SASKATCHEWAN TELECOMMUNICATIONS, (herein called “SaskTel”) -and- WIRELESS AGE COMMUNICATIONS LTD. (herein called “Wireless Age”) -and- WIRELESS SOURCE DISTRIBUTION LTD. (herein called “Wireless Source”) -and- NEWLOOK INDUSTRIES CORP. (herein called...
Exhibit 10.13
THIS
AGREEMENT MADE IN DUPLICATE, as of the 23rd day of October, 2008.
BETWEEN:
SASKATCHEWAN
TELECOMMUNICATIONS,
(herein
called “SaskTel”)
-and-
WIRELESS
AGE COMMUNICATIONS LTD.
(herein
called “Wireless Age”)
-and-
WIRELESS
SOURCE DISTRIBUTION LTD.
(herein
called “Wireless Source”)
-and-
NEWLOOK
INDUSTRIES CORP.
(herein
called “Newlook”)
REPAYMENT
AGREEMENT
WHEREAS:
|
A.
|
SaskTel
and Wireless Source entered into a Prepaid Cellular Service Card
Distribution Agreement dated July 31, 2002 and amended pursuant to a
Prepaid Cellular Service Card Distribution Amendment Agreement dated
February 28, 2003 and a Prepaid Cellular Service Card Distribution
Agreement – ePin Amending Agreement dated December 22, 2004 (collectively,
the “Prepaid Card Agreement”).
|
|
B.
|
|
C.
|
As
of September 30, 2008, Wireless Source is indebted to SaskTel in the
amount of $6,366,070.58 pursuant to the Prepaid Card
Agreement. All amounts owing by Wireless Source to SaskTel
pursuant to the Prepaid Card Agreement are herein referred to as the
“Indebtedness”.
|
|
D.
|
Wireless
Source is indebted in the amount of the Indebtedness to SaskTel and
SaskTel is entitled to immediately take steps to enforce repayment of the
Indebtedness.
|
|
E.
|
As
of October 23, 2008, SaskTel is indebted to Wireless Age in the amount of
$1,718,835.10 pursuant to the Distributorship Agreement. All
amounts now owing or hereafter becoming payable by SaskTel to Wireless Age
pursuant to the Distributorship Agreement are herein referred to as the
“SaskTel Payable”.
|
|
F.
|
Wireless
Age, Wireless Source and Newlook are indebted or otherwise obligated to
TCE Capital Corporation (“TCE”) in the aggregate amount of approximately
$2,730,617 (collectively, the “TCE Loans”) and in respect of which TCE
holds perfected security interests in the property and assets of Wireless
Age, Wireless Source and Newlook (collectively, the “TCE
Security”).
|
|
G.
|
SaskTel
has agreed, upon certain terms and conditions more particularly described
in this Agreement, not to make any further demand for payment
of the Indebtedness or from taking any steps to enforce repayment of the
Indebtedness.
|
|
H.
|
Wireless
Age has agreed, upon certain terms and conditions more particularly
described in this Agreement, to guarantee repayment of the Indebtedness to
SaskTel and to provide a first charge security interest in the assets of
Wireless Age.
|
|
I.
|
The
parties consider it to be in their mutual interest to enter into this
Agreement to:
|
|
(a)
|
Confirm
the various respective obligations owed to SaskTel by Wireless Source and
Wireless Age;
|
|
(b)
|
Confirm
the terms and conditions upon which SaskTel has agreed to accept repayment
of the Indebtedness.
|
|
J.
|
This
paragraph and the preceding nine (9) paragraphs are hereinafter
collectively referred to as the
“Recitals”.
|
NOW,
THEREFORE, THIS AGREEMENT WITNESSETH that, in consideration of the mutual
covenants and obligations herein contained, and other good and valuable
consideration, the receipt and sufficiency of each of which is hereby
acknowledged by SaskTel, Wireless Age and Wireless Source, the parties hereto
agree as follows:
|
1.
|
Confirmations
|
|
1.1
|
Wireless
Age and Wireless Source acknowledge, represent and warrant to SaskTel that
the Recitals to this Agreement are accurate and complete and form an
integral part of this Agreement.
|
|
1.2
|
The
parties hereto each hereby acknowledge, covenant and agree with the other
as follows:
|
|
(a)
|
The
Indebtedness is a valid and enforceable obligation owed by Wireless Source
to SaskTel and is enforceable by SaskTel against Wireless Source in
accordance with its terms.
|
2. Guarantee by Wireless
Age
|
2.1
|
Concurrent
with the execution of this Agreement, Wireless Age agrees to execute the
form of guarantee attached to this Agreement as Schedule
“A”.
|
|
2.2
|
Wireless
Age undertakes to provide a first charge security position, in form
satisfactory to all parties, to SaskTel upon repayment of the TCE Loans
pursuant to the provisions of Article
4.1.
|
3. Payments by Wireless Age and
Wireless Source
|
3.1
|
Wireless
Age and/or Wireless Source shall repay the Indebtedness in accordance with
the following schedule:
|
|
(a)
|
the
sum of $250,000 on November 30,
2008;
|
|
(b)
|
the
sum of $250,000 on December 31,
2008;
|
|
(c)
|
the
sum of $300,000 on January 31,
2009;
|
|
(d)
|
the
sum of $300,000 on February 28,
2009;
|
|
(e)
|
the
sum of $350,000 on March 31, 2009;
|
|
(f)
|
the
sum of $350,000 on April 30, 2009;
|
|
(g)
|
the
sum of $400,000 on May 31, 2009;
|
|
(h)
|
the
sum of $400,000 on June 30, 2009;
|
|
(i)
|
the
sum of $450,000 on July 31, 2009;
|
|
(j)
|
the
sum of $450,000 on August 31, 2009
|
|
(k)
|
the
sum of $1,433,035.29 on September 30,
2009;
|
|
(l)
|
the
sum of $1,433,035.29 plus accrued interest, if any, on October 31,
2009.
|
|
3.2
|
Interest
shall not begin to accrue on the balance of the Indebtedness before
January 1, 2009. Subject to the provisions of Clause 3.3 interest shall
accrue at the rate of 1% per month, compounded monthly (12.68% annual
equivalent).
|
|
3.3
|
If
Wireless Age and/or Wireless Source prepays $1,000,000 principal under
Clause 3.1(k) on or before December 31, 2008 interest shall not begin to
accrue on the balance of the Indebtedness before April 1, 2009 and if
Wireless Age and/or Wireless Source prepays a further $1,000,000 principal
under Clause 3.1 (l) and (k) on or before March 31, 2009 interest shall
not begin to accrue on the Indebtedness before July 1, 2009 and if
Wireless Age and/or Wireless Age prepays the remainder not previously
prepaid under Clause 3.1(k) on or before June 30, 2009 no interest will be
charged or owing on any part of the
Indebtedness.
|
|
4.
|
Payment by
SaskTel
|
|
4.1
|
SaskTel
hereby acknowledges and confirms the amount of the SaskTel Payable set out
in Recital E. SaskTel shall continue to withhold payment of the SaskTel
Payable until the aggregate amount of the SaskTel Payable equals the then
balance of the TCE Loans, at which time SaskTel shall pay to TCE such
balance as a full and complete repayment of the TCE Loans against
discharge by TCE of the TCE Security; provided that SaskTel shall not be
required to pay to TCE such balance as repayment of the TCE Loans unless
Wireless Source and Wireless Age have granted to SaskTel the security
interest contemplated in Section 4.2 hereof; and further provided that if
Wireless Source and Wireless Age have not granted to SaskTel the security
interest contemplated in Section 4.2 hereof, such balance shall be paid by
SaskTel to TCE for an assignment by TCE to SaskTel of the TCE Loans and
the TCE Security in the assets of Wireless Age and Wireless
Source. Upon completion of any such assignment to SaskTel of
the TCE Loans and TCE Security in the assets of Wireless Age and Wireless
Source as hereinbefore provided, Wireless Age and Wireless Source
acknowledge and agree that the assigned TCE Security shall secure not only
the TCE Loans but also all other obligations of Wireless Age and Wireless
Source to SaskTel.
|
|
4.2
|
Prior
to or concurrent with SaskTel paying to TCE the TCE Loans balance,
Wireless Age and Wireless Source shall grant to SaskTel a first charge
security interest or mortgage of all of the assets of Wireless Age and
Wireless Source and each of Wireless Age and Wireless Source shall take
all steps reasonably necessary to obtain such security interests,
including all required supporting documents and
registrations.
|
|
4.3
|
If
Wireless Age and/or Wireless Source fails to make any of the required
payments described in Article 3.1 or any of the prepayments on each of
December 31, 2008, March 31, 2009 or June 30, 2009, described in Article
3.3, SaskTel, Newlook the controlling shareholder of Wireless Age
Communications, Inc. agrees to pledge the common shares of Wireless Age
Communications, Inc. to SaskTel as additional security for the
Indebtedness.
|
|
4.4
|
SaskTel
agrees to provide all reasonable legal documentation and assurances with
respect to the provisions of Section 4.1 to TCE upon signing this
Agreement and each of Wireless Age, Wireless Source and Newlook hereby
consent to SaskTel doing so and to TCE and SaskTel directly exchanging
information as to the Indebtedness, the SaskTel Payable, the TCE Loans and
the TCE Security as against the assets of Wireless Age and Wireless
Source.
|
|
5.
|
Financial
Information
|
|
5.1
|
Wireless
Age and Wireless Source shall, concurrent with the execution of this
Agreement, provide to SaskTel the following documents and/or
information:
|
|
(a)
|
a
copy of all loan and security agreements under which either Wireless Age
or Wireless Source are obligated to repay indebtedness or have granted
security to TCE Capital;
|
|
(b)
|
a
copy of the most recent annual financial statements for Wireless Age and
Wireless Source;
|
|
(c)
|
particulars
of any payments made by Wireless Age and/or Wireless Source out of the
ordinary course of business in the last 12 months, including, without
limitation, any dividends paid or any payments made to related
parties.
|
|
5.2
|
Wireless
Age and Wireless Source shall, not later than the 20th
calendar day of each month, commencing on October 20, 2008 and continuing
until the Indebtedness is repaid in full, provide to SaskTel the following
financial information:
|
|
(a)
|
an
aged accounts receivable and accounts payable listing for each of Wireless
Age and Wireless Source effective as of the last day of the preceding
month;
|
|
(b)
|
monthly
bank statements detailing all receipts and disbursements for each of
Wireless Age and Wireless Source for the preceding
month.
|
|
6.
|
Enforcement
|
|
6.1
|
Subject
to the terms and conditions of this Agreement, SaskTel agrees that it will
not proceed to enforce repayment of the Indebtedness until after 12:00
o’clock midnight on October 31,
2009.
|
|
6.2
|
SaskTel
may, in its absolute and unfettered discretion, grant a further period of
time during which SaskTel will not proceed to enforce its rights , but
SaskTel shall not be obligated to grant such extensions under any
circumstances, and nothing in this Agreement shall constitute any
representation, waiver, or acknowledgement by SaskTel that it intends to,
or will, grant such extensions.
|
|
6.3
|
SaskTel
hereby agrees that upon full, complete and final performance by Wireless
Age and/or Wireless Source of each of the covenants, responsibilities and
obligations in accordance with the time limits herein specified, SaskTel
shall be deemed to have accepted the aforesaid payments, covenants, sums
of money, terms and conditions in full and final satisfaction of the
Indebtedness owed by the Wireless Age and Wireless Source to
SaskTel.
|
|
6.4
|
Wireless
Age and Wireless Source hereby acknowledge that this Agreement shall not
release them from any of their liabilities, obligations and
responsibilities with respect to any other arrangements between themselves
and SaskTel (other than the
Indebtedness).
|
|
7.
|
Default
|
|
7.1
|
SaskTel
may terminate this Agreement forthwith in the event
that:
|
|
(a)
|
Wireless
Age and/or Wireless Source do not make payments as required by this
Agreement;
|
|
(b)
|
Wireless
Age and/or Wireless Source do not observe, perform or adhere to the terms
and conditions in this Agreement;
|
|
(c)
|
Wireless
Age and/or Wireless Source breach any promise, representation or warranty
made in this Agreement or Wireless Age and/or Wireless Source provide any
false or misleading information to SaskTel which materially affects this
Agreement;
|
|
(d)
|
Wireless
Age and/or Wireless Source cease or threaten to cease to carry on in the
normal course of business or any material part
thereof;
|
|
(e)
|
Wireless
Age and/or Wireless Source become insolvent, commit an act of bankruptcy,
or make a proposal or file an assignment for the benefit of creditors
under the Bankruptcy and
Insolvency Act (Canada) or similar legislation in Canada or any
other jurisdiction, or are the subject of a proceeding in bankruptcy or
receivership;
|
|
(f)
|
the
holder of a charge against the property of Wireless Age and/or Wireless
Source takes possession of such property, or a distress, execution or
other similar process is levied against any part of the property of
Wireless Age and/or Wireless
Source;
|
|
(g)
|
SaskTel
in good faith and upon commercially reasonable grounds believes that the
prospect of payment or performance is or is about to be
impaired.
|
|
7.2
|
In
the event of the termination of this Agreement, or upon the expiry of
the period described in Section 6.1 of this Agreement or any
extension thereof agreed to by SaskTel, Wireless Age and Wireless Source
agree that SaskTel or an agent for SaskTel, may forthwith take all steps
it deems necessary to enforce repayment of the Indebtedness, including,
without limitation, setting off against the Indebtedness any amounts owed
by SaskTel to Wireless Age and/or Wireless Source in excess of the then
outstanding balance of the TCE Loans (if any) SaskTel agrees that while
this Agreement is in effect and during the period described in Section 6.1
of this Agreement, SaskTel will limit set off of amounts owing to Wireless
Age and/or Wireless Source against the Indebtedness to the amount of the
scheduled payment or payments described in Section 3.1 that are owing at
the time of the set off by SaskTel and that have not been made by Wireless
Source and/or Wireless Age. Wireless Source and Wireless Age agree that
this limited right of set off shall apply only provided that no more than
two (2) consecutive scheduled payments as set forth in Section 3.1 of this
Agreement are not paid when required by Wireless Source and/or Wireless
Age.
|
8. Miscellaneous
|
8.1
|
This
Agreement shall be governed by and construed in accordance with the laws
of the Province of Saskatchewan and the Canadian federal laws which are
applicable in the Province of
Saskatchewan.
|
|
8.2
|
Each of the parties hereby
attorns to the non-exclusive jurisdiction of the courts
ofSaskatchewan.
|
|
8.3
|
Any
notice or other documentation required to be given to any party hereunder
shall be given to that party at the address set out in Schedule “B”
hereto.
|
|
8.4
|
If
any one or more of the provisions contained in this Agreement shall be
determined to be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired
thereby.
|
|
8.5
|
This
Agreement shall enure to the benefit of and be binding upon SaskTel,
Wireless Age and Wireless Source and their respective successors, assigns,
officers, directors, employees, servants and agents (as the case may
be).
|
|
8.6
|
The
records of SaskTel shall be prima facie proof of
the outstanding amount of the Indebtedness owed by Wireless Age and
Wireless Source to SaskTel in respect of the Indebtedness, of the amount
of any payment made, of the amount of any part of the Indebtedness which
is in default, and of any notice or demand being
made.
|
|
8.7
|
Wireless
Age and Wireless Source and Newlook hereby acknowledge and agree that they
have entered into this Agreement freely without coercion or duress by
SaskTel or any of its officers, directors, employees, servants or
agents.
|
|
8.8
|
The
parties agree that all the rights and remedies of SaskTel hereunder and
under any agreement delivered pursuant hereto are cumulative and are in
addition to, without prejudice to, and shall not be deemed to exclude, any
other right or remedy allowed to SaskTel hereunder or any agreement
delivered pursuant hereto, except as specifically set out
herein.
|
|
8.9
|
The
parties also agree that all rights and remedies of SaskTel may be
exercised concurrently.
|
|
8.10
|
The
parties agree that time shall be of the essence of this Agreement in all
respects.
|
|
8.11
|
The
parties hereby agree that they will execute such further documents, deeds,
assurances and that they will do all such acts as may be reasonably
required to fully implement the intent of this
Agreement.
|
|
8.12
|
No
condoning, excusing, or waiver by either party of any default, breach, or
non-observance by the other party at any time or times with respect to any
covenants or provisos contained in this Agreement shall constitute a
waiver by that party of its rights to act upon such or further default,
breach, or non-observance.
|
|
8.13
|
This
Agreement may be executed in counterparts and shall be fully binding if
executed in counterparts.
|
IN
WITNESS WHEREOF the parties have executed this Agreement effective as of the
date first written above.
SASKATCHEWAN
TELECOMMUNICATIONS
Per:________________________________________
Authorized Signing
Officer
Per:_____________________________________________
Authorized Signing
Officer
WIRELESS AGE COMMUNICATIONS
LTD.
Per:________________________________________
Authorized
Signing Officer
WIRELESS SOURCE DISTRIBUTION
LTD.
Per:________________________________________
Authorized Signing
Officer
NEWLOOK INDUSTRIES
CORP.
Per:________________________________________
Authorized
Signing Officer
SCHEDULE
“A”
GUARANTEE
WHEREAS:
|
1.
|
Wireless
Source Distribution Ltd. (“Wireless Source”) is indebted to Saskatchewan
Telecommunications (“SaskTel”) in the amount of $6,366,070.58 as of
September 30, 2008 (the
“Indebtedness”).
|
|
2.
|
Wireless
Age Communications Ltd. (“Wireless Age”) has agreed to execute this
Guarantee in consideration of SaskTel entering into a Repayment Agreement
with Wireless Source. (the “Repayment
Agreement”)
|
NOW THEREFORE Wireless Age
does hereby covenant, promise and agree in favour of and with SaskTel as
follows:
|
(a)
|
Wireless
Age unconditionally guarantees to SaskTel the due payment by Wireless
Source of the Indebtedness and interest at the time and in the manner
provided for in the Repayment Agreement and the due performance
and observance by Wireless Source of all covenants, conditions,
stipulations and provisos contained in the Repayment
Agreement.
|
|
(b)
|
That
as between SaskTel and Wireless Age, Wireless Age is and shall continue
liable as principal debtor under all the covenants contained in the
Repayment Agreement notwithstanding any transaction which may take place
between Wireless Source and SaskTel or any neglect or default of SaskTel
which might otherwise operate as a discharge whether partial or absolute
of Wireless Age if it were a surety only of Wireless Source and without
restricting the generality of the foregoing notwithstanding the granting
of time or other indulgence to Wireless
Source.
|
|
(c)
|
SaskTel,
in its absolute discretion or in the absolute discretion of any officer or
agent, and without diminishing the liability of Wireless Age, may grant
time or may vary the term of repayment or may grant other indulgences to
Wireless Source and any other person or persons now or hereafter liable to
SaskTel in respect of the Indebtedness and interest and may give up,
modify, vary, exchange, renew or abstain from perfecting or taking
advantage of any security in whole or in part and may discharge any part
or parts or accept any composition or arrangements or realize upon the
said security or any security when and in such manner as SaskTel or any
officer thereof may think expedient, and in no case shall SaskTel be
responsible for any neglect or omission with respect to any such
security. Any account settled or stated by or between SaskTel
and Wireless Source may be adduced by SaskTel and shall in that case be
accepted by Wireless Age as conclusive evidence that the balance or amount
thereof thereby appearing is due by Wireless Source to
SaskTel.
|
|
(d)
|
That
Wireless Age will not at any time claim to be subrogated in any manner to
the position of SaskTel and will not claim the benefit of any security at
the time held by SaskTel PROVIDED HOWEVER that in the event of Wireless
Age paying to SaskTel all the monies remaining unpaid then Wireless Age
shall be entitled on demand made by it in writing to SaskTel to the
assignment of and such of the said security remaining in SaskTel at the
time such notice is received by it.
|
|
(e)
|
That
SaskTel shall not be bound to exhaust its recourse against Wireless Source
or other parties or any security it may hold before requiring payment from
Wireless Age and SaskTel may enforce the various remedies available to it
and may realize upon the various securities held by it or any part thereof
in such order as SaskTel may
determine.
|
|
(f)
|
That
if default shall occur under the Repayment Agreement, Wireless Age shall
forthwith upon demand being made upon it by SaskTel pay to SaskTel all
principal, interest, costs and expenses due by virtue of this Guarantee,
the Repayment Agreement or any
security.
|
|
(g)
|
That
no change in the name, objects, capital stock, or constitution of Wireless
Source shall in any way affect the liability of Wireless Age, either with
respect to a transaction occurring before or after any such change and
SaskTel shall not be concerned to see or enquire into the powers of
Wireless Source or any of its Directors or other agents acting or
purporting to act on its behalf and monies, advances, renewals or credits
in fact borrowed or obtained from SaskTel shall be deemed to be and form
part of the Indebtedness hereby guaranteed, notwithstanding that such
borrowing may be in excess of the powers of Wireless Source or of its
Directors or other agents aforesaid or be in any way irregular, defective
or informal.
|
|
(h)
|
That
this Guarantee shall extend to and enure to the benefit of SaskTel and its
successors and assigns and reference hereunto to the undersigned or to
Wireless Age is a reference to and shall be construed as including its
successors and assigns.
|
IN WITNESS WHEREOF Wireless
Age has executed this Guarantee as of the 23rd, day of
October, 2008.
WIRELESS AGE COMMUNICATIONS
LTD.
Per: ______________________________________
Authorized Signing
Officer
SCHEDULE
“B”
NOTICES
TO: SASKTEL
Saskatchewan
Telecommunications
Legal Department
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxx X0X
0X0
Attention: V.P. Corporate
Counsel & Regulatory Affairs
Fax: (000)000-0000
TO: Wireless
Source Distribution Ltd.
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxx
X0X 0X0
Attention: Xxxxx
Xxxxx
Fax: (000)000-0000
AND
TO:
Wireless
Age Communications Inc. & Wireless Age Communications Ltd.
0000 Xxxx
Xxxx, Xxxxx 000
Xxxx
Xxxx, Xxxxxxx
X0X
0X0
Attention:
Xxxx Xxxxxxxx
Fax:
(000) 000-0000
AND TO:
Newlook
Industries Corp.
000 Xxxxx
Xx. Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention:
Xxxx Xxxxxxxx
Fax:
(000) 000-0000
