Exhibit 2.1
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT made the 5th day of September, 2002 BY and AMONG;
INTERNET CABLE CORPORATION, a corporation incorporated under the laws
of the State of Nevada (hereinafter referred to as "Purchaser")
OF THE FIRST PART
CLEARVIEW COMMUNICATIONS LTD., a corporation incorporated under the
laws of the Province of Ontario (hereinafter referred to as "CCL")
OF THE SECOND PART
XXXX XXXXX, of the Town of Orangeville in the Regional Municipality
of King, Province of Ontario (hereinafter referred to as "Vendor")
OF THE THIRD PART
WHEREAS the Purchaser desires to purchase all of the issued and
outstanding shares in the capital of Clearview;
NOW THEREFORE in consideration of the premises and the respective
covenants and agreements of the Parties herein contained, the sum of one dollar
now paid by each Party hereto to each of the other Parties hereto and other good
and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged by all of the Parties hereto), the Parties hereto covenant and
agree as follows:
ARTICLE 1
1.1 DEFINITIONS - Whenever used in this Agreement, unless there is something in
the subject matter or context inconsistent therewith, the following words and
terms shall have the respective meanings ascribed to them as follows:
"Accounts Receivable" mean any and all accounts receivable, trade
receivables, notes receivable and other receivables arising out of the
Business and operations of Clearview.
"Affiliate" of any Person means any corporation, proprietorship,
partnership or business entity which directly or indirectly owns or
controls, is under common ownership or control with, or is owned or
controlled by, such Person.
"Agreement" means this share purchase agreement, including all Schedules
and Exhibits hereto and all instruments supplemental hereto or in amendment
or confirmation hereof or thereof.
"Applicable Law" means any domestic or foreign law, statute, regulation,
rule, policy, guideline, ordinance, by-law (including, without limitation,
any Environmental Law) applicable to the Purchaser, the Vendor, the
Business or operation of Clearview, the Assets of Clearview or the
Purchased Shares.
"Assets of Clearview" means all of the assets of Clearview used in the
Business of Clearview.
"Business" means the engineering, planning, construction and installation
services in connection with the building, maintaining and upgrading of
cable telecommunications systems presently carried on by Clearview.
"Business Day" means any day other than a Saturday, Sunday or holiday on
which the Canadian chartered banks located at Markham, Ontario are open for
business.
"Clearview" means Clearview Communications Ltd., a corporation incorporated
under the laws of the Province of Ontario.
"Canadian Tax Act" shall mean the Income Tax Act (Canada) as amended and
the Regulations made pursuant thereto.
"Closing" means the completion of the sale to and purchase by the Purchaser
of the Purchased Shares hereunder by the transfer and delivery of documents
of title thereto and the payment of the Purchase Price therefor as
contemplated herein.
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"Closing Date" means the 11th day of September, 2002, or such other date as
the Parties may agree or as may be extended by the Purchaser as the date
upon which the Closing shall take place.
"Closing Time" means 1:00 o'clock p.m. Markham time, on the Closing Date or
such other time on such date as the Parties may agree as the time at which
the Closing shall take place.
"Deposit" has the meaning ascribed in Section 2.2 hereof.
"Dollar" and "$" means lawful money of Canada.
"Effective Date" means the date of execution of this Agreement.
"Encumbrance" means any encumbrance of any kind, including, without
limitation, and option. Pledge, security interest, lien, hypothec, charge,
encumbrance, mortgage, hypothecation, trust, deemed trust, trust deed,
easement, lease, sub-lease, claim, right of way, covenant, condition or
restriction (whether on sale, transfer or disposition or otherwise),
whether imposed by agreement, law or otherwise, whether of record or
otherwise.
"Environmental Law" means any law, statute, regulation, rule, policy,
guideline, order, consent decree, settlement agreement or governmental
requirement of Canada or any province, territory or local government or any
agency thereof, which relates to or otherwise imposes liability or
standards of conduct concerning discharges, releases or threatened releases
of noises, odors or any pollutants, contaminants or hazardous or toxic
wastes, substances or materials into ambient air, water or land, or
otherwise relating to the manufacture, processing, generation,
distribution, use, treatment, storage, disposal, clean-up, transport or
handling of pollutants, contaminants or hazardous or toxic wastes,
substances or materials.
"Environmental Permit" shall mean any Permit required by or pursuant to any
applicable Environmental Law.
"Financial Statements of Clearview" means the unaudited, reviewed financial
statements of Clearview for the fiscal year ended July 31, 2002, consisting
of a balance sheet and the statements of income, retained earnings, source
and application of funds and changes in financial position and all notes
thereto as reported upon by BDO Dunwoody LLP is Xxxxx X Xxxxxxxx,HBA,CA
Senior Manager.
"GAAP" shall mean generally accepted accounting principles from time to
time approved by the Canadian Institute of Chartered Accountants or and
successor Institute applicable as of the date on which any calculation or
determination is required to be
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made in accordance with generally accepted accounting principles, and where
the Canadian Institute of Chartered Accountants includes a recommendation
in its Handbook concerning the treatment of any accounting matter, such
recommendation shall be regarded as the only generally accepted accounting
principle applicable to the circumstance that it covers.
"Governmental Authority" means the government of Canada or the government
of the United States of America or any province, xxxxx, xxxxxxxxx, xxxxxx,
xxxxxxxxxxxx, locality or other political sub-division thereof and any
entity exercising executive, legislative, judicial, regulatory
administrative functions of or pertaining to government, as the case may
be.
"Interim Financial Statements" means the interim unaudited financial
statements of Clearview for the Period ended December 31. 2001, consisting
of a balance sheet and the statements of income, retained earnings, source
and application of funds and changes in financial position and all notes
thereto as reported upon by BDO Dunwoody.
"Key Employees" means the senior employees and officers of Clearview as set
out in this Agreement and the Schedules attached hereto.
"Leased Properties" means all of the lands, buildings, facilities,
installations, fixtures, structures and improvements leased to Clearview.
"Losses" means all liabilities (including, without limitation, all
liabilities relating to Taxes), losses, costs, damages, deficiencies,
penalties or expenses (including, without limitation, solicitors' and
accountants' fees and expenses in costs of investigation and litigation and
any judgment, settlement or compromise relating thereto and interest,
penalties or other amounts paid in respect of judgments, settlements or
compromises).
"Material Adverse Effect" means a negative change in, or effect on the
operations, affairs, prospects, financial condition, results of operations
assets, liabilities, reserves or any other aspect of the corporation of the
business of the corporation that results in a negative adverse effect on or
a negative adverse change in any such aspect of the corporation or the
business of the corporation.
"Material Contract" means any contract entered into by Clearview having an
annual Dollar value greater than Fifty thousand Dollars ($50,000.00) or a
term in excess of twenty-four months, excepting therefrom all financing
agreements and Encumbrances.
"Party" means the Purchaser, Internet Cable Corporation, and Vendor,
Clearview Communications Ltd., "Party" means any one of them.
"Permits" means all of the permits, licenses, consents, approval,
certificates, variances,
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interim permits, permit applications or other authorization required by or
pursuant to Applicable Law.
"Person" means any individual, corporation, partnership, trustee or trust
or unincorporated association, and pronouns have a similarly extended
meaning.
"Purchaser's Counsel" means Xxxxxx X. Xxxxxxx, LLB, Xxxxxxx & Associates,
00 Xxxx Xxxxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx, X0X 0X0.
"Purchase Price" means the purchase price to be paid by the Purchaser for
the Purchased Shares as provided in Article 2 hereof.
"Purchased Shares" means 4 issued and outstanding common shares in the
capital of Clearview.
"Taxes" means all taxes, charges, fees, duties, levies or other
assessments, including (without limitation) income, gross receipts, net
proceeds, ad valorem, turnover, real and personal (tangible and
intangible), sales, use, franchise, excise, value added, goods and
services, stamp, leasing, lease, user, transfer, fuel, excess profits,
payroll, occupation, interest, equalization, windfall profits, severance
and employees' withholding, unemployment, employer health and social
security taxes which are imposed by Canada or any province, xxxxx,
xxxxxxxxx, xxxxxx, xxxxxxxxxxxx or local or foreign government or any
agency thereof, and such term shall include any interest, penalties or
additions to tax attributable to such Taxes.
"Vendor's Counsel" means the law firm of Xxxxx & Xxxxxxxx Barristors and
Solicitors; Xxxxx Xxxxxxxx,X.XX.,M.B.A.,L.L.B., or its successor, counsel
to Clearview.
"Vendor means, Xxxx Xxxxx
"Stock Options" means stock options in the capital of the Purchaser.
Terms defined in the preamble to this Agreement shall have the same meanings
herein as are ascribed thereto in the preamble.
1.2 GENDER AND NUMBER - Words importing the singular include the plural and vice
versa; words importing gender include all genders.
1.3 ENTIRE AGREEMENT - This Agreement, including the Schedules and Exhibits
hereto, together with the agreements and other documents to be delivered
pursuant hereto, constitute the entire agreement between the Parties pertaining
to the subject matter hereof and supersede all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the Parties and there
are no warranties, representations or other agreements between the Parties in
connection
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with the subject matter hereof except as specifically set forth herein and
therein.
1.4 WAIVERS, ETC. - No supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing by the Party to be bound
thereby. No waiver of any of the provisions of this Agreement, in whole or in
part, shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
1.5 OTHER WORDS AND PHRASES - In this Agreement, unless otherwise expressly
provided (i) the words "hereof", "herein", "hereto" and "hereunder" and words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Subsection, paragraph or other subdivision, and (ii) all
references to designated "Articles", "Sections", Subsections", "paragraphs" or
other subdivisions are to the designated Articles, Sections, Subsections,
paragraphs and other subdivisions of this Agreement.
1.6 HEADINGS - The Article and Sections headings contained herein are included
solely for convenience of reference, are not intended to be full or accurate
descriptions of the content thereof and shall not be considered part of this
Agreement.
1.7 GOVERNING LAW - This Agreement and the rights, obligations and relations of
the Parties shall be governed by and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein, and
the courts of Ontario shall have exclusive jurisdiction to entertain any action
in connection with this Agreement.
1.8 CURRENCY - Unless otherwise specified, all reference to currency herein are
deemed to mean lawful money of Canada, and all amounts to be paid or calculated
pursuant to this Agreement are to be paid or calculated in lawful money of
Canada.
ARTICLE 2
PURCHASE AND SALE
2.1 PURCHASE PRICE - Subject to the terms and conditions set forth in this
Agreement, at the Closing, the Vendor shall sell, assign and transfer to the
Purchaser and the Purchaser shall purchase, accept and acquire the Purchased
Shares listed opposite the Vendor's name on Schedule 2.1 attached hereto. The
Purchase Price for the Purchased Shares shall be one hundred and fifty thousand
dollars (CDN$150,000.00) together with seven hundred fifty thousand shares
750,000 of ICC common stock.
2.2 DEPOSIT - The Purchaser shall immediately upon execution of this Agreement
deliver to the Vendor's Counsel a Deposit in the amount delivery of 50% of the
stock and the sum of five thousand dollars (CDN$5,000.00). The Deposit shall be
held in trust by the Vendor's Counsel,
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pending the completion or termination of the transactions contemplated herein.
The Deposit may be invested by the Vendor's Counsel in an interest bearing
account, any such interest accruing shall be for the Vendor's account and
benefit.
2.3 ACTION BY VENDOR AND PURCHASER AT THE CLOSING TIME - At the Closing, the
Vendor and the Purchaser shall take the following action:
(a) Delivery of Certificates, etc. - The Vendor shall transfer and deliver
to the Purchaser at the Closing share certificates representing the
Purchased Shares duly endorsed in blank for transfer or accompanied by
irrevocable security transfer powers of attorney duly executed in blank, in
either case by the holders of records thereof. The Vendor shall take such
steps as shall be necessary to cause Clearview to enter the Purchaser or
its nominee upon the books of Clearview as the holder of the Purchased
Shares and to issue one or more share certificate to the Purchaser or its
nominee representing the Purchased Shares;
(b) Payment to the Vendor - The Purchaser shall pay the sum of one hundred
thousand dollars (CDN$100,000.00) to the Vendor upon the closing of the
transaction; the remaining forty five thousand dollars (CDN$45,000.00) and
the balance of the stock, being the balance of the purchase price, shall be
subject to an escrow period or to the order of the Vendor as follows:
(i) by certified cheque or bank draft in accordance with the direction
of the Vendor in the amount of one hundred thousand dollars
(CDN$100,000.00) shall be paid to the vendor upon the closing of the
transaction.
(ii) by certified cheque or bank draft in the principal amount of
forty five thousand dollars (CDN$45,000.00) together with three
hundred seventy five thousand shares (375,000) of ICC common stock,
being the balance of the purchase price, shall be subject to an escrow
period. (the "2nd Installment") made payable to Xxxxxx X. Xxxxxxx,
LLB, Xxxxxxx and Associates, 00 Xxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx, X0X 0X0 in trust, which shall be held in accordance with the
Escrow Agreement, a copy of which is attached hereto as Schedule 2.2.
(c) Indemnity to Xxxx Xxxxx - The Purchaser shall deliver to Xxxx Xxxxx,
Vendor herein, an agreement to indemnify him for all acts done on behalf of
Clearview to secure the financial obligations of Clearview prior to
closing.
2.4 PAYMENT OF THE 2ND INSTALLMENT - The 2nd Installment shall be held in trust
by the Purchaser's Counsel after Closing, and shall be released to the Vendor at
the expiry of six weeks from the date of Closing; provided the Purchaser cannot
demonstrate the following:
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(a) the warranties, representations and covenants of Clearview are found to
be materially incorrect on Closing; and
(b) Clearview, the Clearview Business or the Assets of Clearview are
effected by a Material Adverse Effect;
in which case the 2nd Installment will be released in part or in full only in
accordance with the Escrow Agreement, a copy of which is attached hereto as
Schedule 2.2
2.5 PLACE OF CLOSING - The Closing shall take place at the Closing Time at a
location in Markham, Ontario as may be agreed upon by the Vendor and the
Purchaser.
2.6 EXTENSION OF CLOSING - The Purchaser may extend the Closing by 30 days up to
three times, for a maximum extension of 90 days. The Purchaser Price shall be
increased by four thousand Dollars ($4,000.00) for each extension of the Closing
required by the Purchaser. The Purchaser shall give the Vendor at least five (5)
days prior written notice in the case of the first extension and at least five
(5) days prior written notice in the case of the second and third extension,
should they be required. Upon each such notice being given, the Purchaser shall
deliver to the Vendor, together with the notice, a cheque in the amount of four
thousand Dollars ($4,000.00) being the increase to the Purchase Price, which
shall be held in trust by the Vendor's Counsel, pending the completion of the
transactions contemplated herein. This increase to the Purchase Price shall be
an increase to the Deposit and shall be treated in a like manner with respect to
the provisions of Section 7.5 herein.
2.7 TENDER - Any tender of documents or money hereunder may be made upon the
Parties or their respective counsel, and money may be tendered by official bank
draft drawn upon a Canadian chartered bank or by negotiable cheque and certified
by a Canadian chartered bank.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE VENDOR, CLEARVIEW
The Vendor and Clearview jointly and severally represent to the
Purchaser as follows:
3.1 ORGANIZATION AND VALID EXISTENCE: CLEARVIEW
Clearview is a corporation duly incorporated, organized and validly
existing under the laws of the Province of Ontario. The execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereunder have been or shall by the Closing Date be duly authorized by all
necessary corporate action on the part of Clearview. Attached herewith as
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Schedule 3.1 is a copy of the articles of incorporation of Clearview.
3.2 ENFORCEABILITY OF OBLIGATIONS
This Agreement constitutes a valid and binding obligation of the
Vendor and Clearview 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 performance and injunction are in the
discretion of the court from which they are sought. The execution, delivery and
performance of this Agreement and all other agreements, instruments,
certificates and documents contemplated hereby by the Vendor and Clearview do
not, on the date hereof, and will not, on the Closing Date:
(i) violate any Applicable Laws;
(ii) except as set forth on Schedule 3.2 attached hereto, violate or
conflict, or result in a breach of, or constitute a default (or event,
which with or without notice or lapse of time or both, would
constitute a default) under, or permit cancellation of, or result in
the creation of any Encumbrance upon any of the Clearview Assets, the
assets used by Clearview in the Business, or the Purchased Shares
under any of the terms, conditions or provisions of any contract or
agreement to which the Vendor is a party or by which he or any of the
Clearview Assets, the assets used in the Clearview Business or the
Purchased Shares are bound;
(iii) permit the acceleration of the maturity of any indebtedness of
Clearview or any indebtedness secured by the Clearview Assets or the
assets of the Clearview Business of the Purchased Shares; or
(iv) violate or conflict with any provisions of the articles of
by-laws of Clearview or any director's or shareholder's resolutions of
Clearview.
3.3 RIGHT TO SELL - THE VENDOR
(i) is the sole and beneficial owner of the Purchased Shares as set
out in Schedule 2.1, which shares constitute all the issued and
outstanding shares in the capital of Clearview;
(ii) has the exclusive right to dispose of the Purchased Shares as
herein provided and such disposition will not violate, contravene,
breach or offend against or result in any default under any indenture,
mortgage, lease, agreement, instrument, charter or by-law provision or
Applicable Law to which the Vendor or by which the Vendor is bound or
affected;
(iii) is the holder of record of all the Purchased Shares, free and
clear of
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Encumbrances or rights of others (other than the rights of the
Purchaser hereunder) and no person (other than the Purchaser
hereunder) has any agreement, option or any rights capable of becoming
an agreement or option for the acquisition of the Purchased Shares;
(iv) upon transfer to the Purchaser at Closing of certificates
representing such Purchased Shares, the Purchaser shall receive full
title to the Purchased Shares free and clear of all Encumbrances.
3.4 LICENSES, REGISTRATIONS AND COMPLIANCE
Clearview is registered, licensed or otherwise qualified as a
corporation to do business in the jurisdiction in which the nature of the
businesses or the property owned or leased by them makes such registrations,
licensing or other qualification necessary, and such registrations, licenses or
qualifications (as the case may be) are in good standing. Clearview is not in
violation of any Applicable Law, which violation could have a Material Adverse
Effect, and, without limiting the generality of the foregoing, are in breach of
any Environmental Law. Each jurisdiction in which Clearview or a subsidiary of
Clearview carries on business is set forth in Schedule 3.4 attached hereto
opposite the name of the relevant corporation.
3.5 SUBSIDIARIES OF CLEARVIEW
Save as set forth in Schedule 3.5 attached hereto, Clearview has no
subsidiaries.
3.6 CAPITALIZATION
The authorized and issued share capital of Clearview is set forth in
Schedule 3.6 attached hereto. All such issued share capital has been duly and
validly issued and is outstanding as fully paid and non-assessable shares in the
capital of Clearview. Save and except as set out in Schedule 3.6 herein, no
options, warrants or other rights to purchase shares or other securities of
Clearview or other rights to purchase shares or other securities of Clearview
have been authorized or agreed to be issued or are outstanding. Clearview is not
subject to any obligations (contingent or otherwise) to re-purchase or other
wise retire or acquire any of its shares.
3.7 FINANCIAL STATEMENTS
(a) The Financial Statements of Clearview by BDO Dunwoody are true and
correct and have been prepared in accordance with GAAP applied on a basis
consistent with that of the preceding period. The Financial Statements of
Clearview present a true and complete statement of the consolidated
financial condition and assets and liabilities of Clearview as at July 31,
2002 and the other statements comprising the Financial Statements of
Clearview accurately set
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forth the results of the operations of Clearview on a consolidated basis
and the source and application of the funds thereof throughout the period
covered thereby.
3.8 ABSENCE OF UNDISCLOSED LIABILITIES
(a) Clearview: Except to the extent reflected or reserved against in the
Financial Statements of Clearview (including the notes thereto) or incurred
subsequent to the date thereof and disclosed in Schedule 3.8 and except as
incurred in the ordinary and usual course of business or insured against,
Clearview has no outstanding indebtedness or any liabilities or obligations
(whether accrued, absolute, contingent or otherwise) of a nature
customarily reflected or reserved against in a balance sheet (including the
notes thereto) prepared in accordance with GAAP.
3.9 TAX MATTERS
(a) Clearview has duly and timely filed all federal, provincial and local
income, franchise, capital, sales or use, goods and services, excise, fuel,
payroll, property or other tax returns required by any Applicable Law to be
filed by it and all liabilities required to be paid by Clearview on account
of Taxes prior to the date hereof have been duly paid.
(b) Neither Clearview nor Xxxx or have received from any Governmental
Authority any assessment, re-assessment or notice of underpayment of any
Taxes or other charges and no such notice is reasonably expected. To the
best of the knowledge, information and belief of the officers and directors
of Clearview, there are no unpaid liabilities.
(d)There are no actions, suits, proceedings, investigations or claims now
threatened or pending against Clearview in respect of Taxes, governmental
charges or assessments, or any matters under discussion with any
Governmental Authority relating to Taxes, governmental charges or
assessments asserted by such authority.
(e) No agreements, consent or other arrangements extending or waiving the
time limited for the filing of any tax return by, or the payment of any
Taxes, governmental charge or deficiency against Clearview or the
re-assessment of any Taxes, or any statutes of limitations related thereto
have been filed with
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respect to Clearview for any fiscal year.
(f) Clearview has withheld form each payment made to any of its officers,
directors, former directors and employees, the full amount of all Taxes and
other deductions (including without limitation, income taxes, unemployment,
disability, and other required taxes and contributions) required to be
withheld and has paid the same together with the employer's share of same,
if any (to the extent required to be paid so no such amount is past due),
to the proper tax or other receiving officers within the prescribed times
and has filed, in complete and accurate form, all information and other
returns required pursuant to any applicable legislation within the
prescribed times.
3.10 ABSENCE OF CHANGES
Since the date of the Interim Financial Statements of Clearview there
has not been:
(a) any material changes in the condition or operations of the Clearview
Business, the Clearview Assets or the financial condition of Clearview
other than changes in the ordinary and normal course of business, none of
which has or would be expected to have a Material Adverse Effect; or
(b) any damage, destruction or loss, labour troubles or other event,
development or condition of any character (whether or not covered by
insurance) affecting the Clearview Business, the Clearview Assets or the
properties or future prospects of Clearview which has or would be expected
to have a Material Adverse Effect.
3.11 ABSENCE OF UNUSUAL TRANSACTIONS
Since the date of the Financial Statements of Clearview, Clearview
has not:
(i) transferred, assigned, sold or otherwise disposed of any of the
Clearview Assets or canceled any debts or claims except in the
ordinary and usual course of business;
(ii) incurred or assumed any obligation or liability (fixed or
contingent), except those listed in Schedule 3.11 attached hereto and
except unsecured current obligations and
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liabilities incurred in the ordinary and normal course of business;
(iii) except as disclosed in Schedule 3.11, issued or sold any shares
in its capital or any warrants, bonds, debentures or other securities
of Clearview or issued, granted or delivered and right, option or
other commitment for the issuance of any such or other securities;
(iv) discharged or satisfied and Encumbrance, or paid any obligation
or liability (fixed or contingent) other than liabilities incurred
since the date of the Financial Statements of Clearview in the
ordinary and normal course of business;
(v) declared or made any payment of any dividend or other distribution
in respect of any shares in its capital or purchased or redeemed any
such shares thereof or effected any subdivision, consolidation or
reclassification of any such shares;
(vi) suffered any operating loss or any extraordinary loss, or waived
any rights of substantial value, or entered into any commitment or
transaction not in the ordinary and usual course of business where
such loss, rights, commitment or transaction is or would have a
Material Adverse Effect on Clearview;
(vii) except those listed in Schedule 3.11, amended or changed or
taken any action to amend or change its articles or by-laws;
(viii) made any general wage or salary increases in respect of
personnel which it employs, other than increases in the ordinary and
normal course of business or as provided for in the collective labour
agreements referred to in Schedule 3.18 attached hereto;
(ix) mortgaged, pledged, subjected to Encumbrance or otherwise
encumbered any of the Clearview Assets or property, whether tangible
or intangible except in the ordinary and normal course of business; or
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(x) authorized or agreed or otherwise become committed to do any of
the foregoing.
3.12 LEASED EQUIPMENT
Schedule 3.12 attached hereto sets forth a true and substantially
complete list of all equipment, other personal property and fixtures in the
possession or custody of Clearview, which, as of the date hereof, is leased or
held under license or similar arrangement and of the leases, licenses,
agreements and other documentation relating thereto.
3.13 COLLECTIBILITY OF ACCOUNTS RECEIVABLE
The accounts receivable as shown on the Financial Statements and
Interim Financial Statements of Clearview are collectible to within five percent
(5%) of the total shown, and the recorded sales are accurate to within five
percent (5%) of the total recorded.
3.14 LEASES OF REAL PROPERTY
All leases of real property and all interests held by Clearview as
lessees under real property leases are reduced to writing and are recorded on
the books of Clearview.
All rental and other payments required to be paid by Clearview as
lessees are paid on a timely basis.
Such leases are in full force and effect without amendment thereto
and neither Clearview is otherwise in default in meeting its obligations
contained in any such lease.
3.15 REAL PROPERTY
Clearview does not own any real property in fee simple.
3.16 USE
The use by Clearview of the buildings and improvements located on the
leased real property referred to in Section 3.14, the operation and maintenance
thereof as now operated and maintained by Clearview, and the purposes for which
they are presently being used, are not in breach in any material respect of any
Applicable Law and there are no restrictive covenants or Applicable Laws which
in any way restrict or prohibit the use of the said buildings, improvements and
real property for the purposes for which they are presently being used.
Clearview is not aware of any buildings and other structures located
on the leased real property referred to in Section 3.14 being or ever having
been insulated with urea formaldehyde
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foam insulation, nor are they aware of such buildings or structures contain any
aluminum wiring or friable asbestos or any other substance containing a type of
asbestos or asbestos product which is a hazardous product, toxic or priority
substance or any other substance deemed hazardous or regulated by any laws or
regulations of Canada or the Province of Ontario in force at the date hereof.
3.17 CONDITION OF ASSETS - All Clearview Assets and all material tangible assets
of Clearview used in or in connection with the Clearview Business are in good
condition, repair and (where applicable) proper working order, reasonable wear
and tear excepted.
3.18 EMPLOYMENT CONTRACTS - Except as set out in Schedule 3.18 attached hereto,
Clearview does not have any union or collective labour, pension, deferred profit
sharing, stock option or other similar agreement nor do they have any written
contracts of employment with any employees or any oral contracts of employment
which are not terminable on the giving of reasonable notice in accordance with
applicable law. There is not now any circumstances or conduct which could result
in the filing of an unfair labour practice complaint.
3.19 MATERIAL CONTRACTS - All material contracts of Clearview have been reduced
to writing and are recorded on the books of Clearview. The material contracts
are all in full force and effect without amendment thereto and no material
default exists in respect thereof on the part of any of the parties thereto.
Such contracts and agreements include all the presently outstanding material
contracts entered into by Clearview in the course of carrying on their
respective businesses and all quotations, orders or tenders for such contracts
which remain open for acceptance. To the best of the knowledge, information and
belief of the Vendor, Clearview has the capacity, including the necessary
personnel, equipment and supplies, to perform all their obligations thereunder.
3.20 PENSION PLANS - There are no pension plans established by or for Clearview
for its or their employees.
3.21 ABSENCE OF GUARANTEES - Except as disclosed in Schedule 3.21 attached
hereto, neither Vendor or Clearview has given or agreed to give, or is a party
or bound by, any guarantee of indebtedness or other obligations of third parties
or any other commitment by which Clearview is contingently, responsible for such
indebtedness or other obligation.
3.22 LITIGATION - Except as disclosed in Schedule 3.22 attached hereto, there is
not suit, action, litigation, arbitration proceeding or governmental proceeding,
hearing before an administrative tribunal, including appeals and applications
for review, in progress, pending or, to the best of the knowledge, information
and belief (after due enquiry) of the senior officers of Clearview, threatened
against or relating to Clearview or affecting its or their properties or
business which, if determined adversely to Clearview, might have a Material
Adverse Effect on the properties, business, future prospects or financial
condition of Clearview. Except as shown in the said Schedule, there is not
presently outstanding against Clearview, any judgment, decree, injunction, rule
or order of any court, governmental department, commission, agency,
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instrumentality or arbitrator.
3.23 EMPLOYEES - There are set forth in Schedule 3.23 attached hereto the names
and titles of all the directors and officers of Clearview, and of all personnel
employed or engaged thereby whose annual rate of remuneration exceeds
$70,000.00.
3.24 RESIDENCE OF VENDOR, ETC. - The Vendor are not non-residents of Canada for
the purposes of the Canadian Tax Act. Clearview is a Canadian-controlled private
corporation for the purposes of the Canadian Tax Act.
3.25 INSURANCE - Clearview maintains such policies of insurance, issued by
responsible insurers, as are appropriate to the Clearview Business, the property
and Clearview Assets, in such amounts and against such risks as are customarily
carried and insured against by owners of comparable businesses, properties and
assets; all such policies of insurance are in full force and effect and
Clearview is not in default, whether as to the payment of premium or otherwise,
under the terms of any such policy.
3.26 VEHICULAR EQUIPMENT - Schedule 3.26 attached hereto contains a list of all
vehicular equipment owned or leased by Clearview. Such vehicular equipment is in
roadworthy condition and is capable of satisfying the inspection requirements
and performance standards prescribed by the Highway Traffic Act (Ontario) and
the Regulations thereto, as may be amended from time to time, for its particular
type or class.
3.27 COPIES OF AGREEMENTS, ETC. - True, correct and complete copies of all
mortgages, leases, agreements, instruments and other documents listed in
Schedules hereto, and of the policies of insurance referred to herein are
located at the head office location of Clearview.
3.28 CORPORATE RECORDS - Other than as set out in Schedule 3.28 attached hereto,
the corporate records and minute books of Clearview contain complete and
accurate copies of all by-laws of Clearview, minutes of all meetings and
resolutions of the directors and shareholders of such corporations; all such
meetings were duly called and held, all such by-laws and resolutions were duly
passed and the share certificate books, registers of shareholders, registers of
transfers and registers of directors of Clearview are complete and accurate in
all material respects.
3.29 BOOKS OF ACCOUNT - The books and records of account of Clearview, fairly
and correctly set out and disclose in all material respects and in accordance
with generally accepted accounting principals, consistently applied, the
financial positions of Clearview as of the date hereof and all material
financial transactions of Clearview have been accurately recorded in such books
and records.
3.30 COMPLIANCE WITH ENVIRONMENTAL LAWS - With respect to the properties leased
by Clearview, since the commencement date of these leases, Clearview, and the
Clearview Business
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are in compliance with and have always been in compliance with all Environmental
Laws.
3.31 EMPLOYMENT EQUITY - None of Clearview have received notice of any proposed
or pending compliance review in respect of employment equity and no sanctions
have been imposed on any of them for failing to honor their commitment to
employment equity.
3.32 FAMILY LAW ACT - No order has been given under the Family Law Act (Ontario)
which would or does affect the Purchased Shares in any manner whatsoever nor is
there any application threatened or pending under the Family Law Act by any of
the Vendor.
3.33 ASSETS SUFFICIENT FOR CONDUCT OF CLEARVIEW BUSINESS
(a) Clearview Assets constitute all of the assets and properties required
for the operation of Clearview `s business as it is presently operated; and
3.34 BROKER - A business brokering agreement has not been was entered into by
Clearview and there is no business broker or finders fee or commission
arrangement due or payable by Clearview to anyone.
3.35 CRIMINAL CODE - Neither Clearview nor any director, officer or shareholder
of Clearview has been found guilty of any offence under the Criminal Code
(Canada).
ARTICLE 4
REPRESENTATIONS OF THE PURCHASER
The Purchaser hereby represents and warrants to the Vendor as
follows:
4.1 ORGANIZATION AND VALID EXISTENCE - The Purchaser is a corporation duly
incorporated and organized and is validly existing under the laws of the State
of Nevada and has all necessary corporate power, authority and capacity to enter
into this Agreement and to carry out its obligations hereunder. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereunder have been or by the Closing Date will be duly authorized
by all necessary corporate action on the part of the Purchaser.
4.2 ENFORCEABILITY OF OBLIGATIONS - This Agreement constitutes a valid and
binding obligation of the Purchaser enforceable against it in accordance with
its terms, subject, however, 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 performance and injunction
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are in the discretion of the court from which they are sought.
4.3 ABSENCE OF CONFLICTING AGREEMENTS - The Purchaser is not a party to, bound
or affected by or subject to any indenture, mortgage, lease, agreement,
instrument, charter or by-law provision, statute, regulation, order, judgment,
decree or law which would be violated, contravened or breached by, or under
which any default would occur, as a result of the execution and delivery of this
Agreement or the consummation of any of the transactions provided for herein.
4.4 RESIDENCE OF THE PURCHASER - The Purchaser is a non-Canadian within the
meaning of the Investment Canada Act. This transaction is exempt from the
operation of the statue because the Purchase Price is less than One Hundred
Million ($100,000,000.00) Dollars.
4.5 LITIGATION - There is no suit, action, litigation, arbitration proceeding or
governmental proceeding, including appeals and applications for review, in
progress, pending or, to the best of the knowledge, information and belief
(after due enquiry) of the senior officers of the Purchaser, threatened against
or involving the Purchaser or any judgment, decree, injunction, rule or order of
any Court, governmental department, commission, agency, instrumentality or
arbitrator which, in any such case, might adversely affect the ability of the
Purchaser to enter into this Agreement or to consummate the transactions
contemplated hereby. The Purchaser is not aware of any existing ground on which
any such action, suit or proceeding may be commenced with any reasonable
likelihood of success.
4.6 KEY EMPLOYEE AGREEMENTS - The Purchaser has or shall prior to the Closing
Date have executed employment agreements with the Key Employees of Clearview as
set out in Schedule 4.6 attached hereto.
4.7 EMPLOYEE STOCK OPTIONS - The Purchaser shall prior to the Closing Date issue
to the employees of Clearview 30,000 Stock Options exercisable after Closing at
a purchase price of to be determined on closing per each option, to be divided
between the employees of Clearview in a manner to be determined.
ARTICLE 5
CONDITIONS PRECEDENT TO THE PERFORMANCE
BY THE PURCHASER OF ITS OBLIGATIONS UNDER THIS AGREEMENT
The obligations of the Purchaser to complete the purchase of the
Purchased Shares hereunder shall be subject to the satisfaction of, or
compliance with, in all material respects, at or before the Closing Time, each
of the following conditions precedent (each of which is hereby acknowledged to
be inserted for the exclusive benefit of the Purchaser any may be waived by it
in whole or in part);
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5.1 TRUTH AND ACCURACY OF REPRESENTATIONS OF VENDOR AT THE CLOSING TIME
All of the representations and warranties of the Vendor and Clearview
made in or pursuant to this Agreement, including, without limitation, the
representations and warranties made and set forth in Article 3 hereof, shall be
true and correct as at the Closing Time and with the same effect as if made at
and as of the Closing Time (except as such representations and warranties may be
affected by the occurrence of events or transactions expressly contemplated and
permitted hereby or by transactions in the ordinary and normal course of
business), and the Purchaser shall have received a certificate from the
President or other person exercising the functions of chief executive officer of
the Vendor, and Clearview and a certificate from the Vendor confirming, to the
best of his knowledge, information and belief (after due enquiry) the truth and
correctness of the representations and warranties of Clearview and the Vendor.
5.2 PERFORMANCE OF OBLIGATIONS - Each of Clearview, and the Vendor shall
have performed or complied with, in all respects, the Vendor, and Clearview, all
of its obligations, covenants and agreements hereunder.
5.3 RECEIPT OF CLOSING DOCUMENTATION
All documentation relating to the due authorization and completion of
the sale and purchase hereunder of the Purchased Shares and all action
proceedings taken on or prior to the Closing in connection with the performance
by any of Clearview or the Vendor of their obligations under this Agreement
shall be satisfactory to the Purchaser and the Purchaser's counsel, acting
reasonably, and the Purchaser shall have received copies of all such
documentation or other evidence as it may reasonably request in order to
establish the consummation of the transactions contemplated hereby and the
taking of all corporate proceedings in connection therewith in compliance with
these conditions, in form (as to certification and otherwise) and substance
satisfactory to the Purchaser and the Purchaser's Counsel.
5.4 NO FIRE DAMAGE - No substantial damage by fire or other hazard to the
Assets of Clearview shall have occurred from the Effective Date to the Closing
Date which is not adequately insured against.
5.5 LITIGATION - On the Closing Date, there shall be no litigation,
governmental investigation or proceeding pending or threatened for the purpose
of enjoining or preventing the consummation of any of the transactions
contemplated by this Agreement or otherwise claiming that such consummation is
improper.
5.6 MATERIAL CHANGE - Since the Effective Date there shall have been no:
(a) Material adverse change in the financial condition, results and
operations, cash flows, Assets or prospects of Clearview;
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(b) Material loss or damage (whether or not covered by insurance) to any of
the Assets of Clearview.
5.7 DUE DILIGENCE REVIEW - The Purchaser shall no later than 55 days
after the Effective Date have completed their due diligence review having been
satisfied with the results of its investigation and review of the business,
operations, assets, liabilities, result of operations, cash flows, conditions
(financial and otherwise) and prospects of, and other matters relating to
Clearview, delivered to the Vendor's Counsel a certificate evidencing the
Purchaser's satisfaction.
5.8 CERTIFICATES - The Vendor shall have delivered to the Purchaser share
certificates representing all of the Purchased Shares, which share certificates
shall have been duly endorsed in blank for transfer or accompanied by duly
executed stock powers.
ARTICLE 6
CONDITIONS PRECEDENT TO THE PERFORMANCE BY
THE VENDOR OF THE OBLIGATIONS UNDER THIS AGREEMENT
The obligations of the Vendor to complete the sale of the Purchased
Shares hereunder shall be subject to the satisfaction of or compliance with, at
or before the Closing Time, each of the following conditions precedent (each of
which is hereby acknowledged to be inserted for the exclusive benefit of the
Vendor and may be waived by each of them in whole or in part);
6.1 TRUTH AND ACCURACY OF REPRESENTATIONS OF PURCHASER AT CLOSING TIME -
All of the representations and warranties of the Purchase made in or pursuant to
this Agreement, including without limitation the representations and warranties
made by the Purchaser and set forth in Article 4 hereof, shall be true and
correct as at the Closing Time and with the same effect as if made at and as of
the Closing Time and the Vendor shall each have received a certificate from a
duly authorized senior officer of the Purchaser confirming, to the best of his
knowledge, information and belief (after due enquiry), the truth and correctness
of the representations and warranties of the Purchaser contained herein;
6.2 PERFORMANCE OF OBLIGATIONS - The Purchaser shall have performed or
complied with, in all respects, all of its obligations, covenants and agreements
hereunder.
6.3 RECEIPT OF CLOSING DOCUMENTATION - All documentation relating to the
due authorization and completion of the sale and purchase hereunder of the
Purchased Shares and all actions and proceedings taken on or prior to the
Closing in connection with the performance by the Purchaser of its obligations
under this Agreement shall be satisfactory to the Vendor and Vendor's Counsel
and the Vendor shall have received copies of all such documentation or other
evidence as
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they may reasonably request in order to establish the consummation of the
transactions contemplated hereby and the taking of all corporate proceedings in
connection therewith in compliance with these conditions, in form (as to
certification and otherwise) and substance satisfactory to the Vendor and
Vendor's Counsel.
6.4 LITIGATION - On the Closing Date, there shall be no litigation,
governmental investigation or proceeding pending or threatened for the purposes
of enjoining or presenting the consummation of any of the transactions
contemplated by this Agreement or otherwise claiming that such consummation is
improper.
6.5 SATISFACTION WITH DUE DILIGENCE - No later than 55 days after the
Effective Date, the Purchaser shall deliver to the Vendor's' Counsel a
certificate evidencing the Purchaser's completion of their due diligence review
and the Purchaser's satisfaction with the same.
6.6 KEY EMPLOYEES UNDER CONTRACT - On the Closing Date, the Key Employees
of Clearview shall have executed employment agreements with the Purchaser
satisfactory to the parties thereto.
6.7 ISSUANCE OF STOCK OPTIONS - On the Closing Date, the Purchaser shall
deliver to the Vendor 30,000 Stock Options as set out in Section 4.7 herein to
be delivered to the employees of Clearview after Closing in a manner to be
determined.
ARTICLE 7
OTHER COVENANTS OF THE PARTIES
7.1 FROM OFFER TO CLOSING DATE - During the period from the date of the
Effective Date to the Closing Time, Clearview have:
(a) except as otherwise contemplated or permitted by this Agreement,
conducted their respective businesses in the ordinary and normal course
thereof and have not, without the prior written consent of the Purchaser,
entered into any transaction which if effected before the date of this
Agreement, would constitute a material breach of the representations,
warranties or agreements contained herein;
(b) continued in force all existing policies of insurance presently
maintained by Clearview;
(c) complied with all Applicable laws affecting the operation of the
Business and the Clearview Business and paid all required Taxes and tax
installments;
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(d) not, without the prior written consent of the Purchaser taken any of
the actions, done any of the things or performed any of the acts described
in paragraphs (i) to (x) inclusive of Section 3.11.
7.2 ABSENCES OF UNUSUAL TRANSACTIONS - Since the date of the Financial
Statements Clearview or its Vendor has not:
(a) transferred, assigned, sold or otherwise disposed of any of the
Clearview Assets or canceled any debts or claims except in the ordinary and
usual course of business;
(b) incurred or assumed any obligation or liability (fixed or contingent),
except those listed in Schedule 3.11 attached hereto and except unsecured
current obligations and liabilities incurred in the ordinary and normal
course of business;
(c) except as disclosed in Schedule 3.11, issued or sold any shares in its
capital or any warrants, bonds, debentures or other securities of Clearview
or issued, granted or delivered and right, option or other commitment for
the issuance of any such or other securities;
(d) discharged or satisfied any Encumbrance, or paid any obligation or
liability (fixed or contingent) other than liabilities incurred since the
date of the Financial Statements of Clearview in the ordinary and normal
course of business;
(e) declared or made any payment of any dividend or other distribution in
respect of any shares in its capital or purchased or redeemed any such
shares thereof or effected any subdivision, consolidation or
reclassification of any such shares;
(f) suffered any operating loss or any extraordinary loss, or waived any
rights of substantial value, or entered into any commitment or transaction
not in the ordinary and usual course of business where such loss, rights,
commitment or transaction is or would have a Material Adverse Effect on
Clearview;
(g) except those listed in Schedule 3.11, amended or changed or taken any
action to amend or change its articles or by-laws;
(h) made any general wage or salary increases in respect of personnel which
it employs, other than increases in the ordinary and normal course of
business or as provided for in the collective labour agreements referred to
in Schedule
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3.22 attached hereto;
(i) mortgaged, pledged, subjected to Encumbrance or otherwise encumbered
any of the Clearview Assets or property, whether tangible or intangible
except in the ordinary and normal course of business; or
(j) authorized or agreed or otherwise become committed to do any of the
foregoing.
7.3 ACTIONS TO SATISFY CLOSING CONDITIONS - Each of the Parties hereby
agrees to take all such actions as are within its power to control, and to use
its best efforts to cause other actions to be taken which are not within its
power to control, so as to ensure compliance with any conditions set forth in
Article 6 hereof which are for the benefit of any other Party.
7.4 ACCESS FOR INVESTIGATION - Until the Closing Time, and in the event
of the termination of this Agreement without consummation of the transactions
contemplated hereby, the Purchaser shall covenant to keep confidential any
information (unless readily available from public or published information or
sources) obtained from Clearview, or the Vendor. If this Agreement is so
terminated, promptly after such termination, all documents, work papers and
other written material obtained from any Person in connection with this
Agreement and not theretofore made public (including all copies thereof), shall
be returned to the Person which provided such material.
7.5 LIQUIDATED DAMAGES - The Purchaser and the Vendor agree that in the
event the transactions contemplated herein to not close, except where the
Purchaser can demonstrate the Vendor, Clearview is in breach of a warranty or
representation contained herein, the Deposit held by the Vendor's' Counsel shall
be forfeited as liquidated damages and shall be released to the Vendor without
requiring a court order to do so.
ARTICLE 8
SURVIVAL AND REMEDY: INDEMNIFICATION
8.1 SURVIVAL - All representations and warranties of the parties hereto
shall survive the Closing and shall expire as of 11:59 p.m. Markham time on the
date which is the first anniversary of the Closing Date.
8.2 INDEMNIFICATION BY VENDOR
The Vendor and Clearview agree, jointly and severally, to indemnify
the Purchaser and agree to hold it harmless from any and all Losses incurred or
suffered by the Purchaser arising from any breach of or any inaccuracy in any
representation or warranty made by the Vendor, Clearview pursuant to this
Agreement and any breach of or failure by the Vendor and Clearview to perform
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any covenant or obligation of the Vendor and Clearview set out in this
Agreement.
8.3 INDEMNIFICATION BY PURCHASER
The Purchaser agrees to indemnify the Vendor and Clearview against
and agrees to hold them harmless from any and all Losses incurred and suffered
by any of the Vendor and Clearview or any of their respective Affiliates (or any
combination thereof) arising from any breach of or any inaccuracy in any
representation or warranty made by the Purchaser pursuant to this Agreement and
any breach of or failure by the Purchaser to perform any covenant or obligation
of the Purchaser set out in this Agreement.
8.4 NOTICE OF CLAIMS: ASSUMPTION OF DEFENSE
The indemnified party shall give prompt notice to the indemnifying
party in accordance with the terms of Section 10.3 of the assertion of any claim
of the commencement of any suit proceeding by any party in respect of which
indemnity may be sought hereunder, specifying with reasonable particularity the
basis therefore and giving the indemnifying party such information with respect
thereto as the indemnifying party may reasonably request (but the giving of such
notice shall not be conditioned precedent to indemnification hereunder). The
indemnifying party may, at its own expense:
(a) participate in; and
(b) upon notice to the indemnified party and the indemnifying party's
written agreement that the indemnified party is entitled to indemnification
pursuant to Section 8.2 or Section 8.3 for Losses arising out of such
claim, suit, action or proceeding, at any time during the course of any
such claim, suit, action or proceeding, assume the defense thereof;
provided that:
(i) the indemnifying party's counsel is reasonably satisfactory to the
indemnified party;
(ii) the indemnifying party shall thereafter consult with the
indemnified party upon the indemnified party's reasonable request for
consultation from time to time with respect to such claim, suit,
action or proceeding; and
(iii) in the case of a claim arising from a breach of the warranties
contained in Section 3.9 hereof for which the Vendor and Clearview
have, pursuant to this section 8.4 assumed the defense thereof, if the
action of the Vendor and Clearview may adversely affect the Purchaser
or Clearview tax obligations for periods ending after the Closing
Date, none of the Vendor or Clearview shall enter into a settlement
agreement, file and amended tax return or seek a refund of Taxes with
respect to the operations of Clearview without the prior written
consent of the Purchaser, which consent shall not
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be unreasonably withheld. If the indemnifying party assumes such
defense, the indemnified party shall have the right (but not the duty)
to participate in the defense thereof and to employ counsel, at its
own expense, separate from the counsel employed by the indemnifying
party. Whether or not the indemnifying party chooses to defend or
prosecute any such claim, suit, action or proceeding, all of the
Parties hereto shall cooperate in the defense or prosecution thereof.
8.5 SETTLEMENT OR COMPROMISE
Any settlement or compromise made or caused to be made by the
indemnified party or the indemnifying party, as the case may be, of any such
claim, suit, action or proceeding of the kind referred to in Section 8.4 shall
also be binding upon the indemnifying party or the indemnified party, as the
case may be, in the same manner as if a final judgment or decree was entered by
a court of competent jurisdiction in the amount of such settlement or
compromise. No party shall settle or compromise any claim, suit, action or
proceeding without the prior written consent of the other parties hereto, which
consent shall not be unreasonably withheld.
8.6 FAILURE OF INDEMNIFYING PARTY TO ACT
In the event the indemnifying party does not elect to assume the
defense of any claim, suit, action or proceeding, then any failure of the
indemnified party to defend or to participate in the defense of any such claim,
suit, action or proceeding or to cause same to be done, shall not relieve the
indemnifying party of its obligations hereunder, provided that the indemnified
party gives the indemnifying party at least thirty (30) days' notice of its
proposed intention not to defend or participate and affords the indemnifying
party the opportunity to assume the defense thereof.
8.7 PAYMENT OF INDEMNIFYING PARTY
Contemporaneously with any compromise or settlement the indemnifying
party shall pay or cause to be paid to the indemnified party or as they may
direct, the amount owing under this indemnity with respect to such matter being
provided further that:
(a) the indemnifying party shall provide further security to the
indemnified party in respect of any cost of damages arising in connection
with any litigation; and
(b) the indemnifying party shall agree to reimburse the indemnified party
promptly in respect of all out of pocket expenses incurred by indemnified
party in connection with such litigation or pending litigation.
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8.8 LIMITATION RE INDEMNIFICATION BY THE VENDOR AND CLEARVIEW
Notwithstanding anything contained in Section 8.2 hereof, the Vendor
and Clearview shall only be required to pay to the Purchaser, an amount in
respect of Losses for indemnification under the Section 8.2 to the extent by
which the amount of such Losses exceeds, in the aggregate, $25,000.
ARTICLE 9
DISPUTE RESOLUTION
9.1 NEGOTIATION
Subject to the provisions of this Agreement, the Vendor and the
Purchaser will attempt to resolve any controversy relating to the Agreement by
negotiation between representatives of the parties who have authority to settle
the controversy. The disputing Party will give the other Parties written notice
of the dispute. Within five (5) business days of receiving such notice, the
receiving Parties will submit to the other Parties a written response. The
notice and response shall not exceed three (3) pages. The representatives shall
meet at a mutually acceptable time and place within five (5) business days of
the date of the responding Party's notice.
9.2 MEDIATION
If the matter has not been resolved within five (5) business days of
the responding Party's notice, or if either Party will not meet, the dispute
will be submitted to mediation as set out below. The mediator will have no power
to bind the Parties. The mediation will be confidential. The mediation process
will be conducted as follows:
(a) Selection of Mediator - The Vendor and the Purchaser will have three
(3) business days from the end of the time for negotiation to agree upon a
mutually acceptable mediator (the "Mediator"). If no Mediator has been
selected within that time, the Vendor and the Purchaser agree jointly to
request that ICC supply, within two (2) business days, a list of three (3)
potential mediators. Within two (2) business days of receipt of the list,
Vendor and Purchaser will independently rank the proposed candidates, will
simultaneously exchange rankings, and will agree to select as the Mediator
the individual receiving the highest combined ranking who is available. If
either Party does not rank and provide a copy of the ranking to the other
Party, the Party who does rank will be able to select the Mediator from the
list;
(b) Time and Place for Mediation - In consultation with the Mediator, the
Vendor and the Purchaser will designate a mutually convenient time and
place for the mediation (and unless circumstances require otherwise, the
date should be no later than five (5) business days after the selection of
the Mediator);
(c) Summary of Views - Two (2) days prior to the mediation, each Party will
deliver to the Mediator and to the other Parties a written summary of its
views of the dispute, such summary not to exceed three (3) pages;
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(d) Fees of Mediator - The fees of the Mediator will be shared equally by
Vendor and Purchaser; and
(e) Termination of Procedure - The Vendor and the Purchaser agree to
participate in the mediation for at least four (4) hours (unless terminated
earlier by the Mediator). After that time, either the Vendor or the
Purchaser may leave the mediation at any time. If the mediation does not
yield a settlement, the Vendor and the Purchaser agree not to take any
action (other than good faith attempts to negotiate a settlement to the
dispute) prior to the conclusion of a five (5) day post-mediation period
that commences on the day after the conclusion of the mediation process.
9.3 ARBITRATION
After the expiry of the five (5) day moratorium period referred to in
the paragraph above, if either Party will not participate in the mediation, the
dispute will be finally settled by arbitration in accordance with the provisions
of the Arbitration Act, R.S.O. 1990, c. A-24, as amended from time to time. The
following rules will apply to the arbitration:
(a) Appointment of Arbitrator - The arbitration tribunal will consist of
one arbitrator (the "Arbitrator"). The Vendor and the Purchaser will have
five (5) business days from the end of the five (5) day post-mediation
period to agree on the Arbitrator. If they cannot agree, either Party may
request that ICC supply, within two (2) business days a list of three (3)
qualified arbitrators. Within two (2) business days of the receipt of the
list, the Vendor and the Purchaser will independently rank the proposed
arbitrators, will simultaneously exchange rankings, and will agree to
select as the Arbitrator the individual receiving the highest combined
ranking who is available. If either Party does not rank and provide a copy
of the ranking to the other party, the Party who does rank will be able to
select the Arbitrator;
(b) Rules of Arbitration - The Vendor and the Purchaser shall agree, in
consultation with the Arbitrator, on the rules for the arbitration. Absent
agreement to the contrary, the following rules, designed to save time and
expense for the Parties, will apply:
(i) Pleadings shall be exchanged within twenty (20) days of the
selection of the Arbitrator, and shall be no more than five (5) pages
in length;
(ii) Each Party shall provide to the other access to any documents in
their possession which may be relevant to the arbitration. Each Party
shall also provide to the other two (2) days before the arbitration
hearing, lists and copies of the documents that the Party intends to
rely on at the arbitration;
(iii) Each Party shall be entitled to oral discovery of the other
Party if it
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deems it appropriate. Any questions refused shall be put to the
Arbitrator for the Arbitrator's determination as to whether the
questions are appropriate and relevant. Oral discovery shall take
place within thirty (30) days of the delivery of the conclusion of the
exchange of pleadings;
(iv) The arbitration shall take place within three (3) months of the
selection of the Arbitrator;
(v) At the Arbitration hearing, opening argument will be limited to
one half hour per party;
(vi) Each Party may produce up to two witnesses for direct
examination. The total time permitted for direct examination (whether
one or two witnesses is produced) will be two hours. Total time for
cross-examination will also be two hours for each Party;
(vii) All evidence is admissible and its weight will be determined by
the Arbitrator;
(viii) Each Party may introduce any of its 15 documents;
(ix) Closing argument will be limited to (1) one hour for each Party;
and
(x) The Arbitrator shall be instructed to produce a decision within
seven (7) calendar days of the conclusion of the arbitration, and
written reasons within one (1) month of the arbitration.
(c) The arbitration will be conducted in English and will take place in the
Town of Markham;
(d) The arbitration awards will be given in writing and will be final, not
subject to any appeal, and will deal with the question of costs of the
arbitration. In the award of costs, the Arbitrator may consider each
Party's efforts to make any settlement offer. If either Party refuses to
participate in the negotiation or mediation, there will be a presumption
that costs on a solicitor and client basis will be awarded against the
Party refusing to participate, regardless of the outcome of the
arbitration;
(e) Judgement upon the arbitration award may be entered into any court
having jurisdiction, or application may be made to such court for judicial
recognition of the award; and
(f) The Arbitrator will not award punitive or special damages.
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9.4 LIMITED PROCEDURE FOR SETTLING DISPUTES
The Parties hereto mutually agree that the procedure specified in the
Agreement are the only procedures available for the resolution of any
controversies or disputes arising out of or relating to this Part, or the
breach, termination or validity of it, or any other related agreement between
the Vendor and the Purchaser. If any Party attempts to have issues resolved in
court that should property be resolved pursuant to this Part, the Parties agree
that this section can be used to stay any such proceedings. However, before or
during the time that the Vendor and the Purchaser follow these procedures,
either one can go to the appropriate court to get an injunction if the party
reasonably believes that such a step is necessary to avoid irreparable damage or
harm. Even if any Party takes such action, the Parties will continue to
participate in good faith in the procedures set out in this Part.
ARTICLE 10
10.1 EXPENSES
The Purchaser shall pay all taxes, assessments, charges and fees,
imposed by Canada or any province or political subdivision thereof required to
be paid in connection with the transfer and sale of the Purchased Shares.
10.2 TIME
Time shall be of the essence hereof.
10.3 NOTICES
Any notice, direction or other document required to be given
hereunder or for the purposes hereof (hereinafter in this Section 9.3 called a
"notice") to any Party shall be in writing and shall be sufficiently given if
delivered personally, or if sent by prepaid registered mail or if transmitted by
facsimile or other form of recorded communication tested prior to transmission
to such Party:
in the case of a notice to the Vendor at:
Xxxx Xxxxx
Clearview Communications Inc.
00X Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
with a facsimile number of; 000-000-0000
Attention: Xxxx Xxxxx
With a copy to the Vendor's Lawyer at:
Xxxxx & Xxxxxxxx
Barristors & Solicitors
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX
X0X 0X0
With a facsimile number of 000 000 0000
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in the case of a notice to the Purchaser at:
Internet Cable Corporation
000-0 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
with a facsimile number of: 000-000-0000
Attention: Xxxx Xxx Xxxxxx
with a copy to the Purchaser's Counsel at:
Xxxxxxx & Associates
00 Xxxx Xxxxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
with a facsimile number of (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
or at such other address as the Party to whom such writing is to be given shall
have last notified the Party giving the same in the manner provided in this
section. Any notice delivered to the Party to whom it is addressed as
hereinbefore provided shall be deemed to have been given and received on the day
it is so delivered at such address, provided that if such day is not a Business
Day then the notice shall be deemed to have been given and received on the first
Business Day next following such day. Any notice mailed as aforesaid shall be
deemed to have been given and received on the fifth Business Day following the
date of its mailing. Any notice transmitted by facsimile or other form of
recorded communication shall be deemed given and received on the first Business
Day
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after its transmission. Failure to transmit timely or adequate notice to
Vendor's Counsel or to Purchaser's Counsel, as the case may be, shall not
invalidate, nullify or otherwise detrimentally affect the provision of same to a
Party.
10.4 AMENDMENT
This Agreement may be amended, modified or supplemented but only in
writing signed by all of the Parties hereto.
10.5 ASSIGNMENT
Neither this Agreement nor any rights or obligations hereunder shall
be assignable by any Party without the prior written consent of the other
Parties hereto.
10.6 TAX MATTERS
The Vendor and Purchaser shall treat and report the transactions
contemplated by this Agreement in all respects consistently for the purposes of
the Canadian Tax Act and any other federal, provincial, xxxxx, xxxxxxxxxxx,
xxxxxxxx, xxxxxxxxx, local or foreign taxing statute. The Parties hereto shall
not take any actions or positions inconsistent with the obligations set forth
herein.
10.7 FURTHER ASSURANCES
The Parties hereto shall with reasonable diligence do all such things
and provide all such reasonable assurances as may be required to consummate the
transactions contemplated hereby, and each Party shall provide such further
documents or instruments required by any other Party as may be reasonably
necessary or desirable to effect the purpose of this Agreement and carry out its
provisions, whether before or after the Closing.
10.8 SEVERABILITY
If any covenant or provision of this Agreement is prohibited in whole
or in part in any jurisdiction, such covenant or provision shall, as to such
jurisdiction, be ineffective to the extent of such jurisdiction without
invalidating the remaining covenants and provisions hereof and shall, as to such
jurisdiction, be deemed to be severed from this Agreement to the extent of such
prohibition.
10.9 COUNTERPARTS
This Agreement may be executed by the Parties in separate
counterparts each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
10.10 PUBLIC NOTICES
Except for disclosures required by Applicable Law, all public notices
to third parties and all other publicity concerning the transactions
contemplated herein shall be jointly planned and coordinated by the Vendor and
the Purchaser and no Party shall act unilaterally in this regard without the
prior approval of every other Party, such approval not to be unreasonably
withheld.
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IN WITNESS WHEREOF the Parties have hereunto duly executed xxxx
Agreement.
SIGNED, SEALED AND DELIVERED )
In the Presence of: ) INTERNET CABLE CORPORATION
)
)
) PER:/s/XXXXX XXXXXX
-----------------------------
) XXXXX XXXXXX, COO
)
)
VENDOR
)
)
) /s/XXXX XXXXX
) ---------------------------------
) XXXX XXXXX
)
)
) CLEARVIEW COMMUNICATIONS LTD.
)
)
) /s/XXXX XXXXX
) ---------------------------------
) XXXX XXXXX, PRESIDENT
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