THIS AGREEMENT dated for reference the 30th day of June, 1999,
BETWEEN:
COYOTENET INC., a company incorporated under th Canada
Business Corporations Act and having an office at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(the "Vendor")
AND:
CyPOST CORPORATION, a company incorporated unde the laws of
Delaware, USA and having an office at Suite ▇▇▇-▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(the "Purchaser")
OF THE SECOND PART WITNESSES THAT WHEREAS:
A. The Vendor is the legal and beneficial owner of the Vendor's Shares;
B. The Vendor has agreed to sell and assign to the Purchaser, and the
Purchaser has agreed to purchase from the Vendor, the Vendor's Shares.
THEREFORE in consideration of the premises and the mutual covenants and
agreements herein set forth, the parties hereto covenant and agree each with the
other as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement:
(a) "Assets" means the assets described in the balance sheet set forth
in the Financial Statements (except those disposed of since the date
of the Financial Statements in the ordinary course of business) and
the assets described in the June 30 Statements, including the
personal property, choses in action, intangible or intellectual
property listed in Schedule "A";
(b) "Asset Transfer Agreement" means an agreement between the Vendor and
the Company in the form of agreement attached hereto as Schedule
"O";
(c) "Balance" has the meaning given to it in paragraph 2.2(b);
(d) "Business" means the internet service provider business carried on
by the Company;
(a) "Closing" means the completion of the purchase and sale of the
Vendor's Shares on the Closing Date;
(b) "Closing Date" means the 30th day of June, 1999 or such other
date as the parties may agree to in writing;
(c) "Closing Receivables" has the meaning given to it in Section
2.4;
(d) "Company" means Intouch.Internet Inc., a British Columbia
company (incorporation no. 509721) having its registered
office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇;
(e) "Computer Hardware" means the computer hardware equipment
listed in Schedule AB";
(f) "Consents" means the consents, waivers and approvals set forth
in Schedule "C";
(g) "Customer List" means the list of approximately 200
subscribers which were formerly covered under the Maximum
Internet business (943 Sand Ltd.) attached hereto as Schedule
"D" and all goodwill related thereto which shall be
transferred to the Company by the Vendor prior to Closing in
accordance with the provisions of Section 5.5;
(h) "Deficit" means the aggregate of amounts payable to officers,
directors, shareholders, related parties and other creditors
of the Company as set forth in the June 30th Statements
(excluding the unearned income of approximately $69,000.00
representing the prepaid revenues from prepaid internet
subscribers and including the software license deficiencies of
approximately $7,189.75 plus taxes listed in Schedule N
attached hereto, which amounts will be shown as liabilities on
the June 30 Statements);
(i) "Escrow Agreement" means an agreement in the form of agreement
attached hereto as Schedule "E";
(j) "Financial Statements" means the unaudited financial
statements for the Company for the year ended January 31, 1999
prepared by Hay & ▇▇▇▇▇▇, Chartered Accountants, and the
unaudited balance sheet for the Company as at May 31, 1999,
which were prepared by the Company internally, all of which
are attached hereto as Schedule "F";
"Indebtedness" means any and all advances, debts, duties,
endorsements, guarantees, liabilities, obligations,
responsibilities and undertakings of a Party assumed, created,
incurred or made whether voluntary or involuntary, however
arising, whether due or not due, absolute, inchoate or
contingent, liquidated or unliquidated, determined or
undetermined, direct or indirect, express or implied, and
whether such Party may be liable individually or jointly with
others;
(k) "Intellectual Property" means all of the intellectual property
(including computer software), proprietary computer hardware
and firmware, patents, trade marks, trade secrets, inventions,
designs, customer lists, trade names, copyrights and other
intellectual property rights whether registered or not, both
domestic and foreign owned by the Company or in which the
Company has an interest including the items described in
Schedule "G";
(l) "Interim Period" means the period from and including the date
of this
Agreement to and including the Closing Date;
(m) "June 30 Statements" means the unaudited financial statments
of the Company as at June 30, 1999 to be prepared by Hay &
▇▇▇▇▇▇, Chartered Accountants as provided in Section 2.4;
(n) "Licensed Technology" has the meaning given to it in
Subsection 4.1(ccc);
(o) "Licences" means the licences and permits required for the
operation of the Business by the Company all of which are
described in Schedule "H";
(p) "Lien" means any mortgage, debenture, charge, hypothecation,
pledge, lien, leasehold interest or other security interest or
encumbrance of whatever kind or nature, regardless of form and
whether consensual or arising by laws, statutory or otherwise
that secures the payment of any Indebtedness or the
performance of any obligation or creates in favour of or
grants to any Party a proprietary right;
(q) "Material Adverse Effect" means a materially adverse effect on
the financial condition, results of operations, business or
prospects of the Company or on the rights and interest of the
Purchaser under this Agreement;
(r) "Material Contracts" means all contracts to which the Company
is a party which are material to the business and operations
of the Company, including all contracts which:
(i) are out of the ordinary course of business of the
Company;
(ii) involve expenditures by the Company in excess of
$5,000 in total;
(iii) are longer than one year in duration;
(iv) are concerned in any way with real property or
with Intellectual Property; (v) are concerne with
employment, profit- sharing, pensions and like
matters; or (vi) cannot be terminated on less than
one month's notice,
including the contracts described in Schedule "I".
(s) "Non-Competition Agreement" means an agreement in
the form of the agreement attached hereto as
Schedule "J";
(b) "Owned Technology" has the meaning given to it in Subsection
4.1(vv);
(c) "Party" means an individual, corporation, body corporate,
partnership, joint venture, society, association, trust or
unincorporated organization or any trustee, executor, administrator,
or other legal representative;
(d) "Premises" has the meaning given to it in Subsection 4.1(ggg)
(e) "Purchase Price" means the sum of $447,000.00 less the Deficit;
(f) "Purchaser's Solicitors" means Alexander, Holburn, ▇▇▇▇▇▇▇ & ▇▇▇▇,
Barristers & Solicitors, ▇▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇;
(g) "Statement Date" means May 31, 1999;
(h) "Vendor's Shares" means the issued and outstanding shares in the
capital of the Company owned by the Vendor described in Schedule K";
and
(i) "Vendor's Solicitors" means Ballem ▇▇▇▇▇▇▇▇, 1800 First Canadian
Centre, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇.
1.2 In this Agreement, except as otherwise expressly provided:
(a) "Agreement" means this agreement, including the preamble and
the Schedules hereto, as it may from time to time be
supplemented or amended and in effect;
(b) all references in this Agreement to a designated "Article",
"Section", "subsection" or other subdivision or to a Schedule
is to the designated Article, Section, subsection or other
subdivision of, or Schedule to, this Agreement;
(j) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section, subsection or other subdivision or
Schedule;
(k) the headings are for convenience only and do not form a part of this
Agreement and are not intended to interpret, define or limit the
scope, extent or intent of this Agreement or any provision hereof;
(l) the singular of any term includes the plural, and vice versa, the
use of any term is equall applicable to any gender and, where
applicable, a body corporate, the word "or" is not exclusive and the
word "including" is not limiting (whether or not non-limiting
language, such as "without limitation" or "but not limited to" or
words of similar import, is used with reference thereto);
(m) any accounting term not otherwise defined has the meanings assigned
to it in accordance with generally accepted accounting principles
applicable in Canada;
(n) any reference to a statute includes and is a reference t that
statute and to the regulation made pursuant thereto, with all
amendments made thereto and i force from time to time, and to any
statute or regulations that may be passed which has the effect of
supplementing or superseding that statute or regulations;
(o) except as otherwise provided, any dollar amount referred to in this
Agreement is in Canadian Funds; and
(p) any other term defined within the text of this Agreement ha the
meanings so ascribed.
1.3 The following are the Schedules to this Agreement:
SCHEDULE DESCRIPTION
A Assets
B Computer Hardware
C Consents
D Customer List
E Escrow Agreement
F Financial Statements
G Intellectual Property
H Licences
I Material Contracts
J Non-Competition Agreement
K Authorized and issued capital of the Company
L Directors and Officers of the Company
M Insurance
N Licensed Technology
O Asset Transfer Agreement
2. PURCHASE AND SALE
1.1 On the basis of the warranties, representations and covenants of the
Vendor herein set forth and subject to the fulfilment of any condition herein
provided that has not been waived by the party entitled to the benefit thereof
the Purchaser will purchase and the Vendor will sell to the Purchaser the
Vendor's Shares on the Closing Date on the terms and conditions herein set
forth.
2.2 The Purchase Price shall be paid by the Purchaser as follows:
(a) the sum of $153,500 by certified cheque or solicitor's trust cheque
on the Closing Date;
(b) the sum of $293,500 less an amount equal to the sum of the Deficit
(excluding the unearned income of approximately $69,000 representing
the prepaid revenues from prepaid internet subscribers, which
amounts will be shown as liabilities on the June 30 Statements) and
the then uncollected Closing Receivables (the result of which is
hereinafter called the "Balance") on the 42nd day next following the
Closing Date subject to Section 2.5:
(i) by the Purchaser issuing that number o its common shares as is equal
to the number obtained by dividing the Balance (up to but not
exceeding $42,000) by the trading price of such shares of the
Purchaser converted to Canadian funds on the NASD OTC Bulletin Board
at the close of the market on May 24, 1999;
(ii) the remainder of the Balance, if any, by certified cheque or
solicitor's trust cheque;
2.3 On the Closing Date the Purchaser shall provide funds to the Vendor's
Counsel in trust who shall on July 5, 1999 pay the following amounts,
which amounts shall be included in the determination of the Deficit:
(a) the sum of $13,646.65 which was advanced by loa to the Company by
▇▇▇▇ ▇.▇. ▇▇▇▇▇ by paying for and on behalf of ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ his
indebtedness to the Royal Bank of Canada directly to such bank to
satisfy the outstanding balance of the Royal Bank Line of Credit
Small Business Visa, account number ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ in the name
of ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇;
(b) the sum of $17,816.14 which was advanced by loa to the Company by
▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ by paying for and on behalf of ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ their indebtedness to the Royal Bank of Canada
directly to such bank as full payment of the outstanding balance of
the CIBC Line of Credit, account number ▇▇▇▇▇-▇▇-▇▇▇▇▇ in the name
of ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇; and
(c) the sum of $69,000.00 as full payment of the Company's additional
indebtedness to ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, directly to ▇▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇.
2.4 The Vendor and the Purchasers shall jointly, within 42 days of the Closing,
cause Hay & ▇▇▇▇▇▇, Chartered Accountants, to prepare in accordance with
generally accepted accounting principles consistent with prior years and at the
expense of the Company, financial statements (the "June 30 Statements") for the
Company for the period ending June 30, 1999, including a balance sheet as at
June 30, 1999. The June 30 Statements shall include by way of separate note a
statement of the Deficit and a statement of the trade accounts receivable (the
"Closing Receivables") of the Company as at June 30, 1999. If the Vendor and the
Purchaser cannot agree on the June 30 Statements, the Vendor and the Purchaser
shall negotiate in good faith to settle the issue and failing resolution by such
good faith efforts, it shall be settled by a single arbitrator, who shall be a
Chartered Accountant, pursuant to the Commercial Arbitration Act of British
Columbia.
2.5 If the June 30 Statements are not settled by the 42nd day next following the
Closing Date, payment the date of the Balance shall be extended to the day next
following the date of settlement of the June 30 Statement pursuant to Section
2.4.
2.6 The Purchaser agrees to pay 50% of the third party sales commission,
established as 6.5% of the Purchase Price and payable to Matfam Holdings Ltd. up
to but not exceeding $15,000.00 plus GST.
2. CLOSING
3.1 The Closing shall take place at 1:00 p.m. local time, on the Closing Date at
the offices of the Purchaser's Solicitors at ▇▇▇▇-▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, or at such other place, date and time as may be mutually agreed upon
by the parties hereto.
4.0 VENDOR'S WARRANTIES AND REPRESENTATIONS
4.1 The Vendor warrants and represents to, and covenants with, the Purchaser,
with the intent that the Purchaser will rely thereon in entering into this
Agreement and in concluding the purchase and sale contemplated herein, that:
(a) the authorized and issued capital of the Compan is as described in
Schedule "K" and the Vendor's Shares are validly issued and
outstanding as fully paid and non-assessable;
(b) the Vendor is the registered holder and beneficial owner of the
Vendor's Shares set in Schedule "K", free and clear of all Liens and
the Vendor has no interest, legal or beneficial, direct or indirect,
in any shares of, or the assets or business of, the Company other
than as set out in Schedule "K" or by virtue of the Vendor's Shares;
(c) neither the Vendor nor any officer, director or employee of the
Company is indebted to the Company;
(d) no Party has any agreement, right or option, consensual or arising
by law, present or future, contingent or absolute, or capable of
becoming an agreement, right or option;
(i) to require the Company to issue any further or other shares in
its capital or any other security convertible or exchangeable
into shares in its capital or to convert or exchange any
securities into or for shares in the capital of the Company;
(ii) for the issue or allotment of any of the authorized but
unissued shares in the capital of the Company;
(iii) to require the Company to purchase, redeem or otherwise
acquire any of the issued and outstanding shares in the
capital of the Company; or
(iv) to purchase or otherwise acquire any shares in the capital of
the Company;
(e) there are no shareholders' agreements, pooling agreements, voting
trusts or other similar agreements with respect to the ownership or
voting of the shares of the Company;
(f) the Vendor has the power and capacity and good and sufficient right
and authority to enter into this Agreement on the terms and
conditions herein set forth and to transfer the legal and beneficial
title and ownership of the Vendor's Shares, as described herein, to
the Purchaser;
(g) the Vendor is not a non-resident of Canada within the meaning of
Section 116 of the Income Tax Act (Canada);
(h) the Company is duly incorporated, validly existing and in good
standing under the laws of British Columbia and is and always has
been since its date of incorporation a "private issuer" as that term
is defined in the Securities Act (B.C.);
(i) the directors and officers of the Company are as described in
Schedule "L";
(j) there have been no alterations to the Memorandu and Articles of the
Company other than as are filed with the Registrar of Companies for
British Columbia;
(k) the Company is now and has been since its date of incorporation a
"Canadian controlled private corporation" within the meaning of the
Income Tax Act (Canada);
(l) the Company had the power, authority and capacity to carry on the
Business;
(m) the Company has the power, authority and capacity to own and use all
of the Assets;
(n) on the Closing Date the Company will own and possesses and have good
and marketable title to and possession of all the Assets free and
clear of all Liens;
(o) on the Closing Date the Company will not own or possess any asset
other than the Assets and will not have any interest in the assets
or business of any other Party;
(p) the Licences described in Schedule "H" are held by the Company and
are the only licences and permits required for the conduct in the
ordinary course of the Business. The Company is in compliance with
all laws, zoning and other bylaws, building and other restrictions,
rules, regulations and ordinances applicable to the Company, the
Business or the Assets;
(q) the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the
terms hereof does not and will not:
(i) conflict with or result in a breach of or violate any of the
terms, conditions or provisions of the Memorandum or Articles
of the Company;
(ii) conflict with or result in a breach of or violate any of the
terms, conditions or provisions of any law, judgment, order,
injunction, decree, resolution or ruling of any court of
governmental authority, domestic or foreign, to which the
Company or the Vendor are subject or constitute or result in a
default under any agreement, contract or commitment to which
the Company or the Vendor are a party;
(iii) subject to obtaining the Consents, giv to any Party any
remedy, cause of action, right of termination, cancellation or
acceleration in or with respect to any agreement, contract, or
commitment to which the Company is party including the
Material Contracts;
(iv) give to any government or governmental authority of Canada or
any Province of Canada or any regional district, district or
municipality or any subdivision thereof, including any
governmental department, commission, bureau, board or
administrative agency any right of termination, cancellation,
or suspension of, or constitute a breach of or result in a
default under any permit, license, control, or authority
issued to the Company and which is necessary or desirable in
connection with the ownership, or use of the Assets; or
(v) subject to obtaining the Consents, constitute a default by the
Company or an event which, with the given of notice or lapse
of time or both, might constitute an event of default or
non-observance under any agreement, contract, indenture or
other instrument relating to any Indebtedness of the company
which would give any Party the right to accelerate the
maturity for the payment of any amount payable under that
agreement, contract, indenture, or other instrument including
the Material Contracts;
(r) the Financial Statements were prepared in accordance with generally
accepted accounting principles applied on a basis consistent with
prior years, and are true and correct in every material respect and
present fairly the financial condition and position of the Company
respectively as at the date thereof and the results of the Company's
operations for the period then ended;
(s) there is no Indebtedness of the Company of any kind whatsoever, and
there is no basis for assertion against the Company of any
Indebtedness of any kind, other than:
(i) liabilities disclosed or reflected in or provided for in the
Financial Statements;
(ii) liabilities incurred by the Company since the Statement Date
which were incurred in the ordinary course of the routine
daily affairs of the Company; and
(iii) other liabilities disclosed in this Agreement or in the
Schedules attached hereto, and all of such indebtedness shall
be described in the June 30, 1999 Statements;
(t) the Company has been assessed for federal and provincial income tax
for all years to and including the fiscal year of the Company ended
January 31, 1999 and the Company has withheld and remitted to
Revenue Canada or other applicable tax collecting authority all
amounts required to be remitted to Revenue Canada or other tax
collecting authority respecting payments to employees or to
non-residents, or otherwise and have or will have paid all corporate
income or other taxes due and payable on or before the Closing Date;
(u) all tax returns and reports of the Company required by law to be
filed prior to the date hereof including all federal and provincial
income tax returns, Workers' Compensation Board returns, GST returns
under the Excise Tax Act (Canada), and corporation capital tax
returns have been filed and are true, complete and correct, and all
taxes and other government charges including all income, excise,
sales, business and property taxes and other rates, charges,
assessment, levies, duties, taxes, contributions, fees and licenses
required to be paid have been paid, and if not required to be paid
as at the date hereof, have been accrued in the Financial
Statements;
(v) adequate provision has been made for taxes payable by the Company
for which tax returns are not yet required to be filed and there are
no agreements, waivers or other arrangements providing for an
extension of time with respect to the filing of any tax return by or
payment of any tax, governmental charge or deficiency by the
Company, and to the knowledge of the Vendor, the Company and its
officers, directors or employees, there are no contingent tax
liabilities or any grounds which would prompt a re-assessment,
including aggressive treatment of income and expenses in filing
earlier tax returns;
(w) the Company has made all elections required to be made under the
Income Tax Act (Canada) or other tax legislation in connection with
any distributions by the Company and all such elections were true
and correct and in the prescribed forms and were made within the
prescribed time periods;
(x) the Company is a "GST registrant" for the purpose of the Excise Tax
Act (Canada), and its GST registration No. is 891462855 RT0001;
(y) the Company's income tax registration No. is 891462855;
(z) the Company has not prior to the date hereof:
(i) made any election under Section 85 of the Income Tax Act
(Canada) with respect to the acquisition or disposition of any
property;
(ii) made any election under Section 83 or 196 of the Income Tax
Act (Canada) with respect to payment out of the capital
dividend accounts or life insurance capital dividend accounts
of the Company;
(iii) acquired or had the use of any propert from a Party with whom
the Company was not dealing at arm's length save and except
for the assets as described in the Asset Transfer Agreement
dated June 30, 1999 attached hereto as Schedule "O";
(iv) disposed of anything to a Party with whom the Company was not
dealing at arm's length for proceeds less than or greater than
the fair market value thereof; or
(v) discontinued carrying on any business in respect of which
non-capital losses were incurred;
(aa) the corporate records and minute books of the Company contain
complete and
accurate minutes of all meetings of the directors and
shareholders of the Company held since its date of
incorporation, and original signed copies of all resolutions
and by-laws duly passed or confirmed by the directors or
shareholders of the Company other than at a meeting. All such
meetings were duly called and held. The share certificate
books, register of security holders, register of transfers and
register of directors and any similar corporate records of the
Company are complete and accurate;
(bb) all material financial transactions of the Company have been
recorded in the financial books and records of the Company in
accordance with good business practice, and such financial
books and records:
(cc) no information, records or systems pertaining t the operation
or administration of the Business are in the possession of,
recorded, stored, maintained by or otherwise dependent upon
any other person;
(dd) the Company has not experienced nor, to the knowledge of the
Vendor, has there been any occurrence or event which has had,
or might reasonably be expected to have, a Material Adverse
Effect;
(ee) as of the Closing Date the Company will not be party to any
written or oral employment, service or consulting agreement
relating to any one or more Parties;
(ff) the Company is not subject to any collective or other
agreement with any labour union or employee association and
has not made any commitment to or conducted negotiations with
any labour union or employee association with respect to any
future agreement and, to the best of the knowledge of the
Vendor, during the period of five years preceding the date of
this Agreement there has been no attempt to organize, certify
or establish any labour union or employee association in
relation to any of the employees of the Company;
(gg) the Company as at the Closing Date will not hav any employees
and on the Closing Date the full amounts of salaries, bonuses,
commissions and other remuneration of any nature, including
accrued vacation pay, severance pay (if any) and unpaid earned
wages of the former officers, directors, employees, salesmen,
consultants and agents of the Company, will have been paid;
(hh) there are no existing or, to the best of the knowledge of the
Vendor, threatened, labour disputes, grievances, controversies
or other labour troubles affecting the Company or the
Business;
(ii) the Company has complied with all laws, rules, regulations and
orders applicable to them relating to employment, including
those relating to wages, hours, collective bargaining,
occupational health and safety, workers' hazardous materials,
employment standards, pay equity and workers' compensation.
There are no outstanding charges or complaints against the
Company relating to unfair labour practices, harassment or
discrimination or under any legislation relating to employees.
The Company has paid in full all amounts owing under the
Workers' Compensation Act (B.C.) or comparable provincial
legislation, and the workers' compensation claims experience
of the Company would not permit a penalty reassessment under
such legislation;
(jj) there are no pension, profit sharing, incentive bonus, group
insurance or similar plans or other compensation plans
affecting the Company and the Company has no unfunded or
unpaid liability in respect of any such plan;
(kk) the Company has no material contract, agreement undertaking or
arrangement, whether oral, written or implied, other than the
Material Contracts;
(ll) Schedule "M" attached hereto contains a true an complete list
of all insurance policies maintained by the Company or under
which the Company is covered in respect of its properties,
assets, business or personnel as of the date hereof. Complete
and correct copies of all such insurance policies have been
provided to the Purchaser. Such insurance policies are in full
force and effect and the Company is not in default with
respect to the payment of any premium or compliance with any
of the provisions contained in any such insurance policy.
There are no circumstances under which the Company would be
required to, or in order to maintain their coverage should,
give any notice to its insurers under any such insurance
policies which has not been given. The Company has not
received notice from any of its insurers regarding
cancellation of such insurance policies. The Company has not
failed to present any claim under any such insurance policy in
due and timely fashion. The Company has not received notice
from any of the insurers denying any claims;
(mm) there is no basis for and there are no actions, suits,
judgments, investigations or proceedings outstanding or
pending or to the knowledge of the Vendor threatened against
or affecting the Company at law or in equity or before or by
any court or federal, provincial, state, municipal or other
governmental authority, department, commission, board,
tribunal, bureau or agency and the Company is not a party to
or threatened with any litigation;
(nn) neither the Company nor the Vendor have any knowledge of any
misleading or similar names to the Company's name in use in
any area where the Business has been conducted, or of any
infringement by the Company of any patent, trademark, trade or
brand name or copyright, whether registered or unregistered;
(oo) the Company:
(i) is not in breach of any of the terms, covenants
conditions, or provisions of, are not in default under,
and has not done or omitted to do anything which, with
the giving of notice or lapse of time or both, would
constitute a breach of or a default under any Material
Contract or Licence;
(ii) is not in violation of nor is any present use b the
Company of any Assets in violation of or contravention
of any applicable law, statute, order, rule or
regulation of Canada or any Province of Canada or any
regional district, district or municipality or any
subdivision thereof; or
(iii) is not in breach or default under any judgment,
injunction or other order or aware of any judicial,
administration, governmental, or other authority or
arbitrator by which the Company is bound or to which the
Company or any Asset are subject, and the Company has
not received notice that an default, breach, or
violation is being alleged;
(pp) the Company has not guaranteed, or agreed to guarantee, any
Indebtedness or other obligation of any Party;
(qq) reasonable wear and tear excepted, the Assets are in
reasonable working order and in a functional state of repair
and to the knowledge of the Vendor, there are no latent
defects;
(rr) since the Statement Date in the case of the Company:
(i) no dividends of any kind or other distribution on any
shares of the Company has been declared or paid by the
Company;
(ii) no capital expenditure or commitment therefor has been
made by the Company in the aggregate in excess of
$2,000.00;
(iii) there has been no material adverse change in th
financial condition or position of the Company and there
has been no damage, loss or destruction materially
affecting the Assets;
(ss) all right, title and interest in and to the Intellectual
Property is vested in the Company free and clear of all Liens;
(tt) the Company does not infringe upon any other Party's right
relating to, or unlawfully or wrongfully use, nor has the
Company received any notice of any claim of infringement or
any other claim or proceeding relating to, any of the
Intellectual Property;
(uu) no person has infringed or breached or is infringing or
breaching any rights of the Company to the Intellectual
Property. Except as disclosed elsewhere in this Agreement, the
Company is not party to any confidentiality or non- disclosure
agreements relating to the Intellectual Property. The Company
has taken all reasonable steps (including, where appropriate,
entering into confidentiality, non-disclosure and
non-competition agreements, copies of which have been
delivered to the Purchaser's solicitors, with all third
parties, including licensees, subcontractors and other
entities, who have knowledge of the products and services of
the Company or who transact business with the Company) to
safeguard and maintain the secrecy and confidentiality of and
the proprietary rights of the Company in all of the
Intellectual Property;
(vv) the information technology (including computer software) owned
by the Company included in the Intellectual Property (the
"Owned Technology") substantially performs in accordance with
the documentation or other written material delivered to
customers in connection with the Owned Technology;
(ww) the Owned Technology and any client enhancement which comprise
the software programs which are licensed to customers of the
Company meet the specifications of any such clients as
contained or referred to in the software licence or other
agreement between the Company and such clients. With regard to
each licence made to a customer of the Company of the Owned
Technology, no representation, warranty or condition, written
or oral, has been made by the Company as to its quality or
fitness for any particular purpose or the accuracy thereof;
(xx) no employee of the Company is in default under any term of any
employment contract or non-competition arrangement with the
Company, or any other contract or any restrictive covenant of
a similar nature between the Company and the employees
relating in any way to the Owned Technology. The Owned
Technology was developed by either independent contractors
hired by the Company or by employees of the Company during the
time they were employees of the Company and all such
independent contracts and employees have waived their
respective "moral rights" of authors as that term is commonly
understood, to the full extent permitted by applicable law.
Owned Technology developed by the Company's employees does not
include any inventions of the employees made prior to the time
such employees became employees of the Company nor any
intellectual property of any previous employer of such
employee and the Company is and always has been considered for
all purposes the owner of all rights in the Owned Technology,
including copyright;
(yy) the Company does not have any obligation to compensate any
Party for the development, use, sale or exploitation of the
Owned Technology nor has the Company granted any other person
or entity any license, option or other rights to develop, use,
sell or exploit in any manner the Owned Technology, whether
requiring the payment of royalties or not;
(zz) the Company maintains the security of the sourc codes for, and
other information about, the Owned Technology in such a manner
as to protect the Company's proprietary trade secret rights.
The source codes for the Owned Technology is afforded limited
access by authorized personnel only. In addition, a copy of
each source code is kept off-site for security. No customer
has possession of, access to, or the right to use the source
codes for any of the Owned Technology;
(aaa) there have been no patents applied for and no copyright
registrations made by the Company for any of the Owned
Technology. None of the Owned Technology has been included in
a published patent specification, or has, to the best of the
knowledge of the Vendor, fallen into the public domain, or
been published by the Company.
(bbb) the Owned Technology and the Licensed Technology, is to the
best of the Vendor's knowledge and to their best efforts
"Substantially Millennium Compliant". In this Subsection
"Substantially Millennium Compliant" is the quality of a
system to provide all of the following functions:
(a) handle date information before, during and after January
1, 2000, including but not limited to accepting date
input, providing date output, and performing
calculations on dates or portions of dates;
(b) function accurately and without interruption before,
during, and after January 1, 2000, without any change in
operations or degradation associated with the advent of
the new century, provided that:
(i) all information imported from other data sources
includes complete dates only;
(ii) linked tables and other share data sources include
complete dates only;
(iii) hardware that fails to correctly switch or change
dates is not used; and
(iv) no other source of date inconsistency is entered
in the Owned Technology or the Licensed
Technology;
(c) respond to two-digit year-date input i a way that
resolves the ambiguity as to century in a disclosed,
defined, and predetermined manner; and
(d) store and provide output of date information in ways
that are unambiguous as to century; and the Owned
Technology does not to the best of th Vendor's knowledge
contain any wilfully introduced undisclosed features or
programming devices (e.g., viruses, key locks, drop-dead
devices, etc.) which would disrupt the use of the Owned
Technology, or modify, delete, destroy or damage data or
make data inaccessible;
(ccc) Schedule "N" sets forth a complete description of intellectual
property which
is licensed by the Company from third Parties for use by the
Company and used in whole or in part in or required for the
proper carrying on of the Business (the "Licensed
Technology"). The Licensed Technology is in machine-readable
form, contains current revisions of such technology as
delivered to the Company by the licensor thereof and includes
all object codes, computer programs, magnetic media and
documentation related to such technology which is used or
required by the Company for use in its business. Copies of the
source codes to the Licensed Software are in escrow for the
benefit of the Company in the event of the occurrence of
certain triggering events. None of the licensing agreements
described in Schedule "N" will be adversely affected by a
change of ownership of shares in the capital of the Company or
requires prior approval of any transfer or assignment to
remain in force or effect;
(ddd) the Company's development, use, sale or exploitation of the
Licensed Technology complies in all material respects with the
licensing agreements by which the Company is afforded use of
the Licensed Technology;
(eee) the Intellectual Property together with the Licensed
Technology constitutes all of the intellectual property which
is used or proposed to be used in the Business;
(fff) the Company is not the lessee under any lease o any personal
property;
(ggg) the Company is leasing its office premise located at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇. (the "Premises") under a
written lease dated November 19, 1995 as renewed and modified
by a Lease Renewal and Modification Agreement dated September
4, 1998 and as assigned to the Company from 469506 B.C. Ltd.
with the consent of the landlord in an Assignment and
Assumption of Lease Agreement dated February 17, 1999 for a
term ending on December 31, 2001 which lease is in good
standing in every respect; the transfer of the Vendor's Shares
to the Purchaser will not cause any default thereunder or
otherwise entitle the landlord thereunder to terminate or
cancel such lease; a copy of such lease has been delivered to
the Purchaser; and the Premises and the use and occupation
thereof by the Company are not in violation of and have not
been in violation of any applicable laws, regulations or
orders of any governmental authority relating to environmental
matters;
(hhh) the Company does not have any subsidiaries or own any
securities issued by, or any equity or ownership interest in,
any other Party. The Company is not subject to any obligation
to make any investment in or to provide funds by way of loan,
capital contribution or otherwise to any Party; and
(iii) the Company is not a partner or participant in any
partnership, joint venture, profit-sharing arrangement or
other association of any kind and is not party to any
agreement under which the Company agrees to carry on any part
of the Business or any other activity in such manner or by
which the Company agrees to share any revenue or profit with
any other Party.
5.0 COVENANTS
5.1 During the Interim Period, the Vendor will provide and will cause the
Company to provide access to, and will permit the Purchaser, through its
representatives, to make such investigation of the operations, properties,
assets and records of the Company and of its financial and legal condition as
the Purchaser deems necessary or advisable to familiarize itself with such
operations, properties, assets, records and other matters. Without limiting the
generality of the foregoing, during the Interim Period the Vendor will sign such
consents as may be requested by the Purchaser in order for the Purchaser to
conduct due diligence searches at the relevant regulatory or statutory offices
and will permit the Purchaser and its representatives to have access to the
premises leased by the
Company and to the Assets and will produce for inspection and provide copies to
the Purchaser of:
(a) all agreements and other documents referred to in Article 5.0 hereof
or in any of the schedules attached hereto and all other contracts,
leases, licenses, title documents, title opinions, insurance
policies, pension plans, information relating to employees of the
Company, customer lists, information relating to customers and
suppliers of the Company, documents relating to all indebtedness and
credit facilities of the Company, documents relating to legal or
administrative proceedings and all other documents of or in the
possession of the Company or relating to the Business;
(b) all minute books, share certificate books, registers of security
holders, registers of transfers of securities, registers of
directors and other corporate documents of the Company;
(c) all books, journals records, accounts, tax returns and financial
statements of the Company; and
(d) all other information which, in the reasonable opinion of the
Purchaser's representatives, is required in order to make an
examination of the Company and the Business.
Such investigations and inspections shall not mitigate or affect the
representations and warranties of the Vendor hereunder, which shall continue in
full force and effect.
5.2 The Vendor will:
(a) do all reasonable acts and things to assist the Purchaser and the
officers and directors of the Company in continuing and furthering
the business and goodwill of the Company;
(b) both before and after the Closing Date, use all commercially
reasonable efforts to assist the Purchaser in obtaining the
Consents;
(c) from the date of this Agreement to the Closing Date, cause the
Company to:
(i) carry on its business in the ordinary and normal course in a
prudent, businesslike, and efficient manner and substantially
in accordance with the procedures and practices in effect on
the Statement Date;
(ii) maintain insurance on its assets as they are insured on the
date hereof;
(iii) use its best efforts to preserve and maintain the goodwill of
its business;
(iv) do all necessary repairs and maintenance to its assets and
take reasonable care to protect and safeguard those assets;
and
(d) pay all wages and salaries and all amounts due in lieu of holiday
pay to and including the Closing Date to all of the employees of the
Company and shall terminate the employment of all the employees of
the Company as of the day before the Closing Date and shall satisfy
all severance, vacation, benefits and other obligations (if any),
statutory and under the common law relating to such employees as a
result of such termination of employment.
5.3 From the date of this Agreement to the Closing Date, the Vendor will not,
and will not permit the Company to, without the prior consent in writing of the
Purchaser:
(a) purchase or sell, consume or otherwise dispose of any of its
assets in connection with its business except in the ordinary
course of its business;
(b) enter into any contract or assume or incur any liability
except in the ordinary course of its business;
(c) make any capital expenditures or commitment therefor;
(d) settle any accounts receivable of a material nature at less
than face value net of the reserve for that account;
(e) waive or surrender any material right;
(f) discharge, satisfy or pay any Lien, obligation or liability
other than current liabilities in the ordinary course of
business;
(g) issue any shares in its capital;
(h) as for the Vendor, it will not lend any more money or extend
credit to the Company;
(i) pay or declare any dividends or make any distributions; or
(j) alter the Memorandum or Articles of the Company
5.4 On the Closing Date, the Vendor shall deliver to the Purchaser each of the
documents required to be delivered pursuant to Article 10.
5.5 The Vendor shall cause the Company to transfer to the Vendor all of the
intellectual property specific to Vstore, QuarterMaster and related URL sites in
exchange for the Vendor transferring the Customer List to the Company all prior
to the Closing Date which shall be consented to in writing by the Purchaser at
the Closing Date.
6.0 NON-MERGER
6.1 The representations, warranties, covenants and agreements of the Vendor
contained herein and those contained in the documents and instruments delivered
pursuant hereto will be true at and as of the Closing Date as though made on the
Closing Date and will survive the Closing, and notwithstanding the completion of
the transactions herein contemplated, the waiver of any condition contained
herein (unless such waiver expressly releases the Vendor from such
representation, warranty, covenant or agreement), or any investigation by the
Purchaser, the same will remain in full force and effect.
7.0 CONDITIONS PRECEDENT OF THE PURCHASER REGARDING CLOSING
7.1 The obligations of the Purchaser to consummate the transactions herein
contemplated are subject to the fulfilment of each of the following conditions
at the times stipulated:
(a) the representations and warranties of the Vendo contained herein
shall be true and correct in all respects at and as of the Closing
Date except as may be in writing disclosed to and approved by the
Purchaser in writing;
(b) all covenants, agreements and obligations hereunder on the part of
the Vendor to be performed or complied with at or prior to the
Closing, including the Vendor's obligation to deliver the documents
and instruments herein provided for in this Agreement and in
particular, but without limitation, under Article 10, shall have
been performed and complied with at and as of the Closing Date;
(c) between the date hereof and the Closing Date, the Company will not
have experienced any event, circumstance or condition or have taken
any action or become subject to any action of any character
adversely affecting the Company or the Business or as would
materially reduce the value of the Company, the Business or the
Vendor's Shares to the Purchaser;
(d) no uninsured damage by fire, negligence or otherwise to the Assets
will have occurred since the date hereof and prior to the Closing
Date which, in the reasonable opinion of the Purchaser, will have a
Material Adverse Affect on the Assets or the Business;
(e) that the Purchaser shall have conducted its due diligence review of
the Company and shall be satisfied, in its sole discretion, with
respect thereto with the results thereof; and
(f) on or before the Closing Date no federal, provincial, regional or
municipal government or any agency thereof will have enacted any
statute or regulation, announced any policy or taken any action that
will have a Material Adverse Affect on the Assets or the right of
the Purchaser to the full enjoyment thereof.
7.2 The conditions set forth in Section 7.1 are for the exclusive benefit of the
Purchaser and may be waived by the Purchaser in writing in whole or in part at
any time.
8.0 PURCHASER'S WARRANTIES AND REPRESENTATIONS
8.1 The Purchaser represents and warrants to and covenants with, the Vendor,
with intent that the Vendor will rely thereon in entering into this Agreement
and in concluding the purchase and sale contemplated herein, that:
(a) the Purchaser has the power and capacity and good and sufficient
right and authority to enter into this Agreement on the terms and
conditions herein set forth;
(b) the Purchaser is duly incorporated, validly existing and in good
standing under the laws of Delaware, USA;
(c) the Purchaser has the authority to issue that number of its common
shares pursuant to section 2.2(b)(i) of this Agreement to the Vendor
and that the common shares issuable to the Vendor will be subject to
a minimum 12 month hold period and thereafter can be sold in
accordance with Rule 144 issued under the Securities Act of 1933, as
amended;
(d) the Purchaser will deliver to the Vendor on the Closing Date, a
legal opinion from its British Columbia solicitors or its U.S.
solicitors that the common shares to be issued to the Vendor subject
to a minimum hold period of 12 months and thereafter will be subject
to the limitations, including but not limited to, the volume
limitations set forth in subsection K of Rule 144 issued under the
Securities Act of 1933 as amended and that the legend on the share
certificate for said common shares will read as follows:
"These shares have not been registered under th Securities Act
of 1933, as amended, and may not be sold or transferred unless
an effective registration statement with respect to such
shares is in effect or pursuant to a then applicable
exemption."
(e) the Purchaser has the requisite U.S. regulatory approval to issue
the common shares to the Vendor pursuant to section 2.2(b)(i);
(f) the Purchaser shall continue to operate the business of the Company
without
any material changes whatsoever included but not limited to changes
to the network system, the service providers, the web page, the
pricing policies, the accounting systems and all other general
administrative and operating standards of the Company until the 42nd
day next following the Closing Date or such earlier time as is
mutually agreed upon by the parties hereto;
(g) the execution and delivery of this Agreement by the Pruchaser and
the consummation of the transactions herein provided for has not and
will not result in the breach or violation of any provisions of, or
constitute a default under, or conflict with or cause the
acceleration of any obligation under:
(i) any agreement, commitment or other instrument to which the
Purchaser is a party or by which it is or its properties are
bound;
(ii) any provision of the constating documents or by-laws or
resolutions of the board of directors (or any committee
thereof) or shareholders of the Purchaser;
(iii) any judgement, decree, order or award of any court, government
body or arbitrator having jurisdiction over the Purchaser;
(iv) any license, permit, approval, consent or authorization held
by the Purchaser; or
(v) any applicable law, statute, ordinance regulation or rule.
9.0 CONDITIONS PRECEDENT OF THE VENDOR REGARDING CLOSING
9.1 The obligations of the Vendor to consummate the transactions herein
contemplated are subject to the fulfilment of each of the following conditions
at the times stipulated:
(a) the representations and warranties of the Purchaser contained herein
shall be true and correct in all respects at and as of the Closing
Date, except as may be in writing disclosed to and approved by the
Vendor;
(b) all covenants, agreements and obligations hereunder on the part of
the Purchaser to be performed or complied with at or prior to the
Closing Date, including in particular the Purchaser's obligations to
deliver the documents and instruments herein provided for, have been
performed and complied with as at the Closing Date; and
(c) on or before the Closing Date no federal, provincial, state,
regional or municipal government or regulatory agency thereof will
have enacted any statute or regulation, announced any policy or
taken any action that will have a Material Adverse Affect on the
right of the Vendor to the full enjoyment thereof.
9.2 The conditions set forth in Section 9.1 are for the exclusive benefit of the
Vendor and may be waived by the Vendor in writing in whole or in part at any
time.
10.0 TRANSACTIONS OF THE VENDOR AT THE CLOSING
10.1 At the Closing, the Vendor will execute and deliver or cause to be executed
and delivered all documents, instruments, resolutions and share certificates as
are necessary to effectively transfer and assign the Vendor's Shares to the
Purchaser, free and clear of all Liens, including:
(a) certified copies of resolutions of the director of the Company
authorizing
the transfer of the Vendor's Shares and the registration of the
Vendor's Shares in the name of the Purchaser and authorizing the
issuance of new share certificates representing the Vendor's Shares
in the name of the Purchaser;
(b) certified copies of resolutions of the director of the Vendor
authorizing the sale of the Vendor's Shares and the execution and
delivery of this Agreement and all related documents;
(c) share certificates representing the Vendor's Shares in the name of
the Vendor, duly endorsed for transfer to the Purchaser which shall
be dealt with in accordance with the Escrow Agreement;
(d) duly issued share certificates in the name of the Purchaser
representing the Vendor's Shares;
(e) resignations in writing of all of the directors officers and/or
signing officers of the Company;
(f) confirmation in writing of the termination of the employment of all
of the employees of the Company;
(g) all corporate records and books of account of the Company including,
without limiting the generality of the foregoing, minute books,
share register books, share certificate books, banking records and
annual reports;
(h) every common seal of the Company;
(i) the Consents;
(j) a closing warranty and certificate confirming that all
representations and warranties of the Vendor contained in this
Agreement are true at and as of the Closing;
(k) a statutory declaration or affidavit in a form satisfactory to the
Purchaser's Counsel, confirming that the Vendor is not a
non-resident of Canada for purposes of the Income Tax Act (Canada);
(l) a release of all claims in favour of the Compan in form satisfactory
to the Purchaser, duly executed by the Vendor;
(m) a Non-Competition Agreement signed by the Vendo and each of ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇;
(n) a legal opinion of the Vendor's Solicitors in a form satisfactory to
the Purchaser's Solicitors;
(o) the Escrow Agreement; and
(q) such other documents and instruments as the Purchaser's Counsel may
reasonably require.
11.0 TRANSACTIONS OF THE PURCHASER AT THE CLOSING
11.1 At the Closing, the Purchaser will execute and deliver or cause to be
executed and delivered the following:
(a) certified copies of resolutions of the Director of the Purchaser
authorizing the purchase of the Vendor's Shares and the execution
and delivery of this Agreement and all related documents;
(b) the Escrow Agreement;
(c) the Non-Competition Agreements; and
(d) a legal opinion of the Purchaser's Solicitors i a form satisfactory
to the Vendor's Solicitors;
(e) a legal opinion of the Purchaser's U.S. counsel regarding the
securities law representations and warranties of the Purchaser's
common shares (which currently trade on the NASD OTC Bulletin
Board), and the tradability restrictions contained thereon, all in a
form satisfactory to the Vendor's Solicitors; and
(f) a certified cheque, bank draft or solicitor's trust cheque payable
to the Vendor's Solicitors (in trust) in the amount of. $253,962.79.
12.0 CONFIDENTIALITY
12.1 The Purchaser agrees that all information provided to it pursuant to this
Agreement, including the existence of this Agreement (collectively "Confidential
Information") shall be held in complete confidence by the Purchaser and by its
advisors and representatives and shall not, without the prior written consent of
the Company, be disclosed to any other person, nor used for any other purpose,
other than in connection with the evaluation and negotiation of the proposed
transactions. However, the Purchaser's obligation does not apply to Confidential
Information:
(a) which is generally available to third parties (unless available as a
result of a breach of this undertaking);
(b) which is lawfully in the possession of the Purchaser and which was
not acquired directly or indirectly from the Company or the Vendor;
(c) which relates to the Company and has become the Purchaser's property
following completion of the transactions contemplated herein on the
Closing Date;
(d) the disclosure of which is required by any applicable law or by any
supervisory or regulatory body to whose rules the Purchaser is
subject or with whose rules it is necessary for the Purchaser to
comply, and the Vendor acknowledges that the Purchaser may issue a
press release disclosing the existence of this Agreement.
13.0 EXCLUSIVITY
13.1 The Vendor will not, and will not authorize or permit the Company or any of
the Company's directors, employees or agents to initiate contact with, solicit
or enter into negotiations with any other party regarding the sale of the
Vendor's Shares, the Business or any of the Assets unless this Agreement is
terminated.
14.0 INDEMNITY BY VENDOR
14.1 The Vendor shall indemnify and save the Purchaser and the Company harmless
from and against any claims, demands, actions, causes of action, damage, loss,
deficiency, cost, liability and expense (collectively "Claims") which may be
made or brought against the Purchaser or the Company or which the Purchaser or
the Company may suffer or incur as a result of, in respect of or arising out of:
(a) any non-performance or non-fulfilment of any covenant or agreement
on the part of the Vendor contained in this Agreement or in any
document given to
the Purchaser in order to carry out the transactions contemplated
hereby;
(b) any misrepresentation, inaccuracy, incorrectnes or breach of any
representation or warranty made by the Vendor contained in this
Agreement or contained in any document or certificate given to the
Purchaser in order to carry out the transactions contemplated
hereby;
(c) any assessment or reassessment of any tax retur of the Company
relating to any period ending prior to but not on the Closing Date
to the extent that such assessment or reassessment increases the tax
payable for that particular period over the amount thereof either
paid or recorded on the books of the Company as payable for that
period prior to the Closing Date;
(d) any Indebtedness of the Company assumed, created, incurred, made or
otherwise arising prior to completion of the Closing including
without limitation all Indebtedness of the Company set forth in the
June 30 Statements; and
(e) all costs and expenses including, without limitation, legal fees on
a solicitor-and-client basis, incidental to or in respect of the
foregoing.
14.2 Notwithstanding the provisions of Section 14.1:
(a) no Claims as set out in subsections 14.1(a), (b or (d) (the "General
Claims") shall be made or brought against the Vendors after the
first anniversary of the Closing Date and any General Claims made or
brought after such date shall be barred and the Vendors shall have
no liability to the Purchaser in respect thereof; and
(b) no Claims as set out in subsection 14.1(c) (the "Tax Claims") shall
be made or brought by the Purchaser except within the period
commencing on the Closing Date and ending 60 days after the date on
which the last applicable limitation period under the applicable
income tax or other tax legislation with respect to such tax matters
expires with respect to any fiscal year which is relevant in
determining any tax liability under this Agreement, and any claim
not made within such time will thereafter be barred. The Purchaser
shall, and shall procure that the Company shall, not take any step
or proceeding to waive or extend any applicable limitation period;
15.0 ANNOUNCEMENTS
15.1 No announcement with respect to this Agreement or the transactions
described herein will be made by any party hereto without the prior approval of
the other party. The foregoing will not apply to any announcement by any party
required in order to comply with laws pertaining to timely disclosure.
16.0 ASSIGNMENT
16.1 This Agreement shall not be assigned by the Vendor without the prior
written consent of the Purchaser, which consent may be arbitrarily withheld.
17.0 TIME OF THE ESSENCE
17.1 Time is of the essence of this Agreement.
18.0 FURTHER ASSURANCES
18.1 The parties will execute and deliver such further documents and instruments
and do all such acts and things as may be reasonably necessary or requisite to
carry out the full intent and meaning of this Agreement and to effect the
transactions contemplated by this Agreement.
19.0 ENUREMENT
19.1 This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.
20.0 COUNTERPARTS AND FACSIMILE
20.1 This Agreement may be executed in several counterparts or by facsimile,
each of which will be deemed to be an original and all of which will together
constitute one and the same instrument.
21.0 NOTICES
21.1 All notices, requests, demands, directions, and other communications
provided for hereunder shall be deemed to have been given, delivered or made if
they are in writing (including telex, telefax or telegraphic communication) and
either mailed by certified mail, return receipt requested (postage prepaid),
telegraphed, telexed (with answerback confirmation), telefaxed (with answerback
confirmation), or actually delivered to the applicable party at the following
address:
(a) If to the Vendor:
Coyotenet Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Fax No. (604)
with a copy to the Vendor's Solicitors as follows:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, L.L.M.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Purchaser:
CyPost Corporation
Suite #▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to the Purchaser's Solicitors as follows:
Alexander, Holburn, ▇▇▇▇▇▇▇ & Lang
Barristers and Solicitors
▇▇▇▇ - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any Party may specify by notice in writing to the
other.
21.2 All notices, requests, demands, directions and other communications shall
be deemed to have been received: when telexed or telefaxed, on transmission;
when mailed, on the twelfth (12) calendar day after being deposited in the
mails, addressed as described above; and when telegraphed or delivered, when
actually received.
22.0 AGENTS
22.1 The Vendor warrants to the Purchaser that no agent or other intermediary
has been engaged by the Vendor in connection with the purchase and sale herein
contemplated.
23.0 TENDER
23.1 Tender may be made upon the Vendor or Purchaser or upon the Vendor's
Solicitor or Purchaser's Solicitor and money may be tendered by solicitor's
trust cheque or by negotiable cheque certified by a chartered bank or trust
company.
24.0 PROPER LAW
24.1 This Agreement will be governed by and construed in accordance with the
laws of British Columbia and the parties will attorn to the Courts thereof.
25.0 ENTIRE AGREEMENT
25.1 This Agreement constitutes the entire agreement between the parties
relating to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, express
or implied, statutory or otherwise between the parties hereto including the
Letter of Intent dated May 24, 1999 between the parties, and there are no
warranties or representations, expressed or implied, statutory or otherwise, and
no agreement collected hereto other than expressly set forth or referred to
herein.
IN WITNESS WHEREOF the parties have caused this Agreement to
be executed effective the 30th day of June, 1999.
COYOTENET INC.
Per:
-------------------------
▇▇▇▇▇ ▇▇▇▇▇, President
CYPOST CORPORATION
Per:
-------------------------
Authorized Signatory