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Exhibit 6(J)
INTERIM MANAGEMENT AGREEMENT
THIS AGREEMENT dated as of August 30, 1996
BETWEEN:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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of the Township of Madoc, County of Hastings, Ontario
(hereinafter referred to as "▇▇▇▇")
OF THE FIRST PART
- and -
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ HOUSTON
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of the Township of Madoc, County of Hastings, Ontario
(hereinafter referred to as "Houston")
OF THE SECOND PART
- and -
E. ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------
of the Township of Madoc, County of Hastings, Ontario
(hereinafter referred to as "▇▇▇▇▇▇")
OF THE THIRD PART
- and -
NICHOLLS INVESTMENTS INC.
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(hereinafter referred to as "Nicholls")
OF THE FOURTH PART
- and -
237894 ONTARIO LIMITED
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a corporation duly incorporated under the laws of the Province of Ontario
(hereinafter called the "237894")
OF THE FIFTH PART
- and -
GRENVILLE AGGREGATE SPECIALITIES LIMITED
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a corporation duly incorporated under the laws of the Province of Ontario
(hereinafter referred to as "Grenville")
OF THE SIXTH PART
- and -
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AMERICAN STONE INDUSTRIES, INC.
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a corporation duly incorporated under the laws of the State of Delaware
(hereinafter called the "Purchaser")
OF THE SEVENTH PART
-and-
AMERICAN STONE INDUSTRIES, INC.
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a corporation duly incorporated under the laws of the Province of Ontario
(hereinafter called the "Corporation")
OF THE EITHTH PART
WHEREAS Grenville and 273984 (Grenville and 273984 together with Nash, Artuso,
Houston and Nicholls are collectively referred to herein as the "Vendors" and
individually as a "Vendor") are the sole shareholders of the Corporation, a
corporation duly incorporated under the Laws of the Providence of Ontario;
AND WHEREAS ▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ are the sole shareholders of 237894;
AND WHEREAS Houston is the sole shareholder of Grenville;
AND WHEREAS the Purchaser and the Vendors are currently negotiating for the
Purchaser to purchase either all of the shares of the Corporation from each
Vendor or, alternatively, to purchase all of the shares of 237894 and all of the
shares of Grenville from the Vendors together with certain other transactions so
as to obtain control of all of the shares and assets of the Corporation (the
sale of shares of any of these companies in furtherance of this objective shall
be referred to as the "Sale of the Shares");
AND WHEREAS the parties have exchanged various draft documentation and proposals
to this date but the Sale of the Shares will not be finalized on or before
August 31, 1996;
AND WHEREAS the parties intend to enter into an Agreement of Purchase and Sale
with respect to the Sale of the Shares (referred to herein sometimes as the
"Purchase Agreement"), on or before September 6, 1996 or such later date as may
be agreed to by the parties in writing (the "Agreement Signing Date")
AND WHEREAS the parties wish to have the Purchaser assume joint control of the
Corporation from and after August 31, 1996 (the "Effective Date") in
anticipation of the completion of the Sale of the Shares hereinbefore referred
to (the date of the completion of the Sale of the Shares as referred to herein
as the ("Closing");
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NOW THEREFORE in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt and sufficiency whereof each
of the parties hereto hereby acknowledges, the parties hereto covenants and
agree as follows:
1. RECITALS. The above recitals are true.
2. MANAGEMENT. The Corporation hereby retains the Purchaser as co-manager
of the Corporation with the intent that the Vendor and the Purchaser
will both act in the management of the Corporation. All material
decisions with respect to the operation of the Corporation during the
term of this Agreement shall require the consent of both the Purchaser
and ▇▇▇▇ or Houston on behalf of the Vendors. The Purchaser shall
assume co-management of the Corporation from and after the Effective
Date, as agent of the Vendors and the Corporation, and as agents, shall
have the full power to conduct the business of the Corporation as if it
were the Corporation, provided that any action that will result in a
material adverse change in the affairs of the Corporation will require
the consent of the Vendors, which may be unreasonably withheld. The
Vendors agree to execute such other documentation as may be necessary
to give effect to agency. The Purchaser shall be entitled to set up
separate bank accounts for the management of the Corporation from and
after the Agreement Execution Date. From and after the Effective Date
until the Agreement Execution Date, ▇▇▇▇ and Houston shall be entitled
to collect their standard salaries (without bonus or other additional
payment) but after the Agreement Execution Date the Corporation shall
make no further payments to either ▇▇▇▇ or Houston except as
specifically agreed between the parties. ▇▇▇▇ and Houston shall be
entitled to attend at the Corporation offices until the closing of the
Sale of the Shares to assure that the Corporation is being run in
accordance with this agreement and good management practices and to
participate as co- managers of the Corporation.
3. PURCHASER COVENANTS. The parties hereby agree to manage and operate the
Corporation in a good and prudent manner, provided that either party
may, but shall not be obligated to, add any further capital by cash or
otherwise to the Corporation as they deem necessary provided both
parties agree
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to the addition of capital. The Vendors agree to leave the sum of
$25,000.00 (the "Float") in the existing Corporation bank accounts to
fund the operation of the Corporation prior to Closing.
4. APPLICATION OF PROCEEDS. All costs of operation, including all taxes
and all sale proceeds and other income accrued and collected up to the
day prior to the Effective Date shall be to the account of the Vendors.
All proceeds from the sale of inventory and other operations of the
Corporation from and after the Effective Date and during the term of
This Agreement shall be to the account of both parties and shall be
applied in the following priority:
a) firstly, payment of all operating expenses (including, without
limitation, operating costs, rent interest charges and taxes,
actual reasonable out of pocket expenses of the Purchaser in
operating the Corporation, refunding of the Float to the
Vendors and payment of the salaries of ▇▇▇▇ and Houston,
provided that there shall be no management fees paid to the
Purchaser or any manager appointed by the Purchaser and the
Purchaser shall not be entitled to reimbursement for travel,
accommodation or other similar costs related to co-management
of the Corporation;
b) secondly, repayment of any capital additions made with the
agreement of both parties, during the term of Agreement; and
c) lastly, all remaining funds (the "Profits") shall be to the
account of the Purchaser, but shall be held in trust by the
Purchaser pending completion of the Sale of the Shares and
shall be subject to the provisions hereinafter set out.
5. PROFIT DISTRIBUTION UPON TERMINATION. Upon Closing the parties agree
that this Agreement shall terminate and all Profits shall be to the
account of the Purchaser and shall be fully available to the Purchaser
upon completion of the Sale of the Shares. In the event that the
Purchase Agreement has not been executed by both parties by the
Agreement Execution Date arrangement created herein forthwith upon
written notice, and all profits shall be paid to the Vendors or as they
direct. In the event that the Sale of the Shares has not been completed
by October 31, 1996 (the "Termination Date") then either party may
terminate this Agreement and the co-management arrangement created
herein forthwith upon written notice. In the event of a termination of
this agreement for reasons other than a completion of Sale of the
Shares or for reasons other than a termination for failure to
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execute the Purchase Agreement by the Agreement Execution Date, then
all Profits shall be divided equally between the Vendors (who shall
collectively receive a fifty per cent share) and the Purchaser (who
shall receive a fifty per cent share). The parties agree that the
Profits shall be paid out no later than ninety days after the Purchaser
have surrendered control of the Corporation to the Vendors. The
Purchaser shall provide a full accounting to the Vendors of all
transactions conducted by the Purchaser during the term of this
Agreement upon request of the Vendors. At Closing, the Corporation and
the Purchaser shall jointly and severally pay to the Vendors an amount
equal to the Float less any refund of the Float already paid to the
Vendors pursuant to Section 4(a) above.
6. GAAP. The parties agree that all accounts and bookkeeping shall be
performed in accordance with generally accepted accounting principles
and procedures in use in the Province of Ontario. The Purchaser agrees
to keep separate books and bank accounts for all operations pertaining
to the Corporation.
7. INDEMNITIES. The parties agree that they shall cooperate
reasonably in order to complete the Sale of the Shares and shall
fulfill their obligations here fully and in good faith, and that
each shall indemnify the other for any breach of covenant. 237984 and
Grenville and the Corporation hereby agree that they shall jointly and
severally indemnify the Purchaser from any action, claim or liability
of the Corporation which arises for reasons other than the wilful,
omission or negligence of the Purchaser. The Purchaser agrees to
indemnify the Vendors and the Corporation from any liability or claim
that arises from the wilful act, omission or negligence of the
Purchaser during the term of this Agreement (unless such act or
omission or negligence was approved by the Vendors in writing). These
indemnities shall survive the termination of Agreement.
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8. RELATIONSHIP. Nothing herein is intended to create any relationship
between the parties other than a co-management relationship except as
specifically set out herein. The parties specifically agree that
they are not partners or joint ventures.
9. NOTICE. The parties agree that any notice to be given under this
agreement may be sent by personal delivery or telephone transmitted
facsimile ("Fax") to the following address. Such notice shall be deemed
delivered on the day of personal delivery, the day of Faxing if Faxed
prior to 4:30 p.m on a business day.
To the Vendors
c/o Stoklosar Marble Quarries Limited
Box 389
Madoc, Ontario
KOK 2KO
With a Copy To:
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ 6L5
▇▇▇-▇▇▇-▇▇▇▇ (Fax)
To the Purchaser
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
FAX ▇▇▇ ▇▇▇ ▇▇▇▇
10. GOVERNING LAW. This agreement shall be construed and interpreted in
accordance with the laws of the Province of Ontario and the laws of
Canada in force therein and the parties agree to submit any dispute
arising out of this agreement to the courts of such Province.
11. FURTHER ASSURANCES. The parties hereto agree to sign or execute such
other deeds and documents and do such other things as may be necessary
or desirable for more completely and effectually carrying
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out the terms and intention of this agreement The parties agree to act
reasonably and in good faith with the intent of completing the Purchase
Agreement and the Closing.
12. SUCCESSORS AND ASSIGNS. This agreement shall enure to the benefit of
and be binding upon the parties hereto and their respective successors
and assigns, provided that this agreement shall not be assigned by
either party without the express written consent of the other party.
The obligations of the Vendors hereunder shall be joint and several.
13. TIME. shall be of the essence of this agreement.
14. ENTIRE AGREEMENT. This Agreement is intended to represent the entire
agreement between the parties.
15. FAX EXECUTION. This agreement may be executed in counter part by fax
and shall be binding on any party so signing. The parties agree to
exchange original signed copies as soon as possible thereafter.
IN WITNESS WHEREOF THE PARTIES HERETO HAVE EXECUTED AND DELIVERED THIS AGREEMENT
AS OF THE TIME AND DATE FIRST ABOVE WRITTEN.
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Witness ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------- ---------------------------------
Witness ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ HOUSTON
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Witness E. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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NICHOLLS INVESTMENTS INC.
By:
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I have authority to bind the corporation.
AMERICAN STONE INDUSTRIES,
INC.
By:
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By:
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I/we have authority to bind the corporation.
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GRENVILLE AGGREGATE
SPECIALITIES LIMITED
By:
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By:
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I/we have authority to bind the corporation.
237894 ONTARIO LIMITED
By:
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By:
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I/we have the authority to bind the corporation.
STOKLOSAR MARBLE QUARRIES
LIMITED
By:
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By:
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I/we have the authority to bind the corporation.
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