods and services tax payable by the Purchaser in
connection with the purchase and sale.
4.4 Assets. The Vendor owns and possesses and has a good and marketable
title to the Assets and, on Closing, the Assets will be free and clear of all
liens, charges, mortgages, pledges, security interests, encumbrances, or other
claims whatsoever.
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4.5 Books and Records. The Vendor's books and records fairly and correctly
set out and disclose in all material respects, in accordance with generally
accepted accounting principles, the Vendor's financial position, and the Vendor
has accurately recorded all of its material financial transactions relating to
the Business in those books and records.
4.6 Material Change. Since August 31, 1999, there has not been:
(a) any material change in the financial condition of the Business, its
liabilities, or the Assets, other than changes in the ordinary course of
business, none of which has been materially adverse; or
(b) any damage, destruction, loss, or other event (whether or not covered by
insurance) materially and adversely affecting the Assets or the Business.
4.7 Litigation. To the Vendor's knowledge, there is no litigation or
administrative or government proceeding or inquiry pending or threatened against
or relating to the Vendor, the Business, or any of the Assets, and the Vendor
does not know of or have reasonable grounds for believing that there is any
basis for any action, proceeding, or inquiry.
4.8 Conformity with Laws. The Vendor has obtained all governmental
licenses and permits required for the conduct in the ordinary course of the
operations of the Business and the uses to which the Assets have been put and
the licenses and permits are in good standing and the conduct and uses are not
in breach of any statute, by-law, regulation, covenant, restriction, plan, or
permit, provided that the Vendor will not transfer the government licenses and
permits to the Purchaser and the Purchaser will be responsible for obtaining its
own permits and licenses.
4.9 No Collective Agreement. The Vendor is not a party to any collective
agreement relating to the Business with any labour union or other association of
employees and no part of the Business has been certified as a unit appropriate
for collective bargaining.
4.10 Terms of Employment. The name of each present employee of the Vendor,
the duration of the employment of each employee with the Vendor, and the
Vendor's remuneration and benefit obligations and accrued vacation pay of each
employee is accurately set out in Schedule "C", and the Vendor will have paid
the full amounts of salaries, pensions, bonuses, commissions, and other
remuneration of any nature, including severance pay and unpaid earned wages of
the Vendor's employees and salespersons, as at the Closing Date up to the most
recent pay day, and there is no employee who cannot be dismissed on less than
two months' notice without further liability.
4.11 No Defaults. Except as otherwise expressly disclosed in this
Agreement, there has been no material default in any term, condition, provision,
or obligation to be performed under the Lease or any Material Contract, each of
which is in good standing and in full force and effect, unamended.
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4.12 List of Material Contracts. The Schedule of Material Contracts,
Schedule "B", contains a true and correct listing of each written or oral
contract of the following types to be acquired or assumed by the Purchaser:
(a) contracts or commitments out of the ordinary course of business;
(b) contracts or commitments involving an obligation to pay in the aggregate
$10,000 or more or of a duration greater than one year;
(c) contracts or commitments affecting ownership of or title to or any interest
in the Assets;
(d) except as required by statute or regulation, contracts or commitments for
bonuses, incentive compensation, pensions, group insurance, or employee
welfare plans, all of which are fully funded as determined by an
independent and reputable firm of actuaries employed by the Vendor; and
(e) employment contracts or commitments other than unwritten employment
contracts of indefinite duration entered into in the ordinary course of the
Business.
4.13 Accuracy of Representations. No certificate furnished by or on behalf
of the Vendor to the Purchaser at the Closing Date regarding the Vendor's
representations, warranties, or covenants in this Agreement will contain any
untrue statement of a material fact or omit to state a material fact known to
the maker of the certificate necessary to make the statements contained in the
certificate not misleading.
4.14 Exclusions and Limitations. Despite anything to the contrary in this
Agreement, the Vendor makes no representations or warranties regarding the
Intangible Property or its right to the Names or use of the Names except that:
(f) the Vendor has not granted the right or license to any person to use the
Names;
(g) the Vendor has not received notice from any person that the Vendor's use of
the Names infringes the rights of any other person; and
(h) the Vendor has not assigned any rights to the Names or any other trademarks
to any other person.
4.15 Canadian Resident. The Vendor is a resident in Canada within the
meaning of the Income Tax Act (Canada).
4.16 Condition of Equipment. To the Vendor's best knowledge, all machinery
and equipment comprised in the Assets are in normal operating condition and in a
state of reasonable maintenance and repair and the Equipment represents all
machinery and equipment owned by the Vendor and used by the Vendor in the
operation of the Business.
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4.17 No Lien Indebtedness. The Vendor has no Indebtedness to any Person
which might, by operation of law or otherwise, now or hereafter, constitute a
lien, charge, or encumbrance on any of the Assets, except for encumbrances which
will be discharged on or following Closing on conditions satisfactory to the
Purchaser's lawyer acting reasonably.
4.18 No Infringement. To the best of the Vendor's knowledge, no copyright,
franchise or license, patent right, trade ▇▇▇▇, trade name, or other of the
Vendor's Intangible Property used in or relating to the Business in any way
infringes on the right of any Person under or regarding any patent, trade ▇▇▇▇,
trade name, copyright, or other industrial or intellectual property.
4.19 No Liability for Indebtedness. There is no Indebtedness of any kind
whatsoever, whether or not determined or determinable relating to the Business,
for which the Purchaser may become liable on or after the Closing Date.
4.20 No Other Agreement. There is no written or oral agreement, option,
understanding, or commitment, or any right or privilege capable of becoming an
agreement, for the purchase of the Business or any of the Assets from the
Vendor, other than purchase orders accepted by the Vendor in the ordinary course
of the operation of the Business.
4.21 Schedules Accurate. To the Vendor's best knowledge, all information
set out in the Schedules to this Agreement is complete and accurate in every
material respect.
5. VENDOR'S COVENANTS
5.1 Conduct of Business. Until the Closing Date, the Vendor will conduct
the Business diligently and only in the ordinary course and will use its best
efforts to preserve the Assets intact, to keep available to the Purchaser its
present employees, and to preserve for the Purchaser its relationship with its
suppliers, customers, and others having business relations with it.
5.2 Access by Purchaser. The Vendor will give to the Purchaser and its
officers, counsel, accountants, and other representatives full access, during
normal business hours throughout the period before the Closing Date, to all of
the Assets and of the Vendor's properties, books, contracts, commitments, and
records relating to the Business, and will furnish to the Purchaser during this
period all information that the Purchaser may reasonably request.
5.3 Insurance. From this date until the Closing Date, the Vendor will
obtain and maintain in full force and effect policies of insurance adequate to
insure the replacement value of the Assets.
5.4 Procure Consents. The Purchaser and the Vendor will cooperate
regarding obtaining any consents that may be required to validly assign the
Material Contracts to the Purchaser.
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5.5 Covenant of Indemnity. The Vendor will indemnify and hold harmless the
Purchaser from and against:
(a) any and all Indebtedness existing at or arising after the Closing Date;
(b) any and all damage or deficiencies resulting from any misrepresentation,
breach of warranty, or non-fulfillment of any covenant on the Vendor's part
under this Agreement or from any misrepresentation in or omission from any
certificate or other instrument furnished or to be furnished to the
Purchaser; and
(c) any and all actions, suits, proceedings, demands, assessments, judgments,
costs, and legal and other expenses incident to any of the foregoing.
5.6 Termination of Employees. The Vendor will, as of the Closing Date,
terminate the employment of all employees to whom the Purchaser has made an
offer of employment under section 7.1 and will indemnify and save harmless the
Purchaser from and against all claims by any employee of the Vendor for wages,
salaries, bonuses, pension or other benefits, severance pay, notice or pay in
lieu of notice, and holiday pay for any period before the Closing Date.
5.7 Steps to Transfer Assets. The Vendor will, before the Closing Date,
take or cause to be taken all proper steps, actions, and corporate proceedings
on its part (including the approval of the sale by the Vendor's directors and
shareholders) to enable it to vest a good and marketable title in the Purchaser
to the Assets, free and clear of all liens, mortgages, encumbrances, equities,
or claims of every nature and kind.
5.8 Care of Assets. From the signing of this Agreement to the Closing
Date, the Vendor will take reasonable care to protect and safeguard the Assets
and do all necessary repairs and maintenance to the assets that the Vendor uses
in the operations of the Business, and will not sell or dispose of any of the
Assets except in the ordinary course of business.
5.9 Pay Employees. The Vendor will pay to all employees in the Business
all wages and salaries and all amounts due in lieu of vacation pay and will pay
all source deductions up to and including the Closing Date.
5.10 Tax Filings. The Vendor will, from the signing of this Agreement to
the Closing Date, make all necessary tax, government, and other filings in a
timely fashion.
5.11 Adverse Development. The Vendor will, from the signing of this
Agreement to the Closing Date, promptly advise the Purchaser regarding any
development which materially affects the Business or the Assets, in either case
taken as a whole.
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6. PURCHASER'S REPRESENTATIONS AND WARRANTIES
The Purchaser represents and warrants to the Vendor as follows, with the intent
that the Vendor will rely on these representations and warranties in entering
into this Agreement, and in concluding the purchase and sale contemplated in
this Agreement:
6.1 Status of Purchaser. The Purchaser is a corporation duly incorporated
and in good standing under the laws of British Columbia, is validly existing,
and has the power and capacity to enter into this Agreement and to carry out its
terms.
6.2 Status of Parent Company. The Parent Company is a corporation duly
incorporated and in good standing under the laws of Florida, is validly
existing, and has the power and capacity to enter into this Agreement and to
carry out its terms. The Parent Company's shares of common stock are quoted for
trading on the National Association of Securities Dealers Over-the-Counter
Bulletin Board.
6.3 Authority to Purchase. All necessary corporate action on the
Purchaser's part has duly and validly authorized the signing and delivery of
this Agreement and the completion of the transaction contemplated by this
Agreement, and this Agreement constitutes a legal, valid, and binding obligation
of the Purchaser enforceable against the Purchaser in accordance with its terms,
except as limited by laws of general application affecting the rights of
creditors.
7. PURCHASER'S COVENANTS
7.1 Offer Employment. The Purchaser covenants with the Vendor to offer
employment only to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
on the terms and conditions contained in the employment agreements attached as
Schedule "D". The Purchaser also agrees to reimburse the Vendor for all employee
wages paid by the Vendor from September 20, 1999 to and including December 31,
1999 in respect of the other employees listed in Schedule "C" who are not
offered employment directly by the Purchaser.
7.2 Social Services Tax and Goods and Services Tax. The Purchaser will be
liable for and will pay on Closing, with proof of payment satisfactory to the
Vendor, all provincial social services taxes, registration charges, and transfer
fees properly payable on and in connection with the Vendor's sale and transfer
of the Assets to the Purchaser. The Purchaser will pay to the Vendor for
remittance to the Excise Tax Branch, Revenue Canada, all goods and services tax
unless, by provisions of the Excise Tax Act, the Vendor is under no obligation
to collect and has no liability for failure to collect that tax. The Vendor will
provide the Purchaser with proof of payment, if required, of all goods and
services tax.
7.3 Consents. The Purchaser will, at the Vendor's request, sign and
deliver all applications for consent and all assumption agreements, provide all
information necessary to obtain the consents referred to in section 5.4, and
assist and co-operate with the Vendor in obtaining those consents.
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7.4 Assumption of Material Contracts. The Purchaser agrees to assume all
of the Vendor's obligations and liabilities under the Material Contracts as of
the Effective Date.
7.5 Indemnity. The Purchaser will jointly and severally indemnify and hold
harmless the Vendor from and against:
(a) any and all covenants, provisions, or obligations of or under the Material
Contracts arising after the Closing Date;
(b) any and all damage or deficiencies resulting from any misrepresentation,
breach of warranty, or non-fulfillment of any covenant on the Purchaser's
part under this Agreement or from any misrepresentation in or omission from
any certificate or other instrument furnished or to be furnished to the
Vendor; and
(c) any and all actions, suits, proceedings, demands, assessments, judgments,
costs, and legal and other expenses incident to any of the foregoing.
8. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND COVENANTS
8.1 Representations, Warranties, and Covenants of Vendor. All statements
contained in any certificate or other instrument delivered by or on behalf of
the Vendor under this Agreement will be deemed to be the Vendor's
representations and warranties. All of the Vendor's representations, warranties,
covenants, and agreements in this Agreement will, unless otherwise expressly
stated, survive the Closing Date and any investigation at any time made by or on
behalf of the Purchaser and, subject to section 8.2, will continue in full force
and effect for the Purchaser's benefit.
8.2 Limitation on Vendor's Indemnity. No claim by the Purchaser under the
covenant of indemnity contained in section 5.5 or for damages or other relief
regarding the Vendor's breach of warranty or breach of covenant under this
Agreement will be valid unless:
(a) the Purchaser gives to the Vendor written notice of the claim before the
expiration of 12 months after the Closing Date; and
(b) the aggregate amount of all claims exceeds $5,000.
8.3 Purchaser's Representations, Warranties, and Covenants. All of the
Purchaser's representations, warranties, covenants, and agreements in this
Agreement will, unless otherwise expressly stated, survive the Closing Date and
any investigation at any time made by or on behalf of the Purchaser and will
continue in full force and effect for the Vendor's benefit.
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8.4 Limitation on Purchaser's Indemnity. No claim by the Vendor under the
covenant of indemnity contained in section 7.5 or for damages or other relief
regarding the Purchaser's breach of warranty or breach of covenant under this
Agreement will be valid unless:
(a) the Vendor gives to the Purchaser written notice of the claim before the
expiration of 12 months after the Closing Date; and
(b) the aggregate amount of all claims exceeds $5,000.
9. CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS
All of the Purchaser's obligations under this Agreement are subject to the
fulfillment at or before the Closing Date of the following conditions:
9.1 Vendor's Representations and Warranties. The Vendor's representations
and warranties contained in this Agreement and in any certificate or document
delivered under this Agreement will be true at and as of the Closing Date if the
Vendor made the representations and warranties at and as of that time.
9.2 Vendor's Covenants. The Vendor will have performed and complied with
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it before or at the Closing Date.
9.3 Vendor's Certificate. The Vendor will have delivered to the Purchaser
a certificate of the Vendor's President, as an officer of the Vendor and not in
his personal capacity, dated the Closing Date and certifying in detail that the
Purchaser may specify to the fulfillment of the conditions set forth in sections
9.1 and 9.2.
9.4 Opinion of Counsel. The Purchaser will have received from the Vendor's
legal counsel an opinion dated the Closing Date that the Vendor has taken all
necessary steps and corporate proceedings to validly transfer the Assets to the
Purchaser, and that, to the knowledge of legal counsel but without
investigation, there are no claims, actions, or proceedings, pending or
threatened against or affecting the Assets or the transfer of the Assets to the
Purchaser.
9.5 Independent Valuation. The Purchaser will have obtained an independent
valuation of the Assets indicating a value of not less than CDN$250,000.
9.6 ▇▇▇▇▇▇▇▇▇ Employment. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ will have signed a five year
employment agreement with the Purchaser in the form attached as Schedule "D".
9.7 Regulatory Approval. The Purchaser will have obtained all approvals
that may be required from all securities regulatory authorities having
jurisdiction over the affairs of the Purchaser.
14
9.8 No Adverse Affect. Before the Closing Date, the Vendor will not have
experienced any event or condition or have taken any action of any kind
adversely affecting the Assets or the Business to materially reduce the value of
the Assets or the Business to the Purchaser.
The foregoing conditions are for the Purchaser's exclusive benefit and the
Purchaser may waive any condition in whole or in part before or at the Closing
Date by delivering to the Vendor a signed written waiver.
10. CONDITIONS PRECEDENT TO THE VENDOR'S OBLIGATIONS
All of the Vendor's obligations under this Agreement are subject to the
fulfillment, before or at the Closing Date, of the following conditions:
10.1 Purchaser's Representations and Warranties. The Purchaser's
representations and warranties contained in this Agreement will be true at and
as of the Closing Date as though the Purchaser made the representations and
warranties at and as of that time.
10.2 Purchaser's Covenants. The Purchaser will have performed and complied
with all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it before or at the Closing Date.
10.3 Consents of Third Parties. The Vendor will have obtained all consents
or approvals required to be obtained to sell, assign, or transfer the Assets,
provided that the Vendor may only rely on this condition if the Vendor has
diligently used its best efforts to procure all consents or approvals and the
Purchaser has not waived the need for any consents or approvals.
The foregoing conditions are for the Vendor's exclusive benefit and the Vendor
may waive any condition in whole or in part before or at the Closing Date by
delivering to the Purchaser a signed written waiver.
11. CLOSING
11.1 Time of Closing. Subject to the terms and conditions of this
Agreement, the purchase and sale of the Assets will close on the Closing Date.
▇▇.▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇. The Closing will take place at the offices of the
Purchaser's solicitor, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, 1700 - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇.
11.3 Effective Date. Despite the Closing Date being after September 20,
1999, the Closing will take place effective on the Effective Date. From and
after the Effective Date, the Business will be operated for the benefit of the
Purchaser so that the Purchaser will receive all profits of the Business that
may arise or accrue from and after the Effective Date.
15
11.4 Documents to be Delivered by the Vendor. At the Closing, the Vendor
will deliver or cause to be delivered to the Purchaser:
(a) all deeds of conveyance, bills of sale, transfer, and assignments in form
and content satisfactory to the Purchaser's counsel, appropriate to
effectively vest a good and marketable title to the Assets in the Purchaser
to the extent contemplated by this Agreement, and immediately registrable
in all places where registration of these instruments is required;
(b) possession of the Assets;
(c) the certificate of the Vendor's President under section 9.3;
(d) signed releases of or evidence to the Purchaser's reasonable satisfaction
for the discharge of any and all Indebtedness and encumbrances which may be
enforceable against any of the Assets being purchased or trust conditions
agreed on by lawyers for the Vendor and the Purchaser discharging the same;
(e) certified copies of resolutions of the Vendor's directors and shareholders
that are required to be passed to authorize the signing, delivery, and
implementation of this Agreement and of all documents to be delivered by
the Vendor under this Agreement; and
(f) all lists of customers, brochures, samples, price lists, files, records,
documents, and other information related to the Business, and all licenses,
authorities, and other rights used in connection with the Business included
in the Assets.
11.5 Documents to be Delivered by the Purchaser. At the Closing, the
Purchaser will deliver or cause to be delivered:
(a) a certificate registered in the name of the Vendor or its nominee
representing the Shares; and
(b) signed employment agreements between the Purchaser and each of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in the forms attached as
Schedule "D".
12. RISK OF LOSS
From this date to the Closing Date, the Assets will be and remain at the
Vendor's risk. If any of the Assets are lost, damaged, or destroyed before the
Closing Date and are not replaced by the Vendor, the Purchaser may terminate
this Agreement on written notice to the Vendor or elect by notice in writing to
the Vendor to complete the purchase to the extent possible without reduction of
the Purchase Price, in which event all proceeds of any insurance or compensation
for any loss, damage, or destruction will be paid to the Purchaser and all of
the Vendor's right and claim to any amounts not paid by the Closing Date will be
assigned to the Purchaser by written assignment in form and substance
satisfactory to the Purchaser's counsel.
16
13. RESTRICTIVE COVENANT
The Vendor and its shareholders, directors, and officers will not, for and
during the period of two years from the Closing Date, directly or indirectly
engage in or carry on, individually or in partnership or in conjunction with any
one or more persons, firms, associations, syndicates, or corporations, as
principal, agent, employee, director, officer, shareholder of any corporation,
guarantor, creditor, or in any manner whatsoever, within the Lower Mainland of
British Columbia, any business which is the same as or similar to, in whole or
in part, the Business. The Vendor acknowledges that it has considered this
provision and that this provision is, regarding their interests and those of the
Purchaser, reasonable as to all of the circumstances of the transactions
contemplated by this Agreement.
14. FURTHER ASSURANCES
The parties will sign all other documents and do all other things necessary to
carry out and give effect to the intent of this Agreement.
15. NOTICE
Any notices to be given by either party to the other will be sufficiently given
if delivered personally or transmitted by facsimile or if sent by registered
mail, postage prepaid, to the parties at their respective addresses shown on the
first page of this Agreement, or to any other addresses as the parties may
notify to the other from time to time in writing. This notice will be deemed to
have been given at the time of delivery, if delivered in person or transmitted
by facsimile, or within three business days from the date of posting if mailed
from Vancouver, British Columbia.
16. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the parties and there
are no representations or warranties, express or implied, statutory or
otherwise, and no terms, conditions, or agreements collateral to this Agreement
other than as expressly set forth or referred to in this Agreement. This
Agreement supersedes all letters of intent or agreements made between the
parties before the date of this Agreement.
17. TIME OF THE ESSENCE
Time will be of the essence of this Agreement.
18. APPLICABLE LAW
This Agreement will be governed by and interpreted in accordance with the laws
of British Columbia.
17
19. SUCCESSORS AND ASSIGNS
This Agreement will enure to the benefit of and be binding on the parties and
their respective heirs, executors, administrators, successors, and assigns.
IN WITNESS WHEREOF the parties have signed this Agreement as of the date
written on the first page of this Agreement.
THE CORPORATE SEAL OF )
▇▇▇▇ AUCTIONEERS AND )
APPRAISERS LTD. )
was affixed in the presence of: )
)
)
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ) c/s
------------------------------------- )
Authorized Signatory )
)
/s/ ▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ )
------------------------------------- )
Authorized Signatory )
THE CORPORATE SEAL OF )
ABLE AUCTIONS (1991) LTD. )
was affixed in the presence of: )
)
)
/s/ ▇▇▇▇▇ ▇▇▇▇▇ ) c/s
------------------------------------- )
Authorized Signatory )
)
------------------------------------- )
Authorized Signatory )
THE CORPORATE SEAL OF )
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC. )
was affixed in the presence of: )
)
)
/s/ ▇▇▇▇▇ ▇▇▇▇▇ ) c/s
------------------------------------- )
Authorized Signatory )
)
------------------------------------- )
Authorized Signatory )
SCHEDULE "A"
List of Equipment
WHITE MA 40 FORKLIFT SER. #26103602
NON WORKING WHITE FORKLIFTS
MISCELLANEOUS SHELVING & PALLET RACKING IN BUILDING
MINOLTA EP5320 PHOTOCOPIER
BACK PACK BLOWER
AUCTION PA SYSTEM
AUCTION TRUCK INDUSTRIAL AUCTION STAND
2 GLASS SHOWCASES
2 HAND TRUCKS
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ CHARGER
1985 GMC 5 TON TRUCK
MISCELLANEOUS OFFICE SUPPLIES, ADDING MACHINES, PIGEONHOLES, ETC.
GREEN AIR COMPRESSOR
FLOOR STAGING
KEY ON SITE BUILDING
SCHEDULE "B"
List of Material Contracts
1. Standing Office Agreement dated * with School District No. 43 (Coquitlam)
2. Agreement dated September 2, 1999 with the Vancouver Regional Cooperative
Purchasing Group.
3. Agreement dated May 9, 1997 with the Workers' Compensation Board.
4. List of various government clients (see attached).
SCHEDULE "C"
Terms of Employment
Name of Employee Wage/Salary
---------------- -----------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $2,500/month
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $2,500/month
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $5,000/month
▇▇▇▇▇ ▇▇▇▇▇▇▇ $10.00/hour
▇▇▇▇▇▇▇ ▇▇▇▇▇ $9.00/hour
Miscellaneous Part-Time Help $9.00/hour
SCHEDULE "D"
Employment Agreements
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective the 20th day of September, 1999.
BETWEEN:
ABLE AUCTIONS (1991) LTD., a company incorporated under the
laws of British Columbia and having its head office located
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Company")
OF THE FIRST PART
AND:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
("▇▇▇▇▇▇▇▇▇")
OF THE SECOND PART
WHEREAS:
A. The Company is an auctioneer and liquidator of a broad range of office
equipment, furniture, and industrial equipment;
B. Under an asset purchase agreement dated for reference September 20, 1999 (the
"Asset Purchase Agreement"), the Company purchased all of the property, assets,
and undertaking of the business of ▇▇▇▇ Auctioneers & Appraisers Ltd. ("▇▇▇▇"),
being the auction of tools, vehicles, industrial equipment, government surplus
equipment, and police seized goods (the "Business");
C. Pursuant to the Asset Purchase Agreement, the Business became a division of
the Company effective September 20, 1999; and
D. The Company has agreed to continue to employ ▇▇▇▇▇▇▇▇▇, being the director
and President of ▇▇▇▇, in the Business and ▇▇▇▇▇▇▇▇▇ has agreed to accept that
employment, subject to the terms and conditions set out in this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, for valuable consideration, the
parties mutually agree as follows:
4
1. EMPLOYMENT
1.1 Subject to the terms and conditions of this Agreement, the Company
employs ▇▇▇▇▇▇▇▇▇ to perform the duties set out in section 2.1 (the "Duties").
1.2 ▇▇▇▇▇▇▇▇▇'▇ obligation to perform the Duties and the Company's
obligation to pay the remuneration to ▇▇▇▇▇▇▇▇▇ will commence on September 20,
1999 (the "Effective Date") and will continue until December 31, 1999 unless
earlier terminated in accordance with Article 5 of this Agreement (the "Term").
2. DUTIES
2.1 ▇▇▇▇▇▇▇▇▇ will use his best efforts to manage the set-up of an auction
site, including displays and advertising.
2.2 ▇▇▇▇▇▇▇▇▇ will perform the Duties in a diligent, professional, and
efficient manner to preserve and enhance the Company's corporate image and will
faithfully devote the time, effort, and ability necessary to perform the Duties.
3. REMUNERATION
3.1 The Company will pay ▇▇▇▇▇▇▇▇▇ $834 for the period September 20 to
September 30, 1999. Beginning October 1, 1999, the Company will pay ▇▇▇▇▇▇▇▇▇ at
the monthly rate of $2,500, payable in two equal instalments (less applicable
source deductions) on the 15th day (or the business day immediately before the
15th day, if the latter is not a business day) and the last business day of each
month during the Term.
3.2 The Company will pay all reasonable expenses actually and properly
incurred by ▇▇▇▇▇▇▇▇▇ in connection with his performance of the Duties to a
maximum of $600 per month against delivery to the Company of invoices evidencing
those expenses.
4. RELATIONSHIP OF THE PARTIES
4.1 The Duties are personal in character and ▇▇▇▇▇▇▇▇▇ cannot assign
either this Agreement or any rights or benefits arising under this Agreement. In
performing the Duties, ▇▇▇▇▇▇▇▇▇ will operate as and will have the status of an
employee and will not act or hold himself out as or be an agent or partner of
the Company.
5. TERMINATION AND RENEWAL
5.1 During the Term, the Company may terminate this Agreement and the
employment of ▇▇▇▇▇▇▇▇▇ at any time for "just cause" by giving written notice to
▇▇▇▇▇▇▇▇▇. For the purpose of this Agreement, "just cause" is defined as:
(a) the wilful and continued failure by ▇▇▇▇▇▇▇▇▇ to substantially perform
the Duties 10 days after a written demand for substantial performance
is delivered to ▇▇▇▇▇▇▇▇▇,
5
which demand specifically identifies the manner in which ▇▇▇▇▇▇▇▇▇ has
not substantially performed his duties and responsibilities;
(b) any dishonesty on the part of ▇▇▇▇▇▇▇▇▇ that materially affects the
Company;
(c) the conviction of ▇▇▇▇▇▇▇▇▇ for any crime involving moral turpitude,
fraud, or misrepresentation; and
(d) any wilful and intentional act on ▇▇▇▇▇▇▇▇▇'▇ part that demonstrably
and materially injures the reputation, business, or business
relationships of the Company.
5.2 ▇▇▇▇▇▇▇▇▇ may terminate this Agreement if, without his express written
consent, the Company breaches any material terms of this Agreement and fails to
remedy that breach within 10 days of ▇▇▇▇▇▇▇▇▇'▇ written notice to the Company.
5.3 On termination of this Agreement for any reason, ▇▇▇▇▇▇▇▇▇ will
deliver to the Company all documents pertaining to the Company or its business,
including without limitation all correspondence, reports, contracts, data bases
related to the Company, and anything included in the definition of "Work
Product" set out in section 6.1.
6. CONFIDENTIALITY
6.1 All reports, documents, customer lists, concepts, and products,
together with any business contracts or any business opportunities prepared,
produced, developed, or acquired by ▇▇▇▇▇▇▇▇▇, directly or indirectly, in
connection with ▇▇▇▇▇▇▇▇▇'▇ performance of the Duties (collectively, the "Work
Product") will belong exclusively to the Company or any of its affiliates, as
appropriate (collectively, the "Ableauctions Companies"), which will be entitled
to all rights, interest, profits, or benefits in respect of the Work Product.
6.2 ▇▇▇▇▇▇▇▇▇ will not make any copies, summaries, or other reproductions
of any Work Product without the Company's express written permission, provided
that the Company permits ▇▇▇▇▇▇▇▇▇ to maintain one copy of the Work Product for
his own use.
6.3 ▇▇▇▇▇▇▇▇▇ will not disclose any information, documents, or Work
Product which ▇▇▇▇▇▇▇▇▇ develops or to which ▇▇▇▇▇▇▇▇▇ may have access by virtue
of his performance of the Duties to any person not expressly authorized in
writing by the Company for that purpose. ▇▇▇▇▇▇▇▇▇ will comply with any
directions that the Company may make to ensure the safeguarding or
confidentiality of all information, documents, and Work Product.
6.4 ▇▇▇▇▇▇▇▇▇ will not disseminate or distribute any of the Work Product
or any other written or printed information about the Ableauctions Companies or
their business to the media, members of the public, shareholders of the
Ableauctions Companies, prospective investors, members of the investment or
brokerage community, securities regulators, or any other third party, without
the Company first reviewing and approving the Work Product or other information
before dissemination or distribution.
6
6.5. ▇▇▇▇▇▇▇▇▇ will not, either directly or indirectly as a member or
associate of any person, make any use of any confidential information for the
purpose of soliciting the business of any customer or former customer of the
Ableauctions Companies, or for the purpose of appropriating any business
opportunity whatsoever available to or which might be available to the
Ableauctions Companies.
6.6 ▇▇▇▇▇▇▇▇▇ acknowledges and agrees that the confidential information is
and will be of a special and unique character, the loss of which cannot be
reasonably, readily, or accurately calculated in monetary terms. Accordingly,
the Ableauctions Companies will be entitled to injunctive or other equitable
relief to prevent or cure any breach or threatened breach of this Agreement by
▇▇▇▇▇▇▇▇▇. Resort to equitable relief, however, will not be construed to be a
waiver of any other right or remedy which the Ableauctions Companies may have
for damages or otherwise.
6.7 ▇▇▇▇▇▇▇▇▇ agrees that for a period of two years following the date of
this Agreement, he will not:
(a) encourage or entice any persons who are employees, contractors, or
suppliers of the Ableauctions Companies during the Term of this
Agreement, or who were employees, contractors, or suppliers of the
Ableauctions Companies at any time within the 30 days preceding the
date of this Agreement, to seek employment or service or contracts for
supply with persons other than the Ableauctions Companies; or
(b) offer employment or service or contracts, directly or indirectly, to
any persons who are employees, contractors, or suppliers of the
Ableauctions Companies during the Term of this Agreement, or who were
employees, contractors, or suppliers of the Ableauctions Companies at
any time within the 30 days preceding the date of this Agreement.
6.8 On termination of this Agreement, ▇▇▇▇▇▇▇▇▇ will furnish to the
Company a certificate in a form approved by the Company's solicitors which
declares that ▇▇▇▇▇▇▇▇▇ has not:
(a) divulged, disclosed, distributed, or otherwise made available to any
person any confidential information; or
(b) reproduced or made any use whatsoever of any confidential information;
or
(c) acted contrary to the provision of the above; except with the
Company's prior written consent.
The remedies afforded to the Ableauctions Companies by this Agreement will be
cumulative and not alternative and will be in addition to and not in
substitution for any other rights and remedies available to the participants at
law or in equity, including the remedy of injunctive relief.
7
7. NON-COMPETITION CLAUSE
7.1 ▇▇▇▇▇▇▇▇▇ agrees with the Company that he will not, except as an
employee of the Company or any of its affiliates:
(a) at any time during the Term or any other association with an
affiliated company and during any notice period while ▇▇▇▇▇▇▇▇▇ is
receiving remuneration from the Company or an affiliated company, or
(b) for a period of two years, where the Term or the association of
▇▇▇▇▇▇▇▇▇ with an affiliated company is terminated for whatever
reason,
either individually or in a partnership or jointly or in conjunction with any
person, firm, corporation, government, association, or syndicate (a "Business
Entity") as principal, agent, employee, director, officer, consultant, or in any
other manner, carry on or be engaged in any Business Entity engaged in or
concerned with or interested in the Business or any other business of the
Ableauctions Companies within the Lower Mainland of British Columbia.
8. NOTICES
8.1 Any notices to be given by either party to the other will be
sufficiently given if delivered personally or transmitted by facsimile or if
sent by registered mail, postage prepaid, to the parties at their respective
addresses shown on the first page of this Agreement, or to any other addresses
as the parties may notify to the other from time to time in writing. This notice
will be deemed to have been given at the time of delivery, if delivered in
person or transmitted by facsimile, or within three business days from the date
of posting if mailed from Vancouver, British Columbia.
9. FURTHER ASSURANCES
9.1 Each party will at any time and from time to time, at the other's
request, sign and deliver other documents and do other things that the other
party may reasonably request to carry out and give full effect to the terms,
conditions, and intent of this Agreement.
10. ENUREMENT
10.1 This Agreement will enure to the benefit of and be binding on the
parties to this Agreement and their respective personal representatives,
successors, and permitted assigns.
8
11. LAW
11.1 This Agreement will be governed by and construed in accordance with
the laws of British Columbia and the parties irrevocably attorn to the courts of
British Columbia.
IN WITNESS WHEREOF the parties have signed this Agreement as of the
date written on the first page of this Agreement.
ABLE AUCTIONS (1991) LTD.
Per:
---------------------------------
Authorized Signatory
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective the 20th day of September, 1999.
BETWEEN:
ABLE AUCTIONS (1991) LTD., a company incorporated under the
laws of British Columbia and having its head office located
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Company")
OF THE FIRST PART
AND:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
("▇▇▇▇▇▇▇▇▇")
OF THE SECOND PART
WHEREAS:
A. The Company is an auctioneer and liquidator of a broad range of office
equipment, furniture, and industrial equipment;
B. Under an asset purchase agreement dated for reference September 20, 1999 (the
"Asset Purchase Agreement"), the Company purchased all of the property, assets,
and undertaking of the business of ▇▇▇▇ Auctioneers & Appraisers Ltd. ("▇▇▇▇"),
being the auction of tools, vehicles, industrial equipment, government surplus
equipment, and police seized goods (the "Business");
D. Pursuant to the Asset Purchase Agreement, the Business became a division of
the Company effective September 20, 1999; and
D. The Company has agreed to continue to employ ▇▇▇▇▇▇▇▇▇, being the Secretary
of ▇▇▇▇, in the Business and ▇▇▇▇▇▇▇▇▇ has agreed to accept that employment,
subject to the terms and conditions set out in this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, for valuable consideration, the
parties mutually agree as follows:
10
1. EMPLOYMENT
1.1 Subject to the terms and conditions of this Agreement, the Company
employs ▇▇▇▇▇▇▇▇▇ to perform the duties set out in section 2.1 (the "Duties").
1.2 ▇▇▇▇▇▇▇▇▇'▇ obligation to perform the Duties and the Company's
obligation to pay the remuneration to ▇▇▇▇▇▇▇▇▇ will commence on September 20,
1999 (the "Effective Date") and will continue until December 31, 1999 unless
earlier terminated in accordance with Article 5 of this Agreement (the "Term").
2. DUTIES
2.2 ▇▇▇▇▇▇▇▇▇ will use her best efforts to act as an auction cashier,
responsible for the collection and deposit of all monies received from the
auction sales and the accounting of the items sold with payments to the proper
auction consigners.
2.2 ▇▇▇▇▇▇▇▇▇ will perform the Duties in a diligent, professional, and
efficient manner to preserve and enhance the Company's corporate image and will
faithfully devote the time, effort, and ability necessary to perform the Duties.
3. REMUNERATION
3.1 The Company will pay ▇▇▇▇▇▇▇▇▇ $834 for the period September 20 to
September 30, 1999. Beginning October 1, 1999, the Company will pay ▇▇▇▇▇▇▇▇▇ at
the monthly rate of $2,500, payable in two equal instalments (less applicable
source deductions) on the 15th day (or the business day immediately before the
15th day, if the latter is not a business day) and the last business day of each
month during the Term.
4. RELATIONSHIP OF THE PARTIES
4.1 The Duties are personal in character and ▇▇▇▇▇▇▇▇▇ cannot assign
either this Agreement or any rights or benefits arising under this Agreement. In
performing the Duties, ▇▇▇▇▇▇▇▇▇ will operate as and will have the status of an
employee and will not act or hold herself out as or be an agent or partner of
the Company.
5. TERMINATION AND RENEWAL
5.2 During the Term, the Company may terminate this Agreement and the
employment of ▇▇▇▇▇▇▇▇▇ at any time for "just cause" by giving written notice to
▇▇▇▇▇▇▇▇▇. For the purpose of this Agreement, "just cause" is defined as:
(a) the wilful and continued failure by ▇▇▇▇▇▇▇▇▇ to substantially perform
the Duties 10 days after a written demand for substantial performance
is delivered to ▇▇▇▇▇▇▇▇▇, which demand specifically identifies the
manner in which ▇▇▇▇▇▇▇▇▇ has not substantially performed her duties
and responsibilities;
11
(b) any dishonesty on the part of ▇▇▇▇▇▇▇▇▇ that materially affects the
Company;
(c) the conviction of ▇▇▇▇▇▇▇▇▇ for any crime involving moral turpitude,
fraud, or misrepresentation; and
(d) any wilful and intentional act on ▇▇▇▇▇▇▇▇▇'▇ part that demonstrably
and materially injures the reputation, business, or business
relationships of the Company.
5.2 ▇▇▇▇▇▇▇▇▇ may terminate this Agreement if, without her express written
consent, the Company breaches any material terms of this Agreement and fails to
remedy that breach within 10 days of ▇▇▇▇▇▇▇▇▇'▇ written notice to the Company.
5.3 On termination of this Agreement for any reason, ▇▇▇▇▇▇▇▇▇ will
deliver to the Company all documents pertaining to the Company or its business,
including without limitation all correspondence, reports, contracts, data bases
related to the Company, and anything included in the definition of "Work
Product" set out in section 6.1.
6. CONFIDENTIALITY
6.1 All reports, documents, customer lists, concepts, and products,
together with any business contracts or any business opportunities prepared,
produced, developed, or acquired by ▇▇▇▇▇▇▇▇▇, directly or indirectly, in
connection with ▇▇▇▇▇▇▇▇▇'▇ performance of the Duties (collectively, the "Work
Product") will belong exclusively to the Company or any of its affiliates, as
appropriate (collectively, the "Ableauctions Companies"), which will be entitled
to all rights, interest, profits, or benefits in respect of the Work Product.
6.2 ▇▇▇▇▇▇▇▇▇ will not make any copies, summaries, or other reproductions
of any Work Product without the Company's express written permission, provided
that the Company permits ▇▇▇▇▇▇▇▇▇ to maintain one copy of the Work Product for
her own use.
6.3 ▇▇▇▇▇▇▇▇▇ will not disclose any information, documents, or Work
Product which ▇▇▇▇▇▇▇▇▇ develops or to which ▇▇▇▇▇▇▇▇▇ may have access by virtue
of her performance of the Duties to any person not expressly authorized in
writing by the Company for that purpose. ▇▇▇▇▇▇▇▇▇ will comply with any
directions that the Company may make to ensure the safeguarding or
confidentiality of all information, documents, and Work Product.
6.4 ▇▇▇▇▇▇▇▇▇ will not disseminate or distribute any of the Work Product
or any other written or printed information about the Ableauctions Companies or
their business to the media, members of the public, shareholders of the
Ableauctions Companies, prospective investors, members of the investment or
brokerage community, securities regulators, or any other third party, without
the Company first reviewing and approving the Work Product or other information
before dissemination or distribution.
12
6.5 ▇▇▇▇▇▇▇▇▇ will not, either directly or indirectly as a member or
associate of any person, make any use of any confidential information for the
purpose of soliciting the business of any customer or former customer of the
Ableauctions Companies, or for the purpose of appropriating any business
opportunity whatsoever available to or which might be available to the
Ableauctions Companies.
6.6 ▇▇▇▇▇▇▇▇▇ acknowledges and agrees that the confidential information is
and will be of a special and unique character, the loss of which cannot be
reasonably, readily, or accurately calculated in monetary terms. Accordingly,
the Ableauctions Companies will be entitled to injunctive or other equitable
relief to prevent or cure any breach or threatened breach of this Agreement by
▇▇▇▇▇▇▇▇▇. Resort to equitable relief, however, will not be construed to be a
waiver of any other right or remedy which the Ableauctions Companies may have
for damages or otherwise.
6.7 ▇▇▇▇▇▇▇▇▇ agrees that for a period of two years following the date of
this Agreement, she will not:
(a) encourage or entice any persons who are employees, contractors, or
suppliers of the Ableauctions Companies during the Term of this
Agreement, or who were employees, contractors, or suppliers of the
Ableauctions Companies at any time within the 30 days preceding the
date of this Agreement, to seek employment or service or contracts for
supply with persons other than the Ableauctions Companies; or
(b) offer employment or service or contracts, directly or indirectly, to
any persons who are employees, contractors, or suppliers of the
Ableauctions Companies during the Term of this Agreement, or who were
employees, contractors, or suppliers of the Ableauctions Companies at
any time within the 30 days preceding the date of this Agreement.
6.8 On termination of this Agreement, ▇▇▇▇▇▇▇▇▇ will furnish to the
Company a certificate in a form approved by the Company's solicitors which
declares that ▇▇▇▇▇▇▇▇▇ has not:
(a) divulged, disclosed, distributed, or otherwise made available to any
person any confidential information; or
(b) reproduced or made any use whatsoever of any confidential information;
or
(c) acted contrary to the provision of the above; except with the
Company's prior written consent.
The remedies afforded to the Ableauctions Companies by this Agreement will be
cumulative and not alternative and will be in addition to and not in
substitution for any other rights and remedies available to the participants at
law or in equity, including the remedy of injunctive relief.
13
7. NON-COMPETITION CLAUSE
7.1 ▇▇▇▇▇▇▇▇▇ agrees with the Company that she will not, except as an
employee of the Company or any of its affiliates:
(a) at any time during the Term or any other association with an
affiliated company and during any notice period while ▇▇▇▇▇▇▇▇▇ is
receiving remuneration from the Company or an affiliated company, or
(b) for a period of two years, where the Term or the association of
▇▇▇▇▇▇▇▇▇ with an affiliated company is terminated for whatever
reason,
either individually or in a partnership or jointly or in conjunction with any
person, firm, corporation, government, association, or syndicate (a "Business
Entity") as principal, agent, employee, director, officer, consultant, or in any
other manner, carry on or be engaged in any Business Entity engaged in or
concerned with or interested in the Business or any other business of the
Ableauctions Companies within the Lower Mainland of British Columbia.
8. NOTICES
8.1 Any notices to be given by either party to the other will be
sufficiently given if delivered personally or transmitted by facsimile or if
sent by registered mail, postage prepaid, to the parties at their respective
addresses shown on the first page of this Agreement, or to any other addresses
as the parties may notify to the other from time to time in writing. This notice
will be deemed to have been given at the time of delivery, if delivered in
person or transmitted by facsimile, or within three business days from the date
of posting if mailed from Vancouver, British Columbia.
9. FURTHER ASSURANCES
9.1 Each party will at any time and from time to time, at the other's
request, sign and deliver other documents and do other things that the other
party may reasonably request to carry out and give full effect to the terms,
conditions, and intent of this Agreement.
10. ENUREMENT
10.1 This Agreement will enure to the benefit of and be binding on the
parties to this Agreement and their respective personal representatives,
successors, and permitted assigns.
14
11. LAW
11.1 This Agreement will be governed by and construed in accordance with
the laws of British Columbia and the parties irrevocably attorn to the courts of
British Columbia.
IN WITNESS WHEREOF the parties have signed this Agreement as of the date
written on the first page of this Agreement.
ABLE AUCTIONS (1991) LTD.
Per:
---------------------------------
Authorized Signatory
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective the 20th day of September, 1999.
BETWEEN:
ABLE AUCTIONS (1991) LTD., a company incorporated under the
laws of British Columbia and having its head office located
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Company")
OF THE FIRST PART
AND:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
("▇▇▇▇▇▇▇▇▇")
OF THE SECOND PART
WHEREAS:
A. The Company is an auctioneer and liquidator of a broad range of office
equipment, furniture, and industrial equipment;
B. Under an asset purchase agreement dated for reference September 20, 1999 (the
"Asset Purchase Agreement"), the Company purchased all of the property, assets,
and undertaking of the business of ▇▇▇▇ Auctioneers & Appraisers Ltd. ("▇▇▇▇"),
being the auction of tools, vehicles, industrial equipment, government surplus
equipment, and police seized goods (the "Business");
E. Pursuant to the Asset Purchase Agreement, the Business became a division of
the Company effective September 20, 1999; and
D. The Company has agreed to continue to employ ▇▇▇▇▇▇▇▇▇ in the Business and
▇▇▇▇▇▇▇▇▇ has agreed to accept that employment, subject to the terms and
conditions set out in this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, for valuable consideration, the
parties mutually agree as follows:
16
1. EMPLOYMENT
1.1 Subject to the terms and conditions of this Agreement, the Company
employs ▇▇▇▇▇▇▇▇▇ to perform the duties set out in section 2.1 (the "Duties").
1.2 ▇▇▇▇▇▇▇▇▇'▇ obligation to perform the Duties and the Company's
obligation to pay the remuneration to ▇▇▇▇▇▇▇▇▇ will commence on September 20,
1999 (the "Effective Date") and will continue until September 30, 2004 unless
earlier terminated in accordance with Article 5 of this Agreement (the "Term").
1.3 The Company may, at its option, renew this Agreement at the end of the
Term for an additional term or as negotiated by the parties. If the Company
elects not to renew this Agreement at the end of the Term, the Company will pay
the sum of $20,000 to ▇▇▇▇▇▇▇▇▇ on the last business day of the Term.
2. DUTIES
2.3 ▇▇▇▇▇▇▇▇▇ will use his best efforts to serve the Company as manager of
industry operations and, in that capacity, will perform any duties and exercise
any powers that may from time to time be directed by the Company's Board of
Directors, subject always to the control and direction of the Board.
2.2 ▇▇▇▇▇▇▇▇▇ will perform the Duties in a diligent, professional, and
efficient manner to preserve and enhance the Company's corporate image and will
faithfully devote the time, effort, and ability necessary to perform the Duties.
3. REMUNERATION
3.1 The Company will pay ▇▇▇▇▇▇▇▇▇ $1,668 for the period September 20 to
September 30, 1999. Beginning October 1, 1999, the Company will pay ▇▇▇▇▇▇▇▇▇ at
the monthly rate of $5,000, payable in two equal instalments (less applicable
source deductions) on the 15th day (or the business day immediately before the
15th day, if the latter is not a business day) and the last business day of each
month during the Term.
3.2 The Company will pay all reasonable expenses actually and properly
incurred by ▇▇▇▇▇▇▇▇▇ in connection with his performance of the Duties against
delivery to the Company of invoices evidencing those expenses.
3.3 The Company will pay ▇▇▇▇▇▇▇▇▇ a cash bonus as follows:
(a) $10,000 if gross revenues from the Business in any fiscal year of the
Company are at least CDN$1,500,000; or
(b) $25,000 if gross revenues from the Business in any fiscal year of the
Company are at least CDN$2,500,000,
17
payable within 14 days of the date of completion of the audit and Board approval
of the Company's financial statements for that fiscal year.
4. RELATIONSHIP OF THE PARTIES
4.1 The Duties are personal in character and ▇▇▇▇▇▇▇▇▇ cannot assign
either this Agreement or any rights or benefits arising under this Agreement. In
performing the Duties, ▇▇▇▇▇▇▇▇▇ will operate as and will have the status of an
employee and will not act or hold himself out as or be an agent or partner of
the Company.
5. TERMINATION AND RENEWAL
5.3 During the Term, the Company may terminate this Agreement and the
employment of ▇▇▇▇▇▇▇▇▇ at any time for "just cause" by giving written notice to
▇▇▇▇▇▇▇▇▇. For the purpose of this Agreement, "just cause" is defined as:
(a) the wilful and continued failure by ▇▇▇▇▇▇▇▇▇ to substantially perform
the Duties 10 days after a written demand for substantial performance
is delivered to ▇▇▇▇▇▇▇▇▇, which demand specifically identifies the
manner in which ▇▇▇▇▇▇▇▇▇ has not substantially performed his duties
and responsibilities;
(b) any dishonesty on the part of ▇▇▇▇▇▇▇▇▇ that materially affects the
Company;
(c) the conviction of ▇▇▇▇▇▇▇▇▇ for any crime involving moral turpitude,
fraud, or misrepresentation; and
(d) any wilful and intentional act on ▇▇▇▇▇▇▇▇▇'▇ part that demonstrably
and materially injures the reputation, business, or business
relationships of the Company.
5.2 ▇▇▇▇▇▇▇▇▇ may terminate this Agreement if, without his express written
consent, the Company breaches any material terms of this Agreement and fails to
remedy that breach within 10 days of ▇▇▇▇▇▇▇▇▇'▇ written notice to the Company.
5.3 On termination of this Agreement for any reason, ▇▇▇▇▇▇▇▇▇ will
deliver to the Company all documents pertaining to the Company or its business,
including without limitation all correspondence, reports, contracts, data bases
related to the Company, and anything included in the definition of "Work
Product" set out in section 6.1.
6. CONFIDENTIALITY
6.1 All reports, documents, customer lists, concepts, and products,
together with any business contracts or any business opportunities prepared,
produced, developed, or acquired by ▇▇▇▇▇▇▇▇▇, directly or indirectly, in
connection with ▇▇▇▇▇▇▇▇▇'▇ performance of the Duties (collectively, the "Work
Product") will belong exclusively to the Company or any of its affiliates, as
appropriate (collectively, the "Ableauctions Companies"), which will be entitled
to all rights,
18
interest, profits, or benefits in respect of the Work Product.
6.2 ▇▇▇▇▇▇▇▇▇ will not make any copies, summaries, or other reproductions
of any Work Product without the Company's express written permission, provided
that the Company permits ▇▇▇▇▇▇▇▇▇ to maintain one copy of the Work Product for
his own use.
6.3 ▇▇▇▇▇▇▇▇▇ will not disclose any information, documents, or Work
Product which ▇▇▇▇▇▇▇▇▇ develops or to which ▇▇▇▇▇▇▇▇▇ may have access by virtue
of his performance of the Duties to any person not expressly authorized in
writing by the Company for that purpose. ▇▇▇▇▇▇▇▇▇ will comply with any
directions that the Company may make to ensure the safeguarding or
confidentiality of all information, documents, and Work Product.
6.4 ▇▇▇▇▇▇▇▇▇ will not disseminate or distribute any of the Work Product
or any other written or printed information about the Ableauctions Companies or
their business to the media, members of the public, shareholders of the
Ableauctions Companies, prospective investors, members of the investment or
brokerage community, securities regulators, or any other third party, without
the Company first reviewing and approving the Work Product or other information
before dissemination or distribution.
6.5. ▇▇▇▇▇▇▇▇▇ and his agents, employees, consultants, or associates
(collectively, the "▇▇▇▇▇▇▇▇▇ Associates") will not, during the Term and for one
year following termination of the Term, either directly or indirectly as a
member or associate of any person, make any use of any confidential information
for the purpose of soliciting the business of any customer or former customer of
the Ableauctions Companies, or for the purpose of appropriating any business
opportunity whatsoever available to or which might be available to the
Ableauctions Companies. The term "associates" as used above will have the
meaning ascribed to it in the Company Act (British Columbia).
6.6 ▇▇▇▇▇▇▇▇▇ acknowledges and agrees that the confidential information is
and will be of a special and unique character, the loss of which cannot be
reasonably, readily, or accurately calculated in monetary terms. Accordingly,
the Ableauctions Companies will be entitled to injunctive or other equitable
relief to prevent or cure any breach or threatened breach of this Agreement by
▇▇▇▇▇▇▇▇▇. Resort to equitable relief, however, will not be construed to be a
waiver of any other right or remedy which the Ableauctions Companies may have
for damages or otherwise.
6.7 ▇▇▇▇▇▇▇▇▇ agrees that during the Term and for one year following the
termination of the Term, neither he nor any of the ▇▇▇▇▇▇▇▇▇ Associates will:
(a) encourage or entice any persons who are employees, contractors, or
suppliers of the Ableauctions Companies during the Term of this
Agreement, or who were employees, contractors, or suppliers of the
Ableauctions Companies at any time within the 30 days preceding the
date of this Agreement, to seek employment or service or contracts for
supply with persons other than the Ableauctions Companies; or
19
(b) offer employment or service or contracts, directly or indirectly, to
any persons who are employees, contractors, or suppliers of the
Ableauctions Companies during the Term of this Agreement, or who were
employees, contractors, or suppliers of the Ableauctions Companies at
any time within the 30 days preceding the date of this Agreement.
6.8 On termination of this Agreement, ▇▇▇▇▇▇▇▇▇ will furnish to the
Company a certificate in a form approved by the Company's solicitors which
declares that ▇▇▇▇▇▇▇▇▇ has not:
(a) divulged, disclosed, distributed, or otherwise made available to any
person any confidential information; or
(b) reproduced or made any use whatsoever of any confidential information;
or
(c) acted contrary to the provision of the above; except with the
Company's prior written consent.
The remedies afforded to the Ableauctions Companies by this Agreement will be
cumulative and not alternative and will be in addition to and not in
substitution for any other rights and remedies available to the participants at
law or in equity, including the remedy of injunctive relief.
7. NON-COMPETITION CLAUSE
7.1 ▇▇▇▇▇▇▇▇▇, on his own behalf and on behalf of the ▇▇▇▇▇▇▇▇▇ Associates
except for ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇, agrees with the Company that he will
not, except as an employee of the Company or any of its affiliates:
(a) at any time during the Term or any other association with an
affiliated company and during any notice period while ▇▇▇▇▇▇▇▇▇ is
receiving remuneration from the Company or an affiliated company, or
(b) for a period of one year, where the Term or the association of
▇▇▇▇▇▇▇▇▇ with an affiliated company is terminated for whatever
reason,
either individually or in a partnership or jointly or in conjunction with any
person, firm, corporation, government, association, or syndicate (a "Business
Entity") as principal, agent, employee, director, officer, consultant, or in any
other manner, carry on or be engaged in any Business Entity engaged in or
concerned with or interested in the Business or any other business of the
Ableauctions Companies within the Lower Mainland of British Columbia.
20
8. NOTICES
8.1 Any notices to be given by either party to the other will be
sufficiently given if delivered personally or transmitted by facsimile or if
sent by registered mail, postage prepaid, to the parties at their respective
addresses shown on the first page of this Agreement, or to any other addresses
as the parties may notify to the other from time to time in writing. This notice
will be deemed to have been given at the time of delivery, if delivered in
person or transmitted by facsimile, or within three business days from the date
of posting if mailed from Vancouver, British Columbia.
9. FURTHER ASSURANCES
9.1 Each party will at any time and from time to time, at the other's
request, sign and deliver other documents and do other things that the other
party may reasonably request to carry out and give full effect to the terms,
conditions, and intent of this Agreement.
10. ENUREMENT
10.1 This Agreement will enure to the benefit of and be binding on the
parties to this Agreement and their respective personal representatives,
successors, and permitted assigns.
11. LAW
11.1 This Agreement will be governed by and construed in accordance with
the laws of British Columbia and the parties irrevocably attorn to the courts of
British Columbia.
IN WITNESS WHEREOF the parties have signed this Agreement as of the date
written on the first page of this Agreement.
ABLE AUCTIONS (1991) LTD.
Per:
---------------------------------
Authorized Signatory
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇