OFFER TO PURCHASE
(Under The Bulk Sales Act)
ON THE GO HEALTHCARE, INC., (as Purchaser)
HEREBY AGREE TO AND WITH SOLUTIONS IN COMPUTING INC., (as Vendor) and with Bert
Silva (as Indemnifier) to purchase all the assets and property set out and
described in Schedule "A" hereto, the intent being to purchase the business
name, trademarks and trade names, customer lists and supplier authorizations,
as described in the aforementioned schedule, upon and subject to the terms
and conditions of this Agreement, (such assets being collectively referred
to in this Agreement as the "Assets"), for the consideration (the "Purchase
Price") of:
Two Hundred and Eighty Thousand US (US$280,000.00), payable as follows:
the Purchaser shall issue and deliver on closing Seven Hundred Thousand
(700,000) Restricted Shares to the Vendors, to be credited to the Purchaser
on closing at the issue price of $0.40 per share;
and One Hundred Thousand CDN ($100,000.00CDN) payable in cash on closing.
The following attached schedules are part of this Agreement, the contents
of which (save for the Purchaser's covenants and representations and
warranties) the Vendor represents to be accurate in all material respects:
Schedule "A" Assets
Schedule "B" Clauses and Conditions
Schedule "C" Accounts Payable and Accounts Receivable
The following attached schedule is part of this Agreement, the Purchaser's
covenants and representations of which the Purchaser represents to be
accurate in all material respects:
Schedule "B" Clauses and Conditions
This Offer shall be irrevocable by the Purchaser until 11:59 A.M. on the
31st day of January, 2006, after which time, if not accepted, this
Offer shall be null and void.
The Vendor represents and warrants that it is the owner of the Assets herein
agreed to be purchased,, that the Vendor has the right, or will have on
closing, to sell, convey, transfer and assign all rights, title and interest
in and to the said Assets and that the same will then be free and clear of all
liens and encumbrances whatsoever, except for those items expressly excluded
herein.
The sale shall be completed on the 2nd day of February, 2006, the Closing
Date, on which date possession of the Assets above described are to be given
to the Purchaser, such completion and closing to be made effective as of the
31st day of January, 2006 (the "Effective Date")
The Bill of Sale or other transfer document to be prepared at the Vendor's
expense, and each party to otherwise pay the costs of preparation and
registration of his own documents.
This Offer when accepted shall constitute a binding contract of purchase and
sale, and time in all respects shall be of the essence of this Agreement.
The parties hereto agree that there is no representation, warranty, collateral
agreement or condition affecting this Agreement or stipulated hereby other
than as expressed herein writing.
All goods, chattels and contents above-described shall be and remain at the
risk of the Vendor until completion of sale.
Any tender of document or money hereunder may be made upon the Vendor or
Purchaser or upon the solicitor acting for the party on whom tender is desired,
and it shall be sufficient that a negotiable certified cheque is tendered
instead of cash.
This Offer and its acceptance to be read with all changes of gender or numbers
required by the context.
IN WITNESS WHEREOF the Purchaser has hereunto set his seal by the hand of its
duly authorized officer in that behalf, as of this 31st day of January, 2006.
ON THE GO HEALTHCARE, INC.
per: /s/Stuart Turk
--------------------------
Date: Feb. 2 2006
The offer is hereby accepted.
IN WITNESS WHEREOF the Vendor has hereunto set his seal by the hand of its duly
authorized officer in that behalf as of this 31st day of January, 2006.
SOLUTIONS IN COMPUTING INC.
per: /s/Bert Silva
--------------------------
Date: Feb. 2 2006
IN WITNESS WHEREOF the Indemnifier has hereunto set his seal and seal as of
this 31st day of January, 2006.
BERT SILVA
per: /s/Bert Silva
--------------------------
Date: Feb. 2 2006
SCHEDULE "A"
1. ASSETS TO BE PURCHASED AND SOLD
The Assets being purchased hereby are:
i) the name and style, "Solutions in Computing" and forthwith
following such closing, undertake to register Articles of
Amendment changing its name, as well as any dissolution of trade
name and style as may be necessary and to provide the Purchaser's
solicitor with particulars of such registration, and the Purchaser
shall be entitled to the use of such corporate name, trade name
and style without liability to the Vendor therefor.
ii) all files, customer lists, charts, models and records of the
business of the Vendor and including computer data and the
employment and personnel records for all employees of the business
of the Vendor;
iii) all software and documentation therefore, including all electronic
data processing systems, program specifications, source codes,
input data and report layout, functional specifications and
narrative descriptions, flow charts, operating manuals, training
manuals and aids and other related material, and all supplier
authorizations and product authorizations (to the extent same
are assignable) as may be used by the business of the Vendor; and
iv) Main server, five (5) sets of work benches and modular steel
racks.
2. ASSETS NOT INCLUDED IN THE SALE
Notwithstanding any other clause in this Agreement, there shall be
specifically excluded from the purchase and sale of assets herein
provided for the following assets, calculated as at the opening of
business on the Effective Date, all of which shall remain the property
of the Vendor:
I) cash on hand or in the banks or other depositories;
ii) all accounts receivable owing to the Vendor, trade accounts, notes
receivable, book debts, prepaid expenses and other debts due or
accruing due to the Vendor in connection with the Practice and
the full benefit of all securities for such accounts, notes or
debts;
iii) all inventories;
iv) all fixtures, furnishings, vehicles and other tangible property;
v) all computer hardware and accessories thereto.
SCHEDULE "B"
SPECIFIC CONDITIONS
VENDOR COVENANTS, REPRESENTS AND WARRANTS
1. COVENANTS, REPRESENTATIONS AND WARRANTIES
The Vendor covenants and agrees with and represents and warrants as
follows to the Purchaser and acknowledges and confirms that the
Purchaser is relying on such covenants, agreements, representations
and warranties in connection with the purchase by the Purchaser of
the Assets.
2. CONTINUATION OF BUSINESS
The Vendor agrees to operate its business practice until the Closing
Date in the normal and customary manner, in a manner conducive to the
preservation of its goodwill to the best of its ability. Between
the date hereof and the Closing Date, the Vendor agrees:
(a) to carry on the business in substantially the same manner as
heretofore carried on;
(b) not to acquire, sell, transfer, lease, mortgage, pledge, encumber
or otherwise dispose of any of the Assets;
In the event of a breach of any of the foregoing, the purchase price
will be abated accordingly.
3. ACCOUNTS PAYABLE AND ACCOUNTS RECEIVABLE
The Vendor represents and warrants that, to the best of his knowledge
and belief, the information contained in the lists of the Vendor's
accounts payable and accounts receivable attached hereto as
Schedule "C" is true and accurate as at the Effective Date. Since
the date thereof no material financial changes have taken place which
would alter the substantial value of the business of the Vendor prior
to the close of the transactions contemplated herein.
4. NON COMPETITION AND NON SOLICITATION
The Vendor agrees that it and the following individuals: Bert Silva,
will on closing enter into a non-competition and confidentiality
covenant in a form satisfactory to the Purchaser, that, during the
term of Bert Silva's employment by the Purchaser and:
(a) for a period of one (1) year immediately following the date Bert
Silva is terminated as an employee by the Purchaser; or
(b) the greater of :
(i) if Bert Silva resigns as an employee of the Purchaser
before the debt payable to Val Silva is paid in full, a period
equal to the three (3) year term of the debt payable to Val
Silva or such earlier time that the debt is paid in full; or
(c) if Bert Silva resigns as an employee of the Purchaser after the
debt payable to Val Silva is paid in full, a period of one (1) year
from the date that Bert Silva resigns,
the Vendor and Bert Silva will not to carry on or be engaged in anyway
whatsoever, either directly or indirectly, either individually or in
partnership or otherwise, in a business within the Province of Ontario
which is competitive with the current business of the Vendor, and
further, not to solicit, invite, encourage in any manner whatsoever,
any customers or potential customers for the purposes of soliciting
business competitive with the current business of the Vendor or to
solicit any employees or staff of the Purchaser to work elsewhere.
5. RECORDS
The Vendor agrees to sell and transfer and leave all records on media
of any kind for the benefit of the Purchaser as of the date of closing,
together with any records of new customers or suppliers acquired from
the date of acceptance of this offer, and including all inactive
customer records for the 10 year period prior to closing.
6. EMPLOYEES (STAFF)
i) If requested by the Purchaser, the Vendor will encourage his staff
to become employed by the Purchaser.
ii) The Vendor, from the date of acceptance of the Offer, will not hire
or dismiss any staff or increase, or decrease any staff wages,
bonuses/or benefits without the Purchaser's written consent.
7. INDEMNIFICATION
The Vendor and Bert Silva jointly and severally agree, in reasonable
form and condition satisfactory to the Purchaser's solicitor, to
indemnify and save harmless the Purchaser from and against all
obligations, commitments, liabilities, claims and demands arising out
of or in any way connected with the Vendor's business which are not
expressly assumed by the Purchaser pursuant to the terms hereof, and
without limiting the generality of the foregoing including arising
out of litigation between the Vendor and AKP Black Walk Post Production
Ltd., and incurred up to and including the Closing Date.
8. NO CHANGE IN BUSINESS
From the date of acceptance of the Offer, there will be no significant
change in the affairs, business, prospects, operations, or conditions
of the Vendor, financial or otherwise, including those arising as a
result of any legislative or regulatory change, revocation of any
licence or right to do business, except changes occurring in the
ordinary course of business, which changes have not adversely affected
and will not significantly adversely affect the organization, business,
properties, prospects, or financial condition of the Vendor.
9. TAXES PAID
The Vendor represents and warrants that all taxes, including provincial
retail sales taxes and goods and services taxes in respect of the
assets and equipment being purchased herein, have been paid by the
Vendor. Vendor will deliver on closing a certificate under Section 6
of the Retail Sales Tax Act of Ontario.
10. RESIDENCE OF VENDOR
The Vendor represents and warrants that he is not a non-resident of
Canada within the meaning of the Income Tax Act (Canada) and that he
is, in fact, and on closing shall continue to be a resident of Canada
within the meaning of that statute.
11. INSURANCE
The Vendor has the purchased assets insured against loss or damage by
insurable hazards or risks and such insurance coverage will be
continued in full force and effect up to and including the closing
date.
12. CONSIGNMENT, BANKRUPTCY AND LITIGATION
The Vendor represents and warrants which representations and warranties
shall survive closing and be true both on the date hereof and on the
date of closing, that:
a) It has not made any assignment in bankruptcy, nor had any petitions
in bankruptcy made against him.
b) There are no existing executions against it and no pending
litigation save for the litigation between the Vendor , Bert Silva
and AKP Black Walk Post Production Ltd. (in respect of which the
Vendor and Bert Silva will on closing indemnify the Purchaser);
c) The Vendor is registered and is required to collect Goods and
Services Tax pursuant to the Excise Tax Act (Canada).
PURCHASER'S COVENANTS, REPRESENTATIONS AND WARRANTIES
13. PURCHASER INDEMNIFICATION
The Purchaser agrees to deliver to the Vendor, in reasonable form and
condition satisfactory to the Vendor's solicitor, on or before the date
of closing, an indemnification to indemnify and save harmless the
Vendor from and against all obligations, commitments, liabilities,
claims and demands arising out of or in any way connected with the
Assets or obligations that are expressly assumed by the Purchaser
hereunder that are incurred after the date of closing.
14. TAXES - PURCHASER
The Purchaser shall be liable for and shall pay all provincial sales
taxes, and all other taxes, duties or other like charges properly
payable upon and in connection with the conveyance and transfer of
the Assets by the Vendor to the Purchaser.
15. EMPLOYEES AND INDEPENDENT CONTRACTORS - PURCHASER
On closing, the Purchaser shall offer employment, effective the
Effective Date, to all of the Vendor's employees save Bert Silva, on
terms and conditions, including salary, incentive compensation,
benefits, positions and responsibilities which are in the aggregate
substantially similar and no less favourable than those presently
enjoyed by such employees. The Purchaser shall recognize the service
of the employees with the Vendor and its predecessors up to the
Effective Date for all purposes as if such service had occurred with
the Purchaser.
The Purchaser shall recognize all vacation pay of such employees that
has accrued during their employment by the Vendor and remains unpaid
and the Purchaser shall offer such employees time off in lieu of pay
for such accrued vacation (as listed in Schedule "1" hereof) without
adjustment to the Purchase Price.
The Purchaser shall be liable for all obligations relating to the
termination of employment after closing of any Vendor employee who
accepts the Purchaser's offer of employment.
The Vendor shall be liable for all obligations relating to any
employee of the Vendor who does not accept the Purchaser's offer of
employment, including without limitation any obligations relating to
the termination of employment of such employees by the Vendor.
On closing, the Purchaser will also assume and shall fulfil all
obligations of the Vendor under contracts relating to independent
contractors or consultants, which are listed in the attached
Schedule "2".
16. ASSUMED SERVICE CONTRACTS - PURCHASER
On closing, the Purchaser shall assume and be liable for all service
obligations contained in technical support agreements between the
Vendor and its customers and the Purchaser shall fulfil such
obligations in accordance with the terms of the contracts, save that
the services required to be provided under the contract shall not
exceed 250 hours.
17. VAL SILVA DEBT
The Purchaser acknowledges that the Vendor is indebted to Val Silva
in the principal amount of approximately $95,000.00, at an interest
rate of approximately 5% (such interest rate may vary slightly,
depending on the final interest rate Val Silva negotiates with his
bank relating to the funds he borrowed to advance to the Vendor) and
said debt is secured against the assets of the Vendor. The Val Silva
debt requires 36 monthly payments of approximately $2,845.00,
commencing March 1, 2006. On closing, the Purchaser shall assume
payment of said debt in accordance with its terms and shall be liable
for all payments thereunder (the Purchaser shall pay the debt in full
earlier if the Purchaser is fiscally able, acting reasonably. The
Purchaser shall grant a general security interest over all of its
assets in favour of Val Silva as security for the payment of such
debt. The documents causing such assumption and the granting of
such security shall be acceptable in form and content to the Vendor,
acting reasonably.
18. BERT SILVA EMPLOYMENT
On closing, the Purchaser shall offer employment to Bert Silva in
accordance with the offer letter attached hereto as Schedule "3" to
this Schedule. The offering of such employment shall be a condition
of closing in favour of the Vendor.
18. ACCESS TO RECORDS
The Purchaser agrees that it will preserve all records it receives from
the Vendor for a period of seven (7) years or such other period as is
required by applicable law and will permit the Vendor and its
representatives reasonable access to same in connection with the
affairs of the Vendor.
19. FOOTBALL FANATICS PROJECT
The Purchaser acknowledges that the Vendor is negotiating a sale to
Football Fanatics in the amount of approximately $25,000.00 US. If a
Purchase Order is issued by Football Fanatics by no later than
February 3, 2006, then this will be deemed to be a receivable of the
Vendor which the Vendor will be entitled to collect. The Purchaser
will fulfil the Purchase Order obligations and will bill the Vendor
for the Purchaser's cost of fulfilling such Purchase Order.
GENERAL - VENDOR AND PURCHASER BOTH AGREE:
19. ACCOUNTS RECEIVABLE
The Purchaser acknowledges that it is not purchasing the Vendor's
accounts receivables. The Vendor agrees to provide the Purchaser with
a list or copy of the accounts receivable due and owing to the Vendor
as of the date of closing. The Purchaser shall reasonably assist the
Vendor in collecting such accounts receivable, including by providing
the services of ist employees at no cost to the Vendor, but the
Purchaser shall have no obligation to collect the accounts receivable
of the Vendor. The Purchaser hereby agrees to remit any monies received
by it on behalf of the Vendor, with respect to the said accounts
receivable, to the Vendor monthly. Monies paid by a customer shall
be applied in accordance with the customer's direction. And further,
the Vendor agrees to collect the accounts receivable in a proper and
business-like manner in order to preserve goodwill.
20. BULK SALES ACT
The Purchaser hereby waives compliance with the provisions of the Bulk
Sales Act, R.S.O. 1990, B. 14, and amendments thereto. Save for the
indebtedness owed to Val Silva which is being assumed by the Purchaser,
the Vendor shall ensure that all trade creditors (as defined in the
abovementioned Act) of the Vendor shall be satisfied without any claim
against the Purchaser.
21. GOODS AND SERVICES TAX
Vendor and Purchaser agree to jointly file a Joint Election pursuant
to s.167(1) of the Excise Tax Act in order to exempt the Purchaser
from the requirement to pay Goods and Services Tax in respect of the
within transaction.
22. SURVIVE CLOSING
The Vendor and the Purchaser agree that all covenants and agreements,
on the part of each of the parties herein, shall survive the closing
of this transaction, and shall continue in full force and effect until
the same have been fulfilled. The Vendor and the Purchaser agree that
all representations and warranties, on the part of each of the parties
herein, shall survive the closing of this transaction, and shall
continue in full force and effect for a period of two years after
closing..
23. EXECUTE DOCUMENTS
The Vendor and the Purchaser agree to execute any document or documents
which may be reasonably required from time to time, to give better
effect to the terms and intent of this agreement.
24. CONFIDENTIALITY
The Vendor and the Purchaser agree that it is in their best interests
to retain the confidentiality of this sale until the transaction is
completed. Each will inform only those parties of such pending sale,
that are necessary in order to complete the sale.
25. RE-ADJUST
The Vendor and the Purchaser agree to provide, on or before the date of
closing, a mutual undertaking to re-adjust the allowances and credits
herein and all particulars of the statement of adjustments.
26. BENEFIT OF PURCHASER
All conditions of this agreement that are expressly intended to be for
the sole benefit of the Purchaser may be waived by it in writing prior
to closing. All conditions of this agreement that are expressly
intended to be for the sole benefit of the Vendor may be waived by it
in writing prior to closing..
27. JURISDICTION
This Agreement shall be governed by and interpreted in accordance with
the laws in effect in the Province of Ontario and each of the parties
irrevocably attorn to the non-exclusive jurisdiction of the Courts of
the Province of Ontario.
28. EXTENDED MEANINGS
In the Agreement, words importing the singular include the plural and
vice versa and words importing the masculine gender include all
genders.
29. HEADINGS
Section headings are not to be considered part of this Agreement and
are included solely for the convenience of reference and are not
intended to be full or accurate descriptions of the contents hereof.
30. ENTIRE AGREEMENT
This Agreement including the Schedules hereto, constitutes the entire
agreement between the parties. There are not and shall not be any
verbal statements, representations, warranties, undertakings or
agreements between the parties. This Agreement may not be amended
or modified in any respect except as written instrument signed by
both parties.
31. TIME OF THE ESSENCE
Time shall be of the essence of this Agreement.
32. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon the parties hereto and their
respective heirs, successors and assigns.
33. VENDOR PROVIDES
The Vendor agrees to deliver to the Purchaser on the date of closing
the following:
a) A warranty that all Assets are fully paid for and not subject to
any lien or encumbrance, with a copy of the recent financial
balance sheet.
b) A bill of sale for all chattel property.
c) An indemnification by the Vendor and by Bert Silva in reasonable
form and condition satisfactory to the Purchaser's solicitor ,as
provided for in paragraph 7 of this Schedule.
d) A copy of a record of employment for each employee properly
completed and confirmation of payment of:
I) Wages up to and including the date of termination.
ii) Statutory and Common law termination of employment
compensation, if applicable, in lieu of notice, for
Vendor employees who do not accept the Purchaser's
offer of employment
iii) Any other monies due and owing to the employee (save
for accrued vacation pay as provided for herein.
e) Evidence in reasonable form approved by the Purchaser's solicitors
that the representations and warranties of the Vendor contained in
this Agreement are true as at the time of closing, as though then
made, and that the covenants of the Vendor to be complied with at
or prior to the time of closing have been complied with; provided
that the receipt of such evidence and the closing of the
transaction contemplated herein shall not be a waiver of the
representations, warranties and covenants of the Vendor which are
contained in this Agreement.
f) A statutory declaration that the Vendor is not then a "non-resident"
of Canada within the meaning of the Income Tax Act (Canada).
g) A credit note executed by the Vendor confirming that the sum of
$25,000.00 (Cdn.) is due as credit to the Purchaser to be used
toward the purchase of inventory from the Vendor at any time
following closing, such note being given as consideration for
Purchaser's assumption of service obligations as provided for
herein.
h) Any other documents reasonably requested by the Purchaser.
34. PURCHASER PROVIDES
The Purchaser agrees to deliver to the Vendor on the date of closing
the following:
a) The share certificates with respect to the shares comprising the
Purchase Price set out on page 1 of this Agreement and evidence that
said share certificates have been duly and properly issued as
fully-paid shares of the Purchaser in favour of the Vendor.
b) Payment of the cash portion of the Purchase Price, payable to the
solicitor for the Purchaser, directed first to pay any amounts owing
to Ingram Micro and to Synnex Canada (secured creditors of the
Vendor), with the balance payable to trade creditors and then as
directed by the Vendor..
c) An indemnification by the Purchaser in reasonable form and condition
satisfactory to the Vendor's solicitor ,as provided for in
paragraph 13 of this Schedule.
35. CLOSING TIME & PLACE
The closing will be completed on the date as stated at a time and place
agreed to by both parties or their counsel.