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ASSET PURCHASE AGREEMENT
between
A NOVO CANADA ENTERPRISES INC.
and
LES TELECOMMUNICATIONS VALSYSTEME INC.
and
9038-2847 QUEBEC INC.
and
JACQUES FRANCO
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September 12, 2000
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TABLE OF CONTENTS
<TABLE>
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1. DEFINITIONS...............................................................................................2
2. RECITALS AND SCHEDULES....................................................................................3
3. ASSETS PURCHASED..........................................................................................3
4. ASSUMED LIABILITIES AND ADJUSTMENT........................................................................4
5. PURCHASE PRICE............................................................................................5
6. ALLOCATION OF THE PURCHASE PRICE..........................................................................5
7. TAX ELECTIONS.............................................................................................5
8. REPRESENTATIONS AND WARRANTIES OF THE SELLER OF 9083-2847 AND JACQUES FRANCO5
8.1 Legal status.....................................................................................6
8.2 Capacity.........................................................................................6
8.3 Regulatory compliance............................................................................7
8.4 Financial position...............................................................................8
8.5 Liability........................................................................................9
8.6 No material omissions............................................................................10
9. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER...........................................................10
10. SCOPE OF REPRESENTATIONS AND WARRANTIES...................................................................11
11. SALE OF AN ENTERPRISE.....................................................................................11
12. EMPLOYEES.................................................................................................11
13. COVENANT OF THE SELLER....................................................................................11
14. INDEMNIFICATION OF THE PURCHASER..........................................................................11
15. INDEMNIFICATION OF THE SELLER.............................................................................12
16. NON-COMPETITION AND NON-SOLICITATION UNDERTAKING..........................................................12
17. ADDITIONAL COVENANTS......................................................................................14
18. FEES AND EXPENSES.........................................................................................14
19. OTHER DOCUMENTS...........................................................................................14
20. NOTICE....................................................................................................14
21. CONFIDENTIALITY...........................................................................................16
22. MISCELLANEOUS.............................................................................................16
</TABLE>
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ASSET PURCHASE AGREEMENT executed in the city of Montreal on September 12,
2000.
BETWEEN: A NOVO CANADA ENTERPRISES INC., a corporation duly
incorporated under the Canada Business
Corporations Act, having its registered office at
1474, rue Cunard, Laval, Quebec, H7S 2B7,
represented and acting hereto by its duly
authorised representative as he so declares;
(hereinafter referred to as the "PURCHASER")
AND: LES TELECOMMUNICATIONS VALSYSTEME INC., a company
duly incorporated under Quebec laws, having its
registered office at 1474, rue Cunard, Laval,
Quebec, H7S 2B7, represented and acting hereto by
its duly authorised representative as he so
declares;
(hereinafter referred to as the "SELLER")
AND INTERVENING HERETO: 9038-2847 QUEBEC INC., a company duly incorporated
under the Quebec laws, having its registered
office at 4525, rue Jeanne-d'Arc, Montreal,
Quebec, H1X 2E4, represented and acting hereto by
its duly authorised representative as he so
declares;
(hereinafter referred to as "9038-2847")
AND: JACQUES FRANCO, businessman, domiciled at 4525,
rue Jeanne-d'Arc, Montreal, Quebec, H1X 2E4;
(hereinafter referred to as "JACQUES FRANCO")
WHEREAS the Seller is a business which specialises in the maintenance and
repairs of CATV, microwave, television/radio broadcasting, optical and cable
broadcasting equipment (the "ENTERPRISE");
WHEREAS 9038-2847 owns all of the issued and outstanding shares of the
Seller and Jacques Franco owns all of the issued and outstanding shares of
9038-2847;
WHEREAS the Seller wishes to sell and the Purchaser wishes to purchase a
substantial part of the assets of the Enterprise subject to the terms and
conditions contained herein;
NOW THEREFORE THE PARTIES HEREBY AGREE AS FOLLOWS:
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1. DEFINITIONS
For the purposes of this agreement, unless otherwise indicated by the
subject matter or the context, the following terms shall have the meanings
which are set forth below:
"1999 FINANCIAL STATEMENTS" shall mean the Seller's financial statements
and the auditors' report thereon for the fiscal year ending August 31,
1999, including the income statement, the statement of deficit, the balance
sheet and the statement of changes in financial position, including the
notes thereto, attached hereto as SCHEDULE B.
"AGREEMENTS" shall be defined at paragraph 3.4;
"ASSETS PURCHASED" shall mean the assets listed at section 3;
"ASSUMED LIABILITIES" shall be defined at paragraph 4.1;
"CLOSING DATE" shall mean September 12, 2000 or any other date agreed upon
between the parties;
"DAMAGES" shall be defined at paragraph 14.1;
"EMPLOYEES" shall be defined at section 12;
"EQUIPMENT" shall be defined at paragraph 3.2;
"GOODWILL" shall be defined at paragraph 3.5;
"HEREUNDER", "HEREBY", "THE AGREEMENT" or "THIS AGREEMENT" shall mean this
asset purchase agreement executed on this date between the Purchaser, the
Seller, 9038-2847 and Jacques Franco as amended from time to time by the
parties;
"INTERVENORS" shall be defined at section 16;
"INVENTORY" shall be defined at paragraph 3.1.
"LEASE" shall be defined at paragraph 3.4;
"PERMITS" shall be defined at paragraph 3.3;
"PURCHASE PRICE" shall be defined at section 5; and
"YEAR 2000 UNAUDITED FINANCIAL STATEMENTS" shall mean the unaudited balance
sheet as at July 31, 2000 and the unaudited income statement for the 11
month period ending July 31, 2000, attached hereto as SCHEDULE A;
2. RECITALS AND SCHEDULES
The recitals and following Schedules form an integral part of this
Agreement:
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Schedule A ! Year 2000 Unaudited Financial Statements
Schedule B ! 1999 Financial Statements
Schedule 3.1 ! Inventory
Schedule 3.2 ! Equipment
Schedule 3.3 ! Permits
Schedule 3.4 ! Agreements
Schedule 4.1 ! Sworn statement
Schedule 6 ! Allocation of Purchase Price
Schedule 8.4.4 ! List of clients and suppliers
3. ASSETS PURCHASED
Subject to the terms and conditions contained herein, the Seller sells to
the Purchaser and the Purchaser purchases from the Seller as of the date
hereof any and all rights, title and interests of the Seller with respect
to the following (the "ASSETS PURCHASED"):
3.1 any and all inventory of any nature whatsoever and wherever located
owned by the Seller in connection with operation of the Enterprise,
including, but without limitation, the items listed in SCHEDULE 3.1
(the "INVENTORY");
3.2 any and all moveable property and equipment of the Enterprise,
including, but without limitation, the property listed at SCHEDULE 3.2
(the "EQUIPMENT");
3.3 all permits, certificates, licences, consents, approvals and other
authorisations issued by government, administrative and other
regulatory authorities which are necessary for the operations of the
Enterprise and which are listed at SCHEDULE 3.3 (the "PERMITS");
3.4 any and all rights, title and interests of the Seller in agreements
binding the Seller in connection with the Enterprise, including the
lease for the immoveable property located at 1474, rue Cunard, Laval,
Quebec, H7S 2B7 (the "LEASE"), which agreements are listed at SCHEDULE
3.4 (the "AGREEMENTS");
3.5 the goodwill of the Enterprise, including, but without limitation, any
and all lists of clients and suppliers, any advertising and
promotional material and any printed or written material used in the
operation of the Enterprise or in connection with the operation of the
Assets Purchased, and the right of the Purchaser to hold itself out as
owner of the Enterprise and successor of the Seller (the "GOODWILL");
and
3.6 any and all documents, books and records, software, data banks or
other information contained in any computer media in connection with
the Assumed Liabilities and the Assets Purchased.
4. ASSUMED LIABILITIES AND ADJUSTMENT
4.1 Subject to the terms and conditions set forth herein, the Purchaser
hereby agrees to pay part of the Purchase Price (as defined below) for
the Assets Purchased by
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assuming as of the date hereof, for and on behalf of the Seller, any
and all liabilities in connection with salaries, benefits, including
accrued vacation pay, severance pay and any other amounts due and
payable to Employees as of midnight on September 12, 2000, and all
other accounts payable (collectively the "ASSUMED LIABILITIES"), the
whole as more fully detailed in the sworn statement of the Seller
pursuant to Article 1768 of the Civil Code of Quebec, which is
attached as a SCHEDULE 4.1 hereto.
4.2 The Purchaser hereby agrees to indemnify and save and hold the Seller
harmless as provided in section 15 from Damages the Seller might incur
in connection with the Assumed Liabilities.
4.3 The Seller, 9038-2847 and Jacques Franco hereby jointly and severally
covenant to indemnify and save and hold the Purchaser harmless,
pursuant to sections 11 and 14 hereof from any Damages arising from
any omission or inaccuracy in the sworn statement attached as SCHEDULE
4.1.
4.4 Subject to paragraph 4.1, the Purchaser shall assume no liabilities of
the Seller, nor be liable to perform any obligations in connection
therewith, unless such liabilities or obligations are incurred after
the Closing Date and arise directly from the Agreements.
4.5 In the event that any amount mentioned in the sworn statement of the
Seller has already been paid by the Seller (with relevant supporting
vouchers), the Purchaser agrees to repay such sum to the Seller upon
receipt of the relevant supporting vouchers.
5. PURCHASE PRICE
The Purchaser hereby agrees to pay the Seller the sum of $4,000,000 for the
Assets Purchased (the "PURCHASE PRICE"), to be allocated in accordance with
SCHEDULE 6 hereof and which shall be payable in the following manner:
5.1 as stated in section 4, by agreeing to undertake the Assumed
Liabilities valued at $112,452.14; and
5.2 $3,887,547.86 on the Closing Date by cheque payable to the order of
the Seller, receipt of which is hereby acknowledged.
6. ALLOCATION OF THE PURCHASE PRICE
The Purchase Price shall be allocated towards the Assets Purchased in the
manner set forth in SCHEDULE 6. The allocation of the Purchase Price shall
be final and binding upon the parties for all purposes, including, but
without limitation, for the purposes of tax returns and the preparation of
financial statements and other documents and records.
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7. TAX ELECTIONS
The Seller and the Purchaser shall, within the required periods, execute
and file duly completed forms in connection with the election referred to
in Section 167(1.1) of the Excise Tax Act (Canada) and section 75.1 of the
Act respecting the Quebec Sales Tax (Quebec).
8. REPRESENTATIONS AND WARRANTIES OF THE SELLER, OF 9038-2847 AND OF JACQUES
FRANCO
As of the date hereof, the Seller, 9038-2847 and Jacques Franco hereby
jointly and severally represent and warrant to the Purchaser as follows,
and acknowledge that the Purchaser relies on such representations and
warranties for the purpose of acquiring the Assets Purchased and
undertaking the Assumed Liabilities:
8.1 legal status:
8.1.1 both the Seller and 9038-2847 are duly incorporated companies,
in good standing and duly existing under the Companies Act
(Quebec) and in good standing under the Act respecting the
Legal Publicity of Sole Proprietorships, Partnerships and
Legal Persons (Quebec), and have complied with the laws
governing its business, have all necessary corporate powers
and capacity and are duly authorised to own their property and
assets and generally to conduct their business as presently
conducted.
8.1.2 9038-2847 owns all the issued and outstanding shares of the
share capital of the Seller and Jacques Franco owns all of the
issued and outstanding shares of the share capital of
9038-2847;
8.2 capacity:
8.2.1 the Seller has the power, authority and capacity to sell,
assign and transfer the Assets Purchased to the Purchaser upon
the terms and conditions of this Agreement and has duly
obtained any and all authorisations and consents required for
such purpose, including, but without limitation to the
foregoing, all necessary resolutions, authorisations and
consents of directors and shareholders of the Seller;
8.2.2 each of the Seller and 9038-2847 has obtained any and all
corporate authorisations required to execute this Agreement
and comply with its provisions;
8.2.3 the Seller has full and good title to the Assets Purchased,
free and clear of any lien, charge, priority, mortgage or
other charge, encumbrance, right or interest of any nature
whatsoever;
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8.2.4 the execution by the Seller and by 9038-2847 of this Agreement
and their compliance with its provisions does not give rise to
the violation of any statute, regulation or other relevant
legislative provision, nor is it a violation of its articles
of incorporation or its bylaws or the provisions of any
arrangements, agreements or undertakings to which it is a
party, nor shall it give rise to acceleration of any provision
contained therein;
8.2.5 other than this Agreement, no agreement, option or other right
likely to become an agreement or an option to purchase the
Assets Purchased or to give rise to a security interest,
priority, mortgage or other lien, charge or encumbrance upon
the Assets Purchased;
8.2.6 this Agreement constitutes a valid obligation which binds the
Seller, 9038-2847 and Jacques Franco and is fully enforceable
in accordance with its terms, subject to enforcement
limitations generally imposed by applicable laws concerning
creditors, particularly in cases of bankruptcy or other
similar proceedings and to the extent that extraordinary
remedies are granted at the discretion of the court having
jurisdiction;
8.3 Regulatory compliance
8.3.1 the accounting books and records of the Seller truly,
accurately and completely reflect the financial position and
operating results of the Seller and have been prepared in
compliance with generally accepted accounting principles in
Canada consistently applied;
8.3.2 the Seller is entitled to conduct business in the districts
where it owns assets or property, and has complied with all
relevant laws, regulations, orders, judgments, policies,
guidelines, decrees, Permits and other requirements of any
federal, provincial, regional or municipal government or
administrative authorities (the "LAWS") in connection with its
business and its operations, including, but without
limitation, environmental or environmental protection Laws;
8.3.3 the Seller operates the Enterprise exclusively within the
Province of Quebec;
8.3.4 the Seller's business has never been in violation nor is it in
violation of any Laws, including, but without limitation, Laws
with respect to environment, environmental protection, and
health and safety in the workplace, nor has the Seller been
found guilty of any offence for non-compliance with the Laws,
or been ordered to pay any fine or other amount, or settled
any prosecution prior to verdict;
8.3.5 the Seller has not received any written or verbal requests for
information further to any federal, provincial, municipal or
regional inquiry concerning the environment or other subject
matter concerning the Seller, its Enterprise or its
operations;
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8.3.6 the Seller is not a non-resident of Canada for the purposes of
the Income Tax Act (Canada) or the Taxation Act (Quebec);
8.3.7 the registration numbers of the Seller for the purposes of
goods and services tax ("GST") and Quebec sales tax ("QST")
are respectively 103300422RT and 1002983229TQ0001;
8.3.8 the Purchaser shall acquire ownership, possession or use
hereunder of all or substantially all of the property which
can reasonably be regarded as being necessary for the
Purchaser to be capable of operating the Enterprise as a
business, as provided by Section 167 of the Excise Tax Act
(Canada) and Article 75 of the Act Respecting Quebec Sales Tax
(Quebec);
8.3.9 the conduct of business of the Enterprise does not infringe
any trademark, patent, trade name or copyright of any other
person;
8.3.10 the Seller owns no patent, trademark, trade name or copyright
and uses no name or business name other than "Les
Telecommunications Valsysteme Inc." for the purposes of
conduct of the business of the Enterprise;
8.3.11 SCHEDULE 3.4 sets forth a true, complete and accurate list of
all Agreements in connection with the Enterprise to which the
Seller is a party and all such Agreements are in force and
effect and fully enforceable in accordance with their terms.
The Seller is note in default under such agreements and, to
the best of the knowledge of the Seller, no other party to
such Agreement is in default thereunder. Furthermore, to the
best of the Seller's knowledge, no lapse of time and/or
failure to give notice has occurred which may give rise to any
such default;
8.4 financial position:
8.4.1 the Year 2000 Unaudited Financial Statements, attached hereto
as SCHEDULE A, truly and accurately reflect the financial
position of the Seller as of July 31, 2000 and have been
prepared in accordance with generally accepted accounting
principles in Canada consistently applied. No liability or
undertaking which may have a materially adverse effect on the
Seller has failed to be disclosed, nor is any statement made
with respect thereto misleading;
8.4.2 The 1999 Financial Statements, attached hereto as SCHEDULE B,
truly and accurately reflect the financial position of the
Seller as of August 31, 1999 and have been prepared in
accordance with generally accepted accounting principles in
Canada consistently applied. No liability or undertaking which
may have a materially adverse effect on the Seller has failed
to be disclosed, nor is any statement made with respect
thereto misleading;
8.4.3 accounts payable assumed by the Purchaser pursuant to the
Assumed Liabilities are recorded in the books and records of
the Seller, were
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incurred in the normal course of business of the Enterprise
and include amounts payable to Employees, including salaries
and benefits, cumulative vacation pay due and owing as of
midnight on September 12, 2000, severance pay and any other
amounts due and owing to Employees;
8.4.4 SCHEDULE 8.4.4 hereunder contains a true, accurate and
complete list of all suppliers and clients of the Seller as of
the date hereof;
8.4.5 the Inventory is of marketable quality, usable and
commercially saleable in the normal course of business;
8.4.6 to the best of its knowledge, the property leased by the
Seller under the Lease currently in force and effect is in
good condition and the owner has not failed to perform its
obligations thereunder;
8.4.7 since August 18, 2000, the Seller:
8.4.7.1 has continuously operated its Enterprise in the
normal course of business, complied with the relevant
Laws and has not been a party to any transactions
completed outside the normal course of business;
8.4.7.2 has neither sold nor assigned any of its assets,
other than in the normal course of business;
8.4.7.3 has incurred no material or adverse change in the
operation of its business which may affect its
property, business or financial position;
8.4.7.4 has paid up and maintained all insurance policies in
connection with its assets and business;
8.4.7.5 has not altered the employment conditions or salaries
of its employees or the payment or other terms or
conditions with suppliers; and
8.4.7.6 has neither solicited nor entered into any agreements
outside the normal course of business;
8.5 liability:
8.5.1 there are currently no pending claims, suits or proceedings,
or any threat of any such claims, suits or proceedings against
the Seller in connection with the Enterprise or the Assets
Purchased before any court, commission, agency or other
administrative body (including, with respect to environmental
matters, Environment Canada and the ministere de
l'Environnement [Environment Ministry] (Quebec)), and to the
best of its
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knowledge, after diligent inquiry, there exists no cause which
may give rise to the any such claims, suits or proceedings;
8.6 no material failure to disclosure:
8.6.1 they have not failed to disclose any material fact or any
material agreement likely to have a substantial and adverse
effect on the property, business or financial position of the
Seller; and
8.6.2 the sworn statement attached as SCHEDULE 4.1 contains a true,
complete and accurate list of all creditors of the Seller
(including tax authorities) and sets forth the amount and
nature of each of their claims, the amounts outstanding and
any security interests granted in connection therewith.
9. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
9.1 As of the date hereof, the Purchaser represents and warrants to the
Seller as follows and acknowledges that the Seller relies on such
representations and warranties for the purposes of the sale of the
Assets Purchased:
9.1.1 the Purchaser has been duly incorporated, is in good standing
and is validly existing under the Canada Business Corporations
Act and has complied with the provisions of the Act respecting
the Legal Publicity of Sole Proprietorships, Partnerships and
Legal Persons (Quebec);
9.1.2 the Purchaser has obtained all necessary corporate
authorisations for the purposes of executing this Agreement
and complying with the provisions hereof;
9.1.3 the execution of this Agreement and compliance with its
provisions by the Purchaser neither constitutes a violation of
its articles of incorporation or by-laws, nor does it breach
the terms and conditions of any arrangements, agreements or
undertakings to which the Purchaser is a party, nor shall it
give rise to acceleration of any provision contained therein;
9.1.4 this Agreement constitutes a valid and binding obligation of
the Purchaser, enforceable in accordance with its terms,
subject to limitations generally imposed by applicable laws
concerning creditors, particularly in the case of bankruptcy
or other similar proceedings and to the extent that
extraordinary remedies are granted at the discretion of the
court having jurisdiction; and
9.1.5 the registration numbers of the Purchaser for the purposes of
GST and QST are respectively 143668788RT and 1023731301TQ0001.
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10. SCOPE OF REPRESENTATIONS AND WARRANTIES
10.1 The representations and warranties set forth in sections 8 and 9
herein shall survive and be fully enforceable for a period of three
years commencing on the date hereof, the parties acknowledging that,
for tax purposes, the provisions shall remain in force and effect
until the expiry of the relevant limitation period and in cases of
fraud they shall continue to be enforceable for an unlimited time
period. As these representations and warranties have been granted for
the benefit of the Purchaser or of the Seller, as the case may be, the
Purchaser or the Seller may, as applicable, waive its entitlement
thereto at any time and at its entire discretion.
10.2 No due diligence examination or inquiry conducted by the Purchaser or
on its behalf at any time whatsoever shall be deemed a waiver of any
statement, representation or warranty made hereunder, nor shall it
restrict the scope or alter the nature thereof in any way whatsoever.
11. SALE OF AN ENTERPRISE
The Seller, 9038-2847 and Jacques Franco jointly and severally agree
pursuant to section 14 to indemnify and save and hold the Purchaser
harmless from any Damages resulting from any omission or inaccuracy
contained in the sworn declaration attached as SCHEDULE 4.1.
12. EMPLOYEES
The Purchaser undertakes to hire all other employees of the Seller
(collectively the "EMPLOYEES") following the Closing Date, in accordance
with terms and conditions to be determined by the Purchaser, but which
shall be similar to those previously offered by the Seller to the
Employees.
13. COVENANT OF THE SELLER
In the event the lessor refuses to agree to the assignment of the Lease or
any renewal or amendment thereof in favour of the Purchaser, the Seller
covenants to continue leasing the premises governed by the Lease for the
benefit of the Purchaser, who shall conduct the business on the premises
until the Purchaser has found a satisfactory alternative.
14. INDEMNIFICATION OF THE PURCHASER
14.1 The Seller, 9038-2847 and Jacques Franco jointly and severally
undertake to indemnify and save and hold the Purchaser harmless from
any damage, loss, undertaking, liability, claim, charge, deficit,
cost, fee or expense (including, but without limitation, any
reasonable legal fees and other costs and disbursements incurred as a
result of any litigation, claim, inquiry, action or proceeding)
(collectively the "DAMAGES") that the Purchaser may incur, assume or
suffer, directly or indirectly, or which it shall pay (i) as a result
of any violation or inaccuracy of representations, warranties,
stipulations, agreements or covenants contained herein; (ii) as a
result of any liabilities of the Seller which have not
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been assumed by the Purchaser hereunder; or (iii) as a result of any
claims in connection with property sold or services rendered by the
Seller or any facts, situations, acts or events which occurred prior
to the Closing Date or otherwise in connection therewith.
14.2 Any amount claimed under paragraph 14.1 shall be paid by the Seller,
9038-2847 or Jacques Franco, as applicable, to the Purchaser upon
demand if such amount is not disputed. In the event of a dispute, the
amount shall be paid to the Purchaser upon final decision rendered by
a court having jurisdiction.
15. INDEMNIFICATION OF THE SELLER
15.1 The Purchaser agrees to indemnify and save and hold the Seller
harmless from any Damages that the Seller suffers, assumes or incurs,
directly or indirectly, or which it is required to pay further to the
violation or inaccuracy of representations, warranties, provisions,
agreements or covenants of the Purchaser contained herein.
15.2 Any amount claimed under paragraph 15.1 shall be paid by the Purchaser
to the Seller upon demand, unless such amount is disputed. In the
event of a dispute, the amount shall be paid to the Seller upon final
judgment being rendered by a court having jurisdiction.
16. NON-COMPETITION AND NON-SOLICITATION UNDERTAKING
16.1 Each of the Seller, 9038-2847 and Jacques Franco and of their
affiliates or associates (an "Intervenor") covenant in favour of the
Purchaser for a five year period, commencing on the Closing Date, that
they shall not, either directly or indirectly:
16.1.1 operate, either solely or in concert with any other person,
corporation, association or entity as owner, shareholder,
agent, employee or in any other capacity, perform any work or
services whatsoever in the sector where the Seller conducts
business, works or pursues activities, i.e. the maintenance
and repair of CATV, microwave, television and radio
broadcasting, optical or cable equipment, nor act as
consultant, lend sums of money, guarantee debts or
liabilities, allow its name or any part thereof to be used or
employed, whether for its own benefit or for the benefit of
any other person, corporation, association or entity engaged,
involved or interested in any enterprise which conducts
business, performs work or services or pursues activities
similar to the business, work, services or activities carried
on by the Seller within the territory of the Province of
Quebec;
16.1.2 solicit existing clients or suppliers of the Seller, use its
efforts to personally benefit from any Agreements it or he has
concluded, or reveal or disclose to any person confidential
information with respect to the Seller and the Enterprise;
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16.1.3 employ or solicit the Employees for the purposes of hiring
them, unless the Purchaser or its successors has terminated
the employment of such person with the Purchaser or its
successors for good cause prior to any such steps being taken
by an Intervenor.
16.2 Each of the Intervenors acknowledges that the restrictions contained
in paragraph 16.1 are reasonable and valid and essential to allow the
Purchaser to adequately safeguard its position in the sector where it
is conducting business, working or carrying on activities and
consequently hereby exempts the Purchaser from any obligation to
demonstrate their validity before a court having jurisdiction.
16.3 Each of the Intervenors acknowledges that failure to comply with the
undertakings and obligations set forth in paragraph 16.1 would cause
the Purchaser a prejudice giving rise to the payment to the Purchaser
of a $1,000 per day penalty for delay in the performance of the
obligations provided for in such paragraph. Consequently, in the event
of such default, the person in default shall pay the Purchaser the sum
of $1,000 for each day that performance of the obligations set forth
in the paragraph 16.1 has been delayed, without prejudice to the
rights of the Purchaser to commence proceedings seeking an injunction
or damages or any other remedy with respect to such default or
apprehended default, the whole in accordance with Article 1622 of the
Civil Code of Quebec.
16.4 The Intervenors and the Purchaser acknowledge that if the scope of any
restriction contained in this section 16 is deemed to be unreasonable
such that it is no longer fully enforceable, such restriction shall
apply to the full extent allowable by the laws of the Province of
Quebec and hereby agree that the scope of such restriction may be
amended by the court presiding over any litigation commenced in order
to enforce compliance with such restriction.
17. ADDITIONAL COVENANTS
17.1 The execution of this Agreement is subject to the following conditions
precedent which must be fulfilled to the satisfaction of the Purchaser
on or prior to the Closing Date:
17.1.1 the execution of an employment letter between the Purchaser
and Yvon Veilleux, the form and content of which shall be to
the satisfaction of the Purchaser;
17.1.2 the acceptance by the Employees of employment terms and
conditions offered to them by the Purchaser;
17.1.3 the undertaking by the Purchaser to assume the Lease, after
review to the satisfaction of the Purchaser; and
17.1.4 delivery by the Seller to the Purchaser of a legal opinion
prepared by legal counsel to the Seller and 9038-2847 to the
satisfaction of the Purchaser and its legal counsel.
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18. FEES AND EXPENSES
18.1 Any and all legal costs and fees of other outside consultants whose
services are retained by the Purchaser, the Seller, 9038-2847 or
Jacques Franco in connection with the purchase by the Purchaser of the
Assets Purchased shall be paid by the party who has retained such
services.
18.2 The parties acknowledge that no commission or other payment of a
similar nature is payable with respect to this transaction and the
Seller, 9038-2847 and Jacques Franco hereby jointly and severally
covenant to indemnify and save and hold the Purchaser harmless in this
regard.
19. OTHER DOCUMENTS
The parties hereby agree to execute any other document, perform any other
act and take any other useful or necessary steps to give full force and
effect to this agreement as applicable.
20. NOTICE
20.1 Any notice or other communication to be given hereunder shall be in
writing and delivered by fax (with original to follow by courier and
confirmation of proper reception) or delivered by courier:
20.1.1 to the Purchaser:
A NOVO CANADA ENTERPRISES INC.
1474, rue Cunard
Laval (Quebec)
H7S 2B7
Attention: Louis Brunel
Fax number: (450) 967-8271
20.1.2 to the Seller:
TELECOMMUNICATIONS VALSYSTEME INC.
1474, rue Cunard
Laval (Quebec)
H7S 2B7
Attention: Jacques Franco
Fax number: (450) 967-8271
20.1.3 to 9038-2847:
9038-2847 QUEBEC INC.
4525, rue Jeanne-d'Arc
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<PAGE> 16
Montreal (Quebec)
H1X 2E4
Attention: Jacques Franco
Fax number: (514) 256-6644
20.1.4 to Jacques Franco:
MR. JACQUES FRANCO
4525, rue Jeanne-d'Arc
Montreal (Quebec)
H1X 2E4
Fax number: (514) 256-6644
or, with respect to each party, to any other address or other
fax number which may be designated by such party by written
notice delivered to the other parties.
20.2 Notices or communications provided for in paragraph 20.1 shall be
deemed received on the date of transmission if sent by fax during
normal business hours or the following business day if sent by courier
or by fax outside of normal business hours.
21. CONFIDENTIALITY
Each of the Seller, 9038-2847 and Jacques Franco hereby covenant not to
disclose the confidential information with respect to the Enterprise to any
person, nor to use such information for personal or any other purposes and
shall use their best efforts to ensure that such information remains
confidential unless its disclosure is required by law.
22. MISCELLANEOUS
22.1 Unless otherwise provided herein, no party hereto may assign any of
its rights or obligations hereunder without the prior written consent
of the other parties hereto.
22.2 Headings and sub-headings of sections and paragraphs of this Agreement
have been inserted for convenience only and shall not be used to
interpret the terms hereof.
22.3 As the context requires, the words importing the singular shall
include the plural and the words importing the masculine gender shall
include the feminine and neutral genders and vice versa.
22.4 This Agreement shall be governed and interpreted in accordance with
the laws of the Province of Quebec and the laws of Canada applicable
therein.
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<PAGE> 17
22.5 All executed counterparts of this Agreement shall be deemed
originals of the same Agreement.
22.6 This Agreement may be amended or altered in whole or in part, at the
discretion of the parties, but any amendment or alteration shall
only be effective after being duly set down in writing and executed
by all of the parties hereto.
22.7 This Agreement shall be binding upon and enure to the benefit of the
parties, and their successors, heirs, legatees, administrators,
assigns and other legal representatives.
22.8 Any court decision which rules that any provision hereto is invalid
or unenforceable shall have no effect on the other provisions hereof
or their validity or enforceability.
22.9 The parties hereby expressly and irrevocably agree that any breach
of the provisions hereof shall entitle the aggrieved party to
mandatory and injunctive remedies, without prejudice to any other
recourse or remedy provided herein or by law.
22.10 The implied or express waiver of the rights provided by any
provision hereof may not be deemed a waiver of the rights granted
under any other provisions, whether similar in nature or not, and
such waiver shall be deemed invalid unless it is specifically
granted by written statement duly executed by the party granting the
waiver.
22.11 This Agreement constitutes the entire agreement between the parties
hereto with respect to the matters contained herein and replaces the
letter of intent and any other prior agreement, written or verbal,
between the parties with respect to the subject matter of this
Agreement.
22.12 Unless the sending of a notice is required in the circumstances, in
which case the notice shall constitute a formal legal notice, the
parties hereto shall be deemed in default by the sole lapse of time
allowed for the performance of their obligations or for curing the
failure to perform their obligations and no formal notice shall then
be necessary.
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<PAGE> 18
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE SIGNED THIS AGREEMENT AT THE PLACE
AND ON THE DATE FIRST MENTIONED HEREIN ABOVE
A NOVO CANADA ENTERPRISES INC.
by:
-----------------------------------------
Name: Louis Brunel
Position: Chairman of the Board of Directors
LES TELECOMMUNICATIONS VALSYSTEME INC.
by:
-----------------------------------------
Name: Jacques Franco
Title: President
9038-2847 QUEBEC INC.
by:
-----------------------------------------
Name: Jacques Franco
Position: Director
--------------------------------------------
JACQUES FRANCO
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<PAGE> 19
LIST OF SCHEDULES
Schedule A: Year 2000 Unaudited Financial Statements
Schedule B: 1999 Financial Statements
Schedule 3.1: Inventory
Schedule 3.2: Equipment
Schedule 3.3: Permits
Schedule 3.4: Agreements
Schedule 4.1: Sworn Statement
Schedule 6: Allocation of the Purchase Price
Schedule 8.4.4: List of Clients and Suppliers
<PAGE> 20
The undersigned represents that the foregoing constitutes a fair and
accurate translation of the French original.
Dated: September 20, 2000
CABLE LINK, INC.
By: /s/ Louis Brunel
-----------------------------------------
Name: Louis Brunel
Title: President and Chief Executive Officer
