Exhibit 10.1
SHARE PURCHASE AGREEMENT
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(the "Vendor")
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TELEPLUS ENTERPRISES, INC.
(the "Purchaser")
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MAXIMO IMPACT, INC.
(the "Corporation")
June 21, 2006
SHARE PURCHASE AGREEMENT made as of the 21st of June, 2006, among ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(the "Vendor"), MAXIMO IMPACT, INC.., a corporation incorporated under the laws
of the State of Nevada (the "Corporation"), and TELEPLUS ENTERPRISES INC., a
corporation incorporated under the laws of Nevada (the "Purchaser"), witnesses
that:
WHEREAS the Vendor, in reliance upon the representations and warranties of the
Purchaser contained herein, have agreed to sell to the Purchaser and the
Purchaser, in reliance upon the representations and warranties of the Vendor
contained herein, has agreed to purchase from the Vendor all of the issued and
outstanding shares in the capital of the Corporation, in accordance with the
terms of this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual agreements
contained in this Agreement and other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged by the parties), the
parties agree as follows:
ARTICLE 1
INTERPRETATION
1.01 Defined Terms
As used in this Agreement, the following terms have the following
meanings:
"Agreement" means this share purchase agreement and all schedules and
instruments in amendment or confirmation of it; "hereof", "hereto" and
"hereunder" and similar expressions mean and refer to this Agreement and
not to any particular Article, Section, Subsection or other subdivision;
"Article", "Section", "Subsection" or other subdivision of this Agreement
followed by a number means and refers to the specified Article, Section,
Subsection or other subdivision of this Agreement;
"Ancillary Agreements" means all agreements, certificates and other
instruments delivered or given pursuant to this Agreement including,
without limitation, the Employment Agreement; and "Ancillary Agreement"
means any one of such agreements, certificates or other instruments;
"Articles" shall mean the certificate and Articles of incorporation (as
amended), statute, constitution, trust indenture, joint venture or
partnership agreement or Articles or other constituting document of any
Person other than an individual, each as from time to time amended or
modified;
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"Authorization" means, with respect to any Person, any authorization,
order, permit, approval, grant, licence, consent, right, franchise,
privilege, certificate, judgment, writ, injunction, award, determination,
direction, decree, or by-law, rule or regulation of any Governmental
Entity, whether or not having the force of law, having jurisdiction over
such Person;
"Books and Records" means all technical, business and financial records,
financial books and records of account, books, data, reports, files,
lists, drawings, plans, logs, briefs, customer and supplier lists, deeds,
certificates, contracts, surveys, title opinions or any other
documentation and information in any form whatsoever (including written,
printed, electronic or computer printout form) relating to Corporation and
the Business;
"Business" means the business carried on by the Corporation consisting of
the offering of prepaid wireless communications services;
"Business Day" means any day of the year, other than a Saturday, Sunday or
any day on which banks are required or authorized to close in Chicago,
Illinois;
"CRA" means the Canada Revenue Agency;
"Claim" means any claim of any nature whatsoever, including any demand,
liability, obligation, debt, cause of action, suit, proceeding, judgment,
award, assessment, and reassessment;
"Closing" means the completion of the transaction of purchase and sale
contemplated in this Agreement;
"Closing Date" means May 19, 2006, or such other date as the parties may
agree in writing;
"Code" means the Internal Revenue Code of 1986, as amended, together with
the rules and regulations promulgated thereunder;
"Corporate Records" means the corporate records of a corporation,
including (i) all articles, by-laws, any unanimous shareholders agreement
and any amendments thereto; (ii) all minutes of meetings and resolutions
of shareholders, directors and any committee thereof; (iii) the share
certificate books, register of shareholders, register of transfers and
register of directors; and (iv) all accounting records;
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"Corporation" means Maximo Impact, Inc. a corporation incorporated under
the laws of the State of Nevada;
"Distribution" means (a) the declaration or payment of any dividend in
cash or property on or in respect of any class of shares of the Person,
(b) the purchase, redemption or other retirement of any shares of the
Person, directly or indirectly or otherwise, or (c) any other distribution
on or in respect of any class of shares or trust units of the Person;
"Effective Date" means the date at which all of the conditions set forth
in Articles 5 and 6 are satisfied;
"Employment Agreement" means that certain employment agreement entered
into as of the date hereof between the Vendor and the Corporation, as same
may be amended, modified or restated at any time and from time to time;
"Environmental Laws" means all applicable Laws relating to the
environment, health and safety matters or conditions, Hazardous
Substances, pollution or protection of the environment;
"GAAP" or "generally accepted accounting principles" means, at any time,
United States generally accepted accounting principles.
"Governmental Entity" means (i) any multi-national, federal, provincial,
state, municipal, local or other governmental or public department, court,
commission, board, bureau, agency or instrumentality, domestic or foreign;
(ii) any subdivision, agent, commission, board, or authority of any of the
foregoing; or (iii) any quasi-governmental or private body exercising any
regulatory, expropriation or taxing authority under or for the account of
any of the foregoing;
"Hazardous Substance" includes any contaminant, pollutant, dangerous
substance, liquid or solid waste, industrial waste, hauled liquid or solid
waste, toxic substance, hazardous waste, hazardous material, or hazardous
substance (including anything with any of the foregoing as a component
thereof), whether or not such substance is "hazardous" as defined under
any Laws;
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"Indebtedness" shall mean all obligations, contingent (to the extent
required to be reflected in financial statements prepared in accordance
with GAAP) and otherwise, which in accordance with GAAP should be
classified on the obligor's balance sheet as liabilities, including
without limitation, in any event and whether or not so classified: (a) all
debt and similar monetary obligations, whether direct or indirect; (b) all
liabilities secured by any mortgage, pledge, security interest, lien,
charge or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been
assumed; (c) all guarantees, endorsements and other contingent obligations
whether direct or indirect in respect of Indebtedness or performance of
others, including any obligation to supply funds to or in any manner to
invest in, directly or indirectly, the debtor, to purchase Indebtedness,
or to assure the owner of Indebtedness against loss, through an agreement
to purchase goods, supplies or services for the purpose of enabling the
debtor to make payment of the Indebtedness held by such owner or
otherwise; and (d) obligations to reimburse issuers of any letters of
credit;
"Intellectual Property" means all right, title, interest and benefit of
the Corporation in and to any registered or unregistered, trade or brand
names, service marks, copyrights, copyright applications, designs,
inventions, patents, patent applications, patent rights (including any
patents issuing on such applications or rights), licences, sub-licences,
franchises, formulas, processes, know-how, technology, computer rights and
other intellectual or industrial property of the Corporation or pertaining
to the Business;
"Laws" means all statutes, codes, ordinances, decrees, rules, regulations,
municipal by-laws, judicial or arbitral or administrative or ministerial
or departmental or regulatory judgments, orders, decisions, rulings or
awards, or any provisions of the foregoing, including general principles
of common and civil law and equity, binding on or affecting the Person
referred to in the context in which such word is used; and "Law" means any
one of them;
"Lien" shall mean: (a) any encumbrance, mortgage, pledge, hypothec, prior
claim, lien, charge or other security interest of any kind upon any
property or assets of any character, or upon the income or profits
therefrom, of any nature whatsoever or howsoever arising and any rights or
privileges capable of becoming any of the foregoing, (b) any acquisition
of or agreement to have an option to acquire any property or assets upon
conditional sale or other title retention agreement, device or arrangement
(including a capitalized lease), or (c) any sale, assignment, pledge or
other transfer for security of any accounts, general intangibles or
chattel paper, with or without recourse;
"Loss" means any loss whatsoever, including expenses, costs, damages,
penalties, fines, charges, claims, demands, liabilities, interest and any
and all legal fees and disbursements;
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"Material Adverse Effect" with respect of a business or Person means an
effect which could reasonably be expected to be materially adverse to the
business, assets, financial condition, earnings, operations or prospects
of the business or Person on a consolidated basis or the market price or
value of any of its securities;
"Parties" means the Vendor, the Purchaser, the Corporation and any other
person who may become a party to this Agreement; and "Party" means any one
of them;
"Person" means an individual, partnership, corporation, trust,
unincorporated association, joint venture or other entity or Governmental
Entity, and pronouns have a similarly extended meaning;
"Purchased Shares" has the meaning ascribed thereto in Section 2.01;
"Purchaser" means TelePlus Enterprises Inc., a corporation incorporated
under the laws of Nevada;
"Security Right" means, with respect to any security, any option, warrant,
subscription right, pre-emptive right, other right, proxy, put, call,
demand, plan, commitment, agreement, understanding or arrangement of any
kind relating to such security, whether issued or unissued, or any other
security convertible into or exchangeable for any such security. "Security
Right" includes any right relating to issuance, sale, assignment,
transfer, purchase, redemption, conversion, exchange, registration or
voting and includes rights conferred by statute, by the issuer's
constituting documents or by agreement;
"Time of Closing" means 5PM (EDT time) on the Closing Date or such other
time as the Closing may occur; and
"Vendor" means ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
1.02 Gender and Number
Any reference in this Agreement to gender shall include all genders, and
words importing the singular number only shall include the plural and vice
versa.
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1.03 Headings, Etc.
The division of this Agreement into Articles, Sections, Subsections and
other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in the construction or
interpretation of this Agreement.
1.04 Currency
All references in this Agreement or any Ancillary Agreement to dollars,
unless otherwise specifically indicated, are expressed in U.S. currency.
1.05 Severability
Any Article, Section, Subsection or other subdivision of this Agreement or
any Ancillary Agreement or any other provision of this Agreement or any
Ancillary Agreement which is, or becomes, illegal, invalid or unenforceable
shall be severed from this Agreement and any Ancillary Agreement and be
ineffective to the extent of such illegality, invalidity or unenforceability and
shall not affect or impair the remaining provisions hereof or thereof, provided,
however, that the Parties shall use commercial reasonable best efforts to
substitute such Article, Section, Subsection or other subdivision with an
Article Section, Subsection or other subdivision of similar effect.
1.06 Entire Agreement
This Agreement together with the Ancillary Agreements constitutes the
entire agreement between the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties. There are no representations,
warranties, conditions or other agreements, express or implied, statutory or
otherwise, between the Parties in connection with the subject matter of this
Agreement, except as specifically set forth herein and therein. If there is any
conflict between the provisions of this Agreement and the provisions of any
Ancillary Agreement, the provisions of this Agreement shall govern.
1.07 Amendments
This Agreement and any Ancillary Agreement may only be amended, modified
or supplemented by a written agreement signed by all of the parties to such
agreement.
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1.08 Waiver
No waiver of any of the provisions of this Agreement or any Ancillary
Agreement shall be deemed to constitute a waiver of any other provision (whether
or not similar), nor shall such waiver constitute a waiver or continuing waiver
unless otherwise expressly provided in writing duly executed by the party to be
bound thereby.
1.09 Governing Law
This Agreement and all Ancillary Agreements shall be governed by and
interpreted and enforced in accordance with the laws of the State of Illinois
applicable therein.
1.10 Inclusion
Where the word "including" or "includes" is used in this Agreement, it
shall mean "including (or includes) without limitation".
1.11 Accounting Terms
All accounting terms not specifically defined in this Agreement shall be
construed in accordance with GAAP.
1.12 Incorporation of Schedules
The following are the schedules attached to and incorporated in this
Agreement:
Schedule2.01 - Purchased Shares
Schedule 2.02 - Performance Targets
Schedule 3.11 - Changes to Corporation
Schedule 3.21 - Liabilities
Schedule 3.25 - Litigation
Schedule 3.26 - Taxes
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ARTICLE 2
PURCHASED SHARES AND PURCHASE PRICE
2.01 Purchase and Sale
Subject to the terms and conditions hereof, the Vendor agrees to sell,
assign and transfer to the Purchaser and the Purchaser agrees to purchase from
the Vendor on the Effective Date, the shares owned by the Vendor representing
all (but not less than all) of the issued and outstanding shares (the "Purchased
Shares") in the capital of the Corporation. The number and class of shares of
the Corporation owned by the Vendor as at the Time of Closing is set out in
Schedule 2.01.
2.02 Consideration and Payment
The consideration payable by the Purchaser to the Vendor for the Purchased
Shares shall be up to $1,000,000 and shall be allocated and paid as follows: (a)
US$30,000, in shares in the capital stock of the Purchaser on the date of the
Closing and (b) the remainder of the Purchase Price, by cash, certified cheque
or wire transfer on an earnout basis in the following manner, provided that the
Vendor is still employed with the Corporation while the earnout is accumulated:
3. for the first year following the product launch (which product
launch shall take place no later than 45 days after the date of the
Closing:
o US$2 for every US$530 of gross revenue generated by the
Corporation less revenues from handset sales;
o US$2 for every US$150 of net profit generated by the
Corporation; and
o US$2 for every incremental increase of five (5) clients in the
Corporation's customer base.
4. thereafter:
o US$1 for every US$530 of gross revenue generated by the
Corporation less revenues from handset sales;
o US$1 for every US$150 of net profit generated by the
Corporation; and
o US$1 for every incremental increase of five (5) clients in the
Corporation's customer base.
The earnout payments described above shall be paid quarterly 45 days in
arrears. If performance falls to less than seventy percent (70%) of any the
targets set forth in Schedule 2.02 attached hereto (the "Targets"), then in
order for the Vendor to earn every US$1 described above, the targets of each of
the gross revenue, net profit and customer base shall double. If performance
exceeds one hundred and forty percent (140%) of each of the Targets, then in
order for the Vendor to earn every US$1 described above, the targets of each of
gross revenue, net profit and customer base shall decrease by twenty-five
percent (25%).
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In the event of the termination of the Vendor's employment with the
Corporation for whatever reason, the Vendor shall only be entitled to the
portion of the Purchase Price equal to the amounts earned by the Vendor under
subsection 2.02(b) above and not yet paid.
2.03 The Closing
The Closing shall take place at the Time of Closing at the offices of the
Purchaser, or at such other time, date or place as the parties agree.
Notwithstanding any other provision of this Agreement, the within transactions
shall be effective as of the Effective Date.
2.04 Payment of Taxes and Registration Charges on Transfer
Except as otherwise provided herein, the Vendor shall be liable for and
shall pay all taxes, duties, registration charges or other like charges properly
payable by the Vendor in connection with the conveyance and transfer by each of
them of their respective Purchased Shares to the Purchaser hereunder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF VENDOR AND CORPORATION
Representations and Warranties of Vendor and Corporation. Each of the Vendor and
the Corporation represents and warrants as follows to the Purchaser and each of
the Vendor and the Corporation acknowledges and confirms that the Purchaser is
relying upon such representations and warranties in connection with the purchase
by the Purchaser of the Purchased Shares:
3.01 Due Incorporation, Existence and Corporate Power of the Corporation
The Corporation is a corporation duly incorporated on May 15, 2006,
validly existing and in good standing in its jurisdiction of incorporation. The
Corporation has all necessary corporate power and authority to own or lease its
properties, to carry on its business as now being conducted by it, to enter into
this Agreement and the other agreements to which it is or is to become a party
pursuant to the terms hereof and to perform its obligations hereunder and
thereunder. The Corporation is not a reporting issuer under applicable
securities legislation, there is not a published market for any securities of
the Corporation and the number of holders of securities of the Corporation is
one (1).
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3.02 Title to Purchased Shares
The Purchased Shares as set out on Schedule 2.01 are, or as of the
Effective Date will be, owned by the Vendor as the registered and beneficial
owner thereof with a good title thereto, free and clear of all Liens. The Vendor
has the right, power and authority to enter into this Agreement and to sell the
Purchased Shares as contemplated herein. All rights and powers to vote the
Purchased Shares are held exclusively by the Vendor. The Purchased Shares were
validly issued, fully paid and non-assessable, were not issued in violation of
the terms of any agreement or other understanding, and were issued in compliance
with all applicable laws and regulations. The delivery of the Purchased Shares
by the Vendor to the Purchaser pursuant to the provisions hereof will transfer
to the Purchaser valid title thereto of the Purchased Shares, free and clear of
all Liens.
3.03 Qualification to Carry on Business
The Corporation is duly qualified, licensed or registered to carry on its
business as now being conducted in all jurisdictions in which the nature of the
business conducted by it or the property owned or leased by it makes such
qualification, licensing or registration necessary.
3.04 Authorized Capital of the Corporation
The authorized capital of the Corporation consists of an unlimited number
of common shares, and Schedule 2.01 sets out as at the date hereof and at the
Time of Closing, the number of issued and outstanding securities of the
Corporation each of which is and will be duly issued and outstanding as fully
paid and non-assessable. The Purchased Shares shall at Closing constitute all of
the issued and outstanding shares of the capital of the Corporation.
3.05 Options, etc.
There are, and at Closing there will be, no Security Rights issued by the
Corporation relating to any of the unissued shares of the Corporation. Except
for the Purchaser's right hereunder, no Person has any option, warrant, right,
call, commitment, conversion right, right of exchange or other agreement or any
right or privilege issued or granted by the Corporation (whether by law,
pre-emptive or contractual) capable of becoming an option, warrant, right, call,
commitment, conversion right, right of exchange or other agreement (i) for the
purchase from the Vendor of any of the Purchased Shares; or (ii) for the
purchase, subscription, allotment or issuance of any of the unissued shares in
the capital of the Corporation or of any securities of the Corporation.
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Except for the Purchaser's rights hereunder, no Person has any option,
warrant, right, call, commitment, conversion right, right of exchange or other
agreement or any right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an option, warrant, right, call, commitment, conversion
right, right of exchange or other agreement for the purchase of any of the
Purchased Shares.
3.06 Valid Issuance of Purchased Shares
The Purchased Shares are validly issued, fully paid and non-assessable,
were not issued in violation of the terms of any agreement or other
understanding to which the Corporation is a party, and were issued in compliance
with all applicable Laws.
3.07 Corporate Records
The Corporate Records of the Corporation are materially complete and
accurate and all corporate proceedings and actions reflected therein have been
conducted or taken in compliance with all applicable Laws and with the articles
and by-laws of the Corporation, and without limiting the generality of the
foregoing, (i) the minute books contain materially complete and accurate minutes
of all meetings of the directors and shareholders of the Corporation held since
the incorporation thereof, and all such meetings were duly called and held; (ii)
the minute books contain all written resolutions passed by the directors and
shareholders of the Corporation and all such resolutions were duly passed; (iii)
the share certificate books, register of shareholders and register of transfers
of the Corporation are materially complete and accurate, and all such transfers
have been duly completed and approved; and (iv) the registers of directors and
officers are materially complete and accurate and all former and present
directors and officers of the Corporation were duly elected or appointed as the
case may be.
3.08 Validity of Agreement
(1) The Corporation has all necessary corporate power and authority to
enter into and perform its obligations under this Agreement and the Ancillary
Agreements to which it is a party.
(2) The execution, delivery and performance by the Corporation of this
Agreement and the Ancillary Agreements to which it is a party and the
consummation of the transactions contemplated thereby: (a) have been duly
authorized by all necessary corporate action on the part of the Corporation; and
(b) do not (or would not with the giving of notice, the lapse of time or the
happening of any other event or condition) result in a violation or a breach of,
or a default under or give rise to a right of termination, amendment or
cancellation or the acceleration of any obligation under (i) any charter, by-law
or trust deed instruments of the Corporation; (ii) any contracts or instruments
to which the Corporation is a party or by which the Corporation is bound; or
(iii) of any Laws applicable to the Corporation.
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(3) The execution, delivery and performance by the Vendor of this
Agreement and the Ancillary Agreements to which it is a party and the
consummation of the transactions contemplated thereby do not (or would not with
the giving of notice, the lapse of time or the happening of any other event or
condition) result in a violation or a breach of, or a default under or give rise
to a right of termination, amendment or cancellation or the acceleration of any
obligation under any contracts or instruments to which the Vendor is a party or
by which the Vendor is bound or of any Laws applicable to the Vendor.
(4) This Agreement and any Ancillary Agreement to which the Corporation
and Vendor are a party constitute legal, valid and binding obligations of the
Corporation and Vendor enforceable against them in accordance with their
respective terms.
3.09 Restrictive Documents
Neither the Corporation nor the Vendor are subject to, or a party to, any
charter, by-law or trust deed restriction, any Law, any Claim, any contract or
instrument, any Lien or any other restriction of any kind or character which
would prevent the consummation of the transactions contemplated by this
Agreement or compliance by the Corporation and Vendor with the terms, conditions
and provisions hereof or the continued operation of the Business after the date
hereof or the Effective Date on substantially the same basis as heretofore
operated or which would restrict the ability of the Purchaser to acquire any of
the Purchased Shares.
3.10 Title to Assets
The Corporation has good title to and has legal and beneficial ownership
of all of the assets and property used in connection with the Business free and
clear of all Liens.
3.11 Absence of Changes
Except as provided for in Schedule 3.11, the Corporation has not:
(a) issued, sold, pledged, hypothecated, leased, disposed of, encumbered
or agreed to issue, sell, pledge, hypothecate, lease, dispose of or
encumber any shares or other corporate securities or any right,
option or warrant with respect thereto;
(b) amended or proposed to amend their respective Articles or by-laws;
(c) split, combined or reclassified any of their respective securities
or made any Distribution;
(d) suffered any loss relating to litigation or been threatened with
litigation;
(e) entered into or amended any employment contracts with any director,
officer or senior management employee, created or amended any
employee benefit plan, profit sharing, deferred compensation,
phantom stock option, stock option, employee stock purchase, bonus,
retirement, health or insurance plan, made any increases in the base
compensation, bonuses, paid vacation time allowed or fringe benefits
for its directors, officers, employees or consultants, except for
increases in compensation pursuant to established compensation
policies of the Corporation applied on a basis consistent with that
of the prior year;
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(f) suffered any change in the established business relationship of the
Corporation with any customer or distributor or supplier;
(g) suffered damage, destruction or other casualty, loss, or forfeiture
of, any property or assets, whether or not covered by insurance;
(h) entered into any contract, commitment or agreement under which it
has outstanding Indebtedness for borrowed money or for the deferred
purchase price of property (other than such property acquired in the
ordinary course of business consistent with past practice), or has
the right or obligation to incur any such Indebtedness or
obligation, or made any loan or advance to any Person other than
advances to employees for business expenses or in connection with
the existing employee share purchase plans of the Corporation in the
ordinary course of business consistent with past practice;
(i) acquired or agreed to acquire (by tender offer, exchange offer,
merger, amalgamation, acquisition of shares or assets or otherwise)
any Person, corporation, partnership, joint venture or other
business organization or division or acquired or agreed to acquire
any material assets;
(j) made any capital expenditures in excess of $5,000;
(k) entered into any material contracts regarding their business
operations, including joint ventures, partnerships or other
arrangements;
(l) entered into any interest rate swap, currency swap, option or other
rate fixing agreement for a financial transaction or entered into
any forward sale agreement for commodities;
(m) created any stock option or bonus plan, paid any bonuses, deferred
or otherwise, or deferred any compensation to any of its directors,
officers or employees other than such payments made in the ordinary
course of business consistent with past practice;
(n) made any material change in accounting procedures or practices;
(o) mortgaged, hypothecated or pledged any of their respective
properties or assets, tangible or intangible, or subjected them to
any Liens;
(p) disposed of or permitted to lapse any rights to the use of any
patent, trademark, service ▇▇▇▇, logo, trade name or copyright, or
disposed of or disclosed (without appropriate confidentiality
protection) to any Person any trade secret, formula, process, method
or know-how not theretofore a matter of public knowledge;
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(q) transferred any assets to any shareholder or any of their Affiliates
or assumed any Indebtedness from any shareholder or any of their
Affiliates or participated in any other related party transaction
that has not been disclosed in writing to the Purchaser;
(r) entered into any other material transaction, or any amendment of any
contract, lease, agreement or license which is material to its
business; or
(s) entered into any agreement or understanding to do any of the
foregoing;
3.12 Compliance with Laws
The Corporation is conducting the Business in compliance with all
applicable Laws of each jurisdiction in which the Business is carried on, except
for acts of non-compliance which in the aggregate are not material.
3.13 Environmental Compliance
The Corporation has at all times received, handled, generated, used,
stored, deposited, labeled, handled, treated, documented, transported and
disposed of any Hazardous Substances in compliance with all, and there is no
circumstance or condition which would subject the Corporation to any material
liability under, any applicable Environmental Laws, health or safety Laws,
approvals or Authorizations.
3.14 Authorizations
The Corporation owns, holds, possesses or lawfully uses in the operation
of the Business, all Authorizations which are in any manner necessary to conduct
the Business as presently or previously conducted or for the ownership and use
of its assets and property, free and clear of all Liens and in compliance with
all Laws applicable thereto. The Corporation is not in default, nor has it
received any notice of any Claim in default, with respect to any such
Authorizations. All such Authorizations are renewable by their terms or in the
ordinary course of business without the need for the Corporation to comply with
any special qualification or procedures or to pay any amounts other than routine
filing fees. None of such Authorizations will be adversely affected by the
consummation of the transactions contemplated hereby.
3.15 No Options, Etc.
No Person has any written or oral agreement, option, understanding or
commitment, or any right or privilege capable of becoming such for the purchase
from the Corporation of any of its assets or property.
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3.16 Real Property
The Corporation has not previously owned, nor is it currently the owner
of, or under any agreement or option to own or lease, any real property or any
interest therein..
3.17 Material Contracts
The Corporation is not a party to or bound by:
(a) any employment agreement, bonus, deferred compensation, pension,
profit sharing, stock option, phantom stock plan, employee stock
purchase, health, insurance, retirement or other employee benefit
plan, any collective agreements or any agreement (oral or written)
providing for compensation to be paid to any employee consequent
upon the sale of any substantial portion of outstanding shares in
the capital of the Corporation;
(b) any agreement or commitment relating to the borrowing of money;
(c) any agreement or commitment relating to capital expenditures;
(d) any loan or advance to, or investment in, any other Person or any
agreement or commitment relating to the making of any such loan,
advance or investment;
(e) any bonds, debentures, mortgages, notes or other similar
indebtedness or liabilities whatsoever or any agreement to create or
issue any bonds, debentures, mortgages, notes or other similar
indebtedness;
(f) any performance bond, indemnity, guarantee or other contingent
liability in respect of any indebtedness or obligation of any
Person;
(g) any management, consulting or any other similar agreement or
commitment;
(h) any agreement or commitment limiting the freedom of the Corporation
or any successor owner of the Corporation, the Business or the
property and assets of the Corporation to engage in any line of
business or to compete with any other Person;
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(i) any licensing or other agreement or commitment relating to
intellectual property used by the Corporation in the conduct of the
Business;
(j) any agreements or commitments entered into in the ordinary course of
the Business involving an aggregate amount of more than $5,000 which
is not cancellable without penalty within thirty (30) days;
(k) any agreement or commitment not entered into in the ordinary course
of the Business; and
(l) any agreement or arrangement with any Person with whom either of the
Corporation or the Vendor (or their directors, officers and
employees) does not deal at arm's length.
3.18 Subsidiaries and Investments
The Corporation does not have any subsidiaries and does not own or hold of
record or beneficially own or hold any shares of any class of the capital of any
corporation or any legal or beneficial ownership interest in any general or
limited partnership, business trust, limited liability company, joint venture or
any other unincorporated trade or business enterprise.
3.19 Books and Records
All Books and Records of the Corporation have been fully, properly and
accurately kept and, where required, completed in accordance with GAAP and there
are no material inaccuracies or discrepancies of any kind contained or reflected
therein. The records, systems, controls, data or information of the Corporation
are not recorded, stored, maintained, operated or otherwise wholly or partly
dependent upon or held by any means (including any electronic, mechanical or
photographic process, whether computerized or not) which (including all means of
access thereto and therefrom) are not under the exclusive ownership and direct
control of the Corporation.
3.20 Third Party Guarantees
The Corporation is not a party to or bound by any agreement or guarantee,
indemnification, assumption or endorsement or any other like commitment of the
obligations, liabilities (contingent or otherwise) or indebtedness of any
Person.
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3.21 No Undisclosed Liabilities
The Corporation does not have any liabilities, expense, claim, deficiency,
guarantee or endorsement of any type whatsoever, contingent, contractual or
otherwise other than those set out in Schedule 3.21.
3.22 Indebtedness and Accounts Payable
Except as set forth in the Financial Statements, the Corporation has not
incurred any Indebtedness, since the date of the Financial Statements. The
Corporation is not indebted to any of its directors, officers, employees or
consultants.
3.23 Capital Expenditures
No capital expenditures exceeding in the aggregate $5,000 have been made
or authorized by the Corporation except in the ordinary course of business since
the date of the Financial Statements.
3.24 Employees
The Corporation is in compliance with all Laws respecting employment and
employment practices, terms and conditions of employment, pay equity and wages
and hours and neither has nor is engaged in any unfair labour practice.
3.25 Litigation
Except as set forth in Schedule 3.25, there is no action, suit or
proceeding, at law or in equity, by any Person, nor any arbitration,
administrative or other proceeding by or before (or to the best knowledge of the
Vendor or the Corporation any investigation by) any Governmental Entity pending,
or, to the best of the knowledge of the Vendor or the Corporation, threatened
against or affecting the Corporation or any of its properties, rights or assets.
The Corporation is not subject to any judgment, order or decree entered in any
lawsuit or proceeding.
3.26 Taxes
Except as set forth in Schedule 3.26:
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(a) the Vendor has duly and timely filed all required tax returns and
has paid all taxes required to be paid by it on or prior to the
Closing, and such tax returns correctly reflected the facts
regarding the income, business, operations and any other required
information. There are no agreements, waivers or other arrangements
providing for an extension of time with respect to the filing of any
tax returns or payment of any taxes; there are no investigations,
examinations, reassessments, claims, actions, suits or proceedings
threatened or pending against the Vendor in respect of any taxes,
nor are there any matters under discussion with any federal,
provincial, state or local government or taxing authority, relating
to any taxes imposed, levied or assessed by any such government or
authority;
(b) the Vendor has withheld from payments made to employees, directors,
officers or shareholders all amounts which it is required to
withhold or deduct by law and has duly remitted such amounts within
the time and in the manner required by law;
(c) the Vendor has filed all necessary tax returns in the states in
which it has conducted business;
(d) the Vendor is not a party to nor has any obligations under any
tax-sharing, tax indemnity or tax allocation agreement or
arrangement. The Vendor has no liability for the taxes of any person
(other than Vendor) under Section 1.1502-6 of the treasury
regulations under the Code (or any similar provisions of state,
local or foreign law) as the transferee or successor, by contract or
otherwise;
(e) There are no liens for taxes (other than for current taxes not yet
due and payable) upon any of the Vendor's assets;
(f) As used herein, "tax or taxes" means all taxes (including estimated
taxes), assessments, reassessments, charges, levies and all other
imposts, together with all interest, penalties and fines thereon or
additions thereto, of whatever kind or nature, including without
limitation, income, sales, employment (including social security and
unemployment) and franchise, imposed, levied or assessed by any
federal, state, provincial or local government or taxing authority,
and including any transferee or secondary liability in respect of
any tax (whether imposed by law, contractual agreement or
otherwise); and "tax returns" means all federal, state or local tax
reports, returns, declarations of estimated tax or other information
required to be filed with respect to the Vendor, its income,
properties and business.
3.27 No Limitations
There is no non-competition, non-solicitation, exclusivity or other
similar agreement, commitment or understanding in place, whether written or
oral, to which the Corporation or the Vendor or, to the knowledge of the
Corporation and Vendor, any director, officer, employee or consultant or any
Affiliate of such Persons, is a party or is otherwise bound that would now or
hereafter, in any way limit the Business or operations of the Corporation: (a)
in a particular manner or to a particular locality or geographic region, or (b)
for a limited period of time.
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3.28 Bank Accounts and Powers of Attorney
The Corporation has no bank accounts or safe deposit boxes, nor do any
persons hold powers of attorney from the Corporation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Representations and Warranties of the Purchaser. The Purchaser represents and
warrants as follows to the Vendor and acknowledges and confirms that the Vendor
are relying on such representations and warranties in connection with the sale
by the Vendor of the Purchased Shares:
4.01 Due Incorporation and Existence
The Purchaser is a corporation incorporated, validly existing and in good
standing under the laws of the State of Nevada. The Purchaser has all necessary
corporate power and authority to own or lease its properties and to carry on its
business as now being conducted by it.
4.02 Validity of Agreement
(1) The Purchaser has all necessary corporate power and authority to enter
into and perform its obligations under this Agreement and the Ancillary
Agreements to which it is a party.
(2) The execution, delivery and performance by the Purchaser of this
Agreement and the Ancillary Agreements to which they are a party or to which
either is a party and the consummation of the transactions contemplated thereby:
have been duly authorized by all necessary corporate action on the part of the
Purchaser; and do not (or would not with the giving of notice, the lapse of time
or the happening of any other event or condition) result in a violation or a
breach of, or a default under or give rise to a right of termination, amendment
or cancellation or the acceleration of any obligation under (i) any charter,
by-law or trust deed instruments of the Purchaser as applicable; (ii) any
contracts or instruments to which the Purchaser is a party or by which the
Purchaser is bound; or (iii) of any Laws applicable to them.
(3) This Agreement and any Ancillary Agreement to which the Purchaser is a
party constitute legal, valid and binding obligations of the Purchaser,
enforceable against it in accordance with their respective terms.
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4.03 Restrictive Documents
The Purchaser is not subject to, or a party to, any charter, by-law or
trust deed restriction, any Law, any Claim, any contract or instrument, any Lien
or any other restriction of any kind or character which would prevent the
consummation of the transactions contemplated by this Agreement or compliance by
the Purchaser with the terms, conditions and provisions hereof.
ARTICLE 5
PRE-CLOSING COVENANTS OF THE PARTIES
5.01 Pre-Closing Activities
During the period from the date hereof until the Effective Date, the
Vendor will use commercially reasonable efforts to cause the Corporation to
conduct its Business in the ordinary course thereof, unless the Corporation has
obtained the prior written consent of the Purchaser to do otherwise. Without
limiting the generality of the foregoing, the Vendor will cause:
(1) the Corporation to continue to maintain and service the assets used in
the conduct of the Business in the same manner as has been its consistent past
practice;
(2) the Corporation to conduct the Business in such a manner that on the
Effective Date the representation and warranties of the Vendor contained herein
shall be true, correct and complete as if such representations and warranties
were made on and as of such date; and
(3) the Corporation not to enter into any material contracts prior to the
Time of Closing, unless the Corporation has obtained the prior written consent
of the Purchaser.
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5.02 Due Diligence Investigations
(1) The Vendor and the Corporation (i) shall permit the Purchaser and its
employees, agents, counsel, accountants or other representatives, between the
date hereof and the Time of Closing, without undue interference to the ordinary
conduct of the Business, to have reasonable access during normal business hours
and upon reasonable notice to the Corporation, all of its assets and property,
the Business and any other information, including accounting records, corporate
records and tax records and returns whether retained by the Vendor, the
Corporation or otherwise; and (ii) shall furnish to the Purchaser or its
employees, agents counsel, accountants, or other representatives such financial
and operating data and other information with respect to the assets and property
of the Corporation and the Business as the Purchaser shall from time to time
reasonably request.
(2) No investigations made by or on behalf of a party hereto, whether
under Section 6.02 or any other provision of this Agreement or any Ancillary
Agreement, shall have the effect of waiving, diminishing the scope of or
otherwise affecting any representation or warranty made in this Agreement or any
Ancillary Agreement.
5.03 Actions to Satisfy Closing Conditions
Each of the Parties hereby agrees to take all such actions as are within
its power to control and to use its commercially reasonable efforts to cause
other actions to be taken which are not within its power to control, so as to
ensure compliance with all of the conditions set forth in Article 6.
5.04 Transfer of the Purchased Shares
The Vendor shall take all necessary and reasonable steps and proceedings
to permit good title to its respective Purchased Shares to be duly and validly
transferred and assigned to the Purchaser at the Time of Closing, free of all
Liens.
5.05 Filings and Authorizations
The Vendor and the Purchaser, as promptly as practicable after the
execution hereof, (i) will make, or cause to be made, all such filings and
submissions under all Laws applicable to it, as may be required for it to
consummate the purchase and sale of the Purchased Shares in accordance with the
terms of this Agreement; (ii) will use all reasonable efforts to obtain, or
cause to be obtained, all Authorizations, approvals, consents and waivers from
all Persons and Governmental Entities necessary or advisable to be obtained by
it in order to consummate such transfer; and (iii) will use all reasonable
commercial efforts to take, or cause to be taken, all other actions necessary,
proper or advisable in order for it to fulfill its obligations hereunder. The
Vendor and the Purchaser will coordinate and cooperate with one another in
exchanging such information and supplying such assistance as may be reasonably
requested by each in connection with the foregoing.
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5.06 Notice of Untrue Representation or Warranty
The Vendor or the Corporation, as the case may be, shall promptly notify
the Purchaser upon any representation or warranty of the Vendor or the
Corporation contained in this Agreement or any Ancillary Agreement becoming
untrue or incorrect prior to the Time of Closing.
ARTICLE 6
CONDITIONS OF CLOSING
6.01 Conditions for the Benefit of the Purchaser
The purchase and sale of the Purchased Shares is subject to the following
conditions to be fulfilled or performed at or prior to the Time of Closing,
which conditions are for the exclusive benefit of the Purchaser and may be
waived in whole or in part by the Purchaser in its sole discretion:
(1) Truth of Representations and Warranties of the Vendor. The
representations and warranties of the Vendor contained in this Agreement and in
the Ancillary Agreements shall be true and correct as of the Effective Date with
the same force and effect as if such representations and warranties had been
made on and as of such date, and the Vendor shall also have executed and
delivered a certificate to that effect. The receipt of such evidence and the
Closing shall not be a waiver of the representations and warranties of the
Vendor which are contained in this Agreement. Upon the delivery of such
certificates, the representations and warranties of the Vendor in Articles 3
shall be deemed to have been made on and as of the Effective Date with the same
force and effect as if made on and as of such date.
(2) Performance of Covenants by the Vendor. The Vendor and the Corporation
shall have fulfilled or complied with all covenants herein contained to be
performed or caused to be performed by them at or prior to the Time of Closing,
and the Vendor and the Corporation shall each have delivered a certificate to
that effect. The receipt of such certificates and the Closing shall not be a
waiver of the covenants of the Vendor and the Corporation which are contained in
this Agreement.
(3) Consents and Authorizations. All required consents and authorizations
shall have been obtained on terms acceptable to the Purchaser, acting
reasonably, in order to permit the Closing of the sale of the Purchased Shares
on the terms and conditions set out in this Agreement without adversely
affecting, or resulting in the violation or a breach of or a default under or
any termination, cancellation, amendment or acceleration of any obligation under
any licence, permit, lease or contract in connection with the Business.
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(4) Legality; Governmental and Other Authorizations. The purchase of the
Purchased Shares shall not be prohibited by any law or governmental order or
regulation or by any order, decree or judgment of any court of competent
jurisdiction nor shall any Person have initiated any action or proceeding before
any court or governmental body seeking damages or other remedies against the
Purchaser for having entered into this Agreement and/or seeking to enjoin the
Purchaser from consummating the transactions contemplated by this Agreement. All
necessary material consents, approvals, licenses, permits, orders and
authorizations of, or registrations, declarations and filings with any
governmental or administrative agency or any other Person, with respect to any
of the transactions contemplated by this Agreement shall have been duly obtained
or made by the Corporation or the Vendor on terms and conditions satisfactory to
the Purchaser, acting reasonably, and shall be in full force and effect.
(5) Deliveries. The Vendor shall have delivered or caused to be delivered
to the Purchaser the following in form and substance satisfactory to the
Purchaser, acting reasonably:
(a) share certificates representing the Purchased Shares duly endorsed
in blank for transfer, or accompanied by irrevocable security
transfer powers of attorney duly executed in blank, in either case
by the holders of record thereof;
(b) certified copies of (i) the charter documents and extracts from the
by-laws of the Corporation; (ii) all resolutions of the board of
directors of the Corporation approving the entering into of this
Agreement and the completion of all transactions contemplated
hereunder; (iii) all other instruments evidencing necessary
corporate action of the Corporation with respect to such matters;
and (iv) specimen signatures of the officers of the Corporation;
(c) a certificate of status, compliance, good standing or like
certificate with respect to the Corporation issued by appropriate
government officials of the jurisdiction of its incorporation;
(d) a favourable opinion of counsel to the Corporation in a form
acceptable to the Purchaser;
(e) all originals of the Corporate Records of the Corporation and access
to the said Corporate Records; and
(f) evidence that all necessary steps and proceedings as approved by
counsel for the Purchaser, acting reasonably, to permit all of the
Purchased Shares to be fully and validly transferred to the
Purchaser or its nominee(s) have been taken.
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(6) Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and any Ancillary Agreement shall be
reasonably satisfactory in form and substance to the Purchaser and the Purchaser
shall have received copies of all such instruments and other evidence as it may
reasonably request in order to establish the consummation of such transactions
and the taking of all proceedings in connection therewith.
(7) Change in Law. Since the date hereof, to the best knowledge of the
Purchaser, without further investigation, no Law, proposed Law, any change in
any Law, or the interpretation or enforcement of any Law shall have been
introduced, enacted or announced (including the introduction, enactment or
announcement of any Law respecting taxes or environmental matters or any change
therein or in the interpretation or enforcement thereof), the effect of which
will be to prevent the closing of the transactions contemplated herein or to
increase materially (i) the cost to the Purchaser of the completion of the
transactions contemplated in this Agreement; or (ii) the cost of the Corporation
of operating the Business after Closing on substantially the same basis as
heretofore operated.
If any condition, obligation or covenant of the Vendor or the Corporation to be
performed hereunder or under any Ancillary Agreement at or prior to the Time of
Closing shall not have been fulfilled or performed by such time, the Purchaser
may terminate this Agreement by notice in writing to the Vendor, and in such
event the Parties shall be released from all obligations hereunder.
Notwithstanding the foregoing, the Purchaser shall be entitled to waive
compliance with any of such conditions, obligations or covenants in whole or in
part if it sees fit to do so without prejudice to any of its rights of
termination in the event of non-performance of any other condition, obligation,
or covenant in whole or in part.
6.02 Conditions for the Benefit of the Vendor
The purchase and sale of the Purchased Shares is subject to the following
conditions to be fulfilled or performed at or prior to the Time of Closing,
which conditions are for the exclusive benefit of the Vendor and may be waived
by the Vendor in his sole discretion:
(1) Truth of Representations and Warranties of the Purchaser. The
representations and warranties of the Purchaser contained in this Agreement or
in any Ancillary Agreement shall be true and correct as of the Effective Date
with the same force and effect as if such representations and warranties had
been made on and as of such date, and the Purchaser shall also have executed and
delivered a certificate of a senior officer to that effect. The receipt of such
evidence and the Closing shall not be a waiver of the representations and
warranties of the Purchaser which are contained in this Agreement. Upon the
delivery of such certificates, the representations and warranties of the
Purchaser in Article 5 shall be deemed to have been made on and as of the
Effective Date with the same force and effect as if made on and as of such date.
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(2) Performance of Covenants by the Purchaser. The Purchaser shall have
fulfilled or complied with all covenants herein contained to be performed or
caused to be performed by it at or prior to the Time of Closing, and the
Purchaser shall have delivered a certificate of a senior officer to that effect.
The receipt of such certificate and the Closing shall not be a waiver of the
covenants of the Purchaser which are contained in this Agreement.
(3) Deliveries. The Purchaser shall have delivered or caused to be
delivered to the Vendor the following in form and substance satisfactory to the
Vendor, acting reasonably all necessary assurances, transfers, assignments and
consents, including all necessary consents, and any other instruments necessary
or reasonably required to effectively carry out the intent of this Agreement and
any Ancillary Agreement and to transfer the agreed upon consideration to the
Vendor, free and clear of all Liens.
(4) Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and any Ancillary Agreement shall be
reasonably satisfactory in form and substance to the Vendor and the Vendor shall
have received copies of all such instruments and other evidence as it may
reasonably request in order to establish the consummation of such transactions
and the taking of all proceedings in connection therewith.
(5) Change in Law. Since the date hereof, to the best knowledge of the
Purchaser, without further investigation, no Law, proposed Law, any change in
any Law, or the interpretation or enforcement of any Law shall have been
introduced, enacted or announced (including the introduction, enactment or
announcement of any Law respecting taxes or environmental matters or any change
therein or in the interpretation or enforcement thereof), the effect of which
will be to prevent the closing of the transactions contemplated herein or to
increase materially (i) the cost to the Vendor of the completion of the
transactions contemplated in this Agreement; or (ii) the cost of the Corporation
of operating the Business after Closing on substantially the same basis as
heretofore operated.
If any condition, obligation or covenant of the Purchaser to be performed
hereunder or under any Ancillary Agreement at or prior to the Time of Closing
shall not have been fulfilled or performed by such time, the Vendor may
terminate this Agreement by notice in writing to the Purchaser, and in such
event the Vendor and the Purchaser shall be released from all obligations
hereunder. The Vendor shall be entitled to waive compliance with any of such
conditions, obligations or covenants in whole or in part if it sees fit to do so
without prejudice to any of its rights of termination in the event of
non-performance of any other condition, obligation, or covenant in whole or in
part.
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ARTICLE 7
CLOSING
7.01 Closing Procedures
Subject to satisfaction or waiver by the relevant Party of the conditions
of Closing set forth herein, at the Time of Closing the Vendor shall deliver
actual possession of the Purchased Shares and the requisite instruments of
conveyance and upon such delivery the Purchaser shall pay or satisfy the
consideration payable in accordance with Article 2. The transfer of possession
of the Purchased Shares shall be deemed to take effect as at the Time of
Closing.
ARTICLE 8
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITIES
8.01 Survival of Representations and Warranties
(1) The representations and warranties of the Vendor contained in this
Agreement and in the Ancillary Agreements shall survive the Closing and,
notwithstanding such or any investigation made by or on behalf of the Purchaser,
shall continue in full force and effect for the benefit of the Purchaser for a
period of 36 months or such longer applicable statute of limitation period from
the Effective Date and any Claim in respect thereof (except a Claim based on tax
matters under Section 3.26 which shall continue until the expiry of seven years
from the Effective Date or a Claim based on ownership of the Purchased Shares
which shall continue indefinitely) shall be made in writing within such time
period.
(2) The representations and warranties of the Purchaser contained in this
Agreement or in any Ancillary Agreement shall survive the Closing and,
notwithstanding such Closing or any investigation made by or on behalf of any of
the Vendor, shall continue in full force and effect for the benefit of the
Vendor for a period of 36 months from the Effective Date and any Claim in
respect thereof shall be made in writing within such time period.
8.02 Indemnification in Favour of the Purchaser
(1) the Vendor agrees to indemnify and save each of the Purchaser, and its
shareholders, directors, officers, employees, agents and representatives, (in
respect of whom the Purchaser hereby acts as agent and trustee with respect
thereto) harmless of and from any Claim or Loss suffered by, imposed upon or
asserted against the Purchaser or the Corporation as a result of, in respect of,
connected with or arising out of, under or pursuant to:
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(a) any failure of the Vendor to perform or fulfill any covenant of the
Vendor under this Agreement or any Ancillary Agreement;
(b) subject to the limitations set forth in Section 8.01 hereof, any
breach, default or inaccuracy of any representation or warranty
given by the Purchaser or the Corporation or any document delivered
pursuant hereto contained in this Agreement or in any Ancillary
Agreement; and
(c) notwithstanding any disclosures with respect thereto, a claim by the
former employer of the Vendor (or any party related to such former
employer) where such claim is based on the Vendor's employment or
other involvement with the Corporation in competition to the
activities of said former employer.
8.03 Indemnification in Favour of the Vendor
The Purchaser shall indemnify and save each of the Vendor harmless of and
from any Claim or Loss suffered by, imposed upon or asserted against the Vendor
as a result of, in respect of, connected with or arising out of, under or
pursuant to:
(a) any failure by the Purchaser to perform and fulfill any
covenant of the Purchaser under this Agreement or any Ancillary
Agreement; or
(b) subject to the limitation period set forth in Section 8.01
hereof, any breach or inaccuracy of any representation or warranty
given by the Purchaser or any document delivered pursuant hereto
contained in this Agreement or in any Ancillary Agreement.
8.04 Indemnification Proceedings
(1) Any Party seeking indemnification under this Article (the "indemnified
party") shall forthwith notify the Party against whom a Claim for
indemnification is sought hereunder (the "indemnifying party") in writing, which
notice shall specify, in reasonable detail, the nature and estimated amount of
the Claim. If a Claim by a third party is made against an indemnified party, and
if the indemnified party intends to seek indemnity with respect thereto under
this Article, the indemnified party shall promptly (and in any case within 30
days of such Claim being made) notify the indemnifying party of such with
reasonable particulars. The indemnifying party shall have 30 days after receipt
of such notice to undertake, conduct and control, through counsel of its own
choosing and at its expense, the settlement or defence thereof, and the
indemnified party shall cooperate with it in connection therewith; except that
with respect to settlements entered into by the indemnifying party (i) the
consent of the indemnified party shall be required if the settlement provides
for equitable relief against the indemnified party, which consent shall not be
unreasonably withheld or delayed; and (ii) the indemnifying party shall obtain
the release of the indemnified party. If the indemnifying party undertakes,
conducts and controls the settlement or defence of such Claim (i) the
indemnifying party shall permit the indemnified party to participate in such
settlement or defence through counsel chosen by the indemnified party, provided
that the fees and expenses of such counsel shall be borne by the indemnified
party; and (ii) the indemnifying party shall promptly reimburse the indemnified
party for the full amount of any loss resulting from any Claim and all related
expenses (other than the fees and expenses of counsel as aforesaid) incurred by
the indemnified party. The indemnified party shall not pay or settle any Claim
so long as the indemnifying party is reasonably contesting any such Claim in
good faith on a timely basis. Notwithstanding the two immediately preceding
sentences, the indemnified party shall have the right to pay or settle any such
Claim, provided that in such event it shall waive any right to indemnity
therefor by the indemnifying party.
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(2) With respect to third party Claims, if the indemnifying party does not
notify the indemnified party within 30 days after the receipt of the indemnified
party's notice of a Claim of indemnity hereunder that it elects to undertake the
defence thereof, the indemnified party shall have the right, but not the
obligation, to contest, settle or compromise the Claim in the exercise of its
reasonable judgment at the expense of the indemnifying party, provided that any
such settlement or compromise shall be subject to the prior written consent of
the indemnifying party, such consent not to be unreasonably withheld.
(3) In the event of any Claim by a third party against an indemnified
party, the defence of which is being undertaken and controlled by the
indemnifying party, the indemnified party will use all reasonable efforts to
make available to the indemnifying party those employees whose assistance,
testimony or presence is necessary to assist the indemnifying party in
evaluating and in defending any such Claims; provided that the indemnifying
party shall be responsible for the expense associated with any employees made
available by the indemnified party to the indemnifying party hereunder, which
expense shall be equal to an amount to be mutually agreed upon per person per
hour or per day for each day or portion thereof that such employees are
assisting the indemnifying party and which expenses shall not exceed the actual
cost to the indemnified party associated with such employees.
(4) With respect to third party Claims, the indemnified party shall make
available to the indemnifying party or its representatives on a timely basis all
documents, records and other materials in the possession of the indemnified
party, at the expense of the indemnifying party, reasonably required by the
indemnifying party for its use in defending any Claim and shall otherwise
cooperate on a timely basis with the indemnifying party in the defence of such
Claim.
(5) With respect to any re-assessment for income, corporate, sales,
excise, or other tax or other liability enforceable by Lien against the property
of the indemnified party, the indemnifying party's right to so contest shall
only apply after such payment of such re-assessment or the provision of such
security as is necessary to avoid an Lien being placed on the property of the
indemnified party.
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(6) The rights of indemnification contained in this Article 8 are
cumulative and are in addition to every other right or remedy of the Parties
contained in this Agreement.
(7) To fund, in part or in whole, any claims made by the Purchaser under
this Article 8 against the Vendor, the Vendor agrees that the Purchaser shall be
entitled to set-off against any amounts owing by it to the Vendor, provided that
any such set-off shall be made in accordance with this subection 8.04(7). The
Purchaser shall provide 5 days prior written notice of its intention to claim
set-off under this section, and such written notice shall include all available
particulars of the claim and a detailed calculation of the Purchaser's estimate
of amounts owing to it under this Article 8. The amount of the proposed set-off
shall represent a bona fide estimate of the quantum of damages to which the
Purchaser claims entitlement under this Article 8. Pending final resolution of
any disputed claim made by the Purchaser under this Section 10.6, the Purchaser
shall be entitled to withhold the amount of such claim from any payment of due
to the Vendor. If the Purchaser and the Vendor are unable to agree as to the
appropriate quantum to be set off by the Purchaser, the matter shall be settled
in accordance with the provisions of Article 10.
ARTICLE 9
POST-CLOSING COVENANTS
9.01 Access to Books and Records
For a period of six (6) years from the Effective Date or for such longer
period as may be required by applicable Law, the Purchaser covenants and agrees
to retain all original accounting books and records relating to the Corporation
for the period prior to the Effective Date. So long as any such books and
records are retained by the Purchaser pursuant to this Agreement, the Vendor
shall have the reasonable right to inspect and to make copies (at their own
expense) of the same at any time upon reasonable request during normal business
hours and upon reasonable notice for any proper purpose and without undue
interference to the business operations of the Purchaser. The Purchaser shall
have the right to have its representatives present during any such
investigations.
9.02 Further Assurances
From time to time subsequent to the Effective Date, each Party shall at
the request of any other Party execute and deliver such additional conveyances,
transfers and other assurances as may be reasonably required effectively to
carry out the intent of this Agreement and any Ancillary Agreement and to
transfer the Purchased Shares to the Purchaser.
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9.03 Securities Law Compliance Certificate
The Vendor agrees and covenants that, from time to time subsequent to the
Effective Date, the Vendor shall provide to the Purchaser such certificates
regarding the conduct of the business and/or financial information of the
Corporation prior to the Closing as the Purchaser may reasonably require from
the Vendor to enable the Purchaser's Chief Executive Officer and Chief Financial
Officer (and such other executive officers of the Purchaser) to execute and
deliver such certificates (the "Officers' Certificates") as they are required to
execute and file with the Securities & Exchange Commission under ▇▇▇▇▇▇▇▇-▇▇▇▇▇
of 2002 Act (or such other Acts as may be adopted) when such Officers'
Certificates include or, in part, are based upon the conduct of the business
and/or the financial information of the Corporation prior to the Closing. The
Vendor agree that this Covenant shall survive for a period of six years from the
Effective Date or for such longer period as may be required by applicable Law.
ARTICLE 10
ARBITRATION
10.01 Best Endeavours to Settle Disputes
In the event of any dispute, claim, question or difference arising out of
or relating to this Agreement or any agreement executed pursuant to this
Agreement or any breach hereof, the parties hereto shall use their best
endeavours to settle such dispute, claim, question or difference. To this
effect, they shall consult and negotiate with each other, in good faith and
understanding of their mutual interests, to reach a just and equitable solution
satisfactory to all parties.
10.02 Arbitration
Any disputes or claims arising out of or from this Agreement or any
Ancillary Agreement shall be finally settled by binding arbitration in Chicago,
Illinois in accordance with the then-current rules and procedures of the
American Arbitration Association. The arbitration shall be adjudicated by one
(1) arbitrator mutually designated by the Parties or appointed by the American
Arbitration Association if the parties fail to so designate an arbitrator.
Judgment on the award rendered by the arbitrator may be entered in any court of
competent jurisdiction. The Parties agree that, any provision of applicable law
notwithstanding, they will not request and the arbitrator shall have no
authority to award punitive or exemplary damages against any Party. Without
limiting the generality of this Section 10.02, any party may seek temporary or
preliminary injunctive relief in a court of competent jurisdiction, but any
permanent injunctive relief shall be resolved by arbitration according to this
section 10.02. The arbitrator shall have the authority to issue injunctive
relief, including a permanent or final injunction, and such orders may be
confirmed as enforceable judgments in a court of competent jurisdiction.
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ARTICLE 11
TERMINATION AND MISCELLANEOUS
11.01 Termination
This Agreement may be terminated by written notice given by the
terminating party to the other parties hereto, at any time prior to the Time of
Closing:
(a) by mutual written consent of the Vendor and the Purchaser; or
(b) by either the Vendor or the Purchaser if the Closing has not
occurred on or before May 31, 2006 provided that the terminating
party has not willfully been the cause of the delay; or
(c) by either the Vendor or the Purchaser if a final and non-appealable
order shall have been entered in any action or proceeding before any
governmental authority or agency either prevents or makes illegal
the consummation of the transaction or, by the Purchaser, if such
order materially affects in an adverse way the benefit of the
transaction to the Purchaser.
In the event of the termination of this Agreement as provided in this Section
11.01, this Agreement shall forthwith have no further force or effect and there
shall be no obligation on the part of the parties hereunder. In the event of
such termination, no party shall have any other liability for any breach of this
Agreement, except for a breach arising from the fraud or willful misconduct of
such party.
11.02 Notices
Any notice, direction or other instrument required or permitted to be
given hereunder shall be in writing and given by delivering or sending it by
telecopy or other similar form of communication addressed:
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(1) to the Purchaser at:
TelePlus Enterprises, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
With Copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ (phone)
▇▇▇-▇▇▇-▇▇▇▇ (fax)
(2) to the Vendor at:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone : ▇▇▇-▇▇▇-▇▇▇▇
Facsimile : ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
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Any such notice, direction or other instrument given as aforesaid shall be
deemed to have been effectively given, if sent by telecopier or other similar
form of telecommunications on the next Business Day following such transmission
or, if delivered, to have been received on the date of such delivery. Any Party
may change its address for service from time to time by notice given in
accordance with the foregoing and any subsequent notice shall be sent to the
party at its changed address.
11.03 Publicity
Save as required by Law or by any stock exchange, none of the Parties
shall issue any press release or make any other public statement or announcement
relating to or connected with or arising out of this Agreement or the matters
contained herein, without obtaining the prior written approval of the other
Parties to the contents and the manner of presentation and publication thereof.
If disclosure is required by Law or by any stock exchange, the disclosing Party
shall consult in advance with the other Parties and attempt in good faith to
reflect such other Parties' concerns in the required disclosure.
11.04 Time of the Essence
Time shall be of the essence of this Agreement.
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11.05 Brokers
The Vendor shall indemnify and save harmless the Purchaser from and
against any Claims whatsoever for any commission or other remuneration payable
or alleged to be payable to any broker, agent or other intermediary who purports
to act or have acted for the Vendor.
11.06 Enurement
This Agreement shall enure to the benefit of and be binding upon each of
the Parties, their successors and any permitted assigns.
11.07 Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original and all of which, taken together, shall constitute
one and the same instrument.
11.08 Assignment
Except as provided in this section, none of the rights or obligations
hereunder shall be assignable or transferable by any Party without the prior
written consent of the other Parties. The Purchaser shall be entitled after the
Time of Closing, upon giving written notice to the Corporation and the Vendor,
at any time to assign all of its rights and obligations under this Agreement to
any wholly-owned subsidiary to perform the Purchaser's rights and obligations
under this Agreement. In such case, such assignee shall have and may exercise
all the rights, and shall assume or perform all of the obligations, of the
Purchaser under this Agreement, reference to the Purchaser shall be deemed also
to refer to such assignee and the Purchaser shall guarantee the obligations of
such assignee. In the event of such an assignment, (a) the Purchaser shall
execute an agreement guaranteeing such assignee's obligations and liabilities
under this Agreement in a form acceptable to the Vendor, acting reasonably, and
(b) the Vendor and such assignee or nominee shall execute an agreement
confirming such assignment or nomination and such assumptions of obligations
shall be on the basis that no such assignment or nomination shall release the
Purchaser from its obligations under this Agreement.
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11.09 Non-Merger
Except as otherwise expressly provided in this Agreement, the covenants,
representations and warranties of the Parties contained in this Agreement and
the Ancillary Agreements shall not merge on and shall survive the Closing and,
notwithstanding such Closing, or any investigation made by or on behalf of any
Party, shall continue in full force and effect. Closing shall not prejudice any
right of one Party against any other Party in respect of anything done or
omitted hereunder or under any of the Ancillary Agreements or in respect of any
right to damages or other remedies.
11.10 Entire Agreement; No Third Party Beneficiaries.
This Agreement and the Ancillary Agreements: (a) constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof and
thereof; and (b) is not intended to confer any rights or remedies upon any
Person other than the parties hereto and thereto.
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IN WITNESS WHEREOF this Agreement has been executed by the Parties as of the
date first above written.
TELEPLUS ENTERPRISES, INC., as the Purchaser
/s/ Marius Silvasan
-------------------
Name: Marius Silvasan
Title: Chief Executive Officer
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as the Vendor
MAXIMO IMPACT, INC., as the Corporation
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
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Schedule 2.01
Purchased Shares
100 common shares in the capital stock of the Corporation
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Schedule 2.02
Performance Targets
------------------------------------------------------------------------------------------------------------------------------------
Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
------------------------------------------------------------------------------------------------------------------------------------
Target
Revenue (excl Handsets) $ 239,000 $ 1,314,500 $ 3,204,420 $ 5,477,147 $ 7,732,598 $ 9,897,596 $12,017,875 $13,738,452
Net Income $ (122,832) $ (38,586) $ 353,387 $ 929,792 $ 1,576,526 $ 2,173,705 $ 2,793,706 $ 3,366,783
Customer Base 6,000 26,000 54,550 87,140 127,742 148,283 176,887 198,351
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
------------------------------------------------------------------------------------------------------------------------------------
Target
Revenue (excl Handsets) $14,508,098 $14,947,708 $15,400,639 $15,867,293 $16,348,088 $16,843,452 $17,353,825 $17,879,663
Net Income $ 3,773,852 $ 3,895,612 $ 4,021,061 $ 4,150,312 $ 4,283,479 $ 4,420,681 $ 4,562,041 $ 4,707,684
Customer Base 204,361 210,554 216,933 223,507 230,279 237,257 244,446 251,853
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Year 5 Year 5 Year 5 Year 5
Q1 Q2 Q3 Q4
--------------------------------------------------------------------------------
Target
Revenue (excl Handsets) $18,421,435 $18,979,623 $19,554,724 $20,147,252
Net Income $ 4,857,740 $ 5,012,343 $ 5,171,631 $ 5,335,745
Customer Base 259,484 267,347 275,448 283,794
--------------------------------------------------------------------------------
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Schedule 3.11
Changes to Corporation
3.11(j) 2 laptops and software in the amount of $5,169.94;
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Schedule 3.21
Liabilities
Potential lawsuit by Beyond Wireless, Vendor's former employer, against the
Vendor and/or the Corporation.
Schedule 3.25
Litigation
Potential lawsuit by Beyond Wireless, Vendor's former employer, against the
Vendor and/or the Corporation.
Schedule 3.26
Taxes
Nil
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