THIS SHARE EXCHANGE AND SHARE PURCHASE AGREEMENT is dated for
reference the 22nd day of April, 1999.
AMONG:
WARWICK ACQUISITION CORPORATION., a corporation incorporated
under the laws of the State of Delaware,
(the "Parent")
AND:
▇▇▇▇▇▇▇.▇▇▇ INC., a corporation incorporated under the laws
of the Province of Nova Scotia
(the "Purchaser")
AND:
THINWEB SOFTWARE INC., a corporation incorporated under the
laws of the Province of Nova Scotia,
(the "Corporation")
AND:
ALL OF THE SHAREHOLDERS OF THE CORPORATION as more
particularly described on Schedule "A" attached hereto,
(Individually a "Shareholder" and collectively the
"Shareholders");
W H E R E A S:
A. the Corporation is a Java software developer for the
Internet E-commerce market:
B. the Shareholders own all of the issued and outstanding
shares of the Corporation (the "Corporation Shares");
C. the Parent owns all of the issued and outstanding shares in
the capital stock of the Purchaser;
D. the Purchaser desires to purchase all of the Corporation's
Shares and the Shareholders desire to sell all of the
Corporation's Shares to the Purchaser on the terms and
conditions hereinafter set forth;
E. the respective boards of directors of the Purchaser, Parent
and Corporation each deem it advisable and in the best
interests of their respective shareholders to combine their
respective businesses by the Purchaser acquiring all of the
shares in the capital stock of the Corporation pursuant to
the terms of this Agreement; and
F. the respective boards of directors of the Purchaser, Parent
and Corporation have approved and adopted this Agreement as
a plan of reorganization under section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code"), and
as a transfer of shares pursuant to section 85 of the Income
Tax Act (Canada) (the "Tax Act").
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
foregoing premises, the mutual representations, warranties,
covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.01 DEFINITIONS. The following terms, as used herein, have
the following meanings:
"AFFILIATE" means, with respect to any Person, any Person directly
or indirectly controlling, controlled by or under direct or indirect
common control with such other Person.
"AGREEMENT" means this Share Exchange and Share Purchase Agreement
by and among the Purchaser, Parent, Corporation and Shareholders.
"APPLICABLE LAW" means, with respect to any Person, any United
States (whether federal, territorial, state or local), Canadian
(whether federal, territorial, provincial, municipal or local) or
foreign statute, law, ordinance, rule, administrative
interpretation, regulation, order, writ, injunction, directive,
judgment, decree or other requirement, all as in effect as of the
Closing, of any Governmental Authority applicable to such Person or
any of its Affiliates or any of their respective properties, assets,
officers, directors, employees, consultants or agents (in connection
with such officer's, director's, employee's, consultant's or agent's
activities on behalf of such Person or any of its Affiliates).
"ASSOCIATE" means with respect to any Person (a) any other Person of
which such Person is an officer or partner or is, directly or
indirectly, the beneficial owner of ten percent (10%) or more of any
class of equity securities issued by such other Person, (b) any
trust or other estate in which such Person has a ten percent (10%)
or more beneficial interest or as to which such Person serves as
trustee or in a similar fiduciary capacity, and (c) any relative or
spouse of such Person, or any relative of such spouse who has the
same home as such Person or who is a director or officer of such
Person or any Affiliate thereof.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other
day on which commercial banks in Halifax, Nova Scotia are authorized
or required by law to close.
"BUYING GROUP" means the Purchaser and the Parent.
"BUYING GROUP BUSINESS" means the business as heretofore or
currently conducted by the Buying Group.
"BUYING GROUP CONTRACTS" means all contracts, agreements, options,
leases, licences, sales and purchase orders, commitments and other
instruments of any kind, whether written or oral, to which either
the Purchaser or the Parent is a party on the Closing Date.
"CORPORATION'S BALANCE SHEET" means the balance sheet of the
Corporation dated December 31, 1998.
"CORPORATION BUSINESS" means the business as heretofore or currently
conducted by the Corporation.
"CORPORATION CONTRACTS" means all contracts, agreements, options,
leases, licences, sales and purchase orders, commitments and other
instruments of any kind, whether written or oral, to which the
Corporation, or any Shareholder on behalf of the Corporation is a
party on the Closing Date.
"CORPORATION PERMITTED LIENS" means, with respect to the
Corporation, (i) Liens for Taxes or governmental assessments,
charges or claims the payment of which is not yet due, or for Taxes
the validity of which is being contested in good faith by
appropriate proceedings; (ii) statutory Liens of landlords and Liens
of carriers, warehousemen, mechanics, material men and other similar
Persons and other Liens imposed by Applicable Law incurred in the
ordinary course of business for sums not yet delinquent or being
contested in good faith; (iii) Liens relating to deposits made in
the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social
security or to secure the performance of leases, trade contracts or
other similar agreements (iv) Liens and Corporation Encumbrances
specifically identified in the Corporation's Balance Sheet included
in the Corporation Financials; (v) Liens securing executory
obligations under any lease that constitute an "operating lease"
under Canadian GAAP and (vi) other Liens set forth on Schedule "E"
hereto; provided, however, that, with respect to each of clauses (i)
through (v), to the extent that any such encumbrance or Lien arose
prior to the date of the Corporation's Balance Sheet included in the
Corporation's Financials and relates to, or secures the payment of,
a Liability that is required to be accrued under Canadian GAAP, such
encumbrance or Lien shall not be a Corporation Permitted Lien unless
adequate accruals for such Liability have been established therefor
on such Corporation's Balance Sheet in conformity with Canadian GAAP.
"CORPORATION PREMISES" means those premises that have been occupied
or used, or are occupied or used, by the Corporation in connection
with the Corporation Business.
"EXCHANGE AND VOTING AGREEMENT" means the agreement in substantially
the form set out in Schedule "B" hereto to be entered into by the
Parent, Purchaser and the Trustee.
"EXCHANGEABLE NON-VOTING SHARES" means those 16,916,344 Class "A"
exchangeable, non-voting, participating common shares without par
value in the capital stock of the Purchaser, having those rights and
terms set forth in the Exchange and Voting Agreement and the
Exchangeable Share Provisions, which will be issued to the
Shareholders in consideration for the purchase and sale of the
Corporation Shares.
"EXCHANGEABLE SHARE PROVISIONS" means those rights, restrictions,
terms and provisions pertaining to the Exchangeable Non-Voting
Shares, as set forth in Schedule "G" hereto, and as summarized in
section 5.03 hereof.
"GOVERNMENTAL AUTHORITY" means any United States (whether federal,
territorial, state, municipal or local), Canadian (whether federal,
territorial, provincial, municipal or local) or foreign government,
governmental authority, quasi-governmental authority,
instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory,
administrative or other agency, or any political or other
subdivision, department or branch of any of the foregoing.
"GST" means all goods and services taxes, sales taxes levied by the
federal government of Canada, value added taxes or multi-stage taxes
and all provincial sales taxes integrated with such federal taxes,
assessed, rated or charged upon the Corporation.
"INTERIM PERIOD" means the period from and including the date of
this Agreement to and including the Closing Date.
"LIABILITY" means, with respect to any Person, any liability or
obligation of such Person of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, secured or unsecured, joint
or several, due or to become due, vested or unvested, determined,
determinable or otherwise and whether or not the same is required to
be accrued on the financial statements of such Person.
"LIEN" means, with respect to any asset, any mortgage, assignment,
trust or deemed trust (whether contractual, statutory or otherwise
arising), title defect or objection, lien, pledge, charge, security
interest, hypothecation, restriction, encumbrance or charge of any
kind in respect of such assets.
"MATERIAL ADVERSE EFFECT" means a change in, or effect on, the
operations, affairs, prospects, financial condition, results of
operations, assets, Liabilities, reserves or any other aspect of a
party to this Agreement or to its business that results in a
material adverse effect on, or a material adverse change in, any
such aspect of the party or to its business.
"PARENT'S BALANCE SHEET" means the balance sheet of the Parent dated
December 31, 1998.
"PARENT COMMON SHARES" means 16,916,344 common shares in the capital
of the Parent to be issued to the Trustee pursuant to paragraph 2.05
hereof, in consideration of subscription proceeds from the Trustee
of $0.0001 per share, having those rights and terms as set forth in
the Exchange and Voting Agreement.
"PARENT PREFERRED SHARES" means 1,500,000 Preferred shares with a
par value of $.0001 each in the capital stock of the Parent to be
issued to 583317 B.C. Ltd ("BCCO") pursuant to paragraph 2.02
hereof, and having those rights and terms as set forth in the bylaws
or articles of the Parent.
"PERSON" includes an individual, body corporate, partnership,
company, unincorporated syndicate or organization, trust, trustee,
executor, administrator and other legal representative.
"SEC" means the United States Securities and Exchange Commission.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation
as to which more than 10% of the outstanding shares having ordinary
voting rights or power (and excluding shares having voting rights
only upon the occurrence of a contingency unless and until such
contingency occurs and such rights may be exercised) is owned or
controlled, directly or indirectly, by such Person and/or by one or
more of such Person's Subsidiaries, and (ii) any partnership, joint
venture or other similar relationship between such Person (or any
Subsidiary thereof) and any other Person (whether pursuant to a
written agreement or otherwise).
"SUPPORT AGREEMENT" means that agreement between the Parent and the
Purchaser, in the form attached hereto as Schedule "H" hereto,
whereby the Parent agrees to make certain payments and deliveries to
enable the Purchaser to comply with the Exchangeable Share Provisions.
"TAX" means all taxes imposed of any nature including any United
States (whether federal, territorial, state or local), Canadian
(whether federal, territorial, provincial or local) or foreign
income tax, alternative or add-on minimum tax, profits or excess
profits tax, franchise tax, gross income, adjusted gross income or
gross receipts tax, employment related tax (including employee
withholding or employer payroll tax or employer health tax), capital
tax, real or personal property tax or ad valorem tax, sales or use
tax, excise tax, stamp tax or duty, any withholding or back up
withholding tax, value added tax, GST, severance tax, prohibited
tax, premiums tax, occupation tax, customs and import duties,
together with any interest or any penalty, addition to tax or
additional amount imposed by any Governmental Authority responsible
for the imposition of any such tax or in respect of or pursuant to
any United States (whether federal, territorial, state or local),
Canadian (whether federal, territorial, provincial or local) or
other Applicable Law.
"TAX RETURN" means all returns, reports, forms or other information
required to be filed with respect to any Tax.
"TRUSTEE" means the trustee or successor trustee designated under
the Exchange and Voting Agreement.
"33 ACT" means the United States Securities Act of 1933 and all
amendments thereto.
"34 ACT" means the United States Securities Act of 1934 and all
amendments thereto.
1.02 CURRENCY USED. All references herein to dollars or the use of
the symbol "$" shall be deemed to refer to United States dollars
unless such reference is prefaced by "CDN" in which case the
reference will be to Canadian dollars.
1.03 CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Where the
Canadian Institute of Chartered Accountants or any successor thereto
includes a statement in its handbook or any successor thereto on a
method or alternative methods of accounting or on a standard or
standards of auditing, such statement shall be regarded as the only
generally accepted accounting principle or principles or generally
accepted auditing standard or standards ("Canadian GAAP") applicable
to the circumstances that it covers, and references herein to
"generally accepted accounting principles" shall be interpreted
accordingly. All accounting and financial terms used herein with
respect to the Corporation, unless specifically provided to the
contrary, shall be interpreted and applied in accordance with
Canadian GAAP.
1.04 AMERICAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Where the
American Institute of Certified Public Accountants or any successor
thereto includes a statement in its handbook or any successor
thereto on a method or alternative methods of accounting or on a
standard or standards of auditing, such statement shall be regarded
as the only generally accepted accounting principle or principles or
generally accepted auditing standard or standards ("American GAAP")
applicable to the circumstances that it covers, and references
herein to "generally accepted accounting principles" shall be
interpreted accordingly. All accounting and financial terms used
herein with respect to the Parent, unless specifically provided to
the contrary, shall be interpreted and applied in accordance with
American GAAP.
ARTICLE II: PURCHASE, SALE AND SUBSCRIPTION
2.01 PURCHASE OF CORPORATION SHARES. On the terms and subject to
the conditions set forth herein, the Shareholders hereby agree to
sell, transfer, convey, assign and deliver to the Purchaser, free
and clear of all Corporation Share Encumbrances (as defined in
paragraph 3.01.1), and the Purchaser hereby agrees to purchase,
acquire and accept from the Shareholders, all of the Corporation
Shares held by the Shareholders. At Closing, the Shareholders will
deliver to the Purchaser certificates evidencing all of the
Corporation Shares duly endorsed for transfer and such other
instruments as have been reasonably requested by the Purchaser to
transfer full legal and beneficial ownership of the Corporation
Shares to the Purchaser, free and clear of all Corporation Share
Encumbrances and the Corporation agrees to enter the Purchaser or
the Purchaser's nominee on the books of the Corporation as the
holder of the Corporation Shares and to issue one or more
replacement share certificates representing the Corporation Shares
to the Purchaser or the Purchaser's nominee. The Purchaser shall
pay the purchase price for the Corporation Shares in accordance with
the terms of Sections 2.02 of this Agreement.
2.02 CONSIDERATION FOR CORPORATION SHARES. The consideration to be
paid by the Purchaser for the Corporation Shares will be the
delivery of the Exchangeable Non-Voting Shares representing the
purchase price and the issuance by the Parent of 1,500,000 Parent
Preferred Shares to BCCO.
2.03 SUBSCRIPTION OF PARENT COMMON SHARES. The Parent
agrees to grant to each Shareholder:
a) such number of voting rights in the Parent as is equivalent to
the number of Exchangeable Non-Voting Shares held by each
Shareholder, as if each Shareholder held an equivalent number
of Parent Common Shares, and, subject to the remaining terms
of this Agreement, which voting rights will be exercisable by
the Shareholders through their holding Exchangeable Non-Voting
Shares in accordance with the Exchange and Voting Agreement;
b) the rights to exchange their Exchangeable Non-Voting Shares
for Parent Common Shares, such rights to be exercised in
accordance with the terms of the Exchange and Voting
Agreement.
To ensure that the Purchaser and the Parent has sufficient common
shares available to issue in exchange for Exchangeable Non-Voting
Shares, and as security for its covenant to do so, the Parent agrees
to issue the Parent Common Shares to the Trustee, at or shortly
following Closing, at the purchase price of $0.0001 per share; such
Parent Common Shares to be held in accordance with the Exchange and
Voting Agreement.
2.04 CLOSING. The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place at the offices of
Maitland & Company on such date as the parties hereto may mutually
agree in writing (the "Closing Date").
2.05 PAYMENT OF PURCHASE PRICE. At Closing the Purchaser will
deliver to the Shareholders certificates representing the
Exchangeable Non-Voting Shares, all such Exchangeable Non-Voting
Shares to be issued as fully paid and non-assessable, and registered
in the names of the Shareholders and in the denominations set forth
in Schedule "A" to the Exchange and Voting Agreement. On or shortly
following the Closing, the Parent will issue the Parent Preferred
Shares to BCCO and the Parent Common Shares to the Trustee, such
Parent Common Shares and Parent Preferred Shares to be issued as
fully paid and non-assessable, and registered in the name of the
Trustee in such denominations as the Trustee may request.
ARTICLE III: REPRESENTATIONS AND
WARRANTIES OF SHAREHOLDERS
As an inducement to the Buying Group to enter into this Agreement
and to consummate the transactions provided for herein, each
Shareholder, as to himself, herself or itself and as to such of the
Corporation Shares owned by him, her or it (and not as to any other
Shareholder or to any of the Corporation Shares owned by any other
Shareholder) represents and warrants to the Buying Group as follows
and confirms that the Purchaser and the Parent are relying upon the
accuracy of each of such representations and warranties in
connection with the purchase of the Corporation Shares and the
completion of the transactions set out herein:
3.01 REPRESENTATIONS REGARDING THE CORPORATION SHARES.
3.01.1 Each Shareholder has good and marketable title to his
respective holdings in the Corporation Shares, free and clear of any
and all covenants, conditions, restrictions, voting trust
arrangements, rights of first refusal, options, Liens and adverse
claims and rights whatsoever (collectively, the "Corporation Share
Encumbrances"), and on the Closing Date, the Shareholders will
deliver to the Purchaser, good and marketable title to the
Corporation Shares free and clear of any and all Corporation Share
Encumbrances;
3.01.2 Each Shareholder has the full right, power and authority to
enter into this Agreement and each Shareholder has the full right,
power and authority to transfer, convey and sell to the Purchaser at
the Closing his respective holdings of the Corporation Shares sold
to the Purchaser by the Shareholders hereunder, and upon
consummation of the purchase, the Purchaser will acquire from the
Shareholders good and marketable title to the Corporation Shares
sold to the Purchaser by the Shareholders, free and clear of all
Corporation Share Encumbrances; and
3.01.3 No Shareholder is a party to, subject to or bound by any
agreement, judgment, order, writ, prohibition, injunction or decree
of any court or other Governmental Authority that would prevent the
execution or delivery to the Purchaser of this Agreement by any
Shareholder, the transfer, conveyance and sale of the Corporation
Shares sold by Shareholder to the Purchaser pursuant to the terms
hereof, or the consummation of the transactions under this Agreement
in accordance with the terms of this Agreement.
3.02 AUTHORIZATION. The execution, delivery and performance of
this Agreement, and the consummation of the transactions provided
for herein, by each Shareholder are within the respective powers of
each Shareholder and have been duly authorized by all necessary
action on the part of each Shareholder, respectively. This Agreement
has been duly and validly executed by each Shareholder and
constitutes a legal, valid and binding agreement of each
Shareholder, respectively, enforceable against each Shareholder in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights and subject to general principles of
equity.
3.03 NON-CONTRAVENTION. The execution, delivery and performance of
this Agreement, and the consummation of the transactions provided
for herein, by each Shareholder, do not (a) contravene or conflict
with or constitute a material violation of any provision of any
Applicable Law binding upon or applicable to any Shareholder or the
Corporation Shares or (b) result in the creation or imposition of
any Lien.
ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
As an inducement to the Buying Group to enter into this Agreement
and to consummate the transactions provided for herein, the
Corporation, represents and warrants to the Buying Group as follows:
4.01 EXISTENCE AND POWER. The Corporation is a corporation duly
incorporated, organized and validly existing under the laws of the
Province of Nova Scotia and has all corporate power and all
governmental licences, authorizations, permits, consents and
approvals required to carry on the Corporation Business as now
conducted and to own and operate the Corporation Business as now
owned and operated. The Corporation is not required to be qualified
to conduct business in any jurisdiction where the failure to be so
qualified, whether individually or in the aggregate, would have a
Material Adverse Effect. No Corporation proceedings have been taken
or authorized by the Corporation or any Shareholder or, to the
knowledge of the Corporation, by any other Person, with respect to
the bankruptcy, insolvency, liquidation, dissolution or winding-up
of the Corporation or with respect to any amalgamation, merger,
consolidation, arrangement or reorganization relating to the
Corporation.
4.02 AUTHORIZATION. The execution, delivery and performance by the
Corporation of this Agreement and the consummation thereby of the
transactions provided for herein are within the Corporation's powers
and have been duly authorized by all necessary action on its part.
This Agreement has been duly and validly executed by the Corporation
and constitutes a legal, valid and binding agreement of the
Corporation enforceable against it in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights and subject to general principles of equity.
4.03 CAPITAL STOCK.
4.03.1 The authorized capital stock of the Corporation consists
solely of 100,000,000 common shares without par value, of which
16,916,344 common shares are issued and outstanding and are held by
the Shareholders (the "Corporation Shares").
4.03.2 All such issued and outstanding Corporation Shares have been
duly and validly authorized and issued and are validly outstanding,
fully paid and non-assessable. The Corporation Shares represent all
of the issued and outstanding shares of the Corporation. The
Corporation does not hold any of the issued and outstanding
Corporation Shares in the treasury of the Corporation, and there are
not outstanding (i) any options, warrants, rights of first refusal
or other rights to purchase any shares of the Corporation except as
disclosed in Schedule "H") hereto, (ii) any securities convertible
into or exchangeable for such shares or (iii) any other commitments
of any kind for the issuance of additional shares of the Corporation
or options, warrants or other securities of the Corporation.
4.04 SUBSIDIARIES. The Corporation has no Subsidiaries.
4.05 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Corporation of this Agreement requires no action
by, consent or approval of, or filing with, any Governmental
Authority other than as expressly referred to in this Agreement.
4.06 NON-CONTRAVENTION. The execution, delivery and performance of
this Agreement by the Corporation, and the consummation by it of the
transactions provided for herein, do not and will not (a) contravene
or conflict with the articles or bylaws of the Corporation; (b)
contravene or conflict with or constitute a material violation of
any provision of any Applicable Law binding upon or applicable to
the Corporation, the Corporation Business or the Corporation Shares
and would not, individually or in the aggregate have a Material
Adverse Effect; (c) constitute a default under or give rise to any
right of termination, cancellation or acceleration of, or to a loss
of any benefit to which the Corporation is entitled, under any
Corporation Contract to which the Corporation is a party or any
permit or similar authorization relating to the Corporation, the
Corporation Business or the Corporation Shares by which the
Corporation, the Corporation Business or the Corporation Shares may
be bound or affected; or (d) result in the creation or imposition of
any Lien.
4.07 FINANCIAL STATEMENTS: UNDISCLOSED LIABILITIES.
4.07.1 Attached hereto as Schedule "C" are true and complete copies
of the Corporation's Balance Sheet as of December 31,1998 and the
related statements of income and retained earnings and changes of
financial position for the year ended December 31, 1998
(collectively, the "Corporation's Financials").
4.07.2 The Corporation's Financials: (i) have been prepared on a
consistent basis and are based on the books and records of the
Corporation in accordance with Canadian GAAP and present fairly the
financial position, results of operations and statements of changes
in the Corporation's financial position as of the dates indicated or
the periods indicated; (ii) contain and reflect all necessary
adjustments and accruals for a fair presentation of its financial
position and the results of its operations for the periods covered
by said financial statements; (iii) contain and reflect adequate
provisions for all reasonably anticipated Liabilities (including
Taxes) with respect to the periods then ended and all prior periods;
and (iv) with respect to the Corporation Contracts and commitments
for the sale of goods or the provision of services by the
Corporation, contain and reflect adequate reserves for all
reasonably anticipated material losses and costs and expenses in
excess of expected receipts.
4.07.3 To the best of the knowledge of the Corporation, there are
no Liabilities of the Corporation other than: (i) any Liabilities
accrued as Liabilities on the Corporation's Balance Sheet; (ii)
Liabilities incurred since the date of the Corporation's Balance
Sheet that do not, and could not, individually or in the aggregate
have a Material Adverse Effect; and (iii) other Liabilities
disclosed in this Agreement or in any schedules attached hereto.
4.08 ABSENCE OF CERTAIN CHANGES. Since December 31, 1998, the
Corporation Business has been conducted in the ordinary course, and
there has not been:
(a) any event, occurrence, state of circumstances, or facts or
change in the Corporation or in the Corporation Business that
has had, or which the Corporation, after reasonable inquiry,
expect to have, either individually or in the aggregate, a
Material Adverse Effect;
(b) (i) any change in any Liabilities of the Corporation that has
had, or which the Corporation may, after reasonable inquiry,
expect to have, a Material Adverse Effect or (ii) any
incurrence, assumption or guarantee of any indebtedness for
borrowed money by the Corporation in connection with the
Corporation Business or otherwise;
(c) any (i) payments by the Corporation in respect of any
indebtedness of the Corporation for borrowed money or in
satisfaction of any Liabilities of the Corporation related to
the Corporation Business, other than in the ordinary course of
business or the guarantee by the Corporation of any of the
indebtedness of any other Person or (ii) creation, assumption
or sufferance of (whether by action or omission) the existence
of any Lien on any assets reflected on the Corporation's
Balance Sheet, other than Corporation Permitted Liens;
(d) any transaction or commitment made, or any Contract entered
into, by the Corporation, or any waiver, amendment,
termination or cancellation of any of the Corporation
Contracts by the Corporation, or any relinquishment of any
rights thereunder by the Corporation or of any other right or
debt owed to the Corporation, other than, in each such case,
actions taken in the ordinary course of business consistent
with past practice;
(e) any (i) grant of any severance, continuation or termination
pay to any director, officer, stockholder or employee of the
Corporation or any Affiliate of the Corporation, (ii) entering
into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement)
with any director, officer, stockholder or employee of the
Corporation or any Affiliate of the Corporation, (iii)
increase in benefits payable or potentially payable under any
severance, continuation or termination pay policies or
employment agreements with any director, officer, stockholder
or employee of the Corporation or any Affiliate of the
Corporation, (iv) increase in compensation, bonus or other
benefits payable or potentially payable to directors,
officers, stockholders or employees of the Corporation or any
Affiliate of the Corporation other than in the normal course
of business, (v) change in the terms of any bonus, pension,
insurance, health or other benefit plan of the Corporation or
(vi) representation of the Corporation to any employee or
former employee of the Corporation that the Purchaser promised
to continue any Corporation benefit plan after the Closing Date,
(f) any change by the Corporation in its accounting principles,
methods or practices or in the manner it keeps its books and
records;
(g) any distribution, dividend, bonus, management fee or other
payment by the Corporation to any officer, director,
stockholder or Affiliate of the Corporation or any of their
respective Affiliates or Associates; or
(h) any (i) material single capital expenditure or commitment, or
any group of related capital expenditures or commitments, or
(ii) sale, assignment, transfer, lease or other disposition of
or agreement to sell, assign, transfer, lease or otherwise
dispose of any asset or property other than in the ordinary
course of business.
4.09 PROPERTIES; CORPORATION MATERIAL LEASES; TANGIBLE ASSETS.
4.09.1 The Corporation does not own any real property.
4.09.2 The Corporation holds title to each of its properties and
assets free and clear of all Liens, adverse claims, easements,
rights of way, servitudes, zoning or building restrictions or any
other rights of others or other adverse interests of any kind,
including leases, chattel mortgages, conditional sales contracts,
collateral security arrangements and other title or interest
retention arrangements (collectively, "Corporation Encumbrances"),
except Corporation Permitted Liens.
4.09.3 All tangible properties and assets reflected on the
Corporation's Balance Sheet are in all material respects fit for the
purposes for which they are used and are in good operating condition
and repair and are adequate for the uses to which they are put, and
no material properties or assets necessary for the conduct of the
Corporation Business in substantially the same manner as the
Corporation Business has heretofore been conducted are in need of
replacement, maintenance or repair except for routine replacement,
maintenance and repair.
4.10 AFFILIATES. Other than as disclosed herein, there are no
Corporation Contracts which have been entered into within the past
five years or are currently in force and effect between the
Corporation and any Shareholder, or any Affiliate or Associate of
any Shareholder. The Corporation is not indebted to any Shareholder.
4.11 LITIGATION. There are no material proceedings pending or, to
the knowledge of the Corporation, threatened against or affecting
the Corporation or the Corporation Business or that seeks to
prevent, enjoin, alter or delay the transactions contemplated by
this Agreement and (ii) there is no existing order, judgment or
decree of any Governmental Authority naming the Corporation as an
affected party which has not been paid or discharged in full.
4.12 MATERIAL CONTRACTS. All Corporation Contracts are legal,
valid and binding obligations of the Corporation and each other
Person who is a party thereto, enforceable against the Corporation
and each such Person in accordance with its terms, and none are
subject to any material default thereunder.
4.13 REQUIRED CONSENTS. There are no governmental or other
registrations, filings, applications, notices, transfers, consents,
approvals, orders, qualifications or waivers required under
Applicable Law or otherwise required to be obtained or made with any
Governmental Authority to be obtained by the Corporation or any
Shareholder by virtue of the execution and delivery of this
Agreement and the consummation of the transactions provided for
herein for any reason; nor are there any Corporation Contracts with
respect to which the consent of the other party or parties thereto
must be obtained by the Corporation or any Shareholder by virtue of
the execution and delivery of this Agreement and the consummation of
the transactions provided for herein (the "Required Consents").
4.14 CORPORATION INTELLECTUAL PROPERTY.
4.14.1 Schedule "F" sets forth a complete and correct list of each
patent, patent application and invention, trademark, tradename,
trademark or tradename registration or application, copyright or
copyright registration or application for copyright registration,
and each licence or licensing agreement, for any of the foregoing
relating to the Corporation Business as conducted by the Corporation
or held by the Corporation (the "Corporation Intellectual Property
Rights"). Corporation Intellectual Property Rights also include any
trade secrets that are material to the conduct of the Corporation
Business in the manner that the Corporation Business has heretofore
been conducted.
4.14.2 The Corporation has not during the three years preceding the
date of this Agreement been a party to any proceeding, nor to the
knowledge of the Corporation, is any proceeding threatened as to
which there is a reasonable possibility of a determination adverse
to the Corporation, involving a claim of infringement by any Person
(including any Governmental Authority) of any Corporation
Intellectual Property Right. No Corporation Intellectual Property
Right is subject to any outstanding order, judgment, decree,
stipulation or agreement restricting the use thereof by the
Corporation or restricting the licensing thereof by the Corporation
to any Person. The Corporation has no knowledge that would cause
such Person to believe that the use of the Corporation Intellectual
Property Rights or the conduct of the Corporation Business conflicts
with, infringes upon or violates any patent, patent licence, patent
application, trademark, tradename, trademark or tradename
registration, copyright, copyright registration, service ▇▇▇▇, brand
▇▇▇▇ or brand name or any pending application relating thereto, or
any trade secret, know-how, programs or processes, or any similar
rights, of any Person.
4.14.3 To the knowledge of the Corporation, the Corporation either
owns the entire right, title and interest in, to and under, or has
acquired an exclusive licence to use, any and all patents,
trademarks, trade names, brand names and copyrights that are
material to the conduct of the Corporation Business in the manner
that the Corporation Business has heretofore, been conducted. The
Corporation Intellectual Property Rights are in full force and
effect and have not been used or enforced or failed to be used or
enforced in a manner that would result in the abandonment,
cancellation or unenforceability of any of the Corporation
Intellectual Property Rights. All registrations and filings
necessary to preserve the rights of the Corporation in and to the
Corporation Intellectual Property Rights have been made.
4.15 TAX MATTERS.
4.15.1 The Corporation has prepared and filed all Tax Returns on
time with all appropriate Governmental Authorities which were
required to be filed on or prior to the Closing Date. Each such Tax
Return was correct and complete. True copies of all Tax Returns
prepared and filed by the Corporation during the past three years
and that the Purchaser has requested have been given to the
Purchaser on or before the date of this Agreement.
4.15.2 The Corporation has paid all Taxes due and payable by it and
has paid all assessments and reassessments it has received in
respect of Taxes. The Corporation has paid all Tax installments due
and payable by it as at December 31, 1998.
4.15.3 The Corporation has withheld from each payment made to any of
its present or former employees, officers and directors, and to all
persons who are non-residents of Canada for the purposes of the
Income Tax Act (Canada) all amounts required by Applicable Law and
has remitted such withheld amounts within the prescribed periods to
the appropriate Governmental Authority. The Corporation has
remitted all Canada Pension Plan contributions, employment insurance
premiums, employer health taxes and other Taxes payable by it in
respect of its employees and has remitted such amounts to the proper
Governmental Authority within the time required by Applicable Law.
The Corporation has charged, collected and remitted on a timely
basis all Taxes as required by Applicable Law on any sale, supply or
delivery whatsoever, made by the Corporation.
4.15.4 The Corporation Business is the only business ever conducted
by the Corporation. The non-capital losses (as defined in the Tax
Act and any applicable provincial taxing statute) were incurred by
the Corporation only in carrying on the Corporation Business. The
Corporation is not prevented by virtue of any amalgamation or
dissolution from carrying back against income earned by it prior to
the Closing Date, any losses incurred by it after the Closing Date.
4.15.5 The Corporation has paid all Taxes imposed by applicable
legislation in the province of Nova Scotia on the acquisition of its
tangible personal property as defined in applicable legislation in
the province of Nova Scotia, and none of its tangible personal
property has been transferred at any time on a tax-exempt basis
under applicable legislation of the Province of Nova Scotia or any
predecessor legislation thereof. The foregoing is accurate, mutatis
mutandis, with respect to all sales or transfer Taxes imposed under
comparable legislation of other provinces.
4.16 SECURITIES LEGISLATION. The Corporation is a private issuer
within the meaning of the Securities Act (Nova Scotia) and the sale
of the Corporation Shares by the Shareholders to the Purchaser is
made in compliance with the exempt takeover-bid provisions of such Act.
4.17 FULL DISCLOSURE. The information contained in the documents,
certificates and written statements (including this Agreement and
the schedules and exhibits hereto) furnished to the Purchaser by or
on behalf of the Corporation with respect to the Corporation
(including the Corporation Business and the results of operations,
financial condition and prospects of the Corporation) for use in
connection with this Agreement or the transactions contemplated by
this Agreement is true and complete in all material respects and
does not, to the best of the knowledge of the Corporation after
conducting an inquiry which a reasonably prudent person would make
under the circumstances, omit to state any material fact necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. There is
no fact known to the Corporation the Corporation that has not been
disclosed to the Purchaser by the Corporation in writing that has
had a Material Adverse Effect on or, so far as the Corporation can
now foresee, could be reasonably likely to have a Material Adverse
Effect on the Corporation (including the Corporation Business and
the results of operations, financial condition or prospects of the
Corporation).
ARTICLE V: REPRESENTATIONS AND WARRANTIES OF THE BUYING GROUP
As an inducement to the Corporation and each Shareholder to enter
into this Agreement and to consummate the transactions provided for
herein, the Purchaser and the Parent, jointly and severally,
represent and warrant to the Corporation and each Shareholder that:
5.01 EXISTENCE AND POWER. Each of the Purchaser and the Parent is
a corporation duly incorporated, organized and validly existing
under the laws of the Province of Nova Scotia and the State of
Delaware respectively and each has all corporate power and all
governmental licences, authorizations, permits, consents and
approvals required to carry on the Buying Group Business as now
conducted and to own and operate their respective businesses as now
owned and operated. The Purchaser and the Parent are not required
to be qualified to conduct business in any jurisdiction where the
failure to be so qualified, whether individually or in the
aggregate, would have a Material Adverse Effect. No proceedings
have been taken or authorized by the Purchaser or the Parent or, to
the knowledge of the Purchaser or the Parent, by any other Person,
with respect to the bankruptcy, insolvency, liquidation, dissolution
or winding-up of the Purchaser or the Parent or with respect to any
amalgamation, merger, consolidation, arrangement or reorganization
relating to the Purchaser or the Parent.
5.02 AUTHORIZATION. The execution, delivery and performance by
each of the Purchaser and the Parent of this Agreement and the
consummation thereby of the transactions provided for herein are
within the powers of the Purchaser and the Parent and have been duly
authorized by all necessary action on their part. This Agreement has
been duly and validly executed by each of the Purchaser and the
Parent and constitutes a legal, valid and binding agreement of the
Purchaser and the Parent enforceable against them in accordance with
its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights and subject to general principles of equity.
5.03 CAPITAL STOCK OF THE PURCHASER.
5.03.1 The authorized capital stock of the Purchaser consists of
100,000,000 common shares no par value of which one common share is
issued and outstanding on the date hereof to and in the name of the
Parent and 20,000,000 Exchangeable Non-Voting Shares with no par
value of which no shares are issued and outstanding. Each
Exchangeable Non-Voting Share shall:
(a) be non-voting as to matters concerning the Purchaser (such
that all voting shares of the Purchaser will be and remain
held by the Parent); however, as stated above in paragraph
2.03, the holder of Exchangeable Non-Voting Shares will be
entitled to voting rights in the Parent as is equivalent to
the number of Exchangeable Non-Voting Shares held by each
Shareholder as if each Shareholder held an equivalent number
of Parent Common Shares;
(b) entitle the holder thereof (the "Holder") to dividend rights
equal, after conversion into Canadian dollars based on the
Canadian/U.S. exchange rate in effect on the record date
thereof, to the per share dividend rights of Parent Common
Shares;
(c) entitle the Holder, on a liquidation of the Purchaser, to
receive in exchange for each Exchangeable Non-Voting Share one
Parent Common Shares for a period ending on the twenty-fifth
anniversary of the Closing Date; and
(d) entitle the Holder, at his election from time to time for a
period ending on the twenty-fifth anniversary of the Closing
Date, upon 30 days' written notice given by such Holder to the
Purchaser, to require the Purchaser to redeem any or all
Exchangeable Non-Voting Shares and to exchange therefor, on a
share for share basis, Parent Common Shares (the "Right of
Retraction"),
5.03.2 The Parent and the Purchaser shall be entitled to deduct and
withhold from the consideration otherwise payable to any Holder of
Exchangeable Non-Voting Shares, including any dividend payments in
respect of the Exchangeable Non-Voting Shares, such amount as the
Parent or the Purchaser is required or permitted to deduct and
withhold with respect to such payment under the United States
Internal Revenue Code, the Income Tax Act (Canada) or any provision
of state, provincial, local or foreign tax law. The Parent and the
Purchaser shall not initially withhold any United States Tax on
dividends paid on the Exchangeable Non-Voting Shares. However, if
any United States taxing authority determines that the Parent or the
Purchaser is liable for United States withholding Tax on dividends
paid to the Holders on the Exchangeable Non-Voting Shares, the
Purchaser shall be entitled to reduce the amount of any future
dividends to be paid to the Holders by such withholding obligation.
To the extent that amounts are so withheld, such withheld amounts
shall be treated for all purposes hereof as having been paid to the
Holder of Exchangeable Non-Voting Shares in respect of which such
deduction and withholding was made; provided, however, that such
withheld amounts are actually remitted to the appropriate taxing
authority. To the extent that the amount so required or permitted
to be deducted or withheld from any payment to a Holder exceeds the
cash portion of the consideration otherwise payable to the Holders,
the Parent upon at least ten (10) days' prior written notice to such
Holder, is hereby authorized to sell or otherwise dispose of at fair
market value such portion of such non-cash consideration otherwise
payable to the Holder as is necessary to provide sufficient funds to
the Parent in order to enable it to comply with such deduction or
withholding requirement and the Parent shall give an accounting to
the Holder with respect thereof and any balance of such proceeds of
sale.
5.03.3 There are not outstanding (i) any options, warrants,
rights of first refusal or other rights to purchase any shares of
the Purchaser, (ii) any securities convertible into or exchangeable
for such shares or (iii) any other commitments of any kind for the
issuance of additional shares of the Purchaser or options, warrants
or other securities of the Purchaser.
5.04 CAPITAL STOCK OF THE PARENT.
5.04.1 The authorized capital stock of the Parent consists
solely of 100,000,000 common shares, $.0001 par value per share
("Parent Common Shares") and 20,000,000 preferred shares which may
be issued in classes or series at the discretion of the Board of
Directors of the Parent (the "Preferred Shares") of which 5,000,000
Parent Common Shares and nil Preferred Shares are issued and
outstanding on the date hereof. The Parent further warrants that it
will cause all but 150,000 of the Parent Common Shares to be
canceled on or before the Closing Date.
5.04.2 There are not outstanding (i) any options, warrants,
rights of first refusal or other rights to purchase any shares of
the Parent, (ii) any securities convertible into or exchangeable for
such shares or (iii) any other commitments of any kind for the
issuance of additional shares of the Parent or options, warrants or
other securities of the Parent.
5.05 GENERAL PROVISIONS OF THE CAPITAL OF THE PURCHASER AND THE
PARENT.
5.05.1 All of the issued and outstanding shares in the respective
capital stocks of the Purchaser and the Parent have been duly and
validly authorized and issued and are validly outstanding, fully
paid and non-assessable. The Purchaser does not hold any of the
issued and outstanding shares in the treasury of the Purchaser or
the Parent, the Parent does not hold any of the issued and
outstanding shares in the treasury of the Parent and there are not
outstanding (i) any options, warrants, rights of first refusal or
other rights to purchase any shares of the Purchaser or the Parent,
(ii) any securities convertible into or exchangeable for such shares
or (iii) any other commitments of any kind for the issuance of
additional shares of the Purchaser or Parent or options, warrants or
other securities of the Purchaser or Parent other than as disclosed
in Article 5.03.1 herein.
5.05.2 All of the Exchangeable Non-Voting Shares, the Parent Common
Shares and the Parent Preferred Shares which will be issued
hereunder will be fully paid and non-assessable, subject to such
terms and provisions as set forth in the Exchange and Voting
Agreement, and the Purchaser and Parent's articles of incorporation
and the Directors Resolutions relating to the issuance of the Parent
Common Shares and Parent Preferred Shares, as applicable, and all
such shares will be issued free and clear of all Liens, charges,
encumbrances and trading restrictions other than as may be imposed
by Applicable Law.
5.06 SUBSIDIARIES. The Purchaser has no Subsidiaries and the only
Subsidiary of the Parent is the Purchaser.
5.07 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Buying Group of this Agreement requires no action
by, consent or approval of, or filing with, any Governmental
Authority other than as expressly referred to in this Agreement.
5.08 NON-CONTRAVENTION. The execution, delivery and performance of
this Agreement by the Buying Group, and the consummation by it of
the transactions provided for herein, do not and will not (a)
contravene or conflict with the respective articles or bylaws of the
Buying Group; (b) contravene or conflict with or constitute a
material violation of any provision of any Applicable Law binding
upon or applicable to the Buying Group, the Buying Group Business or
the outstanding shares in their respective capital stocks and would
not, individually or in the aggregate have a Material Adverse
Effect; (c) constitute a default under or give rise to any right of
termination, cancellation or acceleration of, or to a loss of any
benefit to which the Purchaser or the Parent are entitled, under any
Buying Group Contract to which the Purchaser or the Parent is a
party or any Permit or similar authorization relating to the
Purchaser or Parent, the Buying Group Business or the outstanding
shares in their respective capital stocks may be bound or affected;
or (d) result in the creation or imposition of any Lien.
5.09 FINANCIAL STATEMENTS: UNDISCLOSED LIABILITIES.
5.09.1 Attached hereto as Schedule "D" are true and complete copies
of the Parent's Balance Sheet, as of December 31, 1998 and the
related statements of income and retained earnings and changes of
financial position, for the year ended December 31, 1998
(collectively, the "Parent's Financials").
5.09.2 The Parent's Financials: (i) have been prepared on a
consistent basis and are based on the books and records of the
Parent in accordance with American GAAP and present fairly the
financial position, results of operations and statements of changes
in the Parent's financial position as of the dates indicated or the
periods indicated; (ii) contain and reflect all necessary
adjustments and accruals for a fair presentation of its financial
position and the results of its operations for the periods covered
by said financial statements; (iii) contain and reflect adequate
provisions for all reasonably anticipated liabilities (including
Taxes) with respect to the periods then ended and all prior periods;
and (iv) with respect to Buying Group Contracts and commitments for
the sale of goods or the provision of services by the Parent,
contain and reflect adequate reserves for all reasonably anticipated
material losses and costs and expenses in excess of expected receipts.
5.09.3 To the best of the knowledge of the Buying Group, there are
no Liabilities of the Buying Group other than: (i) any Liabilities
accrued as Liabilities on the Parent's Balance Sheet; (ii)
Liabilities incurred since the date of the Parent's Balance Sheet
that do not, and could not, individually or in the aggregate have a
Material Adverse Effect; (iii) other Liabilities disclosed in this
Agreement or in any schedules attached hereto; and (iv) the Tax on
reserves.
5.10 ABSENCE OF CERTAIN CHANGES. Since December 31, 1998, the
Buying Group Business has been conducted in the ordinary course, and
there has not been:
(a) any event, occurrence, state of circumstances, or facts or
change in the Purchaser or the Parent or in the Buying Group
Business that has had, or which the Purchaser or the Parent,
expect to have, either individually or in the aggregate, a
Material Adverse Effect;
(b) (i) any change in any Liabilities of the Purchaser or the
Parent that has had, or which the Purchaser or the Parent
expect to have, a Material Adverse Effect or (ii) any
incurrence, assumption or guarantee of any indebtedness for
borrowed money by the Purchaser or the Parent in connection
with the Buying Group Business or otherwise;
(c) any (i) payments by the Purchaser or Parent in respect of any
indebtedness of the Purchaser or Parent for borrowed money or
in satisfaction of any Liabilities of the Purchaser or Parent
related to the Buying Group Business, other than in the
ordinary course of business or the guarantee by the Purchaser
or the Parent of any of the indebtedness of any other Person
or (ii) creation, assumption or sufferance of (whether by
action or omission) the existence of any Lien on any assets
reflected on the Parent's Balance Sheet, other than Buying
Group Permitted Liens;
(d) any transaction or commitment made, or any Contract entered
into, by the Buying Group, any waiver, amendment, termination
or cancellation of any Contract by the Buying Group, or any
relinquishment of any rights thereunder by the Buying Group or
of any other right or debt owed to the Buying Group, other
than, in each such case, actions taken in the ordinary course
of business consistent with past practice;
(e) any (i) grant of any severance, continuation or termination
pay to any director, officer, stockholder or employee of the
Buying Group or any Affiliate of the Buying Group, (ii)
entering into of any employment, deferred compensation or
other similar agreement (or any amendment to any such existing
agreement) with any director, officer, stockholder or employee
of the Buying Group or any Affiliate of the Buying Group,
(iii) increase in benefits payable or potentially payable
under any severance, continuation or termination pay policies
or employment agreements with any director, officer,
stockholder or employee of the Buying Group or any Affiliate
of the Buying Group, (iv) increase in compensation, bonus or
other benefits payable or potentially payable to directors,
officers, stockholders or employees of the Buying Group or any
Affiliate of the Buying Group, (v) change in the terms of any
bonus, pension, insurance, health or other benefit plan of the
Buying Group or (vi) representation of the Buying Group to any
employee or former employee of the Buying Group that the
Buying Group promised to continue any benefit plan after the
Closing Date,
(f) any change by the Buying Group in its accounting principles,
methods or practices or in the manner it keeps its books and
records;
(g) any distribution, dividend, bonus, management fee or other
payment by the Buying Group to any of their respective
officers, directors, stockholders or Affiliates of the Buying
Group or any of their respective Affiliates or Associates; and
(h) any (i) material single capital expenditure or commitment, or
any group of related capital expenditures or commitments by
either the Purchaser or the Parent or (ii) material sale,
assignment, transfer, lease or other disposition of or
agreement to sell, assign, transfer, lease or otherwise
dispose of any asset or property by either of the Purchaser or
the Parent other than in the ordinary course of business.
5.11 PROPERTIES; MATERIAL LEASES; TANGIBLE ASSETS. Neither the
Purchaser nor the Parent own or lease any real property or material
assets.
5.12 AFFILIATES. There are no contracts between either the Parent
or Purchaser and any of its shareholders, or any Affiliate or
Associate of any of its shareholders. There is no indebtedness of
either the Parent or the Purchaser to any of its shareholders, or to
any Affiliate or Associate of any of its shareholders.
5.13 LITIGATION. There is no proceeding pending or, to the
knowledge of the Buying Group, threatened against or affecting the
Buying Group or the Buying Group Business or that seeks to prevent,
enjoin, alter or delay the transactions contemplated by this
Agreement, and there is no existing order, judgment or decree of any
Governmental Authority naming either the Purchaser or the Parent as
an affected party which has not been paid or discharged in full.
5.14 MATERIAL CONTRACTS. The Buying Group is not party to any
Buying Group Contract other than as specified herein.
5.15 COMPLIANCE WITH APPLICABLE LAWS. The operation of the Buying
Group Business (i) has not violated or infringed, except for
violations or infringements that have been cured and the prior
existence of which could not, individually or in the aggregate,
reasonably be expected to have an adverse effect on either the
Purchaser or the Parent and (ii) does not in any material respect
violate or infringe any Applicable Law, the terms of any Permit or
any order, writ, injunction or decree of any Governmental Authority
including but not limited to, the 33 Act, the 34 Act, the Rules and
Regulations of the SEC, or the Securities Laws and Regulations of
any state. The Parent is not an investment company as defined in, or
otherwise subject to regulation under, the Investment Company Act of
1940. The Parent is required to file reports pursuant to Section
12(g) of the 34 Act and is now and as of the Closing Date will be
current in its filings.
5.16 BUYING GROUP EMPLOYMENT AGREEMENTS; AND EMPLOYEE BENEFITS.
5.16.1 There are no employment, consulting, severance pay,
continuation pay, termination pay, indemnification agreements,
collective agreements, employee benefit plans or other similar
agreements of any nature whatsoever affecting either the Purchaser
or the Parent.
5.16.2 The Buying Group and its Affiliates have complied and are
currently complying, in respect of all employees of the Buying Group
and its Affiliates, with all Applicable Laws respecting employment
and employment practices and the protection of the health and safety
of employees, except for such instances which are not, in the
aggregate, material.
5.17 INTELLECTUAL PROPERTY. The Buying Group has no interest in
any patent, patent application and invention, trademark, trade name,
trademark or trade name registration or application, copyright or
copyright registration or application for copyright registration.
5.18 TAX MATTERS.
5.18.1 Except as disclosed in the Parent's Financials, the Purchaser
and the Parent have prepared and filed all Tax Returns on time with
all appropriate Governmental Authorities which were required to be
filed on or prior to the Closing Date. Each such Tax Return was
correct and complete.
5.18.2 The Purchaser is not a registrant for the purposes of the
goods and services tax provided for under the Tax Act.
5.18.3 The Purchaser is a taxable Canadian Corporation, as
that term is defined in the Tax Act.
5.18.4 The Purchaser has paid all applicable sales and retail taxes
in the Province of Nova Scotia, and none of its tangible personal
property has been transferred at any time on a tax-exempt basis
under applicable legislation in the Province of Nova Scotia. The
foregoing is accurate, mutatis mutandis, with respect to all sales
or transfer Taxes imposed under comparable legislation of other
provinces.
5.18.5 The Purchaser has never acquired or had the use of any of its
assets from a Person (a "Related Person") with whom the Purchaser
was not dealing at arm's length, within the meaning of the Tax Act.
The Purchaser has never disposed of any asset to a Related Person
for proceeds less than the fair market value of that asset. The
Purchaser is not a party to or bound by any agreement with, is not
indebted to, and no amount is owing to the Purchaser by any Related
Person, not dealing at arm's length, within the meaning of the Tax
Act, with the Purchaser.
5.18.6 For the purposes of the Tax Act the Purchaser and the
Shareholders hereby covenant and agree to elect jointly under
Subsection 85(1) of the Tax Act, by completing and filing with the
Department of National Revenue the prescribed form T2057 within the
prescribed time for the purposes of the Tax Act with respect to the
sale by the Shareholders to the Purchaser of the Corporation Shares
and further agree to transfer the Corporation Shares at an agreed
amount equal to the adjusted cost base of the Corporation Shares to
the Shareholders for purposes of the Tax Act or such greater amount
determined by the Shareholders (the "Elected Amount").
5.18.7 If at any time after the Closing Date the
Shareholders determine that either:
(a) it is necessary or desirable to change the Elected Amount; or
(b) the Tax Act deems the Elected Amount to be an amount which is
different than the amount agreed upon between the Shareholder
and the Purchaser,
then the Shareholder and the Purchaser shall do all things
reasonably necessary to reflect such change including, for example,
filing an amended election pursuant to subsection 85(1) of the Tax Act.
5.19 ISSUANCE OF SHARES.
5.19.1 The issuance of the Parent Common Shares and the Parent
Preferred Shares by the Parent, and the terms and provisions of the
Parent Common Shares and the Parent Preferred Shares, will not
violate any provisions of the Parent's articles or bylaws or any
Applicable Law, nor will the voting rights attached to the Parent
Common Shares derogate from any rights under Applicable Law.
5.19.2 The issuance of the Exchangeable Non-Voting Shares by the
Purchaser, and the terms and provisions of the Exchangeable
Non-Voting Shares, will not violate any provisions of the
Purchaser's articles or bylaws or any Applicable Law.
5.20 NASD STATUS. The Parent warrants that the parent
has not made an application to the National Association of
Securities Dealer for an unpriced quotation of its common shares,
including the Parent Common Shares, on the over-the-counter bulletin
board in the United States.
5.21 FULL DISCLOSURE. The information contained in the documents,
certificates and written statements (including this Agreement and
the schedules and exhibits hereto) furnished to the Shareholders by
or on behalf of the Buying Group with respect to each of the
Purchaser and the Parent (including the Buying Group Business and
the respective results of operations, financial condition and
prospects of the Purchaser and the Parent) for use in connection
with this Agreement or the transactions contemplated by this
Agreement is true and complete in all material respects and does
not, to the best of the knowledge of each Shareholder after
conducting an inquiry which a reasonably prudent person would make
under the circumstances, omit to state any material fact necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. There is
no fact known to the Purchaser or the Parent or any Shareholder that
has not been disclosed to the Shareholders by the Buying Group in
writing that has had a Material Adverse Effect on or, so far as the
Buying Group can now foresee, could be reasonably likely to have a
Material Adverse Effect on the Buying Group (including the Buying
Group Business and the respective results of operations, financial
condition or prospects of the Buying Group).
ARTICLE VI: COVENANTS OF THE CORPORATION AND SHAREHOLDERS
6.01 CONDUCT OF THE BUSINESS. During the Interim Period, other
than with the express written approval of the Purchaser, the
Corporation shall conduct the Corporation Business in the ordinary
course consistent with past practice and shall use its best efforts
to preserve intact the organization, relationships with third
parties and goodwill of the Corporation and keep available the
services of the present officers, employees, agents and other
personnel of the Corporation Business.
6.01.1 Without limiting in any way the importance of the foregoing,
during the Interim Period, other than with the express written
approval of the Purchaser, the Corporation shall not, and each
Shareholder shall not cause the Corporation to:
(a) adopt any material change in any method of accounting or
accounting practice used by the Corporation other than by
reason of a concurrent change in generally accepted accounting
principles;
(b) amend its articles or bylaws;
(c) sell, mortgage, pledge or otherwise dispose of any substantial
assets or properties of the Corporation;
(d) declare, set aside or pay any management fee or dividend or
make any other distribution with respect to the capital stock
of the Corporation or otherwise make a distribution or payment
to any Shareholder;
(e) amalgamate, merge or consolidate with or agree to amalgamate,
merge or consolidate with, or purchase or agree to purchase
all or substantially all of the assets of, or otherwise
acquire, any corporation, partnership or other business
organization or division thereof;
(f) authorize for issuance, issue, sell or deliver any additional
shares of its capital stock of any class or any securities or
obligations convertible into shares of its capital stock of
any class or commit to doing any of the foregoing;
(g) split, combine or reclassify any shares of the capital stock
of any class of the Corporation or redeem or otherwise
acquire, directly or indirectly, any shares of such capital
stock;
(h) incur or agree to incur any debt or guarantee any debt for
borrowed money, including any debt to any Shareholder, or to
any Affiliate or Associate of any Shareholder, except debt
incurred in the ordinary course of business consistent with
past practice;
(i) make any loan, advance or capital contribution to or
investment in any person other than loans, advances and
capital contributions to or investments in joint ventures or
other similar arrangements in which the Corporation has an
equity interest in the ordinary course of business and travel
advances made in the ordinary course of business by the
Corporation to its employees to meet business expenses
expected to be incurred by such employees;
(j) enter into any settlement with respect to any Proceeding or
consent to any order, decree or judgment relating to or
arising out of any such Proceeding;
(k) take any action to terminate, dismiss or cause the retirement
of any key employee of the Corporation;
(l) fail in any material respect to comply with any Applicable
Laws; or
(m) make, or make any commitments for, capital expenditures
exceeding $25,000 for any individual commitment or $100,000
for all such commitments taken in the aggregate.
6.01.2 During the Interim Period, other than with the express
written approval of the Purchaser, the Corporation shall:
(a) file all Canadian, United States, foreign, federal, state,
provincial and local Tax Returns required to be filed and make
timely payment of all applicable Taxes when due;
(b) promptly notify the Purchaser in writing of any action or
circumstance that results in, or could reasonably be expected
to result in, a Material Adverse Effect or the occurrence of
any breach by the Corporation or any Shareholder of any
representation or warranty, or any covenant or agreement
contained in this Agreement; and
(c) promptly notify the Purchaser in writing of the commencement
of any proceeding or the threat thereof by or against the
Corporation or any Shareholder.
6.02 MAINTENANCE OF CORPORATION INSURANCE POLICIES. On and after
the Closing Date, the Corporation shall not take or fail to take any
action if such action or inaction would adversely affect the
applicability of any insurance in effect on the date hereof that
covers all or any material part of the assets of the Corporation or
the Business.
6.03 TAX ELECTION. The Corporation shall not file an election
pursuant to subsection 256(9) of the Income Tax Act (Canada) or any
equivalent provincial provision.
ARTICLE VII: COVENANTS OF THE BUYING GROUP
7.01 APPOINTMENT OF DIRECTORS AND OFFICERS. At Closing, the
following persons will be appointed officers and directors of the
Parent so that the directors and officers of the Parent will be:
NAME POSITION
▇▇▇▇▇ ▇▇▇▇▇▇▇ Director, Chairman and Chief
Executive Officer
▇▇▇▇ ▇▇▇▇▇▇ Director, President
and Chief Executive
Officer
▇▇▇▇▇ ▇▇▇▇▇▇▇ Director, Vice-President and
Chief Technology Officer
▇▇▇▇ ▇▇▇▇ Vice President
▇▇▇▇▇ ▇▇▇▇▇ Chief Administration Officer
and Secretary
7.02 CONDUCT OF BUSINESS. During the Interim Period, the Buying
Group will conduct the Buying Group Business in the ordinary course
consistent with past practice and shall use its best efforts to
preserve intact the organization, relationships with third parties
and goodwill of the Buying Group and keep available the services of
the present officers, directors, employees, agents and other
personnel of the Buying Group Business; and without limiting in any
way the importance of the foregoing, the Buying Group shall not
undertake any of those matters referred to in sections 6.01.1 and
6.01.2, and all such clauses thereof shall apply mutatis mutandis to
the Buying Group.
7.03 PRIORITY. Notwithstanding any term of the Purchaser's bylaws,
memorandum and articles to the contrary, the terms and provisions of
this Agreement and the Exchange and Voting Agreement shall prevail
such that the directors of the Purchaser will only authorize the
exchange of the Exchangeable Non-Voting Shares for shares in the
Parent Common Shares in accordance with the terms of the Exchange
and Voting Agreement.
ARTICLE VIII: ACKNOWLEDGMENTS AND COVENANTS OF ALL PARTIES
8.01 FURTHER ASSURANCES. Each party hereto agrees to execute and
deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be reasonably
necessary or desirable (including obtaining all required consents)
in order to evidence the consummation or implementation of the
transactions provided for under this Agreement.
8.02 CERTAIN FILINGS. The parties hereto shall cooperate with one
another in determining whether any action by or in respect of, or
filing with, any Governmental Authority is required or reasonably
appropriate, or any action, consent, approval or waiver from any
party to any Contract is required or reasonably appropriate, in
connection with the consummation of the transactions contemplated by
this Agreement. Subject to the terms and conditions of this
Agreement, in taking such actions or making any such filings, the
parties hereto shall furnish information required in connection
therewith and seek timely to obtain any such actions, consents,
approvals or waivers.
8.03 REGISTRATION. All parties acknowledge and agree that the
Parent is a reporting issuer in the United States, and all of the
Parent Common Shares has been registered under the 33 Act; and all
parties further acknowledge and agree that neither the Parent nor
the Purchaser is a reporting issuer in any province of Canada, and
the Exchangeable Non-Voting Shares, Parent Common Shares and Parent
Preferred Shares will be subject to such resale restrictions as
imposed by the Applicable Law of the jurisdiction in which a
Shareholder is resident
8.04 FORM SB-2. As soon as practicable after the Closing the
Parent will file a Form SB-2 registration statement and related
documents (the "Registration Documents") with the SEC which, upon
the effective date of the registration statement which is part of
the Registration Documents, will register certain shares of the
Parent, as determined by the Corporation.
ARTICLE IX: CONDITIONS TO CLOSING
9.01 CONDITIONS TO OBLIGATION OF THE BUYING GROUP. The obligations
of the Buying Group to consummate the Closing are subject to the
satisfaction of each of the following conditions:
(a) (i) the Corporation and each Shareholder shall have performed
and satisfied each of their respective obligations hereunder
required to be performed and satisfied by them on or prior to
the Closing Date, (ii) each of the representations and
warranties of the Corporation and each Shareholder contained
herein shall have been true and correct and contained no
misstatement or omission that would make any such
representation or warranty misleading when made and shall be
true and correct and contain no misstatement or omission that
would make any such representation or warranty misleading at
and as of the Closing with the same force and effect as if
made as of the Closing, and (iii) the Buying Group shall have
received certificates signed by each Shareholder and a duly
authorized executive officer of the Corporation to the
foregoing effect and to the effect that the conditions
specified within this Section 9.01(a) have been satisfied.
(b) All Required Consents for the transactions contemplated by
this Agreement shall have been obtained without the imposition
of any conditions that are or would become applicable to the
Corporation, the Business, the Corporation Shares or the
Buying Group (or any of its Affiliates or Associates) after
the Closing that would be materially burdensome upon the
Corporation, the Business, the Corporation Shares or the
Buying Group (or any of its Affiliates or Associates) or their
respective businesses substantially as such businesses have
been conducted prior to the Closing Date or as said
businesses, as of the date hereof, would be reasonably
expected to be conducted after the Closing Date. All such
approvals shall be in effect, and no proceedings shall have
been instituted or threatened by any Governmental Authority or
other Person with respect thereto as to which there is a
material risk of a determination that would terminate the
effectiveness of, or otherwise materially and adversely modify
the terms of, any such approval; all applicable waiting
periods with respect to such approvals shall have expired; and
all conditions and requirements prescribed by Applicable Law
or by such approvals to be satisfied on or prior to the
Closing Date shall have been satisfied to the extent necessary
such that all such approvals are, and will remain, in full
force and effect assuming continued compliance with the terms
thereof after the Closing.
(c) The transactions contemplated by this Agreement and the
consummation of the Closing shall not violate any Applicable
Law. The operation of the Business shall not have violated or
infringed, or be in violation or infringement of any
Applicable Law or any order, writ, injunction or decree of any
Governmental Authority, where such violations and
infringements, individually or in aggregate, have resulted in,
or could reasonably be expected to result in a Material
Adverse Effect.
(d) Since the date hereof, there shall not have been any event,
occurrence, development or state of circumstances or facts or
change in the Corporation or the Corporation Business,
including any damage, destruction or other casualty loss
affecting the Corporation or the Corporation Business that has
had or that may be reasonably expected to have, either alone
or together with all such events, occurrences, developments,
states of circumstances or facts or changes, a Material
Adverse Effect on the Corporation.
9.02 CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS. The
obligations of each Shareholder to consummate the Closing are
subject to the satisfaction of each of the following conditions:
(a) (i) the Buying Group shall have performed and satisfied each
of its obligations hereunder required to be performed and
satisfied by it on or prior to the Closing Date; (ii) each of
the representations and warranties of the Buying Group
contained herein shall have been true and correct and
contained no misstatement or omission that would make any such
representation or warranty misleading when made and shall be
true and correct and contain no misstatement or omission that
would make any such representation or warranty misleading at
and as of the Closing with the same force and effect as if
made as of the Closing and (iii) each Shareholder shall have
received a certificate signed by a duly authorized executive
officer of the Buying Group to the foregoing effect and to the
effect that the conditions specified within this Section
9.02(a) have been satisfied.
(b) All Required Consents for the transactions contemplated by
this Agreement shall have been obtained without the imposition
of any conditions that are or would become applicable to any
Shareholder (or any of their respective Affiliates or
Associates) after the Closing that would be materially
burdensome upon any such Person. All such approvals shall be
in effect, and no Proceedings shall have been instituted or
threatened by any Governmental Authority with respect thereto
as to which there is a material risk of a determination that
would terminate the effectiveness of, or otherwise materially
and adversely modify the terms of, any such approval. All
applicable waiting periods shall have expired, and all
conditions and requirements such approvals to be satisfied on
or prior to the Closing extent necessary such that all such
approvals are, and will remain, in full force and effect
assuming continued compliance with the terms thereof after the
Closing.
(c) The transactions contemplated by this Agreement and the
consummation of the Closing shall not violate any Applicable
Law. No temporary restraining order, preliminary or permanent
injunction, cease and desist order or other order issued by
any court of competent jurisdiction or any competent
Governmental Authority or any other legal restraint or
prohibition preventing the transfer and exchange contemplated
hereby or the consummation of the Closing, or imposing Damages
in respect thereto, shall be in effect, and there shall be no
pending actions or proceedings by any Governmental Authority
(or determinations by any Governmental Authority) or by any
other Person challenging or seeking to materially restrict or
prohibit the transfer and exchange contemplated hereby or the
consummation of the Closing.
(d) Since the date hereof, there shall not have been any event,
occurrence, development or state of circumstances or facts or
change in the Buying Group or the Buying Group Business,
including any damage, destruction or other casualty loss
affecting the Buying Group or the Buying Group Business that
has had or that may be reasonably expected to have, either
alone or together with all such events, occurrences,
developments, states of circumstances or facts or changes, a
Material Adverse Effect on the Buying Group.
(e) Since the date hereof, there shall not have been any:
i) change in the capital structure of either the
Purchaser or the Parent, other than as to effect the
creation or issuance of the Exchangeable Non-Voting
Shares or the Parent Common Shares as contemplated
herein, or to effect the rights, restrictions,
privileges and terms of the Exchangeable Non-Voting
Shares or Parent Common Shares in accordance with
the terms hereof; or
ii) any actions, investigations, inquiries or
proceedings commenced or continued against either
the Parent or the Purchaser, or their respective
officers, directors, promoters, representatives,
agents or their respective businesses by any
securities regulatory authority, tribunal or body
having jurisdiction.
(f) The Parent's Board of Directors, by proper and sufficient
vote, shall have approved this Agreement, the Exchange and
Voting Agreement and the Support Agreement, and the
transactions contemplated hereby.
(g) The Parent shall have completed the cancellation of all but
150,000 shares of the Parent Common Stock;
(h) The Parent and the Purchaser will have entered into the
Exchange and Voting Agreement and the Supporting Agreement.
ARTICLE X: INDEMNIFICATION
10.01 AGREEMENT TO INDEMNIFY.
10.01.1 Each of the Purchaser and the Parent, and their
respective Affiliates, Associates, officers, directors,
shareholders, representatives and agents (collectively, the
"Purchaser Indemnitees") shall each be indemnified and held harmless
to the extent set forth in this Article X by each Shareholder in
respect of any and all damages incurred by any Purchaser Indemnitee
as a result of any inaccuracy or misrepresentation in or breach of
any representation or warranty made in this Agreement by such
Shareholder, provided, however, that each Shareholder shall have no
obligation to indemnify the Purchaser Indemnitees with respect to
damages incurred by any Purchaser Indemnitee as a result of any
inaccuracy or misrepresentation in or breach of any representation
or warranty made in this Agreement by any other Shareholder and
further a Shareholder shall have no such obligation to indemnify a
Purchaser Indemnitee hereunder unless, and to the extent, the
aggregate of all damages incurred by the Purchaser Indemnities for
all items covered by this Section 10.01(1) shall exceed $1,000 in
the aggregate. Notwithstanding the foregoing, no Shareholder shall
have any obligation to indemnify the Purchaser Indemnitees in an
amount that exceeds the Purchase Price paid to Shareholder.
10.01.2 Each of the Purchaser Indemnitees shall be
indemnified and held harmless to the extent set forth in this
Article X by the Corporation in respect of any and all damages
incurred by any Purchaser Indemnitee as a result of any inaccuracy
or misrepresentation in or breach of any representation, warranty,
covenant or agreement made in this Agreement by the Corporation.
10.01.3 Each Shareholder and their respective Affiliates and
Associates and each officer, director, shareholder, employer,
representative and agent of any of the foregoing (collectively, the
"Shareholder Indemnitees") shall each be indemnified and held
harmless to the extent set forth in this Article X by the Purchaser
and Parent in respect of any and all damages incurred by any
Shareholder Indemnitee as a result of any inaccuracy or
misrepresentation in or breach of any representation, warranty,
covenant or agreement made by the Parent or the Purchaser in this
Agreement.
10.02 SURVIVAL OF REPRESENTATION, WARRANTIES AND COVENANTS. Except
as hereinafter provided in this Section 10.02, all representations,
warranties, covenants, agreements and obligations of each
Indemnifying Party contained herein and all claims of any Purchaser
Indemnitee or Shareholder Indemnitee in respect of any breach of any
representation, warranty, covenant, agreement or obligation of any
Indemnifying Party contained in this Agreement, shall survive the
Closing and shall expire one year following the Closing Date.
ARTICLE XI: MISCELLANEOUS
11.01 NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given (i) if personally delivered, when so delivered, (ii) if
mailed, two Business Days after having been sent by registered or
certified mail, return receipt requested, postage prepaid and
addressed to the intended recipient as set forth below, (iii) if
given by facsimile or telecopier, once such notice or other
communication is transmitted to the facsimile or telecopier number
specified below and the appropriate answer back or telephonic
confirmation is received, provided that such notice or other
communication is promptly thereafter mailed in accordance with the
provisions of clause (ii) above or (iv) if sent through an overnight
delivery service in circumstances under which such service
guarantees next day delivery, the day following being so sent:
If to the Corporation: Suite 1405 - ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
If to the Purchaser: Suite 1405 - ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
If to the Parent: ▇▇▇▇ - ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
If to a Shareholder: Suite 1405 - 1959 ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Any party may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary
mail or electronic mail), but no such notice, request, demand, claim
or other communication shall be deemed to have been duly given
unless and until it actually is received by the individual for whom
it is intended. Any party may change the address to which notices,
requests, demands, claims and other communications hereunder are to
be delivered by giving the other parties notice in the manner herein
set forth.
11.02 AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by all parties hereto, or
in the case of a waiver, by the party against whom the waiver
is to be effective.
(b) No waiver by a party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional
or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of
any prior or subsequent occurrence. No failure or delay by a
party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies
provided by law.
11.03 EXPENSES. All costs and expenses incurred in connection
with this Agreement and enclosing and carrying out the transactions
provided for herein shall be paid by the party incurring such cost
or expense. This Section shall survive the termination of this
Agreement.
11.04 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and enure to the benefit, of the parties hereto and their respective
heirs, executors, administrators, legal representatives, successors
and permitted assigns. No party hereto may assign either this
Agreement or any of its rights, interests or obligations hereunder
without the prior written approval of each other party, which
approval shall not be unreasonably withheld.
11.05 GOVERNING LAW. This Agreement shall be governed by, and
interpreted and enforced in accordance with, the laws in force in
the Province of Nova Scotia and the laws of Canada applicable
therein (excluding any conflict of laws rule or principle that might
refer such interpretation to the laws of another jurisdiction). Each
party irrevocably submits to the jurisdiction of the courts of Nova
Scotia with respect to any matter arising hereunder or related hereto.
11.06 COUNTERPARTS; EFFECTIVENESS. This Agreement and the
documents relating to the transactions contemplated by this
Agreement may be signed in any number of counterparts and the
signatures delivered by telecopy, each of which shall be deemed to
be an original, with the same effect as if the signatures thereto
were upon the same instrument and delivered in person. This
Agreement and such documents shall become effective when each party
thereto shall have received a counterpart thereof signed by the
other parties thereto. In the case of delivery by telecopy by any
party, that party shall forthwith deliver a manually executed
original to each of the other parties.
11.07 ENTIRE AGREEMENT. This Agreement (including the Schedules
referred to herein, which are hereby incorporated by reference)
constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements,
understandings and negotiations, both written and oral, between the
parties with respect to the subject matter of this Agreement.
Neither this Agreement nor any provision hereof is intended to
confer upon any Person other than the parties hereto any rights or
remedies hereunder.
11.08 CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or
interpretation hereof. All references to an Article or Section
include all subparts thereof.
11.09 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be
held by a court of competent jurisdiction to be invalid,
unenforceable or void, the remainder of this Agreement and such
provisions as applied to other Persons, places and circumstances
shall remain in full force and effect only if, after excluding the
portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby
in substantially the same manner as originally set forth at the
later of the date this Agreement was executed or last amended.
11.10 CONSTRUCTION. The parties hereto intend that each
representation, warranty, and covenant contained herein shall have
independent significance. If any party has breached any
representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation, warranty
or covenant relating to the same subject matter (regardless of the
relative levels of specificity) that the party has not breached
shall not detract from or mitigate the fact that the party is in
breach of the first representation, warranty or covenant.
11.11 MEANING OF INCLUDE AND INCLUDING. Whenever in this Agreement
the word "include" or "including" is used, it shall be deemed
to mean "include, without limitation" or "including without
limitation", as the case may be, and the language following
"include" or "including" shall not be deemed to set forth an
exhaustive list.
11.12 CUMULATIVE REMEDIES. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.13 THIRD PARTY BENEFICIARIES. Other than Indemnitees under
Article X hereof who are not parties to this Agreement, no provision
of this Agreement shall create any third party beneficiary rights in
any Person, including any employee or former employee of the
Corporation or any Affiliate or Associate thereof (including any
beneficiary or dependent thereof).
11.14 TRANSMISSION BY FACSIMILE. The parties hereto agree that this
Agreement may be transmitted by facsimile or such similar device and
that the reproduction of signatures by facsimile or such similar
device will be treated as binding as if originals and each party
hereto undertakes to provide each and every other party hereto with
a copy of the Agreement bearing original signatures forthwith upon
demand.
11.15 FEES AND COMMISSIONS. Except as described in this Article
11.15, no broker, finder or other person or entity is entitled to
any fee or commission from the Buying Group or the Corporation for
services rendered on behalf of the Buying Group or the Corporation
in connection with the transactions contemplated by this Agreement.
As compensation for its services in initiating this transaction the
Parent agrees to issue to the TPG Capital Corporation ("TPG") a 5
year transferable warrant to acquire up to 50,000 registered shares
of the Parent's common stock at a price of $1.00 per share.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the
day and year first above written.
WARWICK ACQUISITION CORPORATION
Per: ___________________________
(Authorized Signatory)
▇▇▇▇▇▇▇.▇▇▇ INC.
Per: ___________________________
(Authorized Signatory)
THINWEB SOFTWARE, INC.
Per: ___________________________
(Authorized Signatory)
BUTTERNUT CAPITAL LIMITED
Per: ___________________________
(Authorized Signatory)
INTERNATIONAL SHAREHOLDINGS CORP.
Per: ___________________________
(Authorized Signatory)
SEISMIC INVESTMENTS LTD.
Per: ___________________________
(Authorized Signatory)
AMERY ASSOCIATES INC.
Per: ___________________________
(Authorized Signatory)
▇▇▇▇▇▇ EQUITY LIMITED
Per: ___________________________
(Authorized Signatory)
ANTIGHONISH LIMITED
Per: ___________________________
(Authorized Signatory)
STRATHGLEN CAPITAL LIMITED
Per: ___________________________
(Authorized Signatory)
GREENSTED EQUITIES LIMITED
Per: ___________________________
(Authorized Signatory)
ARRENDADORA SOLARSA S.A.
Per: ___________________________
(Authorized Signatory)
TRANSATLANTIC CO., S.A.
Per: ___________________________
(Authorized Signatory)
CHEETAH SYSTEMS LTD.
Per: ___________________________
(Authorized Signatory)
SHAFTESBURY GLOBAL LIMITED
Per: ___________________________
(Authorized Signatory)
MIDLAND SHAREHOLDINGS LIMITED
Per: ___________________________
(Authorized Signatory)
▇. ▇▇▇▇▇▇▇ FAMILY TRUST
Per: ___________________________
(Authorized Signatory)
▇. ▇▇▇▇ FAMILY TRUST
Per: ___________________________
(Authorized Signatory)
▇▇▇▇▇ FAMILY INVESTMENT TRUST
Per: ___________________________
(Authorized Signatory)
▇. ▇▇▇▇▇ FAMILY TRUST
Per: ___________________________
(Authorized Signatory)
▇. ▇▇▇▇▇▇▇ FAMILY TRUST
Per: ___________________________
(Authorized Signatory)
3024704 NOVA SCOTIA LIMITED
Per: ___________________________
(Authorized Signatory)
EVERGREEN (PRIVATE) TRUST COMPANY
Per: ___________________________
(Authorized Signatory)
SIGNED, SEALED AND DELIVERED
BY ▇▇▇▇▇▇ ▇▇▇▇ in the presence of:
___________________________
___________________________________ ▇▇▇▇▇▇ ▇▇▇▇
Signature of Witness
___________________________________
Name of Witness
___________________________________
Address of Witness
___________________________________
SIGNED, SEALED AND DELIVERED
BY ▇▇▇▇ ▇▇▇▇▇▇ in the presence of:
___________________________
___________________________________ ▇▇▇▇ ▇▇▇▇▇▇
Signature of Witness
___________________________________
Name of Witness
___________________________________
Address of Witness
___________________________________
SIGNED, SEALED AND DELIVERED
BY ▇▇▇▇ ▇▇▇▇▇▇ SR. in the presence of:
___________________________
___________________________________ ▇▇▇▇ ▇▇▇▇▇▇ SR.
Signature of Witness
___________________________________
Name of Witness
___________________________________
Address of Witness
___________________________________
SIGNED, SEALED AND DELIVERED
BY ▇▇▇▇ ▇▇▇▇▇▇ JR. in the presence of:
___________________________
___________________________________ ▇▇▇▇ ▇▇▇▇▇▇ JR.
Signature of Witness
___________________________________
Name of Witness
___________________________________
Address of Witness
___________________________________