Document:

fs12012ex10ii_quinko.htm

EXHIBIT 10.2

 

THIS AGREEMENT made as of the 26th day of January, 2012 . BETWEEN:

 

Ira Kroo

(hereinafter called the “Vendor”)

 

OF THE FIRST PART;

 

- and -

 

QUINKO-TEK ACQUISITION CORP. 

a corporation incorporated under the 

laws of the Province of Ontario

 

(hereinafter called the “ Purchaser”)

 

OF THE SECOND PART.

 

WHEREAS the Vendor is the beneficial owner of capital property as more particularly described in Schedule “A” attached hereto (hereinafter referred to as the “Shares”); and

 

WHEREAS the Vendor has agreed to sell and the Purchaser has agreed to purchase from the Vendor the Shares for a purchase price equal to the fair market value of the Shares as set out in Schedule “A” as of the close of business on the date hereof; and

 

WHEREAS the Vendor and the Purchaser have agreed for the purposes of subsection 85(1) of the Income Tax Act (Canada) (the “Act”) to elect a transfer price for the Shares to be an amount equal to the Vendor’s Agreed Amount (as herein defined) of the Shares as at the date hereof; and

 

WHEREAS the Vendor is to receive in consideration for the Shares transferred a sufficient number of Exchangeable shares in the capital stock of the Purchaser, such consideration having a fair market value in the aggregate equal to the fair market value of the Shares.

 

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual covenants and agreements herein contained, it is hereby agreed as follows:

 

ARTICLE 1

INTERPRETATION

 

	
1.1 

	
Defined Terms

 

In this Agreement, except as otherwise expressly provided, the following words or expressions have the following meanings:

 

	
(a)

	
“Act” means theIncome Tax Act (Canada) R.S.C. 1985, c.1 (5th Supp.), as amended from time to time;

 

  

  

  

 

	
(b)

	
“Agreed Amount” means the Cost Amount or such greater amount as set out on Schedule “A”;

 

	
(c)

	
“Agreement” means this Agreement and any instrument supplemental or ancillary hereto including all Schedules attached hereto;

 

	
(d)

	
“Cost Amount” shall have the meaning assigned by subsection 248(1) of the Act;

 

	
(e)

	
“Purchase Price” has the meaning ascribed thereto in section 2.1 of this Agreement;

 

	
(f)

	
“Shares” has the meaning ascribed thereto in the first recital of this Agreement; and

 

	
1.2

	
Gender and Number

 

Words importing the singular number only shall include the plural, and vice-versa, and words importing the masculine gender shall include the feminine gender and neuter gender, and words importing persons shall include a natural person, firm, trust, partnership, association, corporation, government or governmental board, agency or instrumentality.

 

	
1.3 

	
Headings

 

The division of this Agreement into articles and sections and the article and section headings are for convenience of reference only and shall not affect the interpretation or construction of this Agreement.

 

	
1.4 

	
Applicable Law

 

This Agreement shall be governed by the law of the Province of Ontario and the law of Canada applicable therein and the parties hereto do hereby irrevocably attorn to the jurisdiction of the courts of the Province of Ontario.

 

	
1.5 

	
Severability

 

If any provision of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

 

	
1.6 

	
Entire Agreement

 

This Agreement constitutes the entire agreement among the parties and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, among the parties with respect thereto.

 

  

2

  

 

	
1.7 

	
Waiver

 

No waiver by any party hereto of any breach of any of the provisions of this Agreement by such party shall take effect or be binding upon the party unless in writing and signed by such party. Unless otherwise provided therein, such waiver shall not limit or affect the rights of such party with respect to any other breach.

 

	
1.8 

	
Time of Essence

 

Time shall be of the essence of this Agreement.

 

ARTICLE 2

PURCHASE AND SALE

 

	
2.1 

	
Purchase Price

 

Subject to the terms and conditions hereof, the Vendor agrees to sell and the Purchaser agrees to purchase from the Vendor the Shares at a purchase price equal to the fair market value of the shares as set out in Schedule “A” hereto (the “Purchase Price ”).

 

	
2.2 

	
Consideration

 

The Purchase Price shall be satisfied by the issuance of a sufficient number of Exchangeable shares in the capital stock of the Purchaser having a fair market value equal to the Purchase Price and having a stated capital as more particularly set out in Schedule “A” attached hereto which stated capital shall be fixed by the directors of the Purchaser pursuant to subsection 24(3) of the Business Corporations Act(Ontario).

 

	
2.3 

	
Price Adjustment .

 

If the Canada Revenue Agency (“CRA”) determines that the fair market value of the Shares is greater or less than the Agreed Amount, the Purchase Price shall be increased or decreased to reflect this difference, as ultimately determined, and will be settled by issuance of additional shares in the capital of the Purchaser, or as otherwise decided by the Parties. Reference to value as ultimately determined herein shall have the following meaning:

 

	
(a)

	
such amount as may be agreed by CRA, the Vendor and the Purchaser, to have been the fair market value of the Shares; or

 

	
(b)

	
in the absence of such agreement, such amount as shall be determined by a Court having jurisdiction in the matter (after all appeal rights have been exhausted or all times for appeal have expired without appeals having been taken) to be the fair market value of the Shares.

 

Such ultimately determined value shall automatically be substituted for the fair market value hereunder to the same intent and purpose as if such value had been included herein at the time of execution of this agreement, and the parties shall execute all necessary documents as may be permitted or required to give effect to the foregoing.

 

  

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2.4 

	
Election

 

The Vendor and the Purchaser agree that each will make an election in respect of the transfer and sale of the Shares pursuant to subsection 85(1) of the Act, as the same may be amended from time to time, in the form and within the time prescribed by section 85 of the Act, electing a transfer price for the purposes of the Act equal to the Agreed Amount.

 

	
2.5

	
Representations and Warranties of the Vendor

 

The Vendor represents and warrants that:

 

	
(a)  

	
The Vendor owns the Shares with good and marketable title thereto, free of any claim, lien, security interest or encumbrance of any nature or kind and free of any rights or privileges capable of becoming claims, liens, security interests and encumbrances;

 

	

(b)  

	

The Vendor is entitled to sell, transfer and assign good and marketable title to the Shares to the Purchaser, free of any such claims, liens, encumbrances, rights and privileges;

 

	

(c)  

	

This Agreement shall not constitute a default of any other agreements nor does any other agreement exist which would restrict or prohibit the within transaction; and

 

	

(d)  

	

The Vendor is not a non-resident of Canada within the meaning of section 116 of the Act.

 

	
2.6

	
Representations and Warranties of the Purchaser

 

The Purchaser hereby represents and warrants that:

 

	

(a)  

	

The Purchaser is a subsisting corporation duly incorporated under the laws of the Province of Ontario;

 

	

(b)  

	

The execution and delivery of this Agreement by the Purchaser and the purchase of the Shares herein provided for have been duly authorized by all necessary corporate action and corporate power and authority to enter into this Agreement and to carry out the transaction of purchase and sale contemplated herein; and

 

	
(c)  

	
The authorized capital of the Purchaser consists of an unlimited number of Common shares and an unlimited number of Exchangeable shares of which 100 Common shares are issued and outstanding as of the date hereof.

 

	
2.7 

	
Closing

 

The within transaction shall be closed at the offices of Patriquin Law at 112 Yorkville Avenue, 3rd Floor, Toronto, Ontario, M5R 1B9 on the 26th day of January, 2012, or at such later date as the parties may mutually agree at which time the Vendor shall deliver certificates representing the Shares duly endorsed for transfer to the Purchaser in exchange for the consideration described in section 2.2 hereof.

  

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ARTICLE 3

GENERAL

 

	
3.1 

	
Binding Agreement

 

This Agreement shall be binding upon and shall enure to the benefit of the parties hereto and their respective heirs, administrators, executors, successors and permitted assigns.

 

	
3.2 

	
Assignment

 

This Agreement may not be assigned, in whole or in part, by any party without the prior written consent of all of the other parties hereto.

 

	
3.3 

	
Counterparts

 

This Agreement may be executed in several counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument, which shall be sufficiently evidenced by any such original counterpart.

 

	
3.4 

	
Further Assurances

 

The parties hereto agree to execute and deliver such further and other documents and perform and cause to be performed such further and other acts and things as may be necessary or desirable in order to give full effect to this Agreement and every part thereof.

 

IN WITNESS WHEREOF the parties hereto have hereunto caused this Agreement to be executed on the date first above written.

 

	SIGNED, SEALED AND DELIVERED in the presence of	 	 
	 	 	 
	 	 	/s/ Ira Kroo
	 	 	Ira Kroo

 

	 	QUINKO-TEK ACQUISITION CORP.
	 	 
	 	 	 
	
 

	

Per: 

	/s/ Ira Kroo
	 	 	
Name: Ira Kroo

	 	 	
Title: Director

	 	 	I have the authority to bind the corporation

 

  

5

  

 

SCHEDULE A

 

	
TRANSFERRED SHARES

	
Agreed

Amount

(B)

	
Amount

to be

reported

B-A

	
CONSIDERATION RECEIVED

	
Description

	
Elected Amount Limits

	
Non-share

	
Share

	
Fair Market

Value of Total

Consideration

	
Fair

Market

Value

	
Cost Amount

(A)

	
Description

	
Number and Class

	
445 common shares in the capital stock of 152724 Canada Inc.

	
$67,938.93

	
$

As appears in the attached Form T-2057

	
$

As appears in the attached Form T- 2057, to be completed by the parties

action reasonably

	
$

	
None

	
8,133,309 Exchangeable

shares in the capital stock of Quinko­Tek Acquisition Corp. having an aggregate value of

$67,938.93

	
$67,938.93fs12012ex10iii_quinko.htm

EXHIBIT 10.3

 

SUPPORT AGREEMENT

 

MEMORANDUM OF AGREEMENT made as of the 26th of January, 2012.

 

AMONG:

 

QUINKO-TEK INTERNATIONAL INC., a corporation organized and existing under the laws of the State of Nevada (hereinafter referred to as the "USCo")

 

- and -

 

QUINKO-TEK CALL CORP., a corporation incorporated under the laws of the Province of Ontario (hereinafter referred to as the “CallCo”)

 

- and -

 

QUINKO-TEK ACQUISITION CORP., a corporation incorporated under the laws of the Province of Ontario (hereinafter referred to as the “AcquisitionCo”)

 

WHEREAS the parties have agreed to execute and deliver a support agreement which would govern the relationship among the parties as it related to the issuance and existence of the Exchangeable Shares in the capital of AcquisitionCo; and

 

WHEREAS the articles of AcquisitionCo or CallCo set forth the rights, privileges, restrictions and conditions (collectively, the “Share Provisions”) attaching to the Exchangeable Shares; and

 

WHEREAS the parties hereto desire to make appropriate provision and to establish a procedure whereby USCo and CallCo will take certain actions and make certain payments and deliveries necessary to ensure that AcquisitionCo will be able to make certain payments and to deliver or cause to be delivered common stock in USCo (“USCo Common Stock”) in satisfaction of the obligations of AcquisitionCo or CallCo under the Share Provisions with respect to the payment and satisfaction of dividends, Liquidation Prices, Retraction Prices, Redemption Prices and Exchange Prices, all in accordance with the Share Provisions.

 

WHEREAS as of the date of this Agreement, there are 8,133,309 Exchangeable Shares issued and outstanding, and USCo agrees to reserve a number USCo Common Stock as required to satisfy the obligations of AcquisitionCo under the Share Provisions.

 

NOW THEREFORE in consideration of the respective covenants and agreements provided in this agreement and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto covenant and agree as follows:

  

  

  

 

ARTICLE 1

 

DEFINITIONS AND INTERPRETATION

 

	
1.1

	
Defined Terms

 

Each term denoted herein by initial capital letters and not otherwise defined herein shall have the meaning attributed thereto in the Share Provisions, unless the context requires otherwise.

 

	
1.2 

	
Interpretation Not Affected by Headings, Etc.

 

The division of this agreement into Articles, Sections and paragraphs and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this agreement. Unless otherwise indicated, all references to an “Article” or “Section” followed by a number and/or a letter refer to the specified Article or Section of this agreement. The terms “this agreement”, “hereof”, “herein” and “hereunder” and similar expressions refer to this agreement and not to any particular Article, Section or other portion hereof and include any agreement or instrument supplementary or ancillary hereto.

 

	
1.3 

	
Number, Gender, Etc.

 

Words importing the singular number only shall include the plural and vice versa. Words importing the use of any gender shall include all genders.

 

	
1.4 

	
Date for Any Action

 

If any date on which any action is required to be taken under this agreement is not a Business Day, such action shall be required to be taken on the next succeeding Business Day.

 

ARTICLE 2

 

COVENANTS OF USCO, CALLCO AND ACQUISITIONCO

 

	
2.1 

	
Covenants of USCo and CallCo Regarding Exchangeable Shares

 

So long as any Exchangeable Shares are outstanding, USCo, AcquisitionCo and CallCo each agree that:

 

	
(a)  

	
USCo will not declare or pay any dividend on USCo Common Stock unless (i)USCo has sufficient assets, funds and other property available to permit the due declaration and payment in accordance with applicable law, of an equivalent per share dividend on all of the Exchangeable Shares; and (ii) AcquisitionCo shall simultaneously declare or pay, as the case may be, an equivalent dividend on the Exchangeable Shares;

 

  

2

  

 

	
(b)  

	
AcquistionCo will declare simultaneously with the declaration of any dividend by USCo on USCo Common Stock, an equivalent per share dividend on the Exchangeable Shares (an “Equivalent Dividend”), and when such dividend is paid on the USCo Common Stock, AcquisitionCo will pay simultaneously therewith an Equivalent Dividend on the Exchangeable Shares, in each case in accordance with the Exchangeable Share Provisions;

 

	
(c)  

	
USCo will advise AcquisitionCo sufficiently in advance of the declaration by USCo of any dividend on USCo Common Stock and take all such other actions as necessary, in cooperation with AcquisitionCo, to ensure that the Dividend Record Date for a dividend on the Exchangeable Shares shall be the same as the record date for the corresponding dividend on the USCo Common Stock for the determination of the holders of USCo Common Stock entitled to receive payment of, and the payment date for, any corresponding dividend declared on the USCo Common Stock, respectively;

 

	
(d)  

	
USco will advance money to AcquisitionCo to pay Equivalent Dividends;

 

	
(e)  

	
USCo and CallCo will take all such actions and do all such things as are necessary or desirable to enable and permit AcquisitionCo, in accordance with applicable law, to pay and otherwise perform its obligations with respect to the satisfaction of the Liquidation Price in respect of each issued and outstanding Exchangeable Share upon the liquidation, dissolution or winding-up of AcquisitionCo or any other distribution of the assets of AcquisitionCo for the purpose of winding-up its affairs, including without limitation all such actions and all such things as are necessary or desirable to enable and permit AcquisitionCo to cause to be delivered USCo Common Stock to holders of Exchangeable Shares in accordance with the provisions of Section 6 of the Share Provisions;

 

	
(f)  

	
USCo and CallCo will take all such actions and do all such things as are necessary or desirable to enable and permit AcquisitionCo, in accordance with applicable law, to pay and otherwise perform its obligations with respect to the satisfaction of a Retraction Request by a holder of Exchangeable Shares or a redemption of Exchangeable Shares by AcquisitionCo, including without limitation all such actions and all such things as are necessary or desirable to enable and permit AcquisitionCo to cause to be delivered USCo Common Stock to such holder, upon the retraction or redemption of the Exchangeable Shares in accordance with the provisions of Section 4 or Section 5 of the Share Provisions, as the case may be; and

 

	
(g)  

	
CallCo will not exercise its voting rights as a shareholder of AcquisitionCo to initiate the voluntary liquidation, dissolution or winding-up of AcquisitionCo nor take any action or omit to take any action that is designed to result in the liquidation, dissolution or winding-up of AcquisitionCo.

 

  

3

  

 

	
2.2 

	
Segregation of Funds

 

Subject to the excercise by Usco or CallCo of any of the Call Rights, USCo will cause AcquisitionCo to, from time to time, deposit any funds advanced by USCo under section 2.1(d) above, a sufficient amount of funds in a separate account and segregate a sufficient amount of such assets and other property as is necessary to enable AcquisitionCo to pay or otherwise satisfy any Equivalent Dividends, Liquidation Price, Retraction Price, Redemption Price or Exchange Price, in each case for the benefit of holders from time to time of the Exchangeable Shares, and AcquisitionCo will use such funds, assets and other property so segregated exclusively for the payment of dividends and the payment or other satisfaction of the Liquidation Price, the Retraction Price, the Redemption Price, or the Exchange Price, as applicable, net of any corresponding withholding tax obligations and for the remittance of such withholding tax obligations.

 

	
2.3 

	
Notification of Certain Events

 

In order to assist USCo and CallCo to comply with their respective obligations hereunder, AcquisitionCo will give USCo and CallCo notice of each of the following events at the time set forth below:

 

	
(a)  

	
immediately, in the event of any determination by the Board of Directors of AcquisitionCo to take any action which would require a vote of the holders of Exchangeable Shares for approval;

 

	
(b)  

	
immediately, upon the earlier of: (i) receipt by AcquisitionCo of notice of; and (ii) AcquisitionCo otherwise becoming aware of, any threatened or instituted claim, suit, petition or other proceedings with respect to the involuntary liquidation, dissolution or winding-up of AcquisitionCo or to effect any other distribution of the assets of AcquisitionCo among its shareholders for the purpose of winding-up its affairs;

 

	
(c)  

	
immediately, upon receipt by AcquisitionCo of a Retraction Request;

 

	
(d)  

	
at least 30 days prior to any Automatic Redemption Date;

 

	
(e)  

	
as soon as practicable upon the issuance by AcquisitionCo of any Exchangeable Shares or any rights to acquire same; and

 

	
(f)  

	
in the event of any determination by the Board of Directors of AcquisitionCo to institute voluntary liquidation, dissolution or winding-up proceedings with respect to AcquisitionCo or to effect any other distribution of the assets of AcquisitionCo among its shareholders for the purpose of winding-up its affairs, at least 30 days prior to the proposed effective date of such liquidation, dissolution, winding-up or other distribution.

 

	
2.4 

	
Delivery of USCo Common Stock

 

In furtherance of its obligations hereunder, upon notice of any event which requires AcquisitionCo to cause to be delivered USCo Common Stock to any holder of Exchangeable Shares, subject to the exercise by CallCo of any of the Call Rights, USCo shall forthwith issue and deliver the requisite USCo Common Stock to or to the order of the former holder of the surrendered Exchangeable Shares, as AcquisitionCo or CallCo shall direct. All such USCo

 

Common Stock shall be free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest.

 

  

4

  

 

	
2.5 

	
Qualification of USCo Common Stock

 

USCo covenants that if any USCo Common Stock (or other securities into which USCo Common Stock may be reclassified or changed as contemplated by Section 2.6 hereof) to be issued and delivered hereunder (including for greater certainty, in payment of or pursuant to, as applicable, the Liquidation Price, the Retraction Price, the Redemption Price, the Exchange Price, the Liquidation Call Right, the Retraction Call Right, the Redemption Call Right, the Exchange Put Right), require registration or qualification with or approval of or the filing of any document including any prospectus or similar document, the taking of any proceeding with or the obtaining of any order, ruling or consent from any governmental or regulatory authority under any Canadian or US federal or provincial/state law or regulation or pursuant to the rules and regulations of any regulatory authority, or the fulfilment of any other legal requirement (collectively, the “Applicable Laws”) before such securities (or other securities into which USCo Common Stock may be reclassified or changed as contemplated by Section 2.6 hereof) may be delivered by USCo or CallCo to the initial holder thereof (other than AcquisitionCo) or in order that such securities may be freely traded thereafter (other than any restrictions on transfer by reason of a holder being a “control person” of USCo for purposes of Canadian or US federal or provincial/state securities law), USCo and CallCo will in good faith expeditiously take all such actions and do all such things as are necessary to cause such USCo Common Stock (or other securities into which USCo Common Stock may be reclassified or changed as contemplated by Section 2.6 hereof) to be and remain duly registered, qualified or approved. USCo and CallCo represent and warrant that they have in good faith taken all actions and done all things as are necessary under Applicable Laws as they exist on the date hereof to cause the USCo Common Stock (or other securities into which USCo Common Stock may be reclassified or changed as contemplated by Section 2.6 hereof) to be issued and delivered pursuant to the Share Provisions or the terms of the Voting Exchange Trust Agreement to be freely tradable thereafter (other than restrictions on transfer by reason of a holder being a “control person” of USCo for the purposes of Canadian and US federal and provincial/state securities law). USCo and CallCo will in good faith expeditiously take all such actions and do all such things as are necessary to cause all USCo Common Stock (or other securities into which USCo Common Stock may be reclassified or changed as contemplated by Section 2.6 hereof) to be delivered pursuant to the Share Provisions or the terms of the Voting Exchange Trust Agreement to be listed, quoted or posted for trading on the OTCBB or the OTCQB or such other stock exchange or quotation system on which such securities are principally listed, quoted or posted for trading at such time.

 

	
2.6 

	
Equivalence

 

	
(a)   

	
USCo will not:

 

	
(i)  

	
issue or distribute USCo Common Stock (or securities exchangeable for or convertible into or carrying rights to acquire USCo Common Stock) to the holders of all or substantially all of the then outstanding USCo Common Stock by way of stock distribution or other distribution, other than an issue of USCo Common Stock (or securities exchangeable for or convertible into or carrying rights to acquire USCo Common Stock) to holders of USCo Common Stock who exercise an option to receive distributions in USCo Common Stock (or securities exchangeable for or convertible into or carrying rights to acquire USCo Common Stock) in lieu of receiving cash distributions; or

 

  

5

  

 

	
(ii)  

	
issue or distribute rights, options or warrants to the holders of all or substantially all of the then outstanding USCo Common Stock entitling them to subscribe for or to purchase USCo Common Stock (or securities exchangeable for or convertible into or carrying rights to acquire USCo Common Stock); or

 

	
(iii)  

	
issue or distribute to the holders of all or substantially all of the then outstanding USCo Common Stock:

 

	
(A)  

	
shares or securities of USCo of any class other than USCo Common Stock (other than securities convertible into or exchangeable for or carrying rights to acquire USCo Common Stock);

 

	

(B)  

	

rights, options or warrants other than those referred to in Section 2.6(a)(ii) above;

 

	

(C)  

	

evidences of indebtedness of USCo; or

 

	

(D)  

	

assets of USCo (other than dividends on the USCo Common Stock in respect of which a corresponding dividend is concurrently paid on the Exchangeable Shares in accordance with Section 7 of the Share Provisions);

 

unless one or both of the AcquisitionCo and USCo is permitted under applicable law to issue and distribute the economic equivalent on a per share basis of such rights, options, warrants, securities, evidences or indebtedness or assets and the items referred to in clauses (i) (ii) and (iii) above, as applicable, are issued or distributed simultaneously to holders of Exchangeable Shares, on a share-for­share basis, counting each Exchangeable Share as equivalent to a share of USCo Common Stock.

 

	
(b)   

	
USCo will not:

 

	
(i)  

	
subdivide, redivide or change the then outstanding USCo Common Stock into a greater number of USCo Common Stock;

 

	
(ii)  

	
reduce, combine, consolidate or change the then outstanding USCo Common Stock into a lesser number of USCo Common Stock; or

 

	
(iii)  

	
reclassify or otherwise change the rights, privileges or other terms of the USCo Common Stock or effect an amalgamation, merger, reorganization or other transaction involving or affecting the USCo Common Stock.

 

  

6

  

 

unless the Corporation is permitted under applicable law to simultaneously make the same or an economically equivalent change to, or in the rights of the holders of, the Exchangeable Shares and the same or an economically equivalent change is simultaneously made to, or in the rights of the holder of, the Exchangeable Shares.

 

	
(c)  

	
USCo will ensure that the record date for any event referred to in Section 2.6(a) and (b) above, or (if no record date is applicable for such event) the effective date for any such event, is not less than 10 Business Days after the date on which such event is declared or announced by USCo (with simultaneous notice thereof to be given by USCo to AcquisitionCo).

 

	
2.7 

	
Tender Offers, Etc.

 

In the event that a take-over bid or similar transaction with respect to USCo Common Stock (a “Bid”) is proposed by USCo or is proposed to USCo or the holders of USCo Common Stock, and is recommended by the board of directors of USCo or the Board of Directors of AcquisitionCo, as applicable, or is otherwise effected or to be effected with the consent or approval of the board of directors of USCo or the Board of Directors of AcquisitionCo, as applicable, USCo or AcquisitionCo or both shall, in good faith, use reasonable efforts to take all such actions and do all such things as are necessary or desirable to enable and permit holders of Exchangeable Shares to participate in such Bid to the same extent and on an economically equivalent basis as the holders of USCo Common Stock, without discrimination, including, without limiting the generality of the foregoing, USCo or AcquisitionCo or both will use its good faith efforts expeditiously to (and shall, in the case of a transaction proposed by USCo or AcquisitionCo or both or where USCo or AcquisitionCo or both is a participant in the negotiation thereof) ensure that holders of Exchangeable Shares may participate in all such Bids without being required to retract Exchangeable Shares as against AcquisitionCo (or, if so required, to ensure that any such retraction shall be effective only upon, and shall be conditional upon, the closing of the Bid and only to the extent necessary to tender or deposit to the Bid).

 

	
2.8 

	
Ownership of Outstanding Shares

 

USCo and CallCo jointly covenant and agrees that, as long as any outstanding Exchangeable Shares are owned by any person or entity other than USCo, CallCo or any of their respective affiliates or Subsidiaries, CallCo will, unless approval to do otherwise is obtained in accordance with Article 11 of the Share Provisions from the holders of the Exchangeable Shares, be and remain the direct or indirect beneficial owner of more than 50% of all issued and outstanding voting securities of AcquisitionCo; provided that USCo will not be in violation of this provision if a party acquires all or substantially all of the assets of USCo.

 

	
2.9 

	
USCo and CallCo Not to Vote Exchangeable Shares

 

USCo and CallCo covenant and agree that they will appoint and cause to be appointed proxy holders with respect to all Exchangeable Shares held by USCo, CallCo or any of their respective affiliates or Subsidiaries for the sole purpose of attending each meeting of holders of Exchangeable Shares in order to be counted as part of the quorum for each such meeting. USCo and CallCo further covenant and agree that they will not, and will cause their respective affiliates or Subsidiaries not to, exercise any voting rights which may be exercisable by holders of Exchangeable Shares from time to time pursuant to the Share Provisions or pursuant to the provisions of the Act with respect to any Exchangeable Shares held by them or by their respective affiliates or Subsidiaries in respect of any matter considered at any meeting of holders of Exchangeable Shares.

 

  

7

  

 

	
2.10 

	
Due Performance

 

On and after the Effective Date, USCo and CallCo shall duly and timely perform all of their obligations under the Share Provisions.

 

	
2.11

	
No Specified Financial Institution

 

On and after the Effective Date hereof and for the entire period that AcquisitionCo has any Exchangeable Shares issued and outstanding, neither USCo nor CallCo nor any of its affiliates or Subsidiaries will be a “specified financial institution” as that term is defined in the Income Tax Act (Canada).

 

	
2.12 

	
Exercise of Call Rights

 

USCo and CallCo covenant and agree that, as long as any outstanding Exchangeable Shares are owned by any person or entity other than USCo, CallCo or any of their respective affiliates or Subsidiaries, USCo and CallCo will formulate a policy respecting whether CallCo will exercise any of the Call Rights, in accordance with the Share Provisions.

 

ARTICLE 3

 

USCO SUCCESSORS

 

	
3.1 

	
Certain Requirements in Respect of Combination, etc.

 

USCo shall not complete any transaction (whether by way of reconstruction, reorganization, consolidation, merger, transfer, sale, lease or otherwise) whereby all or substantially all of its undertaking, property and assets would become the property of any other person or, in the case of a merger, of the continuing entity resulting therefrom unless, and may do so if:

 

	
(a)  

	
such other person or continuing entity (herein called the "USCo Successor"), by operation of law, becomes, without more, bound by the terms and provisions of this Agreement or, if not so bound, executes, prior to or contemporaneously with the consummation of such transaction, an agreement supplemental hereto and such other instruments (if any) as are reasonably necessary or advisable to evidence the assumption by the USCo Successor of liability for all moneys payable and property deliverable hereunder and the covenant of such USCo Successor to pay and deliver or cause to be delivered the same and its agreement to observe and perform all the covenants and obligations of USCo under this Agreement; and

 

  

8

  

 

	
(b)  

	
such transaction shall be upon such terms and conditions as substantially to preserve and not to impair in any material respect any of the rights, duties, powers and authorities of the other parties hereunder.

 

	
3.2 

	
Vesting of Powers in Successor

 

Whenever the conditions of Section 3.1 have been duly observed and performed, the USCo Successor, CallCo and AcquisitionCo shall, if required by Section 3.1, execute and deliver the supplemental agreement provided for in Section 3.1(a) and thereupon USCo Successor shall possess and from time to time may exercise each and every right and power of USCo under this agreement in the name of USCo or otherwise and any act or proceeding by any provision of this agreement required to be done or performed by the Board of Directors of AcquisitionCo or any officers of AcquisitionCo on behalf of USCo may be done and performed with like force and effect by the directors or officers (or other agents or governing body) of such USCo Successor.

 

	
3.3 

	
Wholly-Owned Subsidiaries

 

Nothing herein shall be construed as preventing the combination of any wholly-owned direct or indirect subsidiary of USCo with or into USCo or the winding-up, liquidation or dissolution of any wholly-owned subsidiary of USCo provided that all of the assets of such subsidiary are transferred to USCo or another wholly-owned direct or indirect subsidiary of USCo, and further provided that such subsidiary shall not include AcquisitionCo and Callco for the purpose of this Section 3.3, and any such transactions are expressly permitted by this Article 3.

 

ARTICLE 4

GENERAL

 

	
4.1 

	
Term

 

This agreement shall come into force and be effective as of the date hereof and shall terminate and be of no further force and effect at such time as no Exchangeable Shares (or securities or rights convertible into or exchangeable for or carrying rights to acquire Exchangeable Shares) are held by any party other than USCo, CallCo or any of their respective Subsidiaries or affiliates.

 

	
4.2

	

Changes in Capital of USCo and AcquisitionCo

 

Notwithstanding the provisions of Section 4.4 hereof, at all times after the occurrence of any event effected pursuant to Section 2.6 or 2.7 hereof, as a result of which either USCo Common Stock or the Exchangeable Shares or both are in any way changed, this agreement shall forthwith be amended and modified as necessary in order that it shall apply with full force and effect, mutatis mutandis, to all new securities into which USCo Common Stock or the Exchangeable Shares or both are so changed, and the parties hereto shall as soon as possible execute and deliver an agreement in writing giving effect to and evidencing such necessary amendments and modifications.

  

9

  

 

	
4.3

	

Severability

 

If any provision of this agreement is held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remainder of this agreement shall not in any way be affected or impaired thereby and this agreement shall be carried out as nearly as possible in accordance with its original terms and conditions.

 

	
4.4 

	
Amendments, Modifications, Etc.

 

This agreement may not be amended, modified or waived except by an agreement in writing executed by USCo, CallCo and AcquisitionCo and approved by the holders of the Exchangeable Shares in accordance with Section 11 of the Share Provisions.

 

	
4.5

	

Amendments

 

Notwithstanding the provisions of Section 4.4, the parties to this agreement may in writing, at any time and from time to time, without the approval of the holders of the Exchangeable Shares, amend or modify this agreement for the purposes of:

 

	
(a)  

	
adding to the covenants of the other parties to such agreement for the protection of the Corporation or the holders of the Exchangeable Shares thereunder;

 

	
(b)  

	
making such provisions or modifications not inconsistent with such agreement or certificate as may be necessary or desirable with respect to matters or questions arising thereunder which, in the good faith opinion of the Board of Directors, it may be expedient to make, provided that the Board of Directors shall be of the good faith opinion, after consultation with counsel, that such provisions and modifications will not be prejudicial to the interests of the holders of the Exchangeable Shares; or

 

	
(c)  

	
making such changes in or corrections to such agreement or certificate which, on the advice of counsel to the Corporation, are required for the purpose of curing or correcting any ambiguity or defect or inconsistent provision or clerical omission or mistake or manifest error contained therein, provided that the Board of Directors shall be of the good faith opinion, after consultation with counsel, that such changes or corrections will not be prejudicial to the interests of the holders of the Exchangeable Shares.

 

	
4.6 

	
Meeting to Consider Amendments

 

AcquisitionCo, at the request of USCo, CallCo, or any combination of them, shall call a meeting or meetings of the holders of the Exchangeable Shares for the purpose of considering any proposed amendment or modification requiring approval of such shareholders. Any such meeting or meetings shall be called and held in accordance with the Act, the by-laws of AcquisitionCo, the Share Provisions and all Applicable Laws.

 

	
4.7 

	
Amendments Only in Writing

 

No amendment to or modification or waiver of any of the provisions of this agreement otherwise permitted hereunder shall be effective unless made in writing and signed by all of the parties hereto.

  

10

  

 

	
4.8 

	
Enurement

 

This agreement shall be binding upon and inure to the benefit of the parties hereto and the holders, from time to time, of Exchangeable Shares and each of their respective heirs, successors and assigns.

 

	
4.9 

	
Notices to Parties

 

All notices and other communications between the parties shall be in writing and shall be deemed to have been given if delivered personally or by confirmed telecopy to the parties at the following addresses (or at such other address for either such party as shall be specified in like notice) to USCo, AcquisitionCo or CallCo to:

 

c/o 152724 Canada Inc., 1855 Blvd Hymus Dorval QC H9P 1J8 

 

Attention: Ira Kroo, Director

 

Any notice or other communication given personally shall be deemed to have been given and received upon delivery thereof and if given by telecopy shall be deemed to have been given and received on the date of confirmed receipt thereof, unless such day is not a Business Day, in which case it shall be deemed to have been given and received upon the immediately following Business Day.

 

	
4.10 

	
Counterparts

 

This Agreement may be executed in several counterparts each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument, which shall be sufficiently evidenced by any such original counterpart.

 

	
4.11 

	
Jurisdiction

 

This agreement shall be construed and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

 

	
4.12 

	
Attornment

 

Each of USCo, CallCo and AcquisitionCo agrees that any action or proceeding arising out of or relating to this agreement may be instituted in the courts of the Province of Ontario, waives any objection which it may have now or hereafter to the venue of any such action or proceeding, irrevocably submits to the jurisdiction of such courts in any such action or proceeding, agrees to be bound by any judgment of such courts and not to seek, and hereby waives, any review of the merits of any such judgment by the courts of any other jurisdiction.

 

	
4.13 

	
Assignment by and Successor to CallCo

 

Notwithstanding any other provision in this agreement to the contrary, CallCo may transfer or assign its rights and interest in or under this agreement to any affiliate of AcquisitionCo or USCo (herein called the "successor corporation"); provided that the successor corporation shall expressly assume, by agreement satisfactory in form to the parties hereto and executed and delivered to parties hereto, the due and punctual performance and observance of each and every covenant and condition of this agreement to be performed and observed by CallCo.

 

  

11

  

 

IN WITNESS WHEREOF the parties hereto have caused this agreement to be signed by their respective officers thereunder duly authorized, all as of the date first written above.

 

	 	
QUINKO-TEK INTERNATIONAL INC.

	 	 	 
	
 

	
Per:

	/s/ Ira Kroo
	 	 	 

 

	 	

QUINKO-TEK ACQUISITION CORP.

	 	 	 
	
 

	
Per:

	/s/ Ira Kroo
	 	 	 

 

	 	

QUINKO-TEK CALL CORP.

	 	 	 
	
 

	
Per:

	/s/ Ira Kroo
	 	 	 

 

 

 

 

12

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