SHARE AND CLAIM PURCHASE AGREEMENT
THIS SHARE AND CLAIM PURCHASE AGREEMENT (hereinafter referred to as this
"Agreement") is entered into as of this day of August 1998, by and between DACO
(USA), INC., a Nevada corporation (hereinafter referred to as "DACO-USA"), and
IWI HOLDING LIMITED and its wholly owned subsidiary IMPERIAL WORLD, INC.
(collectively referred to as "IMPERIAL" and individually referred to as
"LIMITED" and the "SHAREHOLDER," respectively) upon the following premises:
Premises
----------
WHEREAS, DACO-USA is a privately held corporation organized under the laws
of the State of Nevada, recently incorporated for the purpose of accomplishing
this purchase;
WHEREAS, DACO MANUFACTURING LIMITED ("DACO-CANADA") is a privately held
corporation organized under the laws of the province of Ontario, Canada and is
engaged in the manufacturing and distributing of moderately priced gold, silver
and costume jewelry in Canada;
WHEREAS, the SHAREHOLDER, a corporation organized under the laws of
Illinois, is the sole shareholder of DACO-CANADA;
WHEREAS, IMPERIAL and its affiliates have made certain advances and sold
inventory to DACO-CANADA, and have not received payment in full for such
advances and inventory (defined below as the "Intercompany Claim"); and
WHEREAS, pursuant to negotiations amongst management of the constituent
corporations, DACO-USA, and the SHAREHOLDER desire to transfer shares
representing one hundred (100%) percent (100.00%) of the issued and outstanding
stock of DACO-CANADA in exchange for one thousand dollars ($1,000) and a royalty
payment as detailed herein;
WHEREAS, DACO-USA desires to purchase and IMPERIAL wishes to sell the
Claims for the purchase price of four hundred ninety-nine thousand dollars
($499,000), and in accordance with the terms set forth herein;
Agreement
-----------
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter set forth and the mutual benefits to the parties to be
derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF IMPERIAL
As an inducement to, and to obtain the reliance of DACO-USA, except as set
forth on the DACO-CANADA Schedules (as hereinafter defined), IMPERIAL represents
and warrants as follows:
Section 1.01 Organization. DACO-CANADA is a corporation duly organized,
validly existing, and in good standing under the laws of Canada and has the
corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it is now being conducted, including qualification
to do business as a foreign corporation in the states or countries in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification, except where failure to be so qualified
would not have a material adverse effect on its business. Included in the
DACO-CANADA Schedules are complete and correct copies of the organizational
documents of DACO-CANADA and each of its subsidiaries, if any, as in effect on
the date hereof.
Section 1.02 Capitalization and Ownership. The authorized capitalization of
DACO-CANADA consists of an unlimited number of common stock, of which one share
is currently issued and outstanding. All issued and outstanding shares are
legally issued, fully paid, and non-assessable and not issued in violation of
the preemptive or other rights of any person. The Shareholder hereby represents
and warrants that it is the legal and beneficial owner of the only outstanding
share of DACO-CANADA common stock, which constitutes 100% of all of
DACO-CANADA'S outstanding shares, free and clear of any claims, charges,
equities, liens, security interests, and encumbrances whatsoever, including but
not limited to any marital or community property interest, and that it has full
right, power, and authority to transfer, assign, convey, and deliver its
DACO-CANADA shares; and delivery of such shares at the Closing will convey to
DACO-USA good and marketable title to such shares and clear of any claims,
charges, equities, liens, security interests and encumbrances whatsoever.
Section 1.03 Subsidiaries and Predecessor Corporations. DACO-CANADA does
not have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation, except as
disclosed in the DACO-CANADA Schedules. For purposes hereinafter, the term
"DACO-CANADA" also includes those subsidiaries, if any, set forth on the
DACO-CANADA Schedules.
Section 1.04 Financial Statements.
(a) Included in the DACO-CANADA Schedules are the audited balance
sheets of DACO-CANADA as of December 31, 1997 and December 31, 1996, and
the related audited statements of operations, stockholders' equity and cash
flows for the two fiscal years ended December 31, 1997 and December 31,
1996, together with the notes to such statements and the opinion of Ernst &
Young, LLP, independent certified public accountants, with respect thereto.
Also included in the DACO-CANADA schedules are the unaudited balance sheets
of DACO-CANADA as of June 30, 1998, and the related statements of
operations, and cash flows for the quarter ended June 30, 1998.
2
(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles. The DACO-CANADA balance
sheets present a true and fair view as of the dates of such balance sheets
of the financial condition of DACO-CANADA. DACO-CANADA did not have, as of
the dates of such balance sheets, except as and to the extent reflected or
reserved against therein, any liabilities or obligations (absolute or
contingent) which should be reflected in the balance sheets or the notes
thereto, prepared in accordance with generally accepted accounting
principles, and all assets reflected therein are properly reported and
present fairly the financial condition of the assets of DACO-CANADA in
accordance with generally accepted accounting principles.
(c) DACO-CANADA has no liabilities with respect to the payment of any
federal, state, county, local or other taxes (including any deficiencies,
interest or penalties), except for taxes accrued but not yet due and
payable.
(d) DACO-CANADA has filed all state, federal or local income and/or
franchise tax returns required to be filed by it from inception to the date
hereof. Each of such income tax returns reflects the taxes due for the
period covered thereby, except for amounts which, in the aggregate, are
immaterial.
(e) The books and records, financial and otherwise, of DACO-CANADA are
in all material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) All of DACO-CANADA's assets are reflected on its financial
statements, and, except as set forth in the DACO-CANADA Schedules or the
financial statements of DACO-CANADA or the notes thereto, DACO-CANADA has
no material liabilities, direct or indirect, matured or unmatured,
contingent or otherwise.
Section 1.05 Information. The information concerning DACO-CANADA set forth
in this Agreement and in the DACO-CANADA Schedules is complete and accurate in
all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading. In
addition, DACO-CANADA has fully disclosed in writing to DACO-USA (through this
Agreement or the DACO-CANADA Schedules) all information relating to matters
involving DACO-CANADA or its assets or its present or past operations or
activities which (i) indicated or may indicate, in the aggregate, the existence
of a greater than $5,000 liability or diminution in value, (ii) have led or may
lead to a competitive disadvantage on the part of DACO-CANADA or (iii) either
alone or in aggregation with other information covered by this Section,
otherwise have led or may lead to a material adverse effect on the transactions
contemplated herein or on DACO-CANADA, its assets, or its operations or
activities as presently conducted or as contemplated to be conducted after the
Closing Date, including, but not limited to, information relating to
governmental, employee, environmental, litigation and securities matters and
transactions with affiliates.
3
Section 1.06 Options or Warrants. Except as set forth in the DACO-CANADA
Schedules, there are no existing options, warrants, calls, or commitments of any
character relating to the authorized and unissued DACO-CANADA common stock,
except options, warrants, calls or commitments, if any, to which DACO-CANADA is
not a party and by which it is not bound.
Section 1.07 Absence of Certain Changes or Events. Except as set forth in
this Agreement or the DACO-CANADA Schedules, since December 31, 1997:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or condition of DACO-CANADA or
(ii) any damage, destruction, or loss to DACO-CANADA (whether or not
covered by insurance) materially and adversely affecting the business,
operations, properties, assets, or condition of DACO-CANADA;
(b) DACO-CANADA has not (i) amended its Articles of Incorporation or
By-Laws or applicable incorporation documents; (ii) declared or made, or
agreed to declare or make, any payment of dividends or distributions of any
assets of any kind whatsoever to stockholders or purchased or redeemed, or
agreed to purchase or redeem, any of its capital stock; (iii) waived any
rights of value which in the aggregate are outside of the ordinary course
of business or material considering the business of DACO-CANADA; (iv) made
any material change in its method of management, operation or accounting;
(v) entered into any other material transaction other than sales in the
ordinary course of its business; (vi) made any accrual or arrangement for
payment of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee; (vii)
increased the rate of compensation payable or to become payable by it to
any of its officers or directors or any of its salaried employees whose
monthly compensation exceeds $1,000; or (viii) made any increase in any
profit sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement made
to, for, or with its officers, directors, or employees;
(c) DACO-CANADA has not (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability
(absolute or contingent) except as disclosed herein and except liabilities
incurred in the ordinary course of business; (ii) paid or agreed to pay any
material obligations or liability (absolute or contingent) other than
current liabilities reflected in or shown on the most recent DACO-CANADA
balance sheet, and current liabilities incurred since that date in the
ordinary course of business and professional and other fees and expenses in
connection with the preparation of this Agreement and the consummation of
the transactions contemplated hereby; (iii) other than within the ordinary
course of business, sold or transferred, or agreed to sell or transfer, any
of its assets, properties, or rights (except assets, properties, or rights
not used or useful in its business which, in the aggregate have a value of
less than $1,000), or canceled, or agreed to cancel, any debts or claims
(except debts or claims which in the aggregate are of a value of less than
$1,000); (iv) other than in the ordinary course of business, made or
permitted any amendment or termination of any contract, agreement, or
license to which it is a party if such amendment or termination is
material, considering the business of DACO-CANADA; or (v) issued,
delivered, or agreed to issue or deliver any stock, bonds or other
corporate securities including debentures (whether authorized and unissued
or held as treasury stock); and (d) to the best knowledge of IMPERIAL,
DACO-CANADA has not become subject to any law or regulation which
materially and adversely affects, or in the future may adversely affect the
business, operations, properties, assets, or condition of DACO-CANADA.
4
Section 1.08 Title and Related Matters. DACO-CANADA has good and marketable
title to all of its properties, inventory, interests in properties, and assets,
real and personal, which are reflected in the most recent DACO-CANADA balance
sheet or acquired after that date (except properties, inventory, interests in
properties, and assets sold or otherwise disposed of since such date in the
ordinary course of business) free and clear of all liens, pledges, charges, or
encumbrances except (a) statutory liens or claims not yet delinquent; (b) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties; and (c) as described in the DACO-CANADA
Schedules. Except as set forth in the DACO-CANADA Schedules, DACO-CANADA owns,
free and clear of any liens, claims, encumbrances, royalty interests, or other
restrictions or limitations of any nature whatsoever, any and all products it is
currently manufacturing, including the underlying technology and data, and all
procedures, techniques, marketing plans, business plans, methods of management,
or other information utilized in connection with DACO-CANADA's business. Except
as set forth in the DACO-CANADA Schedules, no third party has any right to, and
DACO-CANADA has not received any notice of infringement of or conflict with
asserted rights of others with respect to any product, technology, data, trade
secrets, know-how, propriety techniques, trademarks, service marks, trade names,
or copyrights which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a materially adverse effect
on the business, operations, financial condition, income, or business prospects
of DACO-CANADA or any material portion of its properties, assets, or rights.
Section 1.09 Litigation and Proceedings. Except as set forth in the
DACO-CANADA Schedules, there are no actions, suits, proceedings, or
investigations pending or, to the knowledge of DACO-CANADA after reasonable
investigation, threatened by or against DACO-CANADA or affecting DACO-CANADA or
its properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind. IMPERIAL does not have any knowledge of any material default on its part
with respect to any judgment, order, injunction, decree, award, rule, or
regulation of any court, arbitrator, or governmental agency or instrumentality
or of any circumstances which, after reasonable investigation, would result in
the discovery of such a default.
Section 1.10 Contracts.
(a) Except as included or described in the DACO-CANADA Schedules,
there are no "material" contracts, agreements, franchises, license
agreements, debt instruments or other commitments to which DACO-CANADA is a
party or by which it or any of its assets, products, technology, or
properties are bound other than those incurred in the ordinary course of
business (as used in this Agreement, a "material" contract, agreement,
franchise, license agreement, debt instrument or commitment is one which
(i) will remain in effect for more than six (6) months after the date of
this Agreement or (ii) involves aggregate obligations of at least ten
thousand dollars ($10,000));
5
(b) All contracts, agreements, franchises, license agreements, and
other commitments to which DACO-CANADA is a party or by which its
properties are bound and which are material to the operations of
DACO-CANADA taken as a whole are valid and enforceable by DACO-CANADA in
all respects, except as limited by bankruptcy and insolvency laws and by
other laws affecting the rights of creditors generally;
(c) DACO-CANADA is not a party to or bound by, and the properties of
DACO-CANADA are not subject to any contract, agreement, other commitment or
instrument, any charter or other corporate restriction, or any judgment,
order, writ, injunction, decree, or award which materially and adversely
affects, the business operations, properties, assets, or condition of
DACO-CANADA; and
(d) Except as included or described in the DACO-CANADA Schedules or
reflected in the most recent DACO-CANADA balance sheet, DACO-CANADA is not
a party to any oral or written (i) contract for the employment of any
officer or employee which is not terminable on 30 days, or less notice;
(ii) profit sharing, bonus, deferred compensation, stock option, severance
pay, pension benefit or retirement plan, (iii) agreement, contract, or
indenture relating to the borrowing of money, (iv) guaranty of any
obligation, other than one on which DACO-CANADA is a primary obligor, for
the borrowing of money or otherwise, excluding endorsements made for
collection and other guaranties of obligations which, in the aggregate do
not exceed more than one year or providing for payments in excess of
$10,000 in the aggregate; (v) collective bargaining agreement; or (vi)
agreement with any present or former officer or director of DACO-CANADA.
Section 1.11 Material Contract Defaults. Except as provided in the
DACO-CANADA Schedules, DACO-CANADA is not in default in any material respect
under the terms of any outstanding contract, agreement, lease, or other
commitment which is material to the business, operations, properties, assets or
condition of DACO-CANADA and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which DACO-CANADA has not taken adequate steps to prevent such a
default from occurring.
Section 1.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which DACO-CANADA is a party or to which any of its
properties or operations are subject.
Section 1.13 Governmental Authorizations. Except as set forth in the
DACO-CANADA Schedules, DACO-CANADA has all licenses, franchises, permits, and
other governmental authorizations that are legally required to enable it to
conduct its business in all material respects as conducted on the date hereof.
6
Section 1.14 Compliance With Laws and Regulations. Except as set forth in
the DACO-CANADA Schedules, to the best of its knowledge DACO-CANADA has complied
with all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets, or condition of DACO-CANADA or except to the extent that noncompliance
would not result in the occurrence of any material liability for DACO-CANADA.
Section 1.15 Insurance. DACO-CANADA will maintain all of its current
policies of insurance (liability and casualty) during the term of this
Agreement.
Section 1.16 Approval of Agreement. The SHAREHOLDER has approved this
Agreement as evidenced by its signatures hereto; and the board of directors of
LIMITED has approved this Agreement, as evidenced by the corporate resolution
set forth in Schedule 1.16.
Section 1.17 Material Transactions or Affiliations. Set forth in the
DACO-CANADA Schedules is a description of every contract, agreement, or
arrangement between DACO-CANADA and any predecessor and any person who was at
the time of such contract, agreement, or arrangement an officer, director, or
person owning of record, or known by DACO-CANADA to own beneficially, 5% or more
of the issued and outstanding common stock of DACO-CANADA and which is to be
performed in whole or in part after the date hereof or which was entered into
not more than three years prior to the date hereof. Except as disclosed in the
DACO-CANADA Schedules or otherwise disclosed herein, no officer, director, or 5%
shareholder of DACO-CANADA has, or has had since inception of DACO-CANADA, any
known interest, direct or indirect, in any transaction with DACO-CANADA which
was material to the business of DACO-CANADA. There are no commitments by
DACO-CANADA, whether written or oral, to lend any funds, or to borrow any money
from, or enter into any other transaction with, any such affiliated person.
Section 1.18 Labor Relations. DACO-CANADA has not had work stoppage
resulting from labor problems. To the knowledge of IMPERIAL, no union or other
collective bargaining organization is organizing or attempting to organize any
employee of DACO-CANADA.
Section 1.19 Related Party Transactions. DACO-CANADA has purchased
inventory from IMPERIAL or an IMPERIAL subsidiary or affiliate (collectively
"Related Party"). All receivables due and owing as a result of these purchases
at June 30, 1998, and supplemented up to the date of Closing (the "Inventory
Receivables") are shown in Schedule 1.19, along with a description of all
inventory on hand, and on consignment, sold pursuant to the Inventory
Receivables (the "Returnable Inventory"). Additionally, Related Party has made
certain advances to DACO-CANADA relating to Imperial's purchase of DACO-CANADA
from the original shareholders. All advances due and owing at June 30, 1998, and
supplemented up to the date of Closing ("Advances") are shown in Schedule 1.19.
The Inventory Receivables and Advances amount to $980,376.69 and are
collectively referred to as the "Intercompany Claim". No other amounts are due
or owed to any Related Party from DACO-CANADA.
Section 1.20 Bank Accounts; Power of Attorney. Set forth in Schedule 1.20
is a true and complete list of (a) all accounts with banks, money market mutual
funds or securities or other financial institutions maintained by DACO-CANADA
within the past twelve (12) months, the account numbers thereof, and all persons
authorized to sign or act on behalf of DACO-CANADA, (b) all safe deposit boxes
and other similar custodial arrangements maintained by DACO-CANADA within the
past twelve (12) months, and (c) the names of all persons holding powers of
attorney from DACO-CANADA or who are otherwise authorized to act on behalf of
DACO-CANADA with respect to any matter, other than its officers and directors,
and a summary of the terms of such powers or authorizations.
7
Section 1.21 DACO-CANADA Schedules. IMPERIAL has delivered to DACO-USA the
following schedules, which are collectively referred to as the "DACO-CANADA
Schedules" and which consist of separate schedules dated as of the date of
execution of this Agreement, all certified by the chief executive officer of
DACO-CANADA as complete, true, and correct as of the date of this Agreement in
all material respects:
(a) Schedule 1.01 through Schedule 1.20 setting forth any exceptions,
information and copies of documents required to be disclosed in the
DACO-CANADA Schedules by Sections 1.01 through 1.20.
(b) a Schedule 1.21(b) containing a list indicating the name and
address of each shareholder of DACO-CANADA together with the number of
shares owned by him, her or it;
(c) a Schedule 1.21(c) containing a description of all real property
owned by DACO-CANADA, together with a description of every mortgage, deed
of trust, pledge, lien, agreement, encumbrance, claim, or equity interest
of any nature whatsoever in such real property;
(d) a Schedule 1.21(d) including copies of all licenses, permits, and
other governmental authorizations (or requests or applications therefor)
pursuant to which DACO-CANADA carries on or proposes to carry on its
business (except those which, in the aggregate, are immaterial to the
present or proposed business of DACO-CANADA);
(e) a Schedule 1.21(e) listing the accounts receivable and notes and
other obligations receivable of DACO-CANADA as of June 30, 1998, or
thereafter other than in the ordinary course of business of DACO-CANADA,
indicating the debtor and amount, and classifying the accounts to show in
reasonable detail the length of time, if any, overdue, and stating the
nature and amount of any refunds, set offs, reimbursements, discounts, or
other adjustments, which are in the aggregate material and due to or
claimed by such debtor; and
(f) a Schedule 1.21(f) listing the accounts payable and notes and
other obligations payable of DACO-CANADA as of June 30, 1998, or that arose
thereafter other than in the ordinary course of the business of
DACO-CANADA, indicating the creditor and amount, classifying the accounts
to show in reasonable detail the length of time, if any, overdue, and
stating the nature and amount of any refunds, set offs, reimbursements,
discounts, or other adjustments, which in the aggregate are material and
due to or claimed by DACO-CANADA respecting such obligations.
8
IMPERIAL shall cause the DACO-CANADA Schedules and the instruments and data
delivered to DACO-USA hereunder to be promptly updated after the date hereof up
to and including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by IMPERIAL. IMPERIAL shall
have until twelve hours prior to Closing to provide such schedules. If IMPERIAL
cannot or fails to do so, or if DACO-USA acting reasonably finds any such
schedules or updates provided after the date hereof to be unacceptable, DACO-USA
may terminate this Agreement prior to Closing, by giving written notice to
DACO-CANADA after the schedules or updates were due to be produced or were
provided.
Section 1.22 Valid Obligation. This Agreement and all agreements and other
documents executed by LIMITED and the SHAREHOLDER in connection herewith
constitute the valid and binding obligation of LIMITED and the SHAREHOLDER,
enforceable in accordance with its or their terms, except as may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and subject to the qualification that
the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF DACO-USA
As an inducement to, and to obtain the reliance of the IMPERIAL, except as
set forth in the DACO-USA Schedules (as hereinafter defined), DACO-USA
represents and warrants as follows:
Section 2.01 Organization. DACO-USA is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Nevada and
has the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets, to carry on its
business in all material respects as it is now being conducted, and except where
failure to be so qualified would not have a material adverse effect on its
business, there is no jurisdiction in which it is not qualified in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification. Included in the DACO-USA Schedules are
complete and correct copies of the Articles of Incorporation and By-Laws of
DACO-USA as in effect on the date hereof. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of DACO-USA's Articles of Incorporation or
By-Laws. DACO-USA has taken all action required by law, its Articles of
Incorporation, By-Laws, or otherwise to authorize the execution and delivery of
this Agreement, and DACO-USA has full power, authority, and legal right and has
taken all action required by law, its Articles of Incorporation, By-Laws, or
otherwise to consummate the transactions herein contemplated.
Section 2.02 Capitalization. DACO-USA's authorized capitalization consists
of 50,000,000 shares of common stock, par value $.001 of which 100 shares are
issued and outstanding and 1,000,000 shares of Preferred Stock, par value $.001,
none of which are issued and outstanding. All issued and outstanding shares are
or will be legally issued, fully paid, and non-assessable and not issued in
violation of the preemptive or other rights of any person.
9
Section 2.03 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
a default under, or terminate, accelerate or modify the terms of, any indenture,
mortgage, deed of trust, or other material agreement or instrument to which
DACO-USA is a party or to which any of its assets or operations are subject.
Section 2.04 Governmental Authorizations. No authorization, approval,
consent or order of, of registration, declaration or filing with, any court or
other governmental body is required in connection with the execution and
delivery by DACO-USA of this Agreement and the consummation by DACO-USA of the
transactions contemplated hereby.
Section 2.05 Approval of Agreement. The board of directors of DACO-USA has
authorized the execution and delivery of this Agreement by DACO-USA and has
approved this Agreement and the transactions contemplated hereby.
Section 2.06 Valid Obligation. This Agreement and all agreements and other
documents executed by DACO-USA in connection herewith constitute the valid and
binding obligation of DACO-USA, enforceable in accordance with its or their
terms, except as may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
ARTICLE III
PURCHASE AND SALE
Section 3.01 Purchase and Sale of Stock. On the terms and subject to the
conditions set forth in this Agreement, on the Closing Date (as defined in this
Article), the SHAREHOLDER shall assign, transfer and deliver to DACO-USA, free
of all liens, pledges, encumbrances, charges, restrictions or known claims of
any kind, nature, or description, the only outstanding share of DACO-CANADA
common stock (the "Purchased Shares") which shall constitute 100 percent (100%)
of the issued and outstanding shares of common stock of DACO-CANADA as of the
Closing. In exchange for the transfer of the Purchased Shares by the
SHAREHOLDER, DACO-USA shall pay the SHAREHOLDER a royalty as described below,
and shall pay the sum of one thousand dollars ($1,000), which has previously
been delivered to IMPERIAL, the adequacy and receipt of which is ackowledged by
IMPERIAL.
Section 3.02 Royalty. In addition to the consideration specified in Section
3.01, DACO-USA agrees to pay the SHAREHOLDER a royalty on the following terms
and subject to the following conditions:
a. for the year ended December 31, 1999 up to $50,000 (but limited to 25%
of DACO-CANADA'S net income) payable in a lump sum within 60 days after the
issuance of the audited financial statements of DACO-CANADA.
10
b. for the year ended December 31, 2000, up to $25,000 (but limited to 25%
of DACO-CANADA'S net income) payable in a lump sum within 60 days after the
issuance of the audited financial statements of DACO-CANADA.
Section 3.03 Purchase and Sale of Intercompany Claim. On the terms and
subject to the conditions set forth in this Agreement, on the Closing Date (as
defined in this Article), the IMPERIAL shall assign, transfer and deliver to
DACO-USA, free of all liens, pledges, encumbrances, charges, restrictions or
known claims of any kind, nature, or description, an assignment of the
Intercompany Claim representing an assignment of the Inventory Receivables and
the Advances, in substantially the same form as that attached hereto as Exhibit
A, incorporated herein, in consideration for the purchase price of four hundred
ninety-nine thousand dollars ($499,000) as follows: $499,000 previously
delivered to IMPERIAL, the adequacy and receipt of which is acknowledged by the
IMPERIAL.
Section 3.04 Cash Payment of Balance of Inventory Receivables. In addition
to the consideration specified in Section 3.04, DACO-USA agrees to pay to
IMPERIAL the Cash Payment defined in section 4.03 below.
Section 3.05 Non-competition Agreements. As further consideration for the
purchase and sale of the Purchased Shares and Intercompany Claim, IMPERIAL and
its affiliates agree to maintain all of DACOCANADA'S proprietary information in
confidence and to neither directly or indirectly compete with DACO-CANADA, or
solicit DACO-CANADA's customers, employees or agents, for a period of five years
following the Closing date, and shall execute a Confidentiality Agreement and
Covenant Not to Compete in substantially the same form as that attached hereto
as Exhibit B and incorporated herein.
Section 3.06 Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date") but not later than September 1, 1998. Such
Closing shall take place at a mutually agreeable time and place.
Section 3.07 Closing Events. At the Closing, DACO-USA and IMPERIAL shall
execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged,
and delivered) any and all certificates, opinions, financial statements,
schedules, agreements, resolutions, rulings or other instruments required by
this Agreement to be so delivered at or prior to the Closing, together with such
other items as may be reasonably requested by the parties hereto and their
respective legal counsel in order to effectuate or evidence the transactions
contemplated hereby.
Section 3.08 Termination.
(a) This Agreement may be terminated by the board of directors of
DACO-USA or by IMPERIAL at any time prior to the Closing Date if:
(i) there shall be any actual or threatened action or proceeding
before any court or any governmental body which shall seek to
restrain, prohibit, or invalidate the transactions contemplated by
this Agreement and which, in the judgement of such board of directors,
made in good faith and based upon the advice of its legal counsel,
makes it inadvisable to proceed with the purchase and sale
contemplated hereby; or
11
(ii) any of the transactions contemplated hereby are disapproved
by any regulatory authority whose approval is required to consummate
such transactions or in the judgement of such board of directors, made
in good faith, and upon advice of counsel, there is substantial
likelihood that any such approval will not be obtained or will be
obtained only on a condition or conditions which would be unduly
burdensome, making it inadvisable to proceed with the purchase and
sale.
(b) This Agreement may be terminated by the board of directors of
DACO-USA at any time prior to the Closing Date if:
(i) there shall have been any change after the date of the latest
balance sheet of DACO-CANADA in the assets, properties, business, or
financial condition of DACO-CANADA, which could have a materially
adverse effect on the financial statements of DACO-CANADA listed in
Section 1.04(a) taken as a whole, except any changes disclosed in the
DACO-CANADA Schedules;
(ii) the board of directors of DACO-USA determines in good faith
that one or more of DACO-USA's conditions to Closing has not occurred,
through no fault of DACO-USA.
(iii) DACO-USA takes the termination action specified in Section
1.21 as a result of DACO-CANADA Schedules or updates thereto which
DACO-USA finds unacceptable;
(c) This Agreement may be terminated by IMPERIAL at any time prior to
the Closing Date if:
(i) IMPERIAL determines in good faith that one or more of the
IMPERIAL's conditions to Closing has not occurred, through no fault of
the IMPERIAL;
In the event of termination pursuant to paragraphs (a), (b) or (c) of Section
3.08, or Section 1.21, no obligation, right or liability shall arise hereunder,
and each party shall bear all of the expenses incurred by it in connection with
the negotiation, drafting, and execution of this Agreement and the transactions
herein.
(d) This Agreement may be terminated by the board of directors of DACO-USA
at any time prior to the Closing Date if:
(i) IMPERIAL shall fail to comply in any material respect with any of
its covenants or agreements contained in this Agreement or if any of
the representations or warranties of IMPERIAL herein shall be
inaccurate in any material respect. If this Agreement is terminated
pursuant to this paragraph (d), this Agreement shall be of no further
force or effect, and no obligation, right or liability shall arise
hereunder, except that IMPERIAL shall bear its own costs as well as
the reasonable costs of DACO-USA in connection with the negotiation,
preparation, and execution of this Agreement.
12
(e) This Agreement may be terminated by IMPERIAL at any time prior to
the Closing Date if:
(i) DACO-USA shall fail to comply in any material respect with
any of its covenants or agreements contained in this Agreement or if
any of the representations or warranties of DACO-USA contained herein
shall be inaccurate in any material respect.
If this Agreement is terminated pursuant to this paragraph (e) of Section 3.08,
this Agreement shall be of no further force or effect, and no obligation, right
or liability shall arise hereunder, except that DACO-USA shall bear its own
costs as well as the reasonable costs of IMPERIAL incurred in connection with
the negotiation, preparation and execution of this Agreement.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. The SHAREHOLDER will afford
the officers and authorized representatives of DACO-USA full access to the
properties, books and records of DACO-CANADA in order that it may have a full
opportunity to make such reasonable investigation as it shall desire into the
affairs of DACO-CANADA, and the SHAREHOLDER will furnish DACO-USA such
additional financial and operating data and other information as to the business
and properties of DACO-CANADA, as DACO-USA may reasonably request. Without
limiting the foregoing, as soon as practicable after the end of each fiscal
quarter (and in any event through the last fiscal quarter prior to the Closing
Date), the SHAREHOLDER shall provide DACO-USA with quarterly internally prepared
and unaudited financial statements.
Section 4.02 Delivery of Books and Records. At the Closing, the SHAREHOLDER
shall deliver to DACO-USA the originals of the corporate minute books, books of
account, contracts, records, and all other books or documents of DACO-CANADA now
in the possession of DACO-CANADA or its representatives.
Section 4.03 Return of Inventory. For a period of 30 days following
Closing, DACO-USA shall return to IMPERIAL, all Returnable Inventory in
DACO-CANADA'S possession. In the event that not all of the Returnable Inventory
can be returned within 30 days of the date of Closing, DACO-USA shall pay
IMPERIAL for that portion of the Returnable Inventory which was not returned in
cash within 45 days of Closing (the "Cash Payment").
13
Section 4.04 Exclusive Dealing Rights. Until 5:00 P.M. USA Central Time on
September 1, 1998, in recognition of the substantial time and effort which
DACO-USA has spent and will continue to spend in investigating DACO-CANADA and
its business and in addressing the matters related to the transactions
contemplated herein, each of which may preempt or delay other management
activities, neither the SHAREHOLDER, nor any of its representatives or agents
will directly or indirectly solicit or initiate any discussions or negotiations
with, or, except where required by fiduciary obligations under applicable law as
advised by counsel, participate in any negotiations with or provide any
information to or otherwise cooperate in any other way with, or facilitate or
encourage any effort or attempt by, any corporation, partnership, person or
other entity or group (other than DACO-USA and its directors, officers,
employees, representatives and agents) concerning any merger, sale of
substantial assets, sale of shares of capital stock, (including without
limitation, any public or private offering of the common stock of DACO-CANADA)
or similar transactions involving DACO-CANADA (all such transactions being
referred to as "DACO-CANADA Acquisition Transactions"). If DACO-CANADA receives
any proposal with respect to a DACO-CANADA Acquisition Transaction, the
SHAREHOLDER will immediately communicate to DACO-USA the fact that it has
received such proposal and the principal terms thereof.
Section 4.05 Actions Prior to Closing.
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the DACO-CANADA Schedules or as permitted or
contemplated by this Agreement, IMPERIAL will cause DACO-CANADA to:
(i) carry on its business in substantially the same manner as it
has heretofore;
(ii) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations
under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(v) use its best efforts to maintain and preserve its business
organization intact, to retain its key employees, and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and
all rules, regulations, and orders imposed by federal or state
governmental authorities.
14
(b) From and after the date of this Agreement until the Closing Date,
IMPERIAL will not allow DACO-CANADA to:
(i) make any changes in its articles or certificate of
incorporation or bylaws;
(ii) take any action described in Section 1.07 except as
permitted therein or as disclosed in the DACO-CANADA schedules);
(iii) enter into or amend any contract, agreement, or other
instrument of any of the types described in the DACO-CANADA schedules,
except that it may enter into or amend any contract, agreement, or
other instrument in the ordinary course of business involving the sale
of goods or services; or
(iv) sell any assets or discontinue any operations, sell any
shares of capital stock (other than the sale of securities involving
DACO-USA) or conduct any similar transactions other than in the
ordinary course of business (other than transactions contemplated
herein or in the DACO-CANADA Schedules).
Section 4.06 Indemnification.
(a) IMPERIAL hereby agrees to indemnify DACO-USA and each of the
officers, agents and directors of DACO-USA as of the date of execution of
this Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any substantial or material
inaccuracy appearing in or misrepresentations made under Article I of this
Agreement. The indemnification provided for in this paragraph shall survive
the Closing and consummation of the transactions contemplated hereby and
termination of this Agreement.
(b) DACO-USA hereby agrees to indemnify IMPERIAL and each of its
officers, agents, and directors as of the date of execution of this
Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any inaccuracy appearing in or
misrepresentation made under Article II of this Agreement. The
indemnification provided for in this paragraph shall survive the Closing
and consummation of the transactions contemplated hereby and termination of
this Agreement.
(c) No indemnity obligation shall arise under this Section 4.06 in
relation to any matters to which disclosure was made, if such disclosure
gave the other party sufficient information and warning to investigate in
greater detail, the matter so disclosed.
15
4.07 Attorney Disclosures. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, has previously acted as legal
counsel for DACO-CANADA and the Related Parties. IMPERIAL represents that it
approached and encouraged ▇▇. ▇▇▇▇▇▇▇▇▇ to purchase DACO-CANADA, and authorized
▇▇. ▇▇▇▇▇▇▇▇▇ to use confidential information provided by Imperial and the
Related Parties to evaluate the purchase. Vanderkam has advised Imperial and the
Related Parties that he does not and cannot represent them with respect to the
purchase of DACO-CANADA, and strongly advised Imperial and the Related Parties
to seek the advice of independent counsel prior to executing this Agreement.
IMPERIAL waives any claim of breach of confidentiality or fiduciary duty against
Vanderkam relating to his purchase of DACO-CANADA. IMPERIAL agrees that
Vanderkam may continue to act as legal counsel for the Related Parties regarding
matters not related to the DACO-CANADA purchase, if they so desire from time to
time, and waives any conflict of interest arising therefrom.
4.08 Stock Legend. It is hereby acknowledged and agreed that the Purchased
Shares shall be "restricted stock" as that term is defined under Rule 144 of the
Securities Act of 1993. DACO-USA represents and agrees that the Purchased Shares
are being acquired for investment purposes without intent to resell such shares
and that the subsequent sale or transfer of such shares may only be made in
accordance with registration or a valid exemption from registration pursuant to
U.S. securities laws, to the extent such laws govern any such sale or transfer.
Further, it is understood and agreed that all certificates evidencing the
Purchased Shares shall bear the following legend and shall be subject to
stop-transfer orders with the respective transfer agents for such shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF EITHER AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF DACO-USA
The obligations of DACO-USA under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants. The
representations and warranties made by IMPERIAL in this Agreement were true when
made and shall be true at the Closing Date with the same force and effect as if
such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement). Additionally, IMPERIAL
shall have performed and complied with all covenants and conditions required by
this Agreement to be performed or complied with by IMPERIAL. DACO-USA shall have
been furnished with certificates, signed by duly authorized executive officers
of DACO-CANADA and IMPERIAL and dated the Closing Date, to the foregoing effect.
Section 5.02 Officer's Certificate. DACO-USA shall have been furnished with
a certificate dated the Closing Date and signed by a duly authorized officer of
IMPERIAL and DACO-CANADA to the effect that no litigation, proceeding,
investigation, or inquiry is pending, or to the best knowledge of DACO-CANADA
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement, or, to the
extent not disclosed in the DACO-CANADA Schedules, by or against DACO-CANADA,
which might result in any material adverse change in any of the assets,
properties, business, or operations of DACO-CANADA.
16
Section 5.03 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any change in the financial condition, business, or
operations of DACO-CANADA nor shall any event have occurred which, with the
lapse of time or the giving of notice, is determined to be unacceptable in
accordance with Section 1.21.
Section 5.04 Good Standing. DACO-USA shall have received a certificate of
good standing from the appropriate governmental authority, dated as of a date
within ten days prior to the Closing Date certifying that DACO-CANADA is in good
standing as a corporation in its state of incorporation.
Section 5.05 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 5.06 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of DACO-CANADA after the Closing Date on the basis as presently
operated shall have been obtained.
Section 5.07 Tax matters. IMPERIAL and Related Parties shall furnish all
clearance certificates and/or give appropriate warranties and indemnities,
including costs, interest and penalties to DACO-USA related to all tax related
matters for which DACO-USA could be liable as a result of the purchases made the
basis of this Agreement.
Section 5.08 Release of Security Interest. IMPERIAL and Related Parties
shall furnish documents evidencing the Bank of Boston's release of its security
interest and/or lien in the Intercompany Claim and Purchased Shares, and all
other collateral related to the Intercompany Claim and Purchased Shares,
including without limitation, (i) all dividends (cash or otherwise), (ii) voting
rights and rights to receive securities, and (iii) proceeds of any and all of
the Purchased Shares and/or Intercompany Claim. Such documents shall be in the
form of a general release, UCC-3 and Canadian equivalent, and instructions to
the escrow/collateral agent, and as DACO-USA may reasonably request.
Section 5.09 Other Items. DACO-USA shall have received such further
opinions, documents, certificates or instruments relating to the transactions
contemplated hereby as DACO-USA may reasonably request.
17
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDER
The obligations of IMPERIAL under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants. The
representations and warranties made by DACO-USA in this Agreement were true when
made and shall be true as of the Closing Date (except for changes therein
permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date.
Additionally, DACO-USA shall have performed and complied with all covenants and
conditions required by this Agreement to be performed or complied with by
DACO-USA prior to or at the Closing. IMPERIAL shall have been furnished with
certificates, signed by duly authorized executive officers of DACO-USA and dated
the Closing Date, to the foregoing effect.
Section 6.02 Officer's Certificate. IMPERIAL shall have been furnished with
certificates dated the Closing Date and signed by duly authorized executive
officers of DACO-USA, to the effect that no litigation, proceeding,
investigation or inquiry is pending, or to the best knowledge of DACO-USA
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement or, to the
extent not disclosed in the DACO-USA Schedules, by or against DACO-USA, which
might result in any material adverse change in any of the assets, properties or
operations of DACO-USA.
Section 6.03 Other Items. IMPERIAL shall have received further opinions,
documents, certificates, or instruments relating to the transactions
contemplated hereby as it may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Brokers. DACO-USA and IMPERIAL agree that there were no
finders or brokers involved in bringing the parties together or who were
instrumental in the negotiation, execution or consummation of this Agreement.
DACO-USA and IMPERIAL agree to indemnify the other against any claim by any
third person for any commission, brokerage, or finder's fee arising from the
transactions contemplated hereby based on any alleged agreement or understanding
between the indemnifying party and such third person, whether express or implied
from the actions of the indemnifying party.
Section 7.02 Governing Law. This Agreement shall be governed by, enforced,
and construed under and in accordance with the laws of the United States of
America and, with respect to the matters of state law, with the laws of the
State of Texas, without giving effect to principles of conflicts of law
thereunder, and venue shall be proper in ▇▇▇▇▇▇ County, Texas.
18
Section 7.03 Notices. Any notice or other communications required or
permitted hereunder shall be in writing and shall be sufficiently given if
personally delivered to it or sent by telecopy, overnight courier or registered
mail or certified mail, postage prepaid, addressed as follows:
If to DACO-USA, to: DACO-USA
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
If to IMPERIAL: Imperial World, Inc. and IWI Holding Limited
Oakmont Centre
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
Section 7.04 Attorney's Fees. In the event that either party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the prevailing party shall be reimbursed by the
losing party for all costs, including reasonable attorney's fees, incurred in
connection therewith and in enforcing or collecting any judgement rendered
therein.
Section 7.05 Confidentiality. Each party hereto agrees with the other that,
unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any representative, officer, director or employee, or from any books or
records or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others, except (i) to the extent
such data or information is published, is a matter of public knowledge, or is
required by law to be published; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
Section 7.06 Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 7.07 Expenses. Except as otherwise specified herein and regardless
of whether or not the purchase and sale is consummated, each of DACO-USA and
IMPERIAL will bear their own respective expenses, including legal, accounting
and professional fees, incurred in connection with the purchase and sale or any
of the other transactions contemplated hereby.
19
Section 7.08 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, understandings and negotiations, written or
oral, with respect to such subject matter.
Section 7.09 Survival; Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two years.
Section 7.10 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.11 Amendment or Waiver. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may by amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
Section 7.12 Legal Representation. Each party hereto, including LIMITED,
and the SHAREHOLDER of DACO-CANADA who are signing this Agreement, hereby
acknowledges that he or it has been provided an opportunity to consult with
independent legal counsel of his or its choice to seek counsel with respect to
the transactions contemplated herein and that each such party has secured such
advice as he or it deems necessary to understand the terms of this Agreement.
Section 7.13 Best Efforts. Subject to the terms and conditions herein
provided, each party shall use its best efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.
20
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective officers, hereunto duly authorized, as of the
date first-above written.
ATTEST: DACO (USA), INC.
Secretary or By:
Assistant Secretary Title:
ATTEST: SHAREHOLDER
Imperial World, Inc.
Secretary or
Assistant Secretary
By:
Title:
ATTEST: LIMITED
IWI Holding Limited
Secretary or
Assistant Secretary
By:
Title: