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EXHIBIT 10.3
PACIFIC CART SERVICES LTD.
Canada USA
0000 Xxxxxxxxx Xxxxxx Xxx 000
Xxxxxxxxx, XX X0X IH3 000 Xxxxxxxx Xxxxxx
Tel (000) 000-0000 Reno, Nevada 89503
Fax (000) 000-0000 Tel (000) 000-0000
August 25, 1999
Mr. Tube Steak Canada Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000, Xxx 00000
Xxxxxxxxx, XX X0X IC3
Dear Sirs:
Re: Purchase of Assets of Mr. Xxxx Steak Canada Inc. (XX Xxxx Steak
by Pacific Cart Services Ltd. (Pacific)
Pacific understands that Mr. Xxxx Steak has expressed an interest
in selling; the assets, equipment, trademarks, tradenames, intellectual
property and inventory (hereinafter collectively, referred to as the
Assets) of Mr. Xxxx Steak as a going concern. This letter of intent is
delivered by Pacific to set out the terms and conditions in which
Pacific would be willing to purchase the Assets from Mr. Xxxx Steak,
This letter of intent is a statement of intent to the signatories
and is intended to set forth the general understanding and the basic
terms of the transactions contemplated herein: (the Transactions). The
parties agree that they will work together to prepare the necessary
legal documentation and agreements which will include the detail
necessary to complete the Transactions.
1. Purchase of Assets
Pacific will agree to purchase all of the Assets which Assets
represent all or substantially all the assets of Mr. Xxxx Steak plus
all associated goodwill for the aggregate purchase price of $1,000,000
exclusive of GST (the Purchase Price). The purchase of Assets will be
completed pursuant to an asset purchase agreement (the Purchase
Agreement) to be prepared in accordance with this letter of intent. The
parties jointly agree that they will do all things necessary to
complete all filings with the appropriate authorities as required,
obtain all regulatory, shareholder and directors approval as required
to complete the Transactions.
2. Purchase Price
The aggregate Purchase Price of the Assets shall be $1,000,000.00
exclusive of GST payable on the Closing Date (as defined below), such
Purchase Price to be payable by way of the issuance of that number of
common shares of Pacific that have a market value equal to $1,000,000.
The market value shall be determined by the closing price of the common
shares of Pacific as traded on the NASDAQ Over-the-Counter Bulletin
Board on the most recent trading date preceding the Closing Date, or if
the common shares have not traded on that date, the next most recent
preceding date on which the common shares had traded.
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The issuance of the Pacific shares is subject to such necessary
regulatory, shareholder and corporate approval as may be required,
including, but not limited to, approval of all applicable securities
regulatory authorities
3. Closing Date
The Closing Date of the Transactions shall be that date which is
30 days after Mr. Xxxx Steak gives notice to it shareholders of a
special meeting of the shareholders to approve the Transactions, or
such other later date as the parties may mutually agree to.
4. Intellectual Property Rights
As part of the Transactions, Mr. Xxxx Steak agrees to assign to
Pacific all its rights, titles, and interests in and to any
intellectual property, copyrights, tradenames and trademarks made by or
contributed to by Mr. Xxxx Xxxxx, including all records relating
thereto.
Mr. Xxxx Steak agrees to execute any and all assignments,
documents and further assurances which Pacific may require, from time
to time to convey to Pacific its respective rights, title, and interest
in and to any intellectual property, copyrights, tradenames or
trademarks made by or contributed to by Mr. Xxxx Steak including all
records relating thereto.
Mr. Xxxx Steak will fully cooperate and assist in every way in the
prosecution, maintenance and protection of any intellectual property,
tradenames, or copyrights made by or contributed to by Mr. Xxxx Steak
in respect to the transactions contemplated herein.
Mr. Xxxx Steak shall continually and fully communicate to Pacific
all intellectual property, trademarks, tradenames, or copyrights made
by or contributed to by Mr. Xxxx Steak in respect to the transactions
contemplated herein, and in this regard Mr. Xxxx Steak shall make,
maintain and provide to Pacific full and proper records relating to all
such intellectual property.
5. Conditions Precedent
Pacific's obligation to proceed with and complete the Transactions
is subject to the following conditions, it being understood that such
conditions are solely for the benefit of Pacific and may be waived at
any time by Pacific in its sole discretion:
a. receipt of all required approvals including any corporate,
regulatory or other such approvals that are required pursuant
to applicable securities laws;
b. receipt of the approval of the shareholders of Mr. Xxxx
Xxxxx, directors of Mr. Xxxx Xxxxx and the directors of
Pacific;
c. completion and execution of the formal Purchase Agreement.
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1. Investigation
Mr. Xxxx Steak shall provide Pacific and/or its representatives,
including counsel, accountants and other technical consultants with all
technical, corporate and financial reviews including providing access
to all records, documents, and data required by Pacific (in its sole
discretion including furnishing all other information related to those
matters as may be reasonably requested by Pacific or its
representatives. Once the Purchase Agreement hat been executed, Mr.
Xxxx Steak shall also permit Pacific and/or its representatives access
to all key operating personnel of Mr. Xxxx Steak for the purpose of
conducting interviews and information review.
5. Standstill
Between the date of acceptance of this letter of intent and the
Closing Date, except with the written consent of Pacific, Mr. Xxxx
Steak will not:
a. sell, license, transfer, assign, pledge, encumber or
otherwise transfer any of its assets other then in the
ordinary course of its business;
b. issue any securities, enter into any new agreements, or
modify any material contracts existing at the date of this
letter of intent;
c. make any changes in key personnel other than in the ordinary
course of business;
d. or alter Its current business or businesses.
2. Employees and Employment Contracts
Mr. Xxxx Steak agrees to pay and satisfy all salaries, wages,
holiday pay, unemployment insurance premiums, workers compensation
payments, Income Tax and Canada Pension Plan deductions for any and all
employees of Mr. Xxxx Steak up to and including the Closing Date.
Mr. Xxxx Steak shall terminate all of its employees on the Closing
Date in accordance with the provisions of applicable labour
legislation.
Pacific shall, on the Closing Date, offer employment to the
employees of Mr, Xxxx Steak existing on the day prior to the Closing
Date, under terms and conditions that are substantially consistent with
the terms of such employees employment with Mr. Xxxx Steak, provided it
is understood and agreed that Pacific shall be entitled to conduct
interviews of each and every employee prior to the: Closing Date and
Pacific shall not be required to hire any employees who are in the
opinion of Pacific, not employable by Pacific.
3. Representations and Warranties
Mr. Xxxx Steak shall represent and warrant as of the Closing Date,
that the Assets are beneficially owned by Mr. Xxxx Steak, with good and
marketable title thereto, free and clear of all liens, security,
interests, charges, encumbrances, and any rights in favour of third
parties whatsoever, and that no person or other entity has any right or
option or any right or privilege capable of becoming an agreement or
option for the purchase of the assets.
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4. Confidentiality
The parties mutually agree that any information obtained by either
party respecting the other, including the existence in terms of this
letter of intent or any other documents or discussions respecting the
transactions contemplated herein shall be treated as confidential by
the receiving party and shall not be disclosed to any third party,
excepting the case of information disclosed in order for Pacific to
complete its due diligence review and consummate the transactions.
No party shall make any Public announcements or issue any press
releases regarding the transaction without the prior written consent of
the other party.
5. Fees and Expenses
Pacific shall pay to Mr. Xxxx Steak, upon the execution of this
Letter of intent, the administration fee in the amount of Five Thousand
($5,000.00) Dollars U.S. Apart from such administration fee, the
parties shall bear their own costs in connection with the transactions
contemplated in this Letter of Intent, including, without limitation,
legal, accounting and other professional fees.
6. Termination
This letter of intent maybe terminated by Pacific on notice to Mr.
Xxxx Steak and the shareholders at any time prior to the Closing Date,
if Pacific is not satisfied in its sole discretion, with the Conditions
Precedent forming part of this letter of intent. The parties agree that
any agreements entered into between them in order to give affect of the
transactions can be terminated by one party without cause and without
giving prior notice in the event that the other party breaches the
terms of any of such of agreements. The parties agree that any
agreements entered, into between them in order to give effect to the
transactions can be terminated at any time by mutual agreement of the
parties.
7. Governing Law
This letter of intent shall be governed by and construed and in
accordance with the laws of the Province of Alberta and the laws of
Canada applicable therein.
8. Acceptance and Closing
This letter of intent is open for Acceptance by Pacific or its
duly authorized representative until 4:00 p.m. on August 31, 1999.
Forthwith upon execution of this letter of intent, the parties shall
commence negotiations and instruct their solicitors to draft the
required Purchase Agreement. The Purchase Agreement shall contain
provisions with respect to the matters set out in this letter of
intent, and will also incorporate all such terms and conditions as the
parties may deem necessary or appropriate to complete the transactions,
including all conditions on closing, all representations and
warranties, all covenants, all opinions, and all necessary
indemnifications in relation to such representations and warranties
provided.
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9. General
This letter of intent may be executed in one or more counterparts,
by facsimile or original copies, each of which shall constitute an
original, but all of which shall constitute one and the same document.
The parties hereto covenant and agree to do such things and
execute such further documents, agreement, instruments or assurances as
may be reasonably required by the other party hereto from time to time
in order to carry out the terms of this letter of intent in accordance
with its true intent.
Time shall be of the essence of this letter of intent.
This letter of intent shall enure to the benefit of and be binding
upon the parties hereto their respective heirs, executors,
administrators, successors and assigns).
Yours truly,
PACIFIC CART SERVICES LTD.
Per: /s/ illegible
The: terms and conditions of this letter of intent are accepted by Mr.
Xxxx Steak Canada Inc. this 31st day of August, 1999.
MR. TUBE STEAK CANADA INC.
Per: /s/ Xxxxx Xxxx
