THIS AGREEMENT made the day of May, 2000.
BETWEEN:
514592 B.C. LTD., a body corporate,
of 1033 - 3rd Avenue, Prince George,
British Columbia, V2L 3E3.
(hereinafter called the "Vendor")
OF THE FIRST PART
AND:
R.P.M.J. CORPORATE COMMUNICATIONS
LIMITED, a body corporate, of 100 -
166 Main Street, Penticton, British
Columbia, V2A 5A4.
(hereinafter called the "Purchaser")
OF THE SECOND PART
WHEREAS:
A. The Vendor carries on the business of MOUNTAIN VIEW MOBILE HOME PARK
(hereinafter called the "Vendor's Business")located at 100 Aspen Drive,
Sparwood, British Columbia and in connection therewith owns certain assets.
B. The Vendor has agreed to sell,and the Purchaser has agreed to purchase,
subject to certain exceptions hereinafter enumerated, all the property, assets
and undertaking of the Vendor's Business, as a going concern, on the terms and
subject to the conditions hereinafter provided.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of
the mutual promises and the covenants, agreements, representations, warranties
and payments hereinafter contained, the parties hereto, each with the other,
covenant, agree, represent and promise as follows:
1. PURCHASE AND SALE OF ASSETS
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1.1 Description of Assets. Upon the terms and subject to the conditions hereof,
the Vendor agrees to sell, assign and transfer to the Purchaser, and the
Purchaser agrees to purchase from the Vendor, as a going concern at Closing, the
undertaking and all the property and assets of the Vendors Business of every
kind and description wheresoever situate, including, without limiting, the
foregoing:
1.1.1 The interest of the Vendor in the lands and premises used in connection
with the Vendor's Business (hereinafter called the "Lands"), the particulars of
which are set forth on Schedule "A" attached hereto.
1.1.2 The buildings and improvements located on the Lands (hereinafter called
the "Buildings and Improvements"), the particulars of which are set forth on
Schedule "B" attached hereto.
1.1.3 All equipment, fixtures, furnishings, leasehold improvements and supplies
used in the Vendor's Business, including without limitation, the items listed in
Schedule "C" attached hereto (hereinafter collectively called the "Equipment").
all of which are collectively called the "Assets").
1.2 Exclusions. There shall be specifically excluded from the purchase and sale
herein, and from the Assets hereinbefore described, the following:
1.2.1 cash on hand or on deposit at Closing.
2. PURCHASE PRICE AND ALLOCATION
2.1 Purchase Price. The purchase price payable by the Purchaser to the Vendor
for the Assets shall be the sum of $1,000,000.00.
2.2 Allocation. The purchase price shall be allocated as follows:
2.2.1 To the Lands and mobile home pads, the sum of $957,000.00;
2.2.2 To the Buildings and Improvements, the sum of $25,000.00;
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2.2.3 To the Equipment, the sum of $18,000.00;
3. PAYMENT OF THE PURCHASE PRICE
3.1 Payment of the Purchase Price. The purchase price shall be paid and
satisfied as follows:
3.1.1 The sum of $200,000.00 paid as a deposit.
3.1.2 The sum of $800,000.00 by the Vendor granting unto the Purchaser an
Agreement for Sale of all the Vendor's interest in and to the Lands in the form
attached hereto as Schedule "D".
3.2 Security. As security for the unpaid balance of the purchase price the
Purchaser shall execute and deliver to the Vendor at Closing the following:
3.2.1 an Agreement for Sale in the form attached hereto as Schedule "D";
3.2.2 a Security Agreement in the form attached hereto as Schedule "E";
3.2.3 a Guarantee executed by LEO SHULL in the form attached hereto as Schedule
"F".
4. ADJUSTMENTS TO THE PURCHASE PRICE
4.1 Adjustments. An adjustment shall be made as of the Closing for the property
taxes, municipal utility charges, rents, water, gas and hydro rates, telephone,
any prepaid insurance premiums assumed by the Purchaser and also any other
prepaid expenses relating to the Assets or the Vendor's Business and other
matters customarily the subject of adjustment. The Vendor shall be responsible
and pay for all telephone, electric power and natural gas supplied to Closing
and for all salaries or wages of employees earned up to Closing, as well as
accrued holiday pay, unemployment insurance assessment or contributions,
Workers' Compensation Board assessments and all other employee benefits accruing
to Closing.
4.2 Accounts Payable and Receivable. All accounts payable and accounts
receivable in connection with the Vendor's Business arising prior to Closing
shall be for the account of the Vendor,
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and save as aforesaid all transactions of the Vendor's Business on and after
Closing shall be for the account of the Purchaser.
5. REPRESENTATIONS AND WARRANTIES OF THE VENDOR
5.1 The Vendor represents and warrants to the Purchaser as follows, with the
intent that the Purchaser shall rely thereon in entering into this Agreement,
and in concluding the purchase and sale contemplated herein:
5.1.1 Status of Vendor. The Vendor is a corporation duly incorporated, validly
existing and in good standing under the laws of British Columbia, and has the
power, authority and capacity to own and dispose of the Assets and to carry on
the Vendor's Business as now being conducted by it, and to enter into this
Agreement and carry out its terms to the full extent.
5.1.2 Authority to Sell. The execution and delivery of this Agreement and the
completion of the transaction contemplated hereby has been duly and validly
authorized by all necessary corporate action on the part of the Vendor, and this
Agreement constitutes a legal, valid and binding obligation of the Vendor
enforceable against the Vendor in accordance with its terms except as may be
limited by laws of general application affecting the rights of creditors.
5.1.3 Title to Assets. The Vendor owns and possesses and has a good and
marketable title to the Assets free and clear of all liens, mortgages, charges,
pledges, security interests, encumbrances, equities or claims of any kind
and-nature whatsoever, except: Royal Bank of Canada Mortgage XK24243 and
Assignment of Rents XK24244 and PPSA Security Agreement Registration No. 6562383
and 826805 to be paid out by the Vendor upon payment by the Purchaser of the
Agreement for Sale referred to herein.
5.1.4 Licences and Permits. The Vendor has all governmental licences and permits
required for the conduct of the Vendor's Business.
5.1.5 Labour Unions. The Vendor is not a party to any collective agreement
relating to the Vendor's Business with any labour union or other association of
employees.
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5.1.6 No Pending Actions
There are:
(a) no actions, suits or proceedings before any Court pending or
threatened by or against or of affecting the Vendor or the Vendor's Business.
(b) no proceedings by or before any governmental commission, department,
board, authority or other administrative agency or by or before any
administrative officer pending or threatened against the Vendor or the Vendor's
Business.
5.1.7 Condition of Equipment. All of the Equipment, which is the subject of the
herein purchase and sale, is in normal working condition and has been reasonably
maintained and repaired.
5.1.8 Employees. The Vendor can terminate on one month's notice the employment
of any employee.
5.1.9 Contracts. The Vendor is not party to any contract by which the Purchaser
will be bound by virtue of the purchase of the Vendor's Business as a going
concern, save and except as disclosed in this Agreement.
5.1.10 Canadian Resident. The Vendor is "resident in Canada" within the meaning
of that phrase in Section 116 of the Income Tax Act of Canada.
5.1.11 No Breach of Bylaws. The Vendor is not in breach of any statute,
regulation, bylaw or order applicable to the Vendor or the Vendor's Business or
the Assets and the Vendor has not done any act or failed to do any act which
would be a breach of the terms of any permit, licence, consent or authority held
by the Vendor or the Vendor's Business.
5.1.12 Financial Statements. The unaudited financial statements of the Vendor
attached hereto as Schedule "G" were prepared in accordance with generally
accepted accounting principles applied consistently from year to year and are
substantially correct in every particular, representing fairly and accurately
the financial condition and position of the Vendor as at the effective dates of
the statements noted thereon, and the sales and earnings of the
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Vendor's Business during the periods covered by such statements.
5.1.13 Taxes and Assessments. The Vendor has duly filed when required pursuant
to the provisions of the Social Service Tax Act, the Workers' Compensation Act,
the Employment Standards Act, all returns and has paid all assessments pursuant
thereto.
5.1.14 Health Regulations To the best of the information and belief of the
Vendor, the Vendor's Business complies with all regulations passed by the Health
Department having jurisdiction over the same.
5.1.15 Inspection of Lands
The Vendor has not:
(a) received any written work order or inspector's order or written
notice from any governmental authority with respect to the Lands;
(b) had any discussion with any governmental authority relating to any
threatened work order or inspector's notice with respect to the Lands;
(c) received any notice from any governmental authority of any impending
or intended rezoning of the Lands or any portion thereof.
5.1.16 Location of Improvements. The improvements on the Lands do not encroach
upon any real property not owned by the Vendor and do not infringe upon
right-of-ways, easements or similar charges granted over the Lands.
5.1.17 No Liens. No lien under the Builders Lien Act of British Columbia or any
other similar legislation, or any claim in respect of any such lien filed
previously, remains outstanding in respect of any portion of the Lands.
5.1.18 No Expropriation. No portion of the Lands is subject to any expropriation
notice, nor has the Vendor received any notice of any proposed expropriation of
any portion of the Lands.
5.1.19 Maintenance of Improvements. The improvements on the
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Lands (including all electrical, mechanical, plumbing and drainage systems) have
been maintained in a good and workmanlike manner by the Vendor from the date of
its acquisition of the Lands to and including the Closing.
5.1.20 No Option to Purchase. No person has any written or oral agreement,
option, understanding or commitment, or any right or privilege capable of
becoming an agreement, option, understanding or commitment, for the purchase
from the Vendor of any of the Assets or any part of the Vendors Business.
5.1.21 Payment of Taxes. On Closing the Vendor will have paid all excise, sales
and business and property taxes and all other rates, charges, assessments,
levies and duties of whatsoever nature and kind required by law to the extent
the same are due and payable and all utilities billed and payable insofar as the
same may affect the Assets other than taxes arising from the transfers
contemplated by this Agreement.
5.1.22 Income Taxes. The Vendor has withheld and remitted to Revenue Canada or
the applicable tax collecting authority all amounts required to be withheld and
remitted to Revenue Canada or such tax collecting authority on payments to
employees or to nonresidents, or otherwise, and has paid all installments of
corporate taxes due and payable.
5.1.23 Sale will not cause default. Neither the execution and delivery of this
Agreement, nor the completion of the purchase and sale contemplated herein will:
(a) Violate any of the terms and provisions of the constating documents
or bylaws or articles of the Vendor, or any order, decree, statute, bylaw,
regulation, covenant, restriction applicable to the Vendor or any of the Assets;
(b) Give any person the right to terminate, cancel or remove any of the
Assets;
(c) Result in any fees, duties, taxes, assessments or other amounts
relating to any of the Assets becoming due or payable other than British
Columbia Social Services Tax payable by the Purchaser in connection with the
purchase and sale.
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6. COVENANTS OF THE VENDOR
6.1 Transfer Documents.The Vendor covenants and agrees to take or cause to be
taken all proper steps to enable the Vendor to vest a good and marketable title
in the Purchaser to the Assets free and clear of all liens, mortgages,
encumbrances, equities, or claims of every nature and kind, whatsoever except as
hereinbefore provided, and shall deliver as requested by the Purchaser's
solicitor, such Deeds of conveyance, Bills of Sale,transfers, assignments and
consents to the transfer of licences, leases,leasehold properties, contracts,
and rights as the solicitor for the Purchaser may require.
6.2 Possession. The Vendor covenants and agrees to deliver possession of the
Assets to the Purchaser on
6.3 Termination of Employees. The Vendor will at the Closing terminate the
employment of all employees and the Vendor will indemnify and save harmless the
Purchaser from and against all claims by any employee or past employee of the
Vendor for wages, salaries, bonuses, pension or other benefits, severance pay,
notice or pay in lieu of notice and holiday pay in respect of any period of
employment prior to the Closing.
7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
7.1 ThePurchaser represents and warrants to the Vendor as follows, with the
intent that the Vendor shall rely thereon in entering into this Agreement, and
in concluding the purchase and sale contemplated herein:
7.1.1 Status of Purchaser. The Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of British Columbia, and
has the power, authority and capacity to enter into this Agreement and carry out
its terms.
7.1.2 Authority to Purchase. The execution and delivery of this Agreement and
the completion of the transaction contemplated hereby has been duly and validly
authorized by all necessary corporate action on the part of the Purchaser, and
this Agreement constitutes a legal, valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms except
as limited by laws of general application affecting the
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rights of creditors.
7.1.3 No Default. Neither the execution of this Agreement nor its performance by
the Purchaser will result in a breach of any law or regulation of the
governments of Canada or British Columbia or any regulatory body thereof.
8. COVENANTS OF THE PURCHASER
8.1 The Purchaser covenants and agrees as follows:
8.1.1 Indemnity. To indemnify and save harmless the Vendor from and against all
debts and liabilities of the vendor's Business incurred by the Purchaser from
and after the Closing.
8.1.2 Sales Tax. To pay to the Minister of Finance of the Province of British
Columbia all taxes payable pursuant to the Social Services Tax Act for the
Province of British Columbia on the sale of the chattels included in the Assets,
and to forever indemnify and save harmless the Vendor of and from all claims
pursuant thereto.
9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1 Vendor's Representations, Warranties and Covenants. All representations,
warranties, covenants and agreements made by the Vendor in this Agreement or
pursuant hereto shall, unless otherwise expressly stated, survive the Closing
and any investigation at any time made by or on behalf of the Purchaser and
shall continue in full force and effect for the benefit of the Purchaser.
9.2 Purchaser's Representations, Warranties and Covenants.
All representations,-warranties, covenants and agreements made by the Purchaser
in this Agreement or pursuant hereto shall, unless otherwise expressly stated,
survive the Closing and any investigation at any time made by or on behalf of
the Vendor and shall continue in full force and effect for the benefit of the
Vendor.
10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER
10.1 The obligations of the Purchaser to consummate the transactions herein
contemplated are subject to the fulfillment of
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each of the following conditions at the times stipulated:
10.1.1 Vendor's Representations and Warranties. That the representations,
warranties and agreements of the Vendor contained in this Agreement shall be
true and correct in all material respects at Closing except as may be in writing
disclosed to and approved by the Purchaser.
10.1.2 Vendor's Covenants. That the Vendor shall have performed and complied
with all agreements, covenants and conditions required by this Agreement to be
performed or complied with by it prior to or at Closing.
10.1.3 Adverse Event. That prior to Closing the Vendor shall not have
experienced any event or condition or have taken any action of any character
adversely affecting the Assets or the Vendors Business so as to materially
reduce the value of the Assets or the Vendor's Business to the Purchaser.
10.1.4 Access to Business. That from the date of this Agreement up to Closing
the Purchaser and its authorized representatives will be afforded full access
during normal business hours to all properties, books, contracts, commitments,
records of the Vendor's Business and will be furnished with such copies,
certified as requested, thereof and other information as the Purchaser may
reasonably request.
10.1.5 Damage to Assets. That no substantial damage by fire, negligence or
otherwise to the Assets shall have occurred since the date hereof and prior to
Closing which, in the opinion of the Purchaser will materially adversely affect
the Assets, operations, prospects or earnings of the Vendor's Business.
The foregoing conditions of this section are inserted for the exclusive
benefit of the Purchaser and may be waived in whole or in part by the Purchaser
at any time by delivery to the Vendor a written waiver to that effect signed by
the Purchaser.
11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE VENDOR
11.1 All obligations of the Vendor under this Agreement are subject to the
fulfillment of each of the following conditions at the times stipulated:
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11.1.1 Purchaser's Representations and Warranties. The Purchaser's
representations and warranties contained in this Agreement shall be true at
Closing in all material respects except as may be in writing disclosed to and
approved by the Purchaser.
11.1.2 Damage to Assets. No substantial loss or destruction of or damage to any
of the Assets shall have occurred on or before Closing.
11.1.3 Purchaser's Covenants. The Purchaser shall have performed and complied
with all covenants, agreements and conditions required by this Agreement to be
performed or complied with by it at or prior to Closing.
Each of the foregoing conditions are for the exclusive benefit of the
Vendor and any such condition may be waived in whole or in part by the Vendor at
any time by delivering to the Purchaser a written waiver to that effect signed
by the Vendor.
12. CLOSING
12.1 Time of Closing. Subject to the terms and conditions hereof, the purchase
and sale of the Assets shall be completed at a closing to be held at 9:00
o'clock in the forenoon, in the Town of Osoyoos, on the 15th day of May, 2000,
or at such other time and date as shall be agreed upon in writing between the
parties hereto (herein called the "Closing" or the "time of Closing").
12.2 Place of Closing. The closing shall take place at the offices of the
Purchaser's solicitors, Gordon & Company, of 202 - 8309 Main Street, Osoyoos,
British Columbia.
12.3 Documents to be delivered by the Vendor. At the closing the Vendor shall
deliver or cause to be delivered to the solicitors for the Purchaser:
12.3.1 A Bill of Sale (Absolute) duly executed by the Vendor in registrable form
transferring the Equipment to the Purchaser.
12.3.2 All other deeds of conveyance, bills of sale, transfers and assignments
in form and content satisfactory to the Purchaser's counsel, appropriate to
effectively vest a good and marketable title to the Assets in the Purchaser to
the extent contemplated by
12.3.3 this Agreement, and immediately registrable in all places where
registration of such instruments is required.
12.3.3 Possession of the Assets;
12.3.4 A certified true copy of a Directors and Members Resolution of the Vendor
authorizing the sale of the Assets pursuant to the provisions of this Agreement.
12.4 Documents to be delivered by the Purchaser. At the Closing the Purchaser
shall deliver or cause to be delivered to the solicitors for the Vendor:
12.4.1 a solicitor's trust cheque payable to the Vendor's Solicitor for that
portion of the Purchase Price payable in cash;
12.4.2 an Agreement for Sale in the form attached hereto as Schedule I'D"
executed in registrable form;
12.4.3 a Security Agreement in the form attached hereto as Schedule "Ell
executed in registrable form;
12.4.4 a Guarantee executed by LEO SHULL in the form attached hereto as Schedule
"F";
12.4.5 a GST Section 221 Certificate.
13. INDEMNITY
13.1 Indemnity by Vendor. The Vendor will-indemnify and hold harmless the
Purchaser from and against:
13.1.1 any and all liabilities, whether accrued, absolute, contingent or
otherwise, existing at the Closing and which are not agreed to be assumed by the
Purchaser pursuant to this Agreement.
13.1.2 any and all damage or deficiencies resulting from any misrepresentation,
breach of warranty or non-fulfillment of any covenant on the part of the Vendor
under this Agreement or from any misrepresentation in or omission from any
certificate or other instrument furnished or to be furnished to the Purchaser
hereunder; and
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13.1.3 any and all actions, suits, proceedings, demands, assessments, judgments,
costs and legal and other expenses incidental to any of the foregoing:
The Vendor acknowledges and agrees that the Purchaser has
entered into this Agreement relying on the warranties and representations and
other terms and conditions of this Agreement.
13.2 Indemnity by Purchaser. The Purchaser covenants to indemnify and save
harmless the Vendor from all loss, damage, costs, actions and suits arising out
of or in connection with any breach of any representation, warranty, covenant,
agreement or condition contained in this Agreement.
14. COUNTERPARTS
14.1 This Agreement may be executed in any number of counterparts with the same
effect as if all parties had all signed the same document and all counterparts
and adopting instruments will be construed together and will constitute one and
the same Agreement.
15. NOTICES
15.1 Any notices required or permitted to be given to the parties hereto may be
delivered or mailed by prepaid registered post and such notice shall be deemed
to have been received if delivered, when delivered, and if mailed, three (3)
days after the mailing thereof, unless the postal service is then interrupted by
strikes or lockouts, in which case, such notice shall be deemed to have been
received five (5) days after the termination of such strike or lockout at the
addresses as follows:
(a) To the Vendor: 514592 B.C. Ltd, 1033 - 3rd Avenue, Prince
George, B.C. V2L 3E3
(b) To the-Purchaser: R.P.M.J. Corporate Communications Limited, 100
- 166 Main Street, Penticton, B.C. V2A 5A4
or at such other addresses as from time to time the parties hereto shall provide
in writing, each to the other.
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16. RISK OF LOSS
16.1 The Assets will be at the risk of the Vendor up to the Closing.
17. TIME OF THE ESSENCE
17.1 Time is expressly declared to be of the essence of this Agreement and each
of the terms and conditions of this Agreement.
18. LEGAL COSTS
18.1 The parties hereto agree that all expenses incurred in transferring the
Assets and the Vendor's Business to the Purchaser shall be borne by and be paid
for by the Purchaser including fees and disbursements in registering any
securities for the benefit of the Vendor and except for fees and disbursements
for obtaining clear title to the Assets in the name of the Vendor.
19. ARBITRATION
19.1 It is hereby agreed between the parties hereto that in the event of any
disagreement between the parties hereto in respect of any matter or thing
arising out of this Agreement (other than default under the Security referred to
in Paragraph 3.2 hereof), the dispute shall be referred to arbitration in
accordance with the Commercial Arbitration Act of British Columbia, the costs of
such arbitration to be borne equally by the Vendor and Purchaser.
20. ALTERATIONS TO AGREEMENT
20.1 This Agreement contains the whole Agreement between the parties in respect
of the purchase and sale contemplated hereby, and there are no warranties,
representations, terms, conditions, or collateral agreements, expressed,
implied, or statutory, other than those expressed or set forth in this
Agreement. If at any time during the continuation hereof the parties shall deem
it necessary or expedient to make any alteration in any article, clause, matter,
or thing herein contained, they may do so in writing signed by them and endorsed
on these articles, and all such alterations shall be adhered to and have the
same force and effect as if they had been originally embodied in, and formed
part of this Agreement. No change or modification of this Agreement shall be
valid unless it
15
is in writing and signed by each party hereto.
21. HEADINGS
21.1 The headings used in this Agreement are for the sake of convenience only
and do not modify or form part of the substantive body of this document.
22. BINDING EFFECT
22.1 This Agreement shall enure to the benefit of and be binding upon the
parties hereto, their heirs, executors, administrators, successors and assigns.
23. GENDER
23.1 When the singular or masculine is used in this Agreement they shall be
construed as meaning the plural or feminine or body corporate where the context
so requires.
24. FURTHER ASSURANCES
24.1 The parties hereto shall execute such further and other documents and do
such further and other things as may be necessary to carry out and give effect
to the intent of this Agreement.
APPLICABLE LAW
25.1 This Agreement shall be governed by and interpreted in accordance with the
laws of the Province of British Columbia.
IN WITNESS WHEREOF the parties hereto have hereunto set their hands and
seals, or being corporations have caused their common seals to be affixed in the
presence of their duly authorized signatories, all on the day and year first
above written.
The Corporate Seal of the
Vendor was hereto affixed
in the presence a of:
/s/ Wayne Loftus
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[GRAPHIC]
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The Corporate Seal of the Purchaser was hereto affixed in the presence of:
i
[GRAPHIC]
SCHEDULE "A"
SCHEDULE OF LANDS
Parcel Identifier 012-412-660
Lot 1, DL 4589, Kootenay District, Plan 18084
Mobile Home Pads
SCHEDULE "B"
SCHEDULE OF BUILDINGS AND IMPROVEMENTS
1974 Moduline Monarch Manufactured Home, Registration No. 006420
SCHEDULE "C"
SCHEDULE OF EQUIPMENT
Kubota Tractor, model L345DT, Serial No. L345DT-10050
John Deere Mower, model F935, Serial No. MOF935X475176
Rally mower, Serial No. 0491503081
Baycrest snowblower, Serial No. 7757
Stihl weed eater, Serial No. 1212499
Miscellaneous small tools
LAND TITLE ACT
FORM C Schedule D
(Section 219.81)
Province of British Columbia
GENERAL INSTRUMENT - PART 1 (This area for Land Title Office use) Page 1 of 8
Pages
- -------------------------------------------------------------------------------------------------------------------
1 . APPLICATION: (Name, address, phone number and signature of applicant, applicant's solicitor or agent)
Marlene Tolman, Legal Secretary, Gordon & Company, Barristers and Solicitors,
Box 800, 202 - 8309 Main Street, Osoyoos, B.C. VOH 1 VO 495-6508, Client Number
10534
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2. PARCEL IDENTIFIERS) AND LEGAL DESCRIPTIONS) OF LAND:
(PI D) (LEGAL DESCRIPTION)
012-412-660 Lot 1, DL 4589, Kootenay District, Plan 18084
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3. NATURE OF INTEREST:
DESCRIPTION DOCUMENT REFERENCE PERSON ENTITLED TO INTEREST
(page and paragraph)
Right to Purchase
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4. TERMS: Part 2 of this instrument consists of (select one only)
(a) Filed Standard Charge Terms D.F. No.
----------
(b) Express Charge Terms X X Annexed as Part 2
--------
(c) Release There is no Part 2 of this instrument A selection of (a)
includes any additional or modified terms referred to in item 7 or in a schedule
annexed to this instrument.
If (c) is selected, the charge described in Item 3 is released or discharged as
a charge on the land described in item 2.
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5. TRANSFEROR(S):*
514592 B.C. LTD. (Inc. No. 514592)
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6. TRANSFEREE(S): (Including occupation (s), postal addresses) and postal code (s))
R.P.M.J. CORPORATE COMMUNICATIONS LIMITED (Inc. No. 525560), a body corporate, of R.R.2,
Site 33, Comp. 9, Osoyoos, British Columbia, VOH 1 VO.
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7. ADDITIONAL OR MODIFIED TERMS:*
N/A
- -------------------------------------------------------------------------------------------------------------------
8. EXECUTION(S): * *This instrument creates, assigns, modifies, enlarges,
discharges or governs the priority of the interest(s) described in Item 3 and
the Transferor(s) and every other signatory agree to be bound by this
instrument, and acknowledge(s) receipt of a true copy of the filed standard
charge terms, if any.
EXECUTION DATE
OFFICER SIGNATURE(S) - Y M D PARTY(IES) SIGNATURES)
514592 B.C. LTD. by its
authorized signatory:
- ------------------------------------ ------------------------------------
OFFICER CERTIFICATION:
Your signature constitutes a representation that you are a solicitor, notary
public or other person authorized by the Evidence Act, R.S.B.C. 1979, c. 116, to
take affidavits for use in British Columbia and certifies the matters set out in
Part 5 of the Land Title Act as they pertain to the execution of this
instrument.
* If space insufficient, enter "SEE SCHEDULE" and attach schedule in Form E.
** If space insufficient, continue executions on additional page(s) in Form D
LAND TITLE ACT
FORM D
EXECUTIONS CONTINUED Page
2
- -------------------------------------------------------------------------------------------------------------------
Officer Execution Date Party(ies)
Signature(s) Y M D Signature(s)
R.P.M.J. CORPORATE COMMUNICATIONS
LIMITED by its authorized signatory:
OFFICER CERTIFICATION:
Your signature constitutes a representation that you are a solicitor, notary
public or other person authorized by the Evidence Act, R.S.B.C. 1979, c. 116, to
take affidavits for use in British Columbia and certifies the matters set out in
Part 5 of the Land Title Act as they pertain to the execution of this
instrument.
Page 3
PART 2
THIS AGREEMENT made the day of May, 2000.
BETWEEN:
514592 B.C. LTD. (Inc. No. 514592),
a body corporate, 1033 - 3rd Avenue, Prince George, British
Columbia, V2L 3E3.
(hereinafter called the "Vendor")
OF THE FIRST PART
AND:
R.P.M.J. CORPORATE COMMUNICATIONS LIMITED
(Inc. No. 525560), a body corporate,
R.R.2, Site 33, Comp. 9, Osoyoos, British
Columbia, VOH 1V0.
(hereinafter called the "Purchaser")
OF THE SECOND PART
WITNESS that the Vendor agrees to sell to the Purchaser and the Purchaser agrees
to purchase from the Vendor the lands and premises described in Item 2 of the
Form C annexed hereto-(the said "Lands") for the sum of one Million
($1,000,000.00) Dollars of lawful money of Canada (the "purchase monies")
payable by the sum of Two Hundred Thousand ($200,000.06) Dollars on the
execution hereof (the receipt of which the Vendor hereby acknowledges) and the
balance as follows:
A portion of the balance owing in the amount of $145,000.00 together
with interest thereon at the rate of 6.0% per annum, calculated monthly, not in
advance, from the 15th day of May, 2000 shall become due and payable on July 15,
2000.
The remaining balance owing in the amount of $655,000.00 together with
interest thereon at the rate of 1.0% above the Prime
. Page 4
Interest Rate of Royal Bank of Canada, Prince George, British Columbia, in
effect from time to time, calculated monthly, not in advance, from the 15th day
of May, 2000 on the balance remaining from time to time unpaid, shall be paid in
monthly instalments of $6,800.00 including interest on the 5th day of each month
commencing on the 5th day of June, 2000 with the balance outstanding to become
due and payable on May 15, 2002.
In the event that it may be necessary at any time for the Vendor to
prove the Prime Interest Rate of Royal Bank of Canada, Prince George, British
Columbia applicable as at any time or times a certificate in writing of the
manager for the time being of the branch or unit of Royal Bank at 550 Victoria
Street, Prince George, British Columbia setting forth the Prime Interest Rate of
Royal Bank of Canada as at any time or times shall be conclusive evidence as to
the Prime Interest Rate of Royal Bank of Canada as set forth in the certificate.
Purchaser's Covenants and Agreements
The Purchaser covenants and agrees with the Vendor that:
1. it will duly pay or cause to be paid to the Vendor the purchase monies as
provided above with interest;
2. it will duly pay all taxes, rates, levies, assessments and other impositions,
whatsoever rated, charged, assessed or imposed on the said Lands including all
those relating to machinery, equipment or chattels at any time of the said
Lands;
3. it will insure and keep insured against the risk of fire all buildings on, or
comprised in the said Lands for their full insurable value with loss payable to
the Vendor; it will, on demand, assign, transfer and deliver over to the Vendor
all such policies; the Vendor shall not be bound to insure the said Lands or pay
any insurance premiums nor shall the Vendor be liable or responsible for any
loss arising out of any defect in any policy or failure of any insurer to pay
for any loss;
4. it will not commit voluntary or permissive waste on the said lands;
5. it will pay to the Vendor upon request all costs, charges and expenses of and
incidental to any and all proceedings taken by the Vendor to enforce this
Agreement and any remedies hereunder for
Page 5
breach by the Purchaser of any of its obligations under this Agreement. All such
costs, charges and expenses shall be determined and paid to the Vendor on a
solicitor-client basis;
6. if the Purchaser defaults in payment of any insurance premiums, amounts due
under liens or encumbrances against the said lands, or any monies required to be
paid under this Agreement by the Purchaser, then the Vendor may pay any of the
same and every such payment shall bear interest at the said rate, shall
constitute a charge on the said Lands and shall be paid to the Vendor on demand
with accrued interest.
Vendors Covenants and Agreements
The Vendor covenants and agrees with the Purchaser:
1. that upon performance by the Purchaser of each and every covenant, condition
and agreement herein on the part of the Purchaser to be observed or performed,
the Vendor will convey or cause to be conveyed by good and sufficient transfer
the said Lands free from charges and encumbrances except for the charges set out
on the schedule of lands attached hereto, local improvements, assessments,
taxes, sewer and water rates from and after the date thereof, the conditions and
reservations in the Crown Grant thereof and the charges, if any, granted or
permitted by the Purchaser;
2. that it will permit the Purchaser to occupy and enjoy the said Lands until
default, if any, made of any covenants, conditions or agreements herein on the
part of the Purchaser to be observed or performed or in payment of the purchase
monies of any interest thereon;
3. The Vendor covenants and agrees to pay or cause to be paid as they become due
all payments whether for principal, interest, taxes or otherwise under or by
virtue of the prior financial charges including mortgages and statutory charges
and will otherwise observe, perform and comply with the covenants, provisos and
agreements therein contained; and the Vendor covenants with the Purchaser to
save it harmless and indemnify it from and against the payment of monies secured
by the said prior financial charges; and the parties hereto agree that if the
Vendor should default in the payment of monies secured by the said prior
financial charges or in the performance of any of the covenants under the said
prior financial charges, the Purchaser may at its option make any payment or
cure any default under the prior financial charges and any
Page 6
amount or amounts so paid together with all costs, charges, expenses and outlays
of the Purchaser thereby incurred shall be credited (on the date of payment of
the cost, charge, expense or outlay) in reduction of the principal balance
hereby secured.
Mutual Covenants and Agreements
The parties mutually covenant and agree as follows:
1. if the Purchaser sells or agrees to sell or otherwise dispose of the said
Lands or any part thereof the whole of the principal sum then remaining unpaid
shall, at the option of the Vendor, notwithstanding any other provisions in the
Agreement for Sale contained, forthwith become due and payable;
2. the cost of preparing the said Freehold Transfer and of conveying the said
Lands to the Purchaser shall be paid by the Purchaser;
3. time shall be of the essence of this Agreement. In the event of default of
due payment of the purchase monies or interest or any other default hereunder,
on the part of the Purchaser, the Vendor at his option and in addition to his
other remedies, may give to the Purchaser thirty (30) days' written notice of
such default. If the default shall not have been remedied within thirty (30)
days of receipt of such notice by the Purchaser, then this Agreement shall
thereupon be null and void and of no effect. The Vendor shall thereupon have the
right to re-enter and take possession of the said Lands and the monies paid to
the Vendor under this Agreement on account of the purchase price of the said
Lands shall be retained by the Vendor as liquidated and ascertained damages.
Further in the event of such default, the Vendor shall have the right to sell
and convey the said Lands to any Purchaser thereof upon expiration of the said
thirty (30) days notice;
4. if default is made in payment of the purchase monies or interest thereon or
performance of any covenant, agreement or condition on the part of the Purchaser
to be performed and such default shall continue for a period of thirty (30) days
after notice thereof by the vendor to the Purchaser, then the whole of the
purchase monies, interest and all other monies unpaid hereunder shall forthwith,
at the option of the Vendor, become due and payable;
5. the Vendor shall have the right at all times without the
Page 7
consent of the Purchaser to assign or transfer all his right, title and interest
in this Agreement and the said Lands to any person; In the event of such
transfer or assignment, the Vendor shall forthwith give notice in writing to the
Purchaser of the name of the assignee or transferee and the full address at
which subsequent payments hereunder shall be made by the Purchaser;
6. unless the Purchaser is in default hereunder, or this Agreement is rendered
null and void, the Purchaser, at any time during the currency of this Agreement
may pay all or any part of the purchase monies owing without notice;
7. no covenant or agreement herein shall be merged in a judgment taken thereon
and notwithstanding any such judgment, interest shall. be payable at the said
rate;
8. in the event this Agreement is registered and the Purchaser is in default
hereunder, then it is expressly agreed that the Vendor shall be at liberty to
cancel, remove and determine such registration on producing to the appropriate
Registrar of Land Titles a satisfactory declaration that such default has
occurred and is then continuing. The Purchaser hereby irrevocably appoints the
Vendor his true and lawful attorney for and in the name of the Purchaser to
cancel, remove and determine such registration in the event of such default;
9. any demand or notice which may be required for the purposes of this Agreement
shall be deemed to have been well and sufficiently given and received if
delivered to the Purchaser or if mailed at any post office under prepaid
registered cover addressed as follows:
To the Vendor:
514592 B.C. LTD., 1033 - 3rd Avenue, Prince George, British
Columbia V2L 3E3
To the Purchaser:
R.P.M.J. CORPORATE COMMUNICATIONS LIMITED, R.R.2, Site 33,
Comp. 9, Osoyoos, British Columbia, VOH 1V0
or at such other address as the Purchaser shall specify in writing to the
Vendor;
Page 8
10. where a party includes more than one person, the obligations herein of the
party shall be construed and deemed to be joint as well as several;
11. that all grants, covenants, provisos, agreements, rights, powers, privileges
and liabilities contained in this Agreement shall be read and held as made by
and with, granted to and imposed upon the parties hereto, and their respective
heirs, executors, administrators, successors and assigns; wherever the singular
or the masculine is used, it shall be construed as meaning the plural or
feminine or the body politic or corporate where the context or the parties
hereto so require.
12. IT IS UNDERSTOOD AND AGREED that the Purchaser may make the payments due to
the Vendor under this Agreement for Sale by depositing the amount of such
payment to the Vendor's mortgage account at Royal Bank of Canada, 550 Victoria
Street, Prince George, British Columbia, to be applied to Mortgage KK024244.
IN WITNESS WHEREOF the parties hereto have duly executed this
Agreement as of the day and year first above written.
END OF DOCUMENT
Schedule "E"
SECURITY AGREEMENT - Specific collateral (purchase Money
Security Interest)
This Security Agreement made the day of May, 2000
BY: R.P.M.J. CORPORATE COMMUNICATIONS
LIMITED, R.R.2, Site 33, Comp. 9,
Osoyoos, British Columbia,. VOH 1V0.
(hereinafter referred to as the "Debtor"),
OF THE FIRST PART,
IN FAVOUR OF:
514592 B.C. LTD., of 1033 - 3rd
Avenue, Prince George, British
Columbia, V2L 3E3.
(hereinafter referred to as the "Secured Party"),
OF THE SECOND PART.
ARTICLE 1 - CREATION OF SECURITY INTEREST
1.01 The Debtor hereby grants to the secured Party a security interest in the
collateral referred to in Section 2.01 hereof, to secure the payment or
performance of all obligations, indebtedness and liabilities of the Debtor to
the Secured Party, whether incurred prior to, at the time of or subsequent to
the execution hereof, including extensions or renewals, and all other
liabilities of the Debtor to the Secured Party, direct or indirect,
wheresoever and howsoever incurred and any ultimate unpaid balance including,
without restricting the generality of the forgoing, future advances to the
Debtor under fixed or revolving credits established from time to time and
letters of credit whether or not drawn upon, issued by the Secured Party with
respect to the Debtor.
ARTICLE 2 - COLLATERAL
2.01 The collateral subject to the security interests created herein is:
(a) Manufactured Home Registration Number 006420
Make/Model: Moduline Monarch
Year of Manufacture: 1974
(b) Kubota tractor, model L345DT, Serial No. L345DT-10050
(c) John Deere mower, model F935, Serial No. M0F935X475176
(d) Rally mower, Serial No. 0491503081
(e) Baycrest snowblower, Serial No. 7757
(f) Stihl weed eater, Serial No. 1212499
(g) Miscellaneous small tools
(b) Proceeds
all proceeds derived directly or indirectly therefrom
including, without limiting the generality of the foregoing,
proceeds of sale, lease or other dispositions of any property
subject to all of the foregoing security interest, including
trade-ins, proceeds of any kind similar to the above described
items, money, cheques or deposit accounts in deposit taking
institutions (hereinafter collectively referred to as
"Proceeds").
All of the foregoing are collectively referred to as the "Collateral".
The security interest herein is given to secure the purchase
price of the Collateral and a purchase money security interest hereby granted by
the Debtor to the Secured Party with respect to the Collateral.
The Collateral shall not include the last day of any term of
years reserved by any lease, verbal or written, or any agreement therefrom, now
held or hereafter acquired by the Debtor but the Debtor shall stand possessed of
the revision remaining in the Debtor of any leasehold premises, for the time
being demised, as aforesaid, upon trust to assign and dispose thereof as the
Secured Party for the purpose of vesting the aforesaid reversion of any such
term or any renewal thereof and any purchase or purchasers thereof shall be
entitled by deed or writing to appoint such purchaser or purchasers or any other
person or persons a new trustee or trustees of the aforesaid reversion of any
such term or any such renewal thereof in the place of the Debtor and divest the
same accordingly in the new trustee or trustees so appointed freed and
discharged from any obligations respecting the same.
The security interest shall be a general and continuing
security interest notwithstanding any dealing by the Secured Party with the
Debtor or any other person claiming under or with respect to the Debtor or the
Collateral, notwithstanding any other title retention agreement, commercial
pledge, right of re-sale, security interest or other encumbrance whatsoever, and
.notwithstanding that the indebtedness of the Debtor to the Secured Party may be
reduced to a nil balance or be repaid and further advances made from time to
time.
ARTICLE 3 - SALES IN ORDINARY COURSE OF BUSINESS
3.01 The Debtor shall have no right to sell, lease or dispose of any of the
Collateral except for a sale in the ordinary course of business upon customary
sales items for value received and then only upon the express condition that on
or before delivery to a third party the Debtor shall secure full settlement of
the entire purchase price for the Collateral so sold in cash, notes, chattel
paper or
other property in form satisfactory to the Secured Party. Until the Debtor shall
have made settlement with the Secured Party of the full amount due to the
Secured Party with respect to all such Collateral sold or disposed of by the
Debtor, the Debtor shall aggregate such cash, notes, chattel paper or other
property and hold the same in trust for the Secured Party and the Secured Party
shall have a security interest therein. The debtor shall be entitled to transfer
such notes or chattel paper free of such trust if at or prior to the time of
such transfer the payment due from the Debtor to the Secured Party shall be
assured to the satisfaction of the Secured Party.
ARTICLE 4 - WARRANTIES OF DEBTOR
4.01 The Debtor hereby warrants to the Secured Party that:
(a) if it is a corporation then it is duly organized and validly
existing under the laws of the jurisdiction of its
incorporation and it is duly qualified to conduct its
business in British Columbia, and the execution, delivery and
performance hereto are within its corporate powers, have been
duly authorized and do not contravene, violate or conflict
with any law or the terms of its constating documents or any
indenture or agreement to which it is party;
(b) except for the security interests granted hereby and
expressly permitted security interests having priority over
the security interests granted hereby, the Debtor is or will
be the owner of, or have an interest in, the Collateral free
from any adverse liens, security interest or encumbrances,
and agrees that it will defend the Collateral against all
claims and demands of all persons, firms or bodies
corporate at any time claiming the same or any interest
therein;
(c) the security interests herein are given and taken as security
for the payment of the monies payable under other security
instruments between the Debtor and the Secured Party, and not
in substitution therefor; and
(d) the Collateral does not include any goods or assets of the
Debtor that are consumer goods as defined in the Personal
Property Security Act of British Columbia.
ARTICLE 5-UNDERTAKING OF DEBTOR
5.01 The Debtor hereby undertakes to:
(a) promptly pay all obligations, indebtedness and liabilities
owing to the Secured Party as they become due or are demanded;
(b) maintain the collateral in good condition and repair and
provide adequate storage facilities to protect the Collateral
and not permit the value of the Collateral to be impaired,
reasonable wear and tear excepted;
(c) not, without consent in writing of the Secured Party, create
any security interest, mortgage, hypothec, charge, lien or
other encumbrance upon the Collateral or any part thereof
ranking or purporting to rank in priority to or pari passu
with the security interests created by this Agreement;
(d) defend the title to the Collateral against all persons, firms
or bodies corporate claiming any interest in the Collateral or
any part thereof;
(e) not, without prior written consent of the Secured Party remove
the Collateral or any part thereof from the location where the
Debtor carries on its business within the Province of British
Columbia, except for rentals, machinery demonstrations,
repairs and maintenance in the ordinary course of business
which shall take place within the said province;
(f) pay all taxes, assessments, and levies or charges from any
source which may be assessed against the Collateral or any
part thereof or which may result in a lien against the
Collateral or any part thereof and insure the Collateral for
loss or destruction by fire, wind storm and such other perils
stipulated by the Secured Party in an amount not less than the
full insurable value of the Collateral or the amount from time
to time hereby secured, whichever is lesser, with appropriate
endorsement to secure the Secured Party as its interest shall
appear. In the event the debtor shall fail to provide adequate
insurance when required to do so or to pay any of the said
taxes, assessments, and levies or charges the Secured Party
may, without notice, at its option, but without any obligation
or liability so to do, procure insurance and pay taxes or
other charges and add said sums to the balance of the debt
hereby secured or claim from the Debtor immediate
reimbursement of such sums;
(g) keep, at the principal place of business of the Debtor,
accurate books and records of the Collateral and furnish as
the request of the Secured Party from time to time, in
writing, all information requested relating to the Collateral
or any part thereof and the Secured Party shall be entitled
from time to time to inspect the aforesaid Collateral and to
take temporary custody of and make copies of all documents
relating to Accounts Receivable and for such purposes the
Secured Party shall have access to all premises occupied by
the Debtor or where the Collateral or any of it may be found;
(h) duly observe and confirm to all valid requirements of a
governmental authority relative to any of the Collateral and
all
covenants, terms and conditions upon or under which the
Collateral is held.
(i) do, make and execute, from time to time at the Secured Party's
request, all such financing statements, further assignments,
documents, acts, matters and things as may be reasonably
required by the Secured Party of or with respect to the
Collateral or any part thereof or as may be required to give
effect to these presents, and the Debtor hereby constitutes
and appoints the Secured Party or any receiver, manager or
receiver-manager appointed by the Court or the Secured Party
(all of whom are hereinafter referred to as the "Receiver") as
hereafter set out, the true and lawful attorney of the Debtor
irrevocably with full power of substitution to do, make and
execute all such assignments, documents, act, matters or
things with the right to use the name of the Debtor whenever
it may be deemed necessary or expedient;
(j) give immediate notice to the Secured Party in the event of a
change of the corporate or trade name of the Debtor; and
(k) pay, on demand of the Secured Party, all reasonable expenses,
including solicitor's fees and disbursements and all the
remuneration of any Receiver appointed hereunder, incurred by
the Secured Party in the preparation, perfection and
enforcement of this Agreement.
ARTICLE 6 - MAINTAIN SECURITY INTEREST
6.01 The Debtor shall pay all expenses and, upon request, take any action
reasonably deemed advisable by the Secured Party to preserve the Collateral or
to establish, determine priority of, perfect, continue perfected, terminate
and/or enforce the Secured Party's interest in it or rights under this
Agreement. If the Debtor fails to act as required by the Agreement, the Secured
Party is authorized, in the Debtor's name, to take any such action, including
without limitation, signing the Debtor's name or paying any amount so required,
and the cost thereof shall be one of the debts and liabilities secured
hereunder.
ARTICLE 7 - DEFAULT
7.01 The Secured Party may at its option, in writing, declare the Debtor to be
in default under this Agreement and/or may declare the whole or any part of the
unpaid balance of any obligations, indebtedness and liabilities secured by this
Agreement immediately due and payable if any of the following events occurs:
(a) the Debtor fails to pay when due any of the obligations,
indebtedness or liabilities secured by this Agreement;
(b) the Debtor fails to perform any term, condition, provision,
covenant or undertaking of this Agreement or any other
agreement between the Debtor and the Secured Party;
(c) the Debtor ceases or threatens to cease to carry on its
business; commits an act of bankruptcy, becomes insolvent,
makes an assignment or bulk sale of its assets, or proposes a
compromise or arrangement to its creditors;
(d) any proceeding is taken with respect to a compromise or
arrangement or to have the Debtor declared bankrupt or wound
up or to have a receiver appointed of any part of the
Collateral or if any encumbrance takes possession of any part
thereof;
(e) any execution, sequestration or extent or any other process of
any court becomes enforceable against the Debtor or if any
distress or analogous process is levied upon the Collateral or
any part thereof;
(f) the occurrence of loss, theft, damage or destruction of the
collateral not covered by adequate insurance containing a loss
payable clause for the protection of the Secured Party as its
interest may appear; or
(g) if the Secured Party in good faith believes upon commercially
reasonable grounds, that the prospect of payment or
performance on the part of the Debtor of any of its
obligations is, or is about to be, impaired or that the
Collateral, or any part thereof, is, or is about to be, in
jeopardy including danger of being lost, damaged or
confiscated.
ARTICLE 8 - ENFORCEMENT AND REMEDIES
8.01 (a)Upon default the security interests granted hereby shall become
enforceable and the Secured Party shall have all the rights and remedies
available to it under the Personal Property Security Act of British Columbia as
amended from time as well as any other applicable laws and, but so as not to
restrict the generality of the foregoing, the following rights and remedies:
(i) the Secured Party may appoint by instrument in writing a
Receiver of all or any part of the Collateral and remove
or replace such Receiver from time to time or may
institute proceedings in any Court of competent
jurisdiction for the appointment of such a Receiver. Any
such Receiver or Receivers so appointed shall have power
to take possession of the Collateral or any part thereof,
and for such purposes to occupy and use any real or
personal property of the Debtor without charge therefore
for so long as may be necessary; (ii) the Secured Party
may demand that the Debtor assemble the Collateral or part
thereof, is any convenient place designated by the Secured
Party and deliver possession of all of the Collateral or
part thereof to the Secured Party;
(iii) the Secured Party may take such steps as it considers
necessary or desirable to obtain possession of all or any
part of the collateral, and to that end the Debtor agrees
that the Secured Party may by its servants, agents or
Receiver at any time during the day or night enter upon
lands and premises, and if necessary break into houses,
buildings and other enclosures where the Collateral may be
found for the purpose. of taking possession of and
removing the Collateral or any part thereof;
(iv) the Secured Party may seize, collect, realize, borrow
money on the security of, release to third parties or
otherwise deal with the Collateral or any part thereof in
such manner, upon such terms and conditions and at such
time or times as may seem to it advisable and without
notice to the Debtor(except as otherwise required by any
applicable law);
(v) the Secured Party may charge the Debtor for any expense
incurred by the Secured Party (including taxes, insurance,
legal, accounting and Receiver fees) in protecting,
seizing, collecting, realizing, borrowing on the security
of; selling or obtaining payment of the Collateral or any
part thereof and may add the amount of such. sums to the
indebtedness of the Debtor;
(vi) the Secured Party may elect to retain all or any part of
the Collateral in satisfaction of the obligations,
indebtedness and liabilities of the Debtor to the Secured
Party; (vii)the Secured Party may grant extensions of time
and other indulgences, take and give up securities, accept
compositions, grant releases and discharges, release any
part of the Collateral to third parties and otherwise deal
with the Debtor, debtors of the Debtor, sureties and
others and with the Collateral and other securities as the
Secured Party may see fit without prejudice to the
liability of the Debtor or the Secured Party's right to
hold and realize the Collateral;
(viii) in the event of the Secured Party taking possession of the
Collateral, or any part thereof in accordance with the
provisions of this Agreement, the Secured Party shall have
the right to maintain the same upon the premises on which
the Collateral may then be situate and for the purpose of
such maintaining shall be entitled to the free use and
enjoyment of all necessary building, premises, housing,
stabling, shelter and accommodation
for the proper maintaining, housing and protection of the
Collateral so taken possession of by the Secured Party as
aforesaid, and for its servant or servants, assistant or
assistants and the Debtor covenants and agrees to provide
the same without cost or expense to the Secured Party
until such time as the Secured Party shall determine in
its discretion to remove, sell or otherwise dispose of the
Collateral so taken possession of by it as aforesaid;
(ix) to facilitate the realization of the Collateral, the
Secured Party or its Receiver may carry on or concur in
the carrying on of all or part of the business of the
Debtor and may, to the exclusion of all others, including
the Debtor, enter upon, occupy and use all or any of the
premises, buildings, plant and undertaking of the Debtor
or occupied or used by the Debtor, and use all or any of
the tools, machinery and equipment of the Debtor for such
time as the Secured Party or Receiver sees fit, free of
charge, to manufacture or complete the manufacture of any
inventory and to pack and ship the finished product, and
the Secured Party or Receiver shall not be liable to the
Debtor for any neglect in so doing or in respect of any
rent, rent charges, depreciation or damages in connection
with such actions; (x) the Secured Party may, if it deems
it necessary for the proper realization of all or any part
of the Collateral, pay any encumbrance, lien, claim or
charge that may exist or be threatened against the same
and in every such case the amounts so paid together with
costs, charges and expenses incurred in connection
therewith shall be added to the obligations of the Debtor
to the Secured Party at the date of payment thereof by the
Secured Party;
(xi) The Secured Party may sell, lease or otherwise dispose of
all or any part of the Collateral, whether by public or
private sale or lease or otherwise, in such manner, at
such price as can be reasonably obtained therefore and on
such terms as to credit and with such conditions of sale
and stipulations as to title or conveyance or evidence of
title or otherwise as to the Secured Party may seem
reasonable, provided that if any sale is on credit the
Debtor will not be entitled to be credited with the
proceeds of any such sale, lease or disposition until the
monies therefor are actually received; and
(xii) all monies collected or received by the Secured Party in
respect of the Collateral may be applied on account of
such parts of the indebtedness and liability of the Debtor
as to the Secured Party seems best or may be held
unappropriated in a Collateral account or in the
discretion of the Secured Party may be released to the
Debtor, all without prejudice to the Secured Party's
claims upon the Debtor.
(b) The rights and remedies herein conferred upon the Secured party
shall be cumulative and not alternative and shall be in
addition to and not in substitution for or in derogation of
rights and remedies conferred by the Personal Property Security
Act of British Columbia as amended from time to time and any
other applicable laws.
ARTICLE 9-WAIVER
9.01 (a) The Secured Party may permit the Debtor to remedy any
default without waiving the defaults so remedied and the
Secured Party may waive any default without having waived any
other subsequent or prior default by the Debtor. A waiver
shall only be binding on the Secured Party if it has been
given in writing.
(b) The Debtor shall not be discharged by any extension of time,
additional advances, renewals and extensions, the taking of
further security, releasing security, extinguishment of any of
the security interests created herein as to all or any part of
the Collateral, the failure to perfect the security or any
other act except a release or discharge of the said security
interests upon the full payment of the obligations,
indebtedness and liabilities secured by this Agreement,
including charges, expenses, fees, costs and interest.
(c) The Debtor waives the right to receive any verification
statements or financing statements related to this Agreement.
ARTICLE 10-NONLIABILITY OF THE SECURED PARTY
10.01 The Secured Party shall not be liable or accountable for any failure to
seize, collect, realize, sell or obtain payment of the Collateral or any part
thereof and shall not be bound to institute proceedings for the purpose of
seizing, collecting, realizing or obtaining possession or payments of the same
or for the purpose of preserving any rights of the Secured Party, the Debtor, or
any other person, firm or body corporate in respect of same. The Secured Party
shall use reasonable care in the custody and preservation of collateral it has
taken into its possession and the Debtor hereby agrees that the Secured Party
shall not be obligated to preserve any rights against other persons or take any
steps to preserve any rights of the Debtor with respect to Other Personal
Property including any instrument, security or chattel paper included in the
Collateral.
ARTICLE 11-ADDITIONAL SECURITY
11.01 This Agreement is in addition to and not in substitution for any other
Agreement between the parties creating a security interest in all or part of the
Collateral, whether heretofore or hereafter made, and the terms of such other
agreement or agreements shall be deemed to be continued unless expressly
provided to the contrary in writing and signed by the parties.
ARTICLE 12- ATTACHMENT
12.01 Subject to Section 12.02 the Debtor warrants and acknowledges that value
has been given and that the Debtor and the Secured Party intend the Security
interests created by this Agreement to attach upon the extension of this
Agreement and that value has been given and that the Debtor has rights in the
Collateral.
12.02 With respect to any party of the Collateral to be acquired by the Debtor
after the date hereof, the Debtor warrants and acknowledges that the Debtor and
the Secured Party intend the security interests created by this Agreement to
attach as soon as the Debtor has rights therein.
ARTICLE 13-FUTURE ADVANCES
13.01 Nothing herein contained including the execution of this Agreement nor the
perfection of any of the security interests contained herein shall obligate the
Secured Party to make any advance or loan or renewal or extension of any
indebtedness or liability of the Debtor whatsoever.
ARTICLE 14-NOTICES
14.01 Notwithstanding anything herein contained and whether or not expressly
stipulated herein, every notice or other communication contemplated hereby or
otherwise relating hereto shall be in writing. Every notice required or
permitted to be communicated hereunder, may be:
(a) served personally by leaving it with the party to whom it is
to be communicated;
(b communicated by telecopy to the party to whom it is to be
communicated; or
(c) mailed by pre-paid registered mail(with acknowledgement of
receipt requested) to the party to whom it is to be
communicated.
If notice is served personally, it shall be deemed to have
been validly communicated to and received by the party to whom it was
addresses on the date on which it was delivered. If a notice is communicated
by telecopy, it shall be deemed to have been validly communicated to and
received by the party to whom it was addresses on the expiry of eight hours
after it was transmitted or 9:00 o'clock a.m. (according to the time zone of the
party to whom it was addressed) on the day following transmission, whichever is
later. If a notice is mailed as aforesaid, it shall be deemed to have been
validly communicated to and to have been received by the addressee thereof on
the earlier of the date of its receipt or the eleventh day following the mailing
thereof in Canada, provided that no party shall mail any notice during any
period during which Canadian postal workers, whether in the whole of Canada, or
in any region thereof where a notice is to be communicated, are on strike, are
withholding of services or lockout is threatened or has just been terminated so
that, in the result, it may be adversely affected. Any address as provided for
in this Section may be changed by written notice as contemplated by this
Section, and the respective addresses of the parties hereto for the
communication of the notice shall be as follows:
As to the Debtor:
R.P.M.J. Corporate Communications Limited, R.R.2, Site 33, Comp. 9, Osoyoos,
British Columbia, VOH 1V0
As to the Secured Party:
514592 B.C. LTD., 1033 - 3rd Avenue, Prince George, British Columbia, V2L 3E3
ARTICLE 15-HEADINGS
15.01 All headings used in this Agreement have been inserted for convenience of
reference only and not intended to assist in the interpretation of any of the
provisions of this Agreement unless expressly referred to in the provisions of
this Agreement.
ARTICLE 16-GENERAL
16.01 The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provision.
16.02 This Agreement shall be interpreted in accordance with the laws of the
Province of British Columbia.
ARTICLE 17-RECEIPT OF COPY
17.01 The Debtor hereby acknowledges receipt of a copy of this Security
Agreement.
ARTICLE 18-ANT
18.01 This Agreement benefits the Secured party, its successors and assigns and
binds the Debtor and its heirs, executors, personal representatives, successors
and assigns.
IN ARTICLE 19, THE DEBTOR AND THE SECURED PARTY, OR THE RESPECTIVE SOLICITORS,
SHOULD ADD WHATEVER ADDITIONAL PROVISIONS THEY BELIEVE NECESSARY.
ARTICLE 19 - ADDITIONAL PROVISIONS
The Debtor is indebted to the Secured Party in the amount of $800,000.00 to be
repaid as follows:
See attached Right to Purchase
IN WITNESS WHEREOF
the Debtor has executed this Security Agreement this day of May, 2000.
R.P.M.J. CORPORATE COMMUNICATIONS LIMITED
by its authorized signatory:
- ------------------------------------------
Schedule "F"
GUARANTEE
THIS GUARANTEE dated for reference only the 15th day of May, 2000.
WHEREAS:
A. R.P.M.J. CORPORATE COMMUNICATIONS LIMITED, a British Columbia Company,
Incorporation Number 525560, having its registered and records office at Suite
100, 166 Main Street, Penticton, British Columbia (hereinafter called the
"Debtor"), entered into an Agreement for Sale and Security Agreement with 514592
B.C. LTD. (hereinafter called the "Secured Party").
B. LEO SHULL (hereinafter called the "Guarantor") is the principal shareholder
of the Debtor.
C. Pursuant to the Agreement for Sale and Security Agreement the Debtor is
indebted to the Security Party in the amount of Eight Hundred Thousand Dollars
($800,000.00) (hereinafter called the "Indebtedness"), which is payable in
accordance with and secured by the Agreement for Sale and Security Agreement,
copies of which are attached to this Guarantee (hereinafter called the
"Security").
D. As additional security for the covenant of the Debtor to pay the Indebtedness
to the Secured Party, the Secured Party has required that the Guarantor provide
a guarantee of the Indebtedness to the Secured Party.
NOW THEREFORE WITNESSETH that in consideration of the Secured
Party loaning to the Debtor as aforesaid and in consideration of the sum of Ten
($10.00) DOLLARS, and other good and valuable consideration now paid by the
Secured Party to the Guarantor, (the receipt and sufficiency of which is hereby
acknowledged by the Guarantor), the parties agree as follows:
1. The Guarantor unconditionally guarantees to the secured Party the payment
when due by the Debtor of the Indebtedness pursuant to the provisions of the
Security.
2. The Guarantor is and shall continue liable notwithstanding any transaction
which may take place between the Secured Party and the Debtor, or any neglect or
default of the Secured Party which might otherwise operate as a discharge,
whether partial or absolute of the Guarantor as surety only of the Debtor
and, without restricting the generality of the foregoing, notwithstanding the
releasing in whole or in part of the properties and assets mortgaged or charged
or the granting of time or other indulgences to the Debtor and, notwithstanding
that the Debtor does not in fact execute and deliver the Security or any part
thereof or that the Security or any part thereof may be in fact unenforceable,
invalid or defective in any way, or that the Debtor may have exceeded its
borrowing powers or that the borrowing from the Secured Party may have been
ultra vires.
3. The Secured Party, in its absolute discretion, may grant time or other
indulgences to the Debtor and any other person now or hereafter liable to the
Secured Party in respect of the Indebtedness and may give up, modify, vary,
exchange, renew or abstain from perfecting or taking advantage of the Security
in whole or in part and may discharge any part or parts or accept any
composition or arrangements or realize on any of the Security when and in such
manner as the Secured Party may think expedient and in no case shall the Secured
Party be responsible for any neglect or omission with respect to the Security.
4. The Guarantor shall not at any time claim to be subrogated in any manner to
the position of the Secured Party and shall not claim the benefit of any
Security at any time held by the Secured Party except that if the Guarantor pays
to the Secured Party all monies remaining unpaid of the Indebtedness, then the
Guarantor shall on demand made upon the Secured Party in writing be entitled to
the assignment of such Security as the Secured Party may then hold for the
Indebtedness.
5. The Secured Party shall not be bound to seek recourse against the Debtor or
any other security it may hold before requiring payment by the Guarantor and the
Secured Party may enforce the various remedies available to it and may realize
upon the Security or any part thereof in such order as the Secured Party may
determine.
6. Notwithstanding anything set out in the Security, the Secured Party will not
in any way be responsible for either the holding or the supervision of the
insurance policies required to be maintained under the covenants to insure
contained in the Security or the verification of the compliance with any such
covenants to insure and the Secured Party's permissive power to place insurance
on the assets mortgaged to it contained in the Security is in its sole and
absolute discretion and the Guarantor acknowledges that
the Secured Party's action or lack of action in such holding, supervision,
verification or in its permissive powers shall in no way diminish liability of
the Guarantor hereunder.
7.Any notice or demand given by the Secured Party to the Guarantor may be given
by delivery or by prepaid first class registered mail from any post office
within Canada addressed to the Guarantor at 6015 Lakeshore Drive, Osoyoos,
British Columbia, and any notice given shall be deemed to have been received, if
delivered, on delivery, or if mailed, at the end of five (5) days excluding
Saturdays, Sundays and Holidays after mailing. If there exists a labour dispute
or other event at the time of mailing of any notice hereunder or within five (5)
days thereafter excluding Saturdays, Sundays or Holidays which would affect the
normal delivery of the notice by Canada Post, then notice will only be effective
hereunder if actually delivered.
8.This Guarantee shall enure to the benefit of the Secured Party, its successors
and assigns and shall be binding upon the Guarantor, his heirs, executors,
administrators, successors and assigns.
IN WITNESS WHEREOF the Guarantor has hereunto set his hand and seal at the Town
of Osoyoos, in the Province of British Columbia, this day of May, 2000.
SIGNED, SEALED AND DELIVERED in the presence of:
--------------------------------
LEO SHULL
- ----------------------------------
- ----------------------------------
- ----------------------------------
Schedule G
514982 BC Ltd.
Financial Statements
For the four-month period ended
August 31, 1999
(Unaudited - see Notice to Reader)
Contents
==========================================================================
Notice to Reader 2
Financial Statements
Balance Sheet 3
Statement of Operations and Deficit 4
Note to Financial Statement 5
BDO BBDO Danwoody LLP 600 Park Place
Charted Accountants 666 Burrard Street
Vancouver, BC, Canada V6C
Telephone: (604) 688-5132
Telefax: (604) 685-5132
E-mail: finance@vancouver.bdo.ca
www.bdo
- --------------------------------------------------------------------------------
Notice to Reader
- --------------------------------------------------------------------------------
We have compiled the Balance Sheet of 514592 BC Ltd. as at August 31, 1999 and
the Statement of Operations and Deficit for the four-month period then ended
from information provided by management. We have not audited, reviewed or
otherwise attempted to verify the accuracy or completeness of such information.
Readers are cautioned that these statements may not be appropriate for their
purposes.
BDO Danwoody LLP
Chartered Accountants
Vancouver, British Columbia
February 25, 2000
- --------------------------------------------------------------------------------
514592 BC Ltd.
Balance Sheet
(Unaudited - see Notice to Reader)
August 31 1999
- --------------------------------------------------------------------------------
Assets
Current
Cash $ 19,691
Prepaid expenses and deposits 3,691
-------------
23,282
Capital assets (Note) 864,291
----------
$ 887,573
----------
- --------------------------------------------------------------------------------
Liabilities and Stockholders' Deficiency
Liabilities
Current
Accounts payable and accrued liabilities $ 57,470
Unearned revenue 9,613
Due to director 10,107
Current portion of long-term debt 32,987
-----------
110,187
Long-term debt 641,148
Due to stockholders 300,000
1,051,335
----------
Stockholders' deficiency
Share capital
Authorized
1,000 Class A voting common shares,
no par value
9,000 Class B non-voting common shares,
no par value
Issued
100 Class A common shares 1
Deficit (163,768)
-----------
(163,782)
----------
$ 887,573
- --------------------------------------------------------------------------------
514592 BC Ltd.
Balance Sheet
(Unaudited - see Notice to Reader)
For the four-month period ended August 31 1999
- --------------------------------------------------------------------------------
Rentals
Pad rentals $ 64, 484
Expenses
Amortization $ 12,119
Automobile 328
Interest on long-term debt 22,158
Management fees 20,000
Miscellaneous 4,532
Office 1,530
Professional fees 2,644
Property management 10,824
Property taxes and utilities 22,892
Repairs and maintenance 6,289
Travel 2,134
-------
106,745
-------
Loss from operations (42,282)
-------
Write down of capital assets 28,570
-------
Net loss for the period (70,862)
-------
Deficit, beginning of period (82,911)
-------
Deficit, end of period $ (183,763)
-------
- --------------------------------------------------------------------------------
514592 BC Ltd.
Balance Sheet
(Unaudited - see Notice to Reader)
August 31, 1999
- --------------------------------------------------------------------------------
Capital Assets
---------------------------------------------------------
Accumulated Net Book
Cost Amortization Value
---------------------------------------------------------
Land $ 298,830 $ - $ 298,830
Buildings 14,323 1,349 12,974
Equipment 11,123 4,996 6,127
Pads 685,500 139,140 546,360
---------------------------------------------------------
$ 1,009,776 $ 145,485 $ 854,291
---------------------------------------------------------