SHARE PURCHASE AGREEMENT
THIS
AGREEMENT made effective as of the 1st
day of January, A.D. 2008.
BETWEEN:
XXXXX
XXXXXX, Businessman, of Xxxxx 000, 000 - 0xx Xxxxxx
X.X., Xxxxxxx, Xxxxxxx, X0X 0X0;
(hereinafter
referred to as the "Vendor")
OF THE
FIRST PART
AND:
SCOUT
EXPLORATION, INC.,
a Nevada Corporation, with an office at 609 - 000 Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0;
(hereinafter
referred to as the "Purchaser")
OF THE
SECOND PART
AND:
KERRISDALE
RESOURCES LTD., a company duly incorporated under the laws of the
Province of Alberta, and having an office at Xxxxx 000, 000 - 0xx Xxxxxx
X.X., Xxxxxxx, Xxxxxxx, X0X 0X0;
(hereinafter
referred as the "Company")
OF THE
THIRD PART
WHEREAS
the Vendor is the legal and beneficial owner of all of the issued shares in the
capital stock of the Company.
AND
WHEREAS the Purchaser is desirous of purchasing and the Vendor is desirous of
selling the Shares on the terms and conditions hereinafter set
forth.
NOW
THEREFORE in consideration of the mutual covenants and agreements hereinafter
set forth and in consideration of the sum of Two ($2.00) Dollars
paid by each party to each of the other parties (the receipt and
sufficiency of which consideration is hereby acknowledged by all parties), the
parties hereto agree as follows:
1.
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DEFINITIONS
AND INTERPRETATION
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1.1
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Definitions. In
this Agreement, including the recitals hereto:
"Agreement"
means the agreement constituted by the execution of this document by the
parties hereto, including all schedules referred to herein, as same may be
supplemented or amended from time to time.
"Business
Day" means a day other than a Saturday, Sunday, statutory holiday or day
that is declared by any governmental authority to be a civic holiday in
the jurisdiction in which an event contemplated hereby is to take
place.
"Closing"
means the completion of the sale to the Purchaser and the purchase from
the Vendor of the Shares hereunder by the transfer and delivery of
documents of title thereto and the payment of the purchase price therefor
as set out in Section 2.2 hereof;
"Closing
Day" means the day upon which the events described in section 7 hereof
occur.
"Company"
means Kerrisdale Resources Ltd., a company incorporated under the laws of
the Province of Alberta, having an office at Xxxxx 000, 000 - 0xx
Xxxxxx X.X., Xxxxxxx, Xxxxxxx X0X 0X0.
"Company's
Financial Statements" means the unaudited financial statements of the
Company for the year ended September 30, 2007 as prepared by a Chartered
Accountant and the unaudited interim financial statements of the Company
for the periods ended March 31, 2008 prepared by management, copies of
which are attached hereto as Schedule "A".
"Purchaser"
means Scout Exploration, Inc.
"Place
of Closing" means 2100, 000 – 0xx
Xxxxxx X.X., Xxxxxxx, Xxxxxxx or such other place as
the parties may mutually agree upon.
“Property”
means the oil and gas interests set out in Schedule “C” to this
Agreement.
"Purchaser's
Solicitors" means Hemsworth, Xxxxxxx or such other solicitors as are
appointed by the Purchaser from time to time.
"Shares"
means the 100 Class A voting shares, issued and outstanding, in
the capital stock
of the Company owned by the
Vendor.
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"Vendor's
Solicitors" means Xxxxxx Best Xxxxxxxx LLP, or such other
solicitors as are appointed by the Vendor from time to
time.
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Any other
terms defined within the text of this Agreement shall have the meanings so
ascribed to them.
1.2 Headings and
Paragraphs. The headings to, and the division of this
Agreement into Articles and paragraphs are for convenience of reference only and
shall not in any way affect or be used in interpreting any of the provisions of
this Agreement.
1.3 Gender and
Number. The provisions of this Agreement
shall be read with all changes in gender and number as may be required by the
context.
1.4 Currency and Method of
Payment. All monetary amounts specified in this Agreement are
in reference to lawful currency of Canada, unless specifically stated
otherwise. Any monies payable hereunder shall be paid in cash or by
bank draft, certified cheque or solicitor=s
trust cheque.
1.5
Severance. If
any provision of this Agreement is determined to be illegal or unenforceable,
such provision shall be ineffective to the extent of such illegality or
unenforceability, but shall not invalidate or affect the validity or
enforceability of the remaining provisions of this Agreement.
1.6 Governing
Laws. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Alberta and the federal laws of
Canada applicable therein, and the parties agree to submit to the jurisdiction
of the courts of Alberta with respect to any legal proceedings arising
therefrom.
1.7 Action on Non-Business
Day. If by the terms hereof the Closing or any other event is
scheduled to take place at a time which falls on a day which is not a Business
Day, the Closing or other event shall take place on the first Business Day next
following.
1.8 Schedules. Appended
to this Agreement are the following Schedules which form an integral part
hereof:
Schedule
"A" - Company’s Financial Statements
Schedule
"B" - Vendor's and Company's Disclosures
Schedule
"C" - The Property
Schedule
"D" - The General Security Agreement
Schedule
"E" - Management Agreement
4
2.
PURCHASE AND
SALE
2.1 Purchase and
Sale. The Vendor hereby covenants and agrees to sell, assign
and transfer the Shares to the Purchaser and the Purchaser covenants and agrees
to purchase same from the Vendor on the Closing.
2.2 Purchase
Price. The Purchase Price payable for the Shares by the
Purchaser to the Vendor shall consist of:
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(a)
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the
payment of $25,000.00 CDN to the Vendor upon the signing of a Letter of
Intent (which sum has been paid);
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(b)
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the
payment of $400,000.00 CDN to the Vendor upon the Closing
Day;
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(c)
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a
payment obligation of $350,000.00 CDN (the “Principal Amount”) which
payment obligation the Company hereby irrevocably and unconditionally
assumes from the Purchaser for valuable consideration had and received,
and promises to pay to the Vendor and which the Vendor agrees to accept,
and which payment obligation in respect of the Principal Amount shall be
as follows:
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a.
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the
Company shall make all payments to the Vendor at 00, Xxxxxxxxx Xxxxx X.X.
Xxxxxxx Xxxxxxx X0X 0X0 or such other address as the Vendor may
provide by notice to the Company and to the Purchaser as provided for in
Clause 8.1 hereof;
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b.
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the
Company shall effect payment in full of the Principal Amount and all
interest and any charges that may accrue to the account of the Vendor
under this Agreement and the General Security Agreement on or before
Friday, 12:00 p.m. MST December 31, 2010 subject to the provisions of this
paragraph. For clarity, it is understood and agreed that any
amount of the Principal Amount plus accrued interest that has not been
paid prior to December 31, 2010 will be paid on December 31,
2010;
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c.
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Interest
shall accrue on the Principal Amount from the Effective Date to payment in
full of all the Principal Amount, all accrued interest and any and all
charges that arise hereunder and that accrued to the account of the Vendor
hereunder, to and including any judgment hereunder for unpaid monies and
to and including full collection thereof, at a rate of 6.75% per
annum;
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d.
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The
Company shall remit payment in full of all interest as it accrues at each
calendar quarter-end and deliver payment thereof to the Vendor on the
first business day following each quarter-end; however the
first payment of
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interest
for the period from the Effective Date and ending on June 30, 2008 shall
be due and be paid by the Company to the Vendor on July 1,
2008;
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e.
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Effective
on January 2, 2009, regardless of whether or not the Company is in full
compliance hereunder, the Company shall be required to make and deliver to
the Vendor either of the following:
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(a)
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a
payment to the Vendor equal to a portion of the Principal Sum in the
amount of $125,000.00 accompanied by the interest remittance payment for
the quarter ending December 31, 2008;
OR
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(b)
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a
payment to the Vendor of the Principal Amount IN TOTAL to the Vendor in
the amount of $350,000.00 accompanied
by:
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(i)
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the
interest remittance payment for the quarter ending December 31, 2008; plus
a sum equal to accrued interest on the TOTAL Principal Amount outstanding,
if any; AND
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(ii)
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a
payment equal to the interest that accrued on the Principal Amount under
this Agreement for the two calendar quarters ending December 31,
2008.
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f.
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If
the Company chooses and timely performs election 2.2(c)e.(a) above,
effective on January 2, 2010, regardless of whether or not the Company is
in full compliance hereunder, the Company shall be required to make and
deliver to the Vendor either of the
following:
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(a)
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a
payment to the Vendor equal to a portion of the Principal Sum in the
amount of $125,000.00 accompanied by the interest remittance payment for
the quarter ending December 31, 2009;
OR
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(b)
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a
payment to the Vendor of the balance of the Principal Amount unpaid to the
Vendor on December 31, 2009 accompanied
by:
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(i)
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the
interest remittance payment for the quarter ending December 31, 2009; plus
a sum equal to accrued interest on the TOTAL Principal Amount outstanding,
if any; AND
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(ii)
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a
payment equal to the interest that accrued on the Principal Amount under
this Agreement for the calendar quarter ending December 31,
2009.
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g.
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Except
as specifically provided for above, the Company shall not have the right
to pre-pay any amount on account of the Principal Amount at any time
during the term of the payment obligation; AND if the Company
should attempt to do so, the Vendor shall be unconditionally entitled and
without any rights arising thereby in the Company, to reject payment
thereof and to insist upon the specific performance by the Company of the
conditions of the payment obligation of this
Clause;
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h.
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The
Company shall sign and deliver a General Security Agreement to the Vendor
(attached hereto as Schedule “D”) to secure in and to the Vendor all such
personal and real property rights of the Company, as of the Closing Date
to and including the day the Company pays in full all its accrued
obligations hereunder, and entitle the Vendor to file a “financing
statement” to record the interests and rights of the Vendor hereunder, all
as such quoted terms are defined in and as the rights of the Vendor arise
under the Personal Property Security Act, RSA (such real property
interests shall be those attached hereto in Schedule
“C”);
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i.
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The
Company’s payment obligation:
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(a)
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shall
be a personal obligation between the Company and the Vendor and shall not
be assignable in whole or in part, in law or in equity by the Company;
except with the prior written consent of the Vendor such consent not to be
unreasonably withheld;
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(b)
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subject
to time being of the essence;
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(c)
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shall
enure to the benefit of the Vendor and his respective successors and
assignees, for which the Vendor shall be entitled to assign his rights
hereunder in whole or in part and which assignment shall be effective upon
the Vendor’s delivery of a notice thereof with full particulars to the
Company;
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3.
ADDITIONAL
PROVISIONS
3.1 The
Purchaser shall pay the Vendor's consulting company, Kerrisdale
Consulting Inc., the sum of $1,000.00 CDN. (exclusive of
GST) per month, for one year, commencing January 1, 2008, in consideration for
consulting services to be performed by the Vendor for the Purchaser in respect
to the operations of the Company, including the consolidation of the interests
in the operating assets of the Company. A copy of the Management
Agreement shall be attached hereto as Schedule “E”. There will
be a lump sum payment of $6,000.00 CDN. plus GST on June 18th, 2008,
as per the terms of the Management Agreement.
3.2 The
Company agrees to make a payment of $500.00 CDN. (exclusive of GST) per month to
Kerrisdale Consulting Inc. for a period of
one year, commencing January 1, 2008, in consideration of the sub-lease by the
Company of an office located at Xxxxx 000, 000 - 0xx Xxxxxx
X.X., Xxxxxxx, Xxxxxxx X0X 0X0.
4. REPRESENTATIONS
AND WARRANTIES OF THE VENDOR AND THE COMPANY
4.1 Representations. Each
of the Vendor and the Company jointly and severally represent and warrant to the
Purchaser (and acknowledge that the Purchaser is relying upon such
representations and warranties in entering into this Agreement and completing
the transactions contemplated hereby) that except as disclosed in Schedule "B"
attached hereto:
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(a)
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the
Company is duly incorporated and organized, validly subsisting and in good
standing under the laws of the Province of
Alberta;
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(b)
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the
authorized capital of the Company consists of an unlimited number of Class
A voting shares and an unlimited number of Class B non-voting shares of
which 100 Class A shares are validly issued and outstanding as fully paid
and non-assessable as of the date hereof, and there are no other shares of
the Company issued and outstanding;
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(c)
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all
the issued and outstanding shares in the capital of the Company are duly
authorized, validly issued, fully paid, non-assessable and issued in
compliance with all applicable corporate, securities and other
laws;
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(d)
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the
Vendor is the legal and beneficial owner of the Shares, holds such Shares
free and clear of any and all liens, adverse claims, charges, pledges,
hypothecations and encumbrances
whatsoever;
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(e)
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the
Vendor has full and absolute right, power 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 Shares to the Purchaser as
contemplated hereby;
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(f)
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no
person, firm or corporation has any agreement or option or a right capable
of becoming an agreement or option for the purchase of any of the Shares
or for the purchase of any of the
unissued shares in the capital stock of the Company except as disclosed in
Schedule "B" attached hereto;
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(g)
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there
are no shareholders agreements, proxies, voting trust agreements or
similar agreements among the Vendor or any other parties with respect to
the Shares;
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(h)
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the
Vendor is not acting as nominee, agent, trustee, executor, administrator
or other legal representative of any person in the sale of the Shares
hereunder;
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(i)
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neither
the Vendor nor the company have agreed to pay any finder=s
fee or commissions in connection with the sale of the Shares contemplated
by this
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Agreement
for which the Purchaser or the Company shall have any obligation or
liability;
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(j)
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the
Company has full power and authority to enter into and perform its
obligations under this Agreement;
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(k)
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the
execution and delivery of this Agreement has been duly authorized by the
Company and constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, subject to the qualification
that enforceability may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and to the extent that remedies
of specific performance and injunction, being equitable remedies, may only
be granted in the discretion of the court having
jurisdiction;
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(l)
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the
performance of this Agreement will not be in violation of the
Articles, Bylaws or other constating documents of the Company or
of any agreement to which the Vendor or the Company is a party
and will not give any person, firm or corporation any right to terminate
or cancel any agreement or any right enjoyed by the Company nor result in
the creation or imposition of any lien, encumbrance or restriction of any
nature whatsoever in favour of any third party upon or against the assets
of the Company;
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(m)
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the
Company has the corporate power to own the Property owned by it and to
carry on the business carried on by it and is duly qualified or licensed
to carry on business in every jurisdiction in which the character of the
Property and assets owned by the Company or the nature of the business
conducted by the Company requires the Company to be so licensed or
qualified;
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(n)
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the
Company has good and marketable title to the Property and assets owned and
used by it free and clear of any mortgage, pledge, deed of trust, lien,
conditional sale agreement, encumbrance, security interest, charge or
adverse claim whatsoever, except as disclosed in Schedule "B"
hereto;
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(o)
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the
Company does not carry on business in any jurisdiction other than Alberta
and is not extra-provincially registered in any
jurisdiction;
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(p)
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the
Company is not a party to, or any of its Property or assets bound or
affected by any contract, agreement, deed, instrument or other document,
including any agreement of guarantee, indemnification or other like
commitment, whereby the Company may be held liable for the obligations,
liabilities, contingent or otherwise, or indebtedness of any other person,
firm or corporation;
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9
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(q)
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there
are no actions, suits, claims or proceedings, whether or not purportedly
on behalf
of the Company, pending or in existence or threatened against or affecting
the Company at law or in equity or before or by any federal ,provincial,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign and there is not
now outstanding any order, writ, injunction or judgment of any
court, administrative agency or governmental body or arbitration tribunal
issued and directed against the Company or any of its properties, assets,
businesses or prospects or against any of the
Shares;
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(r)
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the
Company is not in material breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which it is subject or which
apply to it;
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(s)
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the
Company is not a party to any collective agreement with any labour union
or other association of employees and the Company has no contract with any
employee, officer, officer, professional advisor or other individual which
cannot be lawfully terminated without recourse by the other party or
parties thereto on not more than thirty (30) days'
notice;
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(t)
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the
Company is not a party to any material written or oral agreement
respecting cessation of employment or compensation therefor, nor does it
have any officers, employees or consultants who may be dismissed except on
less than one month's prior notice, or payment in lieu
thereof;
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(u)
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the
Company is not in default or breach of any contracts, agreements,
indentures, leases or other instruments to which it is a party or by which
it is bound, which default or breach could, if acted upon by the party or
parties legally entitle to do so, materially, adversely affect
the business operations, assets or financial condition of the Company, and
all contracts, agreements, indentures and leases to which the Company is a
party are listed in Schedule "B"
hereto;
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(v)
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to
the best of the Vendor=s
knowledge, all facts relating to the Company or to its business,
operations, assets or financial conditions that are known or which on
reasonably enquiry ought to be known, to the Vendor and that are material
to the business, operations, assets or financial condition of the Company
have been disclosed to the
Purchaser;
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(w)
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all
material transactions of the Company have been promptly and properly
recorded or filed in or with its books and records, and the record book of
the Company contains complete and accurate minutes and records of all
meetings and proceedings of and resolutions passed by the shareholders and
the directors of the Company since its incorporation and all such meetings
were duly called and held;
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10
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(x)
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the
Vendor is not aware of any event or occurrence which has had, or might
reasonably
be expected to have, a material adverse effect on the business of the
Company or the results of any of its
operations;
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(y)
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the
Company has duly and timely filed all Canadian, local and foreign tax
returns, reports, declarations and other similar reports required to be
filed by it and all liabilities for taxes, assessments and other
governmental charges (including installments on account of such taxes,
assessments and charges and any interest or bounties thereon) upon all or
any of the income of the Company or its assets which were required to be
paid on or before the date hereof, have been duly paid or satisfied on or
before their respective due dates and all liabilities for taxes,
assessments or other governmental charges which fall due and become
payable prior to closing will have been fully paid prior to the Closing
Date;
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(z)
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the
Company has not entered into any long term leases or other long term
contracts of a material nature, except as disclosed in Schedule
"B";
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(aa)
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the
Company's Financial Statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent
basis and truly and accurately reflect the financial position of the
Company as of the last day of the period for which they were prepared and
since that time and except as disclosed in Schedule "B"
hereto;
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i)
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there
has been no material adverse change in the financial position or condition
of the Company, nor any damage, loss or other change in any circumstances
materially affecting the business, operations or properties of the
Company;
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ii)
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the
Company has not waived or surrendered any right of material
value;
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iii)
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the
Company has not discharged, satisfied or paid any lien, encumbrance,
obligation or liability other than current liabilities of the Company
incurred in the ordinary course of business;
and
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iv)
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the
business of the Company has been carried on in the ordinary
course.
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(bb)
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the
Company has no liabilities of any sort except as disclosed in the
Company=s
Financial Statements or Schedule "B"
hereto;
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(cc)
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neither
the Vendor nor members of his family nor any corporation controlled by the
Vendor or members of his family owns any property or assets which are used
by the Company;
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(dd)
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the
names of directors and officers of the Company are as
follows:
Xxxxx
Xxxxxx - President, Secretary and
Director;
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(ee)
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the
Company maintains such insurance against loss or damage to its assets and
with respect to public liability as is reasonably prudent for a company
such as the Company;
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(ff)
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the
Company has not entered into any non-disclosure, confidentiality,
non-competition or similar agreement or arrangement with any person, firm
or corporation;
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(gg)
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the
Company is not indebted or under any financial obligation to the Vendor,
or to any directors, officers, employees, shareholders and other insiders
of the Company whatsoever;
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(hh)
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neither
the Vendor nor any present or former officer, director, employee or
shareholder of the Company is now indebted or under any financial
obligation to the Company on any account
whatsoever;
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(ii)
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the
Vendor is not a non-resident of Canada as provided in the Income Tax Act
(Canada);
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(jj)
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the
Company has no outstanding options to purchase shares, management
agreements or credit cards;
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4.2 General Covenants of the
Vendor and the Company. The Vendor and the Company hereby
jointly and severally covenant with and undertake to the Purchaser
that:
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(a)
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they
will use reasonable efforts to assist the Purchaser to obtain all
necessary consents, amendments, novations or other instruments as may be
required, if any, of third parties in connection with the transactions
contemplated by this Agreement;
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(b)
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between
the date of this Agreement and the Closing Date, they will ensure that the
Company will carry on its business in the ordinary and normal course and
ensure that the Company will not enter into any transactions outside the
ordinary and normal course of its business, or any transactions of a
material nature, including without
limitation:
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i)
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entering
into any agreement or doing any act or thing that might reasonably be
expected to impair the ability of the Vendor or the company to complete
the Closing;
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ii)
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issuing
or re-issuing any capital stock (including, without limitation, treasury
stock), bonds, notes, warrants, options or other securities or becoming
subject to any obligation to issue any such
securities;
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iii)
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incurring
any liability or obligation, whether absolute or contingent, including
without limitation, purchase on credit or installment
basis;
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iv)
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failing
to pay or discharge any material current liability when it may become due
and payable;
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v)
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selling,
transferring or otherwise disposing of, mortgaging, pledging or subject to
any lien or any other encumbrance, any of the Company=s
assets, whether real or personal and whether tangible or intangible,
excepting inventory items and other similar items of personal property in
the ordinary course of business;
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vi)
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incurring
any additional indebtedness beyond its current liability incurred in the
normal course of business, except for reasonable accounting and legal fees
and disbursements incurred on behalf of the Company only in connection
with this transaction and the determination of its current tax liability
triggered as a result of the transaction contemplated by this Agreement,
register and transfer agent charges or amending the terms of, or extending
the time for payment of, any existing indebtedness or guarantee, or
mortgaging or pledging or subject to lien, charge, security interest or
any other encumbrance, any of the Company's assets, real or personal,
tangible or intangible, or making any loans, advances or guarantees to any
person or entity, including without limitation, salary advances to any
employee or officer;
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vii)
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making
any changes in any method of accounting or accounting practice of the
Company;
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(c)
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they
will cooperate with the Purchaser in support of all things
necessary to give effect to the tenor and intent of this
Agreement;
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(d)
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they
shall within thirty (30) days of the Closing, deliver up or cause to be
delivered up to the Purchaser at such address as the Purchaser may direct,
all books, records, files, documents and other data of the Company which
are not delivered to the Purchaser on
Closing.
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4.3 Survival. The
covenants, representations and warranties of the Vendor and the Company
contained herein shall be true and correct at and as of the Closing Date as
though such
representations
and warranties were made at and as of such time. Notwithstanding any
investigations or inquiries made by the Purchaser prior to the Closing Date or
the waiver of any condition by the Purchaser, the covenants, representations and
warranties of the Vendor and the Company shall survive the Closing and continue
in full force an effect thereafter for the benefit of the Purchaser for a period
of one year from the Closing Date.
4.4 Indemnity. The
Vendor shall indemnify and hold harmless the Purchaser from and against any
loss, claims, actions, liability, damages and costs, including any payment made
in good faith in settlement of any claim or potential claim, arising directly or
indirectly:
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(a)
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by
reason of any of the representations and warranties of the Vendor or the
Company set forth in section 4 proving not to have been true and correct
on the date hereof or as of the Closing
Date;
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(b)
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out
of the breach of the Vendor or the Company of any covenants or other
provision or obligation of the Vendor or the company contained in this
Agreement.
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4.5 The
agreement to indemnify contained in this Article 4, shall survive and continue
in existence and enure to the benefit of the Purchaser for a period of one year
from the Closing Date unless such claim is based on fraud, in which event, no
limitation of time shall apply as between the parties.
4.6 The
indemnification pursuant to Section 4.4 and Section 4.5 shall be limited to
$700,000.00 CDN.
4.7 The
obligation of indemnification shall not be applicable to single claims for
damages unless the damages in respect of any such single claim exceeds Five
Thousand ($5,000.00) Dollars.
4.8 Ongoing
Operations. Notwithstanding anything herein contained, the
Company shall
have the
right to conduct such business and to enter into such agreements as may be
necessary in the ordinary course of its business.
5.
PURCHASERS'
REPRESENTATIONS AND WARRANTIES
5.1
In order to induce the Vendor to enter into and consummate this Agreement, the
Purchaser represents and warrants in favour of the Vendor, as of the date
hereof, as follows:
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(a)
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the
Purchaser is a corporation duly incorporated under the laws of Nevada and
is a valid and subsisting corporation under the laws of
Nevada;
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(b)
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the
Purchaser has the requisite power, capacity and authority to enter into
this Agreement on the terms and conditions herein set forth, and all
necessary corporate action
has been taken by the Purchaser to authorize the execution, delivery and
performance of this Agreement and the transaction contemplated
herein;
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(c)
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this
Agreement and all documents required hereunder, when executed and
delivered by the Purchaser and when duly and properly executed and
delivered by the Vendor will be valid and binding agreements and
obligations, enforceable against the Purchaser in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and subject to general principles of
equity;
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(d)
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there
is no suit, action, litigation, arbitration proceeding or governmental
proceeding, including appeals and application for review, in progress,
pending or, as far as the Purchaser is aware threatened, against or
relating to the Purchaser or affecting the properties or business of the
Purchaser which if determined adversely to the Purchaser might materially
and adversely affect the properties, business, future prospects or
financial condition of the Purchaser, or the right of the Purchaser to
use, produce or sell its property and assets in whole or in
part. There is not presently outstanding against the Purchaser
any judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency or
arbitrator.
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(e)
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the
entering into by the Purchaser of this Agreement and the completion of the
transaction contemplated herein will not be in violation
of:
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(i)
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the
constating documents and by-laws of the
Purchaser;
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(ii)
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any
agreement to which the Purchaser is a party and will not give any person
or company any right to terminate or cancel any agreement or any right
enjoyed by the Purchaser because of such agreement, and will not result in
the acceleration, creation or imposition of any obligation, lien,
encumbrance or restriction of any nature whatsoever in favour of a third
party upon or against the Purchaser or the assets of the Purchaser;
or
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(iii)
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any
statute, regulation, rule, by-law, order, judgment, or decree by which the
Purchaser is bound; and
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(f)
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the
Purchaser has not incurred any obligation or liability, contingent or
otherwise, for broker's or finder's fees in respect of the transaction
contemplated by this Agreement
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5.2 Survival. The
representations and warranties of the Purchaser set forth herein shall be true
and correct at and as of the Closing Date as though such covenants,
representations and warranties were made at and as of such
time. Notwithstanding any investigations or inquiries
made
by the
Vendor prior to the Closing Date or the waiver of any condition by the Vendor,
the representations and warranties of the Purchaser shall survive the Closing
and shall continue in full force and effect thereafter for the benefit of the
Vendor.
5.2 Indemnity. The
Purchaser shall indemnify and save harmless the Vendor from and against any
loss, claims, damages, actions, liability and costs, including any payment made
in good faith in settlement of any claim or potential claim, arising directly or
indirectly form any of the said representations and warranties of the Purchaser
set forth in this Article 5 being incorrect or breached.
6.
CONDITIONS
PRECEDENT
6.1 Conditions Precedent of
Purchaser. The obligation of the Purchaser to complete the
purchase of the Shares contemplated by this Agreement is subject to the
fulfillment, at or prior to Closing, of each of the following conditions
precedent:
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(a)
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The
representations and warranties of the Vendor and the Company set forth in
Article 4 of this
Agreement shall be true and
correct as of the Closing as if
such
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representations
and warranties were made at and as of such time, and the Purchaser shall have
received a certificate to that effect from the Vendor;
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(b)
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the
Vendor and the Company shall have performed and complied with all
agreements, covenants and conditions required by this Agreement to be
performed or complied with by them prior to or at the
Closing;
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(c)
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the
Vendor and the Company shall have made available to the Purchaser or its
nominees, at all reasonable times prior to the Closing Date, the minute
book of the Company and all other material contracts, books, accounts,
records and other information with respect to the affairs of the
Company;
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(d)
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from
the date hereof through the Closing
Date;
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i)
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there
has been no material adverse change in the business, prospects, financial
condition, results of operations or the assets of the
Company;
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ii)
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the
Company shall not have suffered any liability, judgement, lien or
termination of any contract or the imposition of any obligation, the
effect of which shall be materially adverse to the
Company;
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iii)
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there
shall have been no other material adverse change of any kind with respect
to the Company other than in the ordinary course of its business
consistent with past practices or as permitted or contemplated by this
Agreement;
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(e)
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the
Company shall deliver the written resignations of the directors and
officers of the Company and the Company and the Vendor shall deliver
certified resolutions of the shareholders of
the Company appointing such persons to the board of directors of the
Company as the Purchaser may
direct;
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(f)
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the
Company shall deliver to the Purchaser certified copies of resolutions
changing the existing bank signing officers to nominees of the
Purchaser.
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6.2 Waiver by
Purchaser. The conditions precedent referred to in paragraph
6.1 are inserted for the exclusive benefit of the Purchaser and may be waived in
whole or in part by the Purchaser at any time prior to Closing by delivering to
the Vendor written notice to that effect. If any of the said
conditions are not complied with or performed to the Purchaser's reasonable
satisfaction on or before the Closing Date or compliance is not waived in
writing by the Purchaser, then the Purchaser shall be relieved of its
obligations to consummate the Closing.
6.3 Conditions Precedent of
Vendor. All obligations of the Vendor under this Agreement are
subject to the fulfillment, prior to or at Closing, of each of the following
conditions.
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(a)
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the
representations and warranties of the Purchaser set forth in Articles 5 of
this Agreement shall be true and correct as of the date of this Agreement
and shall be true and correct in all material respects as of the Closing
Day as if made by the Purchaser again at that time, and the Purchaser
shall deliver at Closing a certificate to such effect regarding the
Purchaser's representations and warranties dated on the Closing
Day;
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(b)
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the
Purchaser shall have performed and satisfied, in all material respects,
all covenants required by this Agreement to be performed and satisfied
prior to the Closing Day including payment of
the Purchase Price;
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(
c)
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at
the Closing, no action or proceeding shall have been instituted or
threatened by any person or entity before any court or governmental agency
to obtain damages in respect of this Agreement or to restrain or prohibit
the consummation of the transactions contemplated
herein;
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(d)
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the
Vendor shall have been provided with copies of any consents necessary to
give effect to the transactions contemplated herein;
and
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(e)
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the
Vendor shall have been provided with evidence that the GSA have been duly
issued and registered.
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17
6.4 Waiver by
Vendor. The conditions precedent referred to in paragraph 6.3
are inserted for the exclusive benefit of the Vendor and may be waived in whole
or in part by the Vendor at any time
prior to Closing by delivering to the Purchaser written notice to that
effect. If any of the said conditions are not complied with or
performed to the Vendor's reasonable satisfaction on or before the Closing Date
or compliance is not waived in writing by the Vendor, then the Vendor shall be
relieved of his obligations to consummate the Closing.
6.5 If
at the Closing all conditions of this Agreement have not been fulfilled or
waived by the party having discretion to waive such condition, then unless both
parties by mutual consent in writing agree to extend the Closing,
this Agreement shall terminate on that date, and upon such termination, the
parties shall be released from all further obligations hereunder except to the
extent that a party may have any claim against the other party hereto based on
an alleged breach or repudiation of this Agreement.
7.
CLOSING
ARRANGEMENTS
7.1 Time of
Closing. Subject to the terms and conditions hereof, the
Closing of the transactions contemplated hereby shall take place at the Place of
Closing at 2:00 p.m. Pacific time, on the Closing Date, provided always, that
the Closing shall take place on or before June 18, 2008 unless otherwise agreed
upon in writing by the parties hereto.
7.2 Deliveries by Vendor and the
Company. Upon Closing, the Vendor and/or the Company shall
deliver or cause to be delivered to the Purchaser:
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(a)
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the
Shares;
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(b)
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the
Vendor's Certificate referred to in paragraph
6.1(a);
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(c)
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the
certified true copy of the directors and shareholders resolutions referred
to in paragraphs 6.1(e)(f);
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(d)
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the
resignations of the directors and officers referred to in paragraph
6.1(e);
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(e)
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a
certificate of good standing;
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(f)
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the
corporate seal and the minute books of the Company;
and
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(g)
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such
other documents as the Purchaser may reasonably require to give effect to
the terms and intention of this
Agreement.
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7.3
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Deliveries by
Purchaser. Upon Closing, the Purchaser shall deliver to
the Vendor, all in a form approved by the Vendor’s
Solicitors:
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18
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(a)
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the
balance of the Purchase Price as provided for in paragraph 2.2(b)
hereof;
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(b) | the sum of Six Thousand ($6,000.00) Dollars plus GST as per the terms of the Management Agreement; | |
(c) | resolution of directors of the Purchaser approving the purchase; | |
(d ) | GSA and related documents: |
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(i)
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Financing
Statement;
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(ii)
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Officer's
Certificate;
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(iii)
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Incumbency
Certificate;
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(iv)
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Acknowledgement
and Waiver;
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(v)
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resolution
of the directors of the Company approving the General Security Agreement
as provided for in paragraph
6.2(e);
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(e)
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opinion
of the Purchaser's Solicitors regarding the GSA in a form satisfactory to
the Vendor's Solicitors.
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(f)
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an
Officers Certificate regarding the truth and accuracy of the Purchaser’s
representations and warranties.
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(g)
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such
other documents as the Vendor's solicitor may reasonably require to give
effect to the terms and intention of this
Agreement.
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8.
GENERAL
PROVISIONS
8.1 Further
Assurances. The parties shall deliver to each other such
further documentation and shall perform such further acts as and when the same
may be required to carry out and give effect to the terms and intent of this
Agreement.
8.2 Communications and
Notices. All notices and other communications given in
connection with this Agreement shall be in writing and shall, except in the
event of mail strike, during which time all notices must be personally
delivered, be sufficiently given if delivered in person or telefaxed or sent by
registered mail, postage prepaid, to the parties as the following
addresses:
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To
the Vendor:
|
XXXXX
XXXXXX
Xxxxx
000, 000 - 0xx
Xxxxxx X.X.
Xxxxxxx,
Xxxxxxx X0X 0X0
|
|
To
the Purchaser:
|
SCOUT
EXPLORATION INC.
000
- 000 Xxxx Xxxxxx
Xxxxxxxxx,
X.X. X0X 0X0
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To
the Company:
|
KERRISDALE
RESOURCES LTD.
Xxxxx
000, 000 - 0xx
Xxxxxx X.X.
Xxxxxxx,
Xxxxxxx X0X 0X0
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Any such
notices or other communications sent by registered mail addressed as aforesaid
shall be deemed to be received by the addressee thereof on the third business
day after the mailing thereof. Any such notices personally delivered
or telefaxed shall be deemed delivered on the day of delivery. Any
party hereto may change its address for service by notices in writing to the
other parties hereto.
8.3 Time of
Essence. Time shall be of the essence of this
Agreement.
8.4 Waiver and
Amendment. This Agreement may only be amended by further
written agreement executed and delivered by all of the parties. No
wavier or consent by a part of or to any breach or default by any other party
shall be effective unless evidenced in writing, executed and delivered by the
party so waiving or consenting and no waiver or consent effectively given as
aforesaid shall operate as a waiver of or consent to any further or other breach
or default in relating to the same or any other provision of this
Agreement.
8.5 Entirety of
Agreement. This Agreement contains the entire agreement among
the parties pertaining to the subject matter hereof and supercedes and replaces
all previous written and oral agreements among the parties with respect to the
subject matter hereof.
8.6 Successors and Permitted
Assigns. This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors, personal
representatives and permitted assigns. Neither the Vendor, the
Company nor the Purchaser shall assign, transfer or encumber this Agreement or
any interest herein without the prior written consent of the other parties
hereto.
8.7 Execution in
Counterparts. This Agreement may be signed by the parties in
as many counterparts as may be necessary, each of which so signed shall be
deemed to be an original and such counterparts together shall constitute one and
the same instrument and notwithstanding the date of execution shall be deemed to
bear the date as et forth above.
IN
WITNESS WHEREOF the parties hereto have duly executed this Agreement as of the
day and year first above written.
SIGNED,
SEALED AND DELIVERED by XXXXX XXXXXX, in the
presence of:
________________________________
Name
________________________________
Address
________________________________
Occupation
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)
)
)
)
)
)
)
)
)
)
)
)
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______________________________
XXXXX
XXXXXX
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THE
CORPORATE SEAL of SCOUT
EXPLORATION INC., in the presence of:
________________________________
________________________________
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)
)
)
)
)
)
)
)
)
)
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C/S
|
21
THE
CORPORATE SEAL of
KERRISDALE RESOURCES
LTD., in
the
presence of:
________________________________
________________________________
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)
)
)
)
)
)
)
)
)
)
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C/S
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