ASSET PURCHASE AGREEMENT
THIS AGREEMENT dated for reference the 6th day of May, 1999.
BETWEEN:
CALLDIRECT ENTERPRISES INC., a company duly incorporated pursuant to the laws of
the Province of British Columbia and having an office at Xxxxx 000, 0000 Xxxxxxx
00, Xxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(herein called the "Vendor")
OF THE FIRST PART
AND:
XXXXXXX XxXXXXX, businessperson, of 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0
(herein called the "Principal")
OF THE SECOND PART
AND:
SUNCOM TELECOMMUNICATIONS INC., a company incorporated pursuant to the Federal
laws of Canada, and having an office at 120 North LaSalle Street, Suite 1000,
Xxxxxxx, Xxxxxxxx, X.X.X. 00000
(herein called the "Purchaser")
OF THE THIRD PART
WITNESSES THAT WHEREAS:
A. The Vendor carries on the business of a direct response catalogue
publisher and merchandise seller and known as CallDirect Enterprises Inc. (the
"Business") at or about Xxxxx 000, 0000 Xxxxxxx 00, Xxxxx, Xxxxxxx Xxxxxxxx;
B. The Vendor has agreed to sell and the Purchaser has agreed to
purchase (subject to certain exclusions hereinafter described) all the property,
assets, and undertaking of the Business as a going concern on the terms and
conditions herein provided;
C. The Principal is a director, officer and shareholder of the Vendor
and has a substantial proprietary and financial interest in the Vendor;
NOW THEREFORE in consideration of the premises and the respective covenants,
agreements representations, warranties and indemnities of the parties herein
contained and for other good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged) the parties hereto covenant and
agree as follows:
1. DEFINED TERMS
1.1 For the purposes of this Agreement, unless the context otherwise
requires, the following terms shall have the respective meanings set out below
and grammatical variations of such terms shall have corresponding meanings:
(a) "Adjustments" means the adjustment of all revenues and expenses of the
Business and relating to the Business Assets between the Vendor and the
Purchaser as at the Closing Date as calculated in accordance with Clause 5.3
hereof;
(b) "Assumed Indebtedness" means the aggregate indebtedness of the Vendor
owing to the creditors as set forth in Schedule "14" hereto which the Purchaser
has settled for no more than CDN$109,000;
(c) "Audited Financial Statements" means the audited consolidated financial
statements of the Vendor as at and for the financial years ended August 31, 1998
and August 31, 1997, including the notes thereto and the report of the Vendor's
auditors thereon, a copy of which is annexed hereto as Schedule "1" - Financial
Statements;
(d) "Business" means the business carried on by the Vendor consisting
primarily of a direct response catalogue publisher and merchandise seller;
(e) "Business Assets" means all property and assets of the Business of every
kind and description and wherever situate, including, without limiting the
foregoing:
(i) all Leased Property of the Business,
(ii) all Equipment of the Business,
(iii) all Inventory of the Business,
(iv) all right, title, benefit, and interest under the Material Contracts.
(v) all customer lists, brochures, samples, price lists, advertising
material, production records, employee manuals, personnel records, accounting
and other books and records, and all other information, correspondence,
documents, and material relating to the Business,
(vi) all right, title, and interest of the Vendor in and to all the
Intellectual Property,
(vii) all permits, licences, consents, authorizations, and approvals
pertaining to the Business,
(viii) all prepaid expenses,
(ix) all computer hardware and software, including all rights and/or
licences and other agreements or instruments relating thereto, and
(x) the Goodwill of the Business.
(f) "Business Day" means any day other than a Saturday, Sunday, or statutory
holiday in either British Columbia or Alberta, Canada or Illinois, U.S.A.;
(g) "Closing" means the completion of the transactions contemplated in this
Asset Purchase Agreement;
(h) "Closing Date" means the date that is no later than May 15, 1999, or
such other date as the Vendor and the Purchaser may mutually determine;
(i) "Contract" means any agreement, indenture, contract, lease, deed of
trust, license, option, instrument or other commitment, whether written or oral;
(j) "Encumbrance" means any encumbrance, lien, charge, hypothec, pledge,
mortgage, title retention agreement, security interest of any nature, adverse
claim, exception, reservation, easement, right of occupation, any matter capable
of registration against title, option, right of preemption, privilege or any
Contract to create any of the foregoing;
(k) "Environmental Laws" means all applicable federal, provincial, municipal
and local laws, statutes, ordinances, by-laws and regulations, and orders,
directives and decisions rendered by any ministry, department or administrative
or regulatory agency relating to the protection of the environment, occupational
health and safety or the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of any Hazardous Substances;
(l) "Environmental Permits" means all licences, permits, approvals,
consents, certificates, registrations and other authorizations under
Environmental Laws required for the operation of the Business;
(m) "Equipment" means all chattels, equipment, fixtures, furnishings,
machinery, vehicles and supplies used in connection with the Business or situate
upon the Real Property or the Leased Property as at the date hereof including
without limitation the items described in Schedule "3" - Machinery and Equipment
hereto;
(n) "ETA" means Part IX of the Excise Tax Act (Canada), as amended from time
to time;
(o) "Financial Statements" means the Audited Financial Statements and the
Interim Financial Statements;
(p) "Goodwill" means the goodwill of the Business, together with the
exclusive right of the Purchaser to represent itself as carrying on the Business
in continuation of and in succession to the Vendor, and the right to the
CallDirect Enterprises Inc. or any variation thereof as part of, or in
connection with the Business;
(q) "GST" means all taxes payable under the ETA or under any provincial
legislation similar to the ETA, and any reference to a specific provision of the
ETA or any such provincial legislation shall refer to any successor provision
thereto of like or similar effect;
(r) "Hazardous Substances" means any pollutants, contaminants, chemical or
industrial toxic, or hazardous waste or substances;
(s) "Intellectual Property" means all registered and unregistered patents,
trade or brand names, business names, trade-marks, trade-xxxx registrations and
applications, copyrights, drawings, logos, designs, patents and all patent
rights, trade secrets, restrictive covenants, processes, technology, registered
user agreements, research data, inventions, instruction manuals, formulae, and
other industrial or intellectual property respecting the Business;
(t) "Interim Financial Statements" means the unaudited consolidated
financial statements of the Vendor as at and for the period ended February 28,
1999, a copy of which is annexed hereto as Schedule "1";
(u) "Leased Property" means all the leased real property that is used in the
Business and leased by the Vendor, including, without limitation, the real
property described in Schedule "2" - Leased Property hereto;
(v) "Leases" means all of the leases of the Leased Property, whether as
lessor or lessee leased by the Vendor as set forth in Schedule "2" - Leased
Property and all leases of personal property as described in Schedule "4" -
Material Contracts hereto;
(w) "Licences" means all licences, permits, approvals, consents,
certificates, registrations and authorizations (whether governmental,
regulatory, or otherwise) 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;
(x) "Losses" means, in respect of any matter, all claims, demands,
proceedings, losses, damages, liabilities, deficiencies, costs and expenses
(including, without limitation, all legal and other professional fees and
disbursements, interest, penalties and amounts paid in settlement) arising
directly or indirectly as a consequence of such matter;
(y) "Material Contracts" means all agreements, indentures, contracts,
leases, deeds of trust, licences, options, instruments or other commitments,
whether written or oral, including the benefit of all unfilled orders received
by the Vendor and forward commitments to purchase made by the Vendor, which the
Vendor is entitled to or possessed of in connection with the Business and the
Business Assets, including, without limitation, all right, title, benefit and
interest in respect of the contracts, leases, engagements and commitments
described in Schedule "4" - Material Contracts hereto;
(z) "Permitted Encumbrances" means any encumbrances or liabilities of the
Vendor agreed to in writing by the Purchaser to be assume pursuant to this
Agreement, and as set out in Schedule "8" - Permitted Encumbrances attached
hereto;
(aa) "Purchase Price" means the aggregate sum payable by the Purchaser to
the Vendor for the Business Assets, including the sum payable for the Inventory
plus or minus any Adjustments;
(ab) "Tax Act" means the Income Tax Act, R.S.C. 1985, Chapter 1 (5th Supp.),
as amended from time to time;
1.2 Currency
Unless otherwise indicated, all dollar amounts in this Agreement are
expressed in United States funds.
1.3 Sections and Headings
The division of this Agreement into Articles, sections and subsections
and the insertion of headings are for convenience of reference only and shall
not affect the interpretation of this Agreement. Unless otherwise indicated,
any reference in this Agreement to an Article, section, subsection or Schedule
refers to the specified Article, section or subsection of or Schedule to this
Agreement.
1.4 Number, Gender and Persons
In this Agreement, words importing the singular number only shall
include the plural and vice versa, words importing gender shall include all
genders and words importing persons shall include individuals, corporations,
partnerships, associations, trusts, unincorporated organizations, governmental
bodies and other legal or business entities of any kind whatsoever.
1.5 Accounting Principles
Any reference in this Agreement to generally accepted accounting
principles refers to generally accepted accounting principles that have been
established in Canada, including those approved from time to time by the
Canadian Institute of Chartered Accountants or any successor body thereto.
1.6 Entire Agreement
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether written or oral. There
are no conditions, covenants, agreements, representations, warranties or other
provisions, express or implied, collateral, statutory or otherwise, relating to
the subject matter hereof except as herein provided.
1.7 Time of Essence
Time shall be of the essence of this Agreement.
1.8 Applicable Law
This Agreement shall be construed, interpreted and enforced in
accordance with, and the respective rights and obligations of the parties shall
be governed by, the laws of the Province of British Columbia and the federal
laws of Canada applicable therein, and each party irrevocably and
unconditionally submits to the non-exclusive jurisdiction of the courts of such
province and all courts competent to hear appeals therefrom.
1.9 Amendments and Waivers
No amendment or waiver of any provision of this Agreement shall be
binding on either party unless consented to in writing by such party. No waiver
of any provision of this Agreement shall constitute a waiver of any other
provision, nor shall any waiver constitute a continuing waiver unless otherwise
provided.
1.10 Schedules
The following Schedules are attached to and form part of this
Agreement: All terms defined in the body of this Agreement will have the same
meaning in the Schedule attached hereto.
Schedule 1 - Financial Statements
Schedule 2 - Leased Property
Schedule 3 - Machinery and Equipment
Schedule 4 - Material Contracts
Schedule 8 - Permitted Encumbrances
Schedule 11 - Consents
Schedule 14 - Assumed Indebtedness
2. PURCHASE AND SALE
2.1 Subject to the terms and conditions of this Agreement, effective as
at the Closing Date, the Vendor will sell, transfer, and assign to the Purchaser
and the Purchaser agrees to purchase from the Vendor, free and clear of all
Encumbrances except as may be otherwise specifically provided for herein as
Permitted Encumbrances, the Business as a going concern and the Business Assets.
2.2 Subject to the terms and conditions of this Agreement, effective as
of the Closing Date, the Purchaser will issue and deliver to the Vendor and the
Vendor agrees to accept the Purchase Shares.
2.3 Except as provided herein and subject to the provisions of this
Agreement, the purchase and sale of the Business Assets contemplated herein does
not include the assumption of contracts with any employees or independent
contractors of the Vendor used in connection with the Business. The Vendor will
at all times before and after the Closing remain solely liable for all matters
relating to such employees and independent contractors, including, without
limitation, all liabilities for wages, loans due to employees, severance pay,
holiday pay, pensions, health, life, disability insurance and other benefits of
any kind, and all remittances payable to applicable governmental authorities, in
respect of such persons and the Vendor will at all times prior to and after
Closing indemnify and save harmless the Purchaser from and against any and all
such liabilities.
2.4 All quotations for the sale or purchase of Inventory or supplies
made or received by the Vendor and not confirmed to contractual commitment will
be deemed to be assigned to the Purchaser at the Closing 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.
3. PURCHASE PRICE AND ALLOCATION
3.1 The Purchase Price payable by the Purchaser to the Vendor for the
Business Assets will be 1,200,000 common shares in the capital of the Purchaser
(the "Purchase Shares") issued at a deemed price of $0.50 (CDN) per common
share, plus the assumption of liabilities as set forth in Schedule "14" hereto
which the Purchaser has settled for no more than CDN$109,000.
4. PAYMENT OF THE PURCHASE PRICE
4.1 On the Closing Date, the Purchaser will deliver to the Vendor the
Purchase Shares, free and clear of all Encumbrances, in full and final payment
of the Purchase Price. The Purchaser agrees to assume debt of the Vendor as set
forth in Schedule "14" hereto which the Purchaser has settled for no more than
CDN$109,000 (the "Assumption") and the Vendor hereby acknowledges the Assumption
as full and final payment of up to CDN$109,000 of the Purchase Price.
4.2 The Vendor acknowledges that the Purchase Shares have not been
registered under the United States Securities Act of 1933 (the "1933 Act"), or
under any state securities or "blue sky" laws of any state of the United States,
and, unless so registered, may not be offered or sold in the United States or to
U.S. persons, except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the 1933 Act. The Vendor further
acknowledges that the Purchase Shares will be subject in the United States to a
one (1) year hold period (the "Hold Period"); however, the Purchaser agrees that
it will add registration of the Purchase Shares to any other registration that
it may file with the Securities and Exchange Commission (the "SEC") during the
Hold Period. The Vendor acknowledges that the only trading market for the
Purchaser's common shares is in the U.S.
4.3 Within ten (10) days of the Closing Date, the Vendor will deposit
the Purchase Shares into a brokerage account (the "Account") to which Xxxxxx
Xxxxxxxx, or another representative of the Purchaser, and the Principal, or
another representative of the Vendor, are joint authorized signatories.
4.4 During the period the Purchase Shares are held in the Account, the
Vendor hereby acknowledges and agrees that the Purchaser shall have a right of
set-off against any or all of the Purchase Shares held in the Account for 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 for which the Purchaser becomes liable.
4.5 Subject to compliance with all applicable laws and the terms of
clause 4.4, the Vendor hereby agrees:
(a) to sell, over a period of one year, after the Hold Period has expired or
the Purchase Shares have been registered with the SEC, whichever is earlier, the
Purchase Shares in an orderly fashion with no more than 50,000 Purchase Shares
to be sold in any one week; and
(b) to distribute, within thirty (30) days of the sale of all the Purchase
Shares, as a dividend all net proceeds from the sale of the Purchase Shares to
the shareholders of CallDirect Capital Corp.
4.6 The Vendor acknowledges that it is aware that the Purchaser is not
a "reporting issuer" as defined in the Securities Act (Alberta) and as a
consequence the Purchase Shares are restricted from transfer within the Province
of Alberta indefinitely or for a period of twelve (12) months after the
Purchaser becomes a "reporting issuer" in Alberta.
4.7 The Vendor acknowledges that it is aware that the Purchaser has no
obligation or present intention of becoming a "reporting issuer" in the Province
of Alberta.
5. CLOSING, POSSESSION, AND ADJUSTMENTS
5.1 The Closing will take place by the exchange of appropriate
solicitors' undertakings, or at such other place, date, and time as may be
mutually agreed upon by the parties hereto, but no later than May 15, 1999.
5.2 The Vendor will deliver possession of the Business Assets, free and
clear of any encumbrances, except the Permitted Encumbrances, and of any other
claim to possession and any tenancies, to the Purchaser on the Closing Date.
5.3 All revenues and expenses of the Business and relating to the
Business Assets will be adjusted between the Vendor and the Purchaser as at the
commencement of business on the Closing Date to the effect that in respect of
any period before that time the Vendor will bear all expenses and receive all
revenues relating to the Business and the Business Assets and that from and
after said time the Purchaser will bear all expenses and receive all revenues
relating to the Business and the Business Assets.
6. ASSUMPTION OF LIABILITY
6.1 It is understood and agreed that from and after the Closing Date
the Purchaser will assume, pay, discharge and satisfy the Assumed Indebtedness
of the Vendor to the creditors described in Schedule "14" - Assumed
Indebtedness, and that at the Closing the Vendor and the Purchaser will execute
and deliver an Assumption Agreement whereby the Purchaser covenants to assume
and pay the Assumed Indebtedness and to indemnify and save harmless the Vendor
in respect thereof.
6.2 Subject to the provisions of this Agreement, the Purchaser agrees
to assume, pay, satisfy, discharge, perform and fulfil, from and after the
Closing Date, all obligations and liabilities of the Business arising from and
after the Closing Date the Material Contracts described in Schedule "4".
6.3 Except as provided for in Article 5, the Vendor hereby bargains,
sells, assigns, transfers and sets over unto the Purchaser all right, title,
benefit and interest which the Vendor is entitled to or possessed of, in, to, or
under all contracts, engagements and commitments respecting the Business or the
Business Assets to have and to hold unto the Purchaser forever.
6.4 The Vendor and the Purchaser agree that in respect of any of the
Material Contracts which are not assignable by the terms hereof or in respect of
which any consent or approval is required, the right, title, benefit and
interest of the Vendor therein will be held by the Vendor in trust for the
Purchaser and will be performed by the Purchaser in the name of the Vendor.
6.5 Both before and after the Closing Date, the Vendor and the
Purchaser will make all reasonable efforts to obtain the release of the Vendor
and as may be applicable the principals of the Vendor of their obligations in
respect of the Assumed Indebtedness and the Material Contracts, and without
limiting the generality of Clause 18.1 the Vendor and the Purchaser will execute
and deliver such documents and instruments and do such acts and things as may be
required for said purposes.
6.6 Without in any way limiting Clause 9.3, 10.4, the Purchaser shall
not assume, and the Vendor shall be solely responsible for and shall indemnify
and hold harmless the Purchaser from and against, all product liability, product
warranty, intellectual property infringement, and other claims and obligations
respecting products manufactured or sold and services rendered by the Vendor in
connection with the Business, any and all obligations payable to or related to
any past or present employees of the Vendor and any and all indebtedness of or
related to the Business. The Purchaser may satisfy any such obligations not
assumed by it where it is required to do so by law or by order of any court or
regulatory authority having jurisdiction over it or where it determines in good
faith to do so for valid business reasons and to not do so would in the
Purchaser's opinion, acting reasonably, materially adversely affect the Business
and , in any such case, the Vendor shall reimburse the Purchaser forthwith
following demand for all expenses incurred by the Purchaser in connection
therewith including all legal and other professional fees and disbursements,
interest, penalties and other amounts.
7. REPRESENTATIONS AND WARRANTIES OF THE VENDOR
7.1 The Vendor represents and warrants to the Purchaser, with the
intent that the Purchaser will rely thereon in entering into this Agreement and
in concluding the transactions contemplated hereby, that:
(a) the Vendor is a corporation duly incorporated, validly existing, and in
good standing under the laws of British Columbia, 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
transaction contemplated hereby have 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 is not a party to any lease or agreement to lease in respect
of any real property, whether as lessor or lessee, other than the Leases
described in Schedule "2" - Leased Property. Schedule "2" sets out the parties
to each of the leases of the Leased Property, their dates of execution and
expiry dates, any options to renew, the locations of leased lands and premises
and the rent payable thereunder. Except as described in Schedule "2", the
Vendor occupies the Leased Property and has the exclusive right to occupy and
use the Leased Property;
(d) each of the Leases of both real and personal property is in good
standing and in full force and effect, and neither the Vendor nor any other
party thereto is in material breach of any covenants, conditions or obligations
contained therein. The Vendor has provided a true and complete of each Lease
and all amendments thereto to the Purchaser.
(e) except as will be remedied by the consents, approvals, releases, and
discharges described in Schedule "11" - Consents hereto, 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, including in particular the Material Contracts,
(ii) give any person the right to terminate or cancel any of the Material
Contracts,
(iii) result in any material fees, duties, taxes, assessments, penalties or
other amounts becoming due or payable and for which the Purchaser may be liable,
other than such as may become payable under the Social Services Tax Act of
British Columbia and the Tax Act,
(iv) give rise to acceleration of the time for payment of any moneys payable
or for the performance of any obligation to be performed under the Material
Contracts,
(v) give rise to the creation or imposition of any Encumbrance on any of the
Business Assets, or
(vi) any licence, permit, approval, consent or authorization held by the
Vendor or necessary to the operation of the Business;
(f) the Vendor owns and possesses and has good and marketable title to the
Business Assets free and clear of all Encumbrances of every kind and nature
whatsoever except as disclosed in Schedule "8" - Permitted Encumbrances;
(g) except as otherwise disclosed in Schedule "3" - Machinery and Equipment,
and 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 there are no latent defects thereto;
(h) the Business Assets comprise all property and assets used by the Vendor
in connection with the Business;
(i) except as disclosed in Schedule "8" - Permitted Encumbrances, the Vendor
does not have any indebtedness which might by operation of law or otherwise now
or hereafter constitute an Encumbrance upon any of the Business Assets;
(j) no person other than the Purchaser has any written or oral agreement or
option or any right or privilege (whether by law, preemptive or contractual)
capable of becoming an agreement or option for the purchase or acquisition from
the Vendor of any of the Business Assets, other than pursuant to purchase orders
accepted by the Vendor in the ordinary course of the Business;
(k) the Vendor is not the beneficial or registered owner of and has not
agreed to acquire any real property or any interest in any real property. The
Vendor has the exclusive right to possess, use and occupy and has good and
marketable title to all the Leased Property. All buildings, structures,
improvements and appurtenances situated on the Leased Property are in good
operating condition and in a state of good maintenance and repair and are
adequate and suitable for the purposes for which they are currently being used,
and the Vendor has adequate rights of ingress and egress for the operation of
the Business in the ordinary course. None of such buildings, structures,
improvements or appurtenances (or any equipment therein), nor the operation or
maintenance thereof, violates any restrictive covenant or any provision of any
federal, provincial or municipal law, ordinance, rule or regulation of which the
Vendor is aware, or encroaches on any property owned by others. Without
limiting the generality of the foregoing:
(i) to the best of the Vendor's knowledge, the Leased Property, the current
uses thereof and the conduct of the Business comply with all regulations,
statutes, enactments, laws and by-laws, including, without limitation, those
dealing with zoning, parking, access, loading facilities, landscaped areas,
building construction, fire and public health and safety and Environmental Laws,
(ii) no alteration, repair, improvement or other work has been ordered,
directed or requested in writing to be done or performed to or in respect of the
Leased Property or to any of the plumbing, heating, elevating, water, drainage
or electrical systems, fixtures or works by any municipal, provincial or other
competent authority, which alteration, repair, improvement or other work has not
been completed, and the Vendor knows of no written notification having been
given to it of any such outstanding work being ordered, directed or requested,
other than those that have been complied with,
(iii) all accounts for work and services performed and materials placed or
furnished upon or in respect of the Leased Property at the request of the Vendor
have been fully paid and satisfied, and no person is entitled to claim a lien
under any builders' lien or similar legislation against the Leased Property or
any part thereof, other than current accounts in respect of which the payment
due date has not yet passed,
(iv) there is nothing owing in respect of the Leased Property by the Vendor
to any municipal corporation or to any other corporation or commission owning or
operating a public utility for water, gas, electrical power or energy, steam or
hot water, or for the use thereof, other than current accounts in respect of
which the payment due date has not yet passed,
(v) no part of the Leased Property has been taken or expropriated by any
federal, provincial, municipal or other competent authority, nor has any notice
or proceeding in respect thereof been given or commenced,
(vi) the Permitted Encumbrances constitute all of the Encumbrances,
agreements, indentures and other matters that affect the Leased Property,
(vii) the Leased Property (including all buildings, improvements and
fixtures) is fit for its present use, and there are no material or structural
repairs or replacements that are necessary or advisable and, without limiting
the foregoing, there are no repairs to, or replacements of, the roof or the
mechanical, electrical, heating, ventilating, air-conditioning, plumbing or
drainage equipment or systems that are necessary or advisable; and none of the
Leased Property is not currently undergoing any alteration or renovation nor are
any such alterations or renovations contemplated, and
(viii) the Leased Property is fully serviced and has suitable access to
public roads, and the Vendor is not aware of any outstanding levies, charges or
fees assessed against the Leased Property by any public authority (including
development or improvement levies, charges or fees);
(l) except as otherwise provided herein, Schedule "4" - Material Contracts,
discloses 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 the payment of in excess of $3,000.00 during any one year
period,
(iii) respecting ownership of or title to any interest or claim in or to any
real or personal property making up the Business Assets,
(iv) respecting Intellectual Property,
(v) respecting any agreement of guarantee, support, indemnification,
assumption or endorsement of, or any similar commitment with respect to, the
obligations, liabilities (whether accrued, absolute, contingent or otherwise) or
indebtedness of any other person except for cheques endorsed for collection in
the ordinary course of the Business,
(vi) any trust indenture, mortgage, promissory note, loan agreement,
guarantee or other contracts for the borrowing of money or a leasing transaction
of the type required to be capitalized in accordance with generally accepted
accounting principles,
(vii) any contracts for capital expenditures in excess of $1,000.00 in the
aggregate,
(viii) any contract for the sale of any assets other than sales of inventory
to customers in the ordinary course of the Business,
(ix) any contract pursuant to which the Vendor is a lessor of any machinery,
equipment, motor vehicles, furniture, fixtures or other personal property of a
material nature,
(x) any confidentiality, secrecy or non-disclosure contract, (whether the
Vendor is a beneficiary or obligant thereunder) relating to any proprietary or
confidential information or any non-competition or similar contract,
(m) Schedule "4" - Material Contracts, contains an accurate and complete
description of all material particulars respecting the Material Contracts and
except as disclosed in said Schedule:
(i) there has not been any default in any obligation or liability in respect
of said contracts, engagements, or commitments by the Vendor and the Vendor has
performed all of the obligations required to be performed by it and is entitled
to all benefits under the Material Contracts,
(ii) there has not been any amendment, modification, variation, surrender,
or release of said contracts, engagements, and commitments, and
(iii) each of said contracts, engagements, and commitments is in good
standing and in full force and effect and the Vendor has performed all of the
obligations required to be performed by it and is entitled to all benefits
thereunder, and is not in default or, to the Vendor's knowledge, alleged to be
in default in respect of any Material Contract or any other Contracts,
engagements or commitments provided for in this Agreement, to which the Vendor
is a party or by which it is bound;
(n) Schedule "14" - Assumed Indebtedness, contains an accurate and complete
description of all material particulars respecting the Assumed Indebtedness
including the amounts thereof as at the dates therein specified (or where the
exact amount cannot be obtained, reasonably accurate estimates thereof) and the
material terms of the settlement of such indebtedness by the Purchaser;
(o) the value of the Inventory as at the Closing Date will not be less than
$40,000 and will not exceed $60,000;
(p) the amount of Assumed Indebtedness as at the Closing Date will not
exceed the amount set out in Schedule 14 hereto;
(q) all Licences 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 licences 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 the said
licenses or permits or affect such compliance;
(r) there are no actions, suits, proceedings, 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 to the best of the Vendor's knowledge threatened against or
affecting the Vendor which would affect the Business or any of the Business
Assets or the Vendor's interest therein;
(s) the Financial Statements of the Vendor attached hereto as Schedule "1" -
Financial Statements, were prepared in accordance with generally accepted
accounting principles consistently applied and are true and correct and present
fairly and completely the assets, 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. The
financial position and condition of the Vendor is now at least as good as that
shown on or reflected in the interim financial statements provided to the
Purchaser;
(t) all outstanding commitments by or on behalf of the Vendor for the
purchase or sale of inventory and supplies have been made in accordance with
established price lists of the Vendor or its suppliers or if otherwise then in
accordance with the Vendor's normal business custom in varying therefrom;
(u) the books and records of the Vendor present fairly and completely in all
material respects, in accordance with generally accepted accounting practices
consistently applied, the matters which said books and records purport to
present, and all material financial transactions of the Vendor relating to the
Business have been accurately recorded in said books and records;
(v) there is no requirement of the Vendor or for the benefit of the Vendor
to make any filing with, give any notice to or to obtain any licence, permit,
certificate, registration, authorization, consent or approval of, any
governmental or regulatory authority as a condition to the lawful consummation
of the transactions contemplated by this Agreement, except for the filings,
notifications, licences, permits, certificates, registrations, consents and
approvals described in Schedule "11" - Consents, or that relate solely to the
identity of the Purchaser or the nature of any business carried on by the
Purchaser. There is no requirement under any Material Contract relating to the
Business or the Business Assets to which the Vendor is a party or by which it is
bound to give any notice to, or to obtain the consent or approval of, any party
to such agreement, instrument or commitment relating to the consummation of the
transactions contemplated by this Agreement except for the notifications,
consents and approvals described in Schedule "11" - Consents;
(w) since February 5, 1999, the Business has been carried on only in the
ordinary and normal course consistent with past practices and since such date
there has not been:
(i) any change, event, or circumstance which would materially adversely
affect the affairs, assets, liabilities, earnings, prospects, operation, or
condition of the Business,
(ii) any loss, damage, or destruction, whether or not covered by insurance,
which would materially adversely affect the affairs, prospects, operations, or
condition of the Business or the Business Assets,
(iii) any material increase in the compensation or benefits payable or to
become payable by the Vendor to any of its officers, directors, employees, or
agents,
(iv) any obligation or liability (whether absolute, accrued, contingent or
otherwise and whether due or to become due) incurred by the Vendor in connection
with the Business, other than those incurred in the ordinary and normal course
of the Business and consistent with past practice,
(v) any licence, sale, assignment, transfer, disposition, pledge, mortgage
of granting of a security interest or other Encumbrance on or over any of the
Business Assets, other than sales of inventory to customers in the ordinary and
normal course of the Business,
(vi) any capital expenditures or commitments relating to the Business or
Business Assets in excess of $3,000.00,
(vii) any cancellation of any debts or claims or any amendment, termination
or waiver of any rights of value to the Business in amounts exceeding $1,000.00
in each instance or $5,000.00 in the aggregate,
(viii) any change in the accounting or tax practices followed by the Vendor;
(x) the Vendor is not a non-resident of Canada within the meaning of the Tax
Act;
(y) the Vendor has duly filed on a timely basis all tax returns and reports
required to be filed by it including all federal and provincial income tax
returns and has paid all taxes that are due and payable, and all assessments,
re-assessments, governmental charges, penalties, interest and fines due and
payable by it prior to the Closing Date. The Vendor has made adequate provision
for taxes payable in respect of the Business for the current period and any
previous period for which tax returns are not yet required to be filed. The
Vendor has remitted to the appropriate tax authority, when required by law to do
so, all amounts collected by it on account of GST;
(z) all required tax returns have been filed and are true, complete and
correct, and all taxes and other government charges including all income,
excise, sales, business and property taxes and other rates, charges,
assessments, levies, duties, taxes, contributions, fees and licenses required to
be paid have been paid for all periods prior to the Closing Date and the Vendor
does not have any deferred tax liability except as expressly stated in the
Financial Statements;
(aa) there are no agreements, waivers or other arrangements providing for an
extension of time with respect to the filing of any tax return by or payment of
any tax, governmental charge or deficiency by the Vendor, and to the knowledge
of the Vendor there are no contingent tax liabilities or any grounds which would
prompt a reassessment, including aggressive treatment of income and expenses in
filing earlier tax returns;
(ab) the Vendor, in respect of the Business and the Business Assets, has
been and is in compliance with all Environmental Laws;
(ac) the Vendor has obtained all Environmental Permits. Each Environmental
Permit is valid, subsisting and in good standing, and the Vendor is not in
default or breach of any Environmental Permit and no proceeding is pending or
threatened to revoke or limit any Environmental Permit;
(ad) the Vendor, in connection with the Business, has not used or permitted
to be used, except in compliance with all Environmental Laws, any of its
property (including any of the Leased Property) or facilities to generate,
manufacture, process, distribute, use, treat, store, dispose of, transport or
handle any Hazardous Substance;
(ae) the Vendor has never received any notice of or been prosecuted for
non-compliance with any Environmental Laws, nor has the Vendor settled any
allegation of non-compliance short of prosecution. There are no orders or
directions relating to environmental matters requiring any work, repairs or
construction or capital expenditures to be made with respect to the Business or
the Business Assets, nor has the Vendor received notice of any of the same;
(af) the Vendor has not caused or permitted, nor does it have any knowledge
of, the release, in any manner whatsoever, of any Hazardous Substance on or from
any of its properties or assets (including any of the Leased Property) utilized
in the Business, or any such release on or from a facility owned or operated by
third parties, but with respect to which the Vendor in connection with the
Business is or may reasonably be alleged to have liability. All Hazardous
Substances and all other wastes and other materials and substances used in whole
or in part by the Vendor in connection with the Business or resulting from the
Business have been disposed of, treated and stored in compliance with all
Environmental Laws;
(ag) the Vendor has not received any notice that the Vendor is potentially
responsible for a federal, provincial, municipal or local clean-up site or
corrective action under any Environmental Laws in connection with the Business.
The Vendor, in connection with the Business, has not received any request for
information in connection with any federal, provincial, municipal or local
inquiries as to disposal sites;
(ah) the Vendor has delivered to the Purchaser a true and complete copy of
all environmental audits, evaluations, assessments, studies or tests relating to
the Business or Business Assets of which it is aware;
(ai) (i) the Intellectual Property comprises all intellectual property
assets necessary to conduct the Business,
(ii) the Vendor is the legal and beneficial owner of the Intellectual
Property, free and clear of all Encumbrances, and is not a party to or bound by
any contract or any other obligation whatsoever that limits or impairs its
ability to sell, transfer, assign or convey, or that otherwise affects, the
Intellectual Property,
(iii) no person other than the Purchaser has been granted any interest in or
right to use all or any portion of the Intellectual Property,
(iv) to the Vendor's knowledge, the Vendor's use, sale and licence of the
Intellectual Property and the conduct of the Business does not infringe upon, or
induce or contribute to the infringement of, the intellectual property rights,
domestic or foreign, of any other person,
(v) the Vendor is not aware of any claim of infringement (or the inducing of
or contribution to the infringement) of any intellectual property rights of any
other person arising from the use of the Intellectual Property nor has the
Vendor received any notice that the conduct of the Business, including the use
of the Intellectual Property, infringes upon or breaches any intellectual
property rights of any other person. The Vendor has no knowledge of any
infringement or violation by any third party of any of the Vendor's rights in
the Intellectual Property,
(vi) the Vendor is not aware of any fact, reason, action or inaction that
adversely affects the scope, validity or enforceability of any of the
Intellectual Property;
(vii) the Vendor has provided the Purchaser a true and complete copy of all
contracts, applications (including prosecution history), registrations and
amendments thereto that comprise or relate to the Intellectual Property, and
(viii) no funding used in the research, development and testing of the
Intellectual Property inventory originated from a governmental source of any
other person outside of the Vendor;
(aj) the Vendor has the Business Assets insured against loss or damage by
all insurable hazards or risks on a replacement cost basis and such insurance
coverage will be continued in full force and effect to and including the Closing
Date. The Vendor is not in default with respect to any of the provisions
contained in any such insurance policy and has not failed to give any notice or
present any claim under any such insurance policy, in due and timely fashion.
The Vendor has provided or will provide upon request a true copy of each such
insurance policy to the Purchaser;
(ak) to the best of the Vendor's knowledge, no officer, director or
shareholder of the Vendor and no entity that is an affiliate or associate of one
or more of such individuals:
(i) owns, directly or indirectly, any interest in (except for shares
representing less than one per cent of the outstanding shares of any class or
series of any publicly traded company), or is an officer, director, employee or
consultant of, any person that is, or is engaged in business as, a competitor of
the Business or a lessor, lessee, supplier, distributor, sales agent or customer
of the Business,
(ii) owns, directly or indirectly, in whole or in part, any property that
the Vendor uses in the operations of the Business, or
(iii) has any cause of action or other claim whatsoever against, or owes any
amount to, the Vendor in connection with the Business, except for any
liabilities reflected in the Financial Statements and claims in the ordinary
course of business;
(al) there has been no termination or cancellation of, and no modification
or change in, the Vendor's business relationship with any major customer or
group of major customers. The Vendor has no reason to believe that the benefits
of any relationship with any of the major customers or suppliers of the Business
will not continue after the Closing Date in substantially the same manner as
prior to the date of this Agreement;
(am) there are no liabilities of the Vendor or its associates or affiliates,
whether or not accrued and whether or not determined or determinable, in respect
of which the Purchaser may become liable on or after the Closing Date, other
than the Assumed Indebtedness; and
(an) neither this Agreement nor any document to be delivered by the Vendor
nor any certificate, report, statement or other documents furnished by the
Vendor in connection with the negotiation of this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statement contained herein or therein not
misleading. The Vendor has disclosed to the Purchaser everything material or
cogent in connection with the business and affairs of the Vendor and its status,
and nothing stated to the Purchaser has been misleading.
8. REPRESENTATIONS OF THE PURCHASER
8.1 The Purchaser represents and warrants to the Vendor as follows,
with the intent that the Vendor will rely thereon in entering into this
Agreement and in concluding the purchase and sale contemplated hereby, that:
(a) the Purchaser is a corporation duly incorporated, validly existing, and
in good standing under the federal laws of Canada and has the power, authority,
and capacity to enter into this Agreement and to 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 Purchaser, and this Agreement
constitutes a valid and binding obligation of the Purchaser in accordance with
its terms;
(c) the Purchaser is not a non-Canadian as defined in the Investment Canada
Act (Canada);
(d) there is no requirement for the Purchaser to make any filing with, give
any notice to or obtain any licence, permit, certificate, registration,
authorization, consent or approval of, any government or regulatory authority as
a condition to the lawful consummation of the transactions contemplated by this
Agreement;
(e) the Purchaser is a corporation duly incorporated, validly existing, and
in good standing under the federal laws of Canada, and has the power, authority,
and capacity to carry on its business as presently conducted and to enter into
this Agreement and carry out its terms;
(f) the execution and delivery of this Agreement and the completion of the
transaction contemplated hereby have 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 enforceable against
the Purchaser in accordance with its terms;
(g) neither the execution and delivery of this Agreement nor the performance
of the Purchaser's obligations hereunder will violate or constitute default
under the constating documents, by-laws, or articles of the Purchaser, any
order, decree, judgment, statute, by-law, rule, regulation, or restriction
applicable to the Purchaser, its business or any of its business assets, or any
contract, agreement, instrument, covenant, mortgage, or security;
(h) each of the Purchaser's contracts, engagements, and commitments is in
good standing and in full force and effect and the Purchaser has performed all
of the obligations required to be performed by it and is entitled to all
benefits thereunder, and is not in default or, to the Purchaser's knowledge,
alleged to be in default in respect of any material contract or any other
contracts, engagements or commitments to which the Purchaser is a party or by
which it is bound;
(i) the audited financial statements of the Purchaser for the period ended
February 28, 1999 were prepared in accordance with generally accepted accounting
principles consistently applied and are true and correct and present fairly and
completely the assets, liabilities (whether accrued, absolute, contingent or
otherwise), and the financial condition of the Purchaser and the results of the
operation of its business for the periods reported thereby. The financial
position and condition of the Purchaser is now at least as good as that shown on
or reflected in the interim financial statements provided to the Vendor;
(j) since February 5, 1999, the Purchaser's business has been carried on
only in the ordinary and normal course consistent with past practices and since
such date there has not been:
(i) any change, event, or circumstance which would materially adversely
affect the affairs, assets, liabilities, earnings, prospects, operation, or
condition of its business, or
(ii) any loss, damage, or destruction, whether or not covered by insurance,
which would materially adversely affect the affairs, prospects, operations, or
condition of the Purchaser's business or its business assets; and
(k) the Form 20F of the Purchaser, in connection with the year ended
February 28, 1998, filed with the SEC is true and correct in all material
respects and there have been no adverse material changes to the business,
affairs or financial condition of the Purchaser since the date of such Form 20F.
9. COVENANTS OF THE VENDOR
9.1 Between the date of this Agreement and the Closing Date, the
Vendor:
(a) will not sell or dispose of any of the Business Assets, except only the
sale of Inventory in the ordinary course of business and will preserve the
Business Assets intact without any further Encumbrances;
(b) will not make or agree to make any payment to any 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 as reasonable
reimbursement for expenses incurred by such persons in connection with the
Business;
(c) will conduct the Business diligently and only in the ordinary course
consistent with past practice, keep the Business Assets in their present state,
and endeavour 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) will maintain insurance coverage of the scope and in the amounts
presently held in full force and effect and shall take out, at the expense of
the Purchaser, such additional insurance as may reasonably be requested by the
Purchaser and shall give all notices and present all claims under all policies
of insurance in a due and timely fashion;
(e) will afford the Purchaser and its authorized representatives full access
during normal business hours to the Business Assets and all other property and
assets utilized in the Business and without limitation all title documents,
abstracts of title, deeds, leases, contracts, financial statements, policies,
reports, licenses, books, records, and other such material relating to the
Business, and furnish such copies thereof and other information, as the
Purchaser may reasonably request;
(f) will use its best efforts to procure and obtain at or prior to the
Closing Date all such consents, approvals, releases, and discharges as may be
required to effect the transactions contemplated hereby from all federal,
provincial, municipal or other governmental or regulatory bodies and from all
other third parties as necessary;
(g) will deliver to the Purchaser true copies of the Material Contracts and
full particulars of and true copies of all instruments evidencing or pertaining
to the Assumed Indebtedness;
(h) at the request of the Purchaser, the Vendor shall execute such consents,
authorizations and directions as may be necessary to permit any inspection of
the Business or any of the Business Assets or to enable the Purchaser or its
authorized representatives to obtain full access to all files and records
relating to the Business or the Business Assets maintained by governmental or
other public authorities;
(i) the Vendor shall permit the Purchaser's representatives or consultants
to conduct all such testing and inspection in respect of environmental matters
at such locations of the Business as the Purchaser may determine, in its sole
discretion, as may be required to satisfy the Purchaser in respect of such
matters;
(j) the Vendor shall pay and discharge the liabilities of the Vendor
relating to the Business in the ordinary course and consistent with the previous
practice of the Vendor, except those contested in good faith by the Vendor and
except as otherwise agreed to among the Vendor and the Purchaser;
(k) the Vendor shall use its best efforts to take or cause to be taken all
necessary corporate action, steps and proceedings to approve and authorize
validly and effectively the transfer of the Business Assets to the Purchaser and
the execution and delivery of this Agreement and any other Agreements or
documents contemplated hereby including, if necessary, the passing of a special
resolution of shareholders required by and to cause all necessary meetings of
directors and shareholders of the Vendor to be held for such purpose; and
(l) will not, without the prior written consent of the Purchaser, enter into
any transaction or refrain from doing any action that, if effected before the
date of this Agreement, would constitute a breach of any representation,
warranty, covenant or other obligation of the Vendor contained herein, and the
Vendor shall not enter into any material supply agreements relating to the
Business or make any material decisions or enter into any material contracts
with respect to the Business without the consent of the Purchaser, which consent
shall not be unreasonably withheld.
9.2 The Vendor will within 30 days after the Closing Date, change its
name and the names of any of its associates or affiliates that include the words
"CallDirect Enterprises Inc." (the "Business Name") to a name dissimilar to the
Business Name. The Vendor agrees that from and after the Closing Date neither
the Vendor nor any of its associates or affiliates will use the words
"CallDirect Enterprises Inc." or any part thereof or any similar words in any
business name or business venture.
9.3 The Vendor covenants and agrees to indemnify and hold harmless the
Purchaser from and against:
(a) except as to the Assumed Indebtedness which by the terms hereof are
specifically 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 for which the Purchaser becomes liable; and the Purchaser may,
but will not be bound to, pay or perform same where not to make such payment
would in the opinion of the Purchaser, acting reasonably, materially adversely
affect the Business and all moneys so paid by the Purchaser in doing so will
constitute indebtedness of the Vendor to the Purchaser hereunder;
(b) any and all damage or deficiency resulting from any misrepresentation,
misstatement, breach of warranty, or the non-fulfilment of any covenant on the
part of the Vendor under this Agreement or under any document or instrument
delivered pursuant hereto or in connection herewith;
(c) any and all claims, actions, suits, proceedings, demands, assessments,
judgments, charges, penalties, costs, and expenses (including the full amount of
any legal expenses invoiced 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;
(d) any and all losses suffered or incurred by the Purchaser as a result of
or arising directly or indirectly out of or in connection with the operation of
the Business up to the Closing Date; and
(e) any claims made pursuant to this clause 9.3 shall not be enforceable
unless notice thereof with reasonable particulars of the claim is given in
writing to the party being claimed against within three (3) years from the
Closing Date.
9.4 The exercise of any rights or inspection by or on behalf of the
Purchaser under Clause 9.1 shall not mitigate or otherwise affect any of the
representations and warranties of the Vendor hereunder which shall continue in
full force and effect as provided in Clause 7.1.
10. COVENANTS OF THE PURCHASER
10.1 Between the date of this Agreement and the Closing Date, the
Purchaser will make all reasonable efforts to obtain and procure in co-operation
with the Vendor all consents, approvals, releases, and discharges required to
effect the transactions contemplated hereby.
10.2 Subject to the provisions of this Agreement, the Purchaser will,
from and after the Closing Date, pay as and when same become due and payable all
debts and liabilities of the Business which arise after the Closing Date and
punctually observe and perform all obligations to be performed in respect of the
Business which relate to any period after the said date.
10.3 Subject to the provisions of this Agreement, from and after the
Closing Date, the Purchaser will indemnify and hold the Vendor harmless from and
against all liabilities of the Business arising after the Closing Date, provided
that such liabilities are in no way due to any misrepresentations, breach of
warranty, misstatement or breach of covenant or obligation hereunder by the
Vendor. Any claims made pursuant to this clause 10.3 shall not be enforceable
unless notice thereof with reasonable particulars of the claim is given in
writing to the party being claimed against within three (3) years from the
Closing Date.
11. NON MERGER
11.1 The representations, warranties, covenants, and agreements of the
Vendor contained herein and those contained in the documents and instruments
delivered pursuant hereto or 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 representation, warranty, covenant, or
agreement), or any investigation by the Purchaser, same will remain in full
force and effect.
11.2 The representations, warranties, covenants, and agreements of the
Purchaser contained herein and those contained in the documents and instruments
delivered pursuant hereto or 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 representation, warranty, covenant, or
agreement), or any investigation by the Vendor, same will remain in full force
and effect.
12. CONDITIONS PRECEDENT
12.1 The obligation of the Purchaser to consummate the transactions
herein contemplated is subject to the fulfilment of each of the following
conditions 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 with the same force and
effect as if such representations and warranties were made as at the Closing
Date, except as may be in writing disclosed to and approved by the Purchaser;
(b) that all the terms, covenants, conditions, agreements, and obligations
hereunder on the part of the Vendor to be performed or complied with at or prior
to the Closing Date;
(c) that between the date hereof and the Closing Date 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,
significantly reduces the value of the Business or the Business Assets to the
Purchaser;
(d) that between the date hereof and the Closing Date there has not been any
substantial loss, damage, or destruction, whether or not covered by insurance,
to any of the Business Assets;
(e) no legal or regulatory action or proceeding shall be pending or
threatened by any person to enjoin, restrict or prohibit the purchase and sale
of the Business Assets contemplated hereby;
(f) that at the Closing Date, there shall have been obtained from The
Alberta Stock Exchange (the "ASE") confirmation that the ASE does not object to
the transactions contemplated in this Agreement;
(g) that at the Closing Date, there shall have been obtained from all
appropriate federal, provincial, municipal or other governmental or
administrative bodies such licences, permits, consents, approvals, certificates,
registrations and authorizations as are required to be obtained by the Vendor to
permit the change of ownership of the Business Assets contemplated hereby, and
all notices, consents and approvals with respect to the transfer or assignment
of the Material Contracts, including, without limitation those described in
Schedule "4" hereof have been obtained;
(h) that at the Closing Date, the Vendor shall have given or obtained the
notices, consents and approvals described in Schedule "11" - Consents, in each
case in form and substance satisfactory to the Purchaser, acting reasonably;
(i) that at the Closing Date, there will have been obtained from each
creditor listed in Schedule "14" an executed Settlement Agreement whereby each
such creditor agrees to settle its debts and claims against the Vendor and the
Business and to release the Vendor from any further liability in connection with
such debts and claims; and
(j) that at the Closing Date, there will have been obtained from the
Principal an executed employment agreement with the Purchaser in a form
satisfactory to the Purchaser and containing the terms customary for this type
of agreement;
The foregoing conditions of this Clause 12.1 are for the exclusive benefit of
the Purchaser and may be waived in whole or in part by the Purchaser at any
time. If any of the conditions contained in this Clause 12.1 shall not be
performed or fulfilled at or prior to the Closing Date to the satisfaction of
the Purchaser, acting reasonably, the Purchaser, may, by notice to the Vendor,
terminate this Agreement and the obligations of the Vendor and the Purchaser
under this agreement, provided that the Purchaser may also bring an action
pursuant to Clause 9.3, 10.4 against the Vendor for damages suffered by the
Purchaser where the non-performance or non-fulfilment of the relevant condition
is as a result of a breach of covenant, representation or warranty by the
Vendor.
12.2 The obligation of the Vendor to consummate the transactions herein
contemplated is subject to the fulfilment 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 with the same force
and effect as if such representations and warranties were made as at the Closing
Date, except as may be in writing disclosed to and approved by the Vendor;
(b) that at the Closing Date, there will have been obtained from each
creditor listed in Schedule "14" an executed Settlement Agreement whereby each
such creditor agrees to settle its debts and claims against the Vendor and the
Business and to release the Vendor from any further liability in connection with
such debts and claims; and
(c) that all terms, covenants, conditions, agreements, and obligations
hereunder on the part of the Purchaser to be performed or complied with at or
prior to the Closing, including in particular the Purchaser's obligation to
deliver the documents and instruments herein provided for in Clause 14, have
been performed and complied with as at the Closing.
The foregoing conditions of this Clause 12.2 are for the exclusive benefit of
the Vendor and may be waived in whole or in part by the Vendor at any time. If
any of the conditions contained in this Clause 12.2 shall not be performed or
fulfilled at or prior to the Closing Date to the satisfaction of the Vendor
acting reasonably, the Vendor may, by notice to the Purchaser, terminate this
Agreement and the obligations of the Vendor and the Purchaser under this
Agreement, provided that the Vendor may also bring an action pursuant to Clause
10.3 against the Purchaser for damages suffered by it where the non-performance
or non-fulfilment of the relevant condition is as a result of a breach of
covenant, representation or a warranty by the Purchaser.
13. TRANSACTIONS OF THE VENDOR AT THE CLOSING
13.1 At the Closing Date, 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 Assets
in the Purchaser free and clear of any Encumbrances (except the Permitted
Encumbrances or 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 xxxx of sale (Absolute) for the Equipment;
(b) a general conveyance of the Business Assets;
(c) all consents, approvals, releases, and discharges as may be required to
effect the transactions contemplated hereby, including in particular those
described in Schedule "11" - Consents;
(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;
(e) a certified copy of a special resolution of the shareholders of the
Vendor duly passed authorizing and approving the sale of the Business Assets as
contemplated hereby;
(f) a certified copy of a special resolution of the shareholders of the
Vendor duly passed changing its name to permit the Business Name to be used by
the Purchaser and all such other documents;
(g) a certificate of the Principal dated the Closing, acceptable in form and
content to the solicitors for the Purchaser, certifying that the conditions set
out in Clause 12.1 have been satisfied;
(h) for the purposes of Clause 6.1 hereof, an affidavit of the Principal
setting forth the names and addresses of the creditors pertaining to the Assumed
Indebtedness and the amount of the indebtedness or liability due or payable to
each such creditor;
(i) the favourable legal opinion of the solicitors for the Vendor, in form
satisfactory to solicitors for the Purchaser, to the effect 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
confirming such other matters as the Purchaser's solicitors may reasonably
require;
(j) an employment agreement executed by the Principal;
(k) all such documents and instruments as may be necessary to transfer or
assign the Intellectual Property;
(l) executed releases by any third parties which have any Encumbrances
against the Business Assets other than the Permitted Encumbrances;
(m) unless waived by the Purchaser, certified copies of any and all
insurance policies relating to the Business and Business Assets with transfer
and consent forms duly endorsed;
(n) an executed Section 167 E.T.A. election form;
(o) executed assignments of all Leases described under the heading Leased
Property in Schedule "2" and all leases of personal property as described in
Schedule "4" - Material Contracts; and
(p) all such other documents and instruments as the Purchaser's solicitors
may reasonably require.
14. TRANSACTIONS OF THE PURCHASER AT THE CLOSING
14.1 At the Closing the Purchaser will deliver or cause to be delivered
to the Vendor:
(a) share certificates representing the Purchase Shares;
(b) 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;
(c) a certificate of the secretary of the Purchaser dated as of the Closing
Date, acceptable in form and content to the solicitors for the Vendor,
certifying that the conditions precedent set out in Clause 12.2 have been
satisfied; and
(d) all such other documents and instruments as the Vendor or its solicitors
may reasonably require.
15. TAXES
15.1 All taxes arising out of the purchase of the Business Assets as
contemplated hereby will be paid by the Purchaser.
15.2 The Purchaser shall be liable for and shall pay all federal and
provincial sales taxes (including any retail sales taxes and land transfer
taxes) and all other taxes, duties, fees or other like charges of any
jurisdiction properly payable in connection with the transfer of the Business
Assets by the Vendor to the Purchaser.
16. ASSETS AT RISK
16.1 From the date hereof to the Closing Date, the Business Assets will
remain at the risk of the Vendor. If any of the Business Assets are lost,
damaged, or destroyed prior to the time of Closing, the Purchaser may in lieu of
terminating this Agreement pursuant to Clause 12.1 elect by notice in writing to
the Vendor to complete the purchase to the extent possible, and at the option of
the Purchaser, either:
(a) the Purchase 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.
17. AGENTS
17.1 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, and if there are any agent's commissions which become
due and payable such costs and expenses will be the sole liability of the
Vendor.
18. FURTHER ASSURANCES
18.1 From time to time subsequent to the Closing Date, the parties
covenant and agree, at the expense of the requesting party, to promptly 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.
19. ASSIGNMENT
19.1 This Agreement may not be assigned by any party hereto without the
prior written consent of the other parties hereto.
20. SUCCESSORS AND ASSIGNS
20.1 This Agreement will enure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assigns.
21. COUNTERPARTS
21.1 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 and the same instrument.
22. NOTICES
22.1 Any notice required or permitted to be given under this Agreement
will be in writing and may be given by personal service or by prepaid registered
mail, posted in Canada, and addressed to the proper party at the address stated
below:
(a) if to the Vendor:
CallDirect Enterprises Inc.
Xxxxx 000, 0000 Xxxxxxx 00
Xxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
(b) if to the Purchaser:
Suncom Telecommunications Inc.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx, X.X.X. 60602
(c) if to the Principal:
Xxxxxxx XxXxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
or to such other address as any party may specify by notice. Any notice sent by
registered mail as aforesaid will be deemed conclusively to have been
effectively given on the fifth business day after posting; but if at the time of
posting or between the time of posting and the third business day thereafter
there is a strike, lockout or other labour disturbance affecting postal service,
then such notice will not be effectively given until actually received.
23. TENDER
23.1 Tender may be made upon the Vendor or Purchaser or upon the
solicitors for the Vendor or Purchaser and money may be tendered by bank draft
issued by a Canadian chartered bank. If the Vendor or the Purchaser is
comprised of more than one person, then tender on any one person will be
sufficient.
24. REFERENCE DATE
24.1 This Agreement is dated for reference the 6th day of May, 1999,
but will become binding as of the date of execution and delivery by all parties
hereto and subject to compliance with the terms and conditions hereof, the
transfer and possession of the Business Assets shall be deemed to take effect as
at the close of business on the Closing Date.
25. REFERENCES TO AGREEMENT
25.1 The terms "this Agreement", "hereof", "herein", "hereby",
"hereto", and similar terms refer to this Agreement and not to any particular
clause, paragraph or other part of this Agreement. References to particular
clauses are to clauses of this Agreement unless another document is specified.
IN WITNESS WHEREOF the parties have executed and delivered these presents on May
6, 1999.
CALLDIRECT ENTERPRISES INC.:
Per: /s/ Xxxxxxx XxXxxxx
---------------------
Authorized Signatory
SUNCOM TELECOMMUNICATIONS INC.:
Per: /s/ signed
-----------
Authorized Signatory
)
SIGNED, SEALED and DELIVERED by )
XXXXXXX XxXXXXX in the presence of: )
)
/s/ signed )
------------------------------------ )
Signature )
4986 Karlota )
------------------------------------ )
Print Name )
Delta, BC )
------------------------------------- )
Address )
Bookkeeper )
------------------------------------- )
)
) /s/ Xxxxxxx XxXxxxx
) ---------------------
Occupation ) XXXXXXX XxXXXXX
LIST OF SCHEDULES
Schedule Description
1 Financial Statements
2 Leased Property
3 Machinery and Equipment
4 Material Contracts
8 Permitted Encumbrances
11 Consents
14 Assumed Indebtedness
May-99 11:45 hrs. CALLDIRECT ENTERPRISES INC. Page: 1
SCHEDULE 1
FINANCIAL STATEMENTS
(See attached)
May-99 11:45 hrs. CALLDIRECT ENTERPRISES INC. Page: 2
May-99 11:45 hrs. CALLDIRECT ENTERPRISES INC. Page: 1
*** BALANCE SHEET ***
(AS AT 06-May-99)
ASSETS
Current Assets
CallDirect Capital Bank . . . . . 6,536.42
Bank of Montreal. . . . . . . . . 8,856.89
Royal Bank. . . . . . . . . . . . 1,083.68
Royal Bank U.S. Acct. . . . . . . 49.38
U.S. Exchange Clearing. . . . . . (161.94)
American Express - Mailed . . . . 1,021.87
Diners Club . . . . . . . . . . . 98.28
$ 17,484.58
Total - Cash on Hand
Accounts Receivable
Accounts Receivable - Trade . . 40,576.29
Accounts Receivable - Clearing. 105.58
Accounts Receivable - Outbound. 2,937.51
$ 43,619.38
Net Accounts Receivable
Other Current Assets
Inventory at Cost . . . . . . . 44,558.41
Inventory - Defective . . . . . 12,701.26
Inventory - Returned to Suppli. 1,575.50
Contra Account. . . . . . . . . 2,211.04
Prepaid Deposits. . . . . . . . 1,845.64
Total Other Current Assets. . . . . $ 62,891.85
Total - Current Assets. . . . . . . $ 123,995.81
Fixed Assets at Cost
Furniture & Fixtures. . . . . . . 116,656.17
Computer Equipment. . . . . . . . 20,422.25
(Accum. Amort. - Computer Eq.). . (10,899.48)
Net Book Value-Computer Eq. . . $ 126,178.94
Computer Software . . . . . . . . 17,112.60
(Accum. Amort.- Comp. Software) . (14,781.22)
Net Book Value - Comp. Softw. . $ 2,331.38
Office Equipment. . . . . . . . . 10,640.65
(Accum. Amort. - Office Eq.). . . (2,866.81)
Net Book Value-Office Eq. . . . $ 7,773.84
Telephone Equipment . . . . . . . 109,753.27
(Accum. Amort. - Telephone Eq.) . (44,047.21)
Net Book Value-Telephone E. . . $ 65,706.06
Equipment Under Capital Lease . . 52,052.35
(Accum. Amort. - Leased Eq.). . . (27,625.12)
Net Equip Under Capital Le. . . $ 24,427.23
Accum.Amort.-Office Furn.&Equip . $ 22,807.34)
Leasehold Improvements. . . . . . 10,721.50
(Accumulated Amor.-Leaseholds). . (4,498.30)
Total Fixed Assets. . . . . . . . . $ 209,833.31
Total - Assets. . . . . . . . . . . $ 333,829.12
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Suncom Loan Payable . . . . . . 51,873.41
Accounts Payable. . . . . . . . 109,000.00
Provincial Sales Tax Payable. . 857.05
G.S.T. Collected. . . . . . . . 16,592.57
G.S.T. Input Credits. . . . . . (18,099.06)
H.S.T. Collected. . . . . . . . ( 5.32)
H.S.T. Input Credits. . . . . . ( 34.00)
Total - Current Liabilities . . . $ 160,184.65
Long-term Liabilities
WJM Advance . . . . . . . . . . (2,691.33)
JR Advance. . . . . . . . . . . 40,516.18
Capital Lease #674021 . . . . . 1,605.72
Capital Lease . . . . . . . . . 3,177.13
Capital Lease #747810 (aug) . . 6,494.64
Capital Lease - 11/97 . . . . . 6,034.38
Total - Long-term Liabilities . . $ 55,136.72
Total - Liabilities . . . . . . . $ 215,321.37
Shareholder's Equity
Share Capital
Common Stock Issued @$0.15. . . 631,973.37
Common Stock Issued @$0.40. . . 132,325.00
Shares Issued @ 0.25. . . . . . 965,440.89
Common Stock Issued for Furn. . 77,932.00
Total - Share Capital . . . . . . $ 1,807,671.26
Retained Earnings . . . . . . . (1,050.40)
Current Earnings. . . . . . . . (1,688,113.11)
Total - Shareholders' Equity. . . $ 118,507.75
Total - Liabilities & Equity. . . $ 333,829.12
*** INCOME STATEMENT ***
(As at 06-May-99)
--- MONTH-TO-DATE--- --- QUARTER-TO-DATE --- ---YEAR-TO-DATE ---
$ % Sales $ $Sales $
INCOME
Rental Income. . . . . . . . . 0.00 - 0.00 - 1,121.50
Sales -Inventory . . . . . . . 16,930.21 100.0 50,876.06 100.0 616,856.70
Total - Net Sales . . . . . . . $ 16,930.21 100.0 $ 50,876.06 100.0 $617,978.20
EXPENSES
Cost of Goods Sold
Duty & Freight-In. . . . . . . 41.96 0.2 181.56 0.4 1,952.88
Inventory Refurbishing . . . . 0.00 162.75 0.3 162.75
Cost of Goods Sold . . . . . . 9,031.67 53.3 $ 29,204.60 57.4 385,942.27
Total - Cost of Goods Sold. . . $ 9,073.63 53.6 $ 29,548.91 58.1 $388,057.90
Gross Profit. . . . . . . . . . 7,856.58 46.4 $ 21,327.15 41.9 $229,920.30
Operating Expenses
Capital Corp Clearing. . . . . 0.00 - 1,233.28 2.4 1,233.28
Accounting . . . . . . . . . . 0.00 - 0.00 - 7,725.00
Advertising Expense. . . . . . 0.00 - 15.91 - 258.61
Advertising Co-op Revenue. . . 0.00 - 0.00 - (4,768.33)
Advertising-List Rental-Revenu 0.00 - (1,203.43) ( 2.4) (4,188.05)
Amortization Costs . . . . . . 0.00 - 0.00 - 27,959.74
Catalogue Residules. . . . . . 263.78 1.6 263.78 0.5 263.78
Computer Maintenance . . . . . 0.00 - 739.00 1.5 3,090.39
Medical. . . . . . . . . . . . 0.00 - 0.00 - 216.00
Auto & Parking Expenses. . . . 0.00 - 809.90 1.6 8,244.27
Collection expense . . . . . . 0.00 - 0.00 - 634.11
Consulting Fees. . . . . . . . 0.00 - 1,512.36 3.0 11,012.36
Bad Debt Expense . . . . . . . 0.00 - 2,658.43 5.2 6,534.39
Bank Charges Expense . . . . . 0.00 - 1,005.31 2.0 8,733.65
Business and Promotion . . . . 0.00 - 3,129.29 6.2 5,590.74
Defective Inventory. . . . . . 0.00 - ( 78.40) ( 0.2) 7,016.49
Delivery Expense . . . . . . . (272.00) ( 1.6) 433.61 0.9 5,869.41
Delivery Supplies . . . . . . . 0.00 - 168.29 0.3 659.15
Janitorial Expenses . . . . . . 0.00 - 0.00 - 990.00
Filing Fees . . . . . . . . . . 0.00 - 100.00 0.2 3,510.25
Investors' Relations. . . . . . 0.00 - 0.00 - 347.15
Insurance Expense . . . . . . . 0.00 - 289.38 0.6 1,240.27
Lease . . . . . . . . . . . . . 1,042.21 6.2 3,847.81 7.6 10,976.05
Lease - Office Building . . . . 3,242.15 19.2 13,148.27 25.8 41,064.14
Leasehold Repairs/Improvements. 0.00 - 71.55 0.1 828.81
Legal . . . . . . . . . . . . . 0.00 - 612.20 1.2 3,362.32
Licenses & Fees . . . . . . . . 0.00 - 1,662.94 3.3 1,884.94
Management Fees . . . . . . . . 0.00 - 9,000.00 17.7 56,000.00
Memberships . . . . . . . . . . 0.00 - 0.00 - 953.30
Office Expense. . . . . . . . . 0.00 - 344.66 0.7 6,189.12
Postage . . . . . . . . . . . . 0.00 - 333.00 0.7 2,241.27
Product Evaluation Expense. . . 0.00 - 0.00 - 235.83
---YEAR-TO-DATE ---
% Sales
INCOME
Rental Income. . . . . . . . . 0.2
Sales -Inventory . . . . . . . 99.8
Total - Net Sales . . . . . . . 100.0
EXPENSES
Cost of Goods Sold
Duty & Freight-In. . . . . . . 0.3
Inventory Refurbishing
Cost of Goods Sold . . . . . . 62.5
Total - Cost of Goods Sold. . . 62.8
Gross Profit. . . . . . . . . . 37.2
Operating Expenses
Capital Corp Clearing. . . . . 0.2
Accounting . . . . . . . . . . 1.3
Advertising Expense
Advertising Co-op Revenue. . . (0.8)
Advertising-List Rental-Revenu (0.7)
Amortization Costs . . . . . . 4.5
Catalogue Residules
Computer Maintenance . . . . . 0.5
Medical
Auto & Parking Expenses. . . . 1.3
Collection expense . . . . . . 0.1
Consulting Fees. . . . . . . . 1.8
Bad Debt Expense . . . . . . . 1.1
Bank Charges Expense . . . . . 1.4
Business and Promotion . . . . 0.9
Defective Inventory. . . . . . 1.1
Delivery Expense . . . . . . . 0.9
Delivery Supplies . . . . . . . 0.1
Janitorial Expenses . . . . . . 0.2
Filing Fees . . . . . . . . . . 0.6
Investors' Relations. . . . . . 0.1
Insurance Expense . . . . . . . 0.2
Lease . . . . . . . . . . . . . 1.8
Lease - Office Building . . . . 6.6
Leasehold Repairs/Improvements. 0.1
Legal . . . . . . . . . . . . . 0.5
Licenses & Fees . . . . . . . . 0.3
Management Fees . . . . . . . . 9.1
Memberships . . . . . . . . . . 0.2
Office Expense. . . . . . . . . 1.0
Postage . . . . . . . . . . . . 0.4
Product Evaluation Expense
*** INCOME STATEMENT ***
(As at 06-May-99)
--- MONTH-TO-DATE--- --- QUARTER-TO-DATE --- ---YEAR-TO-DATE ---
$ % Sales $ $Sales $
Softwear Discrepencies (Sales) 0.00 - 0.00 - 368.66
Subscriptions. . . . . . . . . 0.00 - 99.46 0.2 823.44
Telephone Expense. . . . . . . 97.80 0.6 4,523.37 8.9 23,082.44
Transfer Agent Fees. . . . . . 0.00 - 501.14 1.0 3,012.57
Travel . . . . . . . . . . . . 0.00 - 0.00 - 854.46
Utilities Expense. . . . . . . 0.00 - 783.30 1.5 2,060.42
Workshop Supplies. . . . . . . 0.00 - 6.47 - 6.47
Unallocated Expenses . . . . . (398,329.02) (2352.8) (398,329.02) (782.9) (398,329.02)
Wages. . . . . . . . . . . . . 0.00 - 11,874.10 23.3 115,903.67
U.I. - Employers Share . . . . 0.00 - 253.81 0.5 4,127.98
C.P.P. - Employers Share . . . 0.00 - 367.68 0.7 3,201.12
W.C.B. - Employers Expense . . 0.00 - 260.26 0.5 1,170.42
Total - Operating Expenses . . ($393,955.08) (2326.9) ($339,562.29) (667.4) ($27,808.93)
Operating Income (Loss). . . . $ 401,811.66 2373.3 $ 360,889.44 709.4 $ 257,729.23
Other Revenues and Expenses
Interest/PST Comm. (Earned). . 0.00 - 12.54 - 328.90
Interest Expense . . . . . . . 0.00 - 0.00 - 3,054.65
Foreign Exchange . . . . . . . 0.00 - 0.00 - (1,161.67)
Total-Other (Revenue)/Expense. $ 0.00 - ($12.54) - $ 1,564.08
Income (Loss) Before Taxes . . $ 401,811.66 2373.3 $ 360,901.98 709.4 $ 256,165.15
Net Income or (Loss) . . . . . $ 401,811.66 2373.3 $ 360,901.98 709.4 $ 256,165.15
---YEAR-TO-DATE ---
% Sales
Softwear Discrepencies (Sales) 0.1
Subscriptions. . . . . . . . . 0.1
Telephone Expense. . . . . . . 3.7
Transfer Agent Fees. . . . . . 0.5
Travel . . . . . . . . . . . . 0.1
Utilities Expense. . . . . . . 0.3
Workshop Supplies
Unallocated Expenses . . . . . (64.5)
Wages. . . . . . . . . . . . . 18.8
U.I. - Employers Share . . . . 0.7
C.P.P. - Employers Share . . . 0.5
W.C.B. - Employers Expense . . 0.2
Total - Operating Expenses . . ( 4.5)
Operating Income (Loss). . . . 41.7
Other Revenues and Expenses
Interest/PST Comm. (Earned). . 0.1
Interest Expense . . . . . . . 0.5
Foreign Exchange . . . . . . . ( 0.2)
Total-Other (Revenue)/Expense. 0.3
Income (Loss) Before Taxes . . 41.5
Net Income or (Loss) . . . . . 41.5
SCHEDULE 2
LEASED PROPERTY
(See attached)
ROYAL LEPAGE COMMERCIAL INC. ROYAL LEPAGE
Xxxxx 000, 00000 - 000xx Xxxxxx
Xxxxxx, XX X0X 0X0
FACSIMILE TRANSMISSION
Date: February 17, 1997
Re: Offer to Lease - Glenwood Commerce Centre
Please deliver the following 11 pages (including this page) to:
Name: Xxxx Xxxxxx
Firm: CallDirect Enterprises Inc.
City: Delta, BC
Phone: 0-000-000-0000
Fax: 0-000-000-0000
From: Xxxx Xxxxx Business: (000) 000-0000
Commercial & Industrial Direct Line: (000) 000-0000
Sales & Leasing Fax: (000) 000-0000
Xxxx:
Attached is a copy of your accepted Offer to Lease on Glenwood Commerce Centre.
The quality may suffer over the fax so I am putting a photocopy in the tonights
mail. I will contact you on Wednesday, February 19, 1997 to arrange pick up of
a deposit in the amount of $7,130.13 (two months rent at $3,565.06 per month)
plus GST of $499.11 for a total amount of $7,629.23, If you have any questions,
please don't hesitate to call. Thank you.
/s/ Xxxx Xxxxx
Xxxx X. Xxxxx
OFFER TO LEASE
GLENWOOD COMMERCE CENTRE
(THE "BUILDING")
DATE: February 13, 1997
TO: ROYAL LEPAGE COMMERCIAL INC. (THE "AGENT")
206 - 00000 - 000XX Xxxxxx
Xxxxxx, X.X. X0X 0X0
BETWEEN: GLENWOOD INDUSTRIES LTD. (THE "LANDLORD")
0000 - 000xx Xxxxxx
Xxxxxx, X.X. X0X 0X0
AND: CALLDIRECT ENTERPRISES INC. (THE "TENANT")
0000 Xxxxxx Xxxxx
Xxxxx, X.X. X0X 0X0
The Tenant hereby offers to lease from the Landlord certain premises (the
"Premises"), being a portion of the Landlord's building located at 0000 Xxxxxxx
00, X.X. #0, Xxxxx, X.X., X0X 0X0 and generally known as Glenwood Commerce
Centre (the "Building") on the following terms and conditions:
1. DESCRIPTION OF PREMISES
The Premises shall consist of approximately two thousand four hundred (2,400)
rentable square feet of warehouse and three thousand five hundred eighty-five
(3,585) rentable square feet of office space as shown outlined in heavy black
line on the floor plan attached as Schedule "A" and comprises of the entire
ground floor (3,595 sq.ft.) of Unit #2 and the entire second floor (1,195
sq.ft.) of Unit #3. The Premises will be measured in accordance with the terms
of the Lease described below.
2. TERM
The term of the Lease shall be for five (5) years (the "Term"), commencing on
May 1, 1997 (the "Commencement Date") and expiring on April 30, 2002.
3. BASIC RENT
Tenant will pay to the Landlord Basic Rent of Seven Dollars and Fifteen Cents
($7.15) per rentable square foot of the Premises per annum plus Goods and
Services Tax (GST), payable in advance without deduction in equal monthly
installments on the first day of each and every month throughout the Term,
commencing on the Commencement Date.
For the purposes of the Lease, the Term "Basic Rent" as used in this Offer to
lease shall mean the fixed monthly payments of rent due and payable under the
Lease, whether characterized as "Basic Rent", "Minimum Rent" or otherwise under
the Lease.
4. PERMITTED USE
The Premises are to be used for the purpose of a Direct Mail Catalog Business
and for no other purposes without the prior approval of the Landlord as set out
in the Lease.
5. TENANT RESPONSIBILITIES - ADDITIONAL RENT
In addition to Basic Rent plus GST, the Tenant shall pay for all other charges
and expenses provided for in the lease from and after the Commencement Date,
including without limitation the Tenant's share of property taxes, corporation
capital taxes, business taxes, water/sewer rates, building insurance,
maintenance, management fees, heat, light and power, plus GST applicable to the
foregoing.
6. LANDLORD'S IMPROVEMENT WORK
The Premises to be provided by the Landlord shall be on an "as is, where is"
basis, except for those improvements outlined in Schedule "B" which shall be
provided at the Landlord's expense . (illegible line follows)
7. TENANT'S IMPROVEMENT WORK
For any improvement work not specified in Schedule "B", the Tenant shall be
required to prepare working drawings of the proposed improvement work and obtain
the written consent of the landlord before commencing the improvement work, such
consent not to be unreasonably withheld. All improvement work shall be done at
the Tenant's sole cost and expenses by qualified and licensed contractors and
sub-contractors who shall be subject to the reasonable approval of the Landlord.
All such Tenant improvement work shall be performed in a first class manner in
accordance with the provisions of the Lease.
8. PERMITS AND LICENSES
The Tenant shall be responsible for obtaining all necessary building permits and
approvals at required by the relevant regulatory authorities for the Tenant's
improvement work. Such permits and approvals must be secured before the Tenant
commences its improvement work. If required by the municipal authorities, the
Tenant shall also make application for an occupancy certificate for the Premises
upon completion of the Tenant's improvement work.
9. LEASE
The lease for the Premises shall be the Landlord's standard form of lease for
the Building, modified to include the provisions of this Offer to Lease and the
Tenant's reasonable non-financial amendments (the "Lease"). The Landlord will
deliver a copy of the standard form of lease to the Tenant within a reasonable
period of time after acceptance of this Offer to Lease, and the Tenant shall
have ten (10) days thereafter to review and approve of the same. Upon
completion of the Tenant's review and approval of any non-financial amendments
requested by the Tenant, the Landlord will prepare and deliver the Lease to the
Tenant for execution. The Tenant agrees to execute and return the Lease to the
Landlord forthwith upon receipt of the same, and in any event prior to taking
possession of and commencing business operations in the Premises. If the Tenant
takes possession of the Premises without executing the Lease, the Tenant shall
be deemed to have executed the same and shall be bound by all of the provisions
thereof, provided however the Tenant shall remain obligated to execute and
deliver the Lease to the Landlord forthwith upon demand, and such failure to
execute and deliver the Lease to the Landlord shall be a default under the terms
of the Lease.
10. TENANT'S CONDITIONS
This Offer to Lease is subject to the following conditions precedent, all of
which are for the sole benefit of the Tenant:
(a) This Offer To Lease is subject to the Tenant obtaining any and all
permits that may be required by The Corporation of Delta to legitimately conduct
his business in the Premises.
(the "Tenant's Conditions"). The Tenant's Conditions shall be removed or waived
by notice in writing from the Tenant to the landlord within fifteen (15)
business days of the Landlord's acceptance of this Offer to Lease, failing which
this Offer to Lease shall be null and void and of no force or effect and the
Deposit shall be returned to the Tenant. The Landlord acknowledges the receipt
of Ten Dollars ($10.00) and other good and valuable consideration to be retained
by the Landlord as consideration for keeping this Offer to Lease open for
acceptance until the time for removal or waiver of the Tenant's Conditions has
expired.
11. LANDLORD'S CONDITIONS
This Offer to Lease is subject to the following conditions precedent, all of
which are for the sole benefit of the Landlord:
(a) Acceptance of this Offer by the Landlord is conditional upon the Tenant
providing the Landlord with information respecting the financial status of the
Tenant as the Landlord may reasonably require for the purposes of determining
the financial strength of the Tenant. The Tenant shall furnish the Landlord
with such information forthwith upon acceptance of the Offer. The Landlord
shall have ten (10) business days from the date of provision of the financial
information to determine whether or not the Tenant is acceptable to the
Landlord. The Landlord shall notify the Tenant within ten (10) business days of
receipt of the financial information that the tenancy is acceptable to it in
writing, failing which the Offer shall become null and void.
(the "Landlord's Conditions"). The Landlord's Conditions shall be removed or
waived by notice in writing from the Landlord to the Tenant within ten (10)
business days of the Landlord's acceptance of this Offer to Lease, failing which
this Offer to Lease shall be null and void and of no force or effect and the
Deposit shall be returned to the Tenant. The Tenant acknowledges the receipt of
Ten Dollars ($10.00) and other good and valuable consideration to be retained by
the Tenant as consideration for keeping this Offer to Lease open for acceptance
until the time for removal or waiver of the Landlord's Conditions has expired.
12. DEPOSIT
Within 48 hours of acceptance of this Offer to Lease by the Landlord, the Tenant
shall tender a deposit cheque in the amount of Seven Thousand One Hundred Thirty
Dollars and Thirteen Cents ($7,130.13) plus GST (collectively the "Deposit"),
which is to be credited one half to the first month's Basic Rent payable under
the Lease (including GST), with the balance to be held as security for the due
and proper performance by the Tenant of all of the terms, covenants and
conditions in the Lease, with the balance to be applied toward Basic Rent
(including GST) for the last month of the Term. If this Offer becomes null and
void, the Deposit shall be refunded to the Tenant without deduction.
The Deposit shall be paid to the Agent as the following address:
ROYAL LEPAGE COMMERCIAL INC.
000 - 00000 - 000xx Xxxxxx
Xxxxxx, X.X. X0X 0X0
Should the deposit be equal to Five Thousand Dollars ($5,000.00) or more, the
deposit is to be placed in an interest bearing account with interest accruing to
the Tenant.
13. OPTION TO EXTEND TERM
If the Tenant duly and regularly pays the rent, plus GST, and performs each and
every one of the covenants in the Lease to be performed and observed by the
Tenant, the Tenant shall have one option to extend the Term of the Lease for a
further term of five (5) years (the "Extended Term"), such option to be
exercised on not less than four (4) months' and not more than twelve (12)
months' written notice prior to the expiration of the Term failing which such
option shall be null and void and incapable of exercise. If the Tenant
exercises the option to extend the Term, the Extended Term shall be on the same
terms and conditions as the initial Term of the Lease except for Basic Rent, any
free rent allowance, fixturing period, tenant improvement allowance or other
incentive given to the Tenant during the initial Term, and except for this
option to extend.
The Basic Rent payable by the Tenant during the Extended Term shall be
negotiated and agreed upon between the Landlord and the Tenant based on the
prevailing fair market Basic Rent as at the commencing of the Extended Term for
similarly improved premises of similar size, quality, use and location in
buildings similar to the Building, but shall in any event not be less than the
Basic Rental paid during the last year of the initial Term of the Lease. If the
Landlord and the Tenant are unable to agree on the Basic Rent for the Extended
Term within three (3) months prior to the commencement of the Extended Term, the
matter shall be determined by a single arbitrator pursuant to the provisions of
the Commercial Arbitration Act and in accordance with the foregoing provisions.
14. NO REPRESENTATION / GOVERNING LAW
There are no representations, warranties, covenants or agreements, whether
express or implied, related to the subject matter of this agreement save as
specifically set out in this Offer to Lease. This Offer to Lease shall be
governed by and construed in accordance with the laws of the province in which
the Building is situated.
15. TIME OF THE ESSENCE
Time is of the essence of this Offer to Lease and each part of it.
16. AGENCY DISCLOSURE
The Landlord and Tenant acknowledge that the Agent is acting in a limited dual
agency capacity and further acknowledge and agree that they are both being
represented by Xxxx X. Xxxxx of Royal LePage Commercial Inc.
17. ACCEPTANCE
This Offer to Lease is open for acceptance for ten (10) business days from the
date hereof and thereafter, if not accepted, it shall be null and void.
DATED at Delta, British Columbia, this 13th day of February, 1997.
THE TENANT:
CALLDIRECT ENTERPRISES INC.
Per: /s/ Xxxx Xxxxxx
-----------------
Authorized Signatory
Xxxx Xxxxxx, President /s/ Xxxx X. Xxxxx
--------------------
(Name and Title) Witness: Xxxx X. Xxxxx
We hereby accept his Offer to Lease and agree to be bound by the terms and
conditions contained herein.
DATED at (location), this 17 day of February, 1997.
----------
THE LANDLORD:
GLENWOOD INDUSTRIES LTD.
Per: /s/ Xxx Xxxxxxxx
------------------
Authorized Signatory
Xxx Xxxxxxxx, President /s/ signed
-----------
(Name and Title) Witness:
SCHEDULE "A"
PLAN OMITTED
SCHEDULE "B"
LANDLORD'S IMPROVEMENT WORK
Tenant improvements to be provided by the Landlord and included in the Basic Net
Rent shall consist of: two washrooms, one handicapped on the ground floor*, one
standard washroom on the 2nd floor, one staff lunchroom on the ground floor*,
one private office, one meeting room / office and an Area of Refuge* at the man
door in the warehouse area. The balance of the improved area to be treated as
open office space. The Landlord will provide the aforementioned tenant
improvements to the following standard of construction:
*B.C. Building Code requirement
i) Partitions and Doors
Interior partitions will be steel stud partitions in the office areas. Walls
around washrooms, lunch break rooms and conference rooms will have acoustic
insulation.
Doors will be 3' x 7' solid core hardboard faced wood doors in the office and
hollow metal in the warehouse / service areas. All will have paint finish.
ii) Floor Finishes
Carpet will be used throughout the offices. This will be 26 oz. nylon direct
glue down application.
The warehouse floor will be concrete with 2 coats of acrylic sealer installed
under the base building contract.
iii) Ceiling Finishes
Acoustic ceiling tiles will be used throughout the office areas at 9' 0" height.
The warehouse area will have exposed galvanized metal steel deck and structure.
iv) Wall Finishes
Walls in the office areas will have premium grade paint finishes. The warehouse
will not be finished.
v) Specialties
Washrooms will be fully equipped with washroom accessories. Custom millwork
will include an 8' long counter at the staff room and washroom vanities. These
will be plastic laminate tops and melamine cabinets.
vi) Vertical Conveying
Stairs to the second floor will be concrete filled metal pan steel stairs with
steel handrails. Treads will be finished with carpet and rubber nosings.
vii) Heating, Ventilation and Air Conditioning
The office will be heated, ventilated and air conditioned using a series of
packaged roof top units organized to provide a basic zone controlled system.
Washrooms will be provided with exhaust ventilation.
viii) Plumbing & Drainage
Commercial quality Crane or American Standard plumbing fixtures will be
specified. Electric domestic water heaters will be used for generating domestic
hot water for the plumbing fixtures. One (1) Handicapped accessible 2 piece
washroom will be provided on the ground floor.
ix) Fire Protection
The base building wet pipe sprinkler system will be modified to suite the office
plan. Any upgrade of warehouse system required will be at the tenant's expense.
Electrical Services
x) Lighting
Generally speaking, all office area lighting will be provided by recessed
fluorescent luminaires. Placement of luminaires will be arranged to provide
lighting levels to I.E.S. standards on the task areas.
xi) Lighting Controls
Lighting controls will be provided to limit the consumption of power during
unoccupied hours. Light switches will be provided for all private offices and
areas of 1,000 sq.ft. or less.
xii) Exit Lighting
Exit lights will be provided throughout in accordance with the B.C.
Building Code. All exit lights will be powered from an auxiliary power source
to provide power during normal power outages.
xiii) Emergency Lighting
Emergency lighting will be provided throughout in accordance with the B.C.
Building Code.
xiv) Power Distribution
In open office areas power will be provided to accommodate Pac-Pole
installation to modular work stations. Wall outlets will be provided at the
rate of 2 / 150 sq.ft. in the enclosed office and meeting room areas.
xv) Fire Alarm System
A complete zoned, non-coded fire alarm system will be provided throughout
to the B.C. Building Code standards.
xvi) Communication Systems
An empty conduit system will be provided to accommodate telephone and
computer cable installation at the rate of 1 / 150 sq.ft. of office area.
Wiring is to be by the tenant.
xvii) Mechanical Equipment Connections
Connections, disconnects and starters will be provided for all mechanical
equipment, as required by mechanical system.
Signage
xviii) Tenant Signage
The Landlord will provide, above the entry to the tenant premises, an
illuminated sign box with a blank white plastic face. The tenant will be
responsible for the graphics. No other signage is permitted.
ixx) Project Directory
A project directory will be provided adjacent to the site entrance to
indicate all tenants, their unit number and building.
These improvements are to be completed at the Landlord's sole cost and expense.
Furthermore the Landlord will be responsible for all plans, permits, fees,
inspections, approvals, and occupation permits with regard to the Landlords
Improvement Work.
The Leased Premises will be left free of refuse and in a clean and tenantable
condition with all mechanical, electrical, heating and plumbing systems in good
working order and available for the Tenant's occupation.
LEASE
THIS INDENTURE made as of the DAY OF
(in pursuance of The Land Transfer Act).
BETWEEN:
GLENWOOD INDUSTRIES LTD., a company incorporated under the laws of the Province
of British Columbia, having a place of business at 00000 Xxxxxxxxx Xxxxx, in the
City of Richmond, in the Province xx Xxxxxxx Xxxxxxxx, X0X 0X0
(hereinafter called the "Landlord")
OF THE FIRST PART
AND:
(hereinafter called the "Tenant")
OF THE SECOND PART
WITHESSETH that in consideration of the rents, covenants and agreements
herein contained on the part of the Tenant, the Landlord hereby leases to the
Tenant the premises described in Schedule "A" hereto, being a portion of a
building located on lands described as: Parcel Identifier: 000-000-000 Lot 8
Except Part dedicated on Road Plan 61212, District Xxx 00 Xxxxx 0 Xxx
Xxxxxxxxxxx Xxxxxxxx, Xxxx 00000 and all rights and appurtenances appertaining
thereto, the said premises, rights and appurtenances being hereinafter sometimes
collectively referred to as the "demised premises" or the "premises":
TO HOLD the premises for the term of years and months
(the "Term") commencing on the 1st day of (the
"Commencement Date") and ending on the day of
unless the Term shall be sooner terminated as hereinafter provided.
If the Landlord is unable to obtain an occupancy permit in respect of the
premises by _________________, the Tenant may at its option cancel the Lease.
THE TENANT PAYING THEREFOR during the Term base rental (the "base rental")
in lawful money of Canada of
area of the premises payable in equal consecutive monthly instalments
on the first day of every month commencing on the first day of
; accordingly the monthly base rental will be
Dollars.
The base rental will be adjusted according to the actual square footage of
the premises, to be confirmed by measurement (according to the BOMA standard).
AND FURTHER PAYING THEREFOR as additional rent the monies and other
charges, costs and expenses herein provided to be paid by the Tenant at the
several times when they become payable.
If the Term commences on any day other than the first or ends an any day
other than the last day of the month, the base rental and additional rental for
the fractions of a month at the commencement and at the end of the Term shall be
adjusted pro rata.
ARTICLE I
Tenant's Covenants
The Tenant covenants with the Landlord as follows:
1.1 During the Term to pay to the Landlord the base rental hereby reserved
and all additional rent in the manner and at the times herein provided, without
deduction, abatement or set off.
All base rental and additional rent in arrears shall bear interest at two
(2%) per cent above the Royal Bank of Canada Prime Rate being, as at any date,
the rate of interest equal to the prime rate of interest per annum from time to
time established by the Royal Bank of Canada as a reference rate of interest for
the determination of interest rates which the Royal Bank of Canada will charge
for loans made by it in Canadian dollars to its customers in Canada. A
certificate of an officer of the Royal Bank of Canada at its Vancouver Main
branch shall be conclusive as to the said Royal Bank of Canada Prime Rate from
time to time. The said Royal Bank of Canada Prime Rate is hereinafter called
the "Prime Rate" and is to be determined and calculated on the first day of each
month;
1.2 To pay to the Landlord, commencing on the 1st day of
in each and every year during the Term, as additional rent:
(a) all taxes, rates, duties and assessments whatsoever, including local
improvement rates, and property taxes whether municipal, parliamentary or
otherwise, now charged, levied, rated or assessed, or hereafter to be charged,
levied, rated or assessed against the demised premises or any similar taxes not
now in existence or contemplated at any time during the Term by any competent
governmental or municipal body in addition to, or in lieu of, the taxes, rates,
duties or assessments hereinbefore referred to but excluding capital tax as
defined herein;
(b) if the taxes in respect of the demised premises shall be increased by
reason of any equipment, ,machinery, fixtures or installations in or upon, or
any alteration made in or to the demised premises by the Tenant, the amount of
such increase;
(c) if the Tenant or any person, firm or corporation occupying the demised
premises or any part thereof shall elect to have the demised premises or any
part thereof assessed for separate property taxes, the amount by which the
separate property taxes exceed the amount which would be payable by the Landlord
for property taxes, had such election not be made;
(d) notwithstanding any other provisions of this Lease to the contrary, the
Tenant shall pay to the Landlord, at such times and in such manner as the
Landlord may direct, an amount equal to all goods and services taxes, sales
taxes, value-added taxes or any other taxes imposed with respect to base rent,
additional rental or other amounts payable by the Tenant to the Landlord under
this Lease, howsoever such taxes are characterized. The amount payable by the
Tenant hereunder shall not be deemed to be base rental or additional rent but
the Landlord shall have all of the same rights and remedies for recovery of same
as it has for recovery of base rental and additional rent hereunder. The
payment of goods and services taxes shall not be required more frequently than
monthly, with payment of other rent amounts.
Provided that where any of the foregoing are charged, levied, rated or assessed
with respect to the whole of the lands and building (the "Building") of which
the demised premises form a part, and the additional building (the "New
Building") to be constructed by the Landlord on the lands on which the Building
is situate, the Tenant shall pay its proportionate share ("Proportionate Share")
thereof being determined by multiplying the amount of such tax, rate, duties or
assessment by the fraction which the area of the demised premises, comprises of
the total rentable area of the Building and the New Building, which, for greater
certainty, excludes all Common Areas (as defined in section 1.23 hereof);
1.3 To pay as and when the same become due, and to save the Landlord in all
respects harmless with respect thereto, all business taxes from time to time
levied against, or payable by the Tenant in respect of the Tenant's occupancy of
the demised premises;
1.4 The tax payments required to be made by the Tenant to the Landlord under
the provisions of subsections 1.2 (a), (b) and (c) hereof shall be estimated by
the Landlord, and the Tenant shall pay to the Landlord in addition to the
monthly payments of base rental hereinbefore reserved, one-sixth of the
estimated annual tax payments in the months of January to June, both inclusive,
in each calendar year with an adjustment being made as hereinafter set forth.
When the property tax xxxx respecting the demised premises is received by the
Landlord for each year, the Tenant shall forthwith pay to the Landlord such
additional sums as may be required in order that the Landlord may pay the whole
amount of the annual taxes as the same fall due. If the monthly additional
payments so paid by the Tenant to the Landlord in the last year of the Term
exceed or are less in total than the Tenant's pro rata share of the annual
property taxes then the appropriate payment shall be paid by the Landlord to the
Tenant or vice versa as soon as the same has been ascertained. The Landlord
shall forward to the Tenant copies of all notices or tax bills relating to the
imposition of property taxes or other charges required hereunder to be paid as
to part or all thereof by the Tenant;
1.5 Capital tax means an imputed amount presently or hereinafter imposed
from time to time on the Landlord and payable by the Landlord (or any
corporation acting on behalf of the Landlord) and which is levied or assessed
against the Landlord on account of its ownership of or capital employed in the
demised premises. Capital tax shall be imputed as if the amount of such tax
were that amount due if the demised premises were the only real property of the
Landlord and includes the amount of any capital or place of business tax levied
by the Provincial Government or any other applicable taxing authority against
the Landlord with respect to the demised premises, whether or not known as
capital tax or any other name;
1.6 In each and every year during the Term to pay, satisfy and discharge
directly or indirectly all charges in connection with water, electrical current,
gas, sewage, garbage collection and other public or private utilities or
services extraordinary as well as ordinary, supplied at any time to the demised
premises;
1.7 To indemnify and keep indemnified the Landlord in respect of all losses,
costs, charges, penalties and expenses occasioned by or arising from the
non-payment by the Tenant, its subtenants, licensees and assignees of any and
every tax, rate, assessment, charge, expense or fee, including any business or
similar tax assessed against the Tenant or any sub-tenant or licensee or other
persons occupying the demised premises or any part thereof and provided that the
same shall not be a charge on the demised premises or in any way the ultimate
responsibility of the Landlord, unless the same shall have already been paid by
the Tenant to the Landlord, and provided that the same shall not be of a kind
personal to the Landlord, such as taxes on the income of the Landlord;
1.8.1 To repair, replace and maintain the demised premises or any part
thereof, (excepting only reasonable wear and tear not inconsistent with the
maintenance of a first-class commercial building and hazards covered by the
usual extended form of fire insurance policy) and, without limiting the'
generality of the foregoing, the Tenant shall keep the demised premises in such
condition as a careful and prudent owner would do, including the replacement of
electrical light bulbs, tubes and starters and ballasts. Provided further the
Tenant shall maintain and repair to a modern standard of usage all equipment and
systems of any nature in the demised premises and supplying services to the
demised premises at such time or times when the Landlord shall advise and shall
perform such programme of maintenance as the Landlord may require in its sole
discretion. Until the Landlord advises the Tenant of a programme of
maintenance, the Tenant shall be obliged to carry out its own programme of
maintenance as a prudent owner would do. Provided further that if the Landlord
advises, the Tenant shall perform such maintenance programme not later than one
(1) month after 'notice has been given by the Landlord to the Tenant, failing
which, the Landlord at its sole option and in its sole discretion may perform
the required maintenance programme at the cost of the Tenant. In such event,
the cost shall be paid forthwith upon demand by the Tenant to the Landlord as
additional rental. Provided further that upon the expiration or earlier
termination of this Lease, the Landlord may inspect the said equipment and
systems and if the equipment and systems require maintenance or replacement then
the Landlord shall be entitled to perform such maintenance or replacement at the
cost of the Tenant and upon demand, the Tenant shall pay the entire cost to the
Landlord forthwith as additional rental;
1.8.2 Provided further that if any repairs, replacements or maintenance
which are required to be performed by the Tenant under the terms of this Lease
and are not performed when required, then the Landlord in its sole discretion
after giving reasonable written notice to the Tenant shall be entitled to
perform such repairs, replacements or maintenance entirely at the cost of the
Tenant and the cost of same shall be paid forthwith by the Tenant to the
Landlord upon demand. The cost of same shall be considered to be additional
rental under this Lease;
1.9 It shall be lawful for the Landlord and its agents, at all reasonable
times during the Term, to enter the demised premises to inspect the condition
thereof and the Tenant shall comply with all reasonable requirements of the
Landlord with respect to the care, maintenance, replacement and repair thereof,
excepting only reasonable wear and tear not inconsistent with the maintenance of
a first-class commercial building, and hazards covered by the usual extended
form of fire insurance policy and structural repairs and structural replacement.
Where an inspection reveals repairs or replacements are necessary, the Landlord
shall give to the Tenant notice in writing and thereupon the Tenant will, within
thirty (30) days from the date of delivery of the notice, make the necessary
repairs or replacements in a good and workmanlike manner. In an emergency, the
Landlord nay enter the demised premises without notice;
1.10 Subject to the provisions of this Lease, upon expiration or earlier
termination of the Term, the Tenant will peaceably surrender, quit and deliver
up the demised premises to the Landlord in a good state of repair and
maintenance, excepting only reasonable wear and tear not inconsistent with the
-maintenance of a first-class commercial building, and hazards covered by the
usual extended form of fire insurance policy and structural repairs and
structural replacement. The Tenant shall be fully responsible for and shall
rectify any damage to the demised premises not excepted under this provision,
failing which the Landlord at its option may rectify such damage at the cost of
the Tenant and the Tenant shall pay to the Landlord forthwith upon demand such
cost;
1.11 To comply promptly with and conform to the requirements of all
applicable Governmental and Municipal statutes, laws, bylaws, regulations,
ordinances and orders from time to time, or at any time in force during the Term
and affecting the condition, equipment, maintenance, use or occupation of the
demised premises and with every applicable regulation, order, request or demand
of any municipal fire department or other similar body, or fire insurance
company by which the Landlord and the Tenant or either of them may be insured at
any time during the Term. Such work shall be performed by the Tenant forthwith
upon demand and failure of the Tenant to complete such work within a reasonable
period of time after such demand, shall entitle the Landlord at its sole option
and in its sole discretion to terminate the Lease or to perform such work at the
cost of the Tenant and charge back the costs to the Tenant as additional rental;
1.12 In the event of any damage to the demised premises by any cause, to
give notice in writing to the Landlord of such damage forthwith upon the same
becoming known to the Tenant;
1.13 At its own expense to keep entrance-ways and all steps and platforms
leading thereto clear of all snow, ice and debris;
1.14.1 The Tenant covenants and agrees that it will not permit any
objectionable noise or odours, waste, debris of any kind, hazardous or toxic
substances to be deposited on or to escape from the premises which may be deemed
a nuisance or injurious to the premises or to the Building, the New Building or
to any surrounding buildings or surrounding environment;
1.14.2 The Tenant covenants and agrees with the Landlord to indemnify and
hold harmless the Landlord of and from all claims, demands, costs, loss, damages
and expenses which the Landlord may incur arising out of any pollution of the
environment or contamination of property, whether real or personal, caused by or
attributable to the operations of the Tenant or the materials handled, stored or
transported by the Tenant in, on or about the demised premises;
1.15 The demised premises shall be used only for the purpose of a day care
centre and training facility for independent ministries and no assignee or
sub-lessee shall use the demised premises for any other purpose whatsoever;
1.16 During the Term any stranger or strangers who are prospective
purchasers or mortgagees, or, within the last six months of the Term,
prospective tenants, may inspect the demised premises or any part thereof at
reasonable times and on reasonable notice to the Tenant on producing an order to
that effect signed by the Landlord, provided that such inspections shall not
impinge on the classified nature of the business of the Tenant, if any;
1.17 Subject to section 1.8.1, to assume the sole responsibility for the
condition, operation, maintenance and management of the demised premises and to
heat the same with the heating equipment within the demised premises at its own
expense;
1.18 It will not assign, sub-let, licence or part with the possession of the
demised premises or any part thereof, or share the occupation of the demised
premises, or any part thereof, ,without the consent of the Landlord in writing
first had and obtained and, provided the criteria and conditions hereinafter set
forth are met and complied with, such consent shall not be unreasonably or
arbitrarily withheld. As a condition of the granting of its consent, the
Landlord may require any assignee, sub-tenant, licensee or occupant of the
demised premises to execute an agreement whereby he, it or they attorn to and
become the tenants of the Landlord as if he, it or they had executed this Lease.
The Tenant shall furnish to the Landlord copies of any assignment, sub-lease,
licence or other agreement herein contemplated. Provided that no assignment,
sub-letting, licensing or parting with possession of the demised premises shall
in any way release or be deemed to release the Tenant, (or any guarantor hereof)
from its obligations under the terms of this Lease. Provided further that the
proposed assignee, sub-tenant, licensee or occupant of the demised premises
shall be required to provide financial statements or other financial information
as the Landlord may require. It is agreed that the Landlord may consider in
determining whether to grant consent, among other matters, the personal and
business history of the proposed assignee, occupant sub-lessee and its key
employees. The Tenant agrees to pay the reasonable legal fees of the Landlord's
solicitor relating to the preparation of the Landlord's consent;
1.19 Other than ceiling air-conditioners and/or exhaust system (plans and
specifications of which must be submitted to and are subject to approval by the
Landlord, such approval not to be unreasonably withheld) it will not place
anything on the roof, whether signs or otherwise, or in any way make any opening
in the roof for stacks or other purposes, or in any way alter the walls, or
structure of the demised premises without the prior written consent of the
Landlord, which consent can be arbitrarily withheld;
1.20.1 It will, during the whole of the Term, pay all premiums with respect
to insurance to be placed by the Landlord and described as follows:
(a) Property of Every Description (Building and Equipment) against the
perils of "All-Risks" and to be insured for the Replacement Value, without
allowance for depreciation and Stated Amount;
(b) "Rental Income" for the gross annual rental income on "All-Risks" basis;
(c) "General Liability Insurance" on a Comprehensive form against claims for
Personal and Bodily Injury and Death and/or Property Damage occurring upon or
about the demised premises and for a limit not less than $2,000,000.00 inclusive
for any one occurrence;
(d) Such other insurance coverage or coverages as the Landlord deems
necessary or as may be required by its mortgagee(s);
The Landlord shall obtain its insurance from insurers offering competitive
pricing. All such insurance coverages shall be kept and maintained or amended
by the Landlord, and in no event shall the coverage be less than the amount
required by any institutions then holding mortgages on the demised premises.
The Tenant shall pay to the Landlord, as additional rent, together with the
monthly consecutive payments of base rental and estimated taxes hereinbefore
provided for, an amount equal to one-twelfth of the amount of the insurance
premiums payable to maintain the insurance-coverages herein contemplated, and if
on receipt of the invoice or invoices for the insurance premiums it shall be
made to appear that the monthly payments on account thereof so paid by the
Tenant to the Landlord shall be less than sufficient to pay such invoice or
invoices, then the Tenant shall forthwith pay to the Landlord such additional
sums as may be required in order that, out of such monthly and additional
payments, the Landlord shall have received the whole of the proportionate share
of the insurance premiums payable by the Tenant hereunder. The Tenant shall not
do or permit to be done any act or thing whereby insurance coverages, or any of
them hereinbefore contemplated, -may be increased in premium or cancelled by the
insurer, or the demised premises shall be rendered uninsurable, and if by reason
of any act done or permitted or omission, as the case may be, by the Tenant, the
said insurance coverages, or any of then shall be increased in premium, then the
Tenant shall be liable to pay all of such increase in premium, on demand with
respect to the entire coverages, and if the demised premises shall be rendered
uninsurable, or if the said insurance coverages, or any of them, shall be
cancelled by reason of any act or omission, as the case 'maybe, by the Tenant,
and shall not be susceptible of being replaced, then the Landlord, after giving
the Tenant at least fourteen (14) days within which to replace the insurance
coverage or coverages shall, in its absolute discretion, have the right to
determine that the Term has expired and in such event the Tenant shall deliver
up possession of the demised premises as if the Term had expired. The
Landlord-s insurance policies shall contain a waiver of subrogation in favour of
the Tenant if such waivers are available from time to time at competitive costs
in accordance with insurance industry practice;
1.20.2 Provided that no act required to be done by the Tenant nor any
payment required to be made by the Tenant, including reimbursements of insurance
premiums paid by the Landlord, shall relieve the Tenant from any liability for
damage incurred by the Landlord as a result of any act or omission of the
Tenant;
1.20.3 Provided that where any of the insurance premiums
described in this paragraph 1.20 are with respect to the whole Building and/or
the New Building, the Tenant shall pay only its proportionate share thereof
being the actual area of the demised premises divided by the actual area of all
rented floor space in the Building and/or the New Building, as the case may be;
1.21 The Tenant covenants to insure and keep insured during the whole of the
Term, with an insurance company or companies in good standing and upon terms and
conditions all satisfactory to the Landlord:
(a) All parties hereto on a Comprehensive Form for bodily injury and
property damage, general liability coverage arising out of the use, maintenance
or repair of the demised premises and/or the business of the Tenant or any
subtenant, licensees or occupiers of the demised premises; such insurance shall
be for a limit of not less than $5,000,000.00 inclusive for any one occurrence,
and such higher limits as the Landlord acting reasonably, or the Landlord's
mortgagee requires from time to time, and contain a severability of interest
clause, and a cross liability clause;
(b) Glass Coverage for the replacement of all glassbroken, cracked or
damaged in, on, or about the demised premises;
(c) Any other form of insurance that the Landlord or any mortgagee may
reasonably require from time to -time in form, amounts and for insurance risks
acceptable to the Landlord and any mortgagee.
The Tenant covenants and agrees to provide the Landlord with evidence of
insurance as required under this provision. such evidence shall be by way of a
certified copy of the insurance policy at such time or times as the Landlord may
require. The Tenant agrees to provide same to the Landlord forthwith after
notice has been given by the Landlord to the Tenant of its request. The
Tenant's insurance policies shall contain a waiver of subrogation in favour of
the Landlord if such waivers are available from time to time at competitive
costs in accordance with insurance industry practice;
1.22 Not to use any outside garbage or other containers or allow any ashes,
refuse, garbage or other loose or objectionable ,material to accumulate in or
about the demised premises, the Building or the New Building, and not to store
or cause to be stored outside of the demised premises any of its inventory,
stock-in-trade or raw materials. If the appropriate by-laws permit outside
garbage containers, any such containers to be used by the Tenant shall be
securely closed on top, shall be provided at the Tenant's expense and shall be
located only where authorized by the Landlord;
1.23 To pay to the Landlord as additional rent its Proportionate Share of
Common Area and Operating Costs. "Common Area and Operating Costs" means,
subject to the exclusions hereinafter mentioned, the total without duplication
of all costs, charges and expenses related to the Common Areas of the Building
in each calendar year during the Term, including without limiting the generality
of the foregoing:
(a) the cost of gas, oil, power, electricity, water, sewer, communications,
cleaning, janitorial and all other utilities and services;
(b) the cost of servicing and maintaining sewer and drains, lighting,
heating, ventilating, air conditioning (if any), all other fixtures and
equipment in the Building, the New Building and for the Common Areas;
(c) the cost of cleaning, removing snow and garbage from, servicing,
maintaining, operating, repairing, replacing in lieu of repairing, supervising
and policing wages (including statutory or usual fringe benefits) and fees to
independent contractors relating thereto;
(d) the cost of all service and maintenance of the Building and the New
Building (other than structural repair of the roof, exterior walls and
foundations of the Building and the New Building) loading docks, parking areas,
landscaped areas, curbs, sidewalks and walkways including reasonable
depreciation on items subject to periodic replacement and maintenance;
(e) periodic painting of the exterior of the Building, and the New Building,
common hallways, passageways and lobbies, parking lot lines and lamp standards;
(f) the cost of servicing and maintaining directory signs;
(g) its Proportionate Share of all property management fees (not to exceed
4% of the basic rent) in respect of the Building and the New Building; these
management fees are only those costs associated with the collection of rents
attending to repairs, and the payment of direct operating costs;
(h) all other costs, expenses and charges incurred by the Landlord with
respect to operating the Building from time to time;
Notwithstanding the foregoing, there shall be excluded in the calculating of
Common Area and Operating Costs, realty taxes, bulk metered electric power and
gas and other items of cost that would otherwise be included except for this
provision that are otherwise payable by the Tenant pursuant to express
provisions of this Lease relating thereto. Common Area and operating Costs
shall not include costs for which the Landlord is reimbursed by the proceeds of
insurance claims on insurance policies required to be maintained by the Landlord
pursuant to this Lease, to the extent of such reimbursement. Common Area and
Operating Costs will be costs necessarily incurred for buildings of the nature
and kind of the Building and the New Building and goods and services will be
obtained at competitive market prices;
"Common Areas" means all the areas common to the entire Building, and the New
Building, including parking areas, landscaped areas, common hallways and
lobbies, roadways, curbs, walkways and sidewalks, washrooms, service areas and
all facilities and equipment common to the entire Building and the New Building
and the administration and maintenance thereof, including electrical
installation, plumbing and drainage equipment (other than in respect of
washrooms within rented or rentable premises) the general signs together with
such other areas or facilities presently or hereinafter installed or provided
for the use and enjoyment of the entire Building and/or the New Building by its
tenants, their employees, customers and invitees in common with others entitled
and to the maintenance and administration of the entire Building and the New
Building;
1.24 To save harmless the Landlord from any and all liability, costs,
claims, demands or actions for damages, injury or loss suffered or sustained by
any person or persons in or about the demised premises or any part thereof, and
for damage or injury to the property of any person or persons occasioned by the
Tenant, its customers, employees, servants or agents, or by their neglect,
default or misconduct or occasioned by reason of any other cause or
matter-whatsoever, and in particular, but without in any way limiting the
generality of the foregoing, the Landlord shall not be liable for any damage to
any such property or persons caused by steam, water, rain, or snow which may
leak into, issue or flow from any part of the demised premises or from the
water, steam, sprinkler or drainage pipes or plumbing works of the same or from
any other place or quarter or for any damage caused by, or attributable to, the
condition or arrangement of any electrical or other wiring, or from any other
cause whatsoever and the covenants of indemnity herein contained in respect of
damage to property, injury or death occurring during the term of this Lease
shall survive any termination of this Lease, anything herein to the contrary
notwithstanding. Provided however that this clause shall not apply to any
claims arising out of the Landlord's neglect, default or misconduct;
1.25 Not to bring upon the demised premises or any part thereof any
machinery, equipment, article or thing that by reason of its weight, size or use
might damage the demised premises and/or the Building and will not at any time
overload the floors of the demised premises, and will not cause to be stored or
piled any machinery, equipment, article or thing in such a manner as to cause
damages to the demised premises and if any damage is caused to the demised
premises or the Building by any machinery, equipment, article or thing so stored
or piled or by overloading or by any act, neglect or misuse on the part of the
Tenant or of its servants, agents or employees or any person having business
with the Tenant, the Tenant will, at the option of the Landlord, forthwith
repair the same or pay to the Landlord the cost of making good same. In the
event of any default by the Tenant under this provision, the Landlord shall be
entitled to repair the damage at the cost of the Tenant, (and at the Landlord's
sole option) and the Tenant shall forthwith pay the cost of such repairs upon
demand as additional rent;
1.26 The Tenant shall, from time to time, at the request of the Landlord,
produce to the Landlord satisfactory evidence of the due payment by the Tenant
of all payments required to be made by the Tenant under this Lease;
1.27 Not to place or attach anything to the outside of the windows or the
exterior of the demised premises without the prior written consent of the
Landlord, which consent may not unreasonably be withheld. No air-conditioning
equipment shall be placed in the windows or shall extend from the exterior of
the demised premises without the consent in writing of the Landlord, which
consent may be arbitrarily withheld. The Tenant will have the right to place
reasonable signage on the exterior of the premises;
1.28 If any Builders Liens or other liens or Orders for the payment of money
shall be filed against the demised premises by reason, or arising out of the any
labour or material, work or service furnished to the Tenant or to anyone
claiming through the Tenant, the Tenant shall, within fifteen (15) days after
notice to the Tenant of the filing thereof, cause the same to be discharged.
The Tenant shall defend all suits to enforce such lien or order whether against
the Tenant or the Landlord at the Tenant's own expense. The Tenant hereby
agrees to indemnify the Landlord against any expense or damage as a result of
such lien or Order;
1.29.1 It is agreed and understood that the sprinkler system (if any), in
the demised premises is for ordinary hazard use only-and if the District of
Delta or other government authority determines at any time during this Lease or
any renewal hereof that the sprinkler system is not satisfactory for the use of
the demised premises by the Tenant, including any assignee or sub-tenant,
including the use contemplated by this Lease, then the Tenant shall forthwith
upon demand pay to the Landlord the entire cost of upgrading the sprinkler
system to the standards required because of such use, and such monies shall be
payable to the Landlord as additional rental and in advance of such work being
performed. The Tenant further covenants to allow the Landlord and its servants,
agents, employees and representatives to enter the demised premises to effect
such alterations to the sprinkler system and the Landlord shall not be
responsible to the Tenant for any disturbance or business interruption which may
be caused. The Tenant further covenants that in the event the sprinkler system
at any time malfunctions the Tenant will immediately notify the Landlord. The
Tenant shall be fully responsible for all increases in insurance premiums caused
in and about the demised premises until the alterations have been completed;
1.29.2 In the alternative, if the Landlord in its sole discretion does not
desire to make such alterations, then the Tenant shall be obliged to pay all
insurance premium increases noted above as additional rental forthwith upon
demand. Payment of such increases shall be made at such time or times as the
Landlord requires;
1.29.3 In the further alternative, the Landlord in its sole discretion may
cause the upgrading of the sprinkler system to be performed by the Tenant and
the Tenant agrees to do such work upon receiving notice from the Landlord. Such
work shall be completed by the Tenant not later than two (2) months after
receipt of notice from the Landlord. The Tenant agrees that it will take
instructions from the Landlord as to the nature of the upgrading and will
utilize the services of such contractor as the Landlord may require;
1.29.4 The Tenant covenants and agrees not to shut down the sprinkler system
without the prior written consent of the Landlord, which consent may be
arbitrarily withheld;
1.30 The Landlord and its agents, servants, employees and representatives
shall have the right to inspect the demised premises at any reasonable time or
times for the purpose of determining whether the operation of the Tenant
complies with the above provisions. In the event that the Landlord determines
in its sole discretion that the Tenant is in breach of the above covenant, then
the Landlord shall provide the Tenant with notice in writing of the breach and
the Tenant shall within five (5) days of receipt thereof commence to rectify
such breach at the Tenant's expense. In the event that the Tenant does not
commence to rectify such breach within five (5) days, then the Landlord at its
option and in its sole discretion may terminate this Lease without any further
notice or may rectify such breach at the cost of the Tenant, and the Tenant
shall forthwith upon demand reimburse the Landlord for the cost of rectification
and such sum shall be considered to be additional rental under this Lease and
collectible as additional rental. If the Tenant is prevented from commencing to
rectify the said breach within five (5) days by a cause beyond the Tenant's
control, then the time to commence rectification will be extended accordingly.
Provided further that in the event the Tenant takes action to rectify such
breach as noted above, the Tenant shall complete such rectification not later
than thirty (30) days after receipt of notice given above by the Landlord
subject to any extension due to a cause beyond the Tenant's control. In every
event, the Tenant shall be fully responsible for all damage which may be caused
as a result of the breach of this clause;
1.31 The Tenant agrees that the rules and regulations (if any) accompanying
this Lease with such reasonable variations, modifications and additions as shall
from time to time be made by the Landlord and any other and further reasonable
rules and regulations that may be made by the Landlord and communicated to the
Tenant in writing-shall be observed and performed by the Tenant and its agents,
servants and employees and all such rules and regulations now in force or
hereafter put in force shall be read as forming part of the terms and conditions
of this Lease as if same were embodied herein;
1.32.1 The Tenant shall not permit any vehicles belonging to the Tenant to
cause obstruction on any roads, driveways or common Areas in the neighbourhood
of the Building or the New Building, or prevent the ingress and egress to any
other tenants of the Building or the New Building and other buildings, and will
use its best endeavours to ensure that persons doing business with the Tenant
and its servants and workmen shall not permit any vehicles to cause such
obstruction as aforesaid;
1.32.2 The Tenant shall not stack any materials on the lands on which the
Building is situated, adjacent driveways, or common Areas and shall cause no
obstruction to vehicles operating on the said driveways and adjacent parking and
Common Areas;
1.33 The Tenant shall not at any time during the Term permit any sale by
auction to be held within the demised premises or upon the lands or any-part
thereof;
1.34 Notwithstanding anything to the contrary set forth in this Lease, the
additional rent payable by the Tenant for the period
shall be per square foot of the premises plus Goods and
services Tax thereon;
ARTICLE II
Additional Covenants
2.0 PROVIDED that the Tenant is not in default hereunder it may remove its
trade fixtures at the expiration of the Term, provided that the Tenant shall not
remove or carry away from the demised premises any part of the building, or any
plumbing, heating, ventilating, air conditioning (if any) or lighting equipment,
wiring or electric panels and services or other building services and equipment;
and provided that the Tenant shall repair any damage occasioned by the
installation or removal of its trade fixtures. Should the Tenant, at the
expiration of the term hereof, not have removed from the demised premises its
fixtures, plant, machinery and equipment then the Landlord may, at its option,
remove the same, the cost of such removal, the making good of any damage which
may be occasioned to the demised premises and/or any loss or damage which the
Landlord may suffer as a result of the Landlord removing same according to the
terms of this Lease, shall be borne by the Tenant and shall become immediately
due and payable by the Tenant to the Landlord as rent in arrears. If the
Landlord elects not to remove the Tenant's fixtures as it is entitled to do,
then the ownership of the fixtures shall pass to the Landlord free of any lien
or claims, and the Tenant agrees to execute an acknowledgement to this effect if
required by the Landlord;
2.1 PROVIDED that if during the Term any of the goods and chattels of the
Tenant shall be at any time seized or taken in execution or in attachment by any
creditor of the Tenant or if a Writ of Execution shall be issued against the
goods or chattels of the Tenant, or if the Tenant shall execute any chattel
mortgage or xxxx of sale of any of its goods or chattels other than in the
ordinary course of business, or if a Receiver is appointed or if the Tenant
shall make any assignment for the benefit of creditors or commit any other act
of bankruptcy as defined in The Bankruptcy and Insolvency Act of Canada or any
amendment thereto or becoming a bankrupt or insolvent shall take the benefit of
any Act which may be in force for bankrupt or insolvent debtors, or shall
attempt to abandon the demised premises or to sell or dispose of its goods or
chattels, so that there would not, in the event of such sale or disposal be, in
the opinion of the Landlord, a sufficient distress on the demised premises for
the then accruing rent and monies accruing hereunder as rent, then the current
month's rent and any arrears of rent together with the rent for the three months
next ensuing, (and for the purpose hereof rent shall include all monies
designated to be paid as additional rent, including, but without limiting the
generality of the foregoing, monthly instalments on account of taxes, insurance
premiums and maintenance of the demised premises) shall immediately become due
and payable and the Term shall at the option of the Landlord forthwith become
forfeited and determined, in which event the Landlord may re-enter and take
possession of the demised premises as though the Tenant, or any occupant or
occupants of the demised premises, was or were holding over after the expiration
of the term without any right whatsoever, provided that no action by the
Landlord in so doing shall be deemed to relieve the Tenant of its obligations
for the payment of base rental and additional rent or any other monies payable
hereunder. Provided however that if the Tenant is contesting in good faith any
act which under the terms of this clause would constitute a ground for re-entry,
the Landlord may not re-enter while such act is being contested, provided that
the Tenant is current in payment of base rental and additional rent and, in the
case of the appointment of a Receiver, Receiver-Manager, Liquidator or Trustee
in Bankruptcy, provided that the Tenant posts with the Landlord a sum equal to
three (3) months rent;
2.2 Provided that in the case of removal by the Tenant of its goods and
chattels from the premises, the Landlord may follow the same for thirty (30)
days, in the same manner as is provided for in the Rent Distress Act and
notwithstanding anything contained in the Rent Distress Act or any other statute
or any other subsequent legislation, none of the goods or chattels of the Tenant
at any time during the continuance of the Term on the demised premises shall be
exempt from levy by distress for rent in arrears, and that upon any claim being
made for any exemption by the Tenant on a distress made by the Landlord this
covenant -may be pleaded as an estoppel against the Tenant in any action brought
to test the right to the levying upon any such goods, the Tenant waiving as it
hereby does any exemptions from distress ,which might have accrued to the Tenant
under the provisions of the Rent Distress Act,
2.3 In the event that the Tenant shall be in default of any of its covenants
hereunder, in addition to any other right which the Landlord may have hereunder,
the Landlord may give to the Tenant notice in writing stating the default with
reasonably sufficient particulars, and requiring that the said default be
remedied and that if such default is not remedied by the Tenant within thirty
(30) days after the receipt of such notice, the Landlord may at its option
either enter into and upon the demised premises or any part thereof and have
again, repossess and enjoy the same as of its former estate and this Lease shall
thereupon terminate, or itself take such steps and do or cause to be done such
things as may be necessary to remedy and correct such default. Provided however
that if the Tenant has commenced and is diligently proceeding to remedy such
default, the Landlord's right to terminate this Lease will not be effective
while such default is being remedied, provided that the Tenant is current in its
payment of base rental and additional rent. Written notice shall not be
required in the event of non-payment of base or additional rental. Provided
further that in the event that the Landlord shall be entitled to, and shall
elect to make a re-entry as hereinbefore provided for, any re-entry or other
action so taken shall not be deemed to relieve the Tenant of its obligation to
pay rent and other monies payable as rent hereunder and such rent and other
monies payable as rent in accordance with the provisions hereof shall continue
to accrue and be payable until such time as the Landlord is able to re-let the
premises, or otherwise deal with the same in such manner that it did not sustain
any loss should the Tenant thereafter fail to pay the rent and other monies
payable as rent or otherwise under this Lease. Provided further that in
addition to all other rights hereby reserved to it, the Landlord shall have the
right to re-enter the demised premises as the agent of the Tenant either by
force or otherwise, without being liable for any prosecution therefor, and to
re-let the whole or any portion of the demised premises for any period equal to
or greater or less than the remainder of the then-current term of the tenant and
to receive the rent therefor, said rent to be any sum which it may deem
reasonable, to any tenant which it may deem suitable and satisfactory, and for
any use and purpose which it may deem appropriate, and in connection with any
such lease, the Landlord may make such changes in the character of the
improvements of the demised premises as the Landlord may determine to be
appropriate or helpful in effecting such lease, but in no event shall the
Landlord be under any obligation to re-let the demised premises in whole or in
part for any purpose which the Landlord may regard as injurious to the demised
premises, or to any tenant which the Landlord, in the exercise of reasonable
discretion, shall deem to be objectionable or to apply any rent derived from so
re-letting the demised premises upon account of the rent due hereunder and the
Tenant shall remain liable to the Landlord for the deficiency, if any, it being
the intention hereof that nothing herein contained and no entry made by the
Landlord hereunder shall in any way release the Tenant from the payment of the
rent hereby reserved during the Term beyond such sum as may be realized by the
Landlord by such re-letting or by the proceeds of any distress made by the
Landlord against the Tenant and provided that the Landlord shall not in any
event be required to pay to the Tenant any surplus of any sums received by the
Landlord on a re-letting of the demised premises in excess of the rent reserved
hereunder;
ARTICLE III
Landlord's Covenants
3.0 The Landlord covenants with the Tenant for quiet enjoyment. and to make
necessary structural repairs to the roof, exterior walls and foundations of the
Building save and except damage caused by the negligence or wilful act of the
Tenant,, its servants, agents, employees or invitees;
3.1 The Landlord covenants that the Tenant shall have the right from time to
time to make alterations and changes in the interior of the demised premises as
it may find necessary for its purposes and at its own expense, provided that
plans for such alterations or changes shall first be delivered to the Landlord
and the consent of the Landlord in writing shall first be obtained. Such
consent may not be unreasonably or arbitrarily withheld. Provided that upon the
termination of this Lease, the Tenant, if requested by the Landlord, shall
restore the interior of the demised premises to its former condition immediately
prior to the installation of such alterations or changes, including the
restoration of such standard fixtures as may have been installed by the
Landlord, or alternatively, to install such comparable fixtures and materials
which may then be in use and if not so requested, any such changes or
alterations shall become the property of the Landlord. The Landlord reserves
the right before approving any such alterations and changes to require the
Tenant to furnish it a good and sufficient bond in an amount sufficient to save
the Landlord harmless from the payment of any claims either by way of damages or
liens. Whenever the Tenant makes any repairs, alterations or improvements, it
shall only use union labour of a recognized building trade if so required by the
Landlord, and if required, the Landlord's contractors. The Landlord shall be
permitted to post signs on the demised premises pursuant to the Builders Lien
Act disclaiming responsibility for payment of such alterations, changes or
improvements. Provided further that the Tenant shall be permitted, at its
expense, to construct an outside playground area, the design and location of
which is subject to the Landlord's prior written approval.
3.2 The Landlord warrants that all electrical outlets, heating systems,
plumbing and lighting will be in good working order on the Commencement Date.
3.3 The Landlord shall, at its expense, cause the demised premises to be
partitioned from the remainder of the warehouse area of the Building and cause a
second stairway to be constructed all in accordance with the building code
currently in effect. The Landlord further covenants, at its expense, to remove
all debris resulting from such construction from the demised premises.
ARTICLE IV
Damage
4.0 Provided and it is hereby expressly agreed that if and whenever during
the Term, the demised premises shall be destroyed or damaged by fire, lightning,
tempest or by any of the perils insured against under the preceding provisions
hereof, then and in every such event:
(a) If the damage or destruction is such that the demised-premises are
rendered wholly unfit for occupancy or it is impossible or unsafe to use and
occupy them and if in either event the damage, in the reasonable opinion of the
Landlord's architect, to be given to the Tenant within thirty (30) days of the
happening of such damage or destruction, cannot be repaired with reasonable
diligence within 180 days from the date the Landlord's architect has given its
opinion, then the Landlord or the Tenant may within five (5) days next
succeeding the giving of the Landlord's architect's opinion as aforesaid
terminate this Lease by giving notice to the other in writing of such
termination, in which event this Lease and the Term shall cease and be at an end
as of the date of such destruction or damage and the rent and all other payments
for which the Tenant is liable under the terms of this Lease shall be
apportioned and paid in full to the date of such destruction or damage. In the
event that neither the Landlord nor the Tenant so terminate this Lease,. then
the Landlord shall repair the said building with all reasonable speed and the
rent hereby reserved shall xxxxx from the date of the happening of the damage
until the damage shall be made good to the extent of enabling the Tenant to use
and occupy the demised premises;
(b) If the damage be such that the demised premises are wholly unfit for
occupancy, or it is impossible or unsafe to use or occupy them, but if in either
event the damage, in the reasonable opinion of the Landlord's architect, to be
given to the Tenant within thirty (30) days from the happening of such damage,
can be repaired with reasonable diligence within 180 days from the date the
Landlord's architect has given its opinion, then the rent hereby reserved shall
xxxxx from the date of the happening of such damage until the damage shall be
made good to the extent of enabling the Tenant to use and occupy the demised
premises and the Landlord shall repair the damage with all reasonable speed;
(c) if, in the reasonable opinion of the Landlord's architect the damage can
be made good as aforesaid within 180 days from the date the Landlord's architect
has given its opinion, and the damage is such that the demised premises are
capable of being partially used for the purposes for which they are hereby
demised, then until such damage has been repaired the rent shall xxxxx in the
proportion that the part of the demised premises which is rendered unfit for
occupancy bears to the whole of the demised premises, and the Landlord shall
repair the damage with all reasonable speed.
ARTICLE V
Signs
5.0 The Landlord shall have the right at any time during the Term to place
upon the demised premises, the Building and/or the New Building, a notice of
reasonable dimensions and reasonably placed so as not to interfere with the
Tenant's business, stating that the lands, the Building and/or the New Building
or any portion thereof are for sale, and at any time during the last six (6)
months of the Term that the demised premises are to let, and the Tenant shall
not remove such notices, or permit the same to be removed.
5.1 No signs, sign boards, posters, flags, advertisements or other
decorations on the exterior of, or protrusions from, the demised premises or the
Building shall be erected, placed or displayed unless first approved in writing
by the Landlord, such approval not to be unreasonably withheld.
5.2 Any signs, sign boards, posters, flags, advertisements, decorations
or-protrusions permitted by the Landlord shall remain the property of the Tenant
and shall be removed by it upon the termination of the Term, following which the
demised premises shall be restored to their original condition. The Tenant
shall indemnify the Landlord against any loss or damage caused to any person,
firm, corporation or thing, as a result of the placing or use of any sign,, sign
board, poster, flag, advertisement or protrusion in or about the demised
premises.
ARTICLE VI
Definition
6.0 Words importing the singular number only shall include the plural and
vice-versa, and words importing the masculine gender shall include the feminine
gender and words importing persons shall include firms and corporations and vice
versa.
ARTICLE VII
Additional Terms
7.0 It is the intention of the parties that this Lease shall be a completely
carefree net lease for the Landlord and that the rent herein provided to be paid
shall be net and carefree to the Landlord and clear of all taxes, costs and
charges arising from or relating to the demised premises and except as otherwise
provided in this Lease and except for any deficiencies in the Landlord's work as
described in the Offer to Lease, that the Tenant shall pay all charges,
impositions and expenses of every nature and kind relating to the demised
premises, including legal fees incurred by the Landlord to deal with any default
of the Tenant, and the Tenant hereby covenants with the Landlord accordingly.
This clause does not relieve the Landlord from his responsibilities and
obligations contained elsewhere in this lease.
7.1 The failure-of the Landlord to insist upon a strict performance of any
of the agreements, terms, covenants and conditions hereof shall not be deemed to
be a waiver of any rights or remedies that the Landlord may have and shall not
be deemed to be a waiver of any subsequent breach or default in any of such
agreements, terms, covenants and conditions. All rights and powers reserved to
the Landlord hereunder may be exercised either by the Landlord or its agents or
representatives from time to time and all such rights and powers shall be
cumulative and not alternative.
7.2 If the Tenant fails to pay any taxes, rates, insurance premiums, or
charges which it has herein covenanted to pay, the Landlord may pay them and
charge the sums paid to the Tenant who shall pay them forthwith on demand and
the Landlord, in addition to any other remedies, shall have the same remedies
and may take the same steps for the recovery of all such sums as if they were
base rental in arrears. All arrears of base rental and any monies paid by the
Landlord hereunder, or owing by the Tenant, shall bear interest at the rate of
two (2%) percent above the Prime Rate to be determined and calculated on the
first day of each 'month, from the time such sums become due until paid to the
Landlord.
7.3 In the event that the Tenant takes possession of the demised premises
prior to the commencement date of the within Lease, then the Tenant shall pay a
pro rata portion of the monthly instalments of rent and additional rent hereby
reserved for the period from the date it takes possession of the demised
premises until the commencement date of this Lease.
7.4 All payments required to be made by the Tenant herein shall be made to
the Landlord at the Landlord's address as set out herein, or to such agent or
agents of the Landlord or at such other place as the Landlord shall hereafter
from time to time direct in writing.
7.5 The Tenant shall, whenever reasonably so required by the Landlord,
consent to and become a party to any instrument relating to this Lease which may
be required by or on behalf of any purchaser, mortgagee or the-Landlord from
time to time and to postpone its interest in the demised premises to any such
party. Such postponement will be effective provided the Landlord uses its best
efforts to obtain a non-disturbance agreement from such party in favour of the
Tenant.
7.6 No acceptance of rent subsequent to any breach or default hereunder by
the Tenant shall be taken to operate a waiver of such breach or default or
affect the rights of the Landlord hereunder, and the failure of the Landlord to
insist upon the strict performance of any of the agreements, terms, covenants
and conditions hereof shall not be deemed a waiver of any rights or remedies
that the Landlord may have and shall not be deemed a waiver of any subsequent
breach or default in any of such agreements, terms, covenants and conditions.
7.7 It is understood and agreed that whenever and to the extent that the
Landlord shall be unable to fulfil or shall be delayed or restricted in the
fulfilment of any obligation hereunder in respect of the supply or provision of
any service or utility or the doing of any work or the making of any repairs by
reason of being unable to obtain the material, goods, equipment, service or
labour required to enable it to fulfil such obligation, or by reason of any
Statute, Law or Order in Council, or any regulation or order passed or made
pursuant thereto, or by reason of the order or Direction of any Administrator,
Comptroller, Board, Governmental Department or Officer, or other authority,
required thereby, or by reason of any other cause beyond its control, whether of
the foregoing character or not, the Landlord shall be relieved from the
fulfilment of such obligation and the Tenant shall not be entitled to
compensation for any inconvenience, nuisance or discomfort thereby occasioned.
The Landlord shall not be relieved from the fulfilment of such obligation by
reason of shortage of money.
7.8 Taxes, local improvement rates, insurance premiums, public utility
charges and other adjustable items in respect of those portions of calendar
years, if any, prior and subsequent to the Term shall be adjusted between the
Landlord and Tenant at the commencement of the Term and again at the termination
of this Lease, to the intent that the burden of any such charges shall be borne
by the Landlord until the commencement of this Lease and by the Tenant
thereafter until it shall deliver up possession of the demised premises in
accordance with the provisions hereof upon the termination of this Lease or of
any holding over hereunder.
7.9 Any notice, request or demand herein provided or permitted to be given
by the Tenant to the Landlord shall be sufficiently given if mailed in
Metropolitan Vancouver, postage prepaid, registered or delivered to the Landlord
addressed to it at:
00000 Xxxxxxxxx Xxxxx, Xxxxxxxx, X.X., X0X 0X0
and any notice herein provided or permitted to be given by the Landlord to the
Tenant shall be sufficiently given if mailed in Metropolitan Vancouver, postage
prepaid, registered or delivered to the Tenant addressed to it its address
appearing on page one (1) hereof. Any such notice given as aforesaid shall be
conclusively deemed to have been given on the date on which such notice is
delivered if delivered, or on the fifth business day following the day upon
which such notice is mailed if mailed as aforesaid. Either party may at any
time give notice in writing to the other of any change of address of the party
giving such notice, and from and after the giving of such notice, the address
therein specified shall be deemed to be the address of such party for the giving
of notices hereunder. The word "notice" in this paragraph shall be deemed to
include any request, statement or other writing in this Lease provided or
permitted to be given by the Landlord to the Tenant or vice versa.
7.10 Provided that should the Tenant remain in possession of the demised
premises after the termination of the Term, without other special agreement, it
shall be at a monthly base rental equal to the base rental and additional rent
payable during the last 'month of the Term, multiplied by two, payable on the
first day of each and every month and subject in other respects to the terms of
this Lease, including those provisions requiring the payment of additional rent
in monthly instalments.
7.11 The Tenant agrees that no representation or promise with respect to the
demised premises has been made by or on behalf of the Landlord except as are
herein expressly set forth herein and in the Offer to Lease between the parties
dated which shall survive the execution and delivery of this Lease.
7.12 The parties hereto agree that time shall be of the essence of this
Lease, save as is herein specifically set out.
7.13 This Lease shall be construed under and in accordance with the laws of
the Province of British Columbia and it is hereby agreed that British Columbia
shall be the forum for any legal proceedings in connection with the Lease.
7.14 The Landlord at any time and from time to time may sell, transfer,
lease, assign or otherwise dispose of the whole or any part of its interest in
the demised premises or subdivide the :Lands on which the demised premises are
situate or enter into any mortgage of the whole or any of its interest in the
demised premises and the Tenant covenants and agrees to co-operate and sign such
documents as the Landlord may reasonably request with respect to same. If the
party acquiring such interest shall have agreed to assume and so long as it
holds such interest, to perform each of the covenants, obligations and
agreements of the Landlord under this Lease in the same manner and to the same
extent as if originally named as the Landlord in this Lease, the Landlord shall
thereupon be released from all of its covenants and obligations under this
Lease.
7.15 The Tenant shall, if requested to do so by the Landlord, agree with any
mortgagee of the whole or any part of the demised premises to attorn to and
become tenant of such mortgagee if the mortgagee shall become a mortgagee in
possession, if such mortgagee shall agree that so long as the Tenant pays the
rent and observes and performs the covenants and provisions herein contained on
its part to be performed, the Tenant shall be entitled to hold, occupy and enjoy
the demised premises, subject to any rights the mortgagee may have as a
landlord, free from any interference by the mortgagee or any person claiming by
or through the mortgagee.
7.16 This Lease is and shall be subject and subordinate to all mortgages,
charges, deeds of trust and financing of the Landlord and all indentures
supplemental thereto which may now or hereafter affect the lands on which the
demised premises are situate and to all renewals, modifications, consolidations,
replacements and extensions thereof. The Tenant agrees to execute promptly any
document in confirmation of such subordination as the Landlord may request in
order to give effect to the foregoing provisions of this paragraph provided that
the Landlord uses its best efforts to obtain a non-disturbance agreement from
such lender in favour of the Tenant.
7.17 Within ten (10) days of being requested to do so by the Landlord, the
Tenant shall execute and deliver to the Landlord a statement in writing
certifying that the Lease is unmodified (or, if modified, stating the
modifications), that it is in full force and effect, the amount of the base
rental and additional rent paid hereunder, the dates to which such rents and
other charges hereunder have been paid, by instalment or otherwise, and whether
there is any existing default on the part of the Landlord of which the Tenant
has notice.
7.18 The Tenant covenants and agreed it will not register this Lease or
notice thereof in any Registry or Land Title Office prior to the Landlord
obtaining permanent financing, or the occupancy date, which ever is earlier.
7.19 If any provision of this Lease is determined by a Court to be illegal
or unenforceable, it shall be considered to be separate and severable from this
Lease.
7.20.1 Provided it is mutually agreed and understood that if the Tenant duly
and regularly pays, the rent and performs all of the provisions and agreements
contained herein on the part of the Tenant to be performed, and provided further
that the Tenant is not habitually in default under-the terms of this Lease and
is not in default at the time of the exercise of the option herein and provided
always that the Tenant shall have given to the Landlord not less than one
hundred and twenty (120) days notice in writing before the expiration of the
Term requesting a renewal of this Lease, the Landlord shall grant to the Tenant
a renewal of this Lease for a further period of five (5) years, upon the same
terms and conditions as contained herein save as to the rental rate and save as
to any further right of renewal. The rental rate for the renewal period shall
be at the then current market rate for premises of a similar size, quality and
location and as mutually agreed between the Landlord and the Tenant. In the
event that the Landlord and the Tenant are unable to agree upon the rental rate
for such renewal period by three (3) months prior to the expiry of the Term, the
matter shall be submitted to arbitration by notice given by either party to the
other. Upon such notice being given, the dispute shall be determined by the
award of a single arbitrator appointed pursuant to the commercial Arbitration
Act of British Columbia. Each party shall pay its own costs and shall share
equally the costs of arbitration. The award and determination of the arbitrator
shall be final and binding upon both parties hereto and each party agrees not to
appeal any such award or determination.
7.20.2 In no event shall the rental for the renewal period be less than the
rental payable during the Term.
7.20.3 If the award of the arbitrator is not given before the commencement
date of the renewal period, then the Tenant shall commence paying rent at the
market rate as determined by the Landlord, which shall be adjusted forthwith
after the award of the arbitrator has become final and binding, to be calculated
from the commencement date of the renewal period.
7.20.4 Interest at the rate set out herein shall be calculated monthly on
the difference between the base rental paid by the Tenant and the actual amount
awarded by the arbitrator and shall be paid forthwith upon demand when the
arbitrator's decision has been made.
7.20.5 The renewal of lease form shall be prepared by the Landlord at the
Tenant's cost and the Tenant covenants and agrees to pay to the Landlord said
costs forthwith upon demand.
7.21 The Tenant intends to commence making the Tenant's improvements on
(in accordance with the requirements of section 3.1 hereof). During the period
inclusive no base rental or additional rent will be payable by the Tenant.
Prior to occupying the premises (which includes occupying the premises for the
purpose of making the Tenant's improvements) the Tenant shall provide the
Landlord with proof of insurance in accordance with section 1.21 hereof.
7.22 The Tenant acknowledges that the premises are leased accepting all
zoning and other land use restrictions and it is the Tenant's sole obligation to
ensure that the intended use is permitted.
7.23 The Deposit of held by the Tenant's agent
pursuant to the Offer to Lease between the parties dated
representing the estimated first and last months base rental and Goods and
Services Tax thereon shall be paid to the Landlord on
prior to the Tenant occupying the premises.
7.24 THIS INDENTURE and everything herein contained shall extend to and bind
and enure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and/or assigns, subject to the consent of
the Landlord being obtained as hereinbefore provided to any assignment, sublease
or parting with possession of the demised premises by the Tenant.
IN WITNESS WHEREOF the parties hereby have executed this Lease as of the
day and year first above written.
The Common Seal of Glenwood Industries Ltd.)
was hereunto affixed in the presence )
of: )
)
)
Authorized Signatory )
)
)
Authorized Signatory )
The Common Seal of )
was hereunto affixed in the presence )
of: )
)
)
Authorized Signatory )
)
)
Authorized Signatory )
SCHEDULE "A"
[TO BE PROVIDED]
SCHEDULE 3
MACHINERY AND EQUIPMENT
1. All machinery and equipment contained in the leased premises situated at
Xxxxx 000, 0000 Xxxxxxx 00, Xxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0. A list of such
machinery and equipment to be provided by CallDirect Enterprises Inc. to Suncom
Telecommunications Inc.
SCHEDULE 4
MATERIAL CONTRACTS
1. Distribution Agreement, dated June 19, 1998, between Hello Direct, Inc.
and CallDirect Enterprises, Inc.
2. Distribution Agreement, dated June 2, 1998, between Plantronics B.V. and
CallDirect Enterprises, Inc.
3. Lease Agreement between Glenwood Industries Ltd. and CallDirect
Enterprises, Inc. regarding the leased premises situated at Xxxxx 000, 0000
Xxxxxxx 00, Xxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0.
4. Lease Agreement, dated November 7, 1997, between Pemberton Leasing
Services Ltd., Call Direct Enterprises Inc. and WJM Communications Inc.
5. Lease Agreement, dated September 8, 1997, between Pemberton Leasing
Services Ltd., Call Direct Enterprises Inc. and WJM Communications Inc.
6. Lease Agreement, dated October 29, 1996, between Pemberton Leasing
Services Ltd., Call Direct Enterprises Inc. and WJM Communications Inc.
SCHEDULE 8
PERMITTED ENCUMBRANCES
(See Attached)
**************** P P S A S E C U R I T Y A G R E E M E N T ***************
Reg. Date: SEP 08, 1997 Reg. Length: 3 YEARS
Reg. Time: 11:43:37 Expiry Date: SEP 08, 2000
Base Reg. #: 7231810 Control #: B2474928
This registration was selected and included for your protection
because of close proximity to your search criteria.
Block#
S0001 Secured Party: COMMCORP FINANCIAL SERVICES INC.
0000 XXXXX XXXXXXX XXXX
XXXXXXXXXX XX X0X 0X0
D0001 Base Debtor: WJM COMMUNICATIONS INC
(Business) #000 - 0000 XXXXXXX 00
XXXXX XX X0X 0X0
=D0002 Bus. Debtor: CALL DIRECT ENTERPRISES INC.
#000 - 0000 XXXXXXX 00
XXXXX XX X0X 0X0
General Collateral:
GOODS CONSISTING OF COMPUTER EQUIPMENT WITH ACCESSORIES
C/N 079982 L/N N 747810
******************************************************************************
Some, but not all, tax liens and other Crown claims are registered at the
Personal Property Registry (PPR) and if registered, will be displayed on this
search result. HOWEVER, it is possible that a particular chattel is subject to
a Crown claim that is not registered at the PPR. Please consult the
Miscellaneous Registrations Act, 1992 for more details. If you are concerned
that a particular chattel may be subject to a Crown claim not registered at the
PR, please consult the agency administering the type of Crown claim.
******************************************************************************
WARNING: The currency date noted at the top of this search indicates the
date to which registrations have been completely recorded on the system. While
some registrations processed after this date may be included, others may still
be in process and not included.
END OF SEARCH
Page 1
Curr Date: MAR 11 1999 BC Online: PPRS SEARCH RESULT 1999/03/15
Lterm: XPSP0050 For: PW53800 XXXXX, XXXXXX 15:41:22
Index: BUSINESS DEBTOR
Search Criteria: CALLDIRECT ENTERPRISES INC.
**************** P P S A S E C U R I T Y A G R E E M E N T ***************
Reg. Date: MAY 15, 1996 Reg. Length: 3 YEARS
Reg. Time: 11:55:37 Expiry Date: MAY 15, 1999
Base Reg. #: 6383029 Control #: B1927335
This registration was selected and included for your protection
because of close proximity to your search criteria.
Block#
S0001 Secured Party: COMMCORP FINANCIAL SERVICES INC.
0000 XXXXX XXXXXXX XXXX
XXXXXXXXXX XX X0X 0X0
D0001 Base Debtor: WJM COMMUNICATIONS INC
(Business) 000 - 0000 XXXX XXXXXX
XXXXXXXXX XX X0X 0X0
=D0002 Bus. Debtor: CALL DIRECT ENTERPRISES INC.
000 - 0000 XXXX XXXXXX
XXXXXXXXX XX X0X 0X0
General Collateral:
GOODS CONSISTING OF COMPUTER EQUIPMENT WITH ACCESSORIES
C/N 079982 L/N N 674021
**************** P P S A S E C U R I T Y A G R E E M E N T ***************
Reg. Date: JUL 29, 1996 Reg. Length: 3 YEARS
Reg. Time: 11:45:00 Expiry Date: JUL 29, 1999
Base Reg. #: 6521798 Control #: F0440621
Block#
S0001 Secured Party: SANYO CANADA INC.
00 XXXX XXXXXXX XXXXX
XXXXXXX XX X0X 0X0
=D0001 Base Debtor: CALLDIRECT ENTERPRISES INC
(Business) 0000 XXXXXX XXXXX
XXXXX XX X0X 0X0
General Collateral:
PRODUCTS BEARING THE NAME "SANYO" OR "XXXXXX" OR "NORTEL" INCLUDING BUT NOT
LIMITED TO: TELEVISIONS, STEREOS, HOME ENTERTAINMENT PRODUCTS, APPLIANCES,
TELEPHONES, OFFICE AND BUSINESS EQUIPMENT, VIDEO AND CAMERA EQUIPMENT AND ALL
ACCESSORIES, TRADE FIXTURES AND BOOK DEBTS NOW OR HEREINAFTER ACQUIRED. ALL
PRESENT AND AFTER ACQUIRED PERSONAL PROPERTY OF THE DEBTOR.
Continued on Page 2
Search Criteria: CALLDIRECT ENTERPRISES INC. Page: 2
SCHEDULE 11
CONSENTS
1. Consent of Glenwood Industries Ltd. regarding the leased premises
situated at Xxxxx 000, 0000 Xxxxxxx 00, Xxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0.
2. Consent of Shareholders of CallDirect Capital Corp. and CallDirect
Enterprises Inc.
SCHEDULE 14
ASSUMED INDEBTEDNESS
1. Indebtedness of CallDirect Enterprises Inc. as set forth on the attached
list of creditors which the Purchaser has settled for no more than CDN$109,000.
