THIS SHARE EXCHANGE AND SHARE PURCHASE AGREEMENT is dated for
reference the 1st day of December, 1999.
AMONG:
▇▇▇▇▇▇.▇▇ INC., a corporation incorporated under the laws of the
State of Nevada,
(the "Parent")
AND:
ICC INTEGRATED CARBONICS (CANADA) CORP., a corporation
incorporated under the laws of the Province of British Columbia,
(the "Purchaser")
AND:
▇▇▇▇▇▇▇▇▇▇.▇▇▇ INC., a corporation incorporated under the
laws of the Province of Ontario
(the "Corporation")
AND:
ALL OF THE SHAREHOLDERS OF THE CORPORATIONS as more particularly
described on Schedule "A" attached hereto,
(Individually a "Shareholder" and collectively the "Shareholders");
WHEREAS:
A. The Corporation is an Internet based provider of comprehensive
financial information and consumer products;
B. The Shareholders own all of the issued and outstanding shares
of the Corporation (the "Corporation Shares");
C. The Parent owns all of the issued and outstanding shares in
the capital stock of the Purchaser;
D. The Purchaser desired to purchase all of the Corporation
Shares and the Shareholders desire to sell all of the Corporation
Shares to the Purchaser on the terms and conditions hereinafter
set forth and, on October 1, 1999, entered into a letter of
intent to purchase all of the issued and outstanding shares of
The Corporation and, on <>, 1999, entered into a letter of intent
to purchase all of the issued and outstanding shares of Urbana
(BC) (collectively, the "Letter of Intent");
E. The Letter of Intent called for the parties thereto to enter
into formal share purchase and exchange agreements;
F. The respective boards of directors of the Purchaser, Parent
and Corporation each deem it advisable and in the best interests
of their respective shareholders to combine their respective
businesses by the Purchaser acquiring all of the shares in the
capital stock of the Corporation pursuant to the terms of this
Agreement; and
G. The respective boards of directors of the Purchaser, Parent
and Corporation have approved and adopted this Agreement as a
plan of reorganization under section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"), and as a transfer
of shares pursuant to section 85 of the Income Tax Act (Canada)
(the "Tax Act").
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of
the foregoing premises, the mutual representations, warranties,
covenants and agreements hereinafter set forth, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.01 Definitions. The following terms, as used herein, have the
following meanings:
"Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by or under direct
or indirect common control with such other Person.
"Agreement" means this Share Exchange and Share Purchase
Agreement by and among the Purchaser, Parent, Corporation and
Shareholders.
"Applicable Law" means, with respect to any Person, any United
States (whether federal, territorial, state or local), Canadian
(whether federal, territorial, provincial, municipal or local) or
foreign statute, law, ordinance, rule, administrative
interpretation, regulation, order, writ, injunction, directive,
judgment, decree or other requirement, all as in effect as of the
Closing, of any Governmental Authority applicable to such Person
or any of its Affiliates or any of their respective properties,
assets, officers, directors, employees, consultants or agents (in
connection with such officer's, director's, employee's,
consultant's or agent's activities on behalf of such Person or
any of its Affiliates).
"Associate" means with respect to any Person (a) any other Person
of which such Person is an officer or partner or is, directly or
indirectly, the beneficial owner of ten percent (10%) or more of
any class of equity securities issued by such other Person, (b)
any trust or other estate in which such Person has a ten percent
(10%) or more beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity, and (c) any
relative or spouse of such Person, or any relative of such spouse
who has the same home as such Person or who is a director or
officer of such Person or any Affiliate thereof.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in Toronto, Ontario are authorized
or required by law to close.
"Buying Group" means the Purchaser and the Parent.
"Buying Group Business" means the business as heretofore or
currently conducted by the Buying Group.
"Buying Group Contracts" means all contracts, agreements,
options, leases, licences, sales and purchase orders, commitments
and other instruments of any kind, whether written or oral, to which
either the Purchaser or the Parent is a party on the Closing Date.
"Corporation Balance Sheet" means the balance sheet of the
Corporation dated November 30, 1999.
"Corporation Business" means the business as heretofore or
currently conducted by the Corporation.
"Corporation Contracts" means all contracts, agreements, options,
leases, licences, sales and purchase orders, commitments and
other instruments of any kind, whether written or oral, to which
the Corporation, or any Shareholder on behalf of the Corporation,
is a party on the Closing Date.
"Corporation Premises" means those premises that have been
occupied or used, or are occupied or used, by the Corporation in
connection with the Corporation Business.
"Exchange and Voting Agreement" means the agreement in
substantially the form set out in Schedule "B" hereto to be
entered into by the Parent, Purchaser and Trustee.
"Exchangeable Non-Voting Shares" means those 4,500,000 Class "A"
exchangeable, non-voting, participating common shares without par
value in the capital stock of the Purchaser, having those rights
and terms set forth in the Exchange and Voting Agreement and the
Exchangeable Share Provisions, which will be issued to the
Shareholders in consideration for the purchase and sale of the
Corporation Shares.
"Exchangeable Share Provisions" means those rights, restrictions,
terms and provisions pertaining to the Exchangeable Non-Voting
Shares, as set forth in Schedule "F" hereto, and as summarized in
section 5.03 hereof.
"Governmental Authority" means any United States (whether
federal, territorial, state, municipal or local), Canadian
(whether federal, territorial, provincial, municipal or local) or
foreign government, governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory
organization, commission, tribunal or organization or any
regulatory, administrative or other agency, or any political or
other subdivision, department or branch of any of the foregoing.
"GST" means all goods and services taxes, sales taxes levied by
the federal government of Canada, value added taxes or multi-
stage taxes and all provincial sales taxes integrated with such
federal taxes, assessed, rated or charged upon the Corporation.
"Interim Period" means the period from and including the date of
this Agreement to and including the Closing Date.
"Liability" means, with respect to any Person, any liability or
obligation of such Person of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, secured or unsecured,
joint or several, due or to become due, vested or unvested,
determined, determinable or otherwise and whether or not the same
is required to be accrued on the financial statements of such
Person.
"Lien" means, with respect to any asset, any mortgage,
assignment, trust or deemed trust (whether contractual, statutory
or otherwise arising), title defect or objection, lien, pledge,
charge, security interest, hypothecation, restriction,
encumbrance or charge of any kind in respect of such assets.
"Material Adverse Effect" means a change in, or effect on, the
operations, affairs, prospects, financial condition, results of
operations, assets, Liabilities, reserves or any other aspect of
a party to this Agreement or to its business that results in a
material adverse effect on, or a material adverse change in, any
such aspect of the party or to its business.
"Parent's Balance Sheet" means the balance sheet of the Parent
dated September 30, 1999.
"Parent Common Shares" means 4,500,000 common shares in the
capital of the Parent to be issued to the Trustee pursuant to
paragraph 2.05 hereof, in consideration of subscription proceeds
from the Trustee of $0.0001 per share, having those rights and
terms as set forth in the Exchange and Voting Agreement.
"Person" includes an individual, body corporate, partnership,
company, unincorporated syndicate or organization, trust,
Trustee, executor, administrator and other legal representative.
"SEC" means the United States Securities and Exchange Commission.
"Stock Option Plan" means the stock option plan of the Parent
which plan is more particularly described in Schedule "H"
attached hereto.
"Subsidiary" means, with respect to any Person, (i) any
corporation as to which more than 10% of the outstanding shares
having ordinary voting rights or power (and excluding shares
having voting rights only upon the occurrence of a contingency
unless and until such contingency occurs and such rights may be
exercised) is owned or controlled, directly or indirectly, by
such Person and/or by one or more of such Person's Subsidiaries,
and (ii) any partnership, joint venture or other similar
relationship between such Person (or any Subsidiary thereof) and
any other Person (whether pursuant to a written agreement or
otherwise).
"Support Agreement" means that agreement between the Parent and
the Purchaser, in the form attached hereto as Schedule "G"
hereto, whereby the Parent agrees to make certain payments and
deliveries to enable the Purchaser to comply with the
Exchangeable Share Provisions.
"Tax" means all taxes imposed of any nature including any United
States (whether federal, territorial, state or local), Canadian
(whether federal, territorial, provincial or local) or foreign
income tax, alternative or add-on minimum tax, profits or excess
profits tax, franchise tax, gross income, adjusted gross income
or gross receipts tax, employment related tax (including employee
withholding or employer payroll tax or employer health tax),
capital tax, real or personal property tax or ad valorem tax,
sales or use tax, excise tax, stamp tax or duty, any withholding
or back up withholding tax, value added tax, GST, severance tax,
prohibited tax, premiums tax, occupation tax, customs and import
duties, together with any interest or any penalty, addition to
tax or additional amount imposed by any Governmental Authority
responsible for the imposition of any such tax or in respect of
or pursuant to any United States (whether federal, territorial,
state or local), Canadian (whether federal, territorial,
provincial or local) or other Applicable Law.
"Tax Return" means all returns, reports, forms or other
information required to be filed with respect to any Tax.
"Trustee" means the Trustee or successor Trustee designated under
the Exchange and Voting Agreement attached hereto as Schedule "B".
"33 Act" means the United States Securities Act of 1933 and all
amendments thereto.
"34 Act" means the United States Securities Act of 1934 and all
amendments thereto.
1.02 Currency Used. All references herein to dollars or the
use of the symbol "$" shall be deemed to refer to United States
dollars unless such reference is prefaced by "CDN" in which case
the reference will be to Canadian dollars.
1.03 Canadian Generally Accepted Accounting Principles. Where the
Canadian Institute of Chartered Accountants or any successor
thereto includes a statement in its handbook or any successor
thereto on a method or alternative methods of accounting or on a
standard or standards of auditing, such statement shall be
regarded as the only generally accepted accounting principle or
principles or generally accepted auditing standard or standards
("Canadian GAAP") applicable to the circumstances that it covers,
and references herein to "generally accepted accounting
principles" shall be interpreted accordingly. All accounting and
financial terms used herein with respect to the Corporation,
unless specifically provided to the contrary, shall be
interpreted and applied in accordance with Canadian GAAP.
1.04 American Generally Accepted Accounting Principles. Where the
American Institute of Certified Public Accountants or any
successor thereto includes a statement in its handbook or any
successor thereto on a method or alternative methods of
accounting or on a standard or standards of auditing, such
statement shall be regarded as the only generally accepted
accounting principle or principles or generally accepted auditing
standard or standards ("American GAAP") applicable to the
circumstances that it covers, and references herein to "generally
accepted accounting principles" shall be interpreted accordingly.
All accounting and financial terms used herein with respect to
the Parent, unless specifically provided to the contrary, shall
be interpreted and applied in accordance with American GAAP.
ARTICLE II: PURCHASE, SALE AND SUBSCRIPTION
2.01 Purchase of Corporation Shares. On the terms and subject to
the conditions set forth herein, the Shareholders hereby agree to
sell, transfer, convey, assign and deliver to the Purchaser, free
and clear of all Corporation Share Encumbrances (as defined in
paragraph 3.01.1), and the Purchaser hereby agrees to purchase,
acquire and accept from the Shareholders, all of the Corporation
Shares held by the Shareholders. At Closing, the Shareholders
will deliver to the Purchaser certificates evidencing all of the
Corporation Shares duly endorsed for transfer and such other
instruments as have been reasonably requested by the Purchaser to
transfer full legal and beneficial ownership of the Corporation
Shares to the Purchaser, free and clear of all Corporation Share
Encumbrances and the Corporation agree to enter the Purchaser or
the Purchaser's nominee on the books of the Corporation as the
holder of the Corporation Shares and to issue one or more
replacement share certificates representing the Corporation
Shares to the Purchaser or the Purchaser's nominee. The
Purchaser shall pay the Purchase Price for the Corporation Shares
in accordance with the terms of Sections 2.02 of this Agreement.
2.02 Purchase Price for Corporation Shares. The aggregate
purchase price to be paid to the Shareholders by the Purchaser
for the Corporation Shares (the "Purchase Price") will be:
(a) 4,500,000 Exchangeable Non-Voting Shares, each
Exchangeable Non-Voting Share exchangeable for a Parent Common
Share on the terms and conditions contained herein; and
(b) those sums totalling CDN$123,000 (the "Purchase Price
Cash Portion") and set forth in Schedule "I" hereto.
The Purchase Price Cash Portion shall be paid at and after
Closing as set forth in Schedule "I".
2.03 Subscription of Parent Common Shares and Optioned Securities.
The Parent agrees to grant:
(a) to each Shareholder, such number of voting rights in
the Parent as is equivalent to the number of Exchangeable Non-
Voting Shares held by each Shareholder, as if each Shareholder
held an equivalent number of Parent Common Shares, and, subject
to the remaining terms of this Agreement, which voting rights
will be exercisable by the Shareholders through their holding
Exchangeable Non-Voting Shares in accordance with the Exchange
and Voting Agreement;
(b) to each Shareholder, the rights to exchange their
Exchangeable Non-Voting Shares for Parent Common Shares, such
rights to be exercised in accordance with the terms of the
Exchange and Voting Agreement;
(c) to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇, Shareholders who are
shareholders of The Corporation, incentive stock options
providing for the purchase of 100,000 Parent Common Shares,
exercisable until June 7, 2001 at an exercise price of $0.50
under the terms of the stock option plan attached hereto as
Schedule "H". In the event that some or all of these incentive
stock options are unexercised on June 7, 2001, the Parent agrees
to grant to each of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and to ▇▇▇▇ ▇▇▇▇▇▇ that number
of incentive stock options which is equal to 100,000 less that
number of incentive stock options they personally exercised on
such terms and conditions as may be permitted under the Parent's
stock option plan effective on June 7, 2001 (or later) and under
applicable laws, statutes and regulations.
To ensure that the Parent has sufficient common shares available
to issue in exchange for Exchangeable Non-Voting Shares, and as
security for its covenant to do so, the Parent agrees to issue
the Parent Common Shares to the Trustee, at or shortly following
Closing, at the purchase price of $0.0001 per share; such Parent
Common Shares to be held in accordance with the Exchange and
Voting Agreement.
2.04 Closing. The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place at the offices of
the Parent in Ontario, Canada, on such date as the parties hereto
may mutually agree in writing (the "Closing Date").
2.05 Payment of Purchase Price. At Closing the Purchaser
will deliver to the Shareholders certificates representing the
Exchangeable Non-Voting Shares, all such Exchangeable Non-Voting
Shares to be issued as fully paid and non-assessable, and
registered in the names of the Shareholders and in the
denominations set forth in Schedule "A" to the Exchange and
Voting Agreement. On or shortly following the Closing, the
Parent will issue the Parent Common Shares to the Trustee, such
Parent Common Shares to be issued as fully paid and non-
assessable, and registered in the name of the Trustee in such
denominations as the Trustee may request. At Closing the
Purchaser will also deliver promissory notes (the "Promissory
Notes"), in a form acceptable to the Shareholders and the
Purchaser evidencing the Purchaser's obligation to pay the
Purchase Price Cash Portion. The Promissory Notes shall be
guaranteed by the Corporation and shall be secured by the
Corporation's assets.
2.06 Reversion for Non-Payment of Purchase Price.
Notwithstanding anything else in this Agreement, in the event
that the Purchaser fails to make any of the Purchase Price
payments as outlined in Schedule "I" hereto or in the event that
the Purchaser fails to make any of the Loans as detailed in
paragraph 7.04 then, unless otherwise agreed to in writing by the
Shareholders, the Parent and the Purchaser:
(a) the Shareholders will, within six (6) months of the Default
Date, return to the Purchaser any portion of the Purchase Price
Cash Portion previously paid to them and will agree in writing to
gift back to the treasury of the Purchaser their Exchangeable
Non-Voting Shares;
(b) upon receipt of repayment of the Purchase Price Cash Portion
previously paid to the Shareholders, the Purchaser shall
transfer, for consideration of Cdn $1.00, all shares of the
Corporation back to the Shareholders from whom they were
purchased; and
(c) all Loans made by the Purchaser or the Parent to the
Corporation shall become due and payable on a date (the "Default
Date") being six months from a default on the payment of the
purchase price or a failure to advance a Loan where no extension
has been granted by the Shareholders.
ARTICLE III: REPRESENTATIONS AND
WARRANTIES OF SHAREHOLDERS
As an inducement to the Buying Group to enter into this Agreement
and to consummate the transactions provided for herein, each
Shareholder, as to himself, herself or itself and as to such of
the Corporation Shares owned by him, her or it (and not as to any
other Shareholder or to any of the Corporation Shares owned by
any other Shareholder) represents and warrants to the Buying
Group as follows and confirms that the Purchaser and the Parent
are relying upon the accuracy of each of such representations and
warranties in connection with the purchase of the Corporation
Shares and the completion of the transactions set out herein:
3.01 Representations Regarding the Corporation Shares.
3.01.1 Each Shareholder has good and marketable title to his
or her respective holdings in the Corporation Shares, free and
clear of any and all covenants, conditions, restrictions, voting
trust arrangements, rights of first refusal, options, Liens and
adverse claims and rights whatsoever (collectively, the
"Corporation Share Encumbrances"), and on the Closing Date, the
Shareholders will deliver to the Purchaser, good and marketable
title to the Corporation Shares free and clear of any and all
Corporation Share Encumbrances;
3.01.2 Each Shareholder has the full right, power and
authority to enter into this Agreement and each Shareholder has
the full right, power and authority to transfer, convey and sell
to the Purchaser at the Closing his or her respective holdings of
the Corporation Shares sold to the Purchaser by the Shareholders
hereunder, and upon consummation of the purchase, the Purchaser
will acquire from the Shareholders good and marketable title to
the Corporation Shares sold to the Purchaser by the Shareholders,
free and clear of all Corporation Share Encumbrances; and
3.01.3 No Shareholder is a party to, subject to or bound by
any agreement, judgment, order, writ, prohibition, injunction or
decree of any court or other Governmental Authority that would
prevent the execution or delivery to the Purchaser of this
Agreement by any Shareholder, the transfer, conveyance and sale
of the Corporation Shares sold by Shareholder to the Purchaser
pursuant to the terms hereof, or the consummation of the
transactions under this Agreement in accordance with the terms of
this Agreement.
3.02 Authorization. The execution, delivery and performance of
this Agreement, and the consummation of the transactions provided
for herein, by each Shareholder are within the respective powers
of each Shareholder and have been duly authorized by all
necessary action on the part of each Shareholder, respectively.
This Agreement has been duly and validly executed by each
Shareholder and constitutes a legal, valid and binding agreement
upon each Shareholder, respectively, enforceable against each
Shareholder in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights and
subject to general principles of equity or family law.
3.03 Non-Contravention. The execution, delivery and performance
of this Agreement, and the consummation of the transactions
provided for herein, by each Shareholder, do not (a) contravene
or conflict with or constitute a material violation of any
provision of any Applicable Law binding upon or applicable to any
Shareholder or the Corporation Shares or (b) result in the
creation or imposition of any Lien.
3.04 Residency. Each Shareholder is a resident of Canada as
defined in the Income Tax Act (Canada).
ARTICLE IV: REPRESENTATIONS AND WARRANTIES
OF THE CORPORATION
As an inducement to the Buying Group to enter into this Agreement
and to consummate the transactions provided for herein, the
Corporation represent and warrant to the Buying Group as follows:
4.01 Existence and Power. The Corporation is a corporation duly
incorporated, organized and validly existing under the laws of
the Province of Ontario and has all corporate power and all
governmental licences, authorizations, permits, consents and
approvals required to carry on the business of The Corporation as
now conducted and to own and operate business of The Corporation
as now owned and operated. The Corporation is not required to be
qualified to conduct business in any jurisdiction where the
failure to be so qualified, whether individually or in the
aggregate, would have a Material Adverse Effect. No proceedings
have been taken or authorized by The Corporation or any
Shareholder or, to the knowledge of The Corporation, by any other
Person, with respect to the bankruptcy, insolvency, liquidation,
dissolution or winding-up of The Corporation or with respect to
any amalgamation, merger, consolidation, arrangement or
reorganization relating to The Corporation.
4.02 Authorization. The execution, delivery and performance by
the Corporation of this Agreement and the consummation thereby of
the transactions provided for herein are within the Corporations
powers and have been duly authorized by all necessary action on
its part. This Agreement has been duly and validly executed by
the Corporation and constitutes a legal, valid and binding
agreement of the Corporation enforceable against it in accordance
with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights and subject to general
principles of equity.
4.03 Capital Stock.
4.03.1 The authorized capital stock of the Corporation
consists solely of the share capital described in Schedule "A"
hereto (the "Corporation Shares").
4.03.2 All such issued and outstanding Corporation Shares have
been duly and validly authorized and issued and are validly
outstanding, fully paid and non-assessable. The Corporation
Shares represent all of the issued and outstanding shares of the
Corporation. The Corporation do not hold any of the issued and
outstanding Corporation Shares in the treasury of the
Corporation, and there are not outstanding (i) any options,
warrants, rights of first refusal or other rights to purchase any
shares of the Corporation except as disclosed in Schedule "C"
hereto, (ii) any securities convertible into or exchangeable for
such shares or (iii) any other commitments of any kind for the
issuance of additional shares of the Corporation or options,
warrants or other securities of the Corporation.
4.04 Subsidiaries. The Corporation have no Subsidiaries.
4.05 Governmental Authorization. The execution, delivery and
performance by the Corporation of this Agreement requires no
action by, consent or approval of, or filing with, any
Governmental Authority other than as expressly referred to in
this Agreement or which would normally be expected to be required
as part of the transactions contemplated by this Agreement.
4.06 Non-Contravention. The execution, delivery and performance
of this Agreement by the Corporation, and the consummation by it
of the transactions provided for herein, do not and will not (a)
contravene or conflict with the articles or bylaws of the
Corporation; (b) contravene or conflict with or constitute a
material violation of any provision of any Applicable Law binding
upon or applicable to the Corporation, the Corporation Business
or the Corporation Shares and would not, individually or in the
aggregate, have a Material Adverse Effect; (c) constitute a
default under or give rise to any right of termination,
cancellation or acceleration of, or to a loss of any benefit to
which the Corporation are entitled, under any Corporation
Contract to which the Corporation are a party or any permit or
similar authorization relating to the Corporation, the
Corporation Business or the Corporation Shares by which the
Corporation, the Corporation Business or the Corporation Shares
may be bound or affected; or (d) result in the creation or
imposition of any Lien.
4.07 Financial Statements: Undisclosed Liabilities.
4.07.1 Attached hereto as Schedule "C" are true and complete
copies of the Corporation Balance Sheets as of November 30, 1999
(collectively, the "Corporation Financials").
4.07.2 The Corporation Financials: (i) have been prepared on a
consistent basis and are based on the books and records of the
Corporation in accordance with Canadian GAAP and present fairly
the financial position, results of operations and statements of
changes in the Corporations financial position as of the dates
indicated or the periods indicated; (ii) contain and reflect all
necessary adjustments and accruals for a fair presentation of its
financial position and the results of its operations for the
periods covered by said financial statements; (iii) contain and
reflect adequate provisions for all reasonably anticipated
Liabilities (including Taxes) with respect to the periods then
ended and all prior periods; and (iv) with respect to the
Corporation Contracts and commitments for the sale of goods or
the provision of services by the Corporation, contain and reflect
adequate reserves for all reasonably anticipated material losses
and costs and expenses in excess of expected receipts.
4.07.3 To the best of the knowledge of the Corporation, there
are no Liabilities of the Corporation other than: (i) any
Liabilities accrued as Liabilities on the Corporation Balance
Sheet; (ii) Liabilities incurred since the date of the
Corporation Balance Sheet that do not, and could not,
individually or in the aggregate have a Material Adverse Effect;
and (iii) other Liabilities disclosed in this Agreement or in any
schedules attached hereto.
4.08 Absence of Certain Changes. Since December 1, 1999, the
Corporation Business has been conducted in the ordinary course,
and there has not been:
(a) any event, occurrence, state of circumstances, or facts
or change in the Corporation or in the Corporation Business that
has had, or which the Corporation, after reasonable inquiry,
expect to have, either individually or in the aggregate, a
Material Adverse Effect;
(b) (i) any change in any Liabilities of the Corporation
that has had, or which the Corporation may, after reasonable
inquiry, expect to have, a Material Adverse Effect such that the
total Liabilities of the Corporation would exceed CDN $162,001 or
(ii) any incurrence, assumption or guarantee of any indebtedness
for borrowed money by the Corporation in connection with the
Corporation Business or otherwise;
(c) any (i) payments by the Corporation in respect of any
indebtedness of the Corporation for borrowed money or in
satisfaction of any Liabilities of the Corporation related to the
Corporation Business, other than in the ordinary course of
business or the guarantee by the Corporation of any of the
indebtedness of any other Person or (ii) creation, assumption or
sufferance of (whether by action or omission) the existence of
any Lien on any assets reflected on the Corporation's Balance
Sheet;
(d) any transaction or commitment made, or any Contract
entered into, by the Corporation, or any waiver, amendment,
termination or cancellation of any of the Corporation Contracts
by the Corporation, or any relinquishment of any rights
thereunder by the Corporation or of any other right or debt owed
to the Corporation, other than, in each such case, actions taken
in the ordinary course of business consistent with past practice;
(e) any grant of any severance, continuation or termination
pay to any director, officer, stockholder or employee of the
Corporation or any Affiliate of the Corporation, (ii) entering
into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with
any director, officer, stockholder or employee of the Corporation
or any Affiliate of the Corporation, (iii) increase in benefits
payable or potentially payable under any severance, continuation
or termination pay policies or employment agreements with any
director, officer, stockholder or employee of the Corporation or
any Affiliate of the Corporation, (iv) increase in compensation,
bonus or other benefits payable or potentially payable to
directors, officers, stockholders or employees of the Corporation
or any Affiliate of the Corporation other than in the normal
course of business, (v) change in the terms of any bonus,
pension, insurance, health or other benefit plan of the
Corporation or (vi) representation of the Corporation to any
employee or former employee of the Corporation that the Purchaser
promised to continue any Corporation benefit plan after the
Closing Date,
(f) any change by the Corporation in its accounting
principles, methods or practices or in the manner it keeps its
books and records;
(g) any distribution, dividend, bonus, management fee or
other payment by the Corporation to any officer, director,
stockholder or Affiliate of the Corporation or any of their
respective Affiliates or Associates; or
(h) any (i) material single capital expenditure or
commitment, or any group of related capital expenditures or
commitments, or (ii) sale, assignment, transfer, lease or other
disposition of or agreement to sell, assign, transfer, lease or
otherwise dispose of any asset or property other than in the
ordinary course of business.
4.09 Properties; Corporation Material Leases; Tangible Assets.
4.09.1 The Corporation does not own any real property.
4.09.2 The Corporation hold, title to each of its properties
and assets free and clear of all Liens, adverse claims,
easements, rights of way, servitudes, zoning or building
restrictions or any other rights of others or other adverse
interests of any kind, including leases, chattel mortgages,
conditional sales contracts, collateral security arrangements and
other title or interest retention arrangements (collectively,
"Corporation Encumbrances").
4.09.3 All tangible properties and assets reflected on the
Corporation Balance Sheet are in all material respects fit for
the purposes for which they are used and are in good operating
condition and repair and are adequate for the uses to which they
are put, and no material properties or assets necessary for the
conduct of the Corporation Business in substantially the same
manner as the Corporation Business has heretofore been conducted
are in need of replacement, maintenance or repair except for
routine replacement, maintenance and repair.
4.10 Affiliates. Other than as disclosed herein, there are no
Corporation Contracts which have been entered into within the
past five years or are currently in force and effect between the
Corporation and any Shareholder, or any Affiliate or Associate of
any Shareholder. The Corporation is not indebted to any Shareholder.
4.11 Litigation. There are no material proceedings pending or,
to the knowledge of the Corporation, threatened against or
affecting the Corporation or the Corporation Business or that
seeks to prevent, enjoin, alter or delay the transactions
contemplated by this Agreement and (ii) there is no existing
order, judgment or decree of any Governmental Authority naming
the Corporation as an affected party which has not been paid or
discharged in full.
4.12 Material Contracts. To the knowledge of the Corporation,
all Corporation Contracts are legal, valid and binding
obligations of the Corporation and each other Person who is a
party thereto, enforceable against the Corporation and each such
Person in accordance with their terms, and none are subject to
any material default thereunder.
4.13 Required Consents. There are no governmental or other
registrations, filings, applications, notices, transfers,
consents, approvals, orders, qualifications or waivers required
under Applicable Law or otherwise required to be obtained or made
with any Governmental Authority to be obtained by the Corporation
or any Shareholder by virtue of the execution and delivery of
this Agreement and the consummation of the transactions provided
for herein for any reason; nor are there any Corporation
Contracts with respect to which the consent of the other party or
parties thereto must be obtained by the Corporation or any
Shareholder by virtue of the execution and delivery of this
Agreement and the consummation of the transactions provided for
herein (the "Required Consents").
4.14 Corporation Intellectual Property.
4.14.1 Schedule "E" sets forth a complete and correct list of
each patent, patent application and invention, trademark,
tradename, trademark or tradename registration or application,
copyright or copyright registration or application for copyright
registration, and each licence or licensing agreement, for any of
the foregoing relating to the Corporation Business as conducted
by the Corporation or held by the Corporation (the "Corporation's
Intellectual Property Rights"). The Corporation's Intellectual
Property Rights also include any trade secrets that are material
to the conduct of the Corporation Business in the manner that the
Corporation Business has heretofore been conducted.
4.14.2 The Corporation has not, during the three years
preceding the date of this Agreement, been a party to any
proceeding, nor to the knowledge of the Corporation, is any
proceeding threatened, as to which there is a reasonable
possibility of a determination adverse to the Corporation,
involving a claim of infringement by any Person (including any
Governmental Authority) of any of the Corporation's Intellectual
Property Rights. None of the Corporation Intellectual Property
Right are subject to any outstanding order, judgment, decree,
stipulation or agreement restricting the use thereof by the
Corporation or restricting the licensing thereof by the
Corporation to any Person.
4.14.3 To the knowledge of the Corporation, the Corporation
either owns the entire right, title and interest in, to and
under, or has acquired an exclusive licence to use, any and all
patents, trademarks, trade names, brand names and copyrights that
are material to the conduct of the Corporation Business in the
manner that the Corporation Business has heretofore been
conducted. The Corporation's Intellectual Property Rights are in
full force and effect and have not been used or enforced or
failed to be used or enforced in a manner that would result in
the abandonment, cancellation or unenforceability of any of the
Corporation's Intellectual Property Rights. All registrations and
filings necessary to preserve the rights of the Corporation in
and to the Corporation's Intellectual Property Rights have been
made.
4.15 Tax Matters.
4.15.1 The Corporation has prepared and filed all Tax Returns
on time with all appropriate Governmental Authorities which were
required to be filed on or prior to the Closing Date. To the
best of the Corporation's knowledge, each such Tax Return was
correct and complete.
4.15.2 The Corporation has paid all Taxes due and payable by
them and have paid all assessments and reassessments they have
received in respect of Taxes. The Corporation have paid all Tax
installments due and payable by them as at November 30, 1999,
save and except as disclosed in Schedule "C" hereto.
4.15.3 The Corporation has withheld from each payment made to
any of its present or former employees, officers and directors,
and to all persons who are non-residents of Canada for the
purposes of the Income Tax Act (Canada) all amounts required by
Applicable Law and has remitted such withheld amounts within the
prescribed periods to the appropriate Governmental Authority.
The Corporation has remitted all Canada Pension Plan
contributions, employment insurance premiums, employer health
taxes and other Taxes payable by them in respect of their
employees and have remitted such amounts to the proper
Governmental Authority within the time required by Applicable
Law. The Corporation has charged, collected and remitted on a
timely basis all Taxes as required by Applicable Law on any sale,
supply or delivery whatsoever, made by the Corporation.
4.15.4 The Corporation Business is the only business ever
conducted by the Corporation. The non-capital losses (as defined
in the Tax Act and any applicable provincial taxing statute) were
incurred by the Corporation only in carrying on the Corporation
Business. The Corporation is not prevented by virtue of any
amalgamation or dissolution from carrying back against income
earned by it prior to the Closing Date, any losses incurred by it
after the Closing Date.
4.15.5 The Corporation has paid all Taxes imposed by
applicable legislation in the provinces of British Columbia and
Ontario on the acquisition of its tangible personal property as
defined in applicable legislation in the province of Ontario, and
none of its tangible personal property has been transferred at
any time on a tax-exempt basis under applicable legislation of
the Province of Ontario or any predecessor legislation thereof.
The foregoing is accurate, mutatis mutandis, with respect to all
sales or transfer Taxes imposed under comparable legislation of
other provinces.
4.16 Securities Legislation. The Corporation is a private issuer
within the meaning of the Securities Act (Ontario) and the sale
of the Corporation Shares by the Shareholders to the Purchaser is
made in compliance with the exempt takeover-bid provisions of
this Act or such other exemption as may be available to it and
the Shareholder.
4.17 Full Disclosure. The information contained in the
documents, certificates and written statements (including this
Agreement and the schedules and exhibits hereto) furnished to the
Purchaser by or on behalf of the Corporation with respect to the
Corporation (including the Corporation Business and the results
of operations, financial condition and prospects of the
Corporation) for use in connection with this Agreement or the
transactions contemplated by this Agreement is true and complete
in all material respects and does not, to the best of the
knowledge of the Corporation after conducting an inquiry which a
reasonably prudent person would make under the circumstances,
omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. There is no fact known to the
Corporation that has not been disclosed to the Purchaser by the
Corporation in writing that has had a Material Adverse Effect on
or, so far as the Corporation can now foresee, could be
reasonably likely to have a Material Adverse Effect on, the
Corporation (including the Corporation Business and the results
of operations, financial condition or prospects of the
Corporation).
ARTICLE V: REPRESENTATIONS AND WARRANTIES
OF THE BUYING GROUP
As an inducement to the Corporation and each Shareholder to enter
into this Agreement and to consummate the transactions provided
for herein, the Purchaser and the Parent, jointly and severally,
represent and warrant to the Corporation and to each Shareholder
and confirms that the Corporation and each Shareholder are
relying upon the accuracy of each of such representations and
warranties in connection with the purchase of the Corporation
Shares and the completion of the transactions set out herein:
5.01 Existence and Power. Each of the Purchaser and the Parent
is a corporation duly incorporated, organized and validly
existing under the laws of its incorporating jurisdiction (being
the Province of British Columbia for the Purchaser and the State
of Nevada for the Parent) and each has all corporate power and
all governmental licences, authorizations, permits, consents and
approvals required to carry on the Buying Group Business as now
conducted and to own and operate their respective businesses as
now owned and operated. The Purchaser and the Parent are not
required to be qualified to conduct business in any jurisdiction
where the failure to be so qualified, whether individually or in
the aggregate, would have a Material Adverse Effect. No
proceedings have been taken or authorized by the Purchaser or the
Parent or, to the knowledge of the Purchaser or the Parent, by
any other Person, with respect to the bankruptcy, insolvency,
liquidation, dissolution or winding-up of the Purchaser or the
Parent or with respect to any amalgamation, merger,
consolidation, arrangement or reorganization relating to the
Purchaser or the Parent.
5.02 Authorization. The execution, delivery and performance by
each of the Purchaser and the Parent of this Agreement and the
consummation thereby of the transactions provided for herein are
within the powers of the Purchaser and the Parent and have been
duly authorized by all necessary action on their part. This
Agreement has been duly and validly executed by each of the
Purchaser and the Parent and constitutes a legal, valid and
binding agreement of the Purchaser and the Parent enforceable
against them in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights and
subject to general principles of equity.
5.03 Capital Stock of the Purchaser.
5.03.1 The authorized capital stock of the Purchaser consists
of 100,000,000 common shares of no par value of which one common
share is issued and outstanding on the date hereof to and
50,000,000 Exchangeable Non-Voting Shares with no par value of
which no shares are issued and outstanding. Each Exchangeable
Non-Voting Share shall:
(a) be non-voting as to matters concerning the Purchaser
(such that all voting shares of the Purchaser will be and remain
held by the Parent); however, as stated above in paragraph 2.03,
the holder of Exchangeable Non-Voting Shares will be entitled to
voting rights in the Parent as is equivalent to the number of
Exchangeable Non-Voting Shares held by each Shareholder as if
each Shareholder held an equivalent number of Parent Common
Shares;
(b) entitle the holder thereof (the "Holder") to dividend
rights equal, after conversion into Canadian dollars based on the
Canadian/U.S. exchange rate in effect on the record date thereof,
to the per share dividend rights of Parent Common Shares;
(c) entitle the Holder, on a liquidation of the Purchaser,
to receive in exchange for each Exchangeable Non-Voting Share one
Parent Common Shares for a period ending on the twenty-fifth
anniversary of the Closing Date; and
(d) entitle the Holder, at his or her election from time to
time for a period ending on the twenty-fifth anniversary of the
Closing Date, upon 30 days' written notice given by such Holder
to the Purchaser, to require the Purchaser to redeem any or all
Exchangeable Non-Voting Shares and to exchange therefor, on a
share for share basis, Parent Common Shares (the "Right of
Retraction"),
5.03.2 The Parent and the Purchaser shall be entitled to
deduct and withhold from the consideration otherwise payable to
any Holder of Exchangeable Non-Voting Shares, including any
dividend payments in respect of the Exchangeable Non-Voting
Shares, such amount as the Parent or the Purchaser is required or
permitted to deduct and withhold with respect to such payment
under the United States Internal Revenue Code, the Income Tax Act
(Canada) or any provision of state, provincial, local or foreign
tax law. The Parent and the Purchaser shall not initially
withhold any United States Tax on dividends paid on the
Exchangeable Non-Voting Shares. However, if any United States
taxing authority determines that the Parent or the Purchaser is
liable for United States withholding Tax on dividends paid to the
Holders on the Exchangeable Non-Voting Shares, the Purchaser
shall be entitled to reduce the amount of any future dividends to
be paid to the Holders by such withholding obligation. To the
extent that amounts are so withheld, such withheld amounts shall
be treated for all purposes hereof as having been paid to the
Holder of Exchangeable Non-Voting Shares in respect of which such
deduction and withholding was made; provided, however, that such
withheld amounts are actually remitted to the appropriate taxing
authority. To the extent that the amount so required or
permitted to be deducted or withheld from any payment to a Holder
exceeds the cash portion of the consideration otherwise payable
to the Holders, the Parent upon at least ten (10) days' prior
written notice to such Holder, is hereby authorized to sell or
otherwise dispose of at fair market value such portion of such
non-cash consideration otherwise payable to the Holder as is
necessary to provide sufficient funds to the Parent in order to
enable it to comply with such deduction or withholding
requirement and the Parent shall give an accounting to the Holder
with respect thereof and any balance of such proceeds of sale.
5.03.3 There are not outstanding (i) any options, warrants,
rights of first refusal or other rights to purchase any shares of
the Purchaser, (ii) any securities convertible into or
exchangeable for such shares or (iii) any other commitments of
any kind for the issuance of additional shares of the Purchaser
or options, warrants or other securities of the Purchaser.
5.04 Capital Stock of the Parent.
5.04.1 The authorized capital stock of the Parent consists
solely of 70,000,000 common shares with no par value ("Parent
Common Shares") of which 10,031,350 Parent Common Shares are
issued and outstanding on the date hereof.
5.04.2 There are not outstanding (i) any options, warrants,
rights of first refusal or other rights to purchase any shares of
the Parent from treasury, (ii) any securities convertible into or
exchangeable for such shares or (iii) any other commitments of
any kind for the issuance of additional shares of the Parent or
options, warrants or other securities of the Parent which
materially vary from those disclosed in the financial statements
of the Parent attached hereto as Schedule "D".
5.05 General Provisions of the Capital of the Purchaser and the
Parent.
5.05.1 All of the issued and outstanding shares in the
respective capital stocks of the Purchaser and the Parent have
been duly and validly authorized and issued and are validly
outstanding, fully paid and non-assessable. The Purchaser does
not hold any of the issued and outstanding shares in the treasury
of the Purchaser or the Parent, the Parent does not hold any of
the issued and outstanding shares in the treasury of the Parent
and there are not outstanding (i) any options, warrants, rights
of first refusal or other rights to purchase any shares of the
Purchaser or the Parent, (ii) any securities convertible into or
exchangeable for such shares or (iii) any other commitments of
any kind for the issuance of additional shares of the Purchaser
or Parent or options, warrants or other securities of the
Purchaser or Parent other than as disclosed in Article 5.03.1
herein.
5.05.2 All of the Exchangeable Non-Voting Shares and the
Parent Common Shares which will be issued hereunder will be
fully paid and non-assessable, subject to such terms and
provisions as set forth in the Exchange and Voting Agreement, and
the Purchaser's articles of incorporation and the Parent's
Directors Resolutions relating to the issuance of the Parent
Common Shares, as applicable, and all such shares will be issued
free and clear of all Liens, charges, encumbrances and trading
restrictions other than as may be imposed by Applicable Law.
5.06 Subsidiaries. The Purchaser has no Subsidiaries and
the only Subsidiary of the Parent is the Purchaser.
5.07 Governmental Authorization. The execution, delivery and
performance by the Buying Group of this Agreement requires no
action by, consent or approval of, or filing with, any
Governmental Authority other than as expressly referred to in
this Agreement.
5.08 Non-Contravention. The execution, delivery and performance
of this Agreement by the Buying Group, and the consummation by it
of the transactions provided for herein, do not and will not (a)
contravene or conflict with the respective articles or bylaws of
the Buying Group; (b) contravene or conflict with or constitute a
material violation of any provision of any Applicable Law binding
upon or applicable to the Buying Group, the Buying Group Business
or the outstanding shares in their respective capital stocks and
would not, individually or in the aggregate have a Material
Adverse Effect; (c) constitute a default under or give rise to
any right of termination, cancellation or acceleration of, or to
a loss of any benefit to which the Purchaser or the Parent are
entitled, under any Buying Group Contract to which the Purchaser
or the Parent is a party or any Permit or similar authorization
relating to the Purchaser or Parent, the Buying Group Business or
the outstanding shares in their respective capital stocks may be
bound or affected; or (d) result in the creation or imposition of
any Lien.
5.09 Financial Statements: Undisclosed Liabilities.
5.09.1 Attached hereto as Schedule "D" are true and complete
copies of the Parent's Balance Sheet, prepared on a consolidated
basis, as of September 30, 1999 and the related statements of
income and retained earnings and changes of financial position,
prepared on a consolidated basis, for the year ended December 31,
1998 (collectively, the "Parent's Financials").
5.09.2 The Parent's Financials: (i) have been prepared on a
consistent basis and are based on the books and records of the
Parent in accordance with American GAAP and present fairly the
financial position, results of operations and statements of
changes in the Parent's financial position as of the dates
indicated or the periods indicated; (ii) contain and reflect all
necessary adjustments and accruals for a fair presentation of its
financial position and the results of its operations for the
periods covered by said financial statements; (iii) contain and
reflect adequate provisions for all reasonably anticipated
liabilities (including Taxes) with respect to the periods then
ended and all prior periods; and (iv) with respect to Buying
Group Contracts and commitments for the sale of goods or the
provision of services by the Parent, contain and reflect adequate
reserves for all reasonably anticipated material losses and costs
and expenses in excess of expected receipts.
5.09.3 To the best of the knowledge of the Buying Group, there
are no Liabilities of the Buying Group other than: (i) any
Liabilities accrued as Liabilities on the Parent's Balance Sheet;
(ii) Liabilities incurred since the date of the Parent's Balance
Sheet that do not, and could not, individually or in the
aggregate have a Material Adverse Effect; (iii) other Liabilities
disclosed in this Agreement or in any schedules attached hereto;
(iv) the Tax on reserves; and (v) debts, liabilities and
obligations of the Purchaser (other than intercorporate loans
between Parent and Purchaser) totaling not more than Cdn $2,000.
5.10 Absence of Certain Changes. Since December 1, 1999, the
Buying Group Business has been conducted in the ordinary course,
and, after having made reasonable inquiry, they believe there has
not been:
(a) any event, occurrence, state of circumstances, or facts
or change in the Purchaser or the Parent or in the Buying Group
Business that has had, or which the Purchaser or the Parent,
expect to have, either individually or in the aggregate, a
Material Adverse Effect;
(b) (i) any change in any Liabilities of the Purchaser or
the Parent that has had, or which the Purchaser or the Parent
expect to have, a Material Adverse Effect or (ii) any incurrence,
assumption or guarantee of any indebtedness for borrowed money by
the Purchaser or the Parent in connection with the Buying Group
Business or otherwise;
(c) any (i) payments by the Purchaser or Parent in respect
of any indebtedness of the Purchaser or Parent for borrowed money
or in satisfaction of any Liabilities of the Purchaser or Parent
related to the Buying Group Business, other than in the ordinary
course of business or the guarantee by the Purchaser or the
Parent of any of the indebtedness of any other Person or (ii)
creation, assumption or sufferance of (whether by action or
omission) the existence of any Lien on any assets reflected on
the Parent's Balance Sheet;
(d) any transaction or commitment made, or any Contract
entered into, by the Buying Group, any waiver, amendment,
termination or cancellation of any Contract by the Buying Group,
or any relinquishment of any rights thereunder by the Buying
Group or of any other right or debt owed to the Buying Group,
other than, in each such case, actions taken in the ordinary
course of business consistent with past practice;
(e) any (i) grant of any severance, continuation or
termination pay to any director, officer, stockholder or employee
of the Buying Group or any Affiliate of the Buying Group, (ii)
entering into of any employment, deferred compensation or other
similar agreement (or any amendment to any such existing
agreement) with any director, officer, stockholder or employee of
the Buying Group or any Affiliate of the Buying Group, (iii)
increase in benefits payable or potentially payable under any
severance, continuation or termination pay policies or employment
agreements with any director, officer, stockholder or employee of
the Buying Group or any Affiliate of the Buying Group, (iv)
increase in compensation, bonus or other benefits payable or
potentially payable to directors, officers, stockholders or
employees of the Buying Group or any Affiliate of the Buying
Group, (v) change in the terms of any bonus, pension, insurance,
health or other benefit plan of the Buying Group or (vi)
representation of the Buying Group to any employee or former
employee of the Buying Group that the Buying Group promised to
continue any benefit plan after the Closing Date,
(f) any change by the Buying Group in its accounting
principles, methods or practices or in the manner it keeps its
books and records;
(g) any distribution, dividend, bonus, management fee or
other payment by the Buying Group to any of their respective
officers, directors, stockholders or Affiliates of the Buying
Group or any of their respective Affiliates or Associates; and
(h) any (i) single capital expenditure or commitment, or
any group of related capital expenditures or commitments by
either the Purchaser or the Parent or (ii) sale, assignment,
transfer, lease or other disposition of or agreement to sell,
assign, transfer, lease or otherwise dispose of any asset or
property by either of the Purchaser or the Parent other than in
the ordinary course of business.
5.11 Properties; Material Leases; Tangible Assets. Neither the
Purchaser nor the Parent own or lease any real property or
material assets.
5.12 Affiliates. There are no undisclosed material contracts of
which the Shareholders are unaware between either the Parent or
Purchaser and any of its shareholders, or any Affiliate or
Associate of any of its shareholders. There is no undisclosed
material indebtedness of which the Shareholders are unaware of
either the Parent or the Purchaser to any of its shareholders, or
to any Affiliate or Associate of any of its shareholders.
5.13 Litigation. There is no proceeding pending or, to the
knowledge of the Buying Group, threatened against or affecting
the Buying Group or the Buying Group Business or that seeks to
prevent, enjoin, alter or delay the transactions contemplated by
this Agreement, and there is no existing order, judgment or
decree of any Governmental Authority naming either the Purchaser
or the Parent as an affected party which has not been paid or
discharged in full.
5.14 Material Contracts. The Buying Group is not party to any
Buying Group Contract other than as specified herein.
5.15 Compliance with Applicable Laws. The operation of the Buying
Group Business (i) has not violated or infringed, except for
violations or infringements that have been cured and the prior
existence of which could not, individually or in the aggregate,
reasonably be expected to have an adverse effect on either the
Purchaser or the Parent and (ii) does not in any material respect
violate or infringe any Applicable Law, the terms of any Permit
or any order, writ, injunction or decree of any Governmental
Authority including but not limited to, the 33 Act, the 34 Act,
the Rules and Regulations of the SEC, or the Securities Laws and
Regulations of any state. The Parent is not an investment company
as defined in, or otherwise subject to regulation under, the
Investment Company Act of 1940. The Parent is required to file
reports pursuant to Section 12(g) of the 34 Act and is now, and
as of the Closing Date will be, current in its filings. The
Parent's Form 10-K Annual Reports have been filed with certified
financial statements, in compliance with SEC Regulations.
5.16 Buying Group Employment Agreement; and Employee Benefits.
5.16.1 There are no employment, consulting, severance pay,
continuation pay, termination pay, indemnification agreements,
collective agreements, employee benefit plans or other similar
agreements of any nature whatsoever affecting either the
Purchaser or the Parent save those to which a company listed on
the OTCBB would, in the ordinary course of its business, be party
to.
5.16.2 The Buying Group and its Affiliates have complied and
are currently complying, in respect of all employees of the
Buying Group and its Affiliates, with all Applicable Laws
respecting employment and employment practices and the protection
of the health and safety of employees, except for such instances
which do not materially affect the interests of the Shareholders
under this Agreement.
5.17 Intellectual Property. The Buying Group has no interest in
any patent, patent application and invention, trademark, trade
name, trademark or trade name registration or application,
copyright or copyright registration or application for copyright
registration.
5.18 Tax Matters.
5.18.1 Except as disclosed in the Parent's Financials, the
Purchaser and the Parent have prepared and filed all Tax Returns
on time with all appropriate Governmental Authorities which were
required to be filed on or prior to the Closing Date. Each such
Tax Return was correct and complete.
5.18.2 The Purchaser is not a registrant for the purposes of
the goods and services tax provided for under the Tax Act.
5.18.3 The Purchaser is a taxable Canadian Corporation, as
that term is defined in the Tax Act.
5.18.4 The Purchaser has paid all applicable sales and retail
taxes in the Province of British Columbia, and none of its
tangible personal property has been transferred at any time on a
tax-exempt basis under applicable legislation in the Province of
British Columbia. The foregoing is accurate, mutatis mutandis,
with respect to all sales or transfer Taxes imposed under
comparable legislation of other provinces.
5.18.5 The Purchaser has never acquired or had the use of any
of its assets from a Person (a "Related Person") with whom the
Purchaser was not dealing at arm's length, within the meaning of
the Tax Act. The Purchaser has never disposed of any asset to a
Related Person for proceeds less than the fair market value of
that asset. The Purchaser is not a party to or bound by any
agreement with, is not indebted to, and no amount is owing to the
Purchaser by any Related Person, not dealing at arm's length,
within the meaning of the Tax Act, with the Purchaser.
5.18.6 For the purposes of the Tax Act the Purchaser and the
Shareholders hereby covenant and agree to elect jointly under
Subsection 85(1) or 85.1 of the Tax Act, by completing and filing
with the Department of National Revenue the prescribed form T2057
within the prescribed time for the purposes of the Tax Act with
respect to the sale by the Shareholders to the Purchaser of the
Corporation Shares and further agree to transfer the Corporation
Shares at an agreed amount equal to the adjusted cost base of the
Corporation Shares to the Shareholders for purposes of the Tax
Act or such greater amount determined by the Shareholders (the
"Elected Amount").
5.18.7 If at any time after the Closing Date the Shareholders
determine that either:
(a) it is necessary or desirable to change the Elected
Amount; or
(b) the Tax Act deems the Elected Amount to be an amount
which is different than the amount agreed upon between the
Shareholder and the Purchaser, then the Shareholder and the Purchaser
shall do all things reasonably necessary to reflect such change including,
for example, filing an amended election pursuant to subsection 85(1)
or 85.1 of the Tax Act.
5.19 Issuance of Shares.
5.19.1 The issuance of the Parent Common Shares by the Parent,
and the terms and provisions of the Parent Common Shares, will
not violate any provisions of the Parent's articles or bylaws or
any Applicable Law, nor will the voting rights attached to the
Parent Common Shares derogate from any rights under Applicable
Law.
5.19.2 The issuance of the Exchangeable Non-Voting Shares by
the Purchaser, and the terms and provisions of the Exchangeable
Non-Voting Shares, will not violate any provisions of the
Purchaser's articles or bylaws or any Applicable Law.
5.20 Continuing NASD Status. The Parent warrants that the
National Association of Securities Dealers has cleared the Parent
for quotation of its common shares, including the Parent Common
Shares, on the over-the-counter bulletin board in the United
States, which will continue after the Closing.
5.21 Full Disclosure. The information contained in the
documents, certificates and written statements (including this
Agreement and the schedules and exhibits hereto) furnished to the
Shareholders by or on behalf of the Buying Group with respect to
each of the Purchaser and the Parent (including the Buying Group
Business and the respective results of operations, financial
condition and prospects of the Purchaser and the Parent) for use
in connection with this Agreement or the transactions
contemplated by this Agreement is true and complete in all
material respects and does not, to the best of the knowledge of
the Purchaser and the Parent after conducting an inquiry which a
reasonably prudent person would make under the circumstances,
omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. There is no fact known to the
Purchaser or the Parent that has not been disclosed to the
Shareholders by the Buying Group in writing that has had a
Material Adverse Effect on or, so far as the Buying Group can now
foresee, could be reasonably likely to have a Material Adverse
Effect on the Buying Group (including the Buying Group Business
and the respective results of operations, financial condition or
prospects of the Buying Group).
ARTICLE VI: COVENANTS OF THE CORPORATION AND SHAREHOLDERS
6.01 Conduct of the Business. During the Interim Period, other
than with the express written approval of the Purchaser, the
Corporation shall conduct the Corporation Business in the
ordinary course consistent with past practice and shall use its
best efforts to preserve intact the organization, relationships
with third parties and goodwill of the Corporation and keep
available the services of the present officers, employees, agents
and other personnel of the Corporation Business.
6.01.1 Without limiting in any way the importance of the
foregoing, during the Interim Period, other than with the express
written approval of the Purchaser, the Corporation shall not, and
each Shareholder shall not cause the Corporation to:
(a) adopt any material change in any method of accounting
or accounting practice used by the Corporation other than by
reason of a concurrent change in generally accepted accounting
principles;
(b) amend its articles or bylaws;
(c) sell, mortgage, pledge or otherwise dispose of any
substantial assets or properties of the Corporation;
(d) declare, set aside or pay any management fee or
dividend or make any other distribution with respect to the
capital stock of the Corporation or otherwise make a distribution
or payment to any Shareholder;
(e) amalgamate, merge or consolidate with or agree to
amalgamate, merge or consolidate with, or purchase or agree to
purchase all or substantially all of the assets of, or otherwise
acquire, any Corporation, partnership or other business
organization or division thereof;
(f) authorize for issuance, issue, sell or deliver any
additional shares of its capital stock of any class or any
securities or obligations convertible into shares of its capital
stock of any class or commit to doing any of the foregoing;
(g) split, combine or reclassify any shares of the capital
stock of any class of the Corporation or redeem or otherwise
acquire, directly or indirectly, any shares of such capital
stock;
(h) incur or agree to incur any debt or guarantee any debt
for borrowed money, including any debt to any Shareholder, or to
any Affiliate or Associate of any Shareholder, except debt
incurred in the ordinary course of business consistent with past
practice;
(i) make any loan, advance or capital contribution to or
investment in any person other than loans, advances and capital
contributions to or investments in joint ventures or other
similar arrangements in which the Corporation has an equity
interest in the ordinary course of business and travel advances
made in the ordinary course of business by the Corporation to its
employees to meet business expenses expected to be incurred by
such employees;
(j) enter into any settlement with respect to any
Proceeding or consent to any order, decree or judgment relating
to or arising out of any such Proceeding;
(k) take any action to terminate, dismiss or cause the
retirement of any key employee of the Corporation;
(l) fail in any material respect to comply with any
Applicable Laws; or
(m) make, or make any commitments for, capital or
contractual expenditure exceeding $5,000 for any individual
commitment or $100,000 for all such commitments taken in the
aggregate.
6.01.2 During the Interim Period, other than with the express
written approval of the Purchaser, the Corporation shall:
(a) file all Canadian, United States, foreign, federal,
state, provincial and local Tax Returns required to be filed and
make timely payment of all applicable Taxes when due;
(b) promptly notify the Purchaser in writing of any action
or circumstance that results in, or could reasonably be expected
to result in, a Material Adverse Effect or the occurrence of any
breach by the Corporation or any Shareholder of any
representation or warranty, or any covenant or agreement
contained in this Agreement; and
(c) promptly notify the Purchaser in writing of the
commencement of any proceeding or the threat thereof by or
against the Corporation or any Shareholder.
6.02 Completion of Schedule "I" payments before conversion of
Exchangeable Shares. The Shareholders covenant and agree that
they shall not, prior to completion by the Parent and the
Purchaser of all payments and obligations under Schedule "I",
attempt to exchange any of their Exchangeable Non-Voting Shares
for Parent Common Shares.
6.03 Maintenance of Corporation Insurance Policies. During the
Interim Period, the Corporation shall not take or fail to take
any action if such action or inaction would adversely affect the
applicability of any insurance in effect on the date hereof that
covers all or any material part of the assets of the Corporation
or the Business.
6.04 Tax Election. In accordance with the Letter of Intent,
the Corporation shall not file an election pursuant to subsection
256(9) of the Income Tax Act (Canada) or any equivalent
provincial provision.
ARTICLE VII: COVENANTS OF THE BUYING GROUP
7.01 Appointment of Director. At Closing, the following person(s)
will be appointed a director of the Parent:
Name Position
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Director
7.02 Execution of Management Agreements. At Closing, The
Corporation shall execute the following 2 year term management
agreements:
(a) with ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), a management agreement
whereby ▇▇▇▇▇▇▇▇▇ shall receive a salary of CDN $35,000 for the
first six months of the agreements' two year term, CDN $45,000
for the second six months of the two year term and CDN $125,000
for the remaining 12 months of the two year term, in exchange for
a minimum of 40 hours per week as President of The Corporation;
and
(b) with ▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), a management agreement whereby
Cullen shall receive a salary of CDN $35,000 for the first six
months of the agreement's two year term, CDN $45,000 for the
second six months of the two year term and CDN $125,000 for the
remaining 12 months of the two year term, in exchange for a
minimum of 40 hours per week as an employee of The Corporation.
The agreements in (a) and (b) above shall stipulate that
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ each receive a CDN $500.00 monthly car
allowance for the agreements' term.
7.03 Conduct of Business. During the Interim Period, the Buying
Group will conduct the Buying Group Business in the ordinary
course consistent with past practice and shall use its best
efforts to preserve intact the organization, relationships with
third parties and goodwill of the Buying Group and keep available
the services of the present officers, directors, employees,
agents and other personnel of the Buying Group Business; and
without limiting in any way the importance of the foregoing, the
Buying Group shall not undertake any of those matters referred to
in sections 6.01.1 and 6.01.2, and all such clauses thereof shall
apply mutatis mutandis to the Buying Group. In the event that a
Material Adverse Effect occurs, the Buying Group shall notify the
Corporation of it within one business day.
7.04 Loans. The Buying Group will cause to be made, in
accordance with Schedule "I" hereto, those loans (the "Loans")
set out here, which are intended to permit the Corporation to
meet outstanding debts, liabilities and obligations of it to
certain parties.
7.05 Priority. Notwithstanding any term of the Purchaser's
bylaws, memorandum and articles to the contrary, the terms and
provisions of this Agreement and the Exchange and Voting
Agreement shall prevail such that the directors of the Purchaser
will only authorize the exchange of the Exchangeable Non-Voting
Shares for shares in the Parent Common Shares in accordance with
the terms of the Exchange and Voting Agreement.
7.06 Nothing in Paragraph 6.01.2 shall read to prohibit the
Purchaser or the Parent from negotiating and completing
transactions involving the acquisition of other subsidiaries
including E-▇▇▇▇ Inc.
ARTICLE VIII: ACKNOWLEDGMENTS AND COVENANTS OF ALL PARTIES
8.01 Further Assurances. Each party hereto agrees to execute and
deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be reasonably
necessary or desirable (including obtaining all required
consents) in order to evidence the consummation or implementation
of the transactions provided for under this Agreement.
8.02 Certain Filings. The parties hereto shall cooperate with
one another in determining whether any action by or in respect
of, or filing with, any Governmental Authority is required or
reasonably appropriate, or any action, consent, approval or
waiver from any party to any Contract is required or reasonably
appropriate, in connection with the consummation of the
transactions contemplated by this Agreement. Subject to the
terms and conditions of this Agreement, in taking such actions or
making any such filings, the parties hereto shall furnish
information required in connection therewith and seek timely to
obtain any such actions, consents, approvals or waivers.
8.03 Registration. All parties acknowledge and agree that the
Parent is a reporting issuer in the United States, and all of the
Parent Common Shares have been registered under the 33 Act; and
all parties further acknowledge and agree that neither the Parent
nor the Purchaser is a reporting issuer in any province of
Canada, and the Exchangeable Non-Voting Shares and Parent Common
Shares will be subject to such resale restrictions as imposed by
the Applicable Law of the jurisdiction in which a Shareholder is
resident.
ARTICLE IX: CONDITIONS PRECEDENT TO CLOSING
9.01 Conditions to Obligation of the Buying Group. The obligations
of the Buying Group to consummate the Closing are subject to the
completion of due diligence of the Corporation on the part of the Buying
Group and to the Buying Group's satisfaction on or before December 20,
1999 and are further subject to the satisfaction of each of the following
conditions:
(a) (i) the Corporation and each Shareholder shall have
performed and satisfied each of their respective obligations
hereunder required to be performed and satisfied by them on or
prior to the Closing Date, (ii) each of the representations and
warranties of the Corporation and each Shareholder contained
herein shall have been true and correct and contained no
misstatement or omission that would make any such representation
or warranty misleading when made and shall be true and correct
and contain no misstatement or omission that would make any such
representation or warranty misleading at and as of the Closing
with the same force and effect as if made as of the Closing, and
(iii) the Buying Group shall have received certificates signed by
each Shareholder and a duly authorized executive officer of the
Corporation to the foregoing effect and to the effect that the
conditions specified within this Section 9.01(a) have been
satisfied.
(b) ll Required Consents for the transactions contemplated
by this Agreement shall have been obtained without the imposition
of any conditions that are or would become applicable to the
Corporation, the Corporation Business, the Corporation Shares or
the Buying Group (or any of its Affiliates or Associates) after
the Closing that would be materially burdensome upon the
Corporation, the Corporation Business, the Corporation Shares or
the Buying Group (or any of its Affiliates or Associates) or
their respective businesses substantially as such businesses have
been conducted prior to the Closing Date or as said businesses,
as of the date hereof, would be reasonably expected to be
conducted after the Closing Date. All such approvals shall be in
effect, and no proceedings shall have been instituted or
threatened by any Governmental Authority or other person with
respect thereto as to which there is a material risk of a
determination that would terminate the effectiveness of, or
otherwise materially and adversely modify the terms of, any such
approval; all applicable waiting periods with respect to such
approvals shall have expired; and all conditions and requirements
prescribed by Applicable Law or by such approvals to be satisfied
on or prior to the Closing Date shall have been satisfied to the
extent necessary such that all such approvals are, and will
remain, in full force and effect assuming continued compliance
with the terms thereof after the Closing.
(c) The transactions contemplated by this Agreement and the
consummation of the Closing shall not violate any Applicable Law.
The operation of the Corporation Business shall not have violated
or infringed, or be in violation or infringement of any
Applicable Law or any order, writ, injunction or decree of any
Governmental Authority, where such violations and infringements,
individually or in aggregate, have resulted in, or could
reasonably be expected to result in a Material Adverse Effect.
(d) Since the date hereof, there shall not have been any
event, occurrence, development or state of circumstances or facts
or change in the Corporation or the Corporation Business,
including any damage, destruction or other casualty loss
affecting the Corporation or the Corporation Business that has
had or that may be reasonably expected to have, either alone or
together with all such events, occurrences, developments, states
of circumstances or facts or changes, a Material Adverse Effect
on the Corporation.
9.02 Conditions to Obligations of the Shareholders. The
obligations of each Shareholder to consummate the Closing are
subject completion of reasonable due diligence investigations of
the Buying Group to be completed on or before December 20, 1999
and are further subject to the satisfaction of each of the
following conditions:
(a) (i) the Buying Group shall have performed and satisfied
each of its obligations hereunder required to be performed and
satisfied by it on or prior to the Closing Date; and (ii) each of
the representations and warranties of the Buying Group contained
herein shall have been true and correct and contained no
misstatement or omission that would make any such representation
or warranty misleading when made and shall be true and correct
and contain no misstatement or omission that would make any such
representation or warranty misleading at and as of the Closing
with the same force and effect as if made as of the Closing.
(b) All Required Consents for the transactions contemplated
by this Agreement shall have been obtained without the imposition
of any conditions that are or would become applicable to any
Shareholder (or any of their respective Affiliates or Associates)
after the Closing that would be materially burdensome upon any
such Person. All such approvals shall be in effect, and no
Proceedings shall have been instituted or threatened by any
Governmental Authority with respect thereto as to which there is
a material risk of a determination that would terminate the
effectiveness of, or otherwise materially and adversely modify
the terms of, any such approval. All applicable waiting periods
shall have expired, and all conditions and requirements such
approvals to be satisfied on or prior to the Closing extent
necessary such that all such approvals are, and will remain, in
full force and effect assuming continued compliance with the
terms thereof after the Closing.
(c) The transactions contemplated by this Agreement and the
consummation of the Closing shall not violate any Applicable Law.
No temporary restraining order, preliminary or permanent
injunction, cease and desist order or other order issued by any
court of competent jurisdiction or any competent Governmental
Authority or any other legal restraint or prohibition preventing
the transfer and exchange contemplated hereby or the consummation
of the Closing, or imposing Damages in respect thereto, shall be
in effect, and there shall be no pending actions or proceedings
by any Governmental Authority (or determinations by any
Governmental Authority) or by any other Person challenging or
seeking to materially restrict or prohibit the transfer and
exchange contemplated hereby or the consummation of the Closing.
(d) Since the date hereof, there shall not have been any
event, occurrence, development or state of circumstances or facts
or change in the Buying Group or the Buying Group Business,
including any damage, destruction or other casualty loss
affecting the Buying Group or the Buying Group Business that has
had or that may be reasonably expected to have, either alone or
together with all such events, occurrences, developments, states
of circumstances or facts or changes, a Material Adverse Effect
on the Buying Group.
(e) Since the date hereof, there shall not have been any:
(i) material change in the capital structure of either the
Purchaser or the Parent, other than as to effect the creation or
issuance of the Exchangeable Non-Voting Shares or the Parent
Common Shares as contemplated herein, or to effect the rights,
restrictions, privileges and terms of the Exchangeable Non-Voting
Shares or Parent Common Shares in accordance with the terms
hereof; or
(ii) any actions, investigations, inquiries or
proceedings commenced or continued against either the Parent or
the Purchaser, or their respective officers, directors,
promoters, representatives, agents or their respective businesses
by any securities regulatory authority, tribunal or body having
jurisdiction.
(f) The Parent's Board of Directors, by proper and
sufficient vote, shall have approved this Agreement, the Exchange
and Voting Agreement and the Support Agreement, and the
transactions contemplated hereby and the issuance of the Parent
Common Shares hereunder.
(g) The Parent and the Purchaser will have entered into the
Exchange and Voting Agreement and the Support Agreement.
ARTICLE X: INDEMNIFICATION
10.01 Agreement to Indemnify.
10.01.1 Each of the Purchaser and the Parent, and their
respective Affiliates, Associates, officers, directors,
shareholders, representatives and agents (collectively, the
"Purchaser Indemnitees") shall each be indemnified and held
harmless to the extent set forth in this Article X by each
Shareholder in respect of any and all damages incurred by any
Purchaser Indemnitee as a result of any inaccuracy or
misrepresentation in or breach of any representation or warranty
made in this Agreement by such Shareholder, provided, however,
that each Shareholder shall have no obligation to indemnify the
Purchaser Indemnitees with respect to damages incurred by any
Purchaser Indemnitee as a result of any inaccuracy or
misrepresentation in or breach of any representation or warranty
made in this Agreement by any other Shareholder and further a
Shareholder shall have no such obligation to indemnify a
Purchaser Indemnitee hereunder unless, and to the extent, the
aggregate of all damages incurred by the Purchaser Indemnities
for all items covered by this Section 10.01(1) shall exceed
$1,000 in the aggregate.
10.01.2 Each of the Purchaser Indemnitees shall be indemnified
and held harmless to the extent set forth in this Article X by
the Corporation in respect of any and all damages incurred by any
Purchaser Indemnitee as a result of any inaccuracy or
misrepresentation in or breach of any representation, warranty,
covenant or agreement made in this Agreement by the Corporation.
10.01.3 Each Shareholder and their respective Affiliates and
Associates and each officer, director, shareholder, employer,
representative and agent of any of the foregoing (collectively,
the "Shareholder Indemnitees") shall each be indemnified and held
harmless to the extent set forth in this Article X by the
Purchaser and Parent in respect of any and all damages incurred
by any Shareholder Indemnitee as a result of any inaccuracy or
misrepresentation in or breach of any representation, warranty,
covenant or agreement made by the Parent or the Purchaser in this
Agreement.
10.02 Survival of Representation, Warranties and Covenants.
Except as hereinafter provided in this Section 10.02, all
representations, warranties, covenants, agreements and
obligations of each Indemnifying Party contained herein and all
claims of any Purchaser Indemnitee or Shareholder Indemnitee in
respect of any breach of any representation, warranty, covenant,
agreement or obligation of any Indemnifying Party contained in
this Agreement, shall survive the Closing and shall expire two
years following the Closing Date.
ARTICLE XI: MISCELLANEOUS
11.01 Notices. All notices, requests, demands, claims and
other communications hereunder shall be in writing. Any notice,
request, demand, claim, or other communication hereunder shall be
deemed duly given (i) if personally delivered, when so delivered,
(ii) if mailed, two Business Days after having been sent by
registered or certified mail, return receipt requested, postage
prepaid and addressed to the intended recipient as set forth
below, (iii) if given by facsimile or telecopier, once such
notice or other communication is transmitted to the facsimile or
telecopier number specified below and the appropriate answer back
or telephonic confirmation is received, provided that such notice
or other communication is promptly thereafter mailed in
accordance with the provisions of clause (ii) above or (iv) if
sent through an overnight delivery service in circumstances under
which such service guarantees next day delivery, the day
following being so sent:
If to the Corporation: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
If to the Purchaser: ▇▇▇-▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇ ▇▇▇
If to the Parent: ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
If to a Shareholder: ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Any party may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary
mail or electronic mail), but no such notice, request, demand,
claim or other communication shall be deemed to have been duly
given unless and until it actually is received by the individual
for whom it is intended. Any party may change the address to
which notices, requests, demands, claims and other communications
hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
11.02 Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by all parties hereto,
or in the case of a waiver, by the party against whom the waiver
is to be effective.
(b) No waiver by a party of any default, misrepresentation
or breach of warranty or covenant hereunder, whether intentional
or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of
any prior or subsequent occurrence. No failure or delay by a
party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
11.03 Expenses. All costs and expenses incurred in
connection with this Agreement and enclosing and carrying out the
transactions provided for herein shall be paid by the party
incurring such cost or expense. This Section shall survive the
Closing and the termination of this Agreement.
11.04 Successors and Assigns. This Agreement shall be
binding upon and enure to the benefit, of the parties hereto and
their respective heirs, executors, administrators, legal
representatives, successors and permitted assigns. No party
hereto may assign either this Agreement or any of its rights,
interests or obligations hereunder without the prior written
approval of each other party, which approval shall not be
unreasonably withheld.
11.05 Governing Law. This Agreement shall be governed by,
and interpreted and enforced in accordance with, the laws in
force in the Province of Ontario and the laws of Canada
applicable therein (excluding any conflict of laws rule or
principle that might refer such interpretation to the laws of
another jurisdiction). Each party irrevocably submits to the
jurisdiction of the courts of British Columbia with respect to
any matter arising hereunder or related hereto.
11.06 Counterparts; Effectiveness. This Agreement and the
documents relating to the transactions contemplated by this
Agreement may be signed in any number of counterparts and the
signatures delivered by facsimile, each of which shall be deemed
to be an original, with the same effect as if the signatures
thereto were upon the same instrument and delivered in person.
This Agreement and such documents shall become effective when
each party thereto shall have received a counterpart thereof
signed by the other parties thereto. In the case of execution
and delivery by facsimile by any party, that party shall
forthwith deliver a manually executed original to each of the
other parties.
11.07 Entire Agreement. This Agreement (including the
Schedules referred to herein, which are hereby incorporated by
reference) constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all
prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter
of this Agreement including, without limiting the generality of
the foregoing, the Letter of Intent. Neither this Agreement nor
any provision hereof is intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder.
11.08 Captions. The captions herein are included for
convenience of reference only and shall be ignored in the
construction or interpretation hereof. All references to an
Article or Section include all subparts thereof.
11.09 Severability. If any provision of this Agreement, or
the application thereof to any Person, place or circumstance,
shall be held by a court of competent jurisdiction to be invalid,
unenforceable or void, the remainder of this Agreement and such
provisions as applied to other Persons, places and circumstances
shall remain in full force and effect only if, after excluding
the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated
hereby in substantially the same manner as originally set forth
at the later of the date this Agreement was executed or last
amended.
11.10 Construction. The parties hereto intend that each
representation, warranty, and covenant contained herein shall
have independent significance. If any party has breached any
representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation,
warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) that the party
has not breached shall not detract from or mitigate the fact that
the party is in breach of the first representation, warranty or
covenant.
11.11 Meaning of Include and Including. Whenever in this
Agreement the word "include" or "including" is used, it
shall be deemed to mean "include, without limitation" or
"including without limitation", as the case may be, and the
language following "include" or "including" shall not be deemed
to set forth an exhaustive list.
11.12 Cumulative Remedies. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
11.13 Third Party Beneficiaries. Other than Indemnitees
under Article X hereof who are not parties to this Agreement, no
provision of this Agreement shall create any third party
beneficiary rights in any Person, including any employee or
former employee of the Corporation or any Affiliate or Associate
thereof (including any beneficiary or dependent thereof).
11.14 Transmission by Facsimile. The parties hereto agree
that this Agreement may be transmitted by facsimile or such
similar device and that the reproduction of signatures by
facsimile or such similar device will be treated as binding as if
originals and each party hereto undertakes to provide each and
every other party hereto with a copy of the Agreement bearing
original signatures forthwith upon demand.
11.15 Fees and Commissions. No broker, finder or other person
or entity is entitled to any fee or commission from the Buying
Group or the Corporation for services rendered on behalf of the
Buying Group or the Corporation in connection with the
transactions contemplated by this Agreement.
11.16 Maitland & Company. The parties hereto acknowledge and
agree that Maitland & Company acts only for the Parent in the
preparation and negotiation of this Agreement. The parties
hereto further acknowledge and agree that:
(a) they have been advised to seek independent legal advice
regarding this Agreement,
(b) Maitland & Company has provided no tax advice with
respect to this Agreement and hereby has advised the parties
hereto to seek tax advice respecting their respective tax
obligations; and
(c) Maitland & Company has not provided legal advice to any
of the Shareholders with respect to U.S. securities laws.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of
the day and year first above written.
▇▇▇▇▇▇.▇▇ INC.
Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Authorized Signatory
ICC INTEGRATED CARBONICS (CANADA) CORP.
Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Authorized Signatory
▇▇▇▇▇▇▇▇▇▇.▇▇▇ INC.
Per: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Authorized Signatory
SHAREHOLDERS
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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