MEMORANDUM OF AGREEMENT made the 14th day of July, 1998.
B E T W E E N :
WESTERN INBOUND NETWORK INC., a corporation incorporated under the laws of
Canada
(hereinafter referred to as the "Vendor"),
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COMMSTAR LTD., a corporation incorporated under the laws of Ontario
(hereinafter referred to as the "Purchaser"),
APPLIED CELLULAR TECHNOLOGY, INC., a corporation incorporated under the
laws of the State of Missouri (hereinafter referred to as "ACT")
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3189309 CANADA INC., a corporation incorporated under the laws of Canada,
3189287 CANADA INC., a corporation incorporated under the laws of Canada,
3189295 CANADA INC., a corporation incorporated under the laws of Canada,
3132455 CANADA INC. a corporation incorporated under the laws of Canada,
(hereinafter collectively referred to as the "Shareholders" and
individually as a "Shareholder")
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RECITALS:
WHEREAS the Vendor is in the business of, inter alia, providing telephone
answering, paging dispatch, and inbound and outbound marketing services in the
Province of British Columbia (the "Purchased Business");
AND WHEREAS the Purchaser wishes to purchase and the Vendor wishes to sell
to the Purchaser, as a going concern, all of the assets of the Purchased
Business (the "Purchased Assets");
THIS AGREEMENT WITNESSETH that for and in consideration of the mutual
covenants and agreements herein contained, it is agreed by and between the
parties hereto as follows:
1. Defined Terms
Where used herein or in any amendments hereto, the following terms shall
have the following meanings respectively:
1.1 "ACT Shares" means common shares of ACT listed for trading on
NASDAQ;
"Accounts Receivable" means the accounts receivable of the
Purchased Business as set forth on the Closing Financial Statements;
"Adjustment Conferences means the meetings between the Purchaser
and the Vendor held on August 20, 1998 (the "First Adjustment
Conference") and October 15, 1998 (the "Second Adjustment
Conference"), or as otherwise agreed to by the parties, for the
purpose of making the Adjustments;
"Adjustments" has the meaning ascribed thereto in Section 4.2
hereof;
"Agreement" means this Agreement and any written amendment or
alteration thereto and the expressions "herein", "hereto",
"hereunder", "hereof" and similar expressions refer to this Agreement;
"Average Trading Price" means the average trading price for the
last trade of the ACT Shares for the 19 days immediately preceding the
Conversion Date;
"Base Price" has the meaning ascribed thereto in Section 4.1
hereof;
"B.C. Tel Right of First Refusal" means the right of first
refusal of 403805 to purchase the Purchased Assets; such right was not
exercised by 403805 on or before June 13, 1998 as required and has
expired subject to the transaction of purchase and sale of the
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Purchase Assets contemplated herein being completed by no later than
August 12, 1998, failing which the right of first refusal revives;
"Branch Operations" means the locations described in Schedule B;
"Closing" means the closing of the transaction relating to the
purchase and sale of the Purchased Assets;
"Closing Date" means July 31, 1998 or such other date as the
Vendor and Purchaser may agree, provided that any such date shall be a
month end;
"Closing Financial Statements" means the unaudited financial
statements of the Purchased Business as at the Closing Date prepared
by the Vendor in accordance with generally accepted accounting
principles applied on a basis consistent with prior years;
"Commission" means the United States Securities and Exchange
Commission;
"Contracts" means the agreements set out in Schedule C;
"Conversion Date" means the second (2nd) day prior to the Closing
Date;
"Employee Commitments" has the meaning ascribed thereto in
Section 7.20;
"Environmental Law" means any statute, code, by-law, regulation,
published policy, permit, consent, approval, licence, judgment, order,
writ, judicial decision, common law rule (including without limitation
the common law respecting nuisance and tortious liability) decree,
agency interpretation, injunction, agreement or authorization or
requirement whether federal, provincial, territorial or municipal
related, but not limited to all hazardous substances, wastes,
pollutants, contaminates, or hazardous materials regulated by or
defined, designated or classified under any federal or provincial
statute as of the date of this Agreement;
"Equipment" means the equipment described in Schedule A;
"Exchangeable Shares" means those shares of the Purchaser having
the attributes set forth in Schedule M;
" Execution Date" means the date first written above;
"Financial Statements" means the unaudited financial statements
of the Purchased Business as at November 30, 1997 prepared by the
Vendor in accordance with generally accepted accounting principles
applied on a consistent basis with prior years, a copy of which are
annexed hereto as Schedule F;
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"Interim Period" means the period between the close of business
on the Execution Date and the Time of Closing on the Closing Date;
"June Financial Statements" means the unaudited financial
statements of the Purchased Business as at June 30, 1998 prepared in
accordance with generally accepted accounting principles applied on a
consistent a basis with prior years;
"Lease" means a real property leasehold interest in a Branch
Operation;
"NASDAQ" means The National Market of the National Association of
Securities Dealers Automated Quotation System;
"Purchase Price" has the meaning ascribed thereto in Section 4.1
hereof;
"Purchased Assets" has the meaning ascribed thereto in Section
3.1 hereof;
"Purchased Business" has the meaning given in the first recital;
"Registration Statement" has the meaning ascribed thereto in
Section 10.1 hereof;
"Securities Act" means The United States Securities Act of 1933,
as amended;
"Schedule E" means that Schedule of employees of the Vendor as at
the date hereof attached hereto, as amended and accepted by the
Purchaser at Closing.
"Shareholders" means the shareholders of the Vendor listed in
Schedule I;
"Statement of Adjustments" means a statement of the Adjustments
approved by the Vendor and the Purchaser, in writing, as at each of
the Adjustment Conferences;
"Time of Closing" means 2:00 p.m. (Eastern Daylight Time) on the
Closing Date;
"Vendor's Notice" has the meaning ascribed thereto in subsection
5.2 (a) hereof;
"403805" means 403805 B.C. Ltd., a subsidiary of B.C. Mobile Ltd.
1.2 All dollar amounts referred to in this Agreement are in Canadian funds.
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2. Schedules
The following are the Schedules attached to and incorporated in this
Agreement by reference and deemed to be part hereof.
Schedule A - Equipment
Schedule B - Branch Operations and related Leases
Schedule C - Contracts
Schedule D - Intellectual Property and Trade Names
Schedule E - Employees
Schedule F - Financial Statements
Schedule G - Environmental Matters
Schedule H - Employment Agreements and Collective Agreements
Schedule I - List of Shareholders of the Vendor
Schedule J - Consents
Schedule K - Outstanding Agreements
Schedule L - Litigation
Schedule M - Provisions attached to Exchangeable Shares
Schedule N - Non-Competition Agreement
3. Property and Assets to be Purchased and Sold
3.1 Subject to the terms and conditions hereof, the Vendor agrees to sell,
assign and transfer to the Purchaser and the Purchaser agrees to purchase from
the Vendor as a going concern, all of the assets (the "Purchased Assets") of the
Vendor used in or relating to the Purchased Business of every kind and
description and wheresoever located, including, without limiting the generality
of the foregoing:
(a) all telephone answering service equipment, computers, software,
call centre and paging dispatch equipment, furniture, fixtures and
miscellaneous office supplies used in the Purchased Business (the
"Equipment") all as more particularly set forth in Schedule A hereto;
(b) all Leases in respect of those Branch Operations and locations of
the Vendor as set forth in Schedule B hereto;
(c) all contracts (including subscriber contracts), leases, customer
lists, licenses, telephone numbers, books and records of or pertaining to
the Purchased Business as set out in Schedule C (the"Contracts");
(d) all Accounts Receivable and the full benefit of all securities for
such accounts, notes or debts;
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(e) the full benefit of all other contracts, engagements or
commitments to which the Vendor is entitled in connection with the
Purchased Business, whether written or oral, including the full benefit and
advantage of all forward commitments by the Vendor for supplies or
materials entered into in the ordinary course of the Purchased Business for
use in the Purchased Business whether or not there are any contracts with
respect thereto other than the Contracts;
(f) all the right, title, benefit and interest of the Vendor in and to
all registered or unregistered trade marks, trade or brand names, service
marks, copyrights, designs, inventions, patents, patent applications,
patent rights (including any patents issuing on such applications or
rights), licences, sub-licences, franchises, formulae, processes,
technology and other industrial property of or pertaining to the Purchased
Business or owned by the Vendor, including all restrictive agreements and
negative covenant agreements which the Vendor may have with its employees,
past or present as more particularly set forth on Schedule D hereto;
(g) prepaid expenses;
(h) the goodwill of the Purchased Business, together with the
exclusive right to the Purchaser to represent itself as carrying on the
Purchased Business in continuation of and in succession to the Vendor and
the right to use any words indicating that the Purchased Business is so
carried on, including the exclusive rights to use the Trade Names (a
complete list of which is set forth on Schedule D hereto) or any variation
thereof, as part of the name of or in connection with the Purchased
Business or any part thereof carried on or to be carried on by the
Purchaser; and
(i) all other property, assets and rights, real or personal, tangible
or intangible, owned by the Vendor or to which it is entitled in connection
with the Purchased Business save and except for cash on hand and in banks,
and an interest in Aval Communications Inc.
4. Purchase Price and Allocation Thereof
4.1 The total purchase price for the Purchased Assets (the "Purchase
Price") shall be equal to the sum of $2,000,000 (the "Base Price") adjusted in
accordance with the adjustments (the "Adjustments") set forth in section 4.2 and
shall be payable as provided in section 5.1.
4.2 (a) The Base Price shall be adjusted on the following basis:
(i) the following items shall be added to the Base Price:
(A) the Accounts Receivable as at the Closing Date, at the
stated book value thereof,; and
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(B) all prepaid expenses or deposits made by the Vendor as
at the Closing Date that would be to the benefit of the
Purchaser in its operation of the Purchased Business
after the Closing Date, including amounts due under the
Contracts, business taxes, utility rates, rent and
property taxes, at the stated book value thereof;
(C) the billable value of all unbilled work-in-progress of
the Purchased Business as at the Closing Date;
(ii) the following items shall be deducted from the Base Price:
(A) the deferred revenue of the Purchased Business as at
the Closing Date as set forth in the Closing Financial
Statements;
(B) vacation accruals with respect to those employees
listed on Schedule E as at the Closing Date as set
forth in the Closing Financial Statements;
(C) payroll accruals (including wages, benefits and other
statutory obligations) with respect to those employees
listed on Schedule E as at the Closing Date as set
forth in the Closing Financial Statements;
(D) the Vendor's pro rata share of quarterly bonuses
payable to employees listed on Schedule E;
(E) $80,000 in respect of the obligations of the Vendor for
severance liabilities, if any, which are to be assumed
by the Purchaser;
(iii)all calculations referred to in subparagraphs (i) and (ii)
shall be determined with reference to the Closing Financial
Statements;
(b) All Adjustments shall be determined and agreed to by the Vendor
and the Purchaser at the Adjustment Conferences and the Vendor and the
Purchaser shall use their best efforts to jointly prepare the Statements of
Adjustments as at such dates.
(c) The Purchaser and the Vendor agree as follows:
(i) the Accounts Receivable collected by the Purchaser shall be
first applied against amounts owing by the Vendor to the
Purchaser in respect of the items referred to in Subsections
4.2(a)(ii)(B), (C), (D) and (E) respectively. The balance of
the Accounts Receivable, as collected, shall be remitted to
the Vendor every two weeks;
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(ii) any Accounts Receivable reflected on the Statement of
Adjustments that remain uncollected as at the date of the
Second Adjustment Conference shall be assigned and
transferred to the Vendor and an equivalent amount shall be
deducted from amounts due to the Vendor pursuant to
Subsection 4.2(a)(i)(A).
4.3 (i) The Vendor and the Purchaser covenant and agree with each other
that the Base Price shall be allocated among the Purchased Assets on the
following basis:
(A) $1,200,000 to Equipment; and
(B) $800,000 as to goodwill.
(ii) In the event that the provisions of Section 5.2 apply, the
allocation referred to in subsection 4.3(i) shall be adjusted pro rata to
reflect the change in the Purchase Price.
4.4 The Purchaser shall be responsible for all goods and services taxes and
provincial sales taxes applicable to the sale of the Purchased Assets and shall
be solely responsible for and shall pay at Closing such sales taxes and any and
all other transfer fees and taxes properly payable upon and in connection with
the conveyance and transfer of the Purchased Assets from the Vendor to the
Purchaser as contemplated herein. The Purchaser shall provide the Vendor with a
copy of all forms filed in respect of the taxes and transfer fees payable
hereunder.
5. Payment of the Purchase Price
5.1 Subject to Section 5.2, the Purchase Price shall be paid and satisfied
as follows:
(a) (i) as to $2,000,000 by the issuance from treasury at Closing of that
number of Exchangeable Shares equal to the number derived by applying
the following formula:
$2,000,000
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Average Trading Price
(ii) the Average Trading Price shall be converted into Canadian
dollars at the "spot rate" set by The Toronto-Dominion Bank as at
the close of business on the business day prior to the Conversion
Date;
(iii)upon determination of the Average Trading Price and the number
of Exchangeable Shares to be delivered pursuant to subsection 5.1
(a)(i) herein, the Purchaser shall, by no later than 10 a.m.
(Eastern Daylight Time) on the Conversion Date, give written
notice of same to the Vendor (the "Exchangeable Shares Notice");
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(b) subject to subsection (c) and subject to Section 8.4(c) herein, as
to the balance of the Purchase Price as a result of the Adjustments, by
wire transfer, bank draft or certified cheque made payable to or to the
order of the Vendor. Any such payment to be made by the Purchaser shall be
made no later than two (2) business days following the Second Adjustment
Conference;
(c) in the event that after making the Adjustments the Purchase Price
is less than $2,000,000 the Vendor agrees to pay the amount of any such
deficiency to the Purchaser by wire transfer, bank draft or certified
cheque made payable to or to the order of the Purchaser. Any such payment
to be made by the Vendor shall be made no later than two (2) business days
following the Second Adjustment Conference.
5.2 (a) In the event that (i) on the Conversion Date the closing price for
the ACT Shares is less than $3.00 US per share or (ii) if the ACT Shares are
suspended from trading on or before the Closing Date, the Vendor may deliver
written notice to the Purchaser advising the Purchaser of same and the Vendor
may, at its sole option, give notice (the "Vendor's Notice") to the Purchaser at
any time up to 8 p.m. (Eastern Daylight Time) on the Conversion Date upon the
occurrence of the event referred to in (i) above, or at any time up to 28 hours
prior to Closing upon the occurrence of an event referred to in (ii) above that
the Purchase Price shall be satisfied in full by the payment of $1,800,000 (the
"Cash Consideration") by wire transfer, bank draft or certified cheque made
payable to or to the order of the Vendor.
(b) Upon receipt of the Vendor's Notice, the Purchaser may, in its
sole discretion, give written notice to the Vendor at any time up to 24
hours prior to Closing that either:
(i) the Purchaser does not wish to pay the Cash Consideration
(the "Purchaser's Notice"), in which event upon delivery of
the Purchaser's Notice, the transaction of the purchase and
sale of the Purchased Assets shall be deemed to be a
nullity, ab initio (but the concepts set forth in
Section 5.2(c) shall continue notwithstanding), and neither
party herein shall have any remedy against the other for
damages, costs, compensation or otherwise, or
(ii) the Purchaser wishes to pay the Cash Consideration (the
"Cash Notice"), in which event upon delivery of the Cash Notice the
Vendor shall be entitled to transfer the Purchased Assets to a newly
incorporated wholly owned subsidiary of the Vendor (the "Subsidiary")
pursuant to Section 85 of the Income Tax Act (Canada), in which event
Section 12.8 shall apply with the term "Purchaser" as used therein to
be read as "Subsidiary". In such event the Purchaser agrees to, and
the Vendor agrees to, enter into a share purchase agreement whereby
the Purchaser shall purchase and the Vendor shall sell all of the
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issued and outstanding shares in the Subsidiary (the "Share Purchase
Agreement"). The Share Purchase Agreement shall incorporate this
Agreement by reference. The Purchaser and the Vendor agree that all
terms, conditions, covenants, representations, and warranties and
indemnities contained in this Agreement shall remain in full force and
effect, mutatis mutandis.
(c) Notwithstanding subsection 5.2 (b)(i) herein, in the event that
the transaction of purchase and sale referred to herein is not completed,
the Purchaser shall not, nor shall it permit its affiliates or associates
to, directly or indirectly, whether through a corporation or otherwise,
individually or in partnership, jointly or in conjunction with any person,
firm , association, syndicate, corporation or any other entity whether as
principal, agent, employee, employer, lender or shareholder at any time
from and after the Execution Date up to the 12th month anniversary of such
date, solicit, interfere with or endeavour to entice away from the
Purchased Business any employee or customer of the Purchased Business which
is not an employee or customer of the Purchaser or its affiliates as at the
Closing Date.
The Purchaser acknowledges that the Vendor will suffer irreparable
harm if there is a breach of the foregoing provisions of subsection (c) by
the Purchaser and that the amount of damages will be difficult to ascertain
and to prove. Accordingly, if the Purchaser shall breach the terms of this
subsection, then the Vendor will have, in addition to any other remedies
available to it, the right to injunctive relief (including interlocutory
and permanent injunctive relief) enjoining such action and the Purchaser
agrees that other remedies are inadequate to fully protect the Vendor's
rights hereunder.
6. Liabilities of the Purchased Business
6.1 In accordance with Article 13 hereof, the Vendor agrees to indemnify
and save harmless the Purchaser from and against any and all actions,
proceedings, claims, losses, expenses, demands, damages, liabilities and costs
suffered or incurred by the Purchaser arising in connection with the Purchased
Business on or before the Time of Closing.
6.2 In accordance with Article 13 hereof, the Purchaser agrees to indemnify
and save harmless the Vendor from and against any and all actions, proceedings,
claims, losses, expenses, demands, damages and costs suffered or incurred by the
Vendor for the ongoing obligations and covenants of the Vendor under the
Contracts, Leases, Collective Agreements and Employee Commitments, for the
period after the Time of Closing.
7. Covenants, Representations and Warranties of the Vendor
The Vendor and each of the Shareholders jointly and severally covenants and
agrees with and represents and warrants at the date hereof as follows to the
Purchaser and acknowledges and confirms that the Purchaser is relying on such
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covenants, agreements, representations and warranties in connection with the
purchase by the Purchaser of the Purchased Assets:
7.1 Each of the Shareholders is a corporation duly incorporated and
organized and validly subsisting in good standing under the laws of Canada. Each
of the Shareholders has full corporate power and capacity to execute, deliver
and perform this Agreement. All requisite corporate and other action has been
taken by each of the Shareholders to authorize the execution, delivery and
performance of the Agreement and the consummation of the transaction
contemplated herein. This Agreement has been executed by duly authorized
officers of each of the Shareholders and constitutes a valid and binding
obligation of each of the Shareholders, enforceable against each of them in
accordance with its terms, subject to limitations with respect to enforcement
imposed by law in connection with bankruptcy or similar proceedings and to the
extent that equitable remedies such as specific enforcement and injunction are
in the discretion of the court when they are sought.
7.2 The Vendor is a corporation duly incorporated and organized and validly
subsisting in good standing under the laws of Canada; the Vendor has the
corporate power to own its property and to carry on the Purchased Business as
now being conducted by it, is duly qualified as a corporation to do business and
is in good standing in each jurisdiction in which the nature of the Purchased
Business or the Purchased Assets makes such qualification necessary.
7.3 The Vendor has full corporate power and capacity to execute, deliver
and perform this Agreement. All requisite corporate and other action has been
taken by the Vendor to authorize the execution, delivery and performance of this
Agreement and the consummation of the transaction contemplated herein. This
Agreement has been executed by duly authorized officers of the Vendor and
constitutes a valid and binding obligation of the
Vendor, enforceable against it in accordance with its terms, subject to
limitations with respect to enforcement imposed by law in connection with
bankruptcy or similar proceedings and to the extent that equitable remedies such
as specific enforcement and injunction are in the discretion of the court from
which they are sought.
7.4 The Purchased Assets are owned by the Vendor as the beneficial owner
thereof with a good and marketable title thereto, free and clear of all
mortgages, liens, charges, pledges, security interests, encumbrances or other
claims whatsoever.
7.5 No person, firm or corporation has any written or oral agreement,
option, understanding or commitment, or any right or privilege capable of
becoming an agreement, for the purchase from the Vendor of any of the Purchased
Assets, save and except for the B.C. Tel Right of First Refusal.
7.6 The Financial Statements and the June Financial Statements have been
prepared, and the Closing Financial Statements will be prepared, in accordance
with generally accepted accounting principles applied on a basis consistent with
those of previous fiscal periods and present fairly the assets, liabilities
(whether accrued, absolute, contingent or otherwise) and the financial condition
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of the Purchased Business as at November 30, 1997, June 30, 1998 and the Closing
Date, respectively, and the sales and earnings of the Purchased Business during
the periods covered by such financial statements.
7.7 Since June 30, 1998, there has been no change in the affairs, business,
prospects, operations or condition of the Purchased Business, financial or
otherwise, whether arising as a result of any legislative or regulatory change,
revocation of any licence or right to do business, fire, explosion, accident,
casualty, labour trouble, flood, drought, riot, storm, condemnation, act of God,
public force or otherwise, except changes occurring in the ordinary course of
business, which disruption and changes have not adversely affected and will not
adversely affect the organization, business, properties, prospects or financial
condition of the Purchased Business.
7.8 The Purchased Business has been carried on in the ordinary and normal
course since June 30,1998 and will be carried on in the ordinary and normal
course after the date hereof and up to the Time of Closing.
7.9 No capital expenditures except in the ordinary course of business have
been made or authorized since June 30, 1998, by the Vendor and no capital
expenditures will be made or authorized after the date hereof and up to the Time
of Closing by the Vendor without the prior written consent of the Purchaser.
7.10 The Vendor has the Purchased Assets insured against loss or damage by
all insurable hazards or risks on a replacement cost basis and such insurance
coverage will be continued in full force and effect to and including the Closing
Date.
7.11 To the Vendor's knowledge, except as set forth in Schedule G, the
Purchased Business is and has been, and the condition of all properties and
assets, including the Purchased Assets, previously owned, occupied, managed,
controlled or used by the Vendor is and was during the period of ownership,
occupancy, management, control or use by the Vendor, in compliance, in all
respects, with all Environmental Law, and the operation of Purchased Business
currently carried on does not constitute a breach of any Environmental Laws and
no claim has been made against the Vendor based on any breach or alleged breach
of an Environmental Law.
7.12 The entering into of this agreement and the transactions contemplated
hereby will not result in the violation of any of the terms and provisions of
the constating documents or by-laws of the Vendor or of any indenture or other
agreement, written or oral, to which the Vendor may be a party or by which it is
bound.
7.13 No consent of any party to any agreement, contract, commitment or
arrangement to which the Vendor is a party or by which it or any of its property
or rights are bound or affected is required in order for the Vendor to execute,
deliver and perform this Agreement, except for consents of lessors, licensors
and other co-contractants of the Vendor to the assignment to the Purchaser of
the leases, licenses, contracts and other agreements referred to in the
Schedules hereto, as indicated, complete copies of which are attached hereto as
Schedules.
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7.14 The Vendor is not a party to any real property lease or agreement in
the nature of a lease, other than as it relates to the Purchased Business,
whether as lessor or lessee, except those real property leases set forth and
described in Schedule B hereto (in which is specified the parties to each of
such leases, their dates of execution and expiry dates, the locations of the
leased lands and premises and the rental payable thereunder), and each of such
leases is in good standing and in full force and effect without amendment
thereto (save and except for extensions thereof) and to the Vendor's knowledge,
the Vendor is not in breach of any of the covenants, conditions or agreements
contained in each such lease.
7.15 Except as listed on Schedule H and Schedule K, the Vendor does not
have any outstanding agreement (including any employment agreement), contract or
commitment, whether written or oral, of any nature or kind whatsoever, except
(i) forward commitments by the Vendor for supplies or materials entered into in
the ordinary course of the Purchased Business for use in the Purchased Business,
which commitments have not more than two months to run, (ii) prepaid service
contracts on office equipment, (iii) the Leases described in Schedule B, and
(iv) the agreements and contracts described in Schedule C.
7.16 Except as set forth in Schedule L there are no actions, suits or
proceedings (whether or not purportedly on behalf of the Vendor), pending or
threatened against or affecting the Vendor at law or in equity or before or by
any federal, provincial, municipal or other governmental department, commission,
board, bureau, agency or instrumentality,
domestic or foreign. The Vendor is not now aware of any existing ground on which
any such action, suit or proceeding might be commenced with any reasonable
likelihood of success.
7.17 To the Vendor's knowledge it is not in default or breach of any
contracts, agreements, written or oral, indentures or other instruments to which
it is a party and which are referred to in this Agreement and there exists no
state of facts which after notice or lapse of time or both would constitute such
a default or breach and all such contracts, agreements, indentures or other
instruments are now in good standing and in full force and effect without
amendment thereto and the Vendor is entitled to all benefits thereunder.
7.18 To the Vendor's knowledge, neither the conduct of the Purchased
Business nor any of the Purchased Assets infringes upon the patents, trade
marks, trade names or copyrights, domestic or foreign, of any other person, firm
or corporation.
7.19 To the Vendor's knowledge, it is conducting the Purchased Business in
compliance with all applicable laws, rules and regulations of each jurisdiction
in which the Purchased Business is carried on, is not in breach of any such
laws, rules or regulations and is duly licensed, registered or qualified in each
jurisdiction in which the Vendor owns or leases property or carries on the
Purchased Business, to enable the Purchased Business to be carried on as now
conducted and its property and assets to be owned, leased and operated, and all
such licences, registrations and qualifications are valid and subsisting and in
good standing.
7.20 Except as set forth in Schedules E and H, and subject to federal and
provincial legislation, the Vendor is not a party to or bound by any collective
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bargaining agreement or written employment agreement, or any bonus, pension,
benefit, profit sharing, deferred compensation, stock purchase, stock option,
executive compensation, retirement, hospitalization, disability, insurance,
health, or medical plan or any similar program, policy or practice, formal or
informal (collectively, the "Employee Commitments"), with respect to any of its
employees engaged in the Purchased Business.
7.21 Except as referred to in Schedule H, there is no strike, work
stoppage, other material concerted action, or material dispute existing or
threatened against the Vendor nor is any union which holds bargaining rights for
employees of the Purchased Business in a legal strike position. Correct and
complete copies of all collective agreements, written employment contracts,
commitments, plans, and employment-related agreements have been provided to the
Purchaser or, where oral, correct and complete written summaries of the terms
thereof have been provided to the Purchaser, including all drafts and
preliminary agreements in the process of negotiation, and all procedures and
practices adopted but not yet reflected in written amendments. Correct and
complete copies of any collective bargaining proposals received by or provided
by the Vendor during current collective bargaining negotiations affecting the
Purchased Business and any items agreed to by the Vendor during such
negotiations are also set out in Schedule H.
7.22 Except as set forth in Schedule H, to the Vendor's knowledge:
(a) the Purchased Business and the Vendor are in compliance with all
relevant collective agreements and all applicable laws and regulations,
relating to employees of the Purchased Business, including those relating
to terms and conditions of employment, wages, hours, overtime, and any
payments due under the Employee Commitments;
(b) there are no union certifications granted with respect to any
employees of the Purchased Business, no pending applications for
certification with respect to any of the employees of the Purchased
Business, no voluntary recognition agreements signed with any union by the
Vendor with respect to the Purchased Business, nor, are any union
organizing campaigns currently in progress with respect to any employees of
the Purchased Business, nor is the Purchased Business and the Vendor with
respect to the Purchased Business engaged in any unfair labour practice;
(c) there are no outstanding actions or claims with respect to the
Employee Commitments except for payment of benefits in the ordinary course.
The Employee Commitments are in compliance in all material respects with
all applicable laws and regulations, have been administered according to
their terms, and are registered as required under any applicable law. No
events have occurred which would affect registration status, and no
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material changes have occurred which would affect the actuarial or
financial statements of the benefit plans.
(d) there are no complaints, applications, proceedings, interim
orders, or orders, involving the Purchased Business and the Vendor with
respect to the Purchased Business under any applicable labour relations
legislation, nor any liability arising out of any outstanding labour
relations board proceeding or order;
(e) there are no outstanding grievances, arbitration proceedings,
interest arbitration proceedings, pending arbitration awards or unsatisfied
arbitration awards;
(f) there are no outstanding complaints, claims, decisions, orders or
prosecutions under any applicable employment standards legislation;
(g) there are no claims or actual penalty assessments under the
Vendor's Workers' Compensation Board accounts and no outstanding
assessments as of the date of closing;
(h) there are no outstanding human rights complaints, investigations,
proceedings, decisions, or orders under any applicable human rights
legislation involving the Purchased Business and the Vendor with respect to
the Purchased Business nor has there been any discrimination or any kind
with respect to any employees working in the Purchased Business;
(i) there are no outstanding applications, complaints, investigations,
orders of Review Officers, tribunal proceedings, tribunal orders or
prosecutions under any applicable pay equity legislation involving the
Purchased Business and the Vendor with respect to the Purchased Business;
(j) there are no outstanding health and safety orders, instructions,
investigations, violations, or prosecutions under any applicable health and
safety legislation or regulations involving the Purchased Business or the
Vendor with respect to the Purchased Business and there have been no
accidents or fatalities of employees while engaged in work for the
Purchased Business within the last two years;
(k) the Vendor has complied with its obligations to make and remit all
appropriate source deductions for all employees of the Purchased Business.
7.23 All vacation pay, bonuses, commissions and other emoluments are
reflected and have been accrued in the books of account of the Vendor.
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7.24 Any and all pension plans with respect to the employees listed in
Schedule E shall, on the Closing Date, be fully funded and there shall exist no
unfunded liability thereunder.
7.25 The Equipment is in the condition required to operate the Purchased
Business, subject to normal wear and tear.
7.26 All Accounts Receivable, book debts and other debts due or accruing to
the Vendor in connection with the Purchased Business are bona fide and good and,
subject to an allowance for doubtful accounts taken in accordance with generally
accepted accounting principles applied on a basis consistent with prior years
are collectible without set-off or counterclaim.
7.27 The Vendor is resident in Canada within the meaning of the Income Tax
Act (Canada).
7.28 There are no outstanding work orders relating to the Purchased Assets
from or required by any police or fire department, sanitation, health or factory
authorities or from any
other federal, provincial or municipal authority or any matters under discussion
with any such departments or authorities relating to work orders.
7.29 The Vendor is not a party to or bound by any agreement of guarantee or
indemnification as it relates to the Purchased Business except pursuant to
purchase orders entered into in the ordinary course of the Purchased Business.
7.30 The Vendor shall deliver the June Financial Statements to the
Purchaser on or before July 15, 1998.
8. Covenants, Representations and Warranties of the Purchaser.
The Purchaser covenants and agrees with and represents and warrants as
follows to the Vendor and each of the Shareholders and acknowledges and confirms
that the Vendor and each of the Shareholders is relying on such covenants,
agreements, representations and warranties in connection with the sale by the
Vendor of the Purchased Assets:
8.1 The Purchaser is a corporation duly incorporated and organized and
validly subsisting in good standing under the laws of Ontario.
8.2 The Purchaser has full corporate power and capacity to execute, deliver
and perform this Agreement. All requisite corporate and other action has been
taken by the Board of Directors of the Purchaser to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transaction contemplated herein. This Agreement has been executed by duly
authorized officers of the Purchaser and constitutes a valid and binding
obligation of the Purchaser, enforceable against it in accordance with its
terms, subject to limitations with respect to enforcement imposed by law in
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connection with bankruptcy or similar proceedings and to the extent that
equitable remedies such as specific enforcement and injunction are in the
discretion of the court from which they are sought.
8.3 The Purchaser covenants and agrees that if the Vendor exercises the
rights attached to the Exchangeable Shares, whereby the Vendor elects to
exchange the Exchangeable Shares for ACT shares, the Purchaser shall forthwith
deliver to the Vendor , or cause ACT to deliver to the Vendor, such number of
shares of ACT's treasury stock as may be necessary to satisfy the requirements
of such exercise. The Purchaser represents and warrants that, other than the
filing of the Registration Statement in accordance with Section 10 hereof and
the filing of a Form 20 in each of Ontario and British Columbia, no consent of,
ruling by or filing with any securities regulatory authority will be required in
connection with the issue of the Exchangeable Shares nor in connection with the
conversion of the Exchangeable Shares into ACT shares and that such issue and
exchange and the issue of the ACT shares resulting from the exchange shall be in
compliance with all laws of Canada and the United States of America.
8.4 The Purchaser covenants and agrees as follows:
(a) that amounts collected by it in respect of the Account Receivables
will be applied to retire the oldest accounts receivable first;
(b) that it shall not, without the Vendor's consent, make any
accommodations in respect of past ▇▇▇▇▇▇▇▇ with customers of the Purchased
Business; and
(c) it shall apprise the Vendor of the status of the collection of the
Accounts Receivable and remit any monies owing every two (2) weeks.
8.5 The Purchaser covenants and agrees that it shall provide, or caused to
be provided, to the Vendor written notice, no later than 7 business days after
Closing, confirming that the Registration Statement has become effective.
9. Employment Covenants
(a) Effective immediately upon Closing, the Purchaser shall offer
employment to those employees listed on Schedule E at substantially
equivalent positions and responsibilities and at salaries and benefits no
less favourable than those listed on Schedule E. Effective immediately upon
Closing the Purchaser shall assume all liabilities, including without
limitation, severance and termination obligations (statutory or otherwise)
for those employees listed on Schedule E and shall further recognize each
such employee's prior years of service with the Vendor for the purposes of
calculating termination and severance obligations. In accordance with
Article 13 hereof, the Purchaser shall indemnify the Vendor for all
liabilities, claims and demands whatsoever made against the Vendor by those
employees listed on Schedule E after the Closing Date except that the
Vendor shall be fully responsible for all such claims made where such
claims arise in connection with any act or omission of the Vendor prior to
the Closing Date.
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(b) The Purchaser and the Vendor acknowledge and agree that some or
all of the employees listed on Schedule E will be entitled to quarterly
bonuses payable in August, 1998. The Purchaser and the Vendor agree to pay
their respective pro rata share of such bonuses in conjunction with the
settlement of the Adjustments.
10. Covenants of ACT
10.1 ACT shall prepare and file with the Commission and use its best
efforts to cause to become effective within 30 days of the date of this
Agreement a shelf registration statement (as amended and in effect from time to
time, including the prospectus constituting a part thereof, the "Registration
Statement") on Form S-3 pursuant to Rule 415 under the Securities Act for the
resale of the ACT Shares, and shall use all reasonable efforts to maintain the
effectiveness of the Registration Statement for at least two years (or, if
earlier, until all of the ACT Shares have been sold pursuant to the Registration
Statement), subject to the limitations of Section 10.6 below. ACT shall also
prepare and file with the Commission such amendments and supplements to the
Registration
Statement as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of the ACT Shares as contemplated by this
Agreement.
10.2 ACT shall pay the legal and accounting fees and other expenses
incurred by ACT in connection with the Registration Statement, but the selling
shareholders shall be responsible for all brokers fees and expenses and similar
charges in connection with any sale of the ACT Shares, allocated among such
selling shareholders as may be mutually agreed by them.
10.3 (a) ACT agrees to indemnify and hold harmless the Vendor, each of
its officers and directors, and each person, if any, who controls the
Vendor within the meaning of Section 15 of the Securities Act from and
against any and all losses, claims, damages or liabilities (or any actions
in respect thereof) including any of the foregoing incurred in connection
with settlement of any litigation, commenced or threatened arising out of
or based on any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or any violation
or alleged violation by ACT of the Securities Act or any other applicable
federal or state securities laws or rules or regulations promulgated
thereunder in connection with the sale of securities pursuant to the
Registration Statement, and will reimburse the Vendor and each such
officer, director or controlling person for any legal or other expenses
reasonably incurred in investigating, defending any such losses, claims,
damages, liabilities or actions; provided, however, that ACT will not be
liable in any such case to the extent that any such loss, claim, damage or
liability is caused by any such untrue statement or alleged untrue
statement or omission or alleged omission made therein based upon and in
conformity with information furnished in writing to ACT by the Vendor for
use in connection with the preparation thereof.
(b) The Vendor agrees to indemnify and hold harmless ACT, its
directors, its officers who sign the Registration Statement and any person
controlling ACT to the same extent as the foregoing indemnity from ACT to
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the Vendor and its controlling persons, but only with reference to
information furnished in writing by or on behalf of the Vendor for use in
the Registration Statement.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm (in addition to any
local counsel) for all such indemnified parties and that all such
reasonable fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by the Vendor in the case of parties
indemnified pursuant to paragraph (b) above and by ACT in the case of
parties indemnified pursuant to paragraph (a) above. The indemnifying party
shall not be liable for any settlement of any proceeding effected without
its written consent (which shall not be unreasonably withheld or delayed)
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability reasonably incurred by reason of
such settlement or judgment.
(d) If the indemnification provided for paragraphs (a) through (c) of
this Section 10.3 is unavailable or insufficient to hold harmless an
indemnified party under such paragraphs in respect of any losses, claims,
damages, liabilities, expenses or actions in respect thereof or referred to
therein, then each indemnifying party shall in lieu of indemnifying such
indemnified party contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or actions in such proportion as appropriate to reflect the relative fault
of ACT and the Vendor, respectively, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities,
expenses or actions in respect thereof as well as any other relevant
equitable considerations, including the failure to give any notice under
paragraph (c). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact relates to information supplied by ACT, on the one hand, or
the Vendor, on the other, and to the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph were determined by pro rata
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allocation or by any other method of allocation which did not take account
of the equitable considerations referred to above in this paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or actions in respect thereof, referred to
above in this paragraph, shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act), shall be entitled to contribution from any person who is
not guilty of such fraudulent misrepresentation.
10.4 The Vendor shall furnish to ACT such information regarding the Vendor,
the registrable securities held by it and the distribution proposed by it as ACT
may reasonably request in writing and as shall be required in connection with
any registration, qualification or compliance referred to in this Article 10.
10.5 With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of the
registrable securities to the public without registration, ACT agrees to use its
best efforts to:
(a) Make public information available sufficient to satisfy the
conditions of paragraph (c) of Rule 144 under the Securities Act;
(b) File with the Commission in a timely manner all reports and other
documents required to be filed by ACT under the Securities Act and the
Securities Exchange Act of 1934, as amended;
(c) So long as the Vendor owns any of the ACT Shares, furnish to the
Vendor forthwith upon request a written statement by ACT as to its
compliance with the requirements of paragraph (a) and (b) above, a copy of
its most recent annual or quarterly report, and such other reports and
documents as shall have been filed with the Commission or otherwise made
available to its shareholders generally.
10.6 Notwithstanding the foregoing, the parties acknowledge that it may be
necessary for ACT to suspend or delay the effectiveness of the Registration
Statement or otherwise require that sales of ACT Shares under the Registration
Statement be suspended, because of material developments relating to the
business of ACT which have not yet been made public and which the board of
directors of ACT finds the announcement of which would be seriously detrimental
to ACT's ability to complete a pending acquisition or financing or would
otherwise materially and adversely affect a substantial financial or legal
interest of ACT. ACT agrees that, in such event, it will make all reasonable
efforts to effect the necessary public disclosure as promptly as is feasible in
light of its reasonable business interests, provided that ACT may not suspend or
delay the effectiveness of the Registration Statement more than once in any
twelve month period or for a period of longer than 45 days. If, on account of
the foregoing requirements of this Section 10, ACT would be required to effect,
or to maintain the effectiveness of, the Registration Statement at a time when
it determines that such action would not be in its best interests, it shall, in
lieu of effecting or maintaining such registration, offer to purchase the ACT
Shares which would otherwise be covered by such registration for a price,
payable in cash, equal to the closing price of such shares on the date they are
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submitted to ACT for such purchase (duly endorsed for transfer or accompanied by
stock powers duly executed in blank, all in form reasonably satisfactory to
ACT). Such offer must remain in effect for a period of at least 30 days. If such
offer shall be made and if ACT shall be in compliance with its obligations
hereunder in respect of such offer, the obligations of ACT under this Section 10
shall be suspended for a period of 90 days following the date of commencement of
such offer.
11. Examination of Title
11.1 The Vendor shall forthwith make available to the Purchaser and its
directors, officers, auditors, counsel and other authorized representatives all
title documents, abstracts of title, deeds, leases, certificates of trade marks
and copyrights, contracts and agreements and other documents in its possession
or under its control relating to any of the Purchased Assets or the Purchased
Business, all of the foregoing to become the property of the Purchaser at the
Time of Closing, and the Vendor shall forthwith make available to the Purchaser
and its said authorized representatives for examination all books of account,
accounting records,documents, information and data relating to the Purchased
Business. The Vendor shall afford the Purchaser and its said authorized
representatives every reasonable opportunity to have access to and to inspect
the Purchased Assets, it being agreed that the exercise of any rights of access
or inspection by or on behalf of the Purchaser under this said section 11.1
shall not affect or mitigate the covenants, representations and warranties of
the Vendor hereunder which shall continue in full force and effect as provided
in Article 11 hereof, provided that if the Purchaser shall prior to the Time of
Closing ascertain or determine that any representation or warranty made by the
Vendor hereunder is inaccurate or incorrect, the Purchaser shall immediately
inform the Vendor in writing and shall either (a) waive such representation in
which case the sale and purchase contemplated hereby shall be closed and the
Purchaser shall have no claim against the Vendor whatsoever in respect of such
representation or (b) not close the transaction contemplated hereby in which
case all of the obligations of the parties hereto shall be at an end and neither
party shall have a claim against the other under any of the provisions hereof,
except that the provisions of paragraph 5.2(c) shall remain in full force and
effect.
11.2 At the Time of Closing on the Closing Date, the Vendor shall deliver
to the Purchaser all the documents referred to in Section 11.1, including all
books, records, books of account, lists of suppliers and customers of the Vendor
and all other documents, files, records and other data, financial or otherwise
relating to the Purchased Business, which documents, books and records shall
become the property of the Purchaser. The Purchaser agrees that it will preserve
the documents, books and records so delivered to it for a period of four years
from the Closing Date, or for such other period as is required by any applicable
law, and will permit the Vendor or its authorized representative(s) reasonable
access thereto in connection with the affairs of the Vendor relating to its tax
matters, but the Purchaser shall not be responsible or liable to the Vendor for
or as a result of any loss or destruction of or damage to any such documents,
books or records.
12. Closing Arrangements.
At or before the Time of Closing on the Closing Date the Vendor and
Purchaser, as the case may be, shall do the following:
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12.1 The Vendor shall deliver to the Purchaser all necessary deeds,
conveyances, bills of sale, assurances, transfers, assignments and consents, any
other documents necessary or reasonably required effectively to transfer the
Purchased Assets to the Purchaser with a good and marketable title, free and
clear of all mortgages, liens, charges, pledges, claims, security interests or
encumbrances whatsoever.
12.2 The Vendor shall use its best efforts to obtain, prior to closing,
consents from the landlords under the Leases described in Schedule B hereto, if
such consents are so required under the Leases, in order to properly assign all
of the Vendor's interests thereunder to the Purchaser. In the event that the
Vendor is unable to obtain the consents from landlords for the assignment of the
Leases set forth in Schedule B on the Closing Date, the Vendor shall
obtain such consents forthwith after the Closing Date. In such event the Vendor
shall remain the tenant under any such Lease and the Purchaser shall be entitled
to occupy the subject premises of any such Lease.
12.3 The Vendor shall obtain consents from all contracting parties other
than the Vendor to all contracts, engagements or commitments referred to in
Schedule C, either oral or written, if such consents are so required under the
contracts in order to properly assign all of the Vendor's interests thereunder
to the Purchaser.
12.4 The Vendor shall deliver actual possession of the Purchased Assets to
the Purchaser.
12.5 The Vendor and the Purchaser shall execute an election as to the sale
of accounts receivable under Section 22 of the Income Tax Act (Canada).
12.6 The Vendor and the Purchaser shall jointly execute and file the
applicable election form pursuant to Section 167 of the Excise Tax Act, Canada
at or before the Closing Date.
12.7 The Vendor, each of the Shareholders, and, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, shall deliver an executed copy of the Non-Competition
Agreement, in the form attached hereto as Schedule N, to the Purchaser.
12.8 The Vendor and the Purchaser shall jointly execute and file the
applicable election form pursuant to subsection 85(1) of the Income Tax Act
(Canada), and within the time prescribed within Section 85(6) of such Act, that
the proceeds of disposition to the Vendor, and the cost of acquisition to the
Purchaser, of the Purchased Assets will be equal to the following:
(a) in the case of depreciable assets, the undepreciated capital cost
(as such term is defined in the Income Tax Act (Canada)) of those Purchased
Assets to the Vendor, determined immediately prior to the Time of Closing;
and
(b) in the case of goodwill, an amount equal to 4/3 of the cumulative
eligible capital amount (as such term is defined by the Income Tax Act
(Canada)) to the Vendor, determined immediately prior to the Time of
Closing.
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12.9 The Vendor shall take or cause to be taken all necessary or desirable
actions, steps and corporate proceedings to approve or authorize validly and
effectively the transfer of the Purchased Assets to the Purchaser and the
execution and delivery of this agreement and other agreements and documents
contemplated hereby.
12.10 The Vendor shall deliver to the Purchaser a favourable opinion of the
Vendor's counsel in form satisfactory to counsel for the Purchaser:
(a) that the Vendor is a corporation duly incorporated and organized
and validly subsisting in good standing under the laws of Canada; that it
has the corporate power to own its property and to carry on the Purchased
Business as now being conducted by it; that it is duly qualified as a
corporation to do business and is in good standing in each jurisdiction in
which the nature of the Purchased Business or the Purchased Assets makes
such qualification necessary;
(b) that all necessary corporate action and proceedings have been
taken to permit the due and valid transfer of the Purchased Assets at the
Time of Closing from the Vendor to the Purchaser;
(c) that, to the best of the knowledge of such counsel, the
consummation of the transaction of purchase and sale contemplated by this
agreement will not result in a breach of any term or provision of or
constitute a default under any agreement, instrument, licence, permit or
understanding to which the Vendor is a party or by which it is bound in
connection with the Purchased Business, including the leases described in
Schedule B hereto and the contracts, engagements or commitments referred to
in Section C and Schedule H hereto, nor will the consummation of such
transaction accelerate any commitment or obligation of the Vendor or result
in the creation of any mortgage, charge, lien, pledge, claim or security
interest or encumbrance upon any of the Purchased Assets;
(d) that the execution and delivery of this agreement by the Vendor
has not breached and the consummation of the transaction of purchase and
sale contemplated by this agreement will not be in breach of any federal or
provincial law or laws of any other jurisdiction in which the Purchased
Business is carried on;
(e) that the Vendor is not engaged in and, to the best of the
knowledge of such counsel, has not been threatened with, any legal action
or other proceedings, and has not been charged with, or to the best of the
knowledge of such counsel, incurred, any violation of any federal,
provincial or local law or administrative regulation, which could
materially adversely affect or impair the Purchased Business, Purchased
Assets or the financial position or prospects of the Purchased Business;
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(f) that no consent, authorization, licence, franchise, permit,
approval or order of any court or governmental agency or body is required
for the acquisition by the Purchaser of the Purchased Assets; and
(g) as to such other matters incident to the matters herein
contemplated as the Purchaser and its counsel may reasonably request.
12.11 The Vendor shall deliver to the Purchaser a certificate made by the
President and the Secretary of the Vendor under its corporate seal certifying
that as of the Closing Date all of the matters set out in the sections of
Article 12 relating to the Vendor shall have been complied with.
12.12 The Vendor and each of the Shareholders shall furnish the Purchaser
with evidence satisfactory to the Purchaser that the facts with respect to each
of the matters dealt with in each of the section of Article 7 are as set out
therein, provided that the receipt of such evidence and the closing of the
transaction of purchase and sale herein provided for shall not be a waiver of
the covenants, representations and warranties contained in Article 7, which
representations and warranties shall continue in full force and effect as
provided in Article 13.
12.13 The Vendor shall continue to maintain in full force and effect all
policies of insurance now in effect or renewals thereof up until the time of
Closing.
12.14 The Vendor shall furnish the Purchaser with evidence satisfactory to
counsel for the Purchaser that the Vendor has given notice of the proposed
purchase and sale of the Purchased Assets herein to 403805, that 403805 has
chosen not to exercise the B.C. Tel Right of First Refusal and that 403805 has
no further right, interest or option of any kind whatsoever in respect of the
Purchased Assets except if the transaction of purchase and sale referred to
herein has not been completed before August 13, 1998.
12.15 The Vendor shall furnish the Purchaser with evidence (including a
statutory declaration of duly authorized officers of the Vendor) satisfactory to
counsel for the Purchaser that the Vendor is a resident of Canada within the
meaning of the Income Tax Act (Canada).
12.16 The purchase and sale of the Purchased Assets shall have been duly
authorized and approved by a resolution passed by the directors of the Vendor
and the Purchaser and a copy of such resolutions certified by an officer or
director of the Vendor and the Purchaser, as the case may be, shall have been
delivered to each of the Vendor and the Purchaser, as the case may be.
12.17 All documents or copies thereof required to be delivered to the
Purchaser shall have been so delivered, including the Scheduled agreements and
contracts described herein.
12.18 The Vendor shall use its best efforts to preserve intact the
Purchased Business and keep available to the Purchaser the services of the
present executives, employees and agents and will use its best efforts to
preserve for the Purchaser the goodwill of suppliers, customers and others
having business relations with the Vendor.
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12.19 The Purchaser shall deliver to the Vendor either:
(a) share certificates for the such number of Exchangeable Shares as
is determined pursuant to Section 5.1; or
(b) the Cash Consideration.
12.20 The Purchaser shall take or cause to be taken all necessary or
desirable actions, steps and corporate proceedings to:
(a) approve or authorize, inter alia, the issuance of the Exchangeable
Shares and the execution and delivery of this Agreement and other
agreements and documents contemplated hereby;
(b) to deliver the Exchangeable Shares in compliance with the
Securities Act (Ontario).
12.21 The Purchaser shall deliver to the Vendor a certificate made by the
President of the Vendor under its corporate seal certifying that as of the
Closing Date all of the matters set out in Article 12 relating to the Purchaser
shall have been complied with and that the provisions relating to the
Exchangeable Shares as set out in Schedule M are validly existing as at the
Closing Date and that no steps have been taken to alter such provisions.
12.22 All documents or copies hereof required to be delivered to the Vendor
shall have been so delivered, including the Scheduled agreements and contracts
described herein.
12.23 The Purchaser shall deliver to the Vendor a favourable opinion of the
Purchaser's counsel in form satisfactory to counsel for the Vendor as to such
matters incident to the matters herein contemplated as the Vendor and its
counsel may reasonably request, including the form of all papers and documents
and the validity of all proceedings.
13. Survival of Covenants, Representation and Warranties and Indemnities
13.1 The covenants, representations and warranties of the Vendor, the
Shareholders and the Purchaser contained in this Agreement and contained in
certificates or documents submitted pursuant to or in connection with the
transactions herein provided for shall survive the closing of the purchase and
sale of the Purchased Assets for two (2) years from the Closing Date and,
notwithstanding such closing, and regardless of any investigation by or on
behalf of the Purchaser with respect thereto, shall continue in full force and
effect for the benefit of the Purchaser, the Vendor and the Shareholders, as the
case may be. On the second anniversary of the Closing Date, if no claim shall
have been made by the Purchaser or on the sixth anniversary of the Closing Date
if no claim has been made by a third party in respect of which the Purchaser
seeks indemnification from the Vendor, then the obligations of the Vendor under
this Agreement to indemnify the Purchaser shall cease; provided that the
foregoing provisions shall not apply in respect of any claim by the Purchaser
which is received by the Vendor on or before such dates.
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13.2 (a) The Vendors and each of the Shareholders will jointly and
severally indemnify the Purchaser and hold it harmless from and against all
losses which are incurred or suffered by it:
(i) by reason of the breach of any of the representations or
warranties made by the Vendor or any of the Shareholders herein;
or
(ii) by reason of the failure by either the Vendor or any of the
Shareholders to conform or comply with any of the covenants or
agreements contained herein to be performed or complied with by
either the Vendor or the Shareholders.
Except as otherwise provided, any recovery by the Purchaser for
indemnification shall be limited as follows:
(A) the Purchaser will not be entitled to any recovery unless a
claim for indemnification is made in accordance with
paragraph (c)(i) of this Section 13.2.
(B) the Purchaser will not be entitled to recover any amount for
indemnification claims under subsection (i) of this Section
13.2(a) unless and until the amount which the Purchaser is
entitled to recover in respect of such claims exceeds, in
the aggregate $15,000, in which event the entire amount
which the Purchaser is entitled to recover in respect of
such claims will be payable.
(b) the Purchaser will indemnify the Vendor and the Shareholders and
hold each of them harmless from and against all losses which are incurred
or suffered by either of them:
(A) by reason of the breach of any of the representations or
warranties made by the Purchaser herein; or
(B) by reason of the failure by the Purchaser to perform or
comply with any of the covenants or agreements contained
herein to be performed or complied with by the Purchaser;
Except as otherwise provided, any recovery by the Vendor and the
Shareholders for indemnification shall be limited as follows;
(A) the Vendors and the Shareholders will not be entitled to any
recovery unless a claim for indemnification is made in
accordance with paragraph (c)(i) of this Section 13.2;
(B) neither the Vendors nor the Shareholders will not be
entitled to recover any amount for indemnification claims
-27-
undersubsection (i) of this Section 13.2 unless and
until the amount which the Vendors and the Shareholders and
their affiliates are entitled to recover in respect of such
claims exceeds, in the aggregate, $15,000 in which event the
entire amount which the Vendor and the Shareholders are
entitled to recover in respect of such claims shall be
payable.
(c) (i) If any party shall incur or suffer any loss in
respect of which indemnification may be sought by such
party pursuant to the provisions of this Section 13.2,
the party seeking to be indemnified hereunder (the
"Indemnitee") will assert a claim for indemnification
by written notice (a "Notice") to the party from whom
indemnification is sought (the "Indemnitor") stating
the nature and basis of such claim. In the case of
losses arising by reason of any third party claim, the
Notice will be given within 30 days of the filing or
other written assertion of any such claim against the
Indemnitee, but the failure of the Indemnitee to give
the Notice within such time period will not relieve the
Indemnitor of any liability that the Indemnitor may
have to Indemnitee except to the extent that the
Indemnitor is prejudiced thereby.
(ii) The Indemnitee will provide to the Indemnitor on request all
information and documentation reasonably necessary to
support and verify any losses which the Indemnitee believes
give rise to a claim for indemnification hereunder and will
give the Indemnitor reasonable access to all books, records
and personnel in the possession or under the control of the
Indemnitee which would have bearing on such claim.
(iii)In the case of third party claims for which
indemnification is sought, the Indemnitor will have the
option (a) to conduct any proceedings or negotiations in
connection therewith, (b) to take all other steps to settle
or defend any such claim (provided that the Indemnitor will
not settle any such claim without the consent of the
Indemnitee (which consent will not be unreasonably
withheld)) and (c) to employ counsel to contest any such
claim or liability in the name of the Indemnitee or
otherwise. In any event, the Indemnitee will be entitled to
participate at its own expense and by its own counsel in any
proceedings relating to any third party claim. The
Indemnitor will, within ten days of receipt of the Notice,
notify the Indemnitee of its intention to assume the defence
of such claim. Until the Indemnitee has received notice of
the Indemnitor's election whether to defend any claim, the
Indemnitee will take reasonable steps to defend (but may not
settle) such claim. If the Indemnitor declines to assume the
defense of any such claim, or fails to notify the Indemnitee
within fourteen (14) days after receipt of the Notice of the
Indemnitor's election to defend such claim, the Indemnitee
will defend against such claim (provided that the Indemnitee
will not settle such claim without the consent of the
Indemnitor (which consent will not be unreasonably
withheld)). The expenses of all proceedings, contests or
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lawsuits in respect of such claims will be borne by the
Indemnitor but only if the Indemnitor is responsible
pursuant hereto to indemnify the Indemnitee in respect of
the third party claim, if applicable, only to the extent
required by Section 13.2(a).
Regardless of which party assumes the defense of the claim,
the parties agree to cooperate fully with one another in
connection therewith. In the case of a claim for
indemnification made under Sections 13.2 (a)(i) and 13.2
(b)(i),
A. if (and to the extent) the Indemnitor is responsible
pursuant hereto to indemnify the Indemnitee in respect
of the third party claim, then within ten days after
the occurrence of a final non- appealable determination
with respect to such third party claim, the Indemnitor
will pay the Indemnitee, in immediately available
funds, the amount of any losses (or such portion
thereof as the Indemnitor will be responsible for
pursuant to the provisions hereof, including, without
limitation, Sections 13.2(a)(ii)(B) and 13.2(b)(ii)(B),
and
B. in the event that any losses incurred by the Indemnitee
do not involve payment by the Indemnitee of a third
party claim, then, if (and to the extent) the
Indemnitor is responsible pursuant thereto to indemnify
the Indemnitee against such losses, the Indemnitor will
within ten days after agreement on the amount of losses
or the occurrence of a final non-appealable
determination of such amount pay to the Indemnitee, in
immediately available funds, the amount of such losses
(or such portion thereof as the Indemnitor shall be
responsible for pursuant to the provisions hereof,
including, without limitation, Sections 13.2(a)(ii)(B)
and 13.2(b)(ii)(B)).
(d) The provisions of paragraph (c) of this Section 13.2 shall apply
to all claims for indemnification hereunder, save and except for matters
referred to in Article 10 hereof.
14. Conditions of Closing in Favour of the Purchaser
The sale and purchase of the Purchased Assets is subject to the following
terms and conditions for the exclusive benefit of the Purchaser to be fulfilled
and/or performed at or prior to the Time of Closing:
14.1 The covenants, representations and warranties of the Vendor and each
of the Shareholders to the Purchaser contained in this agreement and Schedules
-29-
hereto shall be true and correct at the Time of Closing on the Closing Date with
the same force and effect as if such covenants, representations and warranties
were made at and as of such time and the Vendor and the Shareholders shall each
deliver to the Purchaser at the Time of Closing on the Closing Date a
certificate to such effect, in the case of the Vendor under its corporate seal
duly executed by its President, provided that the receipt of such evidence and
the closing of the transaction of purchase and sale herein provided for shall
not be nor be deemed to be a waiver of the covenants, representations and
warranties contained in this Agreement and Schedules hereto, which covenants,
representations and warranties shall continue in full force and effect for the
benefit of the Purchaser as provided in Article 13 hereof.
14.2 All of the terms, covenants and conditions of this agreement to be
complied with or performed by the Vendor and the Shareholders at or before the
Closing Date shall have been complied with or performed.
14.3 As at the Time of Closing on the Closing Date, the Vendor shall
beneficially own, possess and have a good and marketable title to the Purchased
Assets, free and clear of any and all mortgages, pledges, liens, charges,
claims, rights, demands, restrictions, security interests or encumbrances of any
kind whatsoever.
14.4 There shall have been obtained from all appropriate federal,
provincial, municipal or other governmental or administrative bodies such
approvals or consents as are required to permit the change of ownership of the
Purchased Assets contemplated hereby.
14.5 No action or proceeding in Canada by law or in equity shall be pending
or threatened by any person, firm, company, government, governmental authority,
regulatory body or agency to enjoin, restrict or prohibit:
(a) the purchase and sale of the Purchased Assets contemplated hereby,
or
(b) the right of the Purchaser to conduct the Purchased Business.
14.6 The execution and delivery of this agreement shall have been duly
authorized by all necessary corporate action on behalf of the Vendor.
14.7 The sale of the Purchased Assets shall have been duly authorized and
approved by a resolution passed by the directors of the Vendor and confirmed,
without variation, by the shareholders of the Vendor and a copy of such
resolution certified by the Secretary of the Vendor shall have been delivered to
the Purchaser.
14.8 All documents or copies thereof required to be delivered to the
Purchaser shall have been so delivered, including the scheduled agreements and
contracts described in the schedules hereto.
14.9 No substantial damage by fire or other hazard to the Purchased Assets
shall have occurred from the date hereof to the Time of Closing.
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14.10 During the Interim Period the Vendor shall have carried on the
Purchased Business in the ordinary and normal course of business, except for the
restrictions imposed by this Agreement.
14.11 The Purchaser shall be satisfied that it will be entitled to carry on
the Purchased Business without being in breach of any applicable zoning or other
municipal or governmental restrictions.
14.12 The Call Notice of ACT dated the 30th day of June, 1998 to Montreal
Trust Company of Canada is in full force and effect at the Time of Closing.
In case any condition, obligation or covenant of the Vendor and each of the
Shareholders to be performed prior to the Time of Closing shall not have been
performed prior to the Time of Closing, the Purchaser may terminate this
agreement by notice in writing to the Vendor and in such event the Purchaser
shall be released from all obligations hereunder and the Vendor shall also be
released from all obligations hereunder; provided, however, that the Purchaser
shall be entitled to waive compliance with any of such conditions, obligations
or covenants in whole or in part if it sees fit to do so without prejudice to
any of its rights of termination in the event of non-performance of any other
condition, obligation or covenant in whole or in part.
15. Conditions of Closing in Favour of the Vendor and each of the Shareholders
The sale and purchase of the Purchased Assets is subject to the following
terms and conditions for the exclusive benefit of the Vendor and each of the
Shareholders to be fulfilled and/or performed at or prior to the Time of
Closing:
15.1 The covenants, representations and warranties of the Purchaser to the
Vendor and each of the Shareholders contained in this agreement and Schedules
hereto shall be true and correct at the Time of Closing on the Closing Date with
the same force and effect as if such covenants, representations and warranties
were made at and as of such time and the Purchaser shall deliver to the Vendor
and each of the Shareholders at the Time of Closing on the Closing Date its
certificate under its corporate seal duly executed by its President, to such
effect; provided that the receipt of such evidence and the closing of the
transaction of purchase and sale herein provided for shall not be nor be deemed
to be a waiver of the covenants, representations and warranties contained in
this Agreement and Schedules hereto, which covenants, representations and
warranties shall continue in full force and effect for the benefit of the Vendor
as provided in Article 13 hereof.
15.2 All of the terms, covenants and conditions of this agreement to be
complied with or performed by the Purchaser and ACT at or before the Closing
Date shall have been complied with or performed.
15.3 The Exchangeable Shares shall be convertible immediately into "free
trading" ACT Shares at the Time of Closing.
-31-
15.4 The ACT Shares have not been delisted or suspended from trading on
NASDAQ.
In case any condition, obligation or covenant of the Purchaser to be
performed prior to the Time of Closing shall not have been performed prior to
the Time of Closing, the Vendor may terminate this agreement by notice in
writing to the Purchaser and in such event the Vendor shall be released from all
obligations hereunder and the Purchaser shall also be released from all
obligations hereunder; provided, however, that the Vendor shall be entitled to
waive compliance with any of such conditions, obligations or covenants in whole
or in part if it sees fit to do so without prejudice to any of its rights of
termination in the event of non-performance of any other condition, obligation
or covenant in whole or in part.
16. Closing Date and Transfer of Possession
16.1 Subject to compliance with the terms and conditions hereof, the
transfer of possession of the Purchased Assets shall be deemed to take effect as
at the close of business on the Closing Date. During the Interim Period the
Purchased Assets shall be held and the Purchased Business shall be managed and
operated by the Vendor in the ordinary course of business.
16.2 The closing shall take place at the Time of Closing on the Closing
Date simultaneously at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, and ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇, Pines, ▇▇▇▇▇▇▇▇ &
Shrieves, ▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
unless otherwise agreed to by the parties hereto.
16.3 From time to time subsequent to the Closing Date, the Vendor shall at
the request and expense of the Purchaser execute and deliver such additional
conveyances, transfers and other assurances as may, in the opinion of counsel
for the Purchaser, be reasonably required effectually to carry out the intent of
this agreement and to transfer the Purchased Assets to the Purchaser.
17. Risk of Loss
17.1 From the date hereof up to the Time of Closing, the Purchased Assets
shall be and remain at the risk of the Vendor. If, prior to the Time of Closing,
all or any part of the Purchased Assets are destroyed or damaged by fire or any
other casualty or shall be appropriated, expropriated or seized by governmental
or other lawful authority, the Purchaser shall have the option, exercisable by
notice in writing given within four business days of the Purchaser receiving
notice in writing from the Vendor of such destruction, damage, expropriation or
seizure:
(a) to reduce the Purchase Price by an amount equal to the cost of
repair, or, if destroyed or damaged beyond repair, by an amount equal to
the replacement cost of the assets forming part of the Purchased Assets so
damaged or destroyed and to complete the purchase; or
-32-
(b) to complete the purchase without reduction of the Purchase Price,
in which event all proceeds of an insurance or compensation for
expropriation or seizure shall be payable to the Purchaser and all right
and claim of the Vendor to any such amounts not paid by the Closing Date
shall be assigned to the Purchaser; or
(c) of cancelling this agreement and not completing the purchase, in
which case all obligations of the Purchaser shall terminate forthwith upon
the Purchaser giving notice as required herein.
18. Notice
All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process with respect thereto
shall be validly made, given or served, if in writing and delivered personally
or by facsimile service or by registered mail, postage prepaid to the parties at
the following addresses:
(a) in the case of the Vendor to:
Western Inbound Network Inc.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
Pines, ▇▇▇▇▇▇▇▇ & Shrieves
▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
(b) in the case of the Purchaser to:
CommStar Ltd.
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
-33-
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman & CEO
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Barristers & Solicitors
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(c) in the case of ACT to:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President
With a copy to:
▇▇▇▇▇ ▇▇▇▇ LL.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Llewelyn Sale III
or to such address as any party hereto may, from time to time, designate by
written notice, delivered in like manner. Any notice or communication if
given by personal delivery shall be deemed to have been received at the
time it is delivered, or if given by facsimile, shall be deemed to have
been made or delivered when dispatched and an appropriate verbal or written
confirmation of receipt is received. Notice given by mail as set out above
shall be deemed received on the fifth day following the date of mailing
-34-
thereof except in the event of a disruption in the postal services at the
date of mailing, in which case notice shall be effected by personal
delivery or a facsimile transmission as stated above. Notices, consents,
requests, instructions, approvals and other communications may be signed by
any officer of any party hereto or by their respective legal counsel.
19. Entire Agreement
This Agreement, the Schedules hereto and the documents to be delivered and
the contracts to be executed pursuant hereto constitute the entire agreement of
the parties and replaces all previous agreements entered into between them and
no party shall be liable or bound to the other party hereto in any manner except
as specifically set forth herein or in other contracts or agreements executed
pursuant hereto, and this Agreement may not be orally amended, modified or
altered.
20. Governing Law
This Agreement shall be construed in accordance with and governed by the
laws of the Province of Ontario.
21. Binding Effect
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, personal representatives,
successors and assigns.
22. Assignment
No party may assign this Agreement without the prior written consent of the
other parties hereto.
23. Descriptive Headings
The descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
24. Enforceability of Provisions
If any provisions of this Agreement or the application thereof to any
person or circumstance shall be invalid or unenforceable, then the remaining
provisions of this Agreement or the application of such provisions to persons or
circumstances other than those as to whom or which it is held invalid or
unenforceable, shall not be affected thereby, and every provision hereof shall
be valid and enforceable to the fullest extent permitted by law.
-35-
25. Plural, Singular, Gender
When the context in which the words are used in this Agreement indicates
that such is the intent, words in the singular number shall include the plural
and vice-versa. References to any gender shall include any other gender as may
be applicable under the circumstances.
26. Joint Work Product
The parties agree that this Agreement is a joint work product. In the event
of any ambiguity in this Agreement, no inference will be drawn against any
party, including the party that drafted this Agreement in its final form.
27. Time of the Essence
Time shall be of the essence of this Agreement.
28. Commissions, etc.
It is understood and agreed that no broker, agent or other intermediary
acted for the Vendor in connection with the sale of the Purchased Assets and the
Vendor agrees to indemnify and save harmless the Purchaser from and against any
claims whatsoever for any commission or other remuneration payable to any
broker, agent or other intermediary who has acted for the Vendor.
29. Public Announcements
No public announcement or press release concerning the purchase and sale of
the Purchased Assets shall be made by the Vendor or the Purchaser without the
consent and joint approval of the Vendor and the Purchaser.
30. Successors and Assigns
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
31. Further Assurances
The Vendor and the Purchaser shall, from time to time after the Closing
Date, at the request and expense of the other, take or cause to be taken such
action and execute and deliver or cause to be executed and delivered to the
other such documents and further assurances as may be reasonable necessary to
give effect to this Agreement.
-36-
32. Counterparts
This Agreement may be executed in several counterparts, each of which so
executed shall be deemed to be an original, and such counterparts together shall
constitute but one and the same instrument.
33. Expenses
The Purchaser and the Vendor shall each bear its respective expenses
incurred in connection with the negotiation, preparation, and consummation of
the transaction contemplated herein.
IN WITNESS WHEREOF this agreement has been executed by the parties hereto
on the date first written above.
WESTERN INBOUND NETWORK INC.
Per:
Per: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
COMMSTAR LTD.
Per: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Per:
APPLIED CELLULAR TECHNOLOGY , INC.
Per: /s/ ▇▇▇▇▇ ▇. Loppert
--------------------
▇▇▇▇▇ ▇. Loppert
Vice President, Chief Financial
Officer
Per:
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3189309 CANADA INC.
Per:
Per: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
3189287 CANADA INC.,
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------
Per:
3189295 CANADA INC.,
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Per:
3132455 CANADA INC.
Per: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------
Per: