<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
February 22, 1999
Date of Report (Date earliest event reported)
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VALUE HOLDINGS, INC.
(exact name of registrant as specified in its charter)
FLORIDA
(State or other jurisdiction of incorporation)
0-15076 59-2388734
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(Commission File Number) (IRS Employer
Identification Number)
2307 Douglas Road, Ste 400, Miami, Fla 33145
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Registrant s Telephone Number, Including Area Code (305) 868-3946
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N/A
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(Former name or former address, if changed since last report)
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Item 2. Acquistion of Assets
On February 25, 1999 Value Holdings, Inc. through its subsidiray
corporation, Network Forest Products Limited, acquired
substantially all of the assets of John Ziner Lumber Limited, an
Ontario corporation. John Ziner Lumber Limited is involved in the
wholesale distribution and remanufacturing of lumber. Value
Holdings intends to use the acquired assets in the same type of
business.
Value Holdings owns all of the issued and outstanding Class A
common shares of Network Forest Products. The Class A common
shares are the only shares with voting rights. Robert Ziner,
formerly an executive with John Ziner Lumber and now president of
Network Forest Products and Value Holdings, is the beneficial owner
of 3,416,335 Series B Special shares of Network Forest Products,
held by 1341125 Ontario Limited, which have no voting rights, but
which are exchangeable for a certain number of common shares of
Value Holdings, as is set forth in the February 22, 1999 Exchange
Agreement between Mr. Ziner and Value Holdings. Additionally,
5,253,147 Series A Preferred shares were issued to John Ziner
Lumber Limited as part of the purchase price. The Series A
Preferred shares are redeemable by the Purchaser for $1.00 Canadian
dollar per share plus any declared unpaid dividends thereon, and
bear a cumulative dividend at the rate of 5% per annum calculated
annually and payable semi-annually.
The Company purchased the assets for $21,044,335 Canadian dollars.
This amount includes $5,807,611 Canadian dollars for accounts
receivable; $5,531,025 Canadian dollars for inventory; $98,138 for
sundry receivables; and $6,761,302 to replace a bank operating
loan. Financing for the transaction was provided by BNY Financial
Corporation - Canada, a subsidiary of the Bank of New York. Value
Holdings has provided a guarantee to BNY Financial Corporation -
Canada securing the indebtedness of Network Forest Products.
Item 6. Resignations of Registrants Directors.
Jeffrey Kurtz and Eugene Bialys resigned as directors of Value
Holdings, Inc., effective February 22, 1999. Neither Mr. Kurtz nor
Mr. Bialys resigned due to any conflict, dispute or disagreement
with the Company.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) 10.53 Asset Purchase Agreement dated February 22, 1999 between
Network Forest Products, John Ziner Lumber Limited and Value
Holdings, Inc.
10.54 Exchange Agreement dated February 22, 1999 between
Robert Ziner and Value Holdings, Inc.
10.55 Guarantee dated February 22, 1999 by Value Holdings,
Inc., in favor of BNY Financial Corporation -- Canada.
17.01 Resignation of Jeffrey Kurtz as a director of Value
Holdings, Inc.
17.02 Resignation of Eugene Bialys as a director of Value
Holdings, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
VALUE HOLDINGS, INC,
By /s/ Robert Ziner
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Robert Ziner
President
Date: March 4, 1999
Exhibit 10.53 Asset Purchase Agreement
ASSET PURCHASE AGREEMENT
As of the _____ day of February, 1999
BETWEEN:
JOHN ZINER LUMBER LIMITED
65 Passmore Avenue
Scarborough, Ontario, M1S 3C6, Canada
fax # 416-291-0598
(referred to in this Agreement as the Vendor )
OF THE FIRST PART
- -and-
NETWORK FOREST PRODUCTS LIMITED
65 Passmore Avenue
Scarborough, Ontario, M1S 3C6 Canada
fax # 416-366-4224
(Referred to in this Agreement as the Purchaser )
OF THE SECOND PART
- - and -
VALUE HOLDINGS, INC.
2307 Douglas Road
Miami, Florida, 33143
fax # 305-447-8770
(Referred to in this Agreement as the Guarantor )
OF THE THIRD PART
- and -
LEONARD ROSENBERG
of the City of Toronto
with offices at 144 King Street West
(Referred to in this Agreement as the Indemnifier )
OF THE FOURTH PART
RECITALS:
A.The Vendor owns and operates a business from premises located at
65 Passmore Ave. Scarborough, Ontario, Canada (the Premises ) under
the name of John Ziner Lumber Limited (the Business ).
B.The Business consists of a lumber distribution centre and a
lumber remanufacturing plant on 14 acres of leased land in the City
of Toronto.
C.The Vendor wishes to sell and the Purchaser wishes to purchase
the Vendor's assets which constitute the Business including
goodwill (the Purchased Assets ).
D.The Purchaser is a wholly-owned subsidiary of the Guarantor and
the Guarantor has agreed to enter into this Agreement for the
purpose of guaranteeing the due performance of the obligations of
the Purchaser hereunder.
THE PARTIES THEREFORE AGREE as follows:
PURCHASE OF BUSINESS
1.01 Purchase and Sale: The Vendor hereby agrees to sell,
transfer, convey and assign to the Purchaser and the Purchaser
hereby agrees to purchase from the Vendor, all of the Vendor's
right, title and interest in and to the property, assets and
undertaking of the Vendor used in connection with the Business
(collectively, the Purchased Assets ) which Purchased Assets shall
include, without limitation, the following:
(a) all machinery, equipment, tools, supplies, furniture,
furnishings (whether or not fixtures) and accessories of all kinds
used in connection with the Business as at the date hereof,
including those assets more particularly described in Schedule A
hereto;
(b) all inventories of and pertaining to the Business as at the
date hereof, including those more particularly described in
Schedule A hereto;
(c) all vehicles of and pertaining to the Business as at the date
hereof, including those more particularly described in Schedule A
hereto;
(d) subject to clause 1.03, all supplies for use in connection
with the Business as at the date hereof;
(e) the full benefit of all unfilled orders received by the Vendor
in connection with the Business which were in existence as of the
date hereof;
(f) the full benefit of all other contracts to which the Vendor
was entitled in connection with the Business;
(g) all accounts receivable and the Sundry Receivables described
in Schedule "M" and other book debts due or accruing due to the
Vendor in connection with the Business as at the date hereof,
except for the following (collectively, the Excluded
Receivables ):
(i) the loans receivable as set out in the Unaudited Financial
Statements of the Vendor for the period ending on September 30,
1998 and
(ii) the receivables described in Schedule B hereto (
Litigation Receivables );
(h) all prepaid expenses of and pertaining to the Business as at
the date hereof;
(i) subject to section 1.03, the goodwill of the Business;
(j) any interest of the Vendor in the Palletto lease of the Vendor
s Premises; and
(k) all other property and assets owned by the Vendor or to which
it is entitled in connection with the Business, provided that the
Purchased Assets shall include any additions, accretions, increases
and supplements in and to the Purchased Assets between the date
hereof and the Closing Date.
1.02 Excluded Assets: The assets which are excluded from the
Purchased Assets (collectively, the Excluded Assets ) are the
Excluded Receivables (described in subsection 1.01(g) hereof) the
books, records, working papers, files and documents of the Vendor
and the right to use the name Ziner Lumber other than as set out
in section 1.03 hereof.
1.03 Limited Right to Use the Vendor's Business Stationery: The
Vendor hereby agrees to grant to the Purchaser the right to use the
following business stationery which are included in the
Purchased Assets and which have the Vendor's name pre-printed
thereon, as follows:
(a) the statements, purchase orders, and envelopes bearing the
Vendor s name may be used:
(i) for a period of two weeks following the Closing Date, only if
such envelopes bear the Purchaser's name and the Vendor's
pre-printed name is struck out by hand or otherwise; and
(ii) thereafter only if the Vendor's name is completely covered by
a label or printed markings; and
(b) the invoice and packing slip forms bearing the Vendor's name
may be used until the current stock of such documents has been
depleted, provided that each part of the form bears the
Purchaser s name in bold large letters and the Vendor's pre-printed
name is struck out by hand, label or otherwise.
Other than as set out above, the Purchaser hereby undertakes and
agrees that it will not use the name Ziner Lumber or John Ziner
Lumber or any other name or business style of which Ziner Lumber
forms a part as part of any trademark, trade, business or corporate
name in respect of any of its businesses. The Purchaser agrees to
indemnify the Vendor and save it harmless from any claims that
may arise regarding the Purchaser's use of the name Ziner Lumber
or John Ziner Lumber or any other name or business style of which
Ziner Lumber forms a part in contravention of the terms set forth
in this section. The Purchaser shall be entitled to refer to
itself as the purchaser of the assets of the Vendor and Purchaser
agrees that it shall not represent itself as carrying on the
Business in continuation of the Vendor and/or in succession to the
Vendor except that the Purchaser shall be entitled to have a one
line listing in the Yellow Pages under Ziner Lumber to refer the
reader to the Purchaser's telephone listing. Purchaser agrees to
make no announcement of the sale of the business that is not
approved by the Vendor in writing.
1.04 Closing: The closing of this transaction will take place on
February 19, 1999 or such other date as may be mutually agreed to
by the parties hereto (the Closing Date ).
PURCHASE PRICE
2.01 The Purchase Price payable by the Purchaser for the Purchased
Assets is allocated subject to Sections 5.01 and 5.02 as follows:
Accounts Receivable: $ 5,807,611.00
Inventory 5,531,025.00
Capital Assets 1,276,000.00
Goodwill 8,331,561.00
Sundry Receivables: 98,138.10
$21,044,335.10
2.02 The Purchase Price shall be payable as follows:
(a)As to the sum of $6,761,302.41 in cash paid which is hereby
directed be paid by the Purchaser to the Bank of Montreal; and
(b)As to the sum of $98,138.10 in cash or certified cheque
(bank draft) paid in respect of the Sundry Receivables.
(c)The sum of $1,000,000 by way of a promissory note to the
Vendor on the Closing Date, a copy of which is annexed hereto as
Schedule C . The promissory note described in subsection 2.02(a)
above shall be secured by a general security agreement between the
Vendor and the Purchaser, a copy of which is annexed hereto as
Schedule C1 , and a guarantee of the Guarantor, a copy of which is
annexed hereto as Schedule C2 .
(d) As to the sum of $5,253,147.00 by the issuance of
5,253,147 Class A Shares by the Purchaser to the Vendor, which
shares will have the attributes set out in Section 3.01 hereof;
(e) By the assumption by the Purchaser of the accounts payable
of the Vendor, particulars of which are set out in Schedule D
hereto and by the assumption by the Purchaser of any liability of
the Vendor for cheques of the Vendor which are outstanding on the
Closing Date and are subsequently presented for payment, all of
which the Purchaser covenants and agrees to pay and satisfy in the
normal course as they fall due or are presented.
(f) As to the sum of $3,416,335.00 by the issuance of
3,416,335 Class B Shares by the Purchaser to the Vendor, which
shares have the attributes set out in Section 3.02 hereof.
(g)As the sum of $675,619.81 in cash or certified cheque or
bank draft regarding Closing Costs.
2.03 In consideration of inducing the Vendor to enter into this
Agreement, the Indemnifier agrees to indemnify and save harmless
the Vendor for any losses the Vendor sustains as a result of the
Purchaser s default under clause 2.02(c) above, a copy of which
Indemnification Agreement is attached as Schedule L .
2.04 In consideration of the Purchaser inducing the Vendor to enter
into this Agreement, the Purchaser shall deliver as fully binding
upon it the Undertaking attached Schedule O in respect of the
accounts payable and outstanding cheques referred to in Section
2.02(e) above.
2.05 Except for the accounts payable assumed as set out in Section
2.02(d) hereof and except the express assumption of contractual
liabilities hereunder which the Purchaser hereby covenants and
agrees to pay and satisfy in full as and when such amounts and
liabilities fall due, the Purchaser is not assuming any other
liabilities relating to the Vendor, the Business or the Purchased
Assets and the Vendor hereby indemnifies and holds harmless the
Purchaser from and against any such liabilities.
PREFERENCE SHARES
3.01 The Class A Shares being issued as part of the Purchase
Price ( Class A Shares ) will be non- voting, non-participating,
redeemable by the Purchaser for $1.00 per share plus any declared
unpaid dividends thereon, will bear a cumulative dividend at the
rate of 5% per annum calculated annually and payable semi-annually.
No dividends will be paid on any other class of share of the
Purchaser pari passu with or in priority to the dividends to be
paid on the Class A Shares, no shares of Purchaser are to be
redeemed or purchased for cancellation pari passu with or in
priority to the redemption of the Class A Shares. Purchaser will
not sell nor permit the sale of its assets out of the ordinary
course of business while any of the Class A Shares held by Vendor
remain outstanding and Purchaser will covenant that no
further Class A Shares will be issued by it. Value Holdings, Inc.
will guarantee the payment of the dividends and on closing, the
Purchaser shall deliver as fully binding upon it, the Undertaking
by the Guarantor (re: share exchange) attached as Schedule P .
3.02 The Class B Shares being issued as part of the Purchase
Price ( Class B Shares ) will be non-voting, non-participating,
redeemable by the Purchaser for $1.00 per share plus any declared
unpaid dividends thereon, with a non-fixed, non-cumulative dividend
for each fiscal year.
3.03 The Class A Shares rank in priority over the Class B
Shares and the common shares in the capital stock of the Purchaser
as to dividends and the distribution of assets on the liquidation,
dissolution or winding up or other distribution of its assets by
way of repayment of capital.
RESTRICTION ON SUBSEQUENT SALE
4.01 While any amount of Class A Shares of the Purchaser
described in Section 3.01 hereof remain outstanding, the Purchaser
shall not sell, or permit the sale of any of the Purchased Assets
out of the ordinary course of business.
ALLOCATION OF PURCHASE PRICE
5.01 The Vendor and Purchaser agree that the value so attributed to
the Purchased Assets in Section 2.01 hereof is the respective fair
market values of those assets and further agree to file in mutually
agreeable form all elections required or desirable under the Income
Tax Act (Canada) in respect of those allocations.
5.02 The Purchase Price shall be subject to adjustment, if
applicable, as at the Date of Closing, for water, rental, gas,
hydro rates, unearned insurance premiums, realty taxes, municipal
taxes, fuel, mortgage interest, and other usual and similar prepaid
expenses and accrued liabilities relating to the Business and to
the Purchased Assets. If final billings are not then available,
the said adjustments shall be made on the basis of the most recent
billings then available and upon final billings becoming available,
the parties hereto agree to readjust all such items, if necessary.
TAXES
6.01 The Purchaser shall pay any and all Ontario retail sales tax
and G.S.T. which may be payable by the Purchaser pursuant to the
Retail Sales Tax Act (Ontario) and the Excise Tax Act of Canada
arising as a result of the completion of the purchase of the
Purchased Assets contemplated herein. The Purchaser and
the Vendor hereby agree to file an election if applicable to exempt
the transaction from GST. Purchaser shall produce satisfactory
evidence of payment on closing of R.S.T. and G.S.T.
BULK SALES
7.01 The Purchaser and the Vendor hereby waive compliance with the
provisions of the Bulk Sales Act (Ontario). The Vendor hereby
represents and warrants to the best of its knowledge that there are
no accounts payable or loans outstanding other than those being
assumed by the Purchaser pursuant to Section 2.02(d) hereof and in
regard to the equipment and vehicle leases which are referred to as
Permitted Encumbrances later in this Agreement and those non-arm s
length creditors more specifically referred to and listed in
Schedule S for whom the Vendor has produced signed Waivers on or
before Closing. With respect to those creditors and amounts
payable set out in Schedule D , the Purchaser agrees to indemnify
and hold harmless the Vendor from any claims that may be asserted
against it by reason of non-compliance with the Bulk Sales Act
(Ontario). The Vendor shall provide the Purchaser with waivers
from all non-arm's length creditors with respect to loans or
payables owing to them.
7.02 The Vendor agrees to indemnify and hold harmless the Purchaser
from any claims that may be asserted against it by reason of
non-disclosure by the Vendor of an account payable and further
agrees to indemnify and hold harmless the Purchaser in regard to
any claim which results in an order of a court of competent
jurisdiction which sets aside the sale, or declares it void under
the Bulk Sales Act of Ontario.
CONDITIONS
THIS AGREEMENT IS CONDITIONAL IN FAVOUR OF THE PURCHASER ON THE
FOLLOWING:
8.01 Financing: This Agreement is conditional, on the Purchaser
obtaining the necessary financing to complete the transaction in
accordance with the attached letter of marked as Schedule E
failing which this Agreement shall be of no effect.
8.02 New Lease: This Agreement is conditional on the Purchaser
executing a new Lease of the Premises, a copy of which is attached
to this Agreement as Schedule F , as well as an assignment of the
lease between the Vendor and Michelina Pallotta concerning an
abutting piece of property, a copy of which is attached to this
Agreement as Schedule G .
8.03 Work Orders: This Agreement is conditional on there being no
outstanding work or other orders affecting the Premises, and the
Business, levied by any competent building, fire, health,
environmental or other authority as at the Closing Date.
8.04 Licenses: This Agreement is conditional on the Purchaser
obtaining, by the Closing Date, all necessary licenses that may be
required to operate the business as contemplated by the Purchaser.
VENDOR S REPRESENTATIONS, WARRANTIES AND COVENANTS
THE VENDOR REPRESENTS AND WARRANTS TO THE PURCHASER THAT THE
FOLLOWING REPRESENTATIONS AND WARRANTIES ARE TRUE AND WILL BE TRUE
IN ALL MATERIAL RESPECTS ON THE CLOSING DATE.
9.01 Power and Authority: The Vendor has the power and authority
to enter into and perform its obligations under this Agreement
including the power to sell it right, title and interest in and to
the Purchased Assets, and this Agreement has been duly executed and
delivered by the Vendor and constitutes a legal, valid and binding
obligation of the Vendor enforceable in accordance with its terms.
9.02 Asset Status:
(a)Encumbrances: Except the Permitted Encumbrances in Schedule
H to this Agreement and their respective outstanding Personal
Property Security Act of Ontario registrations, the Vendor owns all
the Purchased Assets by good and marketable title, free and clear
of any encumbrances.
(b)Condition of Assets: The Purchased Assets are being sold on
an as is, where is basis as they shall exist on the Closing Date.
The Purchaser acknowledges that it has and shall be deemed to have
inspected the Purchased Assets. Other than as provided for in this
Agreement, no representation, warranty or condition, either
expressed or implied, has or will be given by the Vendor as to the
state, location, description, condition, cost, size,
quantity, quality, fitness for purpose, merchantability, or
otherwise of or concerning the Purchased Assets.
(c) Premises: To the best of the Vendor's knowledge, the
Premises do not violate any restrictive covenant or any applicable
law, code or zoning regulation.
(d)Accounts Receivable: The accounts receivable which
comprise the Purchased Assets have been reviewed and accepted by
the Purchaser and are set out in Schedule N attached.
Vendor makes no representation or warranty as to their
collectability.
(e)Inventory: The inventory which comprise the Purchased
Assets is as per the agreed inventory count set out in clause 2.01
performed jointly by the Vendor and the Purchaser prior to the
Closing Date.
(f)Business Names: The Vendor retains the unrestricted right
to use the name Ziner Lumber and such use does not infringe the
rights of others.
(g)Claims: To the best of the Vendor s knowledge, there are no
material outstanding claims, whether contingent or otherwise
against the Vendor, including, without limitation, claims
on account of any applicable workers' compensation, occupational
health and safety, human rights and/or pay equity legislation.
9.03 Ordinary Course: Since October 31, 1998: the Vendor has not
entered into any transactions or incurred any obligations or
liabilities outside of the usual and ordinary course of the
Business; and there has been no substantial, adverse change in the
financial position, physical assets or affairs of the Business.
9.04 Business Relationships: The Vendor is not aware of any threat
or intention on the part of any significant customer, supplier or
distributor to reduce materially the volume of its purchases from
or sales to or otherwise materially modify its business
relationship with the Vendor.
9.05 Employees:
Agreements: There are no written employment agreements and no
employment arrangements which would accord any employee of the
Business rights beyond those provided for in applicable employment
standards legislation and/or at common law;
Benefit Plans: There are no benefit plans including, without
limitation, bonus, pension, profit sharing, deferred compensation,
retirement, hospitalization or medical insurance or similar plan or
practice, formal or informal other that those set out in Schedule
I to this Agreement; Purchaser agrees to assume the Vendor's
Benefit Plan and to pay all costs in relation to the assumption of
same as at the date of Closing. If the Vendor's Benefit Plan
cannot be assumed for any reason Purchaser agrees to obtain a
similar such Plan providing substantially the same benefits to
employees.
Union: The Business is subject to a collective agreement a
copy of which is attached as Schedule J hereto ( Collective
Agreement ). There are no existing or, to the best of the
knowledge of the Vendor, threatened, labour strikes or labour
disputes, grievances, controversies or other labour troubles
affecting the Business. There are no outstanding charges or
complaints against the Vendor in respect of the Business or its
employees relating to unfair labour practices or discrimination or
under any legislation relating to employees of which the Vendor has
received notice.
(d)Workplace Safety: To the best of the Vendor's knowledge, the
Vendor has submitted all required annual statements and paid all
premiums and any other amounts owing to the Workplace Safety and
Insurance Board ( WSIB ) pursuant to the Workplace Safety and
Insurance Act (Ontario) (and its predecessor, the Workers
Compensation Act (Ontario)).
To the best of the Vendor s knowledge, there are no outstanding
liabilities, assessments, levies, fines, penalties, interest or
other obligations owing to the WSIB. To the best of
the knowledge of the Vendor, the Vendor is in good standing with
the WSIB and there are no unreported accidents or pending claims or
appeals to be adjudicated which would affect the Vendor s
experience (accident/cost) rating or current rate group
classification with the WSIB. The Vendor hereby agrees to
cooperate with the Purchaser subsequent to the Closing Date, if
necessary, to cause all filings and payments to be made to the WSIB
to assist in establishing the Purchaser s new WSIB account; and
(e)List of Employees: Schedule K to this Agreement contains a
complete list of all permanent and full-time employees (both union
and non-union), their salaries and wage rates, their positions and
their length of service and particulars of any contracts,
arrangements or understandings, written or oral, with them.
(f)Purchaser shall, with effect from and after the Closing
date, offer employment to all persons who are non-union employees
of the Vendor at the closing. In offering employment, the
Purchaser shall provide to such employees employment conditions and
benefits which are substantially the same as those upon which the
employees and presently employed by the Vendor, including, without
limitation those conditions and benefits referred to in this
Agreement. Without limiting the scope of the foregoing, the
Purchaser shall, with respect to each employee, honour that
employee's outstanding vacation entitlement in respect of that
employee's current vacation year as though the employee were still
employed by the Vendor;
(g)The Purchaser and the Vendor together shall give notice to
the employees concerning the change in their employer in a manner
and at a time mutually agreed to;
(h)The Purchaser shall be responsible for all expenses, costs
and other liabilities and obligations of any kind whatsoever
arising out of or in connection with the employment or the
termination of employment subsequent to the closing date of the
employees set out in Schedule K ;
(i)The Purchaser shall be responsible for all expenses, costs
and other liabilities and obligations of any kind whatsoever
arising out of or in connection with the employment or
termination of employment of those employees who do not accept the
Purchaser's offer of employment referred to in this provision;
(j)The Purchaser agrees to assume all of the Vendor s
obligations in connection with the Collective Agreement and all
employees governed thereby.
9.06 Environmental Considerations: The Vendor has not received
any notice nor is it aware of any notice of a violation of any
applicable federal, provincial, municipal or local laws,
regulations, orders, certificates of approval, licences, permits,
governmental decrees, order, or any and all other legislation or
regulatory instruments with respect to environmental, health or
safety matters (collectively Environmental Laws ) and for greater
certainty:
(a)to the best of the Vendor s knowledge, the Vendor has
operated the Business at all times in compliance with Environmental
Laws;
(b)to the best of the Vendor s knowledge, there has not been
any generation, use, transportation, treatment, storage, release or
disposal of any hazardous substance in connection with the Business
which has created or might reasonably be expected to create
liability under any law or code or which would require reporting to
any competent authority;
(c)to the best of the Vendor s knowledge, no asbestos or
polychlorinated biphenyl is contained in or located at any facility
owned, leased or operated by the Vendor in connection with the
Business.
9.07 Residency: The Vendor is not a non-resident of Canada within
the meaning of section 116 of the Income Tax Act (Canada).
9.08 Full Disclosure: The Vendor is not aware of any liabilities
or obligations, direct, indirect or contingent, other than those
disclosed in this Agreement and those arising in the ordinary
course of business (none of which are materially adverse) for which
the Purchaser might at law be liable. The Vendor is not aware of
any facts or circumstances which might, or give rise to, any
material liabilities or obligations on the part of the Purchaser
which are not disclosed in this Agreement, other than those arising
in the ordinary course of business (none of which are materially
adverse).
THE VENDOR HEREBY COVENANTS AS FOLLOWS:
9.09 Closing Deliveries: On the Closing Date, the Vendor hereby
covenants that it shall:
(a) furnish the Purchaser with evidence satisfactory to the
Purchaser acting reasonably that all necessary corporate
authorizations authorizing and approving the transaction
contemplated herein have been obtained;
(b) deliver to the Purchaser all necessary deeds, conveyances,
bills of sale, assurances, transfers, assignments and consents and
any other documents necessary or reasonably required to transfer to
the Purchaser good and marketable title to the Purchased Assets;
(c) deliver to the Purchaser a certificate dated the Date of
Closing issued by the Minister of Revenue of Ontario under Section
6 of the Retail Sales Tax Act (Ontario) stating that all Retail
Sales Taxes collectible or payable by the Vendor have been paid or
that the Vendor has entered into an arrangement satisfactory to the
said Minister for the payment of such taxes or for securing
their payment;
(d) deliver possession of the Purchased Assets to the Purchaser;
(e) permit reasonable access to the Purchaser of Vendor s books,
records, documents, files and other data relating to the Business,
save and except for those books, records, working papers, files and
other documents and instruments which do not relate solely to the
Business and are not used or required to be used in carrying on the
Business, which Purchaser agrees shall be kept at 65 Passmore
Avenue, Scarborough, Ontario and shall be subject to the terms of
section 9.10 hereof;
(f) provide the Purchaser with evidence reasonably satisfactory to
the Purchaser that the Vendor is not a non-resident of Canada
within the meaning of the Income Tax Act (Canada);
(g) deliver discharges, in a form satisfactory to the Purchaser,
of all of the Bank Act and PPSA registrations in favour of The Bank
of Montreal listed in Schedule R hereto and effect the
registration thereof; and
(h) provide the Purchaser with the opinion of the Vendor s
solicitors in a form reasonably satisfactory to the Purchaser.
9.10 Access to Records: The Vendor will allow the Purchaser or
its authorized representatives to have reasonable access to its
books, account and files, records and other documents and data
relating to the Business at all reasonable times in connection with
the affairs of the Purchaser and to make copies thereof and
extracts therefrom.
PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
THE PURCHASER REPRESENTS AND WARRANTS TO THE VENDOR THAT THE
FOLLOWING REPRESENTATIONS AND WARRANTIES ARE TRUE AND WILL BE TRUE
IN ALL MATERIAL RESPECTS ON THE CLOSING DATE.
10.01 Power and Authority: The Purchaser has the power and
authority to enter into and perform its obligations under this
Agreement and this Agreement has been duly executed and delivered
by the Purchaser and constitutes a legal, valid and binding
obligation of the Purchaser enforceable in accordance with its
terms.
10.02 Collection of Litigation Receivables: If any of the
Litigation Receivables are collected by the Purchaser after the
Closing Date, such amounts will be paid over to the Vendor. The
Purchaser agrees to use reasonable efforts to collect the
Litigation Receivables after the Closing Date.
THE PURCHASER HEREBY COVENANTS AS FOLLOWS:
10.03 Closing Deliveries: On the Closing Date, the Purchaser
hereby covenants that it shall:
(a) furnish the Vendor with evidence satisfactory to the Vendor
that all necessary corporate authorizations authorizing and
approving the transaction contemplated herein have been obtained;
(b) provide the Vendor with the opinion of the Purchaser s
solicitors in a form reasonably satisfactory to the Vendor; and
(c) execute all assignments and documents delivered pursuant to
this Agreement on the Closing Date which require execution by the
Purchaser.
(d)pay the Purchase Price;
(e)deliver to the Vendor a release in the form attached as
Schedule T by Gemini Integrated Financial Services Corp. of its
letter agreement with the Vendor dated March 18th, 1998
as paid in full.
GUARANTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS
THE GUARANTOR REPRESENTS AND WARRANTS TO THE VENDOR THAT THE
FOLLOWING REPRESENTATIONS AND WARRANTIES ARE TRUE AND WILL BE TRUE
IN ALL MATERIAL RESPECTS ON THE CLOSING DATE.
11.01 Power and Authority: The Guarantor has the power and
authority to enter into and perform its obligations under this
Agreement and this Agreement has been duly executed and delivered
by the Guarantor and constitutes a legal, valid and binding
obligation of the Guarantor enforceable in accordance with its
terms.
THE GUARANTOR HEREBY COVENANTS AS FOLLOWS:
11.02 Closing Deliveries: On the Closing Date, the Guarantor
hereby covenants that it shall:
(a) furnish the Vendor with evidence satisfactory to the Vendor
that all necessary corporate authorizations authorizing and
approving the guarantee contemplated herein have been obtained; and
(b) provide the Vendor with the opinion of the Guarantor's
solicitors in a form reasonably satisfactory to the Vendor.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
12.01 Notwithstanding the closing of this transaction, it is
specifically understood and agreed that all of the Vendor's
representations and warranties and any conditions to be satisfied
by the Vendor shall be for the Purchaser s benefit and shall not
merge on the closing of this transaction but shall survive the
Closing Date for a period of 6 months. The Purchaser shall have
the right at any time to waive such representation, warranty or
condition. The waiver of a representation, warranty or condition
by the Purchaser shall not affect the Purchaser's rights with
respect to any other breach by the Vendor.
12.02
(a)Notwithstanding the closing of this transaction, it is
specifically understood and agreed that all of the Purchaser's
representations and warranties and any conditions to be satisfied
by the Purchaser shall be for the Vendor's benefit and shall not
merge on the closing of this transaction but shall survive the
Closing Date for a period of 6 month's. The Vendor shall have the
right at any time to waive such representation, warranty or
condition. The waiver of a representation, warranty or condition
by the Vendor shall not affect the Vendor's rights with respect to
any other breach by the Purchaser.
(b)Purchaser s covenants and obligations set out in this
Agreement shall not merge on closing, and shall survive closing and
shall remain in fully binding and enforceable.
12.03
(a)Notwithstanding the closing of this transaction, it is
specifically understood and agreed that all of the Guarantor's
representations and warranties and any conditions to be satisfied
by the Guarantor shall be for the Vendor s benefit and shall not
merge on the closing of this transaction but shall survive the
Closing Date for a period of one (1) year. The Vendor shall have
the right at any time to waive such representation, warranty or
condition. The waiver of a representation, warranty or condition
by the Vendor shall not affect the Vendor s rights with respect to
any other breach by the Guarantor.
(b)Guarantor s covenants and obligations set out in this
Agreement shall not merge on closing and shall survive closing and
shall remain binding and enforceable.
12.04 Indemnifier s covenants and obligations set out in this
Agreement shall not merge on closing and shall survive closing and
shall remain binding and enforceable.
DUE DILIGENCE
13.01 The Purchaser shall have the right until the Closing Date to
verify or cause to be verified the Vendor's representations and
warranties, and to examine the Purchased Assets including the
Vendor's records.
13.02 No examination by the Purchaser shall:
Prejudice the Purchaser s right with respect to any claims
which the Purchaser may otherwise have for breach of the Vendor s
representations and warranties;
Unreasonably interfere with the interim operation of the
Business.
TERMINATION
14.01 If, prior to the Closing Date:
any of the Vendor s representations and warranties are
inaccurate or any condition to be fulfilled by the Vendor has not
been satisfied, and
the Purchaser has not waived such representations, warranties
or conditions,
then the Purchaser may, by notice in writing, extend the Closing
Date for up to 15 days to permit the Vendor an opportunity to cure
the breach.
14.02 The Vendor shall use reasonable best efforts to cure the
breach by the extended closing date.
14.03 If the Vendor cannot cure the breach then the Purchaser
shall elect to either waive the breach or terminate this Agreement,
in which case this Agreement shall be at an end and the parties
shall be released from any and all obligations contained herein.
ASSETS AT RISK OF VENDOR
15.01 The Purchased Assets are at the risk of the Vendor until
completion of the sale. The Purchaser shall be entitled to
terminate this Agreement if substantial destruction or change
occurs.
INVESTMENT CANADA
16.01 The Purchaser represents and warrants to the Vendor that the
Purchaser is not a non-Canadian for the purpose of the Investment
Canada Act (Canada).
SUCCESSOR EMPLOYER
17.01 The Purchaser agrees to establish a new account with the WSIB
in respect of the employees of the Business, in accordance with the
Workplace Safety and Insurance Act.
CONFIDENTIALITY
18.01 Should this transaction fail, for any reason, to close, the
Purchaser Shall be under an obligation to treat all information
that the Purchaser may then have acquired in relation to the
Business as strictly confidential.
NON-COMPETITION
19.01 Provided that the Purchaser is not in default of its payment
obligations under this Agreement, or arising as a result thereof,
from and after the Closing Date, the Vendor covenants and agrees
that it shall not, without the prior written consent of the
Purchaser:
(a) directly or indirectly, in any manner whatsoever, including,
without limitation, either individually or in partnership or
jointly, or in conjunction with any other person or persons, firm,
association, syndicate, company or corporation, as principal,
agent, shareholder or in any other manner whatsoever, carry on or
be engaged in or be concerned with or interested in or lend
money to, guarantee the debts or obligations of, or permit its name
or any part thereof to be used or employed by any person, persons,
firm, association, syndicate, company or corporation engaged or
concerned with or interested in any business competitive with the
Business within 20 miles of any location where the Business is
currently carried on, for a period of three (3) years following the
Closing Date;
(b) use for its own purposes any information, trade secrets or
confidential data relating to the Business or the Purchased Assets
nor divulge, disclose or communicate any such information,
trade secrets or confidential data to any other person, firm or
corporation; and
(c) for a period of three (3) years from the Closing Date, divulge
to any person, firm or corporation the name of any customer of the
Business or solicit, interfere with or endeavour to entice away
from the Purchaser any customer or any person, firm or corporation
in the habit of dealing with the Business, or interfere with or
entice away any employee of the Business.
19.02 In the event that any of the covenants or any portion of any
of the covenants contained in Section 19.01 are unenforceable or
declared invalid for any reason whatsoever, such unenforceability
or invalidity shall not affect the enforceability or validity of
the remaining covenants or remaining portions of such covenants and
such unenforceable or invalid covenant or portion thereof shall be
severable from the remainder of this Agreement.
GUARANTEE
20.01 In consideration of the Vendor having entered into this
Agreement with the Purchaser and the sum of ONE DOLLAR ($1.00) the
receipt of which is irrevocably acknowledged by the Guarantor, the
Guarantor covenants and agrees with the Vendor that:
The Purchaser will:
pay all the money to be paid by the Purchaser under this
Agreement (including the 5% dividend referred to in clause 3.01
above); and
perform and observe all of the terms of this Agreement;
The Guarantor shall be considered as primarily liable to the
Vendor and shall indemnify the Vendor against any losses that it
might suffer or incur as a result of a breach by the Purchaser of
any of its covenants or obligations under this Agreement;
The Guarantor shall not be released nor shall the liability of
the Guarantor be limited or lessened by:
any variation in or departure from the provisions of this
Agreement;
the Vendor granting time, taking or giving up securities,
accepting proposals, granting releases or any other action taken by
the Vendor with respect to the Purchaser or the Purchased Assets;
any act, omission or fact whereby the Guarantor may
otherwise be released;
(d)The Vendor shall not be bound to exhaust its recourse
against the Purchaser or against any other person or persons before
enforcing the Vendor's rights against the Guarantor.
GENERAL PROVISIONS
21.01 Recitals: The recitals at the beginning of this Agreement
and all understandings and provisions in this Agreement even though
not specifically stated in the form of a covenant shall be
construed as such.
21.02 Public Disclosure: The Parties shall inform the employees
and customers of the Business of the contemplated sale only in a
mutually approved form and manner.
21.03 Arbitration:
Except as set out in paragraph (h), any dispute or difference
between the Parties which cannot be resolved or settled by the
Parties, shall be settled by arbitration in accordance with the
Arbitrations Act, 1991 (Ontario) in this section, the Act .
This section constitutes an arbitration agreement within the
meaning of the Act. The provisions of the Act, except to the extent
that a contrary intention is expressed in this Agreement, shall
apply to any such arbitration.
Either Party may at any time give written notice to the other
Party demanding arbitration and stating with reasonable
particularity the subject matter of the dispute.
Within 7 days (excluding the day on which the notice is
delivered or deemed delivered and inclusive of holidays) of such
notice, the Parties shall appoint a single arbitrator with
appropriate experience to determine the dispute.
If the Parties fail to appoint an arbitrator either Party may
apply to the court under section 10 of the Act to appoint an
arbitrator.
Subject to section 3 ( contracting out ) of the Act, the award
of the arbitrator, including any award on a question of law, shall
be final and binding.
Arbitration may not be waived except by written agreement to
that effect.
Nothing in this section prevents a Party from applying to a
court with respect to:
the detention, preservation and inspection of property;
interim injunctions;
the appointment of receivers;
iv)the enforcement of any indemnity, covenant, guarantee,
security or contractual obligation that may arise after the Closing
Date.
21.04 Time of the Essence: Time shall be of the essence of this
Agreement.
21.05 Delay, etc.: The rights of the Parties under this Agreement
shall not be affected by:
The waiver of or failure to take action with respect to any
prior default;
Any failure or delay on the part of either Party in exercising
any right under this Agreement.
21.06 Severability: The invalidity of any provision of this
Agreement shall not affect the validity of any other provision of
this Agreement.
21.07 Agreement Not Assignable: This Agreement is not assignable
by either Party except in accordance with its terms or with the
prior express written consent of both Parties.
21.08 Notices: Any notice required or permitted to be given under
this Agreement shall be in writing and may be given to the
President of the party for whom it is intended, by:
Delivery by hand to the address set out at the beginning of
this Agreement;
Registered mail (except in the event of a postal strike) to
the address set out at the beginning of this Agreement; or
Facsimile telephone transmission to the fax number set out at
the beginning of this Agreement along with Fedex or UPS overnight
courier delivery to the address set out at the beginning of this
Agreement.
Any notice given under;
Paragraphs (a) or (c) shall be deemed to have been received by
the addressee on the day of delivery or transmission, as the case
may be:
Paragraph (b) shall be deemed to have been received by the
addressee on the sixth day (excluding Saturdays, Sundays and
statutory holidays) following the date of mailing.
Either Party may at any time give notice to the other Party of any
change of address or fax number.
21.09 Successors and Assigns: This Agreement shall enure to the
benefit of and be binding upon the Parties and their successors and
permitted assigns.
21.10 Costs: Each of the Parties shall pay all of that Party s own
costs and expenses relating to this transaction including all
accounting and counsel fees.
21.11 Independent Legal Advice: The Parties irrevocably
acknowledge that they have each been severally advised to obtain
independent legal advice with respect to the preparation and
execution of this Agreement and have either obtained such
independent advice or have declined to obtain such advice but at
such declining Party s own risk.
21.12 Entire Agreement and Exclusion of Tort Liability: This
Agreement, together with all documents attached as Schedules
hereto,:
Contains the entire agreement with respect to its subject
matter and supersedes all prior agreements, written or oral, with
respect to that subject matter;
May not be amended or modified in any respect except by
written agreement.
Tort Liability is expressly excluded, including, without
limitation, liability for representations which may otherwise have
given rise to liability.
21.13 Governing Law: This Agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario
and the laws of Canada which apply within the Province of Ontario.
Any proceedings relating to the subject matter of this Agreement
shall be brought in the Municipality of Metropolitan Toronto.
21.14 Contra Preferentem Rule: Notwithstanding any rule of
construction to the contrary, the Parties agree that should any
court or tribunal of competent jurisdiction make a finding that a
provision of this Agreement is ambiguous or uncertain, then such
ambiguity or uncertainty shall not be construed against any Party
by reason only of the authorship of this Agreement or the provision
in question.
21.15 Counterparts: This Agreement may be executed in several
counterparts, each of which so executed shall be deemed to be an
original and such counterparts, together, shall constitute the
Agreement.
21.16 Facsimile Signatures: Facsimile signatures shall be regarded
as good and sufficient as original signatures of the party so
executing the Agreement.
21.17 No Set Off:
(a)The Guarantor hereby waives and renounces all rights of set
off at law or in equity that it may have or that the Purchaser may
have against the Vendor. The Guarantor further waives the right to
assert in an action or proceeding with respect to this Agreement
any set offs or counterclaims that the Guarantor or the Purchaser
may have.
(b)The Purchaser hereby waives and renounces all rights of set
off at law or in equity that it may have against the Vendor. The
Purchase further waives the right to assert in an action or
proceeding with respect to this Agreement any set offs or
counterclaims that the Purchaser may have.
THE PARTIES HAVE, BY THEIR SIGNATURES BELOW, EXECUTED THIS
AGREEMENT AS OF THE DATE FIRST WRITTEN ABOVE:
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF
JOHN ZINER LUMBER LIMITED
by:
Rose ZinerAuthorized Signatory
NETWORK FOREST PRODUCTS LIMITED
by:
Robert ZinerAuthorized
Signatory
VALUE HOLDINGS, INC.
by:
Alison CohenAuthorized Signatory
Leonard Rosenberg
Exhibit 10.54 Exchange Agreement
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT is entered into on February 18, 1999,
by and among VALUE HOLDINGS, INC., a Florida corporation (the
Company ), and 1341125 ONTARIO LIMITED (the Shareholder );
WITNESSETH:
WHEREAS, the authorized capital stock of NETWORK FOREST
PRODUCTS LIMITED, an Ontario corporation, consists solely of (i) an
unlimited number of special shares without nominal or par value
(the Class B Shares ) and (ii) an unlimited number of common
shares without nominal or par value (the Class A Shares );
WHEREAS, as of the date hereof, the Shareholder legally and/or
beneficially owns the number of shares of Class B Shares set forth
beside his name on Exhibit A attached hereto, which number of
shares constitutes, in the aggregate, all of the issued and
outstanding Class B Shares;
WHEREAS, as of the date hereof, the Company legally and
beneficially owns 100 Class A Shares, constituting all of the
issued and outstanding Class A Shares;
WHEREAS, each of the Company and the Shareholder desire to
permit the Shareholder to exchange from time to time his Class B
Shares for shares of common stock, par value $.0001 per share, of
the Company (the Company Shares ), on the terms and subject to the
conditions set forth in this Exchange Agreement (the Agreement );
NOW, THEREFORE, in consideration of the premises and the
respective covenants and agreements of each of the parties set
forth herein, each of the Company and the Shareholder agree as
follows:
ARTICLE I
EXCHANGE OF SHARES
1.1 Right to Exchange. Subject to the other provisions of
this Agreement, Class B Shares may be exchanged for Company Shares
as follows:
(a) From and after February 18, 1999, the Shareholder may
exchange any or all of the Class B Shares for Company Shares in the
ratio set forth in Section 1.1(b) below, subject to adjustment as
set forth in Section 1.3. By way of example, at February 18, 1999
the Class B Shares would be exchangeable for not more than three
hundred and forty one million, six hundred and thirty three
thousand, five hundred (341,633,500) Company Shares.
(b) Subject to adjustment as provided in Section 1.3
below, one Class B Share shall be exchangeable for one hundred
(100) Company Shares
1.2 Exchange Ratio.
. Intentionally left blank.
1.3 Adjustments to Exchange Ratio.
(a) If at any time after the date of this Agreement, but
prior to the exchange or redemption of all of the Class B Shares
issued and outstanding on the date hereof, the Company shall (i)
issue any shares of the Company Shares as a stock dividend or
subdivide the number of outstanding shares of its common stock into
a greater number of shares, or (ii) the Company shall reduce or
combine the number of outstanding shares the Company Shares by
combining such shares into a smaller number of shares, then, in
either of such cases, the number of Company Shares into which one
Class B Share shall be exchangeable shall be adjusted immediately
after the effective date of such stock dividend, subdivision,
reduction, or combination by multiplying the number of Company
Shares, theretofore obtainable pursuant to an exchange in
accordance with the provisions of this Agreement, by a fraction:
(i) the numerator of which shall be the total
number of Company Shares outstanding immediately after such
effective date; and
(ii) the denominator of which shall be the total
number of Company Shares outstanding immediately prior to such
effective date.
(b) If, at any time after the date of this Agreement,
but prior to the exchange or redemption of all of the Class B
Shares issued and outstanding on the date hereof, the Company shall
be recapitalized by reclassifying its outstanding shares of common
stock into stock with a different par value or by changing its
outstanding shares of common stock with par value to stock without
par value, or the Company shall consolidate or merge with or into
or convey all or substantially all of its property and assets to
another corporation or entity in exchange for stock or securities
of such other corporation or entity, then, in any such case, one
Class B Share shall be exchangeable from and after the effective
date of any such recapitalization, consolidation, merger or
conveyance for the kind and amount of shares of stock, securities,
cash and/or other consideration receivable by the holder of the
number of Company Shares for which one Class B Share is
exchangeable pursuant to this Agreement immediately prior to such
recapitalization, consolidation, merger or conveyance.
(c) Adjustments shall be made successively whenever any
event referred to in Section 1.3(a) or Section 1.3(b) shall occur.
(d) The Company shall not be required to issue
fractional shares in connection with any exchange of Class B Shares
for Company Shares. Any number of Company Shares to be exchanged
by the Company shall be rounded to the nearest whole number.
(e) The Company shall reserve that number of shares it
would have to issue under this Agreement, so that at no time would
the exercise of the exchange rights as set forth herein, cause the
Company to be liable to issue more shares than it is authorized to
do so pursuant to its stated capitalization in its Articles of
Incorporation as filed with the Secretary of State for the State of
Florida.
1.4 Manner of Exchange.
(a) Subject to the other provisions of this Agreement,
the Shareholder may exchange Class B Shares for Company
Shares by the delivery to the Company at its executive offices of
the following instruments and documents:
(i) a written notice of exchange in substantially
the form of Exhibit C attached hereto;
(ii) one or more stock certificates representing the number of
Class B Shares to be exchanged, together with an appropriate number
of stock power(s), separate from the certificate(s), endorsed in
blank and any other documents that may be reasonably required by
Counsel for the Company in order to effect the issuance of the
Company Shares in response to customary requests and requirements
of the Company s transfer agent; provided, that the Company
represents and warrants that the written notice set forth in (i) of
this Section 1.4(a), the delivery of the stock certificates and
stock powers set forth in (ii) of this Section 1.4(a), and the
representation letter substantially in the form of Exhibit D
satisfy all of the requirements of the transfer agent in accordance
with the transfer agent s practices as they exist as of February
18, 1999; and
(iii) a completed and accurate representation
letter in substantially the form of Exhibit D attached hereto, and
containing such substitute and/or additional provisions as may from
time to time be reasonably required by counsel to the Company to
ensure that such exchange complies with all applicable laws and
regulations, in form and in substance reasonably acceptable to the
Company and its legal counsel.
1.5 Delivery of Certificates.
(a) It is the intention and agreement of the parties that
the Company will make its best efforts in good faith to deliver
certificates evidencing the relevant number of Company Shares, in
proper form duly executed and completed, to the Shareholder within
two business days after receipt of the Shareholder's notice of
exchange and the other documents referred to in Section 1.4.
Furthermore, the Company agrees that it will only request such
additional documents pursuant to Section 1.4(a) as are necessary,
in the opinion of its Counsel, to permit the exchange to occur in
compliance with all applicable laws and regulations. The Company
acknowledges and agrees that the agreement that the exchange of
shares will be effected quickly is an integral part of the parties'
contract under this Agreement and a critical inducement to the
Shareholder to enter into this Agreement and related transactions
with the Company. However, the Company may postpone the delivery
of any certificates to the Shareholder for such period of time, but
only such period of time, as is necessary in order to enable the
Company to comply, in connection with the exchange, with (i) the
applicable listing requirements of any securities exchange or the
National Association of Securities Dealers, Inc. Automated
Quotation System on which the Company Shares are listed, (ii) the
requirements of the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, or (iii) the requirements
of any applicable state or provincial securities or blue sky laws
and the rules and regulations promulgated thereunder.
(b) As of February 18, 1999, (i) the Company is not
subject to any listing requirements with which compliance is
required prior to issuance of shares or delivery of certificates
evidencing such shares or which would constitute grounds for delay
in issuance and delivery of shares or certificates evidencing such
shares pursuant to Section 1.5(a)(i) above; (ii) there is no
requirement of the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, or the rules and
regulations promulgated thereunder, with which compliance is
required prior to issuance of shares or delivery of certificates
evidencing such shares or which would constitute grounds for delay
in issuance and delivery of shares or certificates evidencing such
shares pursuant to Section 1.5(a)(ii) above, assuming that the
Shareholder delivers to the Company the representation letter
substantially in the form of Exhibit D hereto; and (iii) there is
no requirement of any applicable state or provincial securities or
blue sky laws or rules and regulations promulgated thereunder with
which compliance is required prior to issuance of shares or
delivery of certificates evidencing such shares or which would
constitute grounds for delay in issuance and delivery of shares or
certificates evidencing such shares pursuant to Section 1.5(a)(iii)
above, assuming that the Company continues to be incorporated in
Florida and the Shareholder continues to reside in Ontario, Canada.
ARTICLE II
REGISTRATION OF COMPANY SHARES
2.1 Piggy-Back Registration. From and after February 18,
1999 the Company shall advise the Shareholder, by written notice at
least fifteen (15) days prior to the filing of a registration
statement or post-effective amendment thereto under the Securities
Act of 1933, as amended (the Act ), other than a registration
statement on Form S-8 or Form Reg.-S or any successor form or any
post-effective amendment thereto, covering the issuance or sale of
any securities of the Company for its own account or for the
account of others, and will include in any such registration
statement or post-effective amendment thereto such information as
may be required to permit a public offering of any of the Company
Shares then legally or beneficially owned by the Shareholder
(the Registrable Securities ). From and after February 1, 1999,
the Company shall continue to advise the Shareholder of its
intention to file a registration statement or post-effective
amendment until the earlier of (i) December 31, 2012, or (ii) such
time as the sale of all of the Registrable Securities have been
registered under the Act.
2.2 Underwritten Public Offering. If the Company shall
engage in any underwritten public offering of its securities to
which the provisions of Section 2.1 above may apply, then the
Registrable Securities shall be included in such underwritten
public offering to the extent, but only to the extent, permitted by
the lead underwriter of such offering, in its reasonable
discretion. If such lead underwriter limits the number of shares
that it would include in its registration that are not newly issued
shares, then such limitation shall apply proportionately to each
and every party intending to register shares, other than the
issuer.
2.3 Expenses of Piggy-Back Registration. To the extent
permitted by law, the Company shall bear the entire cost and
expense of any registration of securities initiated by it as
contemplated by Section 2.1 above, notwithstanding that the
Registrable Securities may be included in any such registration.
Notwithstanding the foregoing, the Shareholder shall bear the fees
of any counsel retained by him..
2.4 Demand Registration. Not more than six times during the
period from Calendar Year 1999 through Calendar Year 2012, the
Shareholder may by delivery of written notice to the Company demand
that the Company file a registration statement or post- effective
amendment thereto under the Act covering the sale of Registrable
Securities by any or all of the Shareholder. Upon its receipt of
such demand, the Company shall diligently proceed to file such a
registration statement or post- effective amendment.
2.5 Expenses of Demand Registration. The Company shall bear
the entire cost and expense of any registration of securities
initiated by the Shareholder pursuant to Section 2.4 above.
2.6 Obligations of the Company. The Company shall supply
prospectuses in order to facilitate the public sale or other
disposition of the Registrable Securities, use its best efforts to
register and qualify the Registrable Securities for sale in such
provinces and states as the Shareholder may reasonably request and
do any and all other acts and things which may be reasonably
necessary to enable the Shareholder to consummate the public sale
of the Registrable Securities.
2.7 Obligations of the Shareholder. The Shareholder shall
furnish information reasonably requested by the Company in
connection with any registration statement or post-effective
amendment filed by the Company.
2.8 Registration on Form S-3. Within six months of the
Company's eligibility to file a Registration Statement on Form S-3,
the Board of the Directors of the Company shall decide whether to
register that certain number of shares which are eligible such
registration.
ARTICLE III
INDEMNIFICATION RELATING TO SECURITIES OFFERINGS
3.1 Indemnification of Shareholder. Whenever a registration
statement relating to any Registrable Securities is filed under the
Act or amended or supplemented, the Company shall indemnify and
hold harmless the Shareholder from and against any and all losses,
claims, damages and liabilities to which the Shareholder may
become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such
registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or
supplement thereto, or arise out of or are based upon the omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that the Company shall not be liable in any such case to
a Shareholder to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement of
alleged untrue statement or omission or alleged omission made in
such registration statement, preliminary prospectus, final
prospectus, amendment or supplement in reliance upon and in
conformity with information furnished by the Shareholder for use
in the preparation thereof.
3.2 Indemnification of Company. Whenever a registration
statement relating to any of the Company's securities is filed
under the Act or amended or supplemented, the Shareholder
shall indemnify and hold harmless the Company, each of its
directors, each of its officers who shall have signed the
registration statement and /or any amendments or supplements
thereto, and each person, if any, who or which controls the Company
(within the meaning of the Act), from and against any and all
losses, claims, damages and liabilities, joint and several, to
which the Company, or any such director, officer or controlling
person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any such
registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or
supplement thereto, or arise out of or are based upon the omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged
omission was made in such registration statement, preliminary
prospectus, final prospectus, amendment or supplement in reliance
upon and in conformity with information furnished by the
Shareholder for use in the preparation thereof.
3.3 Notice of Claim. After receipt by any party of written
notice of any claim or the commencement of any action, such party
shall, within fifteen (15) days of receipt thereof, give the other
party or parties notice of the commencement of such action if a
claim in respect thereof is to be made against the other party for
indemnification hereunder; the omission so to notify the other
party shall relieve it from any liability which it may have to the
party seeking indemnification pursuant to this Article III.
3.3 Legal Defense. If any action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it may desire to assume the
defense thereof with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof.
3.4 Settlement. If any indemnified party pays any amount in
total or partial settlement of any claim without the prior written
consent of any indemnifying party, which consent shall not be
unreasonably withheld, then the failure to obtain such consent will
relieve the indemnifying party from any liability it may have to
the indemnified party.
ARTICLE IV
CERTAIN REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Shareholder to execute and deliver
this Agreement, the Company represents and warrants to the
Shareholder as follows:
4.1 Corporate Organization and Good Standing. The Company is
a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida.
4.2 Authority. The Company has all requisite corporate power
and authority to enter into this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of
this Agreement by the Company have all been duly authorized by all
necessary corporate action of the Company. This Agreement has been
duly executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company and is
enforceable against the Company in accordance with its terms.
4.3 Capitalization of the Company. The authorized capital
stock of the Company consists solely of (i) Twenty Million
(20,000,000) shares of preferred stock, par value $.0001 per share,
and (ii) Nine Hundred Million (900,000,000) Company Shares.
At the date hereof, Seven Hundred Fifty Thousand (750,000) shares
of Preferred Stock are issued and outstanding and 94,398,538
Company Shares are issued and outstanding. The Company
additionally has options and warrants outstanding which are
convertible into 600,000 Company Shares at an exercise prices of
$0.25 per share. No other shares of the Company's capital stock,
whether preferred or common, are authorized, issued or outstanding.
All of the issued and outstanding shares of Preferred Stock of the
Company and the Company Shares are duly and validly issued and
outstanding, fully paid and nonassessable, and none of the issued
and outstanding Company Shares were issued in violation of the
preemptive rights of any person or entity. There are no
pre-emptive rights as relates to any class of the Company's stock.
4.4 The Company further represents and warrants as follows:
(a) Each of the Company's reports filed with the
Securities Exchange Commission during the previous five years for
which the Company has been subject to the periodic reporting
requirements of the Securities Exchange Act of 1934, including
without limitation its Form 10-KSB for its Fiscal Year Ended
October 31, 1998,
(i) complies as to form with all applicable requirements under law
or regulation with respect to such report and so complied on the
date it was filed; and
(ii) there are no agreements, contracts or other documents required
to be described in any such report and filed as an exhibit thereto
other than those described therein or filed as an exhibit thereto
or incorporated by reference therein, and the exhibits which have
been filed are true and correct copies of the documents of which
they purport to be copies;
(iii) the descriptions in the reports of contracts and other
documents to which the Company or any subsidiary is a party or by
which any of them are bound, including any document incorporated by
reference, are accurate and fairly represent the information
required to be shown by the applicable report;
(iv) there is not pending or threatened against the Company or any
subsidiary any action, arbitration, suit, proceeding, inquiry,
investigation, litigation, governmental or other proceeding
(including, without limitation, those having jurisdiction over
environmental or similar matters), domestic or foreign, against (or
circumstances that may give rise to the same), or involving the
properties or assets of, the Company or any subsidiary which (x) is
required to be disclosed in the applicable report which is not so
disclosed (and such proceedings as are summarized in the applicable
report are accurately summarized in all respects), or (y) questions
the validity of the capital stock of the Company or any subsidiary
or this Agreement or the transactions contemplated hereby
(including, without limitation, the exchange of Class B Shares for
Company Shares);
(v) no statute or regulation or legal or governmental proceeding
required to be described in any such report is not so described;
(vi) there is no action, suit or proceeding pending or threatened
against the Company or any subsidiary before any court or
arbitrator or governmental body, agency or official (or any basis
thereof known to the Company) in which there is a reasonable
possibility of a decision which may result in a material adverse
change in the condition, financial or otherwise, business, results
of operations, or prospects of the Company or any subsidiary or
which in any manner draws into question the validity or
enforceability of this Agreement or the transactions contemplated
hereby (including without limitation the exchange of Class B Shares
for Company Shares); and
(vii) neither the Company's representations in this Agreement or
the statements made in the reports referred to above contain (or
contained as of the date the same were filed, in the case of the
reports) any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
(b) There has been no material adverse change in the
business, financial condition, results of operations or prospects
of the Company since October 31, 1999.
(c) The Company has no liabilities, fixed, contingent,
absolute, or unknown, which liabilities, individually or in the
aggregate, would be material to the Company or its business,
financial condition, results of operations or prospects, or which
exceed $10,000 individually or $100,000 in the aggregate, other
than those liabilities specifically (and not just categorically)
described and reflected in its audited balance sheet and the
accompanying financial notes thereto as of October 31, 1998
included in its Form 10-KSB filed with the Securities Exchange
Commission for its fiscal year ended October 31, 1998 on
February 18, 1999.Any liabilities not specifically disclosed in
detail in the Form 10-KSB referenced above are described in Exhibit
F attached hereto.
(d) The Exchange Agreement and all transactions
contemplated thereby, specifically including without limitation the
issuance and delivery to the Shareholder of Company Shares upon
exercise by the Shareholder of the Shareholder's rights to exchange
Class B Shares for Company Shares, does not require any notice
(including, without limitation, any information statement or proxy
statement to shareholders of the Company), filing, approval (by
shareholders of the Company or its Board of Directors or
otherwise), permit, waiver, or registration, whether under Florida
law, United States federal law, Canadian law, or any other
applicable law or the regulations thereunder, or under any
contract, agreement, or understanding whatsoever, except such as
have already been obtained and are listed on Exhibit 4.4(d) to
this Agreement and are in full force and effect, if any. The
foregoing assumes that the Shareholder delivers the representation
letter, substantially in the form of Exhibit D to this Agreement,
upon exercise of the exchange right. The foregoing is based upon
current laws and regulations and the current interpretation and
administration thereof.
4.5 The maturity date of that certain note in favor of
Capbanx Corporation in the amount of $475,000 Canadian Dollars has
been postponed until June 15, 2001.
4.6 The shareholders of the Company have amended the bylaws
of the Company so as to waive the requirements of Florida's Control
Share Acquisition statute, Florida Statute 6 07.0209.ARTICLE V
CERTAIN REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER
In order to induce the Company to enter into this Agreement,the
Shareholder represents and warrants to theCompany as follows:
5.1 Authority. He has full right, power and authority toexecute,
deliver and perform his obligations under this Agreement. This
Agreement has been duly executed and delivered by him
andconstitutes his legal, valid and binding obligation and is
enforceable against him in accordance with its terms.
5.2 Company Disclosure Documents. The Shareholder
acknowledges receipt of all of the filings made by the Company with
the Securities and Exchange Commission listed on Exhibit E attached
hereto (collectively, the Company Disclosure Documents ).
5.3 Review of Company Disclosure Documents. The Shareholder
or his representative(s) have been provided access to the
Company Disclosure Documents, and (ii) have had the opportunity to
ask questions of, and to receive answers from, officers and
employees of the Company concerning the Company and its business,
affairs and operations, and the transactions contemplated by this
Agreement, and to obtain any additional information necessary to
verify the accuracy of the Company Disclosure Documents.
5.4 Evaluation. By virtue of his education, training and
experience, or that of his representative(s), they have such
knowledge and experience in financial and business matters that
they are capable of understanding the information provided to them
by the Company and of evaluating the merits and risks of their
investment in the Company Shares.
5.5 Accredited Investor. He is an accredited investor, as
such term is defined in Regulation D promulgated by the Securities
and Exchange Commission under the Act.
5.6 Restricted Securities. He acknowledges that the Company
Shares have not been registered under the Act. He acknowledges and
agree that, as such, the Company Shares cannot be sold, assigned,
transferred, conveyed, pledged or otherwise disposed of unless they
are registered under the Act or an exemption from such registration
is available.
5.7 Restrictive Legend. He acknowledges that any and all
certificates representing the Company Shares will bear a
restrictive legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, ASSIGNED, TRANSFERRED, CONVEYED, PLEDGED, HYPOTHECATED,
ENCUMBERED OR OTHERWISE DISPOSED OF UNLESS (A) THEY ARE
COVERED BY A REGISTRATION STATEMENT OR POST-EFFECTIVE
AMENDMENT THERETO, EFFECTIVE UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR (B) SUCH SALE, ASSIGNMENT, TRANSFER,
CONVEYANCE, PLEDGE, HYPOTHECATION, ENCUMBRANCE OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THAT
ACT.
5.8 Additional Restrictions. He acknowledges that he may be
subject to the restrictions on resale of the Company Shares imposed
by Section 16(b) of the Securities Exchange Act of 1934, as
amended.
5.9 Residence and Domicile. He is a permanent resident and
has a permanent domiciliary in the Province of Ontario, Canada. At
present, he has no intention of changing his place of residence or
domicile to a place outside of the Province of Ontario, Canada.
ARTICLE VI
CERTAIN COVENANTS OF THE COMPANY
6.1 Valid Issuance. All Company Shares acquired by
the Shareholder in connection with an exchange effected pursuant
to this Agreement shall, upon issuance, be duly and validly issued,
fully paid and nonassessable and no personal liability shall attach
to the Shareholder solely by virtue of his ownership thereof.
6.2 No Encumbrances. All Company Shares acquired by
the Shareholder in connection with an exchange effected pursuant
to this Agreement shall, upon issuance, be free and clear of any
and all liens, pledges, security interests, hypothecations,
charges, encumbrances and restrictions of any kind or nature
whatsoever.
6.3 Reservation of Company Shares. During the period within
which an exchange may be effected by the Shareholder
pursuant to this Agreement the Company shall at all times have
authorized and reserved a sufficient number of Company Shares so as
to provide for the exchange of all of the issued and outstanding
Class B Shares.
6.4 Certain Transactions. The Company shall not effect any
recapitalization, consolidation, merger or conveyance to which the
provisions of Section 1.3(b) above are applicable unless, upon the
consummation thereof, the successor corporation or entity shall
assume by written instrument the obligation to deliver to the
holder of Class B Shares the shares of stock, securities, cash or
property that holder shall be entitled to acquire in accordance
with the provisions of Section 1.3(b) hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 Governing Law. This Agreement shall be governed by, and
shall be construed and interpreted in accordance, with the laws of
the State of Florida, without giving effect to the conflicts of
laws principles thereof.
7.2 Notices. Any and all notices and other communications
given pursuant to this Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand, or when
delivered by mail, by registered or certified mail, postage
prepaid, return receipt requested, to the respective parties at the
following respective addresses:
If to the Company: Value Holdings, Inc.
2307 Douglas Road, Suite 400
Miami, Florida 33145
Attention: President
with a copy to: Jonathan D. Leinwand Esq.
1 Broward Blvd., Suite 700
Ft. Lauderdale Fl., 33301
If to the Shareholder:
1341125 Ontario Limited
65 Passmore Ave East,
Scarborough, Ontario, M1S3C6
with a copy to: Greenberg Traurig
MetLife Building
200 Park Ave.
15th Floor
New York, NY 10166
Attention: Andrew Cosentino, Esq.
Telecopier: 212-805-9304
If to BNY Financial: BNY Financial Corporation-Canada
4 King Street West, Suite 1103
Toronto, Ontario, M5H 1B6
ATT: Mr. Lawrence Clement
Telecopier: 416- 359-9501
With a copy to: BNY Financial Corporation
1290 Avenue of the Americas
New York, N.Y. 10104
Attention Legal Department
Mr. Ray Herbert
Telecopier: 212- 4080 7372
or to such other address as either party may from time to time give
written notice of to the other in accordance with the provisions of
this Section 7.2.
7.3 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 arrangements, both oral and written, between the
parties with respect to such subject matter. This Agreement may
not be amended or modified in any manner, except by a written
instrument executed by each of the parties hereto.
7.4 Benefits; Binding Effect. This Agreement shall be for
the benefit of, and shall be binding upon, the parties hereto and
their respective heirs, personal representatives, executors, legal
representatives, successors and permitted assigns.
7.5 Severability. The invalidity of any one or more of the
words, phrases, sentences, clauses or sections contained in this
Agreement shall not affect the enforceability of the remaining
portions of this Agreement or any part hereof, all of which are
inserted conditionally on their being valid in law. Should any
provision prove to be invalid, the parties agree to substitute for
such provision whatever provision might most nearly as possible
create the economic and other benefits intended for the parties and
on their being valid in law. If any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement
shall be declared invalid by any court of competent jurisdiction,
then, in any such event, this Agreement shall be construed as if
such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses, or section or sections had not been
inserted.
7.6 No Waivers. The waiver by either party of a breach or
violation of any provision of this Agreement by the other party
shall not operate nor be construed as a waiver of any subsequent
breach or violation. The waiver by either party to exercise any
right or remedy it or he may possess shall not operate nor be
construed as a bar to the exercise of such right or remedy by such
party upon the occurrence of any subsequent breach or violation.
7.7 Arbitration. If any dispute requiring resolution
occurs with respect to this Agreement, the parties shall submit
such dispute to the arbitrator for arbitration in accordance with
the provisions of the Arbitrations Act (Ontario), such Arbitration
to take place in the City of Toronto. The Company and the
Shareholder shall each be entitled to appoint one arbitrator and
the third member of the arbitration panel shall be appointed by the
arbitrators so appointed.
The party desiring such arbitration shall give written
notice to that effect to the other party hereto and shall in such
notice appoint a disinterested person of recognized competence in
the field involved as one of the arbitrators. Within fifteen (15)
days thereafter, the later party shall by written notice to the
original party, appoint a second disinterested person of recognized
competence in such field as an arbitrator. The arbitrators thus
appointed shall, as promptly as possible determine such mater,
provided, however, that :
I) if the second arbitrator shall not have been appointed
as aforesaid, the first arbitrator shall proceed to determine such
matter; and
ii) If the two arbitrators appointed by the Company and
the Shareholder shall be unable to agree upon a third arbitrator
within fifteen (15) days after the appointment of the second
arbitrator, then the two (2) arbitrators shall give written notice
of such failure to agree to the Company and the Shareholder.
If the Company and the Shareholder fail to agree upon the selection
of such third arbitrator within fifteen (15) days after the
arbitrators appointed by the parties give notice as aforesaid, then
within ten (10) days thereafter either of the Company or the
Shareholder upon written notice to the other may apply for such
appointment to the Ontario Court of Justice (General Division) or
to any other court having jurisdiction.
The Company and the Shareholder shall each be entitled to present
evidence and argument to the arbitrators. The arbitrator or
arbitrators shall have the right only to interpret and apply the
terms, covenants, agreements, provisions, conditions and
limitations of this Agreement and may not change any terms,
covenants, provisions, conditions or limitations, or deprive any
party to this Agreement to any right or remedy expressly or
impliedly provided in this Agreement.
iii) The determination of the majority of the arbitrators
or of the sole arbitrator, as the case may be, shall be conclusive
upon the Company and the Shareholder and judgment upon the same may
be entered in any Court having jurisdiction thereof and there shall
be no appeal therefrom. The arbitrators shall give written notice
to the Company and the Shareholder stating their determination,
and shall furnish each with a copy of such determination signed by
them.
iv) In the event of the failure, refusal or inability of
any arbitrator to act, a new arbitrator shall be appointed in his
stead, which appointment shall be made in the same manner as
hereinbefore provided for the appointment of the arbitrator so
failing, refusing or unable to act.
The expenses of resolving the disputes described in this
Sub-paragraph shall be borne by the Company and the Shareholder
equally. The Company and the Shareholder shall, however, be
responsible for their own legal fees and disbursements and the fees
and expenses of its witnesses, if any.
7.8 Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretation of any or all of the provisions hereof.
7.9 Counterparts. This Agreement may be executed in any
number of counterparts and by the separate parties in separate
counterparts, each of which shall be deemed to constitute an
original and all of which shall be deemed to constitute one and
the same instrument.
7.10 Facsimile Signatures: This agreement may be executed by
telephone transmission, to the telephone number (if any) of the
other parties set out in this Agreement, of a facsimile signature
of the party so executing the Agreement.
Article VIII -- Escrow
8.1 Class A Shares. The Class A shares of Network shall
be held in escrow by the escrow agent defined in section 8.2 below.
Such shares and the owner thereof shall maintain all voting rights
attached to such shares and shall remain the beneficial owner of
the shares for all purposes. The shares are to be endorsed by the
Company for the benefit of the Shareholder.
8.2 Escrow Agent. Daniel Rutman shall act as the
escrow agent and hold in escrow the shares described above. The
parties shall indemnify and otherwise hold the escrow agent
harmless for all acts performed by the escrow agent acting in his
capacity as escrow agent. The escrow agent is empowered to act
only in accordance with this agreement. The parties hereto agree
to enter into an appropriate escrow agreement with the escrow
agent.
Article IX -- Breach and Right of Recission
9.1 Breach by Company. Upon breach by the Company of
this agreement or that certain asset purchase agreement by and
between Network and John Ziner Lumber Ltd. as defined below in
section 9.3, all the issued and outstanding Class A shares of
Network held by the Company shall be irrevocably assigned and
transferred to the Shareholder without delay. The escrow agent
shall be empowered to deliver the endorsed shares to the
Shareholder upon written notice to the escrow agent from the
Shareholder certifying that there has been a breach as defined by
this Section IX.
9.2 Breach. A breach for the purposes of this section shall
mean:
(a) Specific breaches of the Asset Purchase Agreement are
limited to:
(1) Any undisclosed material liabilities of Value Holdings.
(2) Any undisclosed law suits of a material nature against Value
Holdings, Inc.
(3) Any material breach of any representation or warranty of the
Company.
(4) Any material breach of any covenant or agreement of the
Company.
(b) Specific breaches of this Exchange Agreement shall mean:
(1) Any material breach of any representation or
warranty of the Company.
(2) Any material breach of any covenant or agreement of
the Company, including without limitation (i) Section 1.5 of this
Agreement, (ii) Article II of this Agreement, (iii) Article III of
this Agreement, (iv) Article VI of this Agreement, or (v) Article
IX of this Agreement.
Any material breach of Article VIII of this Agreement.
A material breach of the Company's bylaws as amended through
the date hereof.
9.3 Recission. Upon the happening of any event enumerated in
Section 9.2 that results in the transfer of the shares of Network
as described in Sections 9.1 the additional actions and/or remedies
shall take immediate effect:
a) Any and all rights or exchange and/or conversion as they
relate to the Class B shares shall be rescinded and be of no
effect.
b) Any and all contracts or other arrangements with Network as
they related to management fees or guarantee fees shall be canceled
and have no effect.
c) Any legal, accounting or other related fees shall be paid by
the Company to the Shareholder to a maximum of $500,000 upon
the Shareholder providing the Company with evidence of the
amounts so claimed.
IN WITNESS WHEREOF, each of the parties hereto has executed
and delivered this Agreement on the date first written above.
VALUE HOLDINGS, INC.
By_________________________________
Alison Cohen,
President
_____________________________ ___________________________
Witness 1341125 Ontario Limited
EXHIBIT A
Shareholder of Network Forest Products Limited
Ownership of Class B Shares as of February 18 ,1999 of Network
Forest
Products Limited
Shareholder Number of Class B Shares
1341125 Ontario Limited 3,416,335
TOTAL:3,416,335
EXHIBIT B
Intentionally Left Blank
EXHIBIT C
NOTICE OF EXCHANGE
, 199
Value Holdings, Inc.
2307 Douglas Road, Suite 400
Miami, Florida 33145
Attention: President
Gentlemen/Ladies:
Reference is made to that certain Exchange Agreement dated
February 17 , 1999 by and among Value Holdings, Inc. and 1341125
Ontario Limited. Capitalized terms utilized herein shall have the
same meaning ascribed to them in the Exchange Agreement.
Please be advised that the undersigned desires to exchange
xxxxxxxxx Class B Shares of Network Forest Products Limited for
xxxxxxxxx Company Shares of Value Holdings, Inc.
In order to facilitate such exchange, enclosed please the
following instruments and documents:
1. Stock certificate number xxxx, representing xxxxxxxxx
Class B Shares, together with a stock power, separate from
certificate, endorsed in blank; and
2. A completed and signed representation letter.
You are requested to comply with your obligations pursuant to
Section 1.5 of the Exchange Agreement.
Sincerely,
cc: Jonathan D. Leinwand, Esq.
EXHIBIT D
Representation Letter
, 199
Value Holdings, Inc.
2307 Douglas Road, Suite 400
Miami, Florida, 33145
Gentlemen/Ladies:
1. Exchange Agreement. Reference is made to that certain
Exchange Agreement dated February 18 , 1998 (the Exchange
Agreement ) by and among Value Holdings, Inc., a Florida
corporation (the Company ), and certain persons, including the
undersigned (the Shareholder ). Any capitalized term utilized
herein which is not defined herein shall have the same meaning
ascribed to it in the Exchange Agreement.
2. Exchange of Shares. The Shareholder desires to exchange
Class B Shares for xxxxxxxxx Company Shares.
3. Representations, Warranties and Covenants of the
Shareholder.
In order to induce the Company to issue and deliver the Company
shares to the Shareholder, the Shareholder represents and warrants
to, and covenants and agrees with, the Company as follows:
(a) The Shareholder acknowledges that the offer,
issuance and sale to it of the Shares is intended to be exempt from
the registration requirements of the Securities Act of 1933, as
amended (the Act ), pursuant to the provisions of Section 4(2)
thereof [and Regulation D promulgated thereunder].
(b) The Shareholder acknowledges receipt of all of the
filings made by the Company with the Securities and Exchange
Commission listed on Exhibit A attached hereto (collectively, the
Company Disclosure Documents ).
(c) The Shareholder represents and warrants to the
Company that the Shareholder (i) has thoroughly reviewed and
understood the Company Disclosure Documents, and (ii) has had the
opportunity to ask questions of, and to receive answers from,
officers and employees of the Company concerning the Company and
its business, affairs and operations, and the transactions
contemplated by this Representation Letter, and to obtain any
additional information necessary to verify the accuracy of the
Company Disclosure Documents. The Shareholder acknowledges that
the Company's officers and employees have answered all inquiries
made on behalf of the Shareholder to the satisfaction of the person
or persons making such inquiry.
(d) The Shareholder represents and warrants to the
Company that the Shareholder or his representative, by virtue of
his education, training and experience, has such knowledge and
experience in financial and business matters that he is capable of
understanding the information provided to him by the Company and of
evaluating the merits and risks of his investment in the Company
Shares.
(e) The Shareholder represents and warrants to the
Company that he is an accredited investor, as such term is
defined in Regulation D promulgated by the Securities and Exchange
Commission under the Act.
(f) The Shareholder represents and warrants to the
Company that the Company Shares are not being acquired by the
Shareholder with a view to, or for resale in connection with, any
distribution within the meaning of the Act.
(g) The Shareholder acknowledges that the Company Shares
have not been registered under the Act. The Shareholder
acknowledges and agrees that, as such, the Company Shares cannot be
sold, assigned, transferred, conveyed, pledged or otherwise
disposed of unless they are registered under the Act or an
exemption from such registration is available.
(h) The Shareholder acknowledges that any and all
certificates representing the Company Shares will bear a
restrictive legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, ASSIGNED, TRANSFERRED, CONVEYED, PLEDGED, HYPOTHECATED,
ENCUMBERED OR OTHERWISE DISPOSED OF UNLESS (A) THEY ARE
COVERED BY A REGISTRATION STATEMENT OR POST-EFFECTIVE
AMENDMENT THERETO, EFFECTIVE UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR (B) SUCH SALE, ASSIGNMENT, TRANSFER,
CONVEYANCE, PLEDGE, HYPOTHECATION, ENCUMBRANCE OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THAT
ACT.
(i) The Shareholder acknowledges that he may subject to
the restrictions on resale of the Company Shares imposed by Section
16(b) of the Securities Exchange Act of 1934, as amended.
(j) The Shareholder represents and warrants to the
Company that he acquired the Class B Shares referred to in
paragraph 2 above on February 18, 1999.. Upon transfer to the
Company, the Company will hold full legal and beneficial title to
the Class B Shares referred to in paragraph 2 above free and clear
of any and all liens, pledges, security interests, hypothecations,
charges, encumbrances and restrictions of any kind or nature
whatsoever.
(l) The Shareholder represents and warrants to the
Company that (i) he has full power and authority to execute and
deliver this representation letter, and (ii) this Representation
Letter has been duly and validly executed and delivered by the
Shareholder and constitutes the legal, valid and binding obligation
of the Shareholder and (iii) this Representation Letter is
enforceable against the Shareholder in accordance with its terms.
4. Irrevocability; Survival. The Shareholder acknowledges
and agrees that his exchange of Class B Shares for Company Shares
is irrevocable and that all of his representations, warranties,
covenants, agreements and indemnities set forth herein shall
survive the consummation of the exchange of Class B Shares for
Company Shares contemplated hereby.
5. Indemnification. The Shareholder shall indemnify and
hold harmless the Company and its directors, officers, employees,
attorneys and agents from, against and in respect of the full
amount of any and all liabilities, damages, claims, taxes, losses,
penalties, interest, costs and expenses, including without
limitation reasonable fees and disbursements of legal counsel,
arising from, in connection with, or incident to, any breach or
violation, or any alleged breach or violation, by the Shareholder
of any or all of his representations, warranties, covenants and
agreements set forth in this Representation Letter.
6. Governing Law. This Representation Letter shall be
governed by, and shall be construed and interpreted in accordance,
with the laws of the State of Florida, without giving effect to the
conflicts of laws principles thereof.
7. Benefits; Binding Effect. This Representation Letter
shall be for the benefit of, and shall be binding upon, the Company
and the Shareholder and their respective heirs, personal
representatives, executors, legal representatives, successors and
assigns.
8. Arbitration. If any dispute requiring resolution occurs
with respect to this Agreement, the parties shall submit such
dispute to the arbitrator for arbitration in accordance with the
provisions of the Arbitrations Act (Ontario), such Arbitration to
take place in the City of Toronto. The Company and the
Shareholder shall each be entitled to appoint one arbitrator and
the third member of the arbitration panel shall be appointed by the
arbitrators so appointed.
The party desiring such arbitration shall give written notice to
that effect to the other party hereto and shall in such notice
appoint a disinterested person of recognized competence in the
field involved as one of the arbitrators. Within fifteen (15) days
thereafter, the later party shall by written notice to the
original party, appoint a second disinterested person of recognized
competence in such field as an arbitrator. The arbitrators thus
appointed shall, as promptly as possible determine such mater,
provided, however, that :
I) if the second arbitrator shall not have been appointed
as aforesaid, the first arbitrator shall proceed to determine such
matter; and
ii) If the two arbitrators appointed by the Company and
the Shareholder shall be unable to agree upon a third arbitrator
within fifteen (15) days after the appointment of the second
arbitrator, then the two (2) arbitrators shall give written notice
of such failure to agree to the Company and the Shareholder.
If the Company and the Shareholder fail to agree upon the selection
of such third arbitrator within fifteen (15) days after the
arbitrators appointed by the parties give notice as aforesaid, then
within ten (10) days thereafter either of the Company or the
Shareholder upon written notice to the other may apply for such
appointment to the Ontario Court of Justice (General Division) or
to any other court having jurisdiction.
The Company and the Shareholder shall each be entitled to present
evidence and argument to the arbitrators. The arbitrator or
arbitrators shall have the right only to interpret and apply the
terms, covenants, agreements, provisions, conditions and
limitations of this Agreement and may not change any terms,
covenants, provisions, conditions or limitations, or deprive any
party to this Agreement to any right or remedy expressly or
impliedly provided in this Agreement.
iii) The determination of the majority of the arbitrators
or of the sole arbitrator, as the case may be, shall be conclusive
upon the Company and the Shareholder and judgment upon the same may
be entered in any Court having jurisdiction thereof and there shall
be no appeal therefrom. The arbitrators shall give written notice
to the Company and the Shareholder stating their determination,
and shall furnish each with a copy of such determination signed by
them.
iv) In the event of the failure, refusal or inability of
any arbitrator to act, a new arbitrator shall be appointed in his
stead, which appointment shall be made in the same manner as
hereinbefore provided for the appointment of the arbitrator so
failing, refusing or unable to act.
The expenses of resolving the disputes described in this
Sub-paragraph shall be borne by the Company and the Shareholder
equally. The Company and the Shareholder shall, however, be
responsible for their own legal fees and disbursements and the fees
and expenses of its witnesses, if any.
9. Headings. The headings contained in this Representation
Letter are for reference purposes only and shall not affect in any
way the meaning or interpretation of any or all of the provisions
hereof.
Sincerely,
CC: Jonathan D. Leinwand, Esq.
EXHIBIT A
TO REPRESENTATION LETTER
VALUE HOLDINGS, INC.
(f/k/a Linium Technology, Inc.)
Company Disclosure Documents
Annual Report on Form 10-K for the fiscal year ended October
31
, 199, as amended
Quarterly Report on Form 10-Q for the period ended July 31,
199, as amended
Quarterly Report on Form 10-Q for the period ended April 31,
199, as amended
Quarterly Report on Form 10-Q for the period ended January 31,
199, as amended
NOTE: THIS LIST WILL BE UPDATED PRIOR TO THE TIME OF ANY EXCHANGE.
EXHIBIT E
VALUE HOLDINGS, INC.
(f/k/a Linium Technology, Inc.)
Company Disclosure Documents
Annual Report on Form 10-KSB for the fiscal year ended October
31, 1998, as amended
Quarterly Report on Form 10-Q for the period ended July 31,
1998, as amended
Quarterly Report on Form 10-Q for the period ended April 31,
1998, as amended
Quarterly Report on Form 10-Q for the period ended January 31,
1998, as amended
NOTE: THIS LIST WILL BE UPDATED AT CLOSING
Exhibit F
Current Liabilities of the Company Not Otherwise Specifically
Disclosed on the Company's Form 10-KSB for the Fiscal Year
Ended October 31, 1998
Exhibit 10.55 Guarantee
GUARANTEE
TO: BNY FINANCIAL CORPORATION - CANADA
For valuable consideration, VALUE HOLDINGS, INC.
unconditionally guarantees and promises to pay to BNY FINANCIAL
CORPORATION - CANADA (the Lender ), on demand, any and all
indebtedness of NETWORK FOREST PRODUCTS LIMITED (the Borrower )
pursuant to the Credit Agreement between the Borrower and the
Lender dated as of February 18, 1999 as the same may be amended,
restated, supplemented, revised or replaced from time to time.
The word indebtedness is used herein in its most comprehensive
sense and includes any and all advances, debts, obligations and
liabilities of the Borrower, heretofore, now, or hereafter made,
incurred or created, whether voluntary or involuntary and however
arising, whether direct or acquired by the Lender by assignment or
succession, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and
whether the Borrower may be liable individually or jointly with
others, or whether recovery upon such indebtedness may be or
hereafter become barred by any statute of limitations, or
whether such indebtedness may be or hereafter become otherwise
unenforceable.
The liability of the undersigned under this Guarantee
shall be unlimited. This is a continuing Guarantee relating to any
indebtedness, including that arising under successive transactions
which shall either continue the indebtedness or from time to time
renew it after it has been satisfied.
The obligations hereunder are independent of the
obligations of the Borrower, and a separate action or actions may
be brought and prosecuted against the undersigned whether action is
brought against the Borrower or whether the Borrower be joined in
any such action or actions; and the undersigned waives the benefit
of any statute of limitations affecting its liability hereunder.
The undersigned authorizes the Lender, without notice or
demand and without affecting its liability hereunder, from time to
time, either before or after revocation hereof, to:
renew, compromise, extend, accelerate or otherwise change the
time for payment of, or otherwise change the terms of the
indebtedness or any part thereof, including increase or decrease of
the rate of interest thereon;
receive and hold security for the payment of this Guarantee or
the indebtedness guaranteed, and exchange, enforce, waive, release,
fail to perfect, sell, or otherwise dispose of any such security;
apply such security and direct the order or manner of sale
thereof as the Lender in its discretion may determine; and Release
or substitute any guarantors.
The undersigned waives any right to require the Lender
to:
proceed against the Borrower;
proceed against or exhaust any security held from the Borrower
or any other person; or
pursue any other remedy in the Lender's power whatsoever.
The undersigned waives any defence arising by reason of
any disability or other defence of the Borrower, or the cessation
from any cause whatsoever of the liability of the Borrower, or any
claim that the undersigned's obligations exceed or are more
burdensome than those of the Borrower, the undersigned waives any
right of subrogation, reimbursement, indemnification, and
contribution (contractual, statutory or otherwise), arising from
the existence or performance of this Guarantee and the undersigned
waives any right to enforce any remedy which the Lender now has or
may hereafter have against the Borrower, and waive any benefit of,
and any right to participate in, any security now or hereafter held
by the Lender. The Lender may foreclose, either by judicial
foreclosure or by exercise of power of sale, or realize any deed of
trust or other security securing the indebtedness, and, even though
the foreclosure or other realization may destroy or diminish the
undersigned's rights against the Borrower or may result in security
being sold at an under value, the undersigned shall be liable to
the Lender for any part of the indebtedness remaining unpaid after
the foreclosure or other realization. The undersigned waives all
presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonour, and notices of
acceptance of this Guarantee and of the existence, creation, or
incurring of new or additional indebtedness.
The undersigned acknowledges and agrees that it shall
have the sole responsibility for obtaining from the Borrower such
information concerning the Borrower's financial conditions or
business operations as the undersigned may require, and that the
Lender has no duty at any time to disclose to the undersigned any
information relating to the business operations or financial
conditions of the Borrower.
To secure all of the undersigned s obligations hereunder,
the undersigned assigns and grants to the Lender a security
interest in all moneys, securities and other property of the
undersigned now or hereafter in the possession of the Lender, and
all deposit accounts of the undersigned maintained with the Lender,
and all proceeds thereof.
Upon default or breach of any of the undersigned's obligations to
the Lender, the Lender may apply any deposit account to reduce the
indebtedness, and may realize upon any collateral as provided by
law and in any security agreements between the Lender and the
undersigned.
Any obligations of the Borrower to the undersigned, now
or hereafter existing, including but not limited to any obligations
to the undersigned as subrogees of the Lender or resulting from the
undersigned's performance under this Guarantee, are hereby
assigned to the Lender and postponed and subordinated to the
indebtedness. Any such obligations of the Borrower to the
undersigned received by the undersigned shall be received in trust
for the Lender and the proceeds thereof shall forthwith be paid
over to the Lender on account of the indebtedness of the Borrower
to the Lender, but without reducing or affecting in any manner the
liability of the undersigned under the provisions of this
Guarantee. This assignment and postponement is independent of and
severable from this Guarantee and shall remain in full force and
effect whether or not the undersigned is liable for any amount
under this Guarantee.
This Guarantee may be revoked at any time by the
undersigned in respect to future transactions, unless there is a
continuing consideration as to such transactions which the
undersigned does not renounce. Such revocation shall be effective
upon the expiration of three (3) months after actual receipt by the
Lender at:
BNY Financial Corporation- Canada,
4 King Street West, Suite 1103,
Toronto, Ontario M5H 1B6
Attention: Vice- President
(or such address as the Lender may communicate to the undersigned)
of written notice of revocation
with a copy to:
BNY Financial Corporation,
1290 Avenue of the Americas,
New York, New York, 10104,
Attention: Loan Administration Department,
Mr. Frank Imperato, V.P.,
telecopier: (212) 408-7162.
Revocation shall not affect any of the undersigned's obligations or
the Lender's rights with respect to transactions which precede the
expiration of the three (3) month period following the Lender's
receipt of such notice, regardless of whether or not the
indebtedness related to such transactions, before or after
revocation, has been renewed, compromised, extended, accelerated,
or otherwise changed as to any of its terms, including time for
payment or increase or decrease of the rate of interest thereon,
and regardless of any other act or omission of the Lender
authorized hereunder. If this Guarantee is revoked, returned or
cancelled, and subsequently any payment or transfer of any interest
in property by the Borrower to the Lender are rescinded or must be
returned by the Lender to the Borrower, this Guarantee shall be
reinstated with respect to any such payment or transfer, regardless
of any such prior revocation, return, or cancellation.
Where the Borrower becomes bankrupt or makes an
assignment for the benefit of creditors or if any circumstances
arise necessitating the Lender to file a claim against the Borrower
and/or to value its securities, the Lender shall be entitled to
place such valuation on its securities as the Lender may in its
absolute discretion see fit and the filing of such claim and the
valuing of securities shall not in any way prejudice or restrict
the claim of the Lender against the undersigned and in no way
discharges the undersigned from its liability hereunder to the
Lender, either in whole or in part and until all indebtedness of
the Borrower to the Lender has been fully paid, the Lender shall
have the right to include in its claim the amount of all sums paid
by the undersigned to the Lender under this Guarantee and to prove
and rank for and receive dividends in respect of such claim, any
and all rights to prove and rank for such sums paid for by the
undersigned and receive the full amount of all dividends in respect
thereto are hereby assigned and transferred to the Lender by the
undersigned.
Any account settled or stated by or between the Lender
and the Borrower, or, if any such account has not been so settled
or stated immediately before demand for payment under this
Guarantee, any account stated by the Lender, shall be accepted by
the undersigned as conclusive evidence of the amount which at the
date of the account so settled or stated is due by the Borrower to
the Lender or remains unpaid by the Borrower to the Lender.
The undersigned shall make payment to the Lender of the
amount of its liability to the Lender forthwith after demand
therefor is made in writing and such demand shall be deemed to have
been effectually made when an envelope containing such demand
addressed to the undersigned, at its address last known to the
Lender, is deposited, postage prepaid, in the post office. All
payments hereunder shall be made to the Lender at the office of the
Lender set out in paragraph 9 hereof.
If any provision of this Guarantee is determined in any
proceeding in a court of competent jurisdiction to be void or to be
wholly or partly unenforceable, that provision shall for the
purposes of such proceeding, be severed from this Guarantee at the
Lender s option and shall be treated as not forming a part hereof
and all the remaining provisions of this Guarantee shall remain in
full force and be unaffected thereby.
This Guarantee shall not be subject to or affected by any
promise or condition affecting or limiting the liability of the
undersigned except as expressly set forth herein and no statement,
representation, agreement or promise on the part of the Lender or
any officer, employee or Lender thereof, unless contained herein,
forms any part of this contract or has induced the making thereof
or shall be deemed in any way to affect the liability of the
undersigned hereunder.
There are no representations, collateral agreements or
conditions with respect to this Guarantee affecting the liability
of the undersigned hereunder other than contained herein.
This Guarantee shall extend to and enure to the benefit
of the Lender and its successors and assigns, and shall extend to
and be binding upon the undersigned and its successors and assigns.
The Lender may, without notice to the undersigned and
without affecting the undersigned s obligations hereunder, assign
the indebtedness and this Guarantee, in whole or in part. The
undersigned agrees that the Lender may disclose to any assignee or
purchaser, or any prospective assignee or purchaser, of all or part
of the indebtedness any and all information in the Lender's
possession concerning the undersigned, this Guarantee, and any
security for this Guarantee.
If for the purpose of obtaining judgment in any court it
is necessary to convert an amount due hereunder in the currency in
which it is due (the Original Currency ) into another currency
(the Second Currency ), the rate of exchange applied shall be that
at which, in accordance with normal banking procedures, the Lender
could purchase, in the New York foreign exchange market, the
Original Currency with the Second Currency on the date two (2)
Business Days preceding that on which judgment is given. The
undersigned agrees that its obligation in respect of any Original
Currency due from it to the Lender hereunder shall, notwithstanding
any judgment or payment in such other currency, be discharged only
to the extent that, on the Business Day following the date the
Lender receives payment of any sum so adjudged to be due hereunder
in the Second Currency the Lender may, in accordance with normal
banking procedures, purchase, in the New York City foreign exchange
market the Original Currency with the amount of the Second Currency
so paid; and if the amount of the Original Currency so purchased or
could have been so purchased is less than the amount originally due
in the Original Currency, the undersigned agrees as a separate
obligation and notwithstanding any such payment or judgment to
indemnify the Lender against such loss. The term rate of
exchange in this paragraph 19 means the spot rate at which the
Lender, in accordance with normal practices is able on the relevant
date to purchase the Original Currency with the Second Currency and
includes any premium and costs of exchange payable in connection
with such purchase.
The undersigned agrees to pay all reasonable legal fees,
including allocated costs of the Lender's in-house counsel, and all
other costs and expenses which may be incurred by the Lender in the
enforcement of this Guarantee.
All words used herein in the plural shall be deemed to
have been used in the singular where the context and construction
so require.
This Guarantee shall be governed by and construed in
accordance with the laws of the State of Florida.
The undersigned acknowledges receipt of an executed copy
of this Guarantee.
Executed as of this 18th day of February, 1999.
VALUE HOLDINGS, INC.
Per:c/s
Name:
Title:
S:\Client\2570\49\Docs\Guarantee.VHI.2.VG.wpd
Exhibit 17.01 Resignation of Jeffrey Kurtz
To: The Board of Directors of Value Holdings, Inc.
I hereby tender my resignation as a member of the board of
directors to take effect
immediately.
Dated: 02/22/99
By: /s/ Jeffrey Kurtz
Jeffrey Kurtz
To: The Board of Directors of Value Holdings, Inc.
I hereby tender my resignation as a member of the board of
directors to take effect
immediately.
Dated: 02/22/99
By: /s/ Eugene Bialys
Eugene Bialys
