EXHIBIT 10.12
FUNDING AND PAY-OFF AGREEMENT
-----------------------------
THIS FUNDING AND PAY-OFF AGREEMENT (this "AGREEMENT") is made and
entered into as of January 31, 2005 by and among Compagnie Teckn-O-Laser
Global/Teckn-O-Laser Global Company, a Nova Scotia unlimited liability company
("TARGET"), Teckn-O-Laser Company/Compagnie Teckn-O-Laser, an unlimited
liability company amalgamated under the laws of Nova Scotia and a wholly owned
subsidiary of Target ("CANCO"), Tecknolaser USA Inc., a Delaware corporation and
initially a wholly owned subsidiary of Target ("USCO"), each of Xxxx Xxxxxxxx,
Xxxxx Xxxxxxxxx, each on behalf of himself and on behalf of any entity named in
the respective signature block on the signature page hereof, and Xxxxxx Xxxxxxx
(the preceding individuals, in their respective capacities, are collectively
referred to as the "TOLG SHAREHOLDERS"), Adsero Corp., a Delaware corporation
("ADSERO"), YAC Corp., a Delaware corporation ("YAC"), 3091732 Nova Scotia
Company, a Nova Scotia unlimited liability company and wholly owned subsidiary
of YAC ("CALLCO"), 3091503 Nova Scotia Company, a Nova Scotia unlimited
liability company ("TAC"), Barrington Bank International Limited, a Bahamian
banking company ("LENDER"), and the Caisse de depot et placement du Quebec, an
entity formed by statute under the laws of Quebec ("CDP"). The parties to this
Agreement are sometimes referred to herein individually as a "PARTY" and
collectively as the "PARTIES".
RECITALS
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1. Lender is going to make a loan to Canco in the principal amount of
Cdn.$2.0 million (the "LOAN") pursuant to the terms of that certain
Loan Agreement between Lender and Canco (the "LOAN AGREEMENT"), the
proceeds of which Loan are going to be used to pay a dividend to
Target.
2. Adsero is raising funds through private placements of its equity and
convertible debt, the equity portion of which shall be in the minimum
amount specified in the Loan Agreement (collectively, the "PRIVATE
PLACEMENT"). Adsero shall deposit $2,100,000 (including the gross
proceeds of the Private Placement, the "ADSERO EQUITY") into the
Acquisition Escrow Account (as defined in Section 1.1(a)(i) below).
3. Target is indebted to CDP pursuant to existing debentures or other
instruments issued by Target to CDP (the "CDP DEBT"). The amounts
required by CDP to repay the CDP Debt is reflected in a payoff letter
by CDP addressed to Canco and Lender (a copy of which is attached as
Exhibit F, hereinafter the "CDP PAYOFF LETTER"). Target will use the
Loan proceeds of Canco's dividend (i) to repay the CDP Debt, (ii) to
make a loan of $150,000 to TAC (the "TARGET LOAN"), (iii) to subscribe
for Canco shares valued at $750,000, and (iv) to pay fees aggregating
approximately $500,000, including (A) the legal fees described in
Exhibit D (the "LENDER'S LEGAL FEES") and (B) other fees in connection
with the transactions contemplated hereby.
4. After the payments described in Recital 3 are completed (other than the
payment of the fees described in clause (iv)(B)), Adsero will close the
Private Placement and then subscribe for shares of YAC and contribute
the Adsero Equity to YAC in consideration for such YAC shares; YAC will
pay for shares of Callco that YAC has acquired and contribute the
Adsero Equity to Callco in consideration for such Callco shares, and
Callco will pay for shares of TAC that Callco has acquired and
contribute the Adsero Equity to TAC in consideration for such TAC
shares. Upon the conclusion of the foregoing steps, the organizational
structure will be as set forth on Exhibit A.
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5. TAC will use (i) the Adsero Equity, and (i) the proceeds of the Target
Loan to acquire the entirety of equity interest in Target currently
held by the TOLG Shareholders and by CDP (the latter being the "CDP
Equity"; the CDP Debt and the CDP Equity are collectively referred to
as the "CDP INTEREST", and the aggregate amount required to be
delivered to CDP for the CDP Interest is hereinafter referred to as the
"CDP PAYOFF AMOUNT"). The shares held by the TOLG Shareholders will be
acquired pursuant to the Share Purchase Agreement by and among the
parties hereto other than CDP and Lender (the "SHARE PURCHASE
AGREEMENT"). Concurrently with the payments described in the preceding
sentence, (a) Adsero will issue to the TOLG Shareholders preferred
shares of Adsero entitling the TOLG Shareholders to the voting rights
set forth in Adsero's certificate of incorporation, as amended, and (b)
TAC will issue to the TOLG Shareholders preferred shares of TAC and
shares of TAC that are exchangeable into shares of Adsero.
6. The parties find it necessary and desirable to enter into this
Agreement in order to, inter alia, (i) govern the terms under, and the
order in which, executed copies (originals, pdf or facsimile) of the
documents, instruments, agreements and other materials required for the
closing contemplated hereby (collectively, the "CLOSING DOCUMENTS")
shall be delivered and released in connection with the consummation of
the transactions described in Recitals 1-5 above and certain
agreements, instruments and other documents related thereto, including
(a) the Share Purchase Agreement and the Loan Agreement, and (b) govern
the terms under, and the order in which, payments will be made in
connection with the closing of all of the Transactions.
ARTICLE 1
DOCUMENT ESCROW
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1.1 DELIVERIES INTO ESCROW.
(a) Each party agrees to deliver all of the Closing Documents to
be delivered in connection with the Closing into escrow to the
following counsel:
(i) Closing Documents related to the Loan Agreement have
been delivered to the Montreal office of Davies Xxxx
Xxxxxxxx & Xxxxxxxx LLP, counsel to Lender ("LOAN
ESCROW AGENT"); and
(ii) Closing Documents related to the Share Purchase
Agreement and the repayment and acquisition, as
applicable, of the CDP Interest (the "CDP
ACQUISITION") have been delivered to Xxxxxxxx Nantel
("ACQUISITION ESCROW AGENT"; each of Loan Escrow
Agent and Acquisition Escrow Agent is hereby referred
to as an "ESCROW AGENT" and collectively as the
"ESCROW AGENTS").
Each of the Parties shall promptly give Notice (as defined in
paragraph (b) below) confirming each of (y) the delivery to
the applicable Escrow Agent of all of such Party's Closing
Documents, as contemplated herein, and any funds (the "ESCROW
FUNDS") required to be delivered into the Escrow Accounts
established pursuant to Section 1.1(c) below, and (z) the
satisfaction of all of the conditions precedent to such
Party's transactions (by way of non-exhaustive example, the
conditions to funding under the Loan Agreement and the
conditions to consummating the acquisition and share exchange
contemplated in the Share Purchase Agreement), other than the
steps set forth in Section 2.2 of this Agreement. The Parties
hereby direct each Escrow Agent to hold such Closing Documents
and the Escrow Funds in escrow subject to the terms of this
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Agreement, until such Closing Documents and Escrow Funds are
released from escrow in accordance herewith. After the
aforementioned Notice from all of the respective Parties as
described in the first sentence of this paragraph, each Escrow
Agent shall deliver a Notice that this Agreement has become
binding upon all of the Parties, and thereafter the release of
the Closing Documents and Escrow Funds will be subject to the
requirements of this Agreement.
On the CLOSING DATE (as described in Section 2.1(a)), which
shall be no sooner than two Business Days after the later of
the Notices delivered by the Escrow Agents, the transactions
described in Section 2.2 shall be implemented. For purposes of
the foregoing, a "BUSINESS DAY" is a day on which banks in
Quebec are authorized to be closed or on which the Toronto
Stock Exchange is closed for trading.
(b) Notices to be made under this Agreement shall be sufficient if
made to the individuals set forth on Exhibit B attached
hereto, if made to such individuals by e-mail transmission, by
facsimile, by hand-delivery, or in person using the contact
information provided in such Exhibit B (a "Notice").
(c) Each party also acknowledges that the following funds have
been wired into an escrow account (each, an "ESCROW ACCOUNT")
held by the applicable Escrow Agent:
(i) Adsero has caused the Adsero Equity, as described in
Recital 2, to be wired to the trust account of the
Acquisition Escrow Agent (the "ACQUISITION ESCROW
FUNDS").
(ii) Lender has caused Loan proceeds of $2,000,000 to be
wired to the trust account of the Loan Escrow Account
(the "LOAN ESCROW FUNDS").
1.2 INITIATION/ BINDING NATURE OF OBLIGATIONS. Without in any way
diminishing Section Section 1.1(a) above, once the Notices from Escrow
Agents are received by the Parties reflecting that all closing
deliveries and the Escrow Funds described in Section 1.1(c) have been
received, each Party shall thereafter be and hereby is, subject to the
terms of this Agreement, obligated to take the actions designated to be
taken by such Party in Article 2 below. If the Parties become so
obligated, any instructions or directions set forth herein shall be
irrevocable, the parties hereby acknowledging and agreeing that these
instructions are coupled with an interest. If the Parties do not become
so obligated on or before February 2, 2005, then each Escrow Agent
shall return the Closing Documents and the applicable Escrow Funds to
the Party that delivered same to it.
1.3 ESCROW ACCOUNT. The parties agree that due to the short timeframe for
delivering the Escrow Funds to the applicable Party, neither Escrow
Agent shall be required to invest such funds in an interest-bearing
account. If, at the sole discretion of an Escrow Agent, the applicable
Escrow Funds are invested, then all interest shall be delivered by the
applicable Escrow Agent to the Party that so delivered such Escrow
Funds, and no other party shall have any claim thereto. Each Party
agrees to provide the applicable Escrow Agent with such information,
forms and certifications as may be required in connection with the
establishment of the Escrow Account.
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ARTICLE 2
FUNDING/ TRANSACTION STEPS
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2.1 TRANSACTION PROCESS.
(a) The Parties shall agree upon a Closing Date, and in the
absence of such a unanimous choice of Closing Date, the
Closing Date deemed to have been chosen shall be the Business
Day that is two Business Days from the date of the last
Party's Notice under the first sentence of the penultimate
paragraph of Section 1.1(a).
(b) All transactions to be effected pursuant to Section 2.2
involving the transfer of funds shall be effected by delivery
of checks. The parties acknowledge and agree that delivery of
checks from the Escrow Accounts to each party at its notice
address set forth on Exhibit B in the amounts set forth in
Exhibit D, shall constitute good delivery of such funds.
Exhibit E sets forth the net payments required after giving
effect to the directions in Section 2.2. If all of the
Transactions described in Section 2.2 are not completed in a
timely manner, then all funds advanced or paid shall be
returned promptly (but in no event later than five (5)
Business Days after the Closing Date) to the Party that
initiated the advance or payment of such funds into escrow.
2.2 FLOW OF FUNDS.
(a) For purposes of this Section 2.2 and elsewhere herein,
reference is hereby made to the list of defined "Transactions"
set forth in Exhibit C attached hereto.
(b) The following Parties shall take the actions described below
in the order set forth below, although the Closing Documents
effecting these Transactions shall only be released as set
forth in Section 2.3:
(i) On the Closing Date, Lender shall make the Loan
required pursuant to Transaction 1, but subject to
the payment directions set forth in paragraphs (ii),
(iii), (v) and (vi)(B) below. Lender hereby directs
that Loan Escrow Agent cause the delivery (by check)
to Canco of the Escrow Funds that Lender deposited
into the Loan Escrow Account (subject to the
directions in the provisions referred to above).
(ii) In respect of Transaction 2, Canco hereby directs
Lender to advance (on the Closing Date) the proceeds
of the Loan from Transaction 1 to the order or
direction of Target.
(iii) in respect of Transaction 3, Target hereby directs
(A) Lender to re-direct to Canco $750,000 of the
Loan proceeds in consideration for the
issuance of additional shares of Canco to
Target;
(B) Lender to use a portion of the Loan proceeds
in full repayment of the CDP Debt (in
accordance with the CDP Payoff Letter). CDP
hereby acknowledges that the CDP Payoff
Letter is hereby incorporated herein by
reference, and that upon receipt of payment
of the CDP Payoff Amount (which includes the
amount paid for the CDP Equity, as set
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forth in Section 2.2(b)(vi)(A)), CDP shall
have no further interest in Target, Canco or
USCo, including without limitation the CDP
Interest. CDP agrees and acknowledges that
it has not sold, transferred or assigned, or
encumbered, hypothecated or otherwise
granted a lien upon, or otherwise conveyed
an interest in, all or any portion of the
CDP Interest.
(C) Lender to pay the Lender's Legal Fees to the
counsel named on Exhibit D (such payment may
be effected by moving funds from Loan Escrow
Agents trust account to such firm's
operating account on behalf of both offices
of such firm).
(iv) Effective immediately after the completion of
Transaction 3, in respect of Transaction 4, Adsero
hereby acknowledges the closing of the Private
Placement and directs the Acquisition Escrow Agent to
pay the Adsero Equity to YAC in consideration for YAC
shares. YAC in turn directs the Acquisition Escrow
Agent to pay the Adsero Equity to Callco, and Callco
further directs the Acquisition Escrow Agent to pay
the Adsero Equity to TAC. The resolutions of the
directors of Adsero, YAC, Callco and TAC shall be
deemed to have been executed and the contributions
set forth therein shall be deemed to have been
completed, and (upon the delivery to TAC of a check
evidencing the Adsero Equity) such parties shall be
deemed to jointly and severally represent and
warranty that all shares so issued have duly
authorized and issued and are nonassessable.
(v) In respect of Transaction 5, Target hereby directs
Lender to pay the proceeds of the Target Loan to TAC,
subject to paragraph (vi)(B) below. TAC shall issue
to Target a promissory note to evidence the Target
Loan.
(vi) In respect of Transaction 6, TAC hereby directs:
(A) Acquisition Escrow Agent to pay (1) to CDP
the amount set forth on Exhibit C in
consideration for the CDP Equity, and (2) to
the TOLG Shareholders the respective amounts
set forth on Exhibit C for the balance of
their shares in Target; and
(B) Lender to pay the proceeds of the Target
Loan to the TOLG Shareholders to the extent
that the payments in clause (2) of the
preceding paragraph (vi)(A) are insufficient
to complete Transaction 6.
(vii) Adsero and TAC hereby acknowledge the issuance to the
TOLG Shareholders of (y) the Adsero and TAC preferred
shares described in the Share Purchase Agreement, and
(z) the exchangeable shares of TAC set forth in the
Share Purchase Agreement and the related "support
agreements" related thereto.
2.3 RELEASE OF DOCUMENTS. Concurrently with the completion of all of the
Transactions described in Section 2.2(b), the Closing Documents held by
each Escrow Agent shall be deemed to be released, and the Parties
hereby direct each Escrow Agent to compile and distribute full copies
of such documents to all of the Parties as soon as possible thereafter.
No Closing Documents shall be released until such time.
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2.4 COOPERATION. Each of the Parties agrees not to (i) take actions
inconsistent with this Agreement, or (ii) interfere with the occurrence
of the transactions specified in Section 2.2(b) (as also described in
the Recitals hereto).
ARTICLE 3
THE ESCROW AGENTS
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3.1 Each Escrow Agent shall perform only the duties expressly set forth
herein. It is understood and agreed that the duties of each Escrow
Agent hereunder are purely ministerial in nature and that neither shall
be liable for any error of judgment or for any act done or step taken
or omitted by it in good faith, or for any mistake of fact or law, or
for anything which it may do or refrain from doing in connection
herewith.
3.2 Each Escrow Agent shall henceforth deal with the applicable Escrowed
Funds only in accordance with the terms hereof. If an Escrow Agent is
uncertain as to whether it is obligated to deliver any or all of the
Escrowed Funds or as to who is entitled to the Escrowed Funds, or any
portion thereof, such Escrow Agent shall:
(a) hold the sum in dispute until the final determination of the
rights of the parties in an appropriate court proceeding; or
(b) bring an appropriate action or proceeding for leave to deposit
the sum in dispute, if applicable, into court, pending such
determination.
3.3 Each Escrow Agent may act on the advice of independent counsel and
shall not be liable to any person by reason of following the advice of
counsel (including the attorneys associated with or partners in
Xxxxxxxx Nantel or Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP (New York City
or Canadian offices)) or by any action taken or not taken in good faith
in accordance with such advice, except to the extent that such action
constitutes gross negligence or wilful misconduct.
3.4 Each Escrow Agent shall be entitled to rely exclusively on, and shall
be protected in acting or refraining from acting upon, any written
notice, instruction, request or other document purported to be
furnished to it by the parties hereto, and neither Escrow Agent shall
be bound to enquire as to the veracity, accuracy or adequacy thereof or
be bound by any notice, instruction, request or other document to the
contrary by any person other than a person entitled to give such notice
and each of the parties hereto shall not hold such Escrow Agent liable
for any loss or injury to them.
3.5 Neither Escrow Agent, its partners, associates, employees and agents
shall incur any liabilities hereunder or in connection herewith for
anything whatsoever and the parties hereto hereby release each Escrow
Agent and such persons from any action, cause of action, claim, demand,
damage, loss, cost, liability, penalty and expense whatsoever, whether
arising, directly or indirectly, by way of statute, contract, tort or
otherwise. The parties hereto shall indemnify the each Escrow Agent,
its partners, associates, employees and agents and hold it and them
harmless against any action, cause of action, claim, demand, damage,
loss, liability or expense arising out of or in connection with this
agreement, including the costs and expenses incurred in defending any
such claim of liability. Notwithstanding any other provision of this
agreement, the foregoing indemnification shall survive termination of
this agreement.
3.6 All costs and expenses incurred by an Escrow Agent acting as such shall
be the solidary (joint and several) responsibility of the parties
hereto.
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3.7 In the event of any disagreement between the parties resulting in
adverse claims or demands with respect to Escrowed Funds, the
applicable Escrow Agent shall be entitled, at its option, to refuse to
comply with any claims or demands on it with respect thereto as long as
such disagreement shall continue, and in so refusing, the Escrow Agent
may elect to make no delivery of the Escrowed Funds. In so doing, such
Escrow Agent shall not be or become liable in any way to any party
hereto for its failure or refusal to comply with such claims or
demands. In the event of any disagreement or apparent disagreement
between the parties hereto resulting in adverse claims or demands with
respect to the applicable Escrowed Funds or if any of the parties
hereto, including an Escrow Agent, are in or appear to be in
disagreement about the interpretation of this agreement or about the
rights and obligations of such Escrow Agent or the propriety of an
action contemplated by such Escrow Agent under this agreement, such
Escrow Agent may, at its option, deposit the applicable Escrowed Funds
or any part thereof then in its possession with a court of competent
jurisdiction in Montreal, Quebec and seek instruction or direction from
a court of competent jurisdiction which direction may include a request
for an interpleader order. Upon an Escrow Agent making such deposit,
such Escrow Agent shall be discharged and released of its duties and
obligations hereunder. Each Escrow Agent shall be indemnified by the
parties hereto, on a solidary basis (joint and several), in any such
action, interpleader or any other action or proceeding for all costs,
expenses and fees in its capacity as Escrow Agent in connection with
any deposit or any action brought in connection with this agreement.
The parties hereto hereby acknowledge and agree that an Escrow Agent
shall be entitled to represent itself in connection with any legal
actions taken in connection with this agreement. Upon an Escrow Agent's
delivery or deposit of the applicable Escrowed Funds in accordance with
the provisions of this agreement, the applicable Escrow Agent shall be
automatically and immediately released from all obligations under this
agreement to the other parties hereto and to any other person with
respect to any part of the monies held in escrow hereunder.
3.8 An Escrow Agent may resign its position and be discharged from all
further duties under this agreement on 15 days' written notice to the
parties hereto or such shorter notice as they may accept as sufficient.
Lender (with respect to the Loan Escrow Agent) and Adsero (with respect
to the Acquisition Escrow Agent) shall have the right to appoint a new
escrow agent; until Lender or Adsero (as applicable) appoint a new
escrow agent, the applicable Escrow Agent shall continue to hold the
Escrowed Funds in accordance with the terms and conditions contained in
this agreement or, at the option of the applicable Escrow Agent, bring
an appropriate action or proceeding for leave to deposit such Escrowed
Funds into court, pending such appointment. Lender or Adsero, as
applicable, shall have the right, at any time on 15 days' notice to the
Escrow Agent, acting jointly, to remove an Escrow Agent and to appoint
a new Escrow Agent. In the event of the resignation or removal of the
Escrow Agent, Lender or Adsero, as applicable, shall forthwith appoint
a new escrow agent acceptable to them and shall give notice of such
appointment to the parties hereto. Upon receipt of such notice, the
removed or replaced Escrow Agent shall transfer and deliver to the new
escrow agent the Escrowed Funds and other material in the possession of
such Escrow Agent relating to the administration of this agreement
which would be necessary or useful to the new escrow agent. On any
appointment of a new escrow agent, the new escrow agent shall be vested
with the same powers, rights, duties and responsibilities and shall be
subject to removal as escrow agent hereunder as if it had been
originally named herein as the respective Escrow Agent without any
further assurance, conveyance, act or deed.
3.9 Save for the indemnification obligations described above, which shall
survive this Agreement, this Agreement shall terminate and cease to be
of any further force and effect when each Escrow
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Agent shall have distributed the Escrowed Funds in its possession in
accordance with the terms of this Agreement.
3.10 Neither Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP (New York and Canadian
offices), Xxxxxxxx Nantel, nor any other escrow agent that is a firm of
lawyers shall, by reason of its agreeing to act as an Escrow Agent
hereunder, be precluded from acting as legal counsel to any party
hereto.
3.11 The indemnities, releases and limitations of liability contained in
this section shall not apply with respect to any matter arising out of
the willful misconduct or gross negligence of an Escrow Agent, its
partners, associates, employees or agents.
ARTICLE 4
MISCELLANEOUS
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4.1 ASSIGNMENT. This Agreement and the rights and duties hereunder shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, and to the benefit of each
Escrow Agent, as intended third party beneficiaries. No rights or
obligations hereunder may be sold, transferred or assigned without the
prior written consent of each Party hereto, which may be withheld in
each such Party's sole discretion (except that CDP may not withhold its
consent to any action not affecting or delaying delivery of the CDP
Payoff Amount), and any such sale, transfer or assignment in
contravention hereof shall be void and of no effect.
4.2 TIME OF ESSENCE. Time is of the essence in this Agreement.
4.3 PRINCIPLES OF CONSTRUCTION. All references to sections and schedules in
this Agreement are to sections and schedules in or to this Agreement
unless otherwise specified. Unless the context indicates to the
contrary, all references to a document, instrument or agreement (or any
other written materials) includes all amendments, restatements,
supplements to and substitutions thereof. All references to statutes or
regulations mean such statutes, the regulations or other legislation
promulgated thereunder, any amendments thereto or any substitute
legislation. Unless otherwise specified, the words "hereof," "herein"
and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. Unless otherwise specified, the word
"including" shall mean "including without limitation". Unless otherwise
specified, all meanings attributed to defined terms herein shall be
equally applicable to both the singular and plural and the masculine,
feminine and neutral forms of the terms so defined.
4.4 LIMITED CDP INVOLVEMENT AND LIABILITY. The parties other than CDP
hereby acknowledge that (a) CDP is entering into this Agreement solely
for the purpose of indicating that its receipt of the CDP Payoff Amount
is contingent upon the condition subsequent that the other Transactions
described herein are consummated, and (b) CDP has no responsibilities
or liability hereunder or under any documents, instruments or
agreements evidencing the other transactions described herein, other
than to return the CDP Payoff Amount if all of the Transactions are not
consummated substantially as described in Section 2.2(b) hereof.
4.5 CURRENCY. All references to "$" or "dollars" are to Canadian dollars
unless indicated to the contrary.
4.6 MODIFICATION. No agreement unless in writing and signed by the Party
against whom enforcement is sought, and no course of dealing between
the Parties shall be effective to change,
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waive, terminate, modify, discharge, or release in whole or in part any
provision of this Agreement.
4.7 NO WAIVER. Waivers of rights hereunder are required by all Parties to
which the benefits of the "waived" obligation flow. Any waiver by any
Party of any breach of or failure to comply with any provisions of this
Agreement by any other Party shall be in writing and shall not be
construed as, or constitute, a continuing waiver of such provision, or
a waiver of any other breach of, or failure to comply with, any other
provision of this Agreement.
4.8 INCORPORATION BY REFERENCE. The following provisions of Schedule I to
the Loan Agreement are hereby incorporated herein by reference, as
though set forth at length herein: 2(d), 2(g), 2(i), 2(j) (provided
that such provision shall not eliminate the obligation to deliver the
notices specifically required herein), 2(k) (which provision governs
JURISDICTION and related matters), 2(l), 2(m), 2(n) (which provision
contains a WAIVER OF JURY TRIAL), 2(t) and 2(v).
4.9 GOVERNING LAW; LANGUAGE. This Agreement shall be deemed to be a
contract under the Laws of the Province of Quebec and the federal laws
of Canada, without regard for choice of laws principles. The parties
acknowledge that they have required that the present agreement, as well
as all documents, notices and legal proceedings entered into, given or
instituted pursuant hereto or relating directly or indirectly hereto be
drawn up in English. Les parties reconnaissent avoir exige la redaction
en anglais de la presente convention, ainsi que de tous documents
executes, xxxx xxxxxx et procedures judiciaries intentees, directement
ou indirectement, a la suite ou relativement a la presente convention.
[The remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the Parties have executed (or caused duly
authorized officers to execute) this Agreement as of the date provided in the
first paragraph hereof.
TARGET: Compagnie Teckn-O-Laser Global/ USCO: Tecknolaser USA Inc.
Teckn-O-Laser Global Company
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxx Xxxxxxxx
----------------- -----------------
Name: Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx
CALLCO: 3091732 Nova Scotia Company YAC: YAC Corp.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
----------------- -----------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
CANCO: Teckn-O-Laser Company/ ADSERO: Adsero Corp.
Compagnie Teckn-O-Laser
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxx
----------------- -----------------
Name: Xxxx Xxxxxxxx Name: Xxxxxxx Xxxxx
TAC: 3091503 Nova Scotia Company LENDER: Barrington Bank
International Limited
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxxx
----------------- ------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxxx
TOLG SHAREHOLDERS: CDP: Caisse de depot et placement
du Quebec
/s/ Xxxx Xxxxxxxx By: /s/Xxxxxx Xxxxxx
----------------- ----------------
XXXX XXXXXXXX, on his own behalf and on Name: Xxxxxx Xxxxxx
behalf of 9144-6773 QUEBEC INC.
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxx Xxxxxx
------------------- ---------------
XXXXX XXXXXXXXX, on his own behalf and Name: Xxxx Xxxxxx
on behalf of 9144-6906 QUEBEC INC.
/s/ Xxxxxx Xxxxxxx
------------------
XXXXXX XXXXXXX
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EXHIBIT A
---------
[Corporate / Organizational Chart]
A-1
EXHIBIT B
---------
Party: Notice Address - Notice can be by e-mail or fax
________________________________________________________________________________
Adsero One notice to all 4 is sufficient.
YAC Address for notice:
Callco
TAC 00 Xxxxxxx Xxx.
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
e-mail: xxxxxxxxxxxx0000@xxxxxx.xxx
________________________________________________________________________________
Target 0000 Xxxxx Xxxxxx,
Xxxxx Xxx- Xxxxx, Xxxxxx, X0X 0X0 Xxxxxx
USCo Telephone: (000) 000-0000
TOLG Shareholders (in the
capacities set forth in the Notice delivered to the following two
first paragraph and on the addressees shall be deemed to satisfy the
signature page): notice requirements for Target, Canco and USCo.
Xxxx Xxxxxxxx and Celine Facsimile: (000) 000-0000
Xxxxxxx (one notice e-mail: xxxxxxxxx@xxxxx-x-xxxxx.xxx
sufficient for both)
Xxxxx Xxxxxxxxx Facsimile: (000) 000-0000
e-mail: xxxxxxxxxx@xxxxx-x-xxxxx.xxx
________________________________________________________________________________
CDP Xxxxxx xx xxxxx xx xxxxxxxxx xx Xxxxxx
0000, place Xxxx-Xxxx Xxxxxxxx, bureau X-000
Xxxxxxxx, Xxxxxx X0X 0X0, Xxxxxx
Attn: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
xxxxxxx@xxxxxxxx.xxx
________________________________________________________________________________
Lender Barrington Bank International Limited
Xxxxxxxxxx Xxxxx, X.X. Xxx X0000, 0xx Xxxxx
Xxxxxxx, Bahamas
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 and (000) 000-0000
e-mail: xxxxxxx@xxxxxxxxxxxxxxxxx.xxx
________________________________________________________________________________
B-1
________________________________________________________________________________
Loan Escrow Agent Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP
0000 XxXxxx Xxxxxxx Xxx.
Xxxxxxxx, Xxxxxx X0X 0X0
Attn: Xxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
e-mail: xxxxxxxx@xxxx.xxx
________________________________________________________________________________
Acquisition Escrow Agent Xxxxxxxx Nantel
0000 Xxxxxxxxxx Xx. Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx, X0X 0X0
Attn: Xxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
e-mail: xxxxxxxxx@xxxxxxxx.xx
________________________________________________________________________________
B-2
EXHIBIT C
---------
Transaction List
----------------
1. Transaction 1 shall mean the advance of $2.0 million by Lender to Canco
pursuant to the terms of the Loan Agreement.
2. Transaction 2 shall mean Canco's dividend to Target of the Loan
proceeds.
3. Transaction 3 shall mean, collectively, (I) Target's CONTRIBUTION TO
CANCO OF $750,000, in consideration of shares of Canco, (II) Target's
repayment in full of the CDP Debt and CDP's concurrent release of (a)
all obligations owing by Target, Canco or USCo to CDP and (b) all
liens, if any, in favor of CDP or its affiliates to which the assets of
any of Target, Canco or USCo are subject, all of which is provided for
in the CDP Payoff Letter, and (III) Target's payment of the Lender's
Legal Fees.
4. Transaction 4 shall mean, collectively, (I) Adsero's closing of the
Private Placement, followed by (II) the subscription by Adsero for
shares of YAC and contribution to YAC of the Adsero Equity in
consideration for such YAC shares, followed by (III) YAC's payment to
Callco of the Adsero Equity in consideration for shares of Callco that
YAC previously acquired subject to call, followed by (IV) Callco's
payment to TAC of the Adsero Equity in consideration for shares of TAC
that Callco had previously acquired subject to call. Upon the
conclusion of the foregoing steps, the organizational structure will be
as set forth on Exhibit A.
5. Transaction 5 shall mean Target's making of the Target Loan of $150,000
to TAC.
6. Transaction 6 shall mean (I) TAC's payment to CDP OF $1,500,000 for the
CDP Equity, (II) TAC's payment to the TOLG SHAREHOLDERS OF $750,000
pursuant to the Share Purchase Agreement and the releated documents,
(III) each of Adsero's and TAC's issuance of preferred shares to the
TOLG Shareholders pursuant to the Share Purchase Agreement and the
related documents, and (IV) the issuance to the TOLG Shareholders of
TAC preferred shares and shares in TAC that are exchangeable into
shares of Adsero. The payments required pursuant to clause (II) above
shall be allocated as follows:
(a) To Xxxx Xxxxxxxx: $221,969
(b) To 0000-0000 Xxxxxx Inc. $207,760 (c/o Xxxx Xxxxxxxx)
(c) To Xxxxx Xxxxxxxxx: $144,144
(d) To Xxxxxx Xxxxxxx: $176,127
* * *
C-1
EXHIBIT D
---------
Lender's Legal Fees
-------------------
Firm: Fees Payable (C$)
________________________________________________________________________________
Barrington Lawyer - New York $54,972
Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP
________________________________________________________________________________
Barrington Lawyer - Montreal $44,510
Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP
________________________________________________________________________________
D-1
EXHIBIT E
---------
Recipient: Source
________________________________________________________________________________
CDP:
$1,500,000 Check from Acquisition Escrow Agent
trust account
$ 600,000 + interest(1) Check from Loan Escrow Agent trust account
------------------------
$2,100,000
________________________________________________________________________________
TOLG Shareholders: Aggregate
of $750,000
(a) To Xxxx Xxxxxxxx: ($221,969) Check ($150,000) from Loan Escrow Agent
trust account
Check ($71,969) from Acquisition Escrow
Agent trust account
(b) To 0000-0000 Xxxxxx Inc. Check from Acquisition Escrow Agent
($207,760) trust account
(c) To Xxxxx Xxxxxxxxx: Check from Acquisition Escrow Agent
($144,144) trust account
(d) To Xxxxxx Xxxxxxx: Check from Acquisition Escrow Agent
($176,127) trust account
________________________________________________________________________________
Canco ($750,000) Check from Loan Escrow Agent trust account
Target: The excess of (i) Check from Loan Escrow Agent trust account
$500,000 over (ii) sum of to Xxxxxxxx Nantel, in trust
interest payable to CDP plus
Lender's Legal Fees
________________________________________________________________________________
Xxxxxx Xxxx Philips & Vineberg Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP to move
LLP (Montreal and New York aggregate amount of Lender's Legal Fees from
offices) - (Payment of Lender's its escrow account to its operating account
Legal Fees in Exhibit D)
________________________________________________________________________________
(1) Interest of $12,191 as of December 31, 2004, plus per diem of $271.
E-1
EXHIBIT F
---------
CDP Payoff Letter
{Follows}
F-1
