THIS AGREEMENT FOR PURCHASE AND SALE is made effective the 12th day of
January, 1999
BETWEEN:
REVERE COMMUNICATIONS INC., a corporation formed under the
laws of the Province of Alberta, of 0000, 0000-0xx Xxxxxx
X.X., Xxxxxxx, Xxxxxxx X0X 0X0 (the "Vendor")
OF THE FIRST PART
AND:
ABDE HOLDINGS LTD., a body corporate incorporated under the
laws of the Province of British Columbia, of 0000-00000
Xxxxxxxxx Xxx, Xxxxxxxx, Xxxxxxx
Xxxxxxxx X0X 0X0
(the "Purchaser")
OF THE SECOND PART
WHEREAS:
A. The Vendor carries on the business of providing prepaid telephone calling
card and related telephony services (the "Business") at 000-0000 Xxxxxx
Xxx, Xxxxxxxx, X.X. and at 0000, 0000-0xx Xxxxxx X.X., Xxxxxxx, Xxxxxxx;
B. The Purchaser has agreed to buy from the Vendor, and the Vendor has agreed
to sell to the Purchaser, certain of the Vendor's property and assets of
the Business on the terms and subject to the conditions hereinafter
provided;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
covenants, agreements, representations, warranties and payments hereinafter set
forth and provided for, the parties hereto covenant and agree as follows:
1. PURCHASE AND SALE
1.1 Purchase and Sale of Assets. Relying on the representations and
warranties set forth in Part 3 hereof, and upon the subject to the
terms and conditions hereof, the Vendor shall sell, assign and
transfer to the Purchaser and the Purchaser shall purchase from the
Vendor on the Closing Date the following property and assets of the
Business, namely: (a) All equipment, furnishings, leasehold
improvements and machinery (the "Equipment") owned by the Vendor in
connection with the Business including without limitation that
Equipment described in Schedule "A";
(b) The goodwill of the Business (the "Goodwill") including the right to
acquire and transfer (i) the existing customer base; (ii) the
employment contracts of key personnel; (iii) existing licensing
agreements; (iv) transfer of all current copyrights and trademarks;
and (v) all royalties and payments for software sales and licences.
(The property and assets described in Section 1.1 are hereinafter
collectively referred to as the "Assets")
1.2 Exclusions. Specifically excluded from the purchase and sale herein,
and from the Assets hereinbefore described, are cash on hand or on
deposit and any security deposits.
2. PURCHASE PRICE AND ALLOCATION
2.1 Purchase Price. The total purchase price payable for the Assets shall
be the lesser of $183,828.46 or the amount of the existing account
payable owing to Telus Communications Inc. ("Telus") under the IVR
Platform Services Agreement (the "Purchase Price"), allocated as
follows:
Equipment (@ Richmond, B.C.) $ 10,000.00
Equipment (@ Calgary, AB) $ 13,000.00
Goodwill $160,828.46
It is agreed and understood that in the event that the Purchase Price is less
than $183,828.46 the amount allocated to "Goodwill" will be reduced accordingly.
It is agreed and understood that upon closing the Purchase Price is to be paid
directly to Telus in full and final settlement of the existing indebtedness of
the Vendor to Telus.
Any rebates from Telus payable after the closing date are to be for the benefit
of the Purchaser.
The Purchase Price is inclusive of any other adjustments for prepaids.
2.2 Payment. The Purchase Price is to be paid to Telus, or, as directed by
Telus on the closing date.
3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Vendor. The Vendor hereby
represent and warrant to the Purchaser as follows, with the intent
that the Purchaser shall relay thereon in entering into this
Agreement, and in concluding the purchase contemplated herein.
(a) Capacity to Own and Dispose of Assets. The Vendor has the power and
capacity to own and dispose of the Assets, to enter into this
Agreement and to carry out its terms to the full extent.
(b) Power to Carry on Business. The Vendor has the power to carry on the
Business and holds all licenses and permits required to permit it to
carry on the Business.
(c) Authority to Sell. The execution and delivery of this Agreement and
the completion of the transaction contemplated hereby has been duly
and validly authorized by all necessary action on the part of the
Vendor, and this Agreement constitutes a legal, valid and binding
obligation of the Vendor enforceable against the Vendor in accordance
with its terms.
(d) Sale will not cause Default. Neither the execution and delivery of
this Agreement, nor the completion of the purchase and sale
contemplated herein will:
i) violate any of the terms and provisions of any order, decree,
statute, by-law, regulation, covenant, restriction applicable to
the Vendor or any of the Assets;
ii) give any person the right to terminate or cancel any instrument
relating to the Assets or remove any of the Assets; or
iii) result in any fees, duties, taxes, assessments or other amounts
relating to any of the Assets becoming due or payable by the
Purchaser other than Social Services Tax payable by the Purchaser
in connection with the purchase and sale of the Assets situate in
the Province of British Columbia.
(e) Assets. At Closing the Vendor will own and possess and have a good and
marketable title to the Assets, free and clear of all mortgages,
liens, charges, pledges, security interests, encumbrances or other
claims whatsoever save and except:
Lease of Calgary Switch from Newcourt Financial Ltd.
(f) Equipment. All of the Equipment is in good working condition.
(g) Books and Records. The Vendor has maintained books, records and files
that relate to the Business and such books, records and files have
been maintained in accordance with generally accepted accounting
principles and, to the best of the knowledge of the Vendor, such
books, records and files contain no material errors or omissions.
(h) Terms of Employment. There are no written contracts with persons
employed in connection with the Business governing conditions of
employment except for Xxxxxxx Xxxxxxx and the Vendor has no employees
who cannot be dismissed on not more than one month's notice.
(i) Collective Agreements. The Vendor is not a party to any collective
agreement relating to the Business with any labour union or other
association of employees, and no part of the Business has been
certified as a unit appropriate for collective bargaining.
(j) Litigation. There is no litigation or administrative or governmental
proceeding or inquiry pending, or to the knowledge of the Vendor,
threatened against or relating to the Business or any of the Assets,
nor does the Vendor know of or have reasonable grounds for believing
that there is any basis for any such action, proceeding or inquiry.
(k) Conformity with Laws. All governmental licenses and permits required
for the conduct in the ordinary course of the operations of the
Business and the uses to which the Assets have been put, have been
obtained and are in good standing and such conduct and uses are not in
breach of any statute, by-law, regulation, covenant, restriction, plan
or permit.
(l) Social Services Tax. The Vendor has not accrued any liability with
respect to Social Service Taxes owing for the period ended January 12,
1999;
(m) Goods and Service Tax. The Vendor is not liable for the payment of any
tax pursuant to Part IX of the Excise Tax Act to which the Vendor is
not entitled to an input tax credit.
(n) Government Taxes and Remittances. The Vendor is current and in good
standing for all taxes or other governmental remittances due or
payable to Revenue Canada for Income Tax, G.S.T. and employee source
deductions; and under the following British Columbia Acts and their
Alberta counterparts: the Social Services Tax Act; the Employment
Standards Act; the Corporation Capital Tax Act, and, the Workmen's
Compensation Act.
(o) Accuracy of Representations. No certificate furnished by or on behalf
of the Vendor to the Purchaser at the Closing in respect of the
representations, warranties or covenants of the Vendor herein will
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statement contained therein not
misleading.
(p) Canadian Resident. The Vendor is a resident of Canada within the
meaning of the Income Tax Act.
(q) No Commission Payable by the Purchaser. The Vendor confirms to the
Purchaser that in the event that any commission is payable on this
purchase and sale that the Vendor shall pay any and all commission and
will save harmless the Purchaser from any and all costs and expense.
4. COVENANTS OF THE PARTIES
4.1 Consents. The Vendor shall diligently take all reasonable steps
required to obtain all necessary consents and approvals to the
assignment of the Assets before and, to the extent in his sole and
absolute discretion the Purchaser shall agree to completion of the
purchase and sale prior to obtaining any such consent or approval,
after the Closing. The Purchaser will, at the request of the Vendor,
execute and deliver such applications for consent and such assumption
agreements (subject to the Purchaser's approval of the form thereof
acting reasonably), and provide such information as may be necessary
to obtain the consents and approvals and will assist and co-operate
with the Vendor in obtaining the said consents and approvals.
4.2 Goods and Services Tax. The Vendor and Purchaser shall file an
election in prescribed form with the Minister of National Revenue
pursuant to s. 167 of Part IX of the Excise Tax Act of Canada.
4.3 Sales Tax. The Purchaser shall pay all provincial sales taxes and
registration charges and transfer fees properly payable upon and in
connection with the sale and transfer of the Assets by the Vendor to
the Purchaser.
4.4 Termination of Employees. The Vendor will at the time of closing
terminate the employment of all employees, and shall pay all wages and
salaries and termination pay and also amounts due in lieu of holidays
up to and including the Closing Date and will indemnify and save
harmless the Purchaser from and against all claims by any employee of
the Vendor of the wages, salaries, bonuses, pension or other benefits,
severance pay, notice or pay in lieu of notice and holiday pay in
respect of any period prior to the time of closing.
4.5 Payment of Suppliers. The Vendor will pay all wholesalers and
suppliers to the Vendor up to and including the date of closing and
will indemnify and save harmless the Purchaser from and against all
claims by any wholesaler or supplier in respect of any period prior to
the time of closing.
4.6 Vendor's Covenants of Indemnity. The Vendor will indemnify and hold
harmless the Purchaser from and against:
(a) all liabilities and obligations relative to the Business,
including, without limitation, all liabilities and obligations
relating to his employees, contingent or otherwise, existing at
the time of Closing which are not expressly agreed to be assumed
by the Purchaser pursuant to this Agreement;
(b) any and all damage or deficiency resulting from any
misrepresentation, breach of warranty or nonfulfillment of any
covenant on the part of the Vendor herein contained or from any
misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished to the Purchaser
hereunder; and
(c) any and all actions, suits, proceedings, demands, assessments,
judgments, costs and legal and other expenses incident to any of
the foregoing.
4.7 Purchaser's Covenants of Indemnity. The Purchaser will indemnify and
hold harmless the Vendor from and against:
(a) all liabilities and obligations relative to the Business,
including, without limitation, all liabilities and obligations
relating to his employees, contingent or otherwise, resulting
from and after the time of Closing which are being expressly
agreed to be assumed by the Purchaser pursuant to this Agreement;
(b) any and all damage or deficiency resulting from any
misrepresentation, breach of warranty or nonfulfillment of any
covenant on the part of the Purchaser herein contained or from
any misrepresentation in or omission from any certificate or
other instrument furnished or to be furnished to the Vendor
hereunder; and
(c) any and all actions, suits, proceedings, demands, assessments,
judgments, costs and legal and other expenses incident to any of
the foregoing.
4.8 Material Contracts Assumed. Except for the capital lease with Newcourt
Financial Ltd. for the Calgary switch and as expressly agreed under
Paragraph 6.2 the only contracts being assumed by the Purchaser are as
follows: nil Without limiting the generality of the foregoing, the
Purchaser is not assuming the lease of either the Richmond or Calgary
premises in which the Business is presently situate and undertakes to
have the Equipment removed from such premises by no later than 30 days
following the Closing Date.
4.9 Offer Employment. The Purchaser covenants with the Vendor to offer
employment to Xxxxxxx Xxxxxxx and Xxxx Xxxxxxxxxx.
4.10 Transitional. The Vendor shall cooperate fully with the Purchaser in
connection with the assignment of any contracts and licences.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 Survival of Representations, Warranties and Covenants of the Vendor.
All representations, warranties, covenants and agreements made by the
Vendor in this Agreement or pursuant hereto shall survive the
completion of the transactions contemplated by this Agreement and,
notwithstanding such completion or any investigation at any time made
by or on behalf of the Purchaser, shall continue in full force and
effect for the benefit of the Purchaser. 5.2 Purchaser's
Representations, Warranties and Covenants. All representations,
warranties, covenants and agreements made by the Purchaser in this
Agreement or pursuant hereto shall, unless otherwise expressly stated,
survive the completion of the transactions contemplated by this
Agreement and, notwithstanding such completion or any investigation at
any time made by or on behalf of the Vendor, shall continue in full
force and effect for the benefit of the Vendor.
6. CLOSING ARRANGEMENTS
6.1 Closing. Subject to the terms and conditions hereof, the purchaser and
sale of the Assets shall be completed at a closing (the "Closing") on
January 12, 1999, or such other time as may be mutually agreed upon in
writing by the Vendor and the Purchaser.
6.2 Documents to be delivered at the Closing. At the Closing and
concurrently with the delivery of payment for the balance due and
payable upon Closing, the Vendor shall deliver or cause to be
delivered to the Purchaser:
(a) all deeds of conveyance, bills of sale, transfer and assignments in
form and content satisfactory to the Purchaser's solicitors,
appropriate to effectively vest good and marketable title to the
Assets in the Purchaser to the extent contemplated by this Agreement,
and immediately registerable in all places where registration of such
instruments is required;
(b) the election in prescribed form referred to in paragraphs 4.2;
(c) opinion letter from the Vendor's solicitor stating that the sale is
not in contravention of any securities regulations;
(d) waiver or an assignment by Telus to the Purchaser of the IVR Platform
Services Agreement;
(e) Xxxx of Sale Absolute of the Assets in Richmond and in Calgary;
(f) All records relating to existing customers of the Vendor;
(g) Cancellation of the employment contracts of key personnel as follows:
Xxxx Xxxxxxxxxx and Xxxxxxx Xxxxxxx;
(h) Assignment of all existing licensing agreements including the right to
continue negotiations to acquire card rights for Playboy and
Lucasfilms;
(i) Assignment of all current copyrights and trademarks including the
"Revere" trademark and the rights to the following domains: xxx.xxx,
xxxxxx.xx and xxx-xxxxxxxxxxx.xxx;
(j) Assignment of all royalties and payments for software sale and
licenses including the payments of Revere Voice Mail by Okanagan
Telephone Co. Ltd.;
(k) Assumption of the lease/financing agreement with Newcourt Financial
Ltd. for the Calgary switch including the buy-out rights upon the
termination of such lease;
(l) Certified copies of such resolutions of the shareholders and directors
of the Vendor as are required to be passed to authorize the execution,
delivery and implementation of this Agreement and of all documents to
be delivered by the Vendor pursuant thereto;
(m) Such other documentation as the Purchaser's solicitors may reasonably
request.
6.3 Possession. The Purchaser shall be entitled to possession of the
Assets at 12:00 noon on January 12, 1999.
7. GENERAL PROVISIONS
7.1 Further Assurances. Upon completion of the Closing this Agreement
shall without further act or formality operate as an actual transfer
and conveyance to the Purchaser of title to all the Assets but the
Vendor and the Purchaser hereby covenant and agree that they will from
time to time thereafter execute and do all such further acts, deeds,
transfers, assurances, matters and things as may be necessary to
transfer to and vest in the Purchaser all or any of the Assets and to
give to the Vendor and the Purchaser the full benefit of this
Agreement. For greater certainty, it is hereby agreed that, following
Closing, the Vendor shall hold all of the Assets, to the extent that
the same shall not have been effectually transferred to the Purchaser
by or pursuant to this Agreement, in trust for and as the property of
the Purchaser.
7.2 Time of the Essence. Time shall be of the essence of this Agreement.
7.3 No Assignment. This Agreement and the rights and obligations of any
party hereunder may not be assigned without the express written
consent of the other parties.
7.4 Amendments. This Agreement may only be modified or amended by written
agreement duly executed by the parties.
7.5 Notices. Except as otherwise provided herein, any notice required or
permitted to be given hereunder by any party shall be deemed to have
been well and sufficiently given if mailed by prepaid registered mail,
or sent by facsimile machine ("faxed") to, or delivered at, the
address of the party to whom it is directed hereinbefore set out, or
at such other reasonable address at which personal delivery may be
effected as such party may from time to time give notice of, and any
such notice shall be deemed to have been received, if mailed, 72 hours
after the time of mailng, and if delivered or faxed, upon the date of
delivery or faxing. If normal mail service or fax service is impaired
by strike, slowdown, forced majeure or other cause, then a notice sent
by the impaired means of communication will be deemed not to be
received utnil actually received, and the party sending the notcie
shall utilize another unimpaired means of communications or shall
deliver such notice in order to ensure prompt receipt thereof.
7.6 Headings and Divisions. The divisions of this Agreement into Parts,
paragraphs and subparagraphs and the insertion of headings are for
convenience of reference only and shall not affect the structure or
interpretation of this Agreement.
7.7 Governing Law. This Agreement shall be contrued and enforced in
accordance with the laws of the Province of British Columbia, the laws
of the Province of Alberta and the laws of Canada applicable therein
and shall be treated in all respects as a British Columbia contract.
7.8 Severability. In the event that any provisions of this Agreement or
any part of any provision shall be held to be invalid, illegal or
unenforceable, it shall not affect the validity, legality or
enforceability of any other provision or portion of a provision of
this Agreement.
7.9 Entire Agreement. This Agreement and the instruments referred to
herein constitute the entire Agreement between the parties with
respect to the subject matter hereof and supersede all prior
agreements, understandings, negotiations and discussions, whether oral
or written, between the parties, and there are no warranties,
conditions, representations or other between the parties in connection
with the subject matter hereof except as specifically set forth
herein.
7.10 Successors and Assigns. This Agreement and everything contained herein
shall enure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and
permitted assigns.
7.11 Counterpart Execution. This Agreement may be executed in couterparts
and such counterparts together shall constitute a single agreement.
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement
the day and year first above-written.
WITNESS: REVERE COMMUNICATIONS INC. by
its authorized signatory:
------------------------------
Xxxxx Xxxx, CEO
WITNESS: ABDE HOLDINGS LTD.. by its
authorized signatory:
---------------------------------
Xxxx Xxxxxxxxxxxxx, President
SCHEDULE "A"
EQUIPMENT, FURNISHINGS, LEASEHOLD IMPROVEMENTS
("Equipment")
Part I - at Richmond, B.C.
Computer System and Hardware
File Server with Monitor
Web Server
Voice Mail Server (4 port)
Service Bureau Server (12 port with Fax)
2 Misc. Systems
2 Office Systems with Monitor
2 Development Systems with Monitor
Printer
Scanner
AT & T Telecom Switch (without license) with Monitor
3 Drive External RAID Chassis and Drives
Fax Machine
Inkjet Printer
2-12 Port Network Hubs
19" Rack System
VGA/Mouse Digital Switch Box
Misc. Voice Boards
Furniture and Fixtures
Boardroom Table
6 Boardroom Chairs
2 "Mahogany" Desks
2 "Mahogany" File Cabinets
2 Office Desks
5 Steno Chairs
Lateral File Cabinet
Trade Show Booth
NEC 2000 Telephone Phone System w. 4 sets
Miscellaneous Office Equipment (incl. cutter, binding machine,
laminator, label
machine)
Part II - at Calgary, AB
Computer System and Hardware
Domain Controller/File Server with Monitor ISDN Switch with 24 Voice
Resources/48 Network Resources T-1 Switch (Telephony Experts 24 Voice -
(leased) Resources/48 Network Resources 19" Rack 5 Drive External RAID
Chassis and Drives Accton Network Hub Ascend Pipeline Router VGA/Mouse
Digital Switch Box
5 Full Size Tower Pentium 100 Computers w. 64M Ram and network cards (1
w. damaged power supply) 5 Mini Tower Pentium 100 Computers w. 32M Ram
and network/sound cards 1 Mini Tower Pentium 233 Computer w. 32M Ram
and network/sound cards and CD Rom. 5 - 14" SVGA Monitors 1 - 14" VGA
Monitor 1 - 17" SVGA Monitor 2 US Robotics modems 1 Ascend ISDN modem 1
- 10 port hub Miscellaneous spare parts Telephone Cards
7 - dialogic D41/D 2 - dialogic 4D 1 - dialogic 12 port
NEC telephone system w. 5 sets
