Document:

f8k032610ex10ii_clearlite.htm

Exhibit 10.2

 

                                                                March 26, 2010

 

Personal and Confidential

 

In Store USA

Attn:  Michael Davidson

5181 Everest Drive

Mississauga, Ontario, L4W 2R2

Canada

Re: Non-Binding Term Sheet

 

Dear Michael:

 

This Agreement confirms the commercial structure of the business transaction between Clear-Lite Holdings, Inc. (“Parent”) and TAG Industries, Inc. (“TAG”), with In-Store Group (the “Company”) and Michael Davidson (the “Principal Unitholder”) with respect to the principal terms and conditions under which TAG will become the exclusive supplier of all the existing products relative to the environmental bags, for of the Company, effective April 15, 2010 (the “Effective Date”). This Agreement will run for a period of three (3) years from the Effective Date for all products presently sourced by the Company with its existing suppliers, or any new suppliers that TAG might source, with the approval of the Company.  It is understood that from the Effective Date, and for a period of three (3) years, TAG will exclusively manage all the sourcing of the environmental bag products, presently sold by the Company.

 

1.           Purchase Orders. Purchase orders will be issued in the normal course of business. It is estimated that this volume will be $20,0000,000 over the three (3) year agreement.

 

2.           Wholesale Business Costing. The Company will provide TAG with its target wholesale pricing prior to the Effective Date for all products, along with all product specifications.

 

3.           Order Financing/Mechanics. The Company will provide and guarantee to TAG with the necessary financing required for the orders placed, as specified by the supplier, and mutually approved by the Company and TAG. All financing from the Company will be in a manner suitable to the Company and will be set out in the final Agreement

 

4.           Margin Allocation. The Company will provide TAG with a margin allocation of five percent (5%) of the wholesale costing. Any change will require mutual approval in writing.

 

  

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5.           Consideration. As consideration for the three (3) year contract to TAG, Parent will provide the Company or the Unitholder, as specified by the Unitholder, with 2,000,000 shares of restricted common stock upon the signing of the final Agreement.  It is understood that the estimated amount of purchase orders would be no less than $20,000,000 at wholesale value, over the term of this Agreement.  Should the value of the shares be less then the margin allocation provided to TAG for its exclusive services, the Parent will provide a “make-whole” of the difference through the issuance of new stock from its treasury.  This will be calculated and reconciled on an annual basis if required. Conversely, should the margin allocation be less then the annualized volume, the Company would have to provide additional business to TAG, so as to ensure it meets its obligations of revenue and margin under the terms of this agreement.  The Company or the Unitholder will commit to a leak out agreement of its stock that will not exceed 100% coverage of the profit of orders provided to TAG

 

4.           Representations and Warranties.  The Company represents that the contracts and commitments relative to the purchase are non-cancellable and guaranteed, and will be fully backed financially by the Company

 

5.           Access to Company. The Company will give Parent and TAG access to   current contracts, documents, specification sheets, etc., as appropriate related to its respective businesses, relative to the sourcing and supplying of all specified products. The Company will furnish the Parent and TAG with copies of documents and with such other information as the purchaser may request to help source on behalf of the company.

 

6.           Exclusivity. Parent, TAG acknowledge that the TAG will invest time and money to provide the Company with the sourcing requirements of the Company and that the Company will ensure that TAG is the exclusive supplier of the specified products for the term of this Agreement.  As a result, upon execution of this agreement the Company shall terminate any existing discussions or negotiations with, and shall cease to provide information to or otherwise cooperate with, any party other than TAG relative to the supply contracts. In addition, from and after the date hereof, none of the Company nor any of its unitholders, subsidiaries or affiliates, or any of their respective officers, directors, employees, members, managers, representatives or agents, will directly or indirectly encourage, solicit, initiate, have or continue any discussions or negotiations with or participate in any discussions or negotiations with or provide any information to or otherwise cooperate in any other way with, or enter into any agreement, letter of intent or agreement in principle with, or facilitate or encourage any effort or attempt by any corporation, partnership, company, person or other entity or group other than TAG. The Company shall notify TAG promptly of any inquiries, proposals or offers made by third parties to the Company or any of its, subsidiaries or affiliates, or any of their respective officers, directors, employees, members, managers, representatives or agents with respect to the supply of the products as set out in this agreement, and furnish TAG with the terms thereof.  The Company and the Principal Unitholder shall offer TAG first opportunity on all new sourcing and supplying opportunities, subject to mutual agreement

 

  

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7.           Conduct of Business.  The Company shall use its best efforts to preserve intact the business organization and employees and other business relationships of the Company; shall continue to operate in the ordinary course of business and maintain its books, records and accounts in accordance with generally accepted accounting principles, consistent with past practice; shall use its reasonable best efforts to maintain the Company's current financial condition, including working capital levels so as to fully support the terms of this agreement.

 

8.           Expenses.  Each of the parties shall pay its expenses incident to this agreement, other than the financing of the orders as set out by the Company.

 

9.           Confidentiality.  TAG and the Company shall execute a Confidentiality Agreement, commensurate with the signing of this agreement.

 

10.           Disclosure.  Without the prior written consent neither the Company or TAG will disclose to any person or entity the pricing relative to the supply contract unless part of their normal sourcing process and/or such party disclosure is required to be made by applicable law, regulation or court order, and such disclosure is made after prior consultation with the Company.

 

11.           Termination.  Subject to the terms of this agreement, upon the earlier of (a) the mutual written agreement of the parties hereto or (b) the failure by Company and/or TAG hereto to execute relative to this agreement, the parties shall be released from all liabilities and obligations with respect to the subject matter hereof.

 

 12.           Governing Law.  This letter of intent and the Purchase Agreement shall be governed by the laws of Ontario, without regard to such state’s principles of conflicts of laws.  Any dispute under this letter of intent shall be submitted to the exclusive jurisdiction of the Province of Ontario. In the event of litigation relating to the subject matter of this letter of intent or the final Agreement the non-prevailing party will reimburse the prevailing party for all reasonable attorney fees and costs resulting there from.

 

13.           Non-Binding.  Both parties agree to work in good faith to complete their respective Due Diligence and expeditiously towards closing a final Agreement by April 15, 2010. However, nothing in this Term Sheet will be construed as a binding obligation the Company, the Parent or TAG until the final Agreement is signed outlining various mechanics relative to this Term Sheet which will be satisfactory to all parties.

 

14.           Electronic Execution.  The parties agree that a facsimile or electronic mail copy of this letter of intent will be deemed an original for all purposes, and each waive the necessity of providing the original copy of this letter of Intent to bind the other parties.

 

 

[-Signature page follows-]

 

  

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If the foregoing correctly sets forth our mutual understanding, please so indicate by signing two copies of this agreement in the spaces provided below and returning one copy to us no later than 5:00 p.m. on March 26, 2010.

 

Very truly yours,

 

Clear-Lite Holdings, Inc

By:/s/ Thomas J. Irvine         

Name: Thomas J. Irvine

Title: President & Chief Executive Officer

 

TAG Industries, Inc

By: /s/ Thomas J. Irvine            

Name: Thomas J. Irvine

Title: President & Chief Executive Officer

 

 

ACCEPTED AND AGREED:

 

In Store Group

 

By: /s/ Kevin Watkinson              

Name: Kevin Watkinson

Title: Chief Financial Officer

By: /s/ Michael Davidson                                                                            

      Michael Davidson, Principal Unitholder

 

 4ex4_26.htm

 EXHIBIT 4.26

 

 

NORTHCORE TECHNOLOGIES INC.

 

(the “Company”)

 

AUDIT COMMITTEE CHARTER

 

 

Adopted by the Board of Directors on May 18, 2005

Organization

There shall be a committee of the Board of Directors (the “Board”) to be known as the Audit Committee (the “Committee”).  The Committee shall be composed of at least three directors and any vacancies shall be filled as soon as practicable.

 

All of the members of the Committee must be “independent”1 as such term is defined in Multilateral Instrument 52-110 “Audit Committees” (the “Instrument”) (or exempt therefrom), and free of any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Committee.

 

All members of the Committee should have a working familiarity with basic finance and accounting practices and be “financially literate”2 as such term is defined in the Instrument.

 

The Committee members and the Committee chairman shall be appointed by the Board and members of the Committee shall hold office until the next annual meeting of the shareholders or until they cease to be directors of the Company.  Where a vacancy occurs at any time in the membership of the Committee, it may be filled by the Board on the recommendation of the Committee, and shall be filled by the Board if membership of the Committee falls below three directors.  If the Chair of the Committee is absent from any meeting, the Committee shall select one of the other members of the Committee to preside at the meeting.

 

The Chair of the Committee shall be responsible for:

 

(i) developing and setting the agenda for Committee meetings; and

 

(ii) determining the time, place and frequency of Committee meetings.

 

Any member of the Committee or the external auditor may call a meeting of the Committee.

 

  

1 Meaning of Independence pursuant to s. 1.4 of the Instrument –  A member of an audit committee is independent if the member has no direct or indirect material relationship with the issuer and subject to subsections 1.4(2) through (8) of the Instrument.

2 Meaning of Financial Literacy pursuant to s. 1.5 of the Instrument - An individual is financially literate if he or she has the ability to read and understand a set of financial statements that presents a breadth and

  

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The quorum for a meeting of the Committee is a majority of the members. With the exemption of the foregoing quorum requirement, the Committee may determine its own procedures.

 

Notice of the time and place of every meeting shall be given in writing, verbally, by facsimile or by phone to each member of the Committee, the Chairman of the Board, the Chief Executive Officer of the Company and the Chief Financial Officer of the Company, at least 48 hours prior to the time fixed for the meeting.  The notice period may be waived by all members of the Committee. The external auditor of the Company shall be given notice of every meeting of the Committee, and, at the expense of the Company, shall be entitled to attend and be heard thereat. If requested by a member of the Committee, the external auditor shall attend every meeting of the Committee held during the term of office of the external auditor.

 

Statement of Policy

 

The Committee shall provide assistance to the Board in fulfilling their responsibility to the shareholders, potential shareholders and the investment community relating to:

 

(i) corporate accounting;

 

(ii)  reporting practices of the Company;

 

(iii)  the quality and integrity of the financial reports of the Company;

 

(iv) the Company’s compliance with legal and regulatory requirements, as they relate to the Company’s financial statements;

 

(v) the qualifications, independence and performance of the external auditor;

 

(vi) internal controls and disclosure controls;

 

(v) the performance of the Company’s internal audit function; and

 

(vi) performing the additional duties set out in this Charter or otherwise delegated to the Committee by the Board.

 

In so doing, it is the responsibility of the Committee to maintain free and open means of communications between and among the auditors, the directors and the financial management of the Company.

 

Authority and Responsibilities

 

In carrying out its responsibilities, the Committee believes its policies and procedures should remain flexible, in order to best react to changing conditions and to ensure that the corporate accounting and reporting practices of the Company are in accordance with all applicable requirements and are of the highest quality.  The duties and responsibilities of the members of the Committee are in addition to those of a member of the Board.

 

The Company’s external auditor is required to report directly to the Committee.

 

In carrying out these responsibilities, the audit committee will:

 

  

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1.

	
General. Provide an open avenue of communication among the directors, auditors and financial management of the Company.

 

The Committee has the authority:

 

(i) to engage independent counsel and other advisors as it determines necessary to carry out its duties,

(ii) to set and pay the compensation for any advisors employed by the audit committee, and

(iii) to communicate directly with the internal and external auditors.

	
2.

	
Committee Charter. Review and update the Committee’s charter annually.

 

	
3.

	
Auditor Selection. Review and recommend to the Board the auditors to be selected to be nominated for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company and review and recommend the compensation of the independent auditor.

 

	
4.

	
Auditor Oversight.  Be directly responsible for overseeing the work of the external auditor engaged for the purpose of preparing or issuing an auditor's report or performing other audit, review or attest services for the issuer, including the resolution of disagreements between management and the external auditor regarding financial reporting.

 

	
5.

	
Review of Audit. Meet with the auditors, the Board and financial management of the Company to review the scope of the proposed audit for the current year and the audit procedures to be utilized, and at the conclusion thereof, review such audit, including any comments or recommendations of the auditors.

 

	
6.

	
Appointment of CFO. Review and concur in the appointment, replacement, reassignment, or dismissal of the Chief Financial Officer (the “CFO”) and any other key financial executives involved in the financial reporting process.

 

	
7.

	
Auditor Independence. Confirm and assure the independence of the auditors.

 

	
8.

	
Review Financial Reporting and Accounting Standards. Review with the auditors, the competitiveness and suitability of the financial and accounting personnel and the adequacy and effectiveness of the financial reporting and accounting standards and controls of the Company, and elicit any recommendations for the improvement of such internal control procedures or particular areas where new or more detailed controls or procedures are desirable.  Particular emphasis should be given to the adequacy of such internal controls to expose any payments, transactions, or procedures that might be deemed illegal or otherwise improper.   The Committee is also responsible for reviewing the Company’s accounting policy note to ensure completeness and acceptability with GAAP as part of the approval of the financial statements.

 

	
9.

	
Internal Audit Function. Review the applicability of an internal audit function of the Company including the independence and authority of its reporting obligations, the proposed audit plans for the coming year and the coordination of such plans with the auditors.

 

	
10.

	
Pre-approval of Non-audit Services. Be responsible for the pre-approval of all non-audit services to be provided to the Company or its subsidiary entities by the independent auditor.

 

  

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11.

	
Review Annual Financial Statements. Review the annual financial statements and MD&A contained in the annual report to shareholders with management and the auditors to determine that the auditors are satisfied with the disclosure and content of the financial statements to be presented to the shareholders. Upon review, recommend the annual financial statements and MD&A for approval by the Board.  Any changes in accounting principles should be reviewed.

 

	
12.

	
Review Interim Financials. Review with management and the CFO the interim financial reports and MD&A and recommend that such reports and MD&A be approved by the Board before they are filed with the OSC, SEC or other regulators.

 

	
13.

	
Risk and Uncertainty.  The Committee is responsible for reviewing, as part of its approval of the financial statements, uncertainty notes and disclosures, and MD&A disclosures.

 

	
14.

	
Press Releases and MD&A. Prior to release, review with management and, where necessary, recommend for approval by the Board any press releases and MD&A that disclose annual or interim financial results or that contain other significant financial information.

 

The Committee is responsible for being satisfied that adequate procedures are in place for the review of the Company’s public disclosure of financial information extracted or derived from the Company’s financial statements, other than the public disclosure referred to in the preceding paragraph, and must periodically assess the adequacy of those procedures.

 

	
15.

	
Review Related Party and Conflicts of Interest. Review with management and the independent auditor significant risks or exposures and assess the steps management has taken to minimize such risk to the Company.  This includes a review of related party transactions and conflict of interest transactions and the public disclosure of such transactions, if required.

 

	
16.

	
Review of Accounting and Financial Disclosure Policies. Provide sufficient opportunity for the auditors to meet with the members of the audit committee without members of management present.  Among the items to be discussed in these meetings are the auditors’ evaluation of the Company’s accounting policies and the clarity of the financial information and disclosure practices adopted by the Company, and the cooperation that the auditors received during the course of the audit.

 

	
17.

	
Audit Resources. Review accounting and financial human resources and succession planning and audit efforts of the Company to assure completeness of coverage, reduction of redundant efforts and the effective use of audit resources.

 

	
18.

	
Committee Minutes. Appoint a secretary to the Committee who need not be a director or officer of the Company and will submit the minutes of all meetings of the audit committee to, or discuss the matters discussed at each committee meeting with, the Board.

 

	
19.

	
Committee Reports. Report the Committee’s actions to the Board, including recommendations that the Committee may deem appropriate.

 

	
20.

	
Review Internal Controls. Be responsible for reviewing the plan and scope of the annual audit with respect to planned reliance and testing of controls, and for reviewing major points contained in the auditor’s management letter resulting from control evaluation and testing.  The Committee is also responsible for receiving reports from management when significant control deviations occur.

 

  

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The Committee will also establish and review the Company’s procedures for the:

 

	 	
·

	
Receipt, retention and treatment of complaints regarding accounting, financial disclosure, internal controls or auditing matters; and

 

	 	
·

	
Confidential, anonymous submission by employees regarding questionable accounting auditing and financial reporting and disclosure matters.

 

	
21.

	
Hiring Policies.  Be responsible for reviewing and approving the Company’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditor of the Company.

 

	
22.

	
Authority to Investigate. Investigate any matter brought to its attention within the scope of its duties, with the power to retain outside counsel, accountants and others for this purpose if, in its judgment, that is appropriate.

 

	
23.

	
Review of Expense Accounts and Perquisites. Review policies and procedures with respect to expense accounts and perquisites, including their use of Company assets and address the results of any review of these areas with the CFO.

 

	
24.

	
Legal and Regulatory Matters. Review legal and regulatory matters that may have a material impact on the Company’s financial statements and on its compliance policies programs and procedures, including compliance with tax and financial reporting laws and regulations, if and when issues arise.

 

	
25.

	
Committee Letter for Annual Report. Prepare a letter for inclusion in the annual report that describes the Committee’s composition and responsibilities, and how they were discharged.

 

	
26.

	
Other Functions and Powers. The Committee will perform such other functions and exercise such other powers as are assigned by the Company’s charter or bylaws, or the Board or are prescribed from time to time for the audit committee of a reporting company in Parts 2 and 4 of the Instrument and other relevant legislation.

 

 

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