Exhibit 10.10
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made effective as of the 1st day of January 1998.
AMONG:
IT STAFFING LTD., a corporation incorporated and subsisting under the
laws of the Province of Ontario (hereinafter called "IT")
AND:
XXXX XXXXX, an individual residing in the Town of Markham, in the
Province of Ontario (hereinafter called the "Vendor")
AND:
INTERNATIONAL CAREER SPECIALISTS LTD.,A corporation incorporated and
subsisting under the laws of the Prov'mce of Ontario (hereinafter
called "ics
AREAS:
The Vendor is the legal and beneficial owner of I 00% of the issued and
outstanding shares in capital stock of ICS.
IT desires to acquire, on the terms and conditions as set forth below,
100% of the issued and outstanding shares in the capital stock of ICS.
The Vendor desires to sell, on the terms and in the manner set forth
below, 100% of the issued and outstanding shares in the capital stock of ICS.
The Vendor, as a consequence of the payment of the purchase price will
become a significant shareholder of IT.
NOW THEREFORE THIS AGREEMENT SSES THAT in consideration of the premises
set forth above, the mutual covenants and agreements and such other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
DEFINITIONS
Capitalized terms defined in the Employment Agreement or the Share
Option Agreement, and not otherwise defused in this Agreement, shall have the
same meanings where used in this Agreement. Where used in this Agreement the
following terms shall have the following meanings:
(a) "Affiliate" means any person, firm or corporation (excepting the IT)
who, directly or indirectly through other corporations, fi= or trusts,
has any interest, other than by way of pledge, in any of the
outstanding shares of IT and any firm or corporation controlled,
directly or indirectly through other corporations, firm or trusts, by
any one or more of such persons and any person who is related by blood
relationship, marriage or adoption to any such person;
(b) "Closing Conditions" means, collectively, the IT Conditions and the
Vendor Conditions;
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(c) "Employment Agreement" means the Employment Agreement of even date
herewith between ICS, as employer, and the Vendor, as employee, in the
fortn attached as Schedule "A" hereto;
(d) "Issue D ate" means the date of completion of any Public Offering;
(e) "Public Offering" has the meaning ascribed thereto in the Share Option
Agreement;
(f) "Securities" means, collectively, the ICS Shares and the IT Shares;
(g) "Share Option Agreement" means the Share Option Agreement of even date
herewith between the Vendor, as optionee, and IT, as optionor;
(h) "Target Date" means the earliest of the following dates:
July 29. 1999; and
any date on which:
(A) IT ceases to carry on its business; or
(B) IT makes a general assignment for the benefit of its
creditors or a proposal under the Bankruptcy and
Insolvency Act or is declared banlaup@ or a receiver
is appointed for IT and such appointment is not
stayed with @ I 0 business clays thereof, or a
proposal or plan of arrangement or restructuring
under any applicable laws relating to bankruptcy
and/or insolvency, or any similar laws is made by or
for it; or
(C) an order is made, or an elective resolution is passed
by IT, for the winding-up, liquidation or dissolution
of IT.
2. PURCRASE OF SHARES
(a) Closing. Closing of the transactions contemplated under this
Agreement shall occur at the offices of IT on May 15, 1998, or
such later date as all the parties might agree in writing (the
"Closing Date"), provided, however, that closing shall not in
any event occur at any date later than May 26, 1998 1 after
which date this Agreement shall (if closing has not occurred)
be deemed tenti'mated and of no furdier force or effect and
the Deposit deemed forfeited.
(b) Purchase Price, in aggregate, is $ 1,000,000 paid as follows:
(i) the aggregate purchase price for 50% of the
issued and outstanding shares in the capital
stock of ICS is $500,000 and is to be paid
as follows:
(A) a non-refundable deposit (the "Deposit") in the sum
of $30,000, by cheque;and
(B) on closing, a further $470,000 by certified cheque.
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the aggregate price for 50% of the issued and outstanding
shares in the capital stock of ICS is 5500,000 and is to be
paid and satisfied:
(A) by IT's issuing to the Vendor on the Closing Date,
from treasury, I 00,000 common shares in the capital
stock of IT.
(c) Delively of share certification. On the Clos-mg Date: the
Vendor shall deliver to IT share certificates represent' 1
00% of the issued and outstanding shares in ICS (the M9
"ICS Shares"), duly endorsed in blank for transfer to IT; and
IT shall deliver to the Vendor share certificates
representing I 00,000 conunon shares in the capital of IT
(the "IT Shares"), duly authorized, issued and registered
in IT's corporate minute books/ledgers in the name of
the Vendor.
3. SPECLAL RIGHTS OF VENDOR.
At any time on or within 90 days follow'mg any Target Date, and if as
at such date no Public Offering has been completed, the Vendor may at his option
(exercised by written notice however to IT) exercise any one or more of the
following rights, hereby granted to it:
(a) to ,equire IT to purchase from the Vendor all its IT Shares,
in consideration of a purchase price of either (at the option
of IT):
the return to the Vendor, free and clear of all
encumbrances, charges or claims of any kind 50% of the
ICS Shares originally purchased by IT from the Vendor
pursuant to this Agreement; or
1 00,000, paid by certified cheque;
(b) to terminate his employment under the Employment Agreemen@ and
to require IT, and ICS to release and discharge the Vendor of
any obligations on its part to be performed or observed under
any of this Agreement, any Transaction Documents or any other
agreements binding on it, existing otherwise by law based on
any of the Vendor's employment, appointment as director or
officer or otherwise, or its status at any relevant time as a
fiduciary or as a holder or former holder of any shares in
either IT or ICS, or otherwise applicable to the Vendor in any
capacity whatsoever, to refrain from freely competing directly
or indirectly, in any manner, with ICS or IT, or from
soliciting third parties (including without limitation any
customers or former customers of ICS), to the fullest extent
as though the Vendor had never sold the ICS Shares to IT and
the tmmactions contemplated under the Transaction Documents
never occurred, and each of IT and ICS shall be deemed to have
consented to such matters upon the date of delivery by the
Vendor of any notice under this Section invoking this right;
in such event, IT and ICS shall be deemed further to have
consented to the Vendor's using thereafter in a competing
business any business name or style at any time previously
used by ICS, including without limitation the names
"International Cweer Specialists Ltd." and "ICS", and if so
requested by the Vendor, ICS and IT shall effect a change
(non-continuing) to ICS's corporate name and any required
business styles.
4. FILING ELECTIONS.
The Vendor and IT shall elect in prescribed form and manner to have
the provisions of subsection 85(1) of the Income Tax Act (Canada)
apply to the transfer of the ICS Shares, and shall deliver the same to
Revenue Canada, Taxation within the time period prescribed under
such Act.
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CONDUCT OF BUSINESS.
Interim Operation fom January I st, 1998 until the Target Date:
(a) the Vendor and ICS shall conduct their respective businesses
in the ordinary course, completely autonomously, and 'm a
manner consistent with the Employment Agreement, and they
shall not make any material change in the customary terms and
conditions upon which they historically did business unless
otherwise agreed in writing between IT and the Vendor, with
the following exception:
That Xxxx Xxxxxxxxx of ICS shall be offered a VP title within ICS, a role of
increased responsibility, an annual bonus of one half of one per cent of the
total Production (as such term is defmed in the Employment Agreement) of ICS,
and stock options in IT equal to 50% of this annualbonus;and
(b) the Vendor and ICS shall use their best efforts to preserve
the bus'mess orgamzation and goodwill of the suppliers, staff,
customers and Business of ICS, provided that the Vendor's
obligations in this regard shall be as set forth in the
Employment Agreement.
6. VENDOR COVENANTS.
The Vendor hereby covenants that
(a) it shall not take any action or omission which will in any way
delay or prevent the completion of this transaction on the
Closing Date;
(b) all bonuses (other dm any bonuses relating to Asset Proceeds,
or Bonuses as defined in and payable to the Vendor under the
Employment Agreement) are to be forgiven by ICS on clos'mg;
(c) it shall cause the owner of ICS's business premises (in
respect of which ICS is currently in occupation) forthwith
after execution and delivery of this Agreement to enter into a
formal commercial lease (a "Premises @ase") with IT or with
ICS. Said lease will have a 3 year term at rents of
$5,000/month, which rent terms shall apply in respect of an
periods of occupation prior to execution and delivery of such
lease. Other Premises Lease terms shall be as settled between
the parties, consistent otherwise with ICS's past use and
occupation of the premises, and IT shall prepare and submit to
the owner a draft document for this purpose within I 0 days of
the date of execution hereof;
(d) ICS will be responsible for its' own share of professional
fees relating to this acquisition; and
(e) it shall keep all details of this Agreement strictly
confidential.
7. IT REPRESENTATIONS AND WARRANTIES.
IT hereby represents to and in favour of the Vendor that the
following statements are and will be true and correct on and as
at the Closing Date:
(a) IT is a corporation duly incorporated and organized and is a
valid and subsisting corporation under the laws of Ontario and
has all necessary corporate power and authority to carried on
by it;
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(b) IT has the power, full legal right and corporate authority to
enter into, execute and deliver this Agreement, the Employment
Agreement and the Share Option Agreement (collectively, the
"Tra.s.c-tion Documents") and to do all acts and things and
execute and deliver all documents and instruments as are
required hereunder and thereunder to be done, observed or
performed by it in accordance with the temis thereof.,
(c) IT has taken all necessary corporate action to authorize the
creation, execution, delivery and performance of the
Transaction Documents and none of the foregoing requires or
will require the consent or approval of any person except such
as has already been obtained and is in full force and effect
nor is any such action in contravention of or in conflict with
its charter or by-laws or resolutions of its directors or
shareholders, the provisions of any statute or regulation or
the terms and provisions of any mortgage, indenture, contrac@
agreement, instrument, judgment, decree or order to which IT
is a party or by which it or any of its properties or assets
are or may become bound;
(d) each of the Transaction Documents, constitutes a valid and
legally binding obligation of IT enforceable against it i.
ccordance with its terms;
(e) the IT Shares have been duly and validly issued as fully
paid and non-assessable shares by IT to the Vendor; forms
of share certificates representing the IT Shares have been
validly adopted by IT and the share certificates delivered
to the Vendor have been validly executed and delivered
under the corporate seal of IT by proper off-lcers of IT
duly authorized in that behalf;
(g) the by-laws of IT as enacted by its board of directors are
consistent in all material respects, and do not conflict 'm
any material way with the provisions of the Transaction
Documents;
(h) attached as Schedule "C" hereto are true copies of IT's
Articles of Incorporation (the "IT Articles"); and
(i) IT is a Canadian-controlled private corporation, within the
meaning of such term as referenced in Section 248 of the
I,,,,,.e Tax Act (Canada).
8. IT COVENANTS:
IT hereby covenants that:
(a) it will be responsible for its' own share of professional fees
relating to this acquisition, which for this purpose shall
include all accounting fees charged from and after April 15,
1998, by Naffim Xxxxxx;
(b) it will be responsible for filing all financial statements and
applicable tax returns subsequent to the Closig Date;
(c) no changes will be made to the commission structure of ICS's
consultants or bank signing authorities before the Issue Date
without the express written consent of the Vendor;
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(d) no changes will be made to the time fi-ame for ICS
consultant's commission payouts, between when the applicable
cheque is received by ICS from the customer and vhen the ICS
consultant's commission is paid, currently at a maximum of 72
hours;
(e) it shall 'mdemnify the Vendor from any clause, damages and
legal actions that could occur after the Closing Date;
it shall keep all details of this Agreement strictly
confidential;
(g) it shall not, without the prior written consent of the Vendor
cause or permit, at any time prior to the Issue Date:
(i) any amendment to the IT Articles, other than any amendment
made in anticipation of the Public Offering strictly to remove
any private company restrictions and/or requirements for
d'uector's consent to share transfers;
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the taking by ICS of any proceedings with a view to the dissolution, winding-up
or termination of the corporate existence of ICS;
the creation or assumption after the date hereof of any mortgage,
pledge, charge or other encumbrance on or the creation of any security
interest in any of the Excluded ICS Assets;
(iv) any material change in the undertaking of the business or
operations of ICS;
(v) the making by ICS of any agreements with any of the parties or
any Affiliate of IT not in the ordinary course of business; or
(V1) the assumption by ICS of liability for the obligations of any
third party other than IT.
9. VENDOR REPRESENTATIONS AND WARRANTIES.
The Vendor represents and warrants to and in favour of IT that the
following statements are true and correct on and as of the Closing Date:
(a) it has not been induced into entering into this Agreement by
oral or written representation ,orpromisesexceptassetout'
thisAgreementoranyotherdocumentreferencedinthis Agreement to
which it is a party;
(b) it is not now and will not be on Closing Date a non-resident
as defmed in the Income T= Act (Canada);
(c) there is no material information or knowledge which has been
withheld from IT relating to ICS which, if known, would cause
the purchaser to alter his decision to purchase the ICS
Shares;
(d) from November 1, 1997, other than the purchase and subsequent
sale of the Pahn Harbor, Florida house, or other transactions,
bonuses, dividends and/or divestitures by or on behalf of ICS
referenced in this Agreement, there are no out of the ordinary
transactions affecting ICS, including but not limited to,
declaration or payment of dividends and payment of declared
bonuses other dm a payment up to a maximum of $100,000 over
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and above the employment contract as a bonus payment;
(e) IT is relying on the October 3 1 st 1997 fmancial
statements, copies of which are attached as Schedule "B"
hereto; the Vendor is the beneficial owner of the ICS
Shares with good and marketable title thereto, free and
clear of any mortgage, charge, pledge, security interest
lien, demand or other encumbrance whatsoever;
(g) the Vendor has the right to sell and @fer the ICS Shares free
and clear of any mortgage, charge, pledge, security interest,
lien, demand or other encumbrance whatsoever, all 'M
accordance with the terms of this Agreement and no person,
firm or corporation (other than the Purchaser) has any
agreement or option for the purchase or acquisition of the ICS
Shares from the Vendor;
(h) the share certificates representing the ICS Shares were
duly and validly issued by ICS, and have been validly
executed and delivered under the corporate seal of ICS by
proper off-icers of ICS duly authorized in that behalf; and
the by-laws of ICS enacted by its board of directors are
consistent in all material respects, and do not conflict 'M
any material way with the provisions of the Transaction
Documents.
10. EXCLUDED ICS ASSETS.
IT acknowledges that with its consen@ ICS will, prior to the Closing Date
dispose of (and pay out the net proceeds thereof ("Asset Proceeds") to the
Vendor, by way of dividend or bonus) the following assets (collectively the
"Excluded ICS Assets"):
(i) Florida (Pahn Harbor) property (the "Excluded Real Property");
('i) investment in 1242541 Ontario Ltd.;
(iii) ICS Stocks/Mutual fund investments with Midland Xxxxxx of
$71,000 (approximate); and
(iv) 1993 Jeep Cherokee; and
(v) pay out to the Vendor, by way of bonus or dividend up to
$ 100,000 of cash in ICS's account.
These assets will not, in any even@ form part of this transaction, whether or
not they have been disposed of as of the Closing Date, and the parties shall
make appropriate adjustments in the event that any of same is not disposed of
prior to the Closing Date. IT shall cause ICS to pay out to the Vendor by way of
bonus any Asset Proceeds not rendered paid out or distributed prior to the
Closing Date. Any Asset Proceeds received by ICS shall be held in @t for the
Vendor and shall be immediately thereupon paid over to the Vendor.
IT CLOSING CONDITIONS.
The obligations of the IT hereunder to Purchase the ICS Shares on the
Closing Date is subject to compliance with the following conditions precedent
(the "IT Conditions"), it being agreed that such conditions precedent are for
the exclusive benefit of IT:
(a) the representations and ..r,..ties of the Vendor conta'med 'm
this Agreement or any othe, Transaction Documents shall be
true and cotect on and as at the Closing Date;
(b) all the Transaction Documents and other closing documents as
are contemplated hereby or as are reasonable and appropriate
in the circumstances shall have been executed and delivered by
each of the parties thereto; and
(c) the Vend., shall have copl'@ed with its covenants hereunder.
12. VENDOR CLOSING CONDITIONS.
The obligations of the Vendor hereunder to sell the ICS Shares on the
Closing Date is subject to compliance with the follow'mg conditions
precedent (the "Vendor Conditions"), it being agreed that such
conditions precedent are for the exclusive benefit of the Vendor:
(a) the representations and warranties of IT contained in this
Agreement or any other Transaction Documents shall be true and
correct on and as at the Closing Date;
(b) the IT Articles shall be in form and substance satisfactory to
the Vendor, acting reasonably;
(c) all the Transaction Documents and other closing documents as
are contemplated hereby or as are reasonable and appropriate
in the circumstances shall have been executed and delivered by
each of the parties thereto;
(d) in the event that the Excluded Real Property is not disposed
of by ICS prior to the Closing Date, the Vendor and IT shall
have entered into an arrangement satisfactory to both of them
for the purchase of beneficial ownership of the Excluded Real
Property from the Vendor; and
(e) IT shall have complied with its covenants hereunder.
13. CONFIDENTL&LITY.
IT, ICS and the Vendor agree that any information obtained during
examination of the fmancial records and/or other legal documentation is
confidential and warrant that any such information will not be transmitted to
anyone other than their respective advisors.
14. SEVERABIILITY.
If any term, representation or condition of this Agreement is
determined invalid or to any extent unenforceable, that provision insofar as it
related to that party or circumstances shall be deemed not to be included herein
and the balance of this Agreement shall remain in full force and effect and
continue to be binding upon the parties hereto.
15. SECTIONS AND HEADINGS.
The division of this Agreement into Articles and Sections and the
insertion of headings are for the convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof and
include any agreement or instrument supplemental or ancillary hereto. Unless
something 'M the subject matter or context is inconsistent therewith, references
herein to Articles and
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Sections are to Articles and Sections of this Agreement.
16. T@.
Time shall be of the essence of this Agreement. When calculating the
period of time within which or following which any ct is to be done or step
take. pursuant to this Agreement, the date which is the reference date in
calculating such period shall be excluded.
17. EXTENDED MIEANINGS.
Words importing the singular number only shall include the plural and
vice versa and words importing gender shall 'mclude masculine, feminine and
neuter genders.
18. CANADIAN DOLLARS.
Unless otherwise provided here'm, all monetary amounts set forth in
this Agreement are in Canadian dollars.
19. NOTICES.
Any notices required or permitted to be given hereunder shall be in
writing and may be given by delivering same or sending same by facsimile
addressed to:
(a) the Vendor at: 00 Xxxxx Xxxx Xxxxxxxx
Xxxxxxxx, XX X0X 0X0
Attention: Mr. John @
Facsimile No.: (000) 000-0000;
(b) IT at: c/o Xx. Xxxxxx Xxxxxx
IT Staffing Ltd.
00 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX X0X 0X0
Facsimile No.: (000) 000-0000;
with copy to ICS; and
(c) ICS at: c/o Mr. Xxxx Xxxxx
International Career Specialists Ltd.
0000 XxXxxxxx Xxxxxx
Xxxxxxxxxxx, XX M I W 3W6
Facsimile No.: (000) 000-0000
with copy to IT.
Any such notice if sent by facs@le shall be deemed to have been
received by the addressee on the day following the day o. which the
notice was so sent. Any party to this Agreement may change its or his
address for notice from time to time by notice given in accordance with
the foregoing and any subsequent notice shall be sent to the party at
its or his changed address.
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20. FURTHER DOCUMENTS.
Subject to the satisfaction of all Closing Conditions, this Agreement
shall operate as a transfer, ass'g-,,.t and delivery by each transferor to each
transferee of the Securities, as applicable, (effecti,,e on the Clos' g Date,
but nevertheless each party hereto covenants vith the others of them to execute
all such further documents and p,,rform such other acts as may be requisite or
necessary to carry out the purpose and intent of this Agreement.
21. SURVIVAL.
Any representation, warranty or covenant contained 'M this Agreement
made by a party hereto, and the rights of the Vendor under Section 3, shall
survive the Closing Date and shall continue in full force and effect thereafter
for a period of three years from the Closing Date except for the Vendor's
representation and ' Section 9(f) which shall survive indefmitely. warranty in 1
22. AMIENDMEENT.
This Agreement may not be amended except by a written instrument signed
by all the parties hereto.
IN WITNESS WHEREOF the partied here to have duly executed this
Agreement as of the day of May, 1998.
International Career Specialists Ltd.
/s/ Xxxx Xxxxx
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Xxxx Xxxxx
IT Staffing Ltd.
/s/ Declan French
---------------------------
President
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