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EXHIBIT 10.43
AGENCY AGREEMENT
November 11, 1999
▇▇▇▇▇▇▇▇.▇▇▇ Corporation
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, President
Dear Sirs:
We understand that ▇▇▇▇▇▇▇▇.▇▇▇ Corporation (the "Corporation") proposes
to issue up to 1,000,000 shares (the "Closing Shares") of common stock, par
value $0.00001 per share (the "Common Stock") at a price of US$3.50 each (the
"Offering") and to grant an option to Thomson Kernaghan & Co. Limited
(hereinafter referred to as the "Agent") to increase the size of the Offering by
up to the number of additional shares (the "Option Shares") equal to the sum of
(a) 150,000 plus (b) that number that equals the difference between 1,000,000
and the number of Closing Shares issued on or prior to the Closing Date (as
hereinafter defined) in connection with the Offering (the Closing Shares and the
Option Shares are referred to herein collectively as the "Shares").
Subject to the terms and conditions set forth below, the Corporation
hereby appoints the Agent as the sole and exclusive agent of the Corporation to
solicit, on a best efforts basis, offers to purchase the Shares, and the Agent
hereby agrees to act as such agent. It is understood and agreed that the Agent
is under no obligation to purchase any Shares, although it may subscribe for and
purchase Shares if it so desires.
The terms and conditions relating to the purchase and sale of the Shares
are as follows:
1. THE OFFERING
(a) Sale on Exempt Basis. The Agent will use its best efforts to arrange
for purchasers (the "Purchasers") for the Shares in Ontario and in such other
provinces of Canada as may be determined by the Agent and the Corporation (the
"Qualifying Provinces") and in such jurisdictions outside Canada and outside the
United States as may be determined by the Agent and the Corporation. The sale of
the Shares to Purchasers in Ontario is to be effected in a manner exempt from
the prospectus requirements of the Securities Act (Ontario) and the Regulation
thereunder. Each Purchaser of the Shares resident in or subject to the
securities laws of Ontario shall purchase under subsections 72(1)(a), (c) or (d)
of the Securities Act (Ontario) as qualified by subsection 27(l) of the
Regulation thereto.
(b) Commission. The Corporation agrees to pay to the Agent at the Time
of Closing (as hereinafter defined) a cash commission equal to 8% of the gross
proceeds on the sale of the
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Shares (the "Commission") in consideration of the services to be rendered by the
agent in connection with the Offering, which services shall include:
(i) acting as agent of the Corporation to solicit, on a best
efforts basis, offers to purchase the Shares;
(ii) assisting in the preparation of the form of subscription
agreements (the "Subscription Agreements") to be entered
into by the Corporation and each of the Purchasers; and
(iii) advising the Corporation with respect to the private
placement of the Shares.
In addition to the Commission, as additional consideration for the
performance of its obligations hereunder, the Corporation shall issue to the
Agent at the Time of Closing, compensation options (the "Compensation Options")
entitling the holders thereof to purchase that number of shares of common stock
of the Corporation (the "Brokers' Shares") equal to 10% of the number of Shares
issued in the Offering at the Time of Closing, exercisable until the date which
is two years following the Closing Date, at a price of US$3.50 per Brokers'
Share. The Corporation will use its reasonable best efforts to register the
resale of the Brokers' Shares in the 1933 Act Registration Statement (as
hereinafter defined).
(c) Appointment of Sub-Agent. The Corporation agrees that the Agent will
be permitted to appoint other registered dealers (or other dealers duly
qualified in their respective jurisdictions) as its agent to assist in the
Offering and that the Agent may determine the remuneration payable to such other
dealers appointed by it.
(d) Covenants of the Agent. The Agent covenants, represents and warrants
to the Corporation that: (i) it will comply with all applicable securities
legislation of each province of Canada and such other jurisdictions outside of
Canada in which it solicits or procures subscriptions in connection with the
Offering; (ii) except as described herein, it will not solicit or procure
subscriptions for Shares so as to require registration thereof or filing of a
prospectus with respect thereto under the laws of any jurisdiction; (iii) it, or
its duly appointed agents, is duly qualified in the jurisdictions in which it
solicits or procures subscriptions in connection with the Offering; and (iv) it
will obtain from each Purchaser an executed Subscription Agreement in a form
reasonably acceptable to the Corporation and to the Agent relating to the
transactions herein contemplated.
2. OFFERING OPTION - By the Corporation's acceptance of this Agreement, the
Corporation hereby grants to the Agent an option (the "Offering Option") to sell
the Option Shares on behalf of the Corporation at US$3.50 per Option Share and
on the other terms and conditions of the Subscription Agreement. The Offering
Option may be exercised by the Agent, in whole or in part, at any one time up to
and including 5:00 p.m. (Seattle time) on the date that is 30 days from the
Closing Date. If the Agent exercises the Offering Option, a closing will occur
(the "Offering Option Closing") in the State of California on or prior to the
date that is two business days after the date of the exercise of the Offering
Option where the Agent shall pay to the Corporation the aggregate gross
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proceeds of the Offering Option by certified cheque or bank draft payable to the
Corporation or its nominee against delivery to the Agent of a certificate in
definitive form representing all of the Option Shares registered in the name
that the Purchasers of the Option Shares may direct. The applicable terms,
conditions, and provisions of the agreement resulting from the Corporation's
acceptance of this offer shall apply mutatis mutandis to the Offering Option
Closing. This clause creates an option only and the making of any payments on
account of the purchase price of any of the Option Shares issued on exercise of
the Offering Option shall not obligate the Agent to sell any further Option
Shares issued on exercise of the Offering Option. In the event the Corporation
shall subdivide, consolidate or otherwise change its Common Shares during the
period the Offering Option is outstanding, the Option Shares issuable upon the
exercise of the Offering Option shall similarly be subdivided, consolidated or
changed such that the Agent receives the same number and type of securities that
it would have otherwise received had it exercised in full such option prior to
such subdivision, consolidation or change. The exercise price shall be adjusted
accordingly and notice shall be given to the Agent of such adjustment. In the
event of any dispute as to the required adjustment to the exercise price and
number of Option Shares issuable upon exercise of the Offering Option, such
adjustment shall be determined conclusively by the auditors of the Corporation.
At the Offering Option Closing, the Agent will receive a cash commission
(the "Option Commission") equal to 8% of the gross proceeds for the Option
Shares purchased pursuant to the exercise of the Offering Option and will
receive compensation options entitling the holders thereof to purchase that
number of Common Shares that equals 10% of the number of Option Shares issued at
the Offering Option Closing (the "Offering Option Compensation Options"),
exercisable until the date which is two years following the Offering Option
Closing, at a price of US$3.50 each.
As used herein, the term "Subject Securities" includes the Shares, the
Compensation Options, the Offering Option and the Offering Option Compensation
Options.
3. REGISTRATION, ESCROW AND PENALTY PROVISIONS - Neither the Offering nor the
Offering Option is being made to U.S. Persons (as such term is defined in
Regulation S under the United States Securities Act of 1933, as amended (the
"U.S. Securities Act")).
The Corporation recognizes that it is fundamental to the Purchasers that
the Shares and Option Shares may be traded without restriction in the United
States. In accordance with this recognition that it is fundamental to the
Purchasers of Shares and Option Shares that the foregoing event occurs, the
Corporation covenants and agrees that:
(a) it will file with the Securities and Exchange Commission (the
"SEC") a Form 10-SB, Form 20-F or Form 8-A or other appropriate
form (a "1934 Act Form") under the United States Securities
Exchange Act of 1934, as amended, seeking status as a reporting
company in the United States, on or prior to December 7, 1999 or
as soon practicable thereafter;
(b) it will file with the SEC a Registration Statement (the "1933
Act Registration Statement") under the U.S. Securities Act on or
prior to December 7, 1999 or as soon as practicable thereafter
to qualify the re-sale of the Shares and the Broker's
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Shares issuable upon exercise of the Compensation Options
Compensation Options;
(c) in the event either the 1934 Act Form or the 1933 Act
Registration Statement is not filed on or prior to December 7,
1999 (the "60 Day Filing Deadline"), the Corporation will
deliver to each Purchaser of Closing Shares in the Offering and
Option Shares in the Offering Option, for no further
consideration, an additional 0.02 shares of Common Stock in
respect of each Closing Share issued in connection with the
Offering and each Option Share issued in connection with the
Offering Option, and will deliver a further 0.02 shares of
Common Stock to each such Purchaser for each further 30 days, or
part thereof, that elapse beyond the foregoing 60 Day Filing
Deadline until both filings are effected;
(d) it will keep the 1933 Act Registration Statement effective for a
period of not less than 24 months from the Closing Date;
(e) it will use its commercially reasonable efforts to ensure that
both the 1934 Act Form and the 1933 Act Registration Statement
become effective as soon as possible;
(f) in the event that both the 1934 Act Form and the 1933 Act
Registration Statement have not become effective (the "Effective
Date") on or prior to February 5, 2000 (the " 120 Day
Deadline"), unless waived by the Agent in writing, the
Corporation will deliver to each Purchaser of Closing Shares in
the Offering and Option Shares in the Offering Option, for no
further consideration, an additional 0.02 shares of Common
Stock, in respect of each Closing Share issued in connection
with the Offering and each Option Share issued in connection
with the Offering Option, and will deliver a further 0.02 shares
of Common Stock to each such Purchaser for each 30 days, or part
thereof, that elapse beyond the 120 Day Deadline until the
Effective Date;
(g) as additional consideration for each Purchaser acquiring Shares
pursuant to the Offering, it will issue to the Agent on behalf
of the Purchasers an additional 850,000 shares of Common Stock
(the "Escrowed Shares") and deposit the Escrowed Shares with the
Agent to hold in escrow subject to release to the Purchasers (or
their nominees) in accordance with subsections 3(c) and 3(f)
hereof, with any remaining Escrowed Shares being released to the
Corporation for cancellation on the earlier to occur of: (i) the
Effective Date; and (ii) October 7, 2000;
(h) at the Closing it will direct an amount equal to 10% of the
gross proceeds of the Offering (the "Escrowed Funds") to be
placed in escrow with the Agent pursuant to an escrow agreement
between the Corporation and the Agent (the "Escrow
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Agreement") which will provide, among other matters, that the
escrow and invest the Escrowed Funds pursuant to the Escrow
Agreement and that the Escrowed Funds will be released to the
Corporation on the earlier to occur of: (i) the Effective Date;
and (ii) October 7, 2000.
4. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION - The Corporation
represents and warrants to the Agent and acknowledges that the Agent is relying
upon such representations and warranties, as follows:
(a) the Corporation has full corporate power and authority to
undertake the Offering, the Offering Option and all other
transactions contemplated herein;
(b) the authorized capital of the Corporation consists of
500,000,000 shares of Common Stock, par value $0.00001 per
share, of which at the date hereof 11,109,650 shares of Common
Stock are issued and outstanding and an additional 1,500,000
shares of Common Stock will be issued after the closing of the
Offering in connection with the transfer of 100% of the
ownership of eBanx [Isle of Man] Ltd. to ▇▇▇▇▇▇▇▇.▇▇▇ [Isle of
Man] Ltd., which transfer is subject only to the issue and sale
of in excess of 571,428 shares pursuant to the Offering in
accordance with the terms and conditions of the share purchase
agreement dated November, 1999 between ▇▇▇▇▇▇▇▇.▇▇▇ [Isle of
Man] Ltd., Aundyr Enmyn Limited, IFG International (Nominees)
Limited, Aundyr Trust and ▇▇▇▇▇.▇▇▇ [Isle of Man] Ltd. (the
"eBanx Acquisition Agreement"); and
(c) the Corporation has no subsidiaries other than the subsidiaries
listed below (which list includes eBanx [Isle of Man] Ltd. and
eBanx [Nevada] Ltd., which companies will only become
subsidiaries of the Corporation after the Closing of the
Offering pursuant to the eBanx Acquisition Agreement)
(collectively, the "subsidiaries") and the Corporation
beneficially owns, or will own following the Closing of the
Offering in the case of eBanx [Isle of Man] Ltd. and eBanx
[Nevada] Ltd., directly or indirectly, the percentage indicated
below of all of the issued and outstanding voting and equity
shares in the capital of each of the subsidiaries free and clear
of all mortgages, liens, charges, pledges, security interest,
encumbrances, claims or demands of any kind whatsoever except as
set forth in the financial statements referred to in
subparagraph 4(k) below, all of such shares have been duly
authorized and validly issued and are outstanding as fully paid
and non-assessable shares and no person has any right, agreement
or option, present or future, contingent or absolute, or any
right capable of becoming a right, agreement or option, for the
purchase from the Corporation of any interest in any of such
shares or for the issue or allotment of any unissued shares in
the capital of any subsidiary or any other security convertible
into or exchangeable for any such shares:
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Beneficial Equity and Voting
Name Jurisdiction of Incorporation Ownership
---- ----------------------------- ---------
▇▇▇▇▇▇▇▇.▇▇▇ [Isle of Man] Ltd. ("IOM") Isle of Man Company
Information y Technologies Canadian Costa Rica IOM
Sistemas de Informacion Technologies Costa Rica IOM
▇▇▇▇▇.▇▇▇ [Isle of Man] Ltd.("eBanx IOM") Isle of Man IOM(1)
eBanx [Nevada] Ltd. ("eBanx Nevada") Nevada eBanx IOM(1)
(1) Subject to closing of the Offering pursuant to the terms of the eBanx
Acquisition Agreement.
(d) the Corporation and each of the subsidiaries is duly qualified
to conduct business under the laws of the jurisdiction in which
it conducts its business and is in good standing in each such
jurisdiction;
(e) to the best knowledge of the Corporation, the Corporation and
each of the subsidiaries possesses all material licenses,
certificates, registrations, authorities, permits, consents and
qualifications issued by the appropriate state, provincial,
municipal or federal regulatory agencies or bodies necessary to
conduct the business now operated by it and all such licences,
certificates, registrations, authorities, permits, consents and
qualifications are valid and in full force and effect and do not
contain any unusually burdensome provision, condition or
limitation which has a material adverse effect on the operation
of the business of the Corporation or the subsidiaries as now
conducted and neither the Corporation nor the subsidiaries have
received any notice of proceedings relating to the revocation or
modification of any such licenses, certificates, authorities,
permits, consents or qualifications which, if the subject of an
unfavourable decision, ruling or finding would materially and
adversely affect the conduct of the business, operations,
financial condition, income or future prospects of the
Corporation and the subsidiaries, taken as a whole;
(f) all of the press releases issued by or on behalf of the
Corporation or any of the subsidiaries since March 31, 1999,
copies of which are attached hereto as Schedule A, were true and
correct in all material respects and did not contain a
misrepresentation (as defined in the Securities Act (Ontario))
as at the date of such issuance;
(g) except as set forth herein, neither the Corporation nor any of
the subsidiaries is a party to or has granted any agreement,
warrant, option, right or privilege capable of becoming an
agreement, for the purchase,
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subscription or issuance of any shares of Common Stock or
securities convertible into or exchangeable for shares of Common
Stock other than not more than 1,700,000 options granted to
directors, officers and employees of the Corporation exercisable
at US$1.00 each, not more than 500,000 options granted to
directors, officers and employees of the Corporation exercisable
at market prices at the time of grant, 200,000 compensation
options granted to the Agent exercisable at US$1.00 each, and
1,500,000 Common Shares in connection with the acquisition of
eBanx IOM;
(h) each of this Agreement, the Subscription Agreements, the Escrow
Agreement and the Compensation Options (collectively the
"Transaction Documents") has been, or will be upon execution
thereof, duly authorized and executed by the Corporation and
constitutes, or will constitute when executed, a legal, valid
and binding obligation of the Corporation enforceable in
accordance with its terms except that: (i) the enforcement
thereof may be limited by bankruptcy, insolvency and other laws
affecting the enforcement of creditors' rights generally, (ii)
rights of indemnity, contribution and waiver of contribution
thereunder may be limited under applicable law and (iii)
equitable remedies, including, without limitation, specific
performance and injunctive relief, may be granted by a court of
competent jurisdiction;
(i) the entering into of each of the Transaction Documents and the
performance of the transactions contemplated thereby will not
result in a breach of, and do not create a state of facts which,
after notice or lapse of time or both, will result in a breach
of, and do not and will not conflict with: (i) any statute, rule
or regulation applicable to the Corporation or its subsidiaries;
(ii) any of the terms, conditions or provisions of the
Corporation's Articles of Incorporation or by-laws or
resolutions of the Corporation or its subsidiaries; or (iii) any
trust indenture, agreement, instrument or other document to
which the Corporation is a party or by which the Corporation or
its subsidiaries is a party or will be contractually bound as of
the Time of Closing; or (iv) any judgment, decree or order
binding on the Corporation, its subsidiaries or any of their
assets;
(j) the audited financial statements of Cyberoad Gaming Corporation
("Gaming") as at and for the seven months ended February 28,
1999 (the "Audited Financial Statements"), previously delivered
to the Agent (i) are in accordance with the books and records of
Gaming; (ii) contain and reflect all adjustments necessary for
the fair presentation of the results of operations and the
financial condition of the business of Gaming for the period
covered thereby; and (iii) present fairly the assets and
financial condition of Gaming as at February 28, 1999 and the
results of its
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operations and the changes in its financial position in
accordance with U.S. generally accepted accounting principles
applied on a consistent basis;
(k) the unaudited consolidated financial statements of the
Corporation as at and for the month ended May 31, 1999 (the
"Unaudited Financial Statements"), previously delivered to the
Agent (i) are in accordance with the books and records of the
Corporation and the subsidiaries; and (ii) present fairly the
consolidated assets and financial condition of the Corporation
as at May 31, 1999 and the consolidated results of its
operations and the changes in its consolidated financial
position for the period then ended in accordance with U.S.
generally accepted accounting principles applied on a consistent
basis;
(1) other than as disclosed in the Audited Financial Statements and
the Unaudited Financial Statements, or otherwise disclosed in
writing to the Agent, no material actions, suits, inquiries or
governmental proceedings are outstanding or pending or, to the
knowledge of the Corporation, are contemplated or threatened to
which the Corporation or any of the subsidiaries is a party or
to which the property of the Corporation or the subsidiaries is
subject that would result individually or in the aggregate in
any material adverse change in the operation, business or
condition of the Corporation;
(m) each of the Corporation and the subsidiaries has filed all
necessary tax returns and notices and has paid all applicable
taxes of whatever nature for all tax years to the date hereof to
the extent such taxes have become due or have been alleged to be
due by the appropriate taxing authority and neither the
Corporation nor the subsidiaries is aware of any tax
deficiencies or interest or penalties accrued or accruing, or
alleged to be accrued or accruing, thereon with respect to
itself where, in any of the above cases it might reasonably be
expected to result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Corporation or the
subsidiaries, taken as a whole;
(n) other than the Agent, there is no person, firm or corporation
acting or purporting to act at the request of the Corporation or
any of the subsidiaries, who is entitled to any brokerage or
finder's fee in connection with the transactions contemplated
herein;
(o) each of the Corporation and the subsidiaries is validly existing
under the laws of the jurisdiction of its incorporation and has
all requisite corporate capacity, power and authority to carry
on its business as now conducted by it and as proposed to be
conducted by it in the Business Plan (as defined below) and to
own, lease and operate its assets and the Corporation has all
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requisite corporate power and authority to carry out the
provisions and the transactions contemplated hereunder;
(p) the April 19, 1999 business plan of the Corporation (the
"Business Plan") together with the Subscription Agreements and
the attachments thereto which describes the business (the
"Business") of the Corporation and the subsidiaries,
collectively, do not contain a misrepresentation (as such term
is defined in the Securities Act (Ontario)) regarding the
Corporation which might reasonably be expected to result in any
material adverse effect on the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Corporation or the subsidiaries, taken as a
whole;
(q) for the purposes of the representations and warranties contained
in this paragraph 4(q), the following terms have the following
meanings:
(i) "Computer Technology" means computer hardware, software,
firmware, interfaces, logic, control systems,
engineering documentation, technical designs, systems
requirements, specifications, plans, testing procedures
and all related documentation whether in printed or
computer format, and other equipment that includes
computing technology or embedded logic such as
microchips and sensors;
(ii) "COTS" means third party commercial off-the-shelf
software licensed to the Corporation or its subsidiaries
and utilized by the Corporation or its subsidiaries in
conducting the Business;
(iii) "Intellectual Property" means all technical designs,
systems requirements, specifications and plans, computer
software, whether in machine or human readable form,
patents, trademarks, service names, tradenames,
copyrights, licences, trade secrets or other proprietary
rights or property licensed, sub-licensed or otherwise
transferred to third parties by the Corporation and its
subsidiaries or otherwise used in the Business as now
conducted;
(iv) "Software Licences" means the material licences of Third
Party Software and COTS to the Corporation and its
subsidiaries; and
(v) "Third Party Software" means the software licensed to
the Corporation or its subsidiaries which is bundled
with, embedded in or forms part of the Intellectual
Property;
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(A) the Corporation and/or its subsidiaries owns or
holds a license in respect of the copyright in
any software which is a part of the Intellectual
Property;
(B) any source code for any software forming part of
the Intellectual Property which the Corporation
or any subsidiary holds has been treated as a
trade secret of the Corporation;
(C) subject to any patent or other proprietary
rights of third parties not known to the
Corporation, the Corporation and its
subsidiaries, taken as a whole:
I. have the exclusive right to use, sell,
license, prepare derivative works for,
and dispose of, the Intellectual
Property except for licences to
customers; and
II. have the right to act unilaterally to
bring actions for the infringement or
misappropriation of the Intellectual
Property;
(D) neither the Corporation nor any of its
subsidiaries have received notice that they,
either individually or together, are infringing
upon or otherwise acting adversely to the right
or claimed right of any person under or with
respect to any of the Intellectual Property, and
to the knowledge of each of them, there is no
basis for any such claim provided that the
Corporation has no knowledge of whether or not
there is any infringement of third party patent
or other proprietary rights with respect to any
of the Intellectual Property;
(E) the Software Licences:
I. are in good standing and in full force
and effect and no event, condition or
occurrence exists that, after notice or
lapse of time or both, would constitute
a default under any of the Software
Licences; and
II. have not been assigned by the
Corporation and/or its Subsidiaries;
(F) no material Software License to the Corporation
and/or its Subsidiaries has been terminated in
the last year;
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(G) to the knowledge of the Corporation:
I. there are no activities or conduct of
any third party that would constitute
material infringement of any rights of
the Corporation and/or its Subsidiaries
in or to the Intellectual Property; and
II. neither the Corporation nor its
Subsidiaries has received any notices
asserting that any right in or to the
Intellectual Property, or, subject to
the terms of the Software Licences, the
proposed use, sale, license or
disposition of the Intellectual Property
as contemplated by the Corporation or
its Subsidiaries, conflicts or will
conflict with the rights of any other
party, nor is there any basis for any
such assertion;
(H) the only persons who own or have any rights to
the use of the Intellectual Property are Gaming,
Asanol Management Corporation ("Asanol") and
Internet Wagering Systems, Ltd. ("IWS");
(I) subject to closing of the Offering and the
Corporation's satisfaction of debt to Advanced
Financial Services, Inc. (which the Corporation
hereby covenants to satisfy promptly following
closing), there are no liens or other
encumbrances on or against the Intellectual
Property;
(J) to the knowledge of the Corporation, the
execution, delivery and performance of the
Transaction Documents and the consummation of
the transactions contemplated in this Agreement
will not breach, violate or conflict with any
instrument or agreement governing any rights to
the Intellectual Property or the Third Party
Software, will not cause the forfeiture or
termination of any rights to the Intellectual
Property or the Third Party Software or in any
way excludes the right of the Corporation and/or
its subsidiaries to use, sell, license or
dispose of, or to bring any action for the
infringement of, any rights to the Intellectual
Property which the Corporation and/or its
subsidiaries might otherwise have or in any way
exclude the right of the Corporation and/or its
subsidiaries to use, license or sub-license any
rights to the Third Party Software which the
Corporation and/or its subsidiaries might
otherwise have;
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(K) except with respect to the COTS and the Third
Party Software, all software which forms part of
the Intellectual Property was written only by
individuals who were either full time employees
of the Corporation or contractors who assigned
their intellectual property rights therein to
the Corporation or its subsidiaries pursuant to
written agreements. All of the aforesaid
individuals have waived in writing or have
agreed orally to waive in writing their rights
in such software (and the Corporation hereby
covenants to obtain written waivers from all
such individuals within 30 days following
closing of the Offering);
(L) all licences granted by the Corporation or its
subsidiaries to use the Intellectual Property
have only been granted in the ordinary course of
business and have been in respect of object code
versions of the software comprised in the
Intellectual Property;
(M) there are no restrictions on the ability of the
Corporation or its subsidiaries or any successor
to or assignee from them to use and exploit all
rights in the Intellectual Property, other than
in accordance with the terms of the applicable
Software Licenses and the COTS and Third Party
Software. None of the rights of the Corporation
or its subsidiaries in the Intellectual Property
or the Third Party Software will be impaired or
affected in any way by the transactions
contemplated by this agreement;
(N) to the Corporation's best knowledge, all
Intellectual Property or other Computer
Technology provided by the Corporation or its
subsidiaries to any third party including
without limitation pursuant to any license
agreement is Year 2000 compliant. Without
limiting the foregoing, to the best knowledge of
the Corporation, all Third Party Software and
COTS provided to third parties is Year 2000
compliant. The Corporation does not have any
obligations (contingent or otherwise) in respect
of any Third Party Software provided to third
parties by the Corporation or its subsidiaries
that is not Year 2000 compliant;
(0) the source code for the Intellectual Property
has not been delivered or made available to any
person (other than the
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subsidiaries, Gaming, IWS and Asanol) and none
of the Corporation or its subsidiaries has
agreed to or undertaken to or in any other way
promised to provide such source code to any
other person; and
(P) to the best knowledge of the Corporation, the
COTS are in good standing and in full force and
effect and no event, condition or occurrence
exists that, after notice or lapse of time or
both, would constitute a default under any of
the COTS licenses.
(r) no order ceasing or suspending trading in securities of the
Corporation or prohibiting the sale of securities by the
Corporation has been issued and to the knowledge of the
Corporation, no proceedings for this purpose have been
instituted, are pending, contemplated or threatened; provided,
however, as of December 1, 1999 if the Corporation does not file
a registration statement with the U.S. Securities and Exchange
Commission which is at that date declared effective, the
Corporation's securities will cease to trade on the OTC Bulletin
Board; and provided further, that the Corporation has not filed
a registration statement at the date hereof and believes its
securities will be halted from trading as of December 1, 1999;
(s) since May 31, 1999, the Corporation has not, directly or
indirectly, declared or paid any dividend or declared or made
any other distribution on any of its shares or securities of any
class, or, directly or indirectly, redeemed, purchased or
otherwise acquired any of its shares or securities or agreed to
do any of the foregoing;
(t) there is not, in the Articles of Incorporation or by-laws of the
Corporation or in any agreement, mortgage, note, debenture,
indenture or other instrument or document to which the
Corporation is a party, any restriction upon or impediment to
the declaration or payment of dividends by the directors of the
Corporation or the payment of dividends by the Corporation to
the holders of its Common Stock; and
(u) Interwest Transfer Co., Inc. ("Interwest"), at its principal
offices at 1981 East ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇ has been duly appointed as the transfer agent
and registrar for all of the outstanding Common Shares.
5. COVENANTS OF THE CORPORATION - The Corporation hereby covenants to and with
the Agent that it will:
(a) fulfil all legal requirements to permit the creation, issuance,
offering and sale of the Subject Securities as contemplated in
this Agreement including, without limitation, compliance with
all applicable securities legislation to enable the Shares to be
offered
14
-14-
for sale and sold to Purchasers without the necessity of filing
a prospectus in the provinces of Ontario;
(b) prior to any Closing, permit the Agent and its counsel to
conduct all due diligence which the Agent may reasonably require
to conduct in order to fulfil its obligations under applicable
securities legislation;
(c) ensure that at the respective times of filing and at all times
subsequent to the filing thereof until two years thereafter, the
1933 Act Registration Statement and the 1934 Act Form will fully
comply in all material respects, with the requirements of
applicable securities legislation;
(d) deliver in Toronto, within three Business Days of the Effective
Date for the 1933 Act Registration Statement and the 1934 Act
Form, as the case may be, without charge to the Agent, as many
copies of the 1933 Act Registration Statement and the 1934 Act
Form, as the Agent may reasonably request, and such delivery
shall constitute: (A) the consent of the Corporation to use such
documents in connection with the distribution of the Shares and
the Broker's Shares issuable upon exercise of the Compensation
Options and the Offering Option Compensation Options; and (B)
the Corporation's representation and warranty to the Agent that,
at the time of delivery by the Corporation to the Agent, the
information and statements contained therein (except information
and statements relating solely to or provided by the Agent)
contain no material misrepresentation and do not omit to state a
material fact relating to the Corporation, and the Shares and
the Broker's Shares issuable upon exercise of the Compensation
Options and the Offering Option Compensation Options;
(e) to appoint the Agent, as custodian under the Escrow Agreement;
(f) forthwith after the Closing, to file such documents as may be
required under the applicable securities laws of the Qualifying
Provinces relating to the private placement of the Shares which,
without limiting the generality of the foregoing, shall include
a Form 45-501F1 as prescribed by the Regulation made under the
Securities Act (Ontario); and
(g) in the event that any person, firm or corporation acting or
purporting to act for the Corporation or any of the subsidiaries
establishes a claim for any fee from the Agent relating to the
Offering, the Corporation covenants to indemnify and hold
harmless the Agent with respect thereto and with respect to all
costs reasonably incurred in the defense thereof.
15
-15-
6. CONDITIONS OF CLOSING - The purchase and sale of the Shares and the Closing
shall be subject to the following conditions, which conditions may be waived in
writing in whole or in part by the party entitled to the benefit thereto:
(a) the Corporation having obtained all requisite regulatory
approvals required to be obtained by the Corporation in respect
of the Offering and the Offering Option, as applicable, on terms
mutually acceptable to the Corporation and the Agent;
(b) the Corporation, and the Agent having complied fully with all
relevant statutory and regulatory requirements required to be
complied with prior to the Time of Closing in connection with
the Offering and the Offering Option, as applicable;
(c) the Corporation having taken all necessary corporate action to
authorize and approve the Transaction Documents and all other
matters relating thereto;
(d) the Agent having received at Closing legal opinions of counsel
to the Corporation, addressed to the Agent and each of the
Purchasers, acceptable in all reasonable respects to counsel to
the Agent;
(e) the Agent having delivered to the Corporation at the Closing
duly executed Subscription Agreements to purchase Shares and
such Subscription Agreements having been accepted by the
Corporation; and
(f) the Corporation having delivered to the Agent a certificate of
Interwest as registrar and transfer agent which certifies that
as at the Closing Date and before giving effect to the Offering,
11,109,650 Common Shares are issued and outstanding.
7. CLOSING - The purchase and sale of the Shares (the "Closing") shall be
completed at such place as the Corporation and the Agent may agree upon, in one
or more Closings, at 11:00 a.m. (Toronto time) (the "Time of Closing") the
first of which shall occur on November 11, 1999 or at such other time or on such
other date as the Corporation and the Agent may agree upon (the "Closing Date").
The parties acknowledge that U.S. $499,999.50 has been advanced to the
Corporation prior to the first Time of Closing pursuant to a Subscription
Agreement provided to the Corporation in advance of the Time of Closing to
purchase 142,857 Closing Shares (the "Advance").
At the Time of Closing, the Corporation shall deliver to the Agent on
behalf of the Purchasers:
(a) an irrevocable direction to Interwest to issue and deliver: (i)
to the Purchasers certificates representing the Closing Shares,
and Option Shares, if applicable, duly registered as directed by
the subscription agreements; and (ii) at the first Closing, to
the Agent, as custodian, certificates representing 850,000
Common Shares to be held in escrow;
16
-16-
(b) the legal opinion(s) as contemplated in subsection 6(d) hereof;
and
(c) such further documentation as is contemplated in the closing
agenda attached as Schedule B hereto or as the applicable
regulatory authorities may reasonably require;
against delivery by the Agent to the Corporation of (a) duly executed
Subscription Agreements to purchase such Shares; and (b) payment to the
Corporation or its nominee by certified cheques or bank drafts or other
mechanism agreed to by the Corporation and the Agent, of that amount that equals
90% of the aggregate purchase price for the Shares paid for at the Time of
Closing less: (i) 10% of the amount of the Advance; (ii) the Commission; and
(iii) the expenses payable at the Time of Closing in accordance with section 8
hereof. The Agent shall retain, as custodian under the Escrow Agreement, that
amount that equals 10% of the purchase price for the Shares paid for at the Time
of Closing plus, at the first Closing, 10% of the amount of the Advance.
8. EXPENSES - Whether or not Closing occurs, the Corporation shall pay all
costs, fees and expenses, if any, of or incidental to the performance of the
obligations under this Agreement including, without limitation; (i) the cost of
preparing, filing and amending, if applicable, the 1933 Act Registration
Statement and the 1934 Act Form, (ii) the cost of printing certificates for the
Shares and Broker's Shares issuable upon exercise of the Compensation Options
and Offering Option Compensation Options, (iii) the cost of registration,
countersignature and delivery of the Shares and Broker's Shares issuable upon
exercise of the Compensation Options and Offering Option Compensation Options,
(iv) the fees and expenses of the Corporation's auditors, counsel and any local
counsel, (v) the reasonable fees and expenses of the Agent's counsel, and (vi)
the Agent's reasonable out-of-pocket expenses (including marketing expenses
provided that any flights shall be business class). Such amounts payable to the
Agent and its agents shall be identified in reasonable detail in documents
tabled at Closing and shall be paid by the Corporation at the Time of Closing to
the Agent in respect of fees and expenses incurred to such date (other than
expenses of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Dal Brynelen which shall be payable after the
Time of Closing), and as soon as reasonably possible following receipt of any
additional invoices therefor in respect of expenses and fees incurred after the
Time of Closing (and expenses of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Dal Brynelen), which, to
the extent such expenses and fees incurred after the Time of Closing exceed U.S.
$3,000, have been approved in advance by the Corporation and within a reasonable
time period following receipt of any additional invoices therefor along with
sufficient supporting material as may be reasonably requested by the
Corporation.
9. INDEMNITIES
(a) the Corporation (as the "Indemnifying Party") hereby covenants
and agrees to protect, indemnify and hold harmless the Agent and
its directors, officers, employees, attorneys and agents
(individually, an "Indemnified Party" and, collectively, the
"Indemnified Parties") from and against all losses (except for
loss of profits), claims, expenses, costs, damages or
liabilities, whether joint or several (including the
17
-17-
aggregate amount paid in reasonable settlement of any actions,
suits, proceedings or claims provided such settlement is made
pursuant to the terms and conditions of this section 9) which
they may suffer or incur caused by or arising directly or
indirectly by reason of:
(i) any information or statement (except any information or
statement made or provided by or solely relating to the
Agent, unless such information or statements were
provided to the Agent, or prepared, by the Corporation)
contained in the Business Plan, the 1934 Act Form or the
1933 Act Registration Statement being or being alleged
to be a misrepresentation;
(ii) the omission to state in the Business Plan, the 1934 Act
Form or the 1933 Act Registration Statement, or any
amendment to such document a material fact required to
be stated therein or necessary to make the statements
therein not misleading (except the omission to state a
material fact made or provided by or solely relating to
the Agent, unless such information or statements were
provided to the Agent, or prepared, by the Corporation);
(iii) the Corporation not complying with any requirement of
any securities legislation or regulatory requirements of
any jurisdiction in which Purchasers reside in
connection with the Offering, or the Offering Option;
(iv) any order made or any inquiry, investigation or
proceeding commenced or threatened by any regulatory
authority based upon an allegation that any untrue
statement or alleged omission or any misrepresentation
or alleged misrepresentation in the Business Plan, the
1934 Act Form, the 1933 Act Registration Statement or
any amendment to such document exists (except
information and statements made or prepared by or solely
relating to the Agent, unless such information or
statements were provided to the Agent, or prepared, by
the Corporation) which prevents or restricts the trading
of the Shares or the Option Shares or the Brokers'
Shares; or
(v) the Corporation's failure to comply with any of its
obligations hereunder;
(b) the Agent (as the "Indemnifying Party") agrees to indemnify and
hold harmless the Corporation and its agents, employees,
attorneys, officers and directors of each of the foregoing
(individually, an "Indemnified Party" and collectively, the
"Indemnified Parties") from and against any and all losses
(except for loss of profits), claims, costs, damages,
liabilities or expenses, whether joint or several (including the
aggregate amount paid in reasonable settlement of any actions,
suits, proceedings or claims provided such settlement is made
pursuant to the terms and conditions of this section 9) which
they may suffer or incur arising directly out of or based
directly upon the willful misconduct or gross negligence of the
Agent;
18
-18-
(c) if any action or claim (including any governmental or regulatory
investigation or proceeding) shall be asserted against an
Indemnified Party in respect of which indemnity may be sought
from an Indemnifying Party pursuant to the provisions hereof, or
if any such potential action or potential claim shall come to
the knowledge of an Indemnified Party, the Indemnified Party
shall promptly notify the Indemnifying Party in writing of the
nature of such action or claim (provided that any failure to so
notify shall not affect the Indemnifying Party's liability under
this section 9 unless such delay has prejudiced the defense to
such claim). The Indemnifying Party shall be entitled but not
obliged to participate in or to assume the defense thereof,
provided, however that the defense shall be through legal
counsel acceptable to the Indemnified Party, acting reasonably.
In addition, the Indemnified Party shall also have the right to
employ separate counsel in any such action and to participate in
the defense thereof, and the fees and expenses of such counsel
shall be borne by the Indemnified Party unless (i) the
employment thereof has been specifically authorized in writing
by the Indemnifying Party; (ii) the Indemnified Party has been
advised by counsel acceptable to the Indemnifying Party, acting
reasonably, that representation of the Indemnifying Party and
the Indemnified Party by the same counsel would be inappropriate
due to actual or potential differing interests between them; or
(iii) the Indemnifying Party has failed, within a reasonable
time after receipt of such written notice to assume the defense
of such action or claim. It is understood and agreed that the
Indemnifying Party shall not, in connection with any action,
suit, proceeding or claim in the same jurisdiction, be liable
for the legal fees and expenses of more than one separate legal
firm to represent the Indemnified Parties. Neither party shall
effect any settlement of any such action or claim or make any
admission of liability without the written consent of the other
party, such consent not to be unreasonably withheld or delayed.
The indemnity hereby provided for shall remain in full force and
effect and shall not be limited to or affected by any other
indemnity in respect of any matters specified in this section
obtained by the Indemnified Party from any other person;
(d) to the extent that any Indemnified Party is not a party to this
Agreement, the Agent or Corporation, as the case may be, shall
obtain and hold the right and benefit of this section in trust
for and on behalf of such Indemnified Party;
(e) the Corporation hereby waives its right to recover contribution
from the Agent with respect to any liability of the Corporation
by reason of or arising out of any misrepresentation or omission
contained in the Business Plan, 1934 Act Form or the 1933 Act
Registration Statement or any amendment to such documents;
provided, however, that such waiver shall not apply in respect
of liability caused or incurred by reason of or arising out of
any misrepresentation or omission which is based upon or results
from information made or provided by or solely relating to the
Agent contained in such document (unless such information or
statements were provided to the Agent, or prepared, by the
Corporation); and
19
-19-
(f) each of the Corporation and the Agent hereby consents to personal
jurisdiction and service and venue in any court in which any claim which
is subject to indemnification hereunder is brought against the other or
any Indemnified Party and to the assignment of the benefit of this
section to any Indemnified Party for the purpose of enforcement provided
that nothing herein shall limit the Indemnifying Party's right or
ability to contest the appropriate jurisdiction or forum for the
determination of any such claims.
10. CONTRIBUTION - In the event that, for any reason, the indemnity provided for
in section 9 hereof is illegal or unenforceable, then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the
aggregate of all losses, claims, costs, damages, expenses or liabilities (except
loss of profits in connection with the sale of Shares) of the nature provided
for in section 9 hereof such that the Agent shall be responsible for that
portion represented by the percentage that the Commission bears to the gross
proceeds from the Offering and the Corporation shall be responsible for the
balance provided that in no event shall the Agent be responsible for any amount
in excess of the Commission actually received by the Agent. Notwithstanding the
foregoing, a person guilty of fraudulent misrepresentation shall not be entitled
to contribution from any other party. Any party entitled to contribution will,
promptly after receiving notice of commencement of any claim, action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this section, notify such party
or parties from whom contribution may be sought. In no case shall such party
from whom contribution may be sought be liable under this Agreement unless such
notice shall have been provided, but the omission to so notify such party shall
not relieve the party from whom contribution may be sought from any other
obligation it may have otherwise than under this section. The right to
contribution provided in this section shall be in addition and not in derogation
of any other right to contribution which any Indemnifying Party may have by
statute or otherwise by law.
11. TERMINATION RIGHTS - In addition to any other remedies which may be
available to the Agent, the Agent shall be entitled, at its option, to terminate
and cancel, without any liability on its part, all of its obligations under this
Agreement and the obligations of any person whom the Agent has solicited to
purchase the Shares who has executed a Subscription Agreement, by notice in
writing to that effect delivered to the Corporation prior to the Time of Closing
if:
(a) the Agent is not satisfied in its sole discretion with the
results of all or any portion of its due diligence review and
investigations of the Corporation or the subsidiaries;
(b) there is in the sole opinion of the Agent a material change or
change in material fact or new material fact or an undisclosed
material fact or material change which might be expected to have
an adverse effect on the business, affairs, profitability or
prospects of the Corporation on a consolidated basis or on the
market price or value of the Common Shares, Shares or other
securities of the Corporation;
20
-20-
(c) there should develop, occur or come into effect any occurrence
of national or international consequence, or any action, law or
regulation, inquiry, or other occurrence of any nature
whatsoever which, in the sole opinion of the Agent, seriously
affects, or may seriously affect, the financial markets or the
business of the Corporation, its subsidiaries and affiliates,
taken together or the market price or value of the Common
Shares, Shares or other securities of the Corporation;
(d) the state of the financial markets is such that in the sole
opinion of the Agent it would be unprofitable to offer or
continue to offer the Shares for sale;
(e) there is a new inquiry, action, suit, proceeding or
investigation (whether formal or informal instituted or
announced or threatened) in relation to the Corporation, any one
of the subsidiaries or any one of the Corporation's directors,
officers or principal shareholders;
(f) any order to cease trading in the securities of the Corporation
is made, threatened or announced by a competent securities
regulatory authority; or
(g) the Corporation is in material breach of a term, condition, or
covenant of this Agreement or any representation or warranty
given by the Corporation in this Agreement is or becomes
materially false.
If the Agent terminates this Agreement pursuant to this section there
shall be no further liability on the part of the Agent or of the Corporation to
the Agent except in respect of any obligation which may have arisen or may
thereafter arise under sections 9 or 10 hereof.
The right of the Agent to terminate its obligations under this Agreement
is in addition to such other remedies as it may have in respect of any default,
act or failure to act of the Corporation in respect of any of the matters
contemplated by this Agreement.
12. BREACH OF AGREEMENT - All terms and conditions of this Agreement to be
performed or satisfied by the Corporation shall be constituted as conditions and
any breach of, or failure by the Corporation to comply with, any term or
condition of this Agreement shall entitle the Agent, on behalf of the
Purchasers, to terminate their respective obligations to purchase the Shares by
notice to that effect given to the Corporation prior to the Time of Closing. In
the event of any such termination, there shall be no further liability on the
part of the Corporation or the Agent. The Agent may waive, in whole or in part,
or extend the time for compliance with, any terms and conditions without
prejudice to its rights in respect of any other terms and conditions or any
other or subsequent breach or non-compliance provided, however, that any waiver
or extension must be in writing and signed by the Agent in order to be binding
upon it.
13. NOTICES - Any notice under this Agreement shall be given in writing and
either delivered or telecopied to the party to receive such notice at the
address or telecopy numbers indicated below:
21
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to the Corporation or any indemnified party:
▇▇▇▇▇▇▇▇.▇▇▇ Corporation
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Troop ▇▇▇▇▇▇▇ Pasich Reddick & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
to the Agent or any Indemnified Party:
Thomson Kernaghan & Co. Limited
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Beach, Hepburn
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
22
-22-
or such other address or telecopy number as such party my hereafter designate by
notice in writing to the other party. If a notice is delivered, it shall be
effective from the date of delivery; and if such notice is telecopied (with
receipt confirmed), it shall be effective on the Business Day following the date
such notice is telecopied.
14. SURVIVAL - All representations, warranties, and agreements of the parties
contained herein or contained in any document submitted pursuant to this
Agreement or in connection with the purchase of the Closing Shares shall survive
the purchase of the Closing Shares by the Purchasers, the exercise of the
Offering Option and subsequent disposition of the Option Shares by the
Purchasers and shall continue in full force and effect unaffected by any
subsequent disposition of the Subject Securities, for a period of two years from
the Closing, and the Agent shall not be limited or prejudiced by any
investigation made by or on behalf of the Agent in the course of the
distribution of the Shares except for those matters in respect of which the
Agent had knowledge prior to proceeding with the Closing of the Offering.
15. ENTIRE AGREEMENT - The provisions herein contained constitute the entire
agreement between the parties hereto and supersede all previous communications,
representations, understandings and agreements between the parties with respect
to the subject matter hereof, whether verbal or written, including without
limitation the letter agreement between the Corporation and the Agent dated and
accepted by the Corporation on June 18, 1999.
16. COUNTERPARTS - This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of which when taken together
shall be deemed to be one and the same document, and notwithstanding their
actual date of execution shall be deemed to be dated as of the date first above
written.
17. GENERAL - The Agreement shall be governed by and interpreted in accordance
with the laws of Florida and the federal laws of the United States applicable
therein and time shall be of the essence hereof.
23
-23-
18. CURRENCY - Unless otherwise indicated, all dollar amounts referred to in
this Agreement are in lawful money of the United States.
If the above is in accordance with your understanding, please sign and
return to the Agent a copy of this letter, whereupon this letter and your
acceptance shall constitute a binding agreement between the Corporation and the
Agent.
THOMSON KERNAGHAN & CO. LIMITED
Per: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
The above offer is hereby accepted and agreed to as of the date first
above written.
▇▇▇▇▇▇▇▇.▇▇▇ CORPORATION
Per: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------
24
SCHEDULE A
[▇▇▇▇▇▇▇▇.▇▇▇ LOGO]
FOR IMMEDIATE RELEASE
▇▇▇▇▇▇▇▇.▇▇▇ COMPLETES ACQUISITION
AGREES TO $US7 MILLION PRIVATE PLACEMENT
Dublin, Ireland -- April 29, 1999 -- ▇▇▇▇▇▇▇▇.▇▇▇ Ltd., a corporation organized
under the laws of Ireland, announced today the completion of a share exchange
agreement with LAL Ventures Corp. (OTC BB: LALV) and a $US2,000,000 financing
by way of private placement. Under the terms of the share exchange, LAL
Ventures will acquire all of the stock of ▇▇▇▇▇▇▇▇.▇▇▇ Ltd. in exchange for
restricted common stock of LAL Ventures. LAL Ventures plans to change its name
to ▇▇▇▇▇▇▇▇.▇▇▇ Corporation. By this transaction, ▇▇▇▇▇▇▇▇.▇▇▇ Corporation
becomes the parent corporation of ▇▇▇▇▇▇▇▇.▇▇▇ Ltd. The common stock of LAL
Ventures will trade under the symbol "LALV" until such time as a new symbol is
assigned.
▇▇▇▇▇▇▇▇.▇▇▇ also announced the signing of an agreement with investment
bankers, Thomson Kernaghan & Company Ltd., to complete a financing on a best
efforts basis of a private placement of up to 2,000,000 shares of its common
stock at a price of $US3.50 per share. The closing of this financing is subject
to definitive documentation and satisfactory due diligence.
▇▇▇▇▇▇▇▇.▇▇▇ is a leading Internet company that develops and manages
distributed wide area network gaming (Sportbook and Casino) systems.
For more information about ▇▇▇▇▇▇▇▇.▇▇▇ please contact:
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇.▇.
Website: ▇▇▇▇▇▇▇▇.▇▇▇
e-mail:▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Phone: ▇-▇▇▇-▇▇▇-▇▇▇▇
Except for the historical information contained herein, matters discussed in
this news release may be considered forward looking statements that involve
risks and uncertainties, including those related to customer acceptance of new
products and services, impact of competition, the risk of delay in product
development and release dates, risks of product returns, investments in new
business opportunities and the other risks detailed from time to time in the
Company's SEC reports, including without limitation its quarterly reports on
Form 10-Q and its annual report on Form 10-K. The actual results the Company
achieves may differ materially from any forward-looking statements due to such
risks and uncertainties.
25
A-2
[▇▇▇▇▇▇▇▇.▇▇▇ LOGO]
FOR IMMEDIATE RELEASE
▇▇▇▇▇▇▇▇.▇▇▇ CORPORATION
CHANGES TRADING SYMBOL TO "FUNN"
Dublin, Ireland -- May 10, 1999 -- ▇▇▇▇▇▇▇▇.▇▇▇ Corporation, formerly LAL
Ventures Corp. (OTC BB: LALV) announced today that it has received regulatory
approval for its name change and has been assigned the new OTC BB trading
symbol: FUNN.
▇▇▇▇▇▇▇▇.▇▇▇ Corporation is a pioneering Internet company that develops,
markets and manages distributed wide area network gaming systems (sportsbooks
and casinos). ▇▇▇▇▇▇▇▇.▇▇▇ Corporation also provides ongoing management and
technical support services for its gaming-industry clients.
The FUNN trading symbol emphasizes the Company's commitment to the unlimited
market for online interactive entertainment software.
For more information about ▇▇▇▇▇▇▇▇.▇▇▇ please contact:
▇. ▇▇▇▇▇▇ Christie V.P.
Website: ▇▇▇▇▇▇▇▇.▇▇▇
e-mail: ▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Phone: ▇-▇▇▇-▇▇▇-▇▇▇▇
Except for the historical information contained herein, matters discussed in
this news release may be considered forward looking statements that involve
risks and uncertainties, including those related to customer acceptance of new
products and services, impact of competition, the risk of delay in product
development and release dates, risks of product returns, investments in new
business opportunities and the other risks detailed from time to time in the
Company's SEC reports, including without limitation its quarterly reports on
Form 10-Q and its annual report on Form 10-K. The actual results the Company
achieves may differ materially from any forward-looking statements due to such
risks and uncertainties.
26
A-3
▇▇▇▇▇▇▇▇.▇▇▇ BETS ON VERSANT FOR DATABASE
PERFORMANCE
VERSANT OBJECT DATABASE DRIVES WEB-BASED SPORTS BETTING SYSTEM
FREMONT, California, May 25, 1999 -- Versant Corporation (NASDAQ: VSNT), a
leader in enterprise component management an distributed object systems,
announced today that Irish technology development company ▇▇▇▇▇▇▇▇.▇▇▇ (OTC:BB
FUNN) will release this summer Version 2 of CR Netbook, a web-based sports
betting system that uses the Versant Object Database Management System (ODBMS).
Some of the most prominent online gaming sites, which includes The Big Book &
Casino (▇▇▇▇://▇▇▇▇▇▇▇▇▇▇.▇▇▇), Grand Prix Sportsbook
(▇▇▇▇://▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇) and Mayan Sportsbook (▇▇▇▇://▇▇▇▇▇▇▇▇▇▇▇.▇▇▇),
will be upgrading to version 2 of the Versant-based CR Netbook software when it
becomes available this summer, Version 2 of the product is expected to be the
most advanced, scalable sports betting system on the market.
"Using Versant, rather than a relational database, allows us to focus more on
the business object model, and avoid the compromises we would have to make if
we were to optimize the program for relational storage," said ▇▇▇▇ ▇▇▇▇▇▇▇, CIO
of ▇▇▇▇▇▇▇▇.▇▇▇. "This directly translates into faster development times, and
ultimately a faster product."
Versant's distributed object-based technology was the obvious choice for the
Irish developer. Because ▇▇▇▇▇▇▇▇.▇▇▇ is experiencing very rapid growth, the
company needed a high degree of scalability, easy development, and strong
support. Versant fit the ▇▇▇▇ in each case. "The distributed database
requirements for an application of this nature are very steep, but Versant was
able to meet every one of them," said ▇▇▇▇ ▇▇▇▇▇, President and CEO of Versant.
"The wagering sites that are using CR Netbook are growing rapidly and need a
robust database with a distributed architecture behind their operations.
Versant's ODBMS is uniquely capable of powering these complex, distributed
systems."
The online wagering sites, which depend on CR Netbook to provide the brains
behind the betting, have to be fast, user-friendly and highly secure. Using The
Big Book and other Netbook-powered sits, users can confidently place bets
online in real time. On the back end, Versant enables a quick response time for
end users, keeps rigorous track of each and every transaction across multiple
locations, and makes sure the electronic money floating through each site is
safe and secure.
"Versant's support for distribution and replication is excellent," added
▇▇▇▇▇▇▇. "As the sportsbook operators that use our system start to address the
global market, they'll invariably need to deploy multiple points of presence to
meet demand and provide strong response times to end users. Using Versant, this
distribution will be virtually transparent to our application."
This press release contains forward-looking information within the ???? of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, and is subject to the safe harbor created by these
sections. These forward-looking statements include those related in the
availability and ???? of the Versant-based CR Netbook. Versant ???? no
obligation to update the information contained in this press release.
Further Information Contact:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Versant Corporation
▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
27
A-4 [CYBEROAD LOGO]
▇▇▇▇▇▇▇▇.▇▇▇(TM) IS
CALLING ALL 'WISE GUYS'
▇▇▇▇▇▇▇▇.▇▇▇(tm) creates a smarter, faster WiseGuy Contest
Dublin, Ireland, September 24, 1999 - ▇▇▇▇▇▇▇▇.▇▇▇ Corporation (OTC BB:▇▇▇▇), a
leading internet technology company today launched a faster, more user-friendly
version of the WiseGuy Contest available at ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, the
original free gaming contest website.
The most exciting new feature of the new, free WiseGuy Contest allows
participants to select their bet choices and place them into a "shopping cart"
called the Bet Builder. Players are then able to quickly place bets from this
shopping cart. As well, unlike most any other gaming environment, WiseGuy
Contest participants can now place three new, dynamic bet types parlaying and
teasing across multiple sports, as well as buying points on a spread within a
parlay. In addition, the new "Open Bets" section offers contestants an
instantly updated game status report on all their open bets as the event is
completed and graded, allowing players to check the "real time" status of all
bets.
"▇▇▇▇▇▇▇▇.▇▇▇ has improved the technology that operates the free WiseGuy Contest
based on feedback from players," said ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, vice president for
▇▇▇▇▇▇▇▇.▇▇▇. "The WiseGuy Contest's new technology is part of our ongoing
mission to provide the most user-friendly, seamless and exciting gaming
environment for players of all sites powered by ▇▇▇▇▇▇▇▇.▇▇▇".
The WiseGuy Contest is the premier free online sports betting contest. Players
test their wagering abilities with $10,000 of "playdough" provided each month,
where they can place bets on point spreads, buy points, moneylines, game totals,
parlays and teasers.
In addition, the WiseGuy Contest includes a comprehensive Betting Guide where
novice players can learn the inside strategies and get insight before ever
placing a bet.
The WiseGuy Contest is one of four gaming and sportsbook sites powered by
▇▇▇▇▇▇▇▇.▇▇▇ technology. Other game websites that operate with the ▇▇▇▇▇▇▇▇.▇▇▇
software include ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
▇▇▇▇▇▇▇▇.▇▇▇ is a pioneer among Internet companies, sp?? the global gaming
industry; providing superior software and network systems development, network
management and ongoing technical support services for its gaming industry
clients.
28
SCHEDULE B
CLOSING AGENDA
▇▇▇▇▇▇▇▇.▇▇▇ CORPORATION
Issue of up to 1,000,000 Shares at U.S. $3.50 per Share
for Gross Proceeds of up to U.S. $3,500,000
CLOSING DATE: Thursday, November 11, 1999
TIME: 11:00 a.m. (Toronto time)
PLACE: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
DEFINED TERMS
"Agency Agreement" the agency agreement between the Company and the Agent
dated November 11, 1999, relating to the sale of
Closing Shares
"Agent" Thomson Kernaghan & Co. Limited
"BH" Beach, Hepburn, counsel to the Agent
"Company" ▇▇▇▇▇▇▇▇.▇▇▇ Corporation
"Compensation Option" non-assignable compensation option entitling the Agent
to purchase up to 10% of the number of Closing Shares
issued at closing at a price of U.S. $3.50 per share at
any time on or before the date which is two years
following the closing date
"Compensation Option
Certificate" certificate representing the Compensation Option
"Custodian" Thomson Kernaghan & Co. Limited
"Offering Option" option entitling the Agent to sell additional Shares at
a price of U.S. $3.50 per Option Share at any time on
or before the date which is 30 days following the
closing date
"Offering Option
Compensation Option" compensation option entitling the Agent to Purchase 10%
of the number of Option Shares issued at the Offering
Option closing at a price of U.S.
29
B-2
$3.50 per Share at any time on or before the date which
is two years following the closing
"Transfer Agent" Interwest Transfer Co., Inc.
"TS" Troop ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel to
the Company
All other capitalized words not otherwise defined herein shall have the meanings
ascribed to such words in the Agency Agreement.
STANDARD DELIVERY
Unless otherwise noted, sufficient original copies of the document will
be prepared so that "Standard Delivery" may be made of each document; original
payments and certificates representing Shares will be delivered only to the
parties entitled thereto and photocopies of the same will be provided to all
other parties.
Standard Delivery means delivery to the following parties and in the
following numbers:
Company 1
Agent 1
TS 1
BH 1
-
Total 4
=
TERMS OF CLOSING
All deliveries at the closing as well as all deliveries and payments called for
shall be held in escrow until all such deliveries and payments have been made.
Agreement by a representative of the Company, the Agent, TS and BH that all such
deliveries and payments have been completed, shall be conclusive evidence that
same have been completed.
REPRESENTATION
On behalf of the Company: ▇▇▇▇▇▇ ▇▇▇▇▇▇
On behalf of the Agent: ▇▇▇▇▇ ▇▇▇▇▇▇
On behalf of TS: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
On behalf of BH: ▇▇▇ ▇▇▇▇▇▇▇
On behalf of the Custodian: ▇▇▇▇▇ ▇▇▇▇▇▇
30
B-3
I. DOCUMENTS TO BE DELIVERED AT CLOSING
ITEM DOCUMENT DELIVERED BY DELIVERED TO
---- -------- ------------ ------------
1. Agency Agreement Agent Standard Delivery
2. Escrow Agreement Custodian Standard Delivery
and Custodian
3. Subscription Agreements with Agent Company (original)
consents/waivers of Purchasers Standard Delivery
(copies)
4. Secretary's Certificate attaching: Company Standard Delivery
(a) certified copies of articles and by-
laws of the Company
(b) certified consent resolution of the
directors of the Company: (i)
approving the Agency, Escrow
and Subscription Agreements;
(ii) allotting, and reserving for
issue shares issuable in
connection with the Offering, the
Offering Option, upon exercise
of the Compensation Option and
Offering Option Compensation
Option and under the Escrow
Agreement; (iii) approving the
appointment of the Transfer
Agent as the registrar and
transfer agent of the Company
and; (iv) certain other matters;
and
(c) bring down certificate from the
Agency Agreement
5. Certificate of incumbency of
signatories of the Company
6. Certificate of Compliance/Good Company Agent (original)
Standing for the Company and each of Standard Delivery
the subsidiaries (copies)
7. Letters from local counsel of each of Company Standard Delivery
the subsidiaries confirming registered
shareholders thereof
8. Specimen certificate evidencing Company Standard Delivery
Shares
31
B-4
ITEM DOCUMENT DELIVERED BY DELIVERED TO
---- -------- ------------ ------------
9. Certificate of Transfer Agent as to Company Standard Delivery
issued and outstanding shares
10. eBanx [Isle of Man] Ltd. acquisition Company Standard Delivery
agreement (copies)
11. Comfort letter re: Cyberoad [Ireland] Company Standard Delivery
(copies)
12. Direction of the Company to the Company Transfer Agent
Transfer Agent with respect to (original)
registration particulars of the Shares to Standard Delivery
be issued and delivered to the (copies)
Purchasers and Escrowed Shares to
be issued and delivered to the
Custodian
13. Letter of the Agent confirmed by the Agent Standard Delivery
Company confirming gross proceeds of
$2,271,007; commission payable to the
Agent of $181,680.56; expenses of
$58,324.75; net proceeds payable to the
Company of $1,303,901.49; directing the
advance of $227,100.70 to the Custodian;
and attaching applicable supporting
documentation for the expenses set forth
therein
14. Evidence of wire transfer or cheque Agent Company (original)
(including transfer identification number) Standard Delivery
from the Agent to the Company in the (copies)
amount of $1,303,901.49 representing the
net proceeds of the Offering, payable to
the Company
15. Compensation Option Company Agent (original)
Standard Delivery
(copies)
16. Receipt of Agent for commission, Agent Company (original)
expenses and Compensation Option Standard Delivery
Certificate (copies)
32
B-5
I. DOCUMENTS TO BE DELIVERED AT CLOSING (CONT'D.)
17. Advance of the Agent to the Custodian in Agent Custodian (original)
the amount of $227,100.70, representing Standard Delivery
the funds to be held in escrow by the (copies)
Custodian pursuant to the Escrow
Agreement
18. Receipt of the Custodian for the foregoing Custodian Company (original)
cheque Standard Delivery
(copies)
19. Opinion of TS together with supporting Company Standard Delivery
officers' certificate in respect of opinion
20. Opinion of local Florida counsel Company Standard Delivery
II. MATTERS TO BE COMPLETED FOLLOWING THE CLOSING
1. Certificates representing an aggregate of 648,859 Shares
registered in accordance with item 12 of the closing documents
2. Certificates representing an aggregate of 850,000 Escrowed
Shares issued to the Agent on behalf of the Purchasers and
delivered to the Custodian
3. Settlement of matters relating to Dal Brynelen
4. Company to issue Press Release
5. Exercise of Offering Option, if applicable
6. Closing of Exercise of Offering Option, if applicable
7. Filing of Form 45-501F1 (Ontario)
8. Prepare and file 1934 Act Form and 1933 Act Registration
Statement
9. Release of Escrowed Funds and Escrowed Shares