Exhibit 10.5
MEMORANDUM OF AGREEMENT ENTERED INTO AT THE CITY OF MONTREAL, PROVINCE OF
QUEBEC, THIS _____ DAY OF ______________, 1998.
BY AND BETWEEN: ____________________________________________,
executive of the City of ___________________,
Province of ________________, therein
domiciled and residing at
__________________________________.
(hereinafter referred to as the "VENDOR")
PARTY OF THE FIRST PART
AND: DECTRON INTERNATIONAL INC., a corporation,
duly incorporated according to Law, having
its head office and principal place of
business at 4300 Poirier Blvd., in the City
of Montreal, Province of Quebec,
thereinacting and represented by Ness
Lakdawala duly authorized hereto as he so
declares.
(hereinafter referred to as the "PURCHASER")
PARTY OF THE SECOND PART
THIS AGREEMENT WITNESSTH AS FOLLOWS:
SECTION 1: DEFINITIONS
In this AGREEMENT, the following capitalized words and terms shall
have the following means:
1.1 "ACT" means collectively, the Income Tax Act of Canada ("I.T.A.") and the
Quebec Tax Act ("Q.T.A."), unless otherwise indicated;
1.2 "AGREEMENT" means the present agreement inclusive of all schedules and
exhibits attached hereto as well as other supporting documentation and the
phrase "by these presents", "in virtue of the presents", "to these
presents" and such other similar phrases when used in this agreement shall
be deemed (unless otherwise indicated) as a reference to the entire
agreement rather than a particular provision hereof;
1.3 "COMPANY" shall means DECTRON INC., that being the corporate entity which
prior to these presents issued to the VENDOR, the SHARES which are by these
presents being transferred to the PURCHASE by the VENDOR;
1.4 "PURCHASER" shall mean DECTRON INTERNATIONAL INC., and PURCHASER warrants
being a duly incorporated company having the authority and power to these
presents of unlimited number of Common and Preferred shares;
1.5 "PURCHASE PRICE" shall mean the consideration to be given by the PURCHASER
in exchange for the SHARES to be transferred to the PURCHASER, which the
parties declare by these presents as reflecting the real fair market value
thereof as reasonably and justly determined by the parties upon
consultation with the auditors of the COMPANY. Any consideration to be
given in payment of the PURCHASE PRICE shall be contemplated in Canadian
Funds only.
1.6 "SHARES" shall mean ________________________________________, and warrants
being a CANADIAN citizen and having the full power, authority and capacity
to transfer the SHARES and generally to enter into this AGREEMENT.
1.7 "VENDOR" shall mean _______________________________________, and warrants
being a CANADIAN citizen and having the full power, authority and capacity
to transfer the SHARES and generally to enter into this AGREEMENT.
SECTION 2: SALES
The VENDOR hereby sells to the PURCHASER hereto present and
accepting, the SHARES for the price and consideration and upon the terms and
conditions hereinafter set forth.
SECTION 3: PURCHASE PRICE
The PURCHASE PRICE for the SHARES is _______________________ dollars
($________________) which sum shall be payable by the issuance and allotment to
the VENDOR of ________________________ (_________) Class "_________" shares and
the sum of __________________________________ dollars ($_______) shall be
credited to the stated capital account of the PURCHASER. The said Class "___"
shares may be redeemed or purchased for the sum of
_______________________________ dollars ($_________) per share.
SECTION 4: REPRESENTATIONS AND WARRANTIES
All representations and warranties as contained in these presents
shall survive the execution of this AGREEMENT and shall continue to remain in
full force and effect.
SECTION 5: EXECUTION OF FURTHER DOCUMENTS
The VENDOR will, from time to time, at the purchaser's request and
without further consideration, execute such further instruments of conveyance
and take such other actions as the
PURCHASER may reasonably require to convey and transfer more effectively to the
PURCHASER the Shares. The VENDOR will furthermore sign all documents and do all
things necessary to give effect to these presents.
SECTION 6: ELECTIONS
The parties hereto undertake and agree to avail themselves of the
rights granted them to make all appropriate elections within the prescribed time
periods and in prescribed from under the provisions of the ACT and without
limiting the generality of the foregoing, the parties hereto shall jointly elect
under Section 85 I.T.A. and Section 518 Q.T.A. that for the ends of these
presents the parties have elected the sum of ___________________________________
dollars ($____________) representing the agreed transfer price, for the VENDOR
of the SHARES herein sold.
SECTION 7: ADJUSTMENT
7.1 The parties by these presents do hereby reaffirm that the PURCHASE
PRICE was intended to represent and is the fair market value of the SHARES.
7.2 In consequence thereof, the parties hereto agree that should the
Federal and/or Provincial taxation authorities for tax purposes either of the
parties to the AGREEMENT on the basis that the SHARES were of a value different
than the PURCHASE PRICE or should the taxation authorities establish the value
of the SHARES in any other manner, the parties may concur with the taxation
authorities determination of the value of the SHARES in which case the PURCHASE
PRICE shall be automatically adjusted retroactive to the date of these presents
NUNC PRO TUNC to conform with the assessment as made by the taxation
authorities. IF the parties do not agree with the value of the SHARES as
established by the taxation authorities, the PURCHASE PRICE shall be adjusted to
equal the amount as determined by the final judgement of the competent Court.
Upon adjustment in accordance with the provisions of the present
Section:
(a) if the adjusted value of the SHARES is greater than the PURCHASE
PRICE (the difference thereof being hereinafter referred to as the
"INCREASE"), the total consideration for which the Class "______"
shares were issued as well as its redemption price shall be deemed
to have been retroactively increased NUNC PRO TUNC by an amount
equal to the INCREASE;
(b) if the adjusted value of the SHARES is less than the PURCHASE PRICE
(the difference thereof being hereinafter referred to as the
"DECREASE") then in such case:
[i] if the consideration for which the Class "_________" shares
were issued is greater than the DECREASE< the total
consideration for which the said deemed to have been reduced
retroactively NUNC PRO TUNC by the amount equal to the
DECREASE, or
[ii] if the consideration which the Class "_______" shares were
issued is less than the DECREASE or if there no longer
remains Class "_______" shares then in such case:
(1) the total consideration for which the remaining Class
"____" shares had been issued as well as the redemption
value thereof shall be deemed to have been reduced
retroactively NUNC PRO TUNC by an amount equal to the
total consideration for which these shares have been
issued, and
(2) the VENDOR shall issue to the PURCHASER a promissory
note for an amount equal to the DECREASE less the
amount of the reduction as calculated in Sub-Section
7(b)[ii](1) hereinabove, the said promissory note shall
be payable on demand and shall bear interest at the
rate as foreseen in the ACT and/or of the regulation
thereof.
(c) the paid-up capital as maintained for the said Class "______" shares
shall not be adjusted.
SECTION 8: GENERAL PROVISIONS
8.1 This AGREEMENT shall enure to the benefit of and be binding upon the
parties hereto, their respective heirs, legatees, executors, legal
representatives, successors and assigns.
8.2 This AGREEMENT shall be governed by and construed in accordance with
the Laws of the Province of the Quebec and the applicable Laws of Canada.
8.3 Any notice or other communication to be given pursuant to these
presents shall be in writing and may be hand delivered, by letter of facsimile
or sent by registered mail, postage prepaid and notice will be deemed to have
been given on the date of the hand-delivery, on the date indicated on the
transmission slip if sent by facsimile or on the earlier of the date of actual
delivery by the postal authorities or three (3) business days after the date of
mailing.
For the purpose hereof, the address of the VENDOR and PURCHASER are
the addresses as set forth in these presents or such other address as either
party may from time to time notify the other party of.
8.4 Unless otherwise expressed in these presents, any word herein
containing the singular number will include the plural, any word import any
gender will include the masculine, feminine and neuter genders ; any word
importing a person will include a corporation, a partnership and other entity;
and vice-versa.
8.5 Every provision of this AGREEMENT is and will be independent of the
other and the event that any part of this AGREEMENT is declared invalid, illegal
or unenforceable, the
remaining provisions will be unaffected by such declaration and will remain
valid, binding and enforceable.
8.6 This AGREEMENT sets for the entire AGREEMENT and understanding
between the parties with respect to the subject matter hereof and supersedes all
prior negotiations and discussions. No party shall be bound by any conditions,
representations and warranties with respect to the subject matter hereof other
than those contained in these presents.
8.7 The parties hereto agree that they will from time to time execute
and deliver such other documents and perform such acts and sign such instruments
as may be necessary or desirable in order to give full effect to these presents
including without restriction the provisions of signatures int he minute book of
the Company as well as attending at the offices of the Company's attorney to
execute and deliver such documents as may be necessary.
8.8 Failure by either party to take action against the other shall not
affect their respective rights to require full performance of this AGREEMENT at
any time thereafter. The waiver by either party of the breach of any provision
of this AGREEMENT by the other party shall not operate or be construed as a
waiver of any subsequent breach by such party.
8.9 The parties have requested that this AGREEMENT and any related
documents be drafted in English. Les parties aux presents ont exige que ce
contrat at les documents y afferents soient rediges en anglais.
IN WITNESS WHEREOF, the parties have signed on the date and at the place first
hereinabove mentioned.
PARTY OF THE FIRST PART
______________________________ ______________________________
WITNESS
______________________________
WITNESS
PARTY OF THE SECOND PART
DECTRON INTERNATIONAL INC.
______________________________ Per:___________________________
WITNESS NESS LAKDAWALA
______________________________
WITNESS