EXHIBIT 2.1
SHARE EXCHANGE AGREEMENT
BY AND BETWEEN RIMPAC RESOURCES LTD.
AND THE SHAREHOLDERS OF INTERNET LOTO, INC.
DATED AS OF JANUARY 17, 2002
SHARE EXCHANGE AGREEMENT
by and between
RIMPAC RESOURCES LTD.
and
the shareholders of
INTERNET LOTO
Dated as of January 17, 2002
TABLE OF CONTENTS
PAGE
THE SHARE EXCHANGE.............................................................1
1.1 The Share Exchange...............................................1
1.2 Effective Date...................................................1
1.3 Exchange of INTERNET LOTO Common Stock...........................1
1.4 Exchange of Certificates.........................................2
1.5 Reporting of Share Exchange......................................2
1.6 Board of Directors of Rimpac.....................................2
THE CLOSING....................................................................2
2.1 Time and Place of Closing........................................2
2.2 Obligations of the INTERNET LOTO Shareholders at or Prior
to the Closing...................................................2
2.3 Obligations of Rimpac at or Prior to the Closing.................3
REPRESENTATIONS AND WARRANTIES OF THE INTERNET LOTO SHAREHOLDERS...............3
3.1 Organization and Qualification...................................4
3.2 Capitalization...................................................4
3.3 Subsidiaries and Affiliates......................................4
3.4 Options or Other Rights..........................................4
3.5 Ownership of Shares..............................................4
3.6 Validity and Execution of Agreement..............................4
3.7 No Conflict......................................................5
3.8 Consents and Approvals...........................................5
3.9 Violation of Laws, Permits, etc..................................5
3.10 Books and Records................................................5
3.11 INTERNET LOTO Financial Statements...............................6
3.12 Undisclosed Liabilities..........................................6
3.13 Title to Property; Encumbrances..................................6
3.14 Taxes............................................................6
3.15 Litigation.......................................................7
3.16 Contracts and Other Agreements...................................8
3.17 Accounts Receivable and Accounts Payable.........................8
3.18 Compensation Arrangements; Officers, Directors and Employees.....8
3.19 ERISA............................................................8
3.20 Operations.......................................................8
3.21 Intangible Property and Intellectual Property...................10
3.22 Employee Relations..............................................11
3.23 Insurance.......................................................11
3.24 Licenses and Permits............................................11
3.25 Brokers.........................................................12
3.26 Acquisition of Rimpac Shares....................................12
3.27 Disclosure......................................................12
3.28 Best Efforts....................................................12
Share Exchange Agreement - Page ii
REPRESENTATIONS AND WARRANTIES OF RIMPAC......................................12
4.1 Organization and Qualification..................................13
4.2 Capitalization..................................................13
4.3 Rimpac and Affiliates...........................................13
4.4 Options or Other Rights.........................................13
4.5 Validity and Execution of Agreement.............................13
4.6 No Conflict.....................................................13
4.7 Consents and Approvals..........................................14
4.8 Violation of Laws, Permits, etc.................................14
4.9 Books and Records...............................................14
4.10 Rimpac Financial Statements.....................................14
4.11 Undisclosed Liabilities.........................................15
4.12 Title to Property; Encumbrances.................................15
4.13 Taxes...........................................................15
4.14 Litigation......................................................15
4.15 Contracts and Other Agreements..................................16
4.16 Compensation Arrangements; Officers, Directors and Employees....16
4.17 ERISA...........................................................16
4.18 Operations......................................................16
4.19 Brokers.........................................................18
4.20 Approval of Share Exchange......................................18
4.21 SEC Reporting Status............................................18
4.22 Investment Company..............................................18
4.23 OTC Bulletin Board Status.......................................18
4.24 Disclosure......................................................19
ACTIONS PRIOR TO CLOSING......................................................19
5.1 Corporate Examinations and Investigations.......................19
5.2 Conduct of Business.............................................19
5.3 Preservation of Business........................................20
5.4 Advice of Changes...............................................20
5.5 Other Agreements................................................20
CONDITIONS PRECEDENT TO CLOSING...............................................20
6.1 Conditions Precedent to the Obligations of Rimpac to
Complete the Closing............................................20
6.2 Conditions Precedent to the Obligations of the INTERNET
LOTO Shareholders to Complete the Closing.......................22
POST-CLOSING COVENANTS........................................................24
7.1 Further Information.............................................24
7.2 Record Retention................................................24
7.3 Post-Closing Assistance.........................................24
7.4 SEC Reporting...................................................24
Share Exchange Agreement - Page iii
SURVIVAL; INDEMNIFICATION.....................................................25
8.1 Survival of Agreements, Representations and Warranties..........25
8.2 Indemnification by the INTERNET LOTO Shareholders...............25
8.3 Rimpac's Indemnity..............................................26
8.4 Method of Asserting Claims......................................26
8.5 General Provisions..............................................27
TERMINATION OF AGREEMENT......................................................28
9.1 Termination.....................................................28
9.2 Survival After Termination......................................29
MISCELLANEOUS.................................................................29
10.1 Expenses........................................................29
10.2 Further Assurances..............................................29
10.3 Notices.........................................................29
10.4 Arbitration.....................................................30
10.5 Publicity.......................................................30
10.6 Entire Agreement................................................30
10.7 Waivers and Amendments..........................................31
10.8 Governing Law...................................................31
10.9 Binding Effect, No Assignment...................................31
10.10 Counterparts....................................................31
10.11 Exhibits and Schedules..........................................31
10.12 Effect of Disclosure on Schedules...............................31
10.13 Headings........................................................31
10.14 Severability of Provisions......................................31
Share Exchange Agreement - Page iv
THIS SHARE EXCHANGE AGREEMENT is entered into as of January 17, 2002 by
and between RIMPAC RESOURCES LTD, a Nevada corporation ("RIMPAC"), and the
persons named on Schedule A attached to this Agreement (the "INTERNET LOTO
SHAREHOLDERS"), who are all of the shareholders of INTERNET LOTO, a California
corporation ("INTERNET LOTO").
RECITALS
It is the intention of the parties hereto that INTERNET LOTO become a
wholly-owned subsidiary of Rimpac through the exchange of all outstanding shares
of INTERNET LOTO Common Stock for shares of Rimpac Common Stock on the following
terms:
AGREEMENT
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements hereinafter set forth, in accordance with the provisions of
applicable law, the parties hereby agree as follows:
ARTICLE I
THE SHARE EXCHANGE
1.1 THE SHARE EXCHANGE. Subject to the terms and conditions of this
Agreement, at Closing, the INTERNET LOTO Shareholders shall tender all
their respective shares of INTERNET LOTO Common Stock to Rimpac in
exchange for Rimpac Common Stock. Rimpac shall then own 100% of the
issued and outstanding shares of INTERNET LOTO, making it a
wholly-owned subsidiary of Rimpac.
1.2 EFFECTIVE DATE. The Share Exchange will become effective upon the
proper filing of Articles of Share Exchange with the Secretary of State
of the State of Nevada and the State of California.
1.3 EXCHANGE OF INTERNET LOTO COMMON STOCK. The Common Stock shall be
exchanged in the Share Exchange as follows:
(a) Each share of Common Stock of INTERNET LOTO that existed prior
to the Effective date will be exchanged for 1.43125 shares of
Rimpac Common Stock. As a result, the INTERNET LOTO
Shareholders will collectively own 11,450,000 shares, or
57.25% of the then outstanding shares of Rimpac's Common Stock
such that upon completion of the exchange Rimpac shall have a
total of 20,000,000 shares of common stock outstanding.
(b) No fraction of a share of Rimpac Common Stock will be issued
upon such exchange of shares of INTERNET LOTO Common Stock.
Instead amounts of shares will be rounded to the nearest whole
number.
Share Exchange Agreement - Page 1
1.4 EXCHANGE OF CERTIFICATES. At Closing, or as soon as practicable
thereafter, Rimpac shall deliver to each INTERNET LOTO Shareholder
listed on SCHEDULE A hereto, certificates representing the whole number
of shares of Rimpac Common Stock and INTERNET LOTO shall be a
wholly-owned subsidiary of Rimpac.
1.5 REPORTING OF SHARE EXCHANGE. For federal, state, and local income tax
return reporting purposes, all parties agree to treat the Share
Exchange as a nontaxable exchange under Section 368 of the Internal
Revenue Code.
1.6 BOARD OF DIRECTORS OF RIMPAC. At closing, or as soon as practicable
thereafter, the board of directors and officers of Rimpac shall be
replaced with the board of directors and officers of INTERNET LOTO.
ARTICLE II
THE CLOSING
2.1 TIME AND PLACE OF CLOSING. The closing of the Share Exchange (the
"CLOSING") shall, unless otherwise agreed to in writing by the parties,
take place at a mutually acceptable location at 10:00 AM, local time,
on or before twenty (20) days after Rimpac receives the INTERNET LOTO
Financial Statements as defined herein, and subject to the Sections
contained within this Agreement.
2.2 OBLIGATIONS OF THE INTERNET LOTO SHAREHOLDERS AT OR PRIOR TO THE
CLOSING. At or prior to Closing, and subject to the satisfaction by
Rimpac of their obligations hereunder, the INTERNET LOTO Shareholders
shall deliver to Rimpac the following:
(a) A copy of the Articles of Incorporation of INTERNET LOTO
certified as of a date within thirty days of the Closing by
the appropriate authorities of California and certified by the
corporate secretary of INTERNET LOTO as to the absence of any
amendments between the date of certification by the
appropriate authorities and the Closing;
(b) A certificate from the appropriate authorities of California
as to the existence and good standing of INTERNET LOTO as of a
date within thirty (30) days of the Closing;
(c) A certificate of the corporate secretary of INTERNET LOTO
attaching thereto true and correct copies of the bylaws of
INTERNET LOTO and the corporate resolutions duly adopted by
the board of directors of INTERNET LOTO authorizing the
consummation of the transactions contemplated hereby;
(d) The certificate of INTERNET LOTO referred to in SECTION 6.1
hereof; and
Share Exchange Agreement - Page 2
(e) Such other documents as are required pursuant to this
Agreement or as may reasonably be requested from the INTERNET
LOTO Shareholders by Rimpac or its counsel as provided for in
SECTION 5 hereof.
(f) The certificates evidencing the shares of INTERNET LOTO Common
Stock owned by the INTERNET LOTO Shareholders, duly endorsed
for transfer to Rimpac.
2.3 OBLIGATIONS OF RIMPAC AT OR PRIOR TO THE CLOSING. At or prior to
Closing, and subject to the satisfaction by the INTERNET LOTO
Shareholders of their obligations hereunder, Rimpac shall deliver to
the INTERNET LOTO Shareholders the following:
(a) A copy of the Articles of Incorporation of Rimpac certified as
of a date within thirty days of the Closing by the Secretary
of State of the State of Nevada and certified by the corporate
secretary of Rimpac as to the absence of any amendments
between the date of certification by the Secretary of State
and the Closing;
(b) A certificate from the Secretary of State of the State of
Nevada as to the existence and good standing of Rimpac as of a
date within thirty (30) days of the Closing;
(c) A certificate of the corporate secretary of Rimpac attaching
thereto true and correct copies of the bylaws of Rimpac and
the corporate resolutions duly adopted by the board of
directors of Rimpac authorizing the consummation of the
transactions contemplated hereby;
(d) The certificate of Rimpac referred to in SECTION 6.2 hereof;
and
(e) Such other documents as are required pursuant to this
Agreement or as may reasonably be requested from Rimpac by the
INTERNET LOTO Shareholders or their counsel.
(f) Certificates evidencing the Rimpac Common Stock to be issued
to the INTERNET LOTO Shareholders pursuant to Article I
hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE INTERNET LOTO SHAREHOLDERS
Except as expressly set forth and specifically identified by the section number
of this Agreement in the schedule to be delivered to Rimpac by the INTERNET LOTO
Shareholders within twenty (20) days from the execution of this Agreement (the
"INTERNET LOTO SHAREHOLDERS DISCLOSURE SCHEDULE"), the INTERNET LOTO
Shareholders represent, warrant, and covenant to Rimpac as follows:
Share Exchange Agreement - Page 3
3.1 ORGANIZATION AND QUALIFICATION. INTERNET LOTO is a corporation duly
organized, validly existing and in good standing under the laws of
California, and has all requisite corporate power and authority to (a)
own, lease and operate its properties and assets as they are now owned,
leased and operated and (b) carry on its business as currently
conducted and as proposed to be conducted. INTERNET LOTO is duly
qualified or licensed to do business in each jurisdiction in which the
failure to be so qualified or licensed could have a material adverse
effect in the business, operations, properties, assets, liabilities,
prospects, or condition (financial or otherwise) of INTERNET LOTO
(hereinafter a "MATERIAL EFFECT").
3.2 CAPITALIZATION. The issued and outstanding capital stock of INTERNET
LOTO consists of 8,000,000 shares of common stock. All of the issued
and outstanding shares of capital stock of INTERNET LOTO are validly
issued, fully paid, and non-assessable, and none of such shares has
been issued in violation of the preemptive rights of any person.
3.3 SUBSIDIARIES AND AFFILIATES. INTERNET LOTO does not own or hold,
directly or indirectly, any equity, debt, or other interest in any
entity or business or any option to acquire any such interest.
3.4 OPTIONS OR OTHER RIGHTS. No options, warrants, calls, commitments or
other rights to acquire, sell or issue shares of capital stock or other
equity interests of INTERNET LOTO, whether upon conversion of other
securities or otherwise, are issued or outstanding, and there is no
agreement or understanding with respect to the voting of such capital
stock or other equity interests.
3.5 OWNERSHIP OF SHARES. The shares of INTERNET LOTO Common Stock are owned
of record and beneficially by the INTERNET LOTO Shareholders as set
forth on SCHEDULE A. The INTERNET LOTO Shareholders possess full
authority and legal right to sell, transfer, and assign the entire
legal and beneficial ownership of the shares of INTERNET LOTO Common
Stock, free from all liens, claims, and encumbrances of any kind; and
there are no outstanding rights or obligations granted by the INTERNET
LOTO Shareholders to purchase or acquire any of the shares of INTERNET
LOTO Common Stock or any interest in any of the shares of INTERNET LOTO
Common Stock. Upon transfer of the shares of INTERNET LOTO Common Stock
to Rimpac hereunder at the Closing, Rimpac will receive the entire
legal and beneficial interest in the shares of INTERNET LOTO Common
Stock, free and clear of all liens, claims, and encumbrances and
subject to no legal or equitable restrictions of any kind.
3.6 VALIDITY AND EXECUTION OF AGREEMENT. Each of the INTERNET LOTO
Shareholders has the full legal right, capacity and power required to
enter into, execute and deliver this Agreement and to carry out the
transactions contemplated. This Agreement has been duly executed and
delivered by each of the IINTERNET LOTO Shareholders and constitutes
the valid and binding obligation of each of the INTERNET LOTO
Shareholders, enforceable in accordance with its terms, subject to the
qualification that enforcement of the rights and remedies created
hereby is subject to (a) bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting
Share Exchange Agreement - Page 4
the rights and remedies of creditors and (b) general principles of
equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
3.7 NO CONFLICT. None of the execution, delivery, or performance of this
Agreement does or will: (a) result in any violation or be in conflict
with or constitute a default under any term or provision of the
Articles of Incorporation or bylaws of INTERNET LOTO or any term or
provision of any judgment, decree, order, statute, injunction, rule, or
regulation applicable to INTERNET LOTO or any INTERNET LOTO
Shareholder, or of any material note, bond, mortgage, indenture, lease,
license, franchise, agreement, or other instrument or obligation to
which INTERNET LOTO or any INTERNET LOTO Shareholder is bound; (b)
result in the creation of any material option, pledge, security
interest, lien, charge, encumbrance, or restriction, whether imposed by
agreement, understanding, law or otherwise, except those arising under
applicable federal or state securities laws (hereinafter an
"ENCUMBRANCE") upon any of the properties or assets of INTERNET LOTO or
any INTERNET LOTO Shareholder pursuant to any such term or provision;
or (c) constitute a default under, terminate, accelerate, amend or
modify, or give any party the right to terminate, accelerate, amend,
modify, abandon, or refuse to perform or comply with, any material
contract, agreement, arrangement, commitment, or plan to which INTERNET
LOTO or any INTERNET LOTO Shareholder is a party, or by which INTERNET
LOTO or any INTERNET LOTO Shareholder or any of their respective
properties or assets may be subject or bound.
3.8 CONSENTS AND APPROVALS. No federal, state, foreign or other regulatory
approvals are required to be obtained, nor any regulatory requirements
complied with, by INTERNET LOTO or any INTERNET LOTO Shareholder in
connection with the Share Exchange.
3.9 VIOLATION OF LAWS, PERMITS, ETC.
(a) INTERNET LOTO is not in violation of any term or provision of
its Articles of Incorporation or bylaws, or of any material
term or provision of any judgment, decree, order, statute,
law, injunction, rule, ordinance, or governmental regulation
that is applicable to it and where the failure to comply with
which would have a Material Effect.
(b) INTERNET LOTO has maintained in full force and effect all
certificates, licenses, and permits material to the conduct of
its business, and has not received any notification that any
revocation or limitation thereof is threatened or pending.
(c) INTERNET LOTO's business plan and intended operations will not
violate any international, federal, state or local laws,
statutes, ordinances, rules or regulations.
3.10 BOOKS AND RECORDS. The books and records of INTERNET LOTO (including,
without limitation, the books of account, minute books, and stock
record books) are complete and correct in all material respects and
have been maintained in accordance with sound business practices. The
minute books of INTERNET LOTO are complete and current in all material
respects and, as applicable, accurately reflect all actions taken by
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the shareholders and the board of directors of INTERNET LOTO since the
date of inception of INTERNET LOTO, and all signatures contained
therein are the true signatures of the persons whose signatures they
purport to be.
3.11 INTERNET LOTO FINANCIAL STATEMENTS.
(a) The audited balance sheets of INTERNET LOTO as of the most
recent period when delivered, November, 30, 2001, and the
related audited statements of income, statements of cash flow
and statements of shareholders equity for the periods then
ended, when delivered and which comply with SEC filing
requirements, present fairly, in all material respects, the
financial position of INTERNET LOTO as at such dates and the
results of operations of INTERNET LOTO for the periods then
ended, in accordance with United States generally accepted
accounting principles ("US GAAP") consistently applied for the
periods covered thereby.
(b) The financial statements referred to in paragraph (a) are
hereinafter referred to as the INTERNET LOTO FINANCIAL
STATEMENTS.
3.12 UNDISCLOSED LIABILITIES. INTERNET LOTO does not have any material
direct or indirect indebtedness, liability, claim, loss, damage,
deficiency, obligation or responsibility, fixed or unfixed, ▇▇▇▇▇▇ or
inchoate, liquidated or unliquidated, secured or unsecured, accrued,
absolute, contingent or otherwise (all of the foregoing being
collectively referred to as "LIABILITIES" and individually as a
"LIABILITY"), of a kind required by US GAAP to be set forth on a
financial statement that is not fully and adequately reflected or
reserved against on the INTERNET LOTO Financial Statements. INTERNET
LOTO does not have any Liabilities, whether or not of a kind required
by US GAAP to be set forth on a financial statement, other than (a)
Liabilities incurred in the ordinary course of business since the date
of the latest balance sheet included in the INTERNET LOTO Financial
Statements that are consistent with past practice and are included in
the latest INTERNET LOTO Financial Statements, (b) Liabilities that are
fully reflected on or reserved against on the latest balance sheet
included in the INTERNET LOTO Financial Statements, or (c) as
specifically disclosed in the INTERNET LOTO Financial Statements.
3.13 TITLE TO PROPERTY; ENCUMBRANCES. INTERNET LOTO has good and
indefeasible title to and other legal right to use all properties and
assets, real, personal and mixed, tangible and intangible, reflected as
owned on the latest balance sheet included in the INTERNET LOTO
Financial Statements or acquired after the date of such balance sheet,
except for properties and assets disposed of in accordance with
customary practice in the business or disposed of for full and fair
value since the date of such balance sheet in the ordinary course of
business consistent with past practice and except for matters that
would not have a Material Effect.
3.14 TAXES. All returns, reports, information returns, or other documents
(including any related or supporting information) filed or required to
be filed with any federal, state, local, or foreign governmental entity
or others authority in connection with the
Share Exchange Agreement - Page 6
determination, assessment or collection of any Tax (whether or not such
Tax is imposed on INTERNET LOTO) or the administration of any laws,
regulations or administrative requirements relating to any Tax
(hereinafter "TAX RETURNS"), reports and declarations of estimated tax
or estimated tax deposit forms required to be filed by INTERNET LOTO
have been duly and timely filed; INTERNET LOTO has paid all taxes,
charges, fees, levies or other assessments imposed by any federal,
state, local or foreign taxing authority, whether disputed or not,
including, without limitation, income, capital, estimated, excise,
property, sales, transfer, withholding, employment, payroll, and
franchise taxes and such terms shall include any interest, penalties or
additions attributable to or imposed on or with respect to such
assessments and any expenses incurred in connection with the settlement
of any tax liability (hereinafter "TAXES") which have become due
whether pursuant to such returns or any assessment received by it or
otherwise, and has paid all installments of estimated Taxes due; and
all Taxes which INTERNET LOTO is required by law to withhold or to
collect have been duly withheld and collected, and have been paid over
to the proper court, tribunal, arbitrator or any government or
political subdivision thereof, whether federal, state, county, local or
foreign, or any agency, authority, official or instrumentality of any
such government or political subdivision (hereinafter "GOVERNMENTAL OR
REGULATORY BODY"). There are no tax liens upon any of the assets or
properties of INTERNET LOTO except for any lien, pledge, hypothecation,
mortgage, security interest, claim, lease, charge, option, right of
first refusal, easement, servitude, transfer restriction under any
member or similar agreement, encumbrance or any other restriction or
limitation whatsoever, other than (i) materialmen's, mechanics',
repairmen's or other like liens arising in the ordinary course of
business for amounts either not yet due or being contested in good
faith and by appropriate proceedings so long as such proceedings shall
not involve any material danger of sale, forfeiture or loss of any part
of the assets and shall have been disclosed to Rimpac hereunder, or
(ii) any lien arising as a result of any act or omission of Rimpac
(hereinafter "LIENS") for Taxes not yet due. INTERNET LOTO is not a
party to any express tax settlement agreement, arrangement, policy or
guideline, formal or informal (a "SETTLEMENT AGREEMENT"), and INTERNET
LOTO does not have any obligation to make payments under any Settlement
Agreement.
3.15 LITIGATION.
(a) There is no action, proceeding, investigation, or inquiry
pending or, to the best of INTERNET LOTO's knowledge,
threatened (i) against or affecting any of INTERNET LOTO's
assets or business that, if determined adversely to INTERNET
LOTO, would result in a Material Effect or (ii) that questions
this Agreement or any action contemplated by this Agreement or
in connection with the Share Exchange.
(b) INTERNET LOTO has no knowledge of any state of facts or of the
occurrence or nonoccurrence of any event or group of related
events, that should reasonably cause INTERNET LOTO to
determine that there exists any basis for any material claim
against INTERNET LOTO for any of the matters described in
paragraph (a) above.
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3.16 CONTRACTS AND OTHER AGREEMENTS. SECTION 3.16 to the INTERNET LOTO
Shareholder Disclosure Schedule contains a complete and correct list as
of the date hereof of all material agreements, contracts, and
commitments (and all amendments thereto), written or oral, to which
INTERNET LOTO is a party or by which any of its properties is bound.
INTERNET LOTO will make available to Rimpac complete and correct copies
of all material written agreements, contracts, and commitments,
together with all amendments thereto, and accurate (in all material
respects) descriptions of all material oral agreements. Such
agreements, contracts, and commitments are in full force and effect,
and, to the best of INTERNET LOTO's knowledge, all other parties to
such agreements, contracts, and commitments have performed all
obligations required to be performed by them to date thereunder in all
material respects and are not in default thereunder in any material
respect.
3.17 ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE. All accounts receivable
reflected on the balance sheet of INTERNET LOTO included in the
INTERNET LOTO Financial Statements, and all accounts receivable arising
subsequent to the date of the INTERNET LOTO Financial Statements, (a)
have arisen from bona fide sales transactions in the ordinary course of
business on ordinary trade terms and (b) have been collected or are
collectible in the ordinary course of business in the aggregate
recorded amounts thereof in accordance with their terms without valid
set-off or counterclaim. INTERNET LOTO has made payments on accounts
payable and other current obligations arising subsequent to the date of
the INTERNET LOTO Financial Statements, in accordance with past
practice of the business of INTERNET LOTO.
3.18 COMPENSATION ARRANGEMENTS; OFFICERS, DIRECTORS AND EMPLOYEES. SECTION
3.18 to the INTERNET LOTO Shareholder Disclosure Schedule sets forth:
(a) the name of all present officers, directors and employees of
INTERNET LOTO and current annual salary, including any promised,
expected or customary bonus or such other amount, and (b) the names and
titles of all directors and officers of INTERNET LOTO. INTERNET LOTO
has not made a commitment or agreement (verbally or in writing) to
increase the compensation or to modify the conditions or terms of
employment of any person listed in SECTION 3.18 to the INTERNET LOTO
Shareholder Disclosure Schedule. To the knowledge of INTERNET LOTO,
none of such persons has made a threat to INTERNET LOTO to terminate
such person's relationship with INTERNET LOTO.
3.19 ERISA. Except as set forth in SECTION 3.19 to the INTERNET LOTO
Shareholder Disclosure Schedule, there are no employee benefit plans as
defined in ERISA ("PLANS") maintained for the benefit of, or covering,
any employee, former employee, independent contractor or former
independent contractor of INTERNET LOTO, or their dependents or their
beneficiaries, or otherwise, now or heretofore contributed to by
INTERNET LOTO, and no such Plan is or has ever been subject to ERISA.
3.20 OPERATIONS. Except as expressly authorized by this Agreement, and
except as set forth in SECTION 3.20 to the INTERNET LOTO Shareholder
Disclosure Schedule, since the date
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of the latest INTERNET LOTO Financial Statements, November 30, 2001,
INTERNET LOTO has not:
(a) amended its Articles of Incorporation or By-Laws or merged
with or into or consolidated with any other entity, or changed
or agreed to rearrange in any manner the character of the
business of INTERNET LOTO;
(b) issued, sold or purchased options or rights to subscribe to,
or entered into any contracts or commitments to issue, sell or
purchase, any shares of its capital stock or other equity
interests;
(c) entered into, amended or terminated any (i) employment
agreement or collective bargaining agreement, (ii) adopted,
entered into or amended any arrangement which is, or would be,
a Plan or (iii) made any change in any actuarial methods or
assumptions used in funding any Plan or in the assumptions or
factors used in determining benefit equivalencies thereunder;
(d) issued any note, bond or other debt security, created,
incurred or assumed any indebtedness for borrowed money other
than in the ordinary course of business in connection with
trade payables, or guaranteed any indebtedness for borrowed
money or any capitalized lease obligation;
(e) declared, set aside or paid any dividends or declared or made
any other distributions of any kind to the shareholders, or
made any direct or indirect redemption, retirement, purchase
or other acquisition of any shares of its capital stock or
other equity interests;
(f) knowingly waived any right of material value to the business
of INTERNET LOTO;
(g) made any change in its accounting methods or practices or made
any changes in depreciation or amortization policies or rates
adopted by it or made any material write-down of inventory or
material write-off as uncorrectable of accounts receivable;
(h) made any wage or salary increase or other compensation payable
or to become payable or bonus, or increase in any other direct
or indirect compensation, for or to any of its officers,
directors, employees, consultants, agents or other
representatives, or any accrual for or commitment or agreement
to make or pay the same, other than increases made in the
ordinary course consistent with past practice;
(i) entered into any transactions with any of its affiliates,
shareholders, officers, directors, employees, consultants,
agents or other representatives (other than employment
arrangements made in the ordinary course of business
consistent
Share Exchange Agreement - Page 9
with past practice), or any affiliate of any shareholder,
officer, director, consultant, employee, agent or other
representative;
(j) made any payment or commitment to pay any severance or
termination pay to any person or any of its officers,
directors, employees, consultants, agents or other
representatives, other than payments or commitments to pay
such persons or their officers, directors, employees in the
ordinary course of business;
(k) except in the ordinary course of business, (i) entered into
any lease (as lessor or lessee), (ii) sold, abandoned or made
any other disposition of any of its assets or properties other
than in the ordinary course of business consistent with past
practice, (iii) granted or suffered any Lien on any of its
assets or properties other than sales of inventory in the
ordinary course of business, or (iv) entered into or amended
any material contract or other agreement to which it is a
party, or by or to which it or its assets or properties are
bound or subject, or pursuant to which it agrees to indemnify
any person or to refrain from competing with any person, in
each case or type required to be disclosed pursuant to SECTION
3.15 hereof;
(l) except in the ordinary course of business, incurred or assumed
any debt, obligation or liability (whether absolute or
contingent and whether or not currently due and payable);
(m) except for inventory or equipment acquired in the ordinary
course of business, made any acquisition of all or any part of
the assets, properties, capital stock or business of any other
person;
(n) except in the ordinary course of business, paid, directly or
indirectly, any of its Liabilities before the same became due
in accordance with their terms or otherwise than in the
ordinary course of business, except to obtain the benefit of
discounts available for early payment;
(o) except in the ordinary course of business, created, incurred
or assumed any indebtedness for borrowed money, or guaranteed
any indebtedness for borrowed money or any capitalized lease
obligation, in each case in excess of $5,000 individually or
in the aggregate;
(p) except in the ordinary course of business, made any capital
expenditures or commitments for capital expenditures in
aggregate amount exceeding $5,000; or
(q) except in the ordinary course of business, terminated, failed
to renew, amended or entered into any contract or other
agreement of a type required to be disclosed pursuant to
SECTION 3.16.
3.21 INTANGIBLE PROPERTY AND INTELLECTUAL PROPERTY. INTERNET LOTO possesses
all of the necessary licenses, trademarks, trade names, trade secrets,
confidential information, know-how, domain names, patents and
proprietary information (hereinafter "INTELLECTUAL
Share Exchange Agreement - Page 10
PROPERTY RIGHTS") necessary to conduct its business and implement its
business plan and intended operations in the manner that is currently
being conducted and anticipates conducting in the future. All of such
Intellectual Property Rights are held in the name of INTERNET LOTO.
None of the Intangible Property of INTERNET LOTO infringes upon the
rights of any other person in any material respect or, to the knowledge
of INTERNET LOTO, is so infringed upon by any other person or its
property. INTERNET LOTO has not received any notice of any claim of any
other person relating to any of the Intangible Property or any process
or confidential information of INTERNET LOTO and does not know of any
basis for any such charge or claim. Except for the Intangible Property,
no other material intellectual property or intangible property rights
are required for INTERNET LOTO to conduct the business of INTERNET
LOTO, or its business plan, in the ordinary course consistent with past
practice and future expectations. Except as separately identified in
SECTION 3.21 of the INTERNET LOTO Shareholder Disclosure Schedule, no
approval or consent of any person is needed so that the interest of
INTERNET LOTO in the Intangible Property shall continue to be in full
force and effect and enforceable by INTERNET LOTO following the
transactions contemplated by this Agreement.
3.22 EMPLOYEE RELATIONS. INTERNET LOTO is not a party to any agreement with
any labor organization, collective bargaining or similar agreement with
respect to its employees. There are no material complaints, grievances
or arbitrations, employment-related litigation, administrative
proceedings or controversies either pending or, to the knowledge of
INTERNET LOTO, threatened, involving any employee, applicant for
employment, or former employee of INTERNET LOTO against INTERNET LOTO.
During the past five years, INTERNET LOTO has not suffered or sustained
any labor dispute resulting in any work stoppage and no such work
stoppage is, to the knowledge of INTERNET LOTO, threatened. To the
knowledge of INTERNET LOTO, there are no attempts presently being made
to organize any employees employed by INTERNET LOTO.
3.23 Insurance. INTERNET LOTO is not in default with respect to any material
provision contained in any policy or binder of insurance and has not
failed to give any notice or present any claim under any such policy or
binder in due and timely fashion. There are no outstanding unpaid
claims under any such policy or binder which have gone unpaid for more
than 45 days or as to which the carrier has disclaimed liability.
INTERNET LOTO has not received any notice of cancellation or non
renewal of any such policy or binder. INTERNET LOTO has not received
any notice from any of its insurance carriers that any insurance
premiums will be materially increased in the future or that any
existing insurance coverage will not be available in the future on
substantially the same terms as now in effect.
3.24 LICENSES AND PERMITS. Except as set forth in SECTION 3.24 of the
INTERNET LOTO Shareholder Disclosure Schedule, no material government
permits, licenses, domain name and other registrations, and other
consents and authorizations (federal, state, local and foreign) of any
Governmental or Regulatory Body (collectively, "PERMITS") is required
to be obtained by INTERNET LOTO in connection with its properties or
the
Share Exchange Agreement - Page 11
business of INTERNET LOTO. INTERNET LOTO has not received any notice of
any claim of revocation of any such Permit and has no knowledge of any
event which would be likely to give rise to such a claim.
3.25 BROKERS. All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried out by the INTERNET
LOTO Shareholders directly with Rimpac without the intervention of any
other person on behalf of the INTERNET LOTO Shareholders in such manner
as to give rise to any valid claim by any person against the INTERNET
LOTO Shareholders or Rimpac for a finder's fee, brokerage commission or
similar payment.
3.26 ACQUISITION OF RIMPAC SHARES. Each INTERNET LOTO Shareholder
acknowledges that the Rimpac shares of Common Stock are restricted
securities under the Securities Act and represents that such INTERNET
LOTO Shareholder (i) is acquiring the Rimpac shares of Common Stock for
his own account without a view to distribution within the meaning of
the Securities Act; (ii) has received from Rimpac all information that
he has deemed necessary to make an informed investment decision with
respect to an investment in Rimpac in general and the Rimpac shares of
Common Stock in particular; (iii) is financially able to bear the
economic risks of an investment in Rimpac; and (iv) has such knowledge
and experience in financial and business matters in general and with
respect to investments of a nature similar to the Rimpac shares of
Common Stock so as to be capable, by reason of such knowledge and
experience, of evaluating the merits and risks of, and making an
informed business decision with regard to, the acquisition of the
Rimpac shares of Common Stock. Each INTERNET LOTO Shareholder
understands and agrees that the certificates evidencing the Rimpac
shares of Common Stock shall bear the usual restrictive legend
pertaining to Rule 144 under the Securities Act and that the Rimpac
shares of Common Stock will not be transferable except in accordance
with a valid exemption from registration to the satisfaction of the
Rimpac.
3.27 DISCLOSURE. To the knowledge of the INTERNET LOTO Shareholders, neither
this Agreement, nor any Schedule or Exhibit to this Agreement, contains
an untrue statement of a material fact or omits a material fact
necessary to make the statements contained herein or therein not
misleading.
3.28 BEST EFFORTS. INTERNET LOTO Shareholders, officers and directors shall
use their best efforts at all times to implement the business plan and
intended operations of INTERNET LOTO, and shall take all steps
necessary to further the best interests of INTERNET LOTO.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF RIMPAC
Except as expressly set forth and specifically identified by the section number
of this Agreement in the schedule delivered by Rimpac to the INTERNET LOTO
Shareholders within twenty (20) days from the execution of this Agreement (the
"RIMPAC DISCLOSURE SCHEDULE"), Rimpac represents, warrants, and covenants to the
INTERNET LOTO Shareholders as follows:
Share Exchange Agreement - Page 12
4.1 ORGANIZATION AND QUALIFICATION. Rimpac is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Nevada and has all requisite corporate power and authority to (a) own,
lease and operate its properties and assets as they are now owned,
leased and operated and (b) carry on its business as currently
conducted and as proposed to be conducted. Rimpac is duly qualified or
licensed to do business in each jurisdiction in which the failure to be
so qualified or licensed could have a Material Effect.
4.2 CAPITALIZATION. The total authorized common stock of Rimpac is
100,000,000 shares. The issued and outstanding capital stock of Rimpac
consists of shares of 8,550,000 common stock, $0.001 par value per
share. There are no shares of preferred stock outstanding. All of the
issued and outstanding shares of capital stock of Rimpac are validly
issued, fully paid, and non-assessable, and none of such shares has
been issued in violation of the preemptive rights of any person. The
Rimpac shares of Common Stock shall be validly issued, fully paid, and
non-assessable.
4.3 RIMPAC AND AFFILIATES. Rimpac does not own or hold, directly or
indirectly, any equity, debt, or other interest in any entity or
business or any option to acquire any such interest.
4.4 OPTIONS OR OTHER RIGHTS. No options, warrants, calls, commitments or
other rights to acquire, sell or issue shares of capital stock or other
equity interests of Rimpac whether upon conversion of other securities
or otherwise, are issued or outstanding, and there is no agreement or
understanding with respect to the voting of such capital stock or other
equity interests.
4.5 VALIDITY AND EXECUTION OF AGREEMENT. The execution and performance of
this Agreement have been duly and validly authorized by the board of
directors of Rimpac and no other corporate action by Rimpac is
necessary to authorize the execution, delivery, and performance of this
Agreement. Rimpac has the corporate power and authority to execute and
perform this Agreement and to carry out the transactions contemplated
hereby. This Agreement has been duly and validly executed on behalf of
Rimpac and is a valid and binding obligation of Rimpac, enforceable in
accordance with its terms, subject to the qualification that
enforcement of the rights and remedies created hereby is subject to (a)
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of creditors and
(b) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
4.6 NO CONFLICT. None of the execution, delivery, or performance of this
Agreement does or will: (a) result in any violation or be in conflict
with or constitute a default under any term or provision of the
Articles of Incorporation or bylaws of Rimpac or any term or provision
of any judgment, decree, order, statute, injunction, rule, or
regulation applicable to Rimpac, or of any material note, bond,
mortgage, indenture, lease, license, franchise, agreement, or other
instrument or obligation to which Rimpac is bound; (b) result in the
creation of any Encumbrance upon any of the properties or assets of
Rimpac
Share Exchange Agreement - Page 13
pursuant to any such term or provision; or (c) constitute a default
under, terminate, accelerate, amend or modify, or give any party the
right to terminate, accelerate, amend, modify, abandon, or refuse to
perform or comply with, any material contract, agreement, arrangement,
commitment, or plan to which Rimpac is a party, or by which Rimpac or
any of its properties or assets may be subject or bound.
4.7 CONSENTS AND APPROVALS. No federal, state, or other regulatory
approvals are required to be obtained, nor any regulatory requirements
complied with, by Rimpac in connection with the Share Exchange.
4.8 VIOLATION OF LAWS, PERMITS, ETC.
(a) Rimpac is not in violation of any term or provision of its
Articles of Incorporation or bylaws, or of any material term
or provision of any judgment, decree, order, statute, law,
injunction, rule, ordinance, or governmental regulation that
is applicable to it and where the failure to comply with which
would have a Material Effect.
(b) Rimpac has maintained in full force and effect all
certificates, licenses, and permits material to the conduct of
its business, and has not received any notification that any
revocation or limitation thereof is threatened or pending.
4.9 BOOKS AND RECORDS. The books and records of Rimpac (including, without
limitation, the books of account, minute books, and stock record books)
are complete and correct in all material respects and have been
maintained in accordance with sound business practices. The minute
books of Rimpac are complete and current in all material respects and,
as applicable, accurately reflect all actions taken by the shareholders
and the board of directors of Rimpac since the date of inception of
Rimpac, and all signatures contained therein are the true signatures of
the persons whose signatures they purport to be.
4.10 RIMPAC FINANCIAL STATEMENTS.
(a) The audited balance sheet of Rimpac as of its last Form
10-KSB, and the related audited statements of income,
statements of cash flow and statements of shareholders equity
for the year then ended, true and complete copies of which
have been delivered to the INTERNET LOTO Shareholders, present
fairly, in all material respects, the financial position of
Rimpac as at such dates and the results of operations of
Rimpac for the year then ended, in accordance with US GAAP
consistently applied for the periods covered thereby. The
unaudited balance sheet and related statements of income,
statements of cash flow and statements of shareholders equity
for the period ended September 30, 2001, true and complete
copies of which have been delivered to INTERNET LOTO
Shareholders, present fairly, in all material respects, the
financial position of Rimpac at such date in accordance with
US GAAP.
Share Exchange Agreement - Page 14
(b) The financial statements referred to in paragraph (a) above
are hereinafter referred to as the RIMPAC FINANCIAL
STATEMENTS.
4.11 UNDISCLOSED LIABILITIES. Rimpac does not have any Liabilities of a kind
required by US GAAP to be set forth on a financial statement that is
not fully and adequately reflected or reserved against on the Rimpac
Financial Statements. Rimpac does not have any Liabilities, whether or
not of a kind required by US GAAP to be set forth on a financial
statement, other than (a) Liabilities incurred in the ordinary course
of business since the date of the latest balance sheet included in the
Rimpac Financial Statements that are consistent with past practice and
are included in the latest Rimpac Financial Statements, (b) Liabilities
that are fully reflected on or reserved against on the latest balance
sheet included in the Rimpac Financial Statements, or (c) as
specifically disclosed in the Rimpac Financial Statements.
4.12 TITLE TO PROPERTY; ENCUMBRANCES. Rimpac has good and indefeasible title
to and other legal right to use all properties and assets, real,
personal and mixed, tangible and intangible, reflected as owned on the
latest balance sheet included in the Rimpac Financial Statements or
acquired after the date of such balance sheet, except for properties
and assets disposed of in accordance with customary practice in the
business or disposed of for full and fair value since the date of such
balance sheet in the ordinary course of business consistent with past
practice and except for matters that would not have a Material Effect.
4.13 TAXES. All Tax Returns, reports and declarations of estimated tax or
estimated tax deposit forms required to be filed by Rimpac have been
duly and timely filed; Rimpac has paid all Taxes which have become due
whether pursuant to such returns or any assessment received by it or
otherwise, and has paid all installments of estimated Taxes due; and
all Taxes which Rimpac is required by law to withhold or to collect
have been duly withheld and collected, and have been paid over to the
proper Governmental or Regulatory Body. There are no tax liens upon any
of the assets or properties of Rimpac except for Liens for Taxes not
yet due. Rimpac is not a party to any Settlement Agreement, and Rimpac
does not have any obligation to make payments under any Settlement
Agreement.
4.14 LITIGATION.
(a) There is no action, proceeding, investigation, or inquiry
pending or, to the best of Rimpac's knowledge, threatened (i)
against or affecting any of Rimpac's assets or business that,
if determined adversely to Rimpac, would result in a Material
Effect or (ii) that questions this Agreement or any action
contemplated by this Agreement or in connection with the Share
Exchange.
(b) Rimpac has no knowledge of any state of facts or of the
occurrence or nonoccurrence of any event or group of related
events, that should reasonably cause Rimpac to determine that
there exists any basis for any material claim against Rimpac
for any of the matters described in paragraph (a) above.
Share Exchange Agreement - Page 15
4.15 CONTRACTS AND OTHER AGREEMENTS. SECTION 4.15 to the Rimpac Disclosure
Schedule contains a complete and correct list as of the date hereof of
all material agreements, contracts, and commitments (and all amendments
thereto), written or oral, to which Rimpac is a party or by which any
of its properties is bound. Rimpac has made available to the INTERNET
LOTO Shareholders complete and correct copies of all material written
agreements, contracts, and commitments, together with all amendments
thereto, and accurate (in all material respects) descriptions of all
material oral agreements. Such agreements, contracts, and commitments
are in full force and effect, and, to the best of Rimpac's knowledge,
all other parties to such agreements, contracts, and commitments have
performed all obligations required to be performed by them to date
thereunder in all material respects and are not in default thereunder
in any material respect.
4.16 COMPENSATION ARRANGEMENTS; OFFICERS, DIRECTORS AND EMPLOYEES. Rimpac
does not pay any compensation to any of its officers and directors and
has no employees. Rimpac has not made a commitment or agreement
(verbally or in writing) to pay any compensation to such persons.
4.17 ERISA. There are no Plans maintained for the benefit of, or covering,
any employee, former employee, independent contractor or former
independent contractor of Rimpac or their dependents or their
beneficiaries, or otherwise, now or heretofore contributed to by Rimpac
and no such Plan is or has ever been subject to ERISA.
4.18 OPERATIONS. Except as expressly authorized by this Agreement, or except
as set forth in SECTION 4.18 to the Rimpac Disclosure Schedule, since
the date of the latest Rimpac Financial Statements, Rimpac has not:
(a) amended its Articles of Incorporation or By-Laws or merged
with or into or consolidated with any other entity, or changed
or agreed to rearrange in any manner the character of the
business of Rimpac;
(b) issued, sold or purchased options or rights to subscribe to,
or entered into any contracts or commitments to issue, sell or
purchase, any shares of its capital stock or other equity
interests;
(c) entered into, amended or terminated any (i) employment
agreement or collective bargaining agreement, (ii) adopted,
entered into or amended any arrangement which is, or would be,
a Plan or (iii) made any change in any actuarial methods or
assumptions used in funding any Plan or in the assumptions or
factors used in determining benefit equivalencies thereunder;
(d) issued any note, bond or other debt security, created,
incurred or assumed any indebtedness for borrowed money other
than in the ordinary course of business in connection with
trade payables, or guaranteed any indebtedness for borrowed
money or any capitalized lease obligation;
Share Exchange Agreement - Page 16
(e) declared, set aside or paid any dividends or declared or made
any other distributions of any kind to the shareholders, or
made any direct or indirect redemption, retirement, purchase
or other acquisition of any shares of its capital stock or
other equity interests;
(f) knowingly waived any right of material value to the business
of Rimpac;
(g) made any change in its accounting methods or practices or made
any changes in depreciation or amortization policies or rates
adopted by it or made any material write-down of inventory or
material write-off as uncorrectable of accounts receivable;
(h) made any wage or salary increase or other compensation payable
or to become payable or bonus, or increase in any other direct
or indirect compensation, for or to any of its officers,
directors, employees, consultants, agents or other
representatives, or any accrual for or commitment or agreement
to make or pay the same, other than increases made in the
ordinary course consistent with past practice;
(i) entered into any transactions with any of its affiliates,
shareholders, officers, directors, employees, consultants,
agents or other representatives (other than employment
arrangements made in the ordinary course of business
consistent with past practice), or any affiliate of any
shareholder, officer, director, consultant, employee, agent or
other representative;
(j) made any payment or commitment to pay any severance or
termination pay to any person or any of its officers,
directors, employees, consultants, agents or other
representatives, other than payments or commitments to pay
such persons or their officers, directors, employees in the
ordinary course of business;
(k) except in the ordinary course of business, (i) entered into
any lease (as lessor or lessee), (ii) sold, abandoned or made
any other disposition of any of its assets or properties other
than in the ordinary course of business consistent with past
practice, (iii) granted or suffered any Lien on any of its
assets or properties other than sales of inventory in the
ordinary course of business, or (iv) entered into or amended
any material contract or other agreement to which it is a
party, or by or to which it or its assets or properties are
bound or subject, or pursuant to which it agrees to indemnify
any person or to refrain from competing with any person, in
each case or type required to be disclosed pursuant to SECTION
4.14 hereof;
(l) except in the ordinary course of business, incurred or
assumed any debt, obligation or liability (whether absolute
or contingent and whether or not currently due and payable);
Share Exchange Agreement - Page 17
(m) except for inventory or equipment acquired in the ordinary
course of business, made any acquisition of all or any part of
the assets, properties, capital stock or business of any other
person;
(n) except in the ordinary course of business, paid, directly or
indirectly, any of its Liabilities before the same became due
in accordance with their terms or otherwise than in the
ordinary course of business, except to obtain the benefit of
discounts available for early payment;
(o) except in the ordinary course of business, created, incurred
or assumed any indebtedness for borrowed money, or guaranteed
any indebtedness for borrowed money or any capitalized lease
obligation, in each case in excess of $5,000 individually or
in the aggregate;
(p) except in the ordinary course of business, made any capital
expenditures or commitments for capital expenditures in
aggregate amount exceeding $5,000; or
(q) except in the ordinary course of business, terminated, failed
to renew, amended or entered into any contract or other
agreement of a type required to be disclosed pursuant to
SECTION 4.15.
4.19 BROKERS. All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried out by the INTERNET
LOTO Shareholders directly with Rimpac without the intervention of any
other person on behalf of the INTERNET LOTO Shareholders in such manner
as to give rise to any valid claim by any person against the INTERNET
LOTO Shareholders or Rimpac for a finder's fee, brokerage commission or
similar payment.
4.20 APPROVAL OF SHARE EXCHANGE. The board of directors of Rimpac has
approved the Share Exchange without reservation or qualification.
4.21 SEC REPORTING STATUS. Rimpac is a reporting company with the Securities
and Exchange Commission accordance with the provisions of the
Securities Exchange Act of 1934. Rimpac is current on all reports
required to be filed in accordance with the Securities Exchange Act of
1934.
4.22 INVESTMENT COMPANY. Rimpac is not an investment company within the
meaning of Section 3 of the Investment Company Act.
4.23 OTC BULLETIN BOARD STATUS. The Rimpac shares of Common Stock are
approved for quotation on the National Association of Securities
Dealers (NASD) Over The Counter Bulletin Board (OTCBB). Rimpac is
current with all NASD requirements for quotation of its securities on
the OTCBB and is not currently subject and will not be subject as of
the date of closing to de-listing or any other NASD sanction.
Share Exchange Agreement - Page 18
4.24 DISCLOSURE. To the knowledge of Rimpac, neither this Agreement, nor any
Schedule or Exhibit to this Agreement, contains an untrue statement of
a material fact or omits a material fact necessary to make the
statements contained herein or therein not misleading.
ARTICLE V
ACTIONS PRIOR TO CLOSING
5.1 CORPORATE EXAMINATIONS AND INVESTIGATIONS. From the execution of the
this Agreement until the Closing Date, Rimpac shall be entitled to make
such investigation of the assets, properties, agreements, business and
operations of INTERNET LOTO and such examination of the books, records,
Tax Returns, financial condition and operations of INTERNET LOTO, and
to otherwise complete Rimpac's feasibility review of acquiring INTERNET
LOTO. Any such investigation and examination shall be conducted at
reasonable times and under reasonable circumstances and INTERNET LOTO
shall cooperate fully therein. In order that Rimpac may have full
opportunity to make such a business, accounting and legal review,
examination or investigation as they may wish of the business and
affairs of INTERNET LOTO, INTERNET LOTO shall furnish to Rimpac during
such period all such information and copies of such documents
concerning the affairs of INTERNET LOTO as Rimpac may reasonably
request and cause INTERNET LOTO's officers, employees, consultants,
agents, accountants and attorneys to fully cooperate with Rimpac and
disclose all material facts affecting the financial condition and
business operations of INTERNET LOTO. INTERNET LOTO, upon notice, may,
but has no obligation to, address the issues raised by Rimpac during
this feasibility review period. In the event that Rimpac is not
satisfied with any document or issue concerning the operations or
business of INTERNET LOTO, or any matter related to this Agreement,
Rimpac may, for any reason, in its sole discretion, at any time prior
to Closing, give written notice of termination to INTERNET LOTO and the
INTERNET LOTO Shareholders, and all parties shall be released from any
obligation or further liabilities under this Agreement.
Until the Closing and if the Closing shall not occur, thereafter,
Rimpac and its affiliates shall keep confidential and shall not use in
any manner inconsistent with the transactions contemplated by this
Agreement and after termination of this Agreement, Rimpac and its
affiliates shall not disclose, nor use for their own benefit, any
information or documents obtained from INTERNET LOTO concerning its
assets, properties, business and operations, unless (a) readily
ascertainable from public or published information, or trade sources,
(b) received from a third party not under an obligation to INTERNET
LOTO to keep such information confidential or (c) required by any Law
or Order. If this transaction does not close for any reason, Rimpac and
its affiliates shall return or destroy all such confidential
information and compilations thereof as is practicable, and shall
certify such destruction or return to INTERNET LOTO.
5.2 CONDUCT OF BUSINESS. From the date hereof through the Closing Date, the
INTERNET LOTO Shareholders shall cause the business of INTERNET LOTO to
be conducted in the ordinary course in the same manner as it has been
conducted since it inception. The
Share Exchange Agreement - Page 19
INTERNET LOTO Shareholders covenant that, except with the prior written
consent of Rimpac, which consent shall not be unreasonably withheld,
INTERNET LOTO will not:
(a) Do any of the restricted acts set forth in SECTION 3.20
hereof, or enter into any agreement of a nature set forth in
SECTION 3.16 hereof; or
(b) Enter into any transaction other than in the ordinary course
of business.
5.3 PRESERVATION OF BUSINESS. From the date hereof through the Closing
Date, the INTERNET LOTO Shareholders shall cause INTERNET LOTO to use
commercially reasonable efforts to (i) preserve intact the business,
assets, properties and organizations of INTERNET LOTO, (ii) keep
available the services of the present officers, employees, consultants
and agents of INTERNET LOTO; and (iii) maintain the present suppliers
and customers and preserve the goodwill of INTERNET LOTO.
5.4 ADVICE OF CHANGES. The INTERNET LOTO Shareholders will promptly
advise Rimpac in writing from time to time prior to the Closing with
respect to any matter hereafter arising and known to them that, if
existing or occurring at the date of this Agreement, would have been
required to be set forth or described in the INTERNET LOTO Shareholder
Disclosure Schedule or would have resulted in any representation of the
INTERNET LOTO Shareholders in this Agreement being untrue. Rimpac will
promptly advise the INTERNET LOTO Shareholders in writing from time to
time prior to the Closing with respect to any matter hereafter arising
and known to it that, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in the
Rimpac Disclosure Schedule nor would have resulted in any
representation of Rimpac in this Agreement being untrue in any material
respect.
5.5 OTHER AGREEMENTS. The INTERNET LOTO Shareholders and Rimpac agree to
take, or cause to be taken, all actions and to do, or cause to be done,
all things reasonably necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated
by this Agreement, including, without limitation, the obtaining of all
necessary waivers, consents and approvals and the effecting of all
necessary registrations and filings, including, but not limited to,
submissions of information requested by Governmental or Regulatory
Bodies and any other persons required to be obtained by them for the
consummation of the closing and the continuance in full force and
effect of the permits, contracts and other agreements set forth on the
Schedules to this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF RIMPAC TO COMPLETE THE
CLOSING. The obligations of Rimpac to enter into and complete the
Closing are subject to the fulfillment of the following conditions, any
one or more of which may be waived by Rimpac:
Share Exchange Agreement - Page 20
(a) (i) All of the terms, covenants, and conditions of this
Agreement to be complied with or performed by the INTERNET
LOTO Shareholders at or before the Closing shall have been
duly complied with and performed in all material respects, to
the sole satisfaction of Rimpac, (ii) the representations and
warranties of the INTERNET LOTO Shareholders set for in
Article III shall be true in all material respects on and as
of the Closing Date with the same force and effect as if such
representations and warranties had been made on and as of the
Closing, and (iii) Rimpac shall have received a certificate to
such effect from the INTERNET LOTO Shareholders.
(b) All consents, waivers, approvals, licenses, authorizations of,
or filings or declarations with third parties or Governmental
or Regulatory Bodies required to be obtained by INTERNET LOTO
or the INTERNET LOTO Shareholders in order to permit the
transactions contemplated by this Agreement to be consummated
in accordance with agreements and court orders applicable to
INTERNET LOTO or the INTERNET LOTO Shareholders and applicable
governmental laws, rules, regulations and agreements shall
have been obtained and any waiting period thereunder shall
have expired or been terminated, and INTERNET LOTO shall have
received a certificate from the INTERNET LOTO Shareholders to
such effect.
(c) All actions, proceedings, instruments, and documents in
connection with the consummation of the transactions
contemplated by this Agreement, including the forms of all
documents, legal matters, opinions, and procedures in
connection therewith, shall have been approved in form and
substance by counsel for Rimpac.
(d) The INTERNET LOTO Shareholders shall have furnished such
certificates to evidence compliance with the conditions set
forth in this Article, as may be reasonably requested by
Rimpac or its counsel.
(e) INTERNET LOTO shall not have suffered any Material Effect.
(f) No material information or data provided or made available to
Rimpac by or on behalf of INTERNET LOTO shall be incorrect in
any material respect.
(g) No investigation and no suit, action, or proceeding before any
court or any governmental or regulatory authority shall be
pending or threatened by any state or federal governmental or
regulatory authority, against INTERNET LOTO or any of its
affiliates, associates, officers, or directors seeking to
restrain, prevent, or change in any material respect the
transactions contemplated hereby or seeking damages in
connection with such transactions that are material to
INTERNET LOTO.
(h) Counsel to INTERNET LOTO and/or the INTERNET LOTO Shareholders
shall have delivered to Rimpac on and as of the Closing Date
an opinion to Rimpac
Share Exchange Agreement - Page 21
substantially as to the matters set forth in SECTIONS 3.1,
3.2, 3.3, 3.4, 3.6. 3.7, AND 3.8, all subject to customary
limitations reasonably acceptable to counsel to Rimpac.
(i) The following key employee ("KEY EMPLOYEE") shall have entered
into at least a two-year employment agreement on terms
satisfactory to Rimpac: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. The EMPLOYMENT
AGREEMENT shall contain provisions as to a year-end
performance bonus based on standards to be established by the
directors of Rimpac, incentive stock options with minimum
guarantees, the repurchase of Rimpac shares of Common Stock in
the event of termination of employment, and modified
non-compete and proprietary information provisions.
(j) Each officer and Key Employee shall have entered into a
proprietary information and non-compete agreement on terms
satisfactory to Rimpac with the exception of any relationship
any officer or Key Employee may have with Hi-Tek Multimedia
(k) The INTERNET LOTO Shareholders shall have provided audited
financial statements of INTERNET LOTO covering the November
30, 2001 in a form suitable for filing with the SEC.
(l) Rimpac shall have fully completed its feasibility review as
provided under SECTION 5.1 hereof to its satisfaction.
(m) The following benchmarks shall have been completed: (1)
preparation of the INTERNET LOTO business plan; (2) design and
launch of FLASH Animation web page (▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇); and
(3) design and launch of the INTERNET LOTO front end web site
(Alpha stage).
6.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE INTERNET LOTO
SHAREHOLDERS TO COMPLETE THE CLOSING. The obligations of the INTERNET
LOTO Shareholders to enter into and complete the Closing are subject to
the fulfillment on or prior to the Closing Date, of the following
conditions, any one or more of which may be waived by the INTERNET LOTO
Shareholders:
(a) (i) All of the terms, covenants, and conditions of this
Agreement to be complied with or performed by Rimpac at or
before the Closing shall have been duly complied with and
performed in all material respects, (ii) the representations
and warranties of Rimpac set for in Article IV shall be true
in all material respects on and as of the Closing Date with
the same force and effect as if such representations and
warranties had been made on and as of the Closing, and (iii)
the INTERNET LOTO Shareholders shall have received a
certificate to such effect from Rimpac.
(b) All consents, waivers, approvals, licenses, authorizations of,
or filings or declarations with third parties or Governmental
or Regulatory Bodies required to
Share Exchange Agreement - Page 22
be obtained by Rimpac in order to permit the transactions
contemplated by this Agreement to be consummated in accordance
with agreements and court orders applicable to Rimpac and
applicable governmental laws, rules, regulations and
agreements shall have been obtained and any waiting period
thereunder shall have expired or been terminated, and the
INTERNET LOTO Shareholders shall have received a certificate
from Rimpac to such effect.
(c) All actions, proceedings, instruments, and documents in
connection with the consummation of the transactions
contemplated by this Agreement, including the forms of all
documents, legal matters, opinions, and procedures in
connection therewith, shall have been approved in form and
substance by counsel for the INTERNET LOTO Shareholders, which
approval shall not be unreasonably withheld.
(d) Rimpac shall have furnished such certificates to evidence
compliance with the conditions set forth in this Article, as
may be reasonably requested by the INTERNET LOTO Shareholders
or their counsel.
(e) Rimpac shall not have suffered any Material Effect.
(f) No material information or data provided or made available to
the INTERNET LOTO Shareholders by or on behalf of Rimpac shall
be incorrect in any material respect.
(g) No investigation and no suit, action, or proceeding before any
court or any governmental or regulatory authority shall be
pending or threatened by any state or federal governmental or
regulatory authority, against Rimpac or any of its affiliates,
associates, officers, or directors seeking to restrain,
prevent, or change in any material respect the transactions
contemplated hereby or seeking damages in connection with such
transactions that are material to Rimpac.
(h) Counsel to Rimpac shall have delivered to the INTERNET LOTO
Shareholders on and as of the Closing Date an opinion to the
INTERNET LOTO Shareholders substantially as to the matters set
forth in SECTIONS 4.1, 4.2, 4.3, 4.4, 4.5, 4.6., AND 4.7, all
subject to customary limitations reasonably acceptable to
counsel to the INTERNET LOTO Shareholders.
(i) Rimpac shall be current on all filings required by the
Securities Exchange Act of 1934, including the Form 10KSB for
the period ending December 31, 2001.
Share Exchange Agreement - Page 23
ARTICLE VII
POST-CLOSING COVENANTS
The parties covenant to take the following actions after the Closing Date:
7.1 FURTHER INFORMATION. Following the Closing, each party will afford to
the other party, its counsel and its accountants, during normal
business hours, reasonable access to the books, records and other data
of INTERNET LOTO or Rimpac, as the case may be, relating to the
business of INTERNET LOTO or Rimpac in their possession with respect to
periods prior to the Closing and the right to make copies and extracts
therefrom, to the extent that such access may be reasonably required by
the requesting party (a) to facilitate the investigation, litigation
and final disposition of any claims which may have been or may be made
against any party or its affiliates and (b) for any other reasonable
business purpose.
7.2 RECORD RETENTION. Each party agrees that for a period of not less than
five years following the Closing Date, such party shall not destroy or
otherwise dispose of any of the Books and Records of INTERNET LOTO or
Rimpac relating to the business of INTERNET LOTO or Rimpac in his or
its possession with respect to periods prior to the Closing Date. Each
party shall have the right to destroy all or part of such Books and
Records after the fifth anniversary of the Closing Date or, at an
earlier time by giving each other party hereto 30 days prior written
notice of such intended disposition and by offering to deliver to the
other party or parties, at the other party's or parties' expense,
custody of such Books and Records as such party may intend to destroy.
7.3 POST-CLOSING ASSISTANCE. The INTERNET LOTO Shareholders on the one
hand, and Rimpac, on the other hand, will provide each other with such
assistance as may reasonably be requested in connection with the
preparation of any Tax Return, any audit or other examination by any
taxing authority, or any judicial or administrative proceedings
relating to liability for Taxes, and each will retain and provide the
requesting party with any records or information that may be reasonably
relevant to such return, audit or examination, proceedings or
determination. The party requesting assistance shall reimburse the
other party for reasonable out-of-pocket expenses incurred in providing
such assistance. Any information obtained pursuant to this Section 7.3
or pursuant to any other Section hereof providing for the sharing of
information or the review of any Tax Return or other schedule relating
to Taxes shall be kept confidential by the parties hereto.
7.4 SEC REPORTING. With a view to making available the benefits of certain
rules and regulations of the SEC which may at any time permit the sale
of the Rimpac shares of Common Stock to the public without
registration, from and after the Closing, the new management of Rimpac
shall:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities
Act, at all times; and
Share Exchange Agreement - Page 24
(b) file with the SEC in a timely manner all reports and other
documents required of Rimpac and of them under the Exchange
Act.
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
8.1 SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES. Notwithstanding
any investigation conducted or notice or knowledge obtained by or on
behalf of any party hereto, each covenant and agreement in this
Agreement shall survive the Closing without limitation as to time until
fully performed, and each representation and warranty in this Agreement
or in the Exhibits, Schedules or certificates delivered pursuant to
this Agreement shall survive the Closing for a period of two years
(other than the representations and warranties contained in SECTION 3.5
and 3.26 which shall survive the Closing without limitation as to time,
and other than the representations and warranties contained in SECTION
3.14, which shall survive the Closing until the earlier of (i) three
and one-half years from the Closing Date and (ii) three years following
the date on which Tax files the Tax Return relating to the taxable
period from December 31, 2001 through the Closing Date). Notice must be
given to the party from whom indemnification is sought of any claim for
indemnification under Article VIII prior to the termination of the
relevant survival period.
8.2 INDEMNIFICATION BY THE INTERNET LOTO SHAREHOLDERS. From and after the
Closing Date, the INTERNET LOTO Shareholders agree jointly and
severally, to indemnify, hold harmless, protect and defend Rimpac and
its affiliates (and their respective directors, officers, agents and
employees, successors and assigns) in accordance with the provisions of
this Article VII from and against:
(a) any and all damages incurred by any of them arising out of,
relating to or based upon or in connection with any inaccuracy
in, or breach of, any of the representations or warranties,
covenants or agreements of any of the INTERNET LOTO
Shareholders or INTERNET LOTO contained in or incorporated
into this Agreement, in the Schedules hereto or in
certificates delivered pursuant to this Agreement;
(b) any and all Taxes (other than to the extent such Taxes are
reflected in the INTERNET LOTO balance sheet included in the
INTERNET LOTO Financial Statements) imposed on INTERNET LOTO
in respect of its income, business, property or operations or
for which INTERNET LOTO may otherwise be liable for any period
ending or deemed to end prior to or on the date of the
INTERNET LOTO Financial Statements;
(c) any cost incurred by INTERNET LOTO in connection with this
Agreement and the transactions contemplated hereby.
Share Exchange Agreement - Page 25
The right of the parties to be indemnified hereunder shall not be
limited or affected by any investigation conducted or notice or
knowledge obtained by or on behalf of any such persons.
8.3 RIMPAC'S INDEMNITY. Rimpac shall indemnify the INTERNET LOTO
Shareholders and hold the INTERNET LOTO Shareholders harmless against
and in respect of any and all damages, losses, claims, penalties,
liabilities, costs and expenses (including, without limitation, all
fines, interest, reasonable legal fees and expenses and amounts paid in
settlement), that arise from or relate or are attributable to (and
without giving effect to any tax benefit to the indemnified party) (a)
any misrepresentation by Rimpac or breach of any warranty by Rimpac in
this Agreement and (b) any breach of any covenant or agreement on the
part of Rimpac in this Agreement.
8.4 METHOD OF ASSERTING CLAIMS. The party making a claim under this Article
VIII is referred to as the "Indemnified Party" and the party against
whom such claims are asserted under this Article VIII is referred to as
the "Indemnifying Party". All claims by any Indemnified Party under
this Article VIII shall be asserted and resolved as follows:
(a) Whenever an Indemnified Party becomes aware of a claim for
which an Indemnifying Party would be liable to an Indemnified
Party hereunder, the Indemnified Party shall with reasonable
promptness notify in writing the Indemnifying Party of such
claim, identifying the representation or warranty on which
such claim is based, the basis for such claim or demand, and
the amount or the estimated amount thereof to the extent then
determinable (which estimate shall not be conclusive of the
final amount of such claim and demand; the "Claim Notice");
provided, that any failure to give a Claim Notice will not be
deemed a waiver of any rights of the Indemnified Party except
to the extent the rights of the Indemnifying Party are
actually prejudiced by such failure. If the basis of such
claim is a claim or demand by a third party, the Indemnifying
Party, upon request of the Indemnified Party, shall retain
counsel (who shall be reasonably acceptable to the Indemnified
Party) to represent the Indemnified Party and shall pay the
reasonable fees and disbursements of such counsel with regard
thereto; provided, that any Indemnified Party is hereby
authorized prior to the date on which it receives written
notice from the Indemnifying Party designating such counsel,
to retain counsel, whose fees and expenses shall be at the
expense of the Indemnifying Party, to file any motion, answer
or other pleading and take such other action which it
reasonably shall deem necessary to protect its interests or
those of the Indemnifying Party until the date on which the
Indemnified Party receives such notice from the Indemnifying
Party. The Indemnified Party shall have the right to retain
its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (a)
the Indemnifying Party and the Indemnified Party shall have
mutually agreed to the retention of such counsel or (b)
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. The Indemnifying Party shall not, in connection
with any proceedings or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more
Share Exchange Agreement - Page 26
than one such firm for the Indemnified Party (except to the
extent the Indemnified Party retained counsel to protect its
(or the Indemnifying Party's) rights prior to the selection of
counsel by the Indemnifying Party). If requested by the
Indemnifying Party, the Indemnified Party agrees to cooperate
with the Indemnifying Party and its counsel in contesting any
claim or demand which the Indemnifying Party defends. A claim
or demand may not be settled by either party without the prior
written consent of the other party (which consent will not be
unreasonably withheld) unless, as part of such settlement, the
Indemnified Party shall receive a full and unconditional
release reasonably satisfactory to the Indemnifying Party.
(b) After delivery of a Claim Notice, so long as any right to
indemnification exists pursuant to this Article VIII, the
affected parties each agree to retain all Books and Records
related to such Claim Notice. In each instance, the
Indemnified Party shall have the right to be kept fully
informed by the Indemnifying Party and its legal counsel with
respect to any legal proceedings. Any information or documents
made available to any party hereunder and designated as
confidential by the party providing such information or
documents and which is not otherwise generally available to
the public and not already within the knowledge of the party
to whom the information is provided (unless otherwise covered
by the confidentiality provisions of any other agreement among
the parties hereto, or any of them), and except as may be
required by applicable law, shall not be disclosed to any
third person (except for the representatives of the party
being provided with the information, in which event the party
being provided with the information shall request its
representatives not to disclose any such information which it
otherwise required hereunder to be kept confidential).
8.5 GENERAL PROVISIONS. The following general provisions shall apply to any
claim for indemnification under this Article VIII:
(a) The amount of any claim subject to indemnification shall be
determined after taking into account the present value of any
tax benefits (net of tax detriments) accruing to the
Indemnified Party or any affiliate as a result of such claim.
(b) Except as otherwise set forth in this Section 8.5(b), with
respect to any breach, violation or nonfulfillment of or
default in the performance of any representation, warranty or
covenant of this Agreement for which a right to claim
indemnification is provided in this Article VIII, after the
Closing a claim or an action under and pursuant to the terms,
conditions and limitations of this Article VIII shall be the
sole and exclusive right and remedy of Rimpac and the INTERNET
LOTO Shareholders and neither Rimpac nor any INTERNET LOTO
Shareholder shall have any other claim, cause of action,
right, or remedy for such breach, violation, non-fulfillment
or default against the other based upon this Agreement, any
provision of any federal or state securities or other statute,
law, rule or regulation or based upon any other cause of
action arising at law or in equity; PROVIDED, that if for any
reason a court of competent jurisdiction shall refuse to
enforce this
Share Exchange Agreement - Page 27
provision, and shall permit Rimpac or the INTERNET LOTO
Shareholders to assert any action based other than upon the
right to claim indemnification as provided in this Article
VIII, Rimpac and the INTERNET LOTO Shareholders agree that the
amount of such other claim shall be subject to and limited by
the provisions of this Article VIII. The provisions of this
Section 8.5(b) shall not preclude the prosecution of any
action or proceeding based on fraud that, if found to exist,
would be sufficient to give rise to the right of rescission
with respect to the transactions contemplated by this
Agreement.
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing as follows:
(a) by mutual written consent of Rimpac and the INTERNET LOTO
Shareholders;
(b) by Rimpac on the one hand, or by all of the INTERNET LOTO
Shareholders, on the other hand, by written notice to the
other party hereto, if the Closing shall not have occurred on
the date as established pursuant to SECTION 2.1 hereof (unless
such event has been caused by a breach of this Agreement by
the party seeking such termination);
(c) by Rimpac or by all of the INTERNET LOTO Shareholders if a
Governmental or Regulatory Body has permanently enjoined or
prohibited consummation of the Share Exchange and such court
or government action is final and non-appealable;
(d) by Rimpac if the INTERNET LOTO Shareholders have failed to
comply in any material respect with any of its covenants or
agreements under this Agreement that are required to be
complied with prior to the date of such termination;
(e) by Rimpac for any reason whatsoever as provided by SECTION 5.1
hereof; or
(f) by the INTERNET LOTO Shareholders if Rimpac has failed to
comply in any material respect with any of its covenants or
agreements under this Agreement that are required to be
complied with prior to the date of such termination.
Should the INTERNET LOTO Shareholders terminate this Agreement for any
reason other than a default by Rimpac as described in SECTION 9.1(f)
hereof, the INTERNET LOTO Shareholders shall be jointly and severally
liable for all damages caused by the failure to close and not just the
expenses listed in SECTION 10.1 hereof. Should Rimpac terminate this
Agreement for any reason other than a default by the INTERNET LOTO
Shareholders as described in SECTION 9.1(d) hereof, or as allowed by
Section 5.1 hereof, then Rimpac shall be liable for all damages caused
by the failure to close and not just the expenses listed in SECTION
10.1. hereof.
Share Exchange Agreement - Page 28
9.2 SURVIVAL AFTER TERMINATION. If this Agreement is terminated pursuant to
SECTION 9.1, (a) this Agreement shall become null and void and of no
further force and effect, except for the provisions of SECTION 5.1
relating to the obligation to keep confidential certain information and
(b) there shall be no liability on the part of INTERNET LOTO or Rimpac
or their respective affiliates.
ARTICLE X
MISCELLANEOUS
10.1 EXPENSES. Rimpac shall be solely responsible for its own legal and
accounting fees in connection with the Share Exchange. INTERNET LOTO
shall be responsible for legal and accounting fees and other expenses
in connection with the Share Exchange as it relates to INTERNET LOTO.
10.2 FURTHER ASSURANCES. At any time and from time to time after the Closing
Date at the request of Rimpac, and without further consideration, the
INTERNET LOTO Shareholders will execute and deliver such other
instruments of sale, transfer, conveyance, assignment and confirmation
and take such other action as Rimpac may reasonably deem necessary or
desirable in order to transfer, convey and assign the Shares to Rimpac
and to assist Rimpac in exercising all rights with respect thereto. The
parties shall use their best efforts to fulfill or obtain the
fulfillment of the conditions to the Closing, including, without
limitation, the execution and delivery of any document or other papers,
the execution and delivery of which are conditions precedent to the
Closing.
10.3 NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and
shall be given personally, sent by facsimile transmission or sent by
prepaid air courier or certified or express mail, postage prepaid. Any
such notice shall be deemed to have been given (a) when received, if
delivered in person, sent by facsimile transmission and confirmed in
writing within three (3) business days thereafter or sent by prepaid
air courier or (b) three (3) business days following the mailing
thereof, if mailed by certified first class mail, postage prepaid,
return receipt requested, in any such case as follows (or to such other
address or addresses as a party may have advised the other in the
manner provided in this SECTION 10.3):
If to the INTERNET LOTO Shareholders:
INTERNET LOTO
▇▇▇▇ ▇▇▇▇▇▇ ▇▇. #▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇
Attention: Messrs. ▇▇▇▇▇▇▇ and Amoeba Corporation
Share Exchange Agreement - Page 29
If to Rimpac:
RIMPAC RESOURCES LTD.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
with a copy to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
10.4 ARBITRATION. The Agreement shall be governed by and construed in
accordance with the substantive laws of Nevada, without reference or
regard to principles of conflicts of law, except as to questions
regarding securities laws in which case federal securities laws shall
control. Any and all claims, controversies or disputes arising out of
relating to this Agreement, including any claim for declaratory relief
or any claim whatsoever regardless of whether sounding in contract or
tort, regardless of whether such claim, controversy or dispute is
against the Rimpac or the shareholders of INTERNET LOTO or any of their
officers, employees, agents, attorneys or accountants, shall be
resolved by binding arbitration under the Commercial Arbitration Rules
of the American Arbitration Association. There shall be no rights of
pretrial discovery. Venue for any such arbitration or any application
disputing anything whatsoever concerning this Agreement shall be in the
City of San Diego, California. The prevailing party in any arbitration
or judicial application of any nature whatsoever, including any and all
claims regardless of whether said claim is framed in contract or tort,
shall be entitled to reasonable attorney's fees and costs of suit.
Judgment upon any arbitration award may be entered in a court of
competent jurisdiction. The parties hereto understand and agree that
the execution of this Agreement will result in a waiver of the right to
a jury trial and other procedures inherent in civil litigation in the
event of a dispute.
10.5 PUBLICITY. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be made without
advance approval thereof by Rimpac and the INTERNET LOTO Shareholders
except as may be required by applicable law.
10.6 ENTIRE AGREEMENT. This Agreement (including the Exhibits and Schedules)
and the agreements, certificates and other documents delivered pursuant
to this Agreement contain the entire agreement among the parties with
respect to the transactions described herein, and supersede all prior
agreements, written or oral, with respect thereto.
Share Exchange Agreement - Page 30
10.7 WAIVERS AND AMENDMENTS. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only
by a written instrument signed by the parties or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof
10.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada without regard to
principles of conflicts of law.
10.9 BINDING EFFECT, NO ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement is not assignable by any party hereto
without the prior written consent of the other parties hereto except by
operation of law and any other purported assignment shall be null and
void.
10.10 COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof each signed by less than all, but together
signed by all of the parties hereto.
10.11 EXHIBITS AND SCHEDULES. The Exhibits and Schedules are a part of this
Agreement as if fully set forth herein. All references herein to
Sections, subsections, clauses, Exhibits and Schedules shall be deemed
references to such parts of this Agreement, unless the context shall
otherwise require.
10.12 EFFECT OF DISCLOSURE ON SCHEDULES. Any item disclosed on any Schedule
to this Agreement shall only be deemed to be disclosed in connection
with (a) the specific representation and warranty to which such
Schedule is expressly referenced, (b) any specific representation and
warranty which expressly cross-references such Schedule and (c) any
specific representation and warranty to which any other Schedule to
this Agreement is expressly referenced if such other Schedule expressly
cross-references such Schedule.
10.13 HEADINGS. The headings in this Agreement are for reference only, and
shall not affect the interpretation of this Agreement.
10.14 SEVERABILITY OF PROVISIONS. If any provision or any portion of any
provision of this Agreement or the application of such provision or any
portion thereof to any person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the
remaining provisions of this Agreement, or the application of such
provision or portion of such provision as is held invalid or
unenforceable to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby.
Share Exchange Agreement - Page 31
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
RIMPAC RESOURCES LTD.:
By:
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
INTERNET LOTO SHAREHOLDERS:
---------------------------------------
---------------------------------------
---------------------------------------
Share Exchange Agreement - Page 32
SCHEDULE A
The following individuals are the only shareholders of Internet LOTO, and they
have each signed the Share Exchange Agreement as referenced above.
NUMBER OF
NAME: SHARES OWNED:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1,000,000
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ 1,000,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Amoeba Corporation 6,000,000
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
TOTAL: THREE (3) SHAREHOLDERS AND 8,000,000 SHARES ISSUED AND OUTSTANDING
Share Exchange Agreement - Page 33