EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
------------------------
THIS AGREEMENT dated for reference the 9th day of May, 2002
BETWEEN:
RX TECHNOLOGY, INC., 0000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxx, X.X.X.
--------------------- 70471
(the "Vendor")
AND: GRAVITAS DIGITAL COMMUNICATIONS, INC. 000X Xxxxxxx Xxxx, Xxxxxxxxx,
------------------------------------- British Columbia, Canada V5Z 4B2
(the "Purchaser")
WITNESSES THAT WHEREAS:
A. The Vendor carries on the business (the "Business") of designing,
integrating, deploying, operating and supporting revenue generating digital
imaging business sites that compliment highest-traffic/highest speed rides
at theme parks for the capture, digitizing, manipulation and display of
images of riders for sale to those riders; and
B. The Vendor has agreed to sell to the Purchaser and the Purchaser has agreed
to purchase from the Vendor the Business and certain of the property,
assets and undertaking of the Vendor on the terms and conditions set forth
in this Agreement;
NOW THEREFORE in consideration of the premises and the mutual covenants and
agreements set forth in this Agreement and in consideration of Ten Dollars
(US$10.00) (United States currency) now paid by each party to each of the other
parties (the receipt and sufficiency of which is hereby acknowledged by each
party), the parties represent, warrant, covenant and agree as follows:
1.0 PURCHASE AND SALE
-------------------
1.1 Subject to the terms and conditions of this Agreement, at the Closing
(hereinafter defined) the Vendor will sell, transfer and assign to the
Purchaser, free and clear of all liens, charges and encumbrances except as may
be specifically permitted hereby, and the Purchaser will purchase from the
Vendor, the Business and, except as provided in Section 1.2, all property,
assets and undertaking of the Vendor of every kind and description and wherever
situate (collectively, the "Business Assets"), including without limitation:
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(a) all chattels, equipment, fixtures, furnishings, machinery, vehicles
and supplies used in connection with the Business as at the date of this
Agreement, including without limitation the items described in that certain
appraisal by _Valuation Technology, dated December 2001 (the "Equipment");
(b) all right, title, benefit and interest in and under all contracts,
engagements and commitments, whether oral or written, which the Vendor is
entitled to or possessed of in connection with the Business including without
limitation all leases of real property and all contracts of insurance
(collectively the "Material Contracts")previously ;
(c) cash on hand or on deposit at the commencement of business on the
Closing Date (hereinafter defined) and all accounts receivable, trade accounts,
notes receivable and other debts owing to the Vendor on account of the Business,
and the full benefit of all securities for such accounts, notes or debts (the
"Receivables");
(d) all customer lists, marketing materials, brochures, samples, price
lists, accounting and other books and records, and all other information,
correspondence, documents, and material relating to the Business;
(e) all current trade secrets, proprietary information, technical data
and materials, knowledge, know-how, show-how and techniques relating to the
Business (including all proprietary computer software, programs and codes,
binary or otherwise) all right, title and interest of the Vendor in and to all
registered and unregistered patents, trademarks, trade or brand names,
copyrights, designs, restrictive covenants and other industrial or intellectual
property owned by the Vendor and/or used in connection with the Business (the
"Intangible Property");
(f) all expenses prepaid by or on behalf of the Vendor in connection
with the Business;
(g) all permits, licenses, consents, authorizations, and approvals
relating to the Business;
(h) any "websites" related to the Business, meaning any series of
interconnected web pages having home pages that can be reached at one or more
Uniform Resource Locator ("URL") addresses and the world-wide web domains having
those URL addresses; and
(i) the goodwill of the Business together with the exclusive right of
the Purchaser to represent itself as carrying on the Business in succession to
the Vendor and the right to use "RX" in any business or corporate name or names
used in association with the Business and such future businesses as may be
carried on by the Purchaser (including without limitation "RX Imaging")
(collectively the "Goodwill"); provided that the Purchaser shall have no right
to use "RX Technologies" or "RX Technology" in any such names.
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1.2 All inquiries respecting the sale of goods received by the Vendor and
not confirmed by contractual commitment will be deemed to be assigned to the
Purchaser at the Closing (hereinafter defined), to be accepted, confirmed or
withdrawn or otherwise acted upon by the Purchaser in its own name, for its own
account and in accordance with its own business judgment.
2.0 PURCHASE PRICE
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2.1 The purchase price payable by the Purchaser to the Vendor for the
Business Assets will be that amount (the "Purchase Price") which is equal to:
(a) US$1,176,413 (the "Cash Portion of the Purchase Price"); plus
(b) that amount (the "Assumed Indebtedness") which is equal to the lesser
of:
(i) the Vendor's actual liabilities on the Closing Date, specifically
excluding the full amount of any debts or obligations to Xxx Xxx
or Xxxxxxx Xxxxxxxx; and
(ii) US $4,000,000.
2.2 The Vendor acknowledges and agrees that the Cash Portion of the Purchase
Price has been calculated on the basis of the Vendor's representations to the
effect that the Vendor's aggregate liabilities on Closing (excluding any debts
or obligations to Xxx Xxx or Xxxxxxx Xxxxxxxx) will not exceed that amount which
is equal to the value of the Business Assets plus US$1,176,413.
3.0 ALLOCATION OF PURCHASE PRICE
-------------------------------
3.1 The Purchase Price will be allocated among the various items comprising
the Business Assets (including goodwill) as may be determined by the Purchaser
on advice from its auditor.
4.0 PAYMENT OF THE PURCHASE PRICE
---------------------------------
4.1 The Purchase Price will be paid as follows:
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(a) on Closing, that amount of the Purchase Price which is equal to the
Assumed Indebtedness, by the assumption by the Purchaser of the
Assumed Indebtedness; and
(b) on or before October 31, 2002, the Cash Portion of the Purchase Price,
without interest thereon, in cash or by bank draft or, at the option
(the "Conversion Option") of the Purchaser, by issuance and delivery
of that number of shares in the capital of the Purchaser which is
equal to the quotient obtained by dividing US$1,176,413 by the fair
market value of one of the Purchaser's common shares as at the date of
exercise of the Conversion Option, as determined by a qualified
independent business valuator selected by the Purchaser, with the
result that, for example, if the fair market value of the Purchaser's
common shares as at the date of exercise of the Conversion Option is
US$1.00, the Purchaser would receive 1,176,413 common shares of the
Purchaser.
4.2 The Conversion Option may be exercised by the Purchaser by notice in
writing to the Vendor at any time on or before October 31, 2002, and in such
event the Purchaser shall proceed to obtain the required valuation of the issued
and outstanding shares of the Purchaser and, forthwith upon receipt of such
valuation, issue to the Vendor the common shares of the Purchaser to which the
Vendor is entitled in full and final satisfaction of the Purchase Price.
5.0 CLOSING AND POSSESSION
------------------------
5.1 The completion of the transactions contemplated hereby (the "Closing")
will take place at 10:00 a.m. local time on the 3rd day of May, 2002 (the
"Closing Date") at the offices of Xxxxxx & King, Barristers & Solicitors, 1300 -
1111 West Georgia Street, Vancover, British Columbia, Canada, or at such other
place, date, and time as may be mutually agreed upon by the parties hereto.
5.2 The Vendor will deliver possession of the Business Assets, free of any
other claim to possession and any tenancies, to the Purchaser on the Closing
Date.
6.0 CONFIDENTIALITY AND NON-COMPETITION
-------------------------------------
6.1 The Vendor will treat all non-public aspects of the Business and the
Business Assets as strictly confidential and will not disclose or communicate or
cause to be disclosed or communicated non-public aspects of the Business or the
Business Assets to any person except as may be consented to in writing by the
Purchaser.
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6.2 The Vendor will initiate and maintain an appropriate internal program
limiting the internal distribution of non-public aspects of the Business and the
Business Assets to its directors, officers, employees, servants and agents on a
"need to know" basis, and will obtain appropriate non-disclosure agreements from
any and all persons who may have access to non-public aspects of the Business
and the Business Assets.
6.3 After Closing, the Vendor will not directly or indirectly participate in
any business which is in direct competition with the Business, and will not use
any information respecting customers and potential customers in direct or
indirect competition with the Purchaser; and without limiting the generality of
the foregoing, the Vendor will not:
(a) carry on any portion of the Business or use or otherwise exploit,
directly or indirectly, any Business Asset;
(b) permit the use or other exploitation of any Business Asset by any
director, officer, employee, contractor or agent of the Vendor; or
(c) copy, reproduce in any form or store in any retrieval system or data
base any Intangible Property.
7.0 ASSUMPTION OF LIABILITY
-------------------------
7.1 From and after the Closing, subject to the terms and conditions of this
Agreement, the Purchaser will assume the Assumed Indebtedness.
7.2 From and after the Closing the Purchaser will assume, perform, and
discharge the Vendor's obligations and liabilities in respect of the Material
Contracts.
7.3 From and after the Closing the Vendor and the Purchaser will make
reasonable efforts to obtain the release of the Vendor and, as may be
applicable, Xxx Xxx and Xxxxxxx Xxxxxxxx (the "Principals"), of their respective
obligations in respect of the Assumed Indebtedness and the Material Contracts.
7.4 Notwithstanding any other provision of this Agreement, the Purchaser
shall have the right to negotiate with creditors of the Vendor, before or after
Closing, for a reduction, settlement and/or extension of time for payment of all
or any portion of the Assumed Indebtedness on such terms and conditions as may
be acceptable to the Purchaser and such creditor; and any such agreement or
arrangement shall not affect the rights or obligations of either the Vendor or
the Purchaser under this Agreement.
8.0 REPRESENTATIONS OF THE VENDOR
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8.1 The Vendor represents and warrants to the Purchaser, with the intent
that the Purchaser shall rely upon such representations and warranties in
concluding the transactions contemplated hereby, that:
(a) the Vendor is a corporation duly incorporated, valid existing, and in
good standing under the laws of Nevada, and has the power, authority,
and capacity to carry on the Business as presently conducted and to
enter into this Agreement and carry out its terms;
(b) the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby has been duly and validly authorized
by all necessary corporate action on the part of the Vendor, and this
Agreement constitutes a valid and binding obligation of the Vendor
enforceable against the Vendor in accordance with its terms;
(c) the Vendor has previously disclosed to the Purchaser in writing all
material particulars relating to employment or engagement of any
officers, directors, employees, and agents of the Vendor including
particulars of any contacts, engagements, or commitments, whether oral
or written, respecting bonuses, commissions, pensions, profit sharing,
health benefits, group insurance and other such benefits;
(d) except as previously disclosed by the Vendor to the Purchaser in
writing, every employee of the Business may be lawfully dismissed on
thirty-days' notice and such dismissal would not give rise to any
rights or valid claims for severance or termination pay or like
compensation;
(e) the Vendor is not a party to any collective agreement relating to the
Business with any union, association of employees, or bargaining
agent, and no part of the Business is bound by any such collective
agreement or has been certified as a unit appropriate for collective
bargaining;
(f) except as will be remedied by those consents, approvals, releases and
discharges which will be delivered by the Vendor at Closing, neither
the execution and delivery of this Agreement nor the performance of
the Vendor's obligations hereunder will:
(i) violate or constitute default under the constating documents,
by-laws, or articles of the Vendor, any order, decree, judgment,
statute, by-law, rule, regulation, or restriction applicable to
the Vendor, the Business or any of the Business Assets, or any
contract, agreement, instrument, covenant, mortgage or security
to which the Vendor is a party or which is binding upon the
Vendor,
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(ii) give any person the right to terminate or cancel any contract,
agreement, instrument, covenant, mortgage or security in favor of
the Vendor,
(iii) result in any fees, duties, taxes, assessments, penalties or
other amounts becoming due or payable, or
(iv) give rise to acceleration of the time for payment of any moneys
payable or for the performance of any obligation to be performed
by the Vendor;
(g) the Vendor owns and possesses and has good and marketable title to the
Business Assets, free and clear of all liens, charges, and
encumbrances of every kind and nature whatsoever, except as previously
disclosed by the Vendor to the Purchaser in writing, and the
Receivables of the Vendor (currently estimated at US$ $75,000.00) are
good and collectible;
(h) reasonable wear and tear excepted, the Business Assets are in good
working order and in a functional state of repair and to the best of
the knowledge of the Vendor have no latent defects;
(i) with the exception of the items excluded by Section 1.02, the Business
Assets comprise all property and assets used by the Vendor in
connection with the Business;
(j) except as previously disclosed by the Vendor to the Purchaser in
writing, the Vendor does not have any indebtedness which might be
operation of law or otherwise now or hereafter constitute a lien,
charge, or encumbrance upon any of the Business Assets;
(k) the Vendor has previously disclosed to the Purchaser in writing all
contracts, engagements and commitments, whether oral or written,
relating to the Business or the Business Assets including in
particular contracts, engagements, and commitments:
(i) out of the ordinary course of Business;
(ii) which entail payments in excess of US$1,000 during any
one-year period;
(iii) respecting ownership of or title to any interest or claim in or
to any real or personal property; and
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(iv) respecting Intangible Property;
(l) the Vendor has previously provided to the Purchaser in writing an accurate
and complete description of all Material Contracts and, except as
previously disclosed by the Vendor to the Purchaser in writing:
(i) there has not been any default in any obligation or liability in
respect of such contracts, engagements, or commitments;
(ii) there has not been any amendment, modification, variation, surrender,
or release of such contracts, engagements, and commitments; and
(iii) each of such contracts, engagements, and commitments is in good
standing and in full force and effect;
(m) the Vendor has previously provided to the Purchaser in writing an accurate
and complete description of all instruments evidencing or relating to, and
all material particulars of, the Assumed Indebtedness including the amounts
thereof or, where the exact amount cannot be obtained, reasonably accurate
estimates thereof, and the material terms of payment or repayment and
interest rates applicable thereto;
(n) the amount of Assumed Indebtedness as at the Closing Date will not exceed
US$4,000,000 and will not include any indebtedness or obligation to either
Xxx Xxx or Xxxxxxx Xxxxxxxx;
(o) all licenses and permits required for the conduct in the ordinary course of
the operations of the Business and the uses to which the Business Assets
have been put have been obtained and are in good standing and such conduct
and uses are in compliance with such licenses and permits and with all
laws, zoning and other bylaws, building and other restrictions, rules,
regulations and ordinances applicable to the Business and the Business
Assets, and neither the execution and delivery of this Agreement nor the
completion of the purchase and sale hereby contemplated will give any
person the right to terminate or cancel such licenses or permits or affect
such compliance;
(p) there is no basis for and there is no action, suit, litigation,
investigation, arbitration proceeding, governmental proceeding or other
proceedings (including appeals and applications for review) outstanding,
pending, threatened against or involving, affecting or possibly affecting
the Vendor, the Business or the Business Assets; or any judgment, decree,
injunction, rule or order of any court, governmental department,
commission, agency, officer, instrumentality or arbitrator, which, if
determined adversely to the Vendor, might adversely affect the ability of
the Vendor to enter into this Agreement or to consummate the transactions
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contemplated hereby, or adversely affect title to any of the Business
Assets, at law or in equity, or the Vendor's ability to dispose of the
Business Assets or any of them, in its sole discretion; or any
investigations, complaints, orders, directives or notices of defect or
non-compliance by or before any court, governmental or domestic commission,
department, board, tribunal, or authority, or administrative, licensing, or
regulatory agency, body, or officer issued, pending, or threatened against
the Vendor or in respect of the Business or any of the Business Assets;
(q) the budgets for capital expenditures provided to the Purchaser in respect
of future operations are fair and reasonable
(r) the facts contained in all "due diligence" and other disclosure materials
provided by the Vendor to the Purchaser or otherwise made public by the
Vendor are substantially true and correct, and the Vendor does not have any
information or knowledge of any facts relating to the Business, the
Business Assets, the Vendor or either of the Principals which, if known to
the Purchaser, might reasonably be expected to deter the Purchaser from
completing the transactions contemplated by this Agreement;
(s) the representations and warranties of the Vendor included in this Agreement
are true and correct and do not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
contained in such representations and warranties not misleading to a
prospective purchaser of the Business and Business Assets;
(t) all financial statements of the Vendor, both audited and unaudited, have
been prepared in accordance with generally accepted United States
accounting principles consistently applied and present fairly and
completely the assets and liabilities, whether accrued, absolute,
contingent or otherwise, and the financial condition of the Vendor and the
results of the operation of the Business for the periods reported thereby;
and the Vendor has disclosed to the Purchaser in writing all material
financial information respecting the Vendor, the Business and the Business
Assets as at the date of this Agreement;
(u) all outstanding commitments by or on behalf of the Vendor for the purchase
of supplies have been made in accordance with established price lists of
the Vendor's suppliers or, if otherwise, then in accordance with the
Vendor's normal business custom;
(v) the books and records of the Vendor present fairly and completely in all
material respects, in accordance with sound accounting practices
consistently applied, the matters which such books and records purport to
present, and all material financial transactions of the Vendor relating to
the Business have been accurately recorded in such books and records;
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(w) since the date of the most recent financial statements of the Vendor
provided to the Purchaser, there has not been:
(i) any change, event, or circumstance which would adversely affect the
affairs, prospects, operation, or condition of the Business;
(ii) any loss, damage, or destruction, whether or not covered by insurance,
which would adversely affect the affairs, prospects, operations, or
condition of the Business; or
(iii) any increase in the compensation or benefits payable or to become
payable to the Vendor to any of its officers, directors, employees, or
agents.
8.2 Notwithstanding any investigations or enquiries made by or on behalf of
the Purchaser prior to Closing or the waiver of any condition by the Purchaser,
the representations and warranties of the Vendor shall survive the Closing and,
notwithstanding the closing of the purchase and sale herein provided for, shall
continue in full force and effect for the benefit of the Purchaser until the
third anniversary of the Closing Date, with the exception that all
representations and warranties with respect to tax matters shall continue in
full force and effect until the date that is one year after the date on which
the last applicable limitation period under the applicable income tax or other
tax legislation expires with respect to any taxation year which is relevant in
determining any liability under this Agreement with respect to tax matters, and
with the further exception that there shall be no limit on the representations
and warranties relating to title of the Vendor to the Business Assets.
9.0 REPRESENTATIONS OF THE PURCHASER
-----------------------------------
9.1 The Purchaser represents and warrants to the Vendor, with the intent
that the Vendor shall rely upon such representations and warranties in
concluding the transactions contemplated hereby, that:
(a) the Purchaser is a corporation duly incorporated, validly existing and
in good standing under the laws of Nevada and has the power,
authority, and capacity to enter into this Agreement and to carry out
its terms; and
(b) the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby has been duly and validly authorized
by all necessary corporate action on the part of the Purchaser, and
this Agreement constitutes a valid and binding obligation of the
Purchaser in accordance with its terms.
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9.2 The representations and warranties of the Purchaser shall survive the
Closing and, notwithstanding the closing of the purchase and sale herein
provided for, shall continue in full force and effect for the benefit of the
Vendor until the third anniversary of the Closing Date.
10. COVENANTS OF THE VENDOR
--------------------------
10.1 From the date of this Agreement to the Closing, the Vendor will:
(a) not sell or dispose of any of the Business Assets;
(b) not make or agree to make any payment to pay of the officers,
directors, employees, or agents of the Vendor except in the ordinary
course of business and at the regular rates of compensation now in
effect or at reasonable reimbursement for expenses incurred by such
persons in connection with the Business;
(c) conduct the Business diligently and only in the ordinary course, keep
the Business Assets in their present state, and endeavor to preserve
the organization of the Business intact and the goodwill of the
suppliers and customers and others having business relations with the
Vendor relating to the Business;
(d) maintain insurance coverage of the scope and in the amounts presently
held;
(e) afford the Purchaser and its authorized representatives full access
during normal business hours to the Business Assets and without
limitation all title documents, abstracts of title, deeds, leases,
contracts, books, records, and other such material relating to the
Business, and furnish such copies thereof and other information, as
the Purchaser may reasonably request; and
(f) procure and obtain all such consents, approvals, releases, and
discharges as may be required to effect the transactions contemplated
hereby.
10.2 The Vendor covenants and agrees to indemnify and hold harmless the
Purchaser from and against:
(a) except those which by the terms of this Agreement are to be assumed or
paid by the Purchaser, any and all debts, obligations and liabilities,
whether accrued, absolute, contingent or otherwise, existing at the
time of Closing, respecting the Business or the Business Assets, and
the Purchaser may, but will not be bound to, pay or perform same and
all moneys so paid by the Purchaser in so doing will constitute
indebtedness of the Vendor to the Purchaser which the Purchaser may,
but shall not be obligated to set off against obligations of the
Purchaser to the Vendor;
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(b) any and all loss, costs, damage or deficiency resulting from any
misrepresentation, mis-statement, breach of warranty or the
non-fulfillment or breach of any covenant on the part of the Vendor
under this Agreement or under any document or instrument delivered in
connection with this Agreement; and
(c) any and all claims, actions, suits, proceedings, demands, assessments,
judgments, charges, penalties, costs and expenses, including the full
amount of any legal expenses involved to the Purchaser, which arise or
are made or claimed against or are suffered or incurred by the
Purchaser in respect of any of the foregoing.
10.4 The Vendor will, effective the Closing Date, terminate the employment
of all employees of the Business and will on or before the Closing Date pay all
wages, salaries, bonuses, benefits, termination or severance pay, holiday pay,
and all other compensation and benefits owing to such employees and all
remittances payable to governmental and regulatory bodies and under existing
plans to which the Vendor is a party, including Medical or Health Plans, and
other such remittances, in respect of any period up to and including the Closing
Date or which become payable by reason of the purchase and sale contemplated
hereby.
11.0 COVENANTS OF THE PURCHASER
-----------------------------
11.1 From the date of this Agreement to the Closing, the Purchaser will make
all reasonable efforts to obtain and procure in cooperation with the Vendor all
consents, approvals, releases, and discharges required to effect the
transactions contemplated hereby.
12.0 NON-MERGER
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12.1 The representations, warranties, covenants, and agreements of the
Vendor set forth in this Agreement and those contained in the documents and
instruments delivered in connection herewith will survive the Closing Date, and
notwithstanding the completion of the transactions contemplated hereby, the
waiver of any condition contained herein, unless such waiver expressly releases
the Vendor of such representations, warranty, covenant, or agreement, or any
investigation by the Purchaser, will remain in full force and effect.
12.2 The representations, warranties, covenants, and agreements of the
Purchaser set forth in this Agreement and those contained in the documents and
instruments delivered in connection herewith will survive the Closing Date, and
notwithstanding the completion of the transactions contemplated hereby, the
waiver of any condition contained herein, unless such waiver expressly releases
the Purchaser of such representations, warranty, covenant, or agreement, or any
investigation by the Vendor, will remain in full force and effect.
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13.0 CONDITIONS PRECEDENT
---------------------
13.1 The obligation of the Purchaser to consummate the transactions
contemplated by this Agreement is subject to the fulfillment of each of the
following condition precedent at the times stipulated:
(a) that the representations and warranties of the Vendor contained
herein are true and correct on and as at the Closing Date except as may be
disclosed in writing to, and approved by, the Purchaser;
(b) that all covenants, agreements, and obligations hereunder on the
part of the Vendor to be performed or complied with at or before the Closing,
including in particular the Vendor's obligation to deliver the documents and
instruments herein provided for, have been performed and complied with as at the
Closing;
(c) that from the date hereof to the Closing no change, event, or
circumstance has occurred which materially adversely affects the Business Assets
or the prospects, operation, or condition of the Business, or which, in the
reasonable opinion of the Purchaser, significantly reduces the value of the
Business or the Business Assets to the Purchaser;
(d) that from the date hereof to the Closing there has not been any
substantial loss, damage, or destruction, whether or not covered by insurance,
to any of the Business Assets; and
(e) the Vendor shall have negotiated an agreement with Biz Capital in
form and substance acceptable to the Purchaser pursuant to which the Vendor's
indebtedness to Biz Capital is an amount not greater than US$1,600,000, with
such sum to be payable over time on terms acceptable to the Purchaser or
otherwise satisfied on terms acceptable to the Purchaser;
(f) no action, suit or proceeding shall have been commenced or shall be
pending or threatened against the Vendor;
(g) the Purchaser shall have received approval of the board of
directors of the Purchaser and any required approvals or notices of acceptance
or consent from governmental and regulatory authorities, including without
limitation securities regulatory authorities and NASDAQ; and
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These conditions are for the exclusive benefit of the Purchaser and may be
waived in whole or in part by the Purchaser in writing at any time.
13.2 The obligation of the Vendor to consummate the transactions
contemplated by this Agreement is subject to the fulfillment of each of the
following conditions precedent at the times stipulated:
(a) that the representations and warranties of the Purchaser contained
herein are true and correct on and as of the Closing Date except as
may be disclosed in writing to, and approved by, the Vendor; and
(b) that all covenants, agreements, and obligations hereunder on the part
of the Purchaser to be performed or complied with at or before the
Closing, including in particular the Purchaser's obligation to deliver
the documents and instruments herein provided for, have been performed
and complied with as at the Closing.
These conditions are for the exclusive benefit of the Vendor and may be waived
in whole or in part by the Vendor in writing at any time.
14.0 TRANSACTIONS OF THE VENDOR AT THE CLOSING
-----------------------------------------------
14.1 At the Closing the Vendor will execute and deliver or cause to be
executed and delivered all deeds, conveyances, bills of sale, transfers,
assignments, agreements, certificates, documents, and instruments as may be
necessary to effectively vest good and marketable title to the Business and the
Business Assets in the Purchaser free and clear of any liens, charges, and
encumbrances, except as may be otherwise specifically provided herein, and
without limiting the foregoing will execute and deliver or cause to be executed
and delivered:
(a) a general conveyance and physical delivery of the Business Assets;
(b) all consents, approvals, releases, and discharges as may be required
to effect the transactions contemplated hereby;
(c) signed letters on the Vendor's letterhead to each of the regular
customers of the Business in form and substance acceptable to the
Purchaser, acting reasonably, and addressed envelopes directed to such
customers;
(d) a certified copy of a resolution of the Directors of the Vendor duly
passed authorizing the execution and delivery of this Agreement and
the completion of the transactions contemplated hereby;
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(e) a certified copy of a special resolution of the shareholders of the
Vendor duly passed authorizing and approving the sale of the Business
and Business Assets as contemplated hereby, or a solicitor's opinion,
in form and substance acceptable to the Purchaser, acting reasonably,
to the effect that such a resolution is not required for the Vendor to
perform its obligations hereunder and to convey title to the Business
Assets to the Purchaser;
(f) a certificate of the secretary of the Vendor and the Principal dated
the Closing Date, acceptable in form and content to the solicitors for
the Purchaser, certifying that the conditions set out in Section 13.1
have been satisfied;
(g) for the purpose of subsection 4.1(b) and Section 7.1, an affidavit of
one or both of the Principals setting forth the names and addresses of
the creditors with respect to the Assumed Indebtedness and the amount
of the indebtedness or liability due or payable to each such creditor;
(h) the favorable legal opinion of the solicitors for the Vendor, in form
satisfactory to solicitors for the Purchaser, that all necessary steps
and corporate proceedings have been taken by the Vendor to permit the
sale of the Business and the Business Assets as contemplated hereby,
that this Agreement and all documents and instruments delivered
pursuant hereto have been duly and validly authorized, executed, and
delivered by the Vendor and will constitute valid and legally binding
obligations of the Vendor, and confirming such other matters as the
Purchaser's solicitors may reasonably require;
(i) all such documents and instruments as may be necessary to transfer or
assign the Intangible Property; and
(j) all such other documents and instruments as the Purchaser may, on
advice from its solicitors, reasonably require to give effect to the
transactions contemplated hereby.
15.0 TRANSACTIONS OF THE PURCHASER AT THE CLOSING
--------------------------------------------------
15.1 At the Closing the Purchaser will deliver or cause to be delivered:
(a) a certified copy of a resolution of the Directors of the Purchaser
duly passed authorizing the execution and delivery of this Agreement
and the completion of the transactions contemplated hereby;
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(b) a certificate of the secretary of the Purchaser dated the Closing
Date, acceptable in form and content to the solicitors for the Vendor,
certifying that the conditions precedent set out in Section 13.2 have
been satisfied; and
(c) all such other documents and instruments as the Vendor or its
solicitors may reasonably require to give effect to the transactions
contemplated hereby.
16.0 TAXES
-----
16.1 All sales and other transaction taxes payable in connection with the
purchase of the Business Assets will be paid by the Purchaser.
17.0 ASSETS AT RISK
----------------
17.1 From the date of this Agreement to the Closing, the Business Assets
will remain at the risk of the Vendor. If any of the Business Assets are lost,
damaged, or destroyed before the Closing, the Purchaser may in lieu of
terminating this Agreement pursuant to Section 13.1 elect by notice in writing
to the Vendor to complete the purchaser to the extent possible, and at the
option of the Purchaser, either:
(a) the Purchaser Price will be reduced by an amount equal to the cost of
making good such loss, damage, or destruction; or
(b) the Vendor will assign and pay over to the Purchaser all insurance
moneys payable in respect of such loss, damage or destruction.
18.0 GENERAL PROVISIONS
-------------------
18.1 The Vendor warrants to the Purchaser that no agent or other
intermediary has been engaged by the Vendor in connection with the purchase and
sale herein contemplated.
18.2 Time is of the essence of this Agreement and all transactions
contemplated hereby.
18.3 The parties will execute and deliver all such further documents and
instruments and do all such further acts and things as may be required to carry
out the full intent and meaning of this Agreement and to effect the transactions
contemplated hereby.
18.4 This Agreement may not be assigned by either party without the prior
written consent of the other party.
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18.5 This Agreement will endure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
18.6 This Agreement may be executed in several counterparts, each of which
will be deemed to be an original and all of which will together constitute one
instrument.
18.7 Any notice required or permitted to be given under this Agreement will
be in writing and may be given by personal service or by telex or telecopy, and
addressed to the proper party at the address stated below:
(a) if to the Vendor:
X.X. Xxx 0000, Xxxxxxxxxx, XX 00000 (Telecopier No. 504-727-9825)
(b) if to the Purchaser:
0000 Xxxxx Xxxxxxx Xxxx., Xxxx 000X, Xxx Xxxxx, XX 00000
(Telecopier No. 604-606-2040)
18.8 The Schedules attached are incorporated into this Agreement and form a
part hereof. All terms defined in the body of this Agreement will have the same
meaning in the Schedules.
18.9 This Agreement is dated for reference April 30, 2002, but will become
binding as of the date of execution and delivery by all parties.
18.10 The terms "this Agreement", "hereof", "herein", "hereby", "hereto",
and similar terms refer to this Agreement and not to any particular section,
paragraph, or other part of this Agreement. References to particular sections
or subsections are to sections or subsections of this Agreement unless another
document is specified.
18.11 The headings appearing in this Agreement are for convenience of
reference only and in no way define, limit, or enlarge the scope or meaning of
the provisions of this Agreement.
18.12 This Agreement will be governed by and construed in accordance with
the laws of Nevada.
IN WITNESS WHEREOF the parties have executed and delivered this Agreement as of
the day and year first above written.
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RX TECHNOLOGY, INC. and
RX TECHNOLOGY HOLDINGS, INC.
Per:
/s/ Xxxxxx Xxx Gay
Authorized Signatory c/s
GRAVITAS DIGITAL COMMUNICATIONS, INC.
Per:
/s/ Xxxxx Xxxxxx
Authorized Signatory c/s
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LIST OF SCHEDULES
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