EXHIBIT 99.1
SALE OF ENTERPRISE AGREEMENT
ENTERED THIS JUNE 16TH, 1999
BETWEEN: TELEHUBLINK CORPORATION, a duly constituted corporation,
having its head office located at New England Executive
Park, in the city and district of Burlington, State of
Massachussets, represented by XXXXX XXXXX being duly
authorized to enter its President, into this Agreement,
(hereinafter referred to as "the Buyer");
AND: WEB TRAFIC INC., a duly constituted corporation, having its
head office at 9625 Ignace, in the city of Brossard,
province of Quebec, herein represented by XXXXX XXXXXXX, its
President being duly authorized to enter into this Agreement
and its Director Xxxxxx Xxxx,
(hereinafter referred to as "the Vendor");
BEFORE ENTERING INTO THE PRESENT AGREEMENT, THE PARTIES DECLARE AS FOLLOWS:
WHEREAS the Vendor is engaged in the operatation of an e-commerce and internet
business known as WEB TRAFIC INC. (hereinafter the "business");
WHEREAS the Vendor has concluded an agreement with IMALL to represent its
services, on a non-exclusive basis, in Canada produced and appended hereto in
ANNEX "A" and referred to hereafter as the "IMALL Agreement".
WHEREAS the Vendor desires to sell the said business and all related rights and
assets;
WHEREAS the Buyer has expressed an interest in acquiring the business and all
related rights and assets;
WHEREAS the Vendor's representative and the Buyer have prior to this agreement
entered into a management contract referred to, and appended hereto in ANNEX
"B" (hereinafter referred to as the ("Management Agreement");
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WHEREAS the parties intend to satisfy the requirements of the Code Civil of
Quebec governing such a transaction;
NOW THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. DEFINITIONS
For the purpose of the present agreement, and of any other document related to
it or which makes reference to it, unless the context opposes it, the following
words, terms or expressions will have the meaning given to them hereafter:
1.1. ASSETS: means all of the fixed assets, plus inventory as defined
hereafter, any and all rights, trade marks, trade names which it may
have in its internet and e-commerce related businesses and the goodwill
attached to such businesses, including the rights and benefits
pertaining to the IMALL Agreement referred hereto as if recited at
length (Annex "A");
1.2. CLOSING: means the fulfilling and the complete execution, in accordance
with the conditions laid out in the present agreement, of the sale of
the business by the Vendor to the Buyer and of all other related
transactions between the parties made necessary by the present
agreement and which will happen, on or before June 16, 1999 in the
province of Quebec;
1.3. EFFECTIVE CLOSING DATE: means June 16, 1999;
1.4. BUSINESS: means the Internet and e-commerce business presently
exploited by the Vendor under the name "Web Trafic Inc.";
1.5 ESCROW AGENT: means the law firm of Xxxxxxxx & Associates, located at
3055, De l'Assomption, in Montreal, province of Quebec;
1.6 FIXED ASSETS: means all the equipment, furniture and other accessories;
1.7. INVENTORY: means all existing supplies on the Premises;
1.8. MANAGEMENT: means the officers, directors, key employees identified by
the Buyer as being part of the management of the Vendor;
1.09. TAXES: means federal and provincial income taxes, federal, provincial
or municipal taxes of any type such as goods and services taxes,
capital taxes, sales or use taxes, property taxes, business taxes, any
liability relating to Worker's Compensation or Employers' Health Tax
and any withholding requirements relating to Employment Insurance, the
Canada Pension Plan or
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Employment Standards, the Quebec Pension Plan and any other
governmental charges or assessments.
2. PREAMBLE
2.1. The preamble hereto shall form a part hereof as if hereinafter recited
at length.
3. NATURE OF THE AGREEMENT
3.1. This Agreement is an offer to purchase from the Vendor the entreprise
called "WEB TRAFIC INC." together with all its rights and assets, as
further described hereinafter, effective on the Effective Closing Date;
3.2. The present Agreement constitutes the entire agreement between the
parties and any and all previous agreement, written or oral, express or
implied between the parties or on their behalf during the course of the
negotiation of the present Agreement are hereby terminated and
cancelled;
4. SALE PRICE OF THE ENTERPRISE
4.1. The parties have agreed that the sale price of the business and its
assets shall be EIGHTY THOUSAND DOLLARS (80,000.00 $) which the Vendor
herein declares having received and for which said Vendor gives
complete quit and discharge thereof to the Buyer;
5. VENDOR'S REPRESENTATIONS AND WARRANTEES
5.1. The Vendor represents and warrants to the Buyer, that, at the signing
of the present agreement, that each of the following representations
and warrantees constitute for the Buyer a condition without which the
Buyer would not have entered into the present Agreement.
5.2. The Vendor represents and warrants to the Buyer that it is a duly
constituted corporation and is in good standing with respect to the
laws pertaining to its existence and its activities; that it will have
the capacity and the right to own assets and to dispose of them, to
carry out its business and, notwithstanding the approval of the present
Agreement by its board of directors, to fulfill its obligations under
the present Agreement;
5.3. The Vendor represents and warrants that all returns, filings, elections
and information reports required to be filed by it have been or will be
filed on or
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before the date of closing and that such returns are true, complete and
correct and properly reflect the liability of the Vendor for taxes.
5.4. The Vendor has furnished the Buyer with an unaudited balance sheet and
the related unaudited statement of income, for the period ending June
15, 1999 at closing attached as ANNEX "C". The Vendor represents and
warrants that such financial statements, including the notes thereto,
are true and correct and fairly present the financial condition of the
Vendor at the date thereof and, except as indicated therein, reflect
all claims against and all liabilities of the Vendor, fixed or
contigent, as at the date thereof, required to be shown under Canadian
generally accepted accounting principles, and accurately present the
results of the operations of the Vendor and the changes in financial
position for the period indicated;
5.5 The Vendor represents and warrants that it has made timely payment of
all taxes, installments and all assessments, reassessments, charges,
penalties, interest and fines related thereto which were or are due and
payable by it.
The Vendor also represents and warrants that it is not subject to taxes
in any jurisdiction other than Canada and the province of Quebec;
5.6. The Vendor represents and warrants that, where applicable, it has
withheld from each payment made to any of its officers, directors,
former directors, and employees the amount of all taxes and other
deductions required to be withheld therefrom and has paid the same on a
timely basis to the proper governmental authority.
5.7. The Vendor represents and warrants that all accounts, books, ledgers
and other records material to the buniess of whatsoever kind have been
fully, properly and accurately kept and completed in all material
respects, and there are no material inaccuracies or discrepancies of
any kind contained or reflected therein, and they give and reflect a
true and fair view of the business;
5.8 The Vendor represents and warrants that the Vendor is not a party to
any material contract, but not limited to, (a) any employment,
compensation, pension plan or shareholders agreement, (b) any loan
agreement, (c) any guarantee, (d) any maintenance or service agreement,
(e) any agreement, contract or commitment limiting the ability of the
Vendor to engage in any line of business or to compete with any other
person, (f) any lease for real (immoveable) or personal (moveable)
property, (g) any agreement with any officer or director of the Vendor,
(h) any contract with clients, and (i) any agreement, contract or
commitment which might reasonably be expected to have a negative
material impact on the business or operations of the Vendor;
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5.9 The Vendor represents and warrants that it is the sole proprietor of
all the assets sold under the present Agreement and that those assets
are free of any charges, liens or encumbrances of any sort;
5.10 The Vendor represents and warrants that there has not been, and to its
best knowledge, information and belief do not anticipate, any adverse
change in relations with Clients as a result of the transactions
contemplated by this Agreement or otherwise;
5.11. The Vendor represents and warrants that all of the assets sold and all
of the inventory on the Premises are insured;
5.12. The Vendor represents and warrants to the Buyer that it has no
employees;
5.13. The Vendor represents and warrants that it has no unpaid creditors;
The Vendor agrees and undertakes to confirm in writing and repeat all of the
above representations and warranties to the Buyer as of Closing Effective Date
on Closing;
6. OPERATION OF THE BUSINESS UNTIL THE CLOSING DATE
6.1. As from the time of signing of the present Agreement until the date of
closing, the Vendor will carry on the operations of the business with
due diligence and in a manner appropriate and normal for an enterprise
operating a similar business. Without limiting the meaning of the
preceding, the Vendor undertakes not modify the prices or offer
discount or prices of any kind on the services that it offers to the
Clients;
6.2. The Vendor will not hire any employee or enter into any kind of
contractual agreement for the purpose of employment or of offering
services to the Clients from the Premises without prior written
approval of the Buyer;
6.3. The Vendor will maintain until the closing date proper property damage
insurance, including public and general liability, for the Premises;
6.4. The Vendor undertakes not to pledge or other wise encumber the assets
sold. In addition, the Vendor shall not sell, transfer or assign or
promise to sell, transfer or assign the assets sold to a third party
between the time of signing of the present Agreement and the closing
date;
6.5. The Vendor will pay all taxes, including, but without limiting the
generality of the preceding, all income, business, real-estate and
municipal taxes, due on or before December 31st, 1999 against the
business, if applicable;
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6.6. The Vendor will buy all the supplies if applicable necessary for the
effective continuous operation of the business directly from its
suppliers and pay for them no later thirty (30) days;
6.7. The Vendor will allow access to the Premises to the designated
representatives and to the officers of the Buyer at any time during
regular business hours and will if requested to do so introduce the
representatives or officers of the Buyer to the Clients;
6.8 It is agreed by the parties that until June 16, 1999, and subject to
the terms and conditions of the present agreement, including, without
limiting the generality of the preceding, the Closing, the income from
the operations, including, without limiting the generality of the
preceding, the account receivable as of Effective Closing Date, but
excluding work-in-progress not yet billed to the Clients, and profits
if any, of the business shall remain the sole property of WEB TRAFIC
INC.;
6.9. The Vendor agrees to abandon on the date of closing, forever and
without any recourse the name "WEB TRAFIC INC." or "WEB TRAFIC" and to
do all the acts and sign all the documents necessary for the buyer to
be able to use the name "WEB TRAFIC INC." or "WEB TRAFIC" for the
purpose of the business that it acquires under the present Agreement;
7. BUYER'S OBLIGATIONS, REPRESENTATIONS AND WARRANTEES
7.1. The Buyer represents and warrants to the Vendor the following and
acknowledges that each of the following representations and warrantees
constitute for the Vendor a condition without which the Vendor would
not have entered into the present Agreement;
7.2. The Buyer represents and warrants to the Vendor that it will be, at the
date of closing, a duly constituted corporation and will be in good
standing with respect to the laws pertaining to its existence and its
activities; that it will have the capacity and the right to own assets,
to carry out its business and, notwithstanding the approval of the
present Agreement by its board of directors, to fulfill its obligations
under the present Agreement;
7.3. The Buyer shall abide by the dispositions of the Management Agreement
(Annex "B") and any and all modifications brought thereto by
the parties hereto relating to the execution of the said Management
Agreement;
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8. NON-COMPETITION AND NON-SOLICITATION
8.1. The Management and the Vendor acknowledge that the goodwill acquired as
part of the present business purchase represents its most important
element and that the Management of the Vendor entering into a business
competitive to that of the business would cause serious and irreparable
damage to the Buyer;
8.2. Consequently, the Management and the Vendor both undertake, for a
period of twenty-four (24) months following the signing of the present
agreement, not to, alone or in association with others, directly or
indirectly, whether as employee, shareholder, director, agent, officer,
lender, guarantor, mandatory or otherwise:
(a) enter into any business that would be competitive in any way
with the business of the enterprise within the province of
Quebec;
8.3. Also, the Management and the Vendor both undertake to NEVER, alone or
in association with others, directly or indirectly, whether as
employee, shareholder, director, agent, officer, lender, guarantor,
mandatory or otherwise:
(b) solicit a client of the enterprise, present or future; and
(c) solicit an employee of the enterprise, present or future, to
work into any business that would be competitive with that of
the enterprise;
8.4. Any contravention to the non-competition obligations contained in
provision 8.2 or the non-solicitation obligations contained in
provision 8.3 from a member of the Management or the Vendor will
generate against the contravening party, without prejudice to any of
the other rights and recourses offered to the Buyer, a fixed penalty of
TEN THOUSAND DOLLARS ($10,000) for each and every day any such
contravention shall occur or continue;
8.5. The Management and the Vendor both recognize that the non-competition
obligations and penalties contained in provisions 8.2, 8.3 and 8.4 are
reasonable in the circumstances and are necessary for the protection of
the Buyer;
8.6. In the event that any of the obligations contained in provisions 8.2,
8.3 or 8.4 is found to be abusive by a court or an arbitrator for any
reason, the court or arbitrator can reduce the obligation to a
reasonable level;
9. ESCROW AGENT
9.01 The escrow agent shall not be required to give security nor shall he be
responsible for the acts, omissions, faults, errors, fraud, failure or
misconduct of any agent whom he may reasonably employ in the exercise
of the powers conferred upon him hereunder, nor for loss occasioned by
his own acts,
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omissions or defaults, unless such acts, omissions or defaults
constitute a breach of trust knowingly and intentionally committed by
him;
9.02 The escrow agent shall not be required to institute, defend, or
intervene in any legal action to enforce the terms and conditions of
the present Agreement until the escrow agent has been indemnified
against all expenses and liabilities incurred and to be incurred by the
escrow agent, including his own reasonable compensation as escrow
agent;
9.03 The escrow agent may, at any time, consult with and retain the advice
of such counsel it deems appropriate, and the escrow agent shall incur
no liability whatsoever for any action taken by the escrow agent
pursuant to this Agreement, whether or not with advice of such counsel,
unless the escrow agent knowingly and intentionally commits a breach of
trust;
9.04 The escrow agent shall not be bound to pay any premiums nor to ensure
that any policies of insurance are kept in force;
9.05 The parties shall be jointly and severally responsible to the escrow
agent for prompt payment of all fees, charges and expenses incurred by
him, including those incurred by him in fulfilling his obligations or
in defending himself against any claims made against him in connection
with his duties hereunder including counsel fees, and the escrow agent
shall have the right to retain the shares and of any moneys deposited
with him, as security for the payment of all such fees, charges and
expenses;
10. FINAL DISPOSITIONS
10.1. The present Agreement shall be governed by and construed in accordance
with the laws of the Province of Quebec.
10.2. Within context, the singular form shall also include the plural form
and the masculine gender includes the feminine gender.
10.3. The parties hereto confirm that they have each required that the
present Agreement and all accessory documents and notices be drawn up
in the English language. Les parties a la presente confirment qu'elles
ont exige que cette convention ainsi que tout autre document ou avis
soient rediges dans la langue anglaise.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement in Montreal,
Quebec, this 16th day of June 1999.
THE BUYER:
TELEHUBLINK CORPORATION
per: /s/ XXXXX XXXXX
-------------------------
Xxxxx Xxxxx
THE VENDOR:
WEB TRAFIC INC.
per: /s/ XXXXX XXXXXXX
------------------------
Xxxxx Xxxxxxx
Per: /s/ XXXXXX XXXX
------------------------
Xxxxxx Xxxx
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A F F I D A V I T
Je, soussigne, XXXXX XXXXXXX, residant aux fins des presentes au 0000
xxx Xxxxxx, Xxxxxxxx, xxxxxxxx xx Xxxxxx, X0X 0X0, declare sous serment ce qui
suit :
1. Je suis le Directeur de la compagnie WEB TRAFIC INC.;
2. La compagnie WEB TRAFIC INC. est en operation depuis moins d'une annee;
3. La compagnie WEB TRAFIC INC. n'a, en date des presentes, aucun
creancier.
ET J'AI SIGNE :
_________________________________
Xxxxx Xxxxxxx
DECLARE SOLENNELLEMENT DEVANT MOI
a Montreal, ce 16ieme jour de juin 1999
_______________________________________
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