Exhibit 8(a)
SHARE PURCHASE AGREEMENT
Dated for Reference January 11, 1999
Between
POWERTECH, INC.
as Purchaser
and
XXXXX XXXXXXX AND XXXXXX XXXX
as Vendors
BULL, HOUSSER & XXXXXX
------------
BARRISTERS & SOLICITORS
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made the 11th day of January, 1999.
BETWEEN
XXXXX XXXXXXX, businessman, of 000 Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0,
and
XXXXXX XXXX, businessman, of 00000 00xx Xxxxxx, Xxxxxxxx,
Xxxxxxx, Xxxxxx, X0X 0X0
(collectively the "Vendors" and individually by their full
names)
AND:
POWERTECH, INC., a Nevada corporation with an office at 0000
X. Xxxxxx Xxxxx, Xxxxxx, Xxxxxxx, X.X.X. 00000
(the "Purchaser")
WHEREAS:
A. The Vendors are the registered holders and beneficial owners of all the
issued and outstanding shares of NetSentry Technology Inc. (the "Company") as
follows:
In the name of Class A Common Shares
Xxxxx Xxxxxxx 100,000
Xxxxxx Xxxx 100,000
B. The Vendors wish to sell, and the Purchaser wishes to purchase, the Vendors'
Shares.
IN CONSIDERATION of the covenants and agreements in this Agreement, the parties
agree as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
(a) "Agreement" means this agreement including any recitals and Schedules to
this agreement, as amended, supplemented or restated from time to time;
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(b) "Ancillary Agreements" means all agreements, certificates and other
instruments delivered or given pursuant to this Agreement;
(c) "Applicable Laws" in respect of any Person, property, transaction or
event, means all present and future laws, statutes, regulations,
treaties, judgments and decrees applicable to that Person, property,
transaction or event and, whether or not having the force of law, all
applicable official directives, rules, consents, approvals,
authorizations, guidelines, orders and policies of any Governmental
Authority having or purporting to have authority over that Person,
property transaction or event;
(d) "Associates" as describing the relationship between two Persons, means
that they are "related persons" as defined in the Tax Act;
(e) "Business" means the business of software design, development and
marketing as now carried on by the Company;
(f) "Business Day" means a day other than a Saturday, Sunday or statutory
holiday in British Columbia. The Business Day will end at 4:30 p.m. PST
on that day;
(g) "Closing" has the meaning given to it in Section 2.1;
(h) "Closing Date" has the meaning given to it in Section 7.1;
(i) "Company" means NetSentry Technology Inc., a corporation incorporated
under the laws of the Province of British Columbia with a registered and
records office at 2500 - Four Bentall Centre, 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, X.X. X0X 0X0;
(j) "GAAP" means generally accepted accounting principles in effect in
Canada including the accounting recommendations published in the
Handbook of the Canadian Institute of Chartered Accountants or generally
accepted accounting principles in effect in the United States of America
as indicated;
(k) "Governmental Authority" means any domestic or foreign government,
including any federal, provincial, state, territorial or municipal
government, and any government agency, tribunal, commission or other
authority exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, government;
(l) "Intellectual Property" means, collectively, all right, title, and
interest of the Company in and to all copyrights, moral rights, patents,
trade-marks, trade names, business names, know-how, trade secrets or
confidential information, industrial designs, integrated circuit
topographies, plant breeder's rights and other industrial or
intellectual property, whether registered or unregistered, including all
improvements, modifications or enhancements thereto, owned by,
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licensed to, or used by, the Company in connection with the Business all
as more particularly described in Schedule 1.1(l);
(m) "Interim Period" means the period between the date of this Agreement and
the Closing Date;
(n) "Lien" means any mortgage, lien, charge, hypothec or encumbrance,
whether fixed or floating, on, or any security interest in, any
property, whether real, personal or mixed, tangible or intangible, any
pledge or hypothecation of any property, any deposit arrangement,
priority, conditional sale agreement, other title retention agreement or
equipment trust, capital lease or other security arrangements of any
kind (and including, in the case of shares or other securities,
shareholders agreements, voting trust agreements and similar
arrangements);
(o) "Person" means any natural person, sole proprietorship, partnership,
corporation, trust, joint venture, any Governmental Authority or any
incorporated or unincorporated entity or association of any nature;
(p) "Pubco Shares" has the meaning given to it in Section 2.2;
(q) "Tax" or "Taxes" includes all present and future taxes, surtaxes,
duties, levies, imposts, rates, fees, assessments, withholdings, dues
and other charges of any nature imposed by any Governmental Authority
(including income, capital (including large corporations), withholding,
consumption, sales, use, transfer, goods and services or other
value-added, excise, customs, anti-dumping, stumpage, countervail, net
worth, stamp, registration, franchise, payroll, employment, health,
education, business, school, property, local improvement, development,
education development and occupation taxes, surtaxes, duties, levies,
imposts, rates, fees, assessments, withholdings, dues and charges)
together with all fines, interest, penalties on or in respect of, or in
lieu of or for non-collection of, those taxes, surtaxes, duties, levies,
imposts, rates, fees, assessments, withholdings, dues and other charges;
(r) "Time of Closing" means 10:00 a.m. on the Closing Date;
(s) "Vendors' Shares" means all (and not less than all) of the issued and
outstanding shares of the Company as more particularly described in
Recital A; and
(t) "written" includes printed, typewritten, faxed or otherwise capable of
being visibly reproduced at the point of reception and "in writing" has
a corresponding meaning.
1.2 Section References
Unless otherwise specified, references in this Agreement to "Sections" and
"Schedules" are to Sections of, and Schedules to, this Agreement.
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1.3 Statutory References
Unless otherwise specified, each reference to a statute is deemed to be a
reference to that statute, and to the regulations made under that statute, as
amended or re-enacted from time to time.
1.4 Number and Gender
Unless otherwise specified, words importing the singular include the plural and
vice versa and words importing gender include all genders.
1.5 Time of Day
Unless otherwise specified, references to time of day or date mean the local
time or date in Vancouver, British Columbia.
1.6 Use of the Word "Including"
The word "including" when following any general term or statement will not be
construed as limiting the general term or statement to the specific matter
immediately following the word "including" or to similar matters, and the
general term or statement will be construed as referring to all matters that
reasonably could fall within the broadest possible scope of the general term or
statement.
1.7 Currency
All references to amounts of money mean lawful currency of the United States of
America.
1.8 Severability
Each provision of this Agreement is several. If any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any jurisdiction, the
illegality, invalidity or unenforceability of that provision will not affect:
(a) the legality, validity or enforceability of the remaining provisions of
this Agreement; or
(b) the legality, validity or enforceability of that provision in any other
jurisdiction;
except that if:
(c) on the reasonable construction of this Agreement as a whole, the
applicability of the other provision presumes the validity and
enforceability of the particular provision, the other provision will be
deemed also to be invalid or unenforceable; and
(d) as a result of the determination by a court of competent jurisdiction
that any part of this Agreement is unenforceable or invalid and, as a
result of this Section 1.8, the basic intentions of the parties in this
Agreement are entirely frustrated, the parties
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will use all reasonable efforts to amend, supplement or otherwise vary
this Agreement to confirm their mutual intention in entering into this
Agreement.
1.9 Time of Essence
Time is of the essence of this Agreement.
2. PURCHASE AND SALE
2.1 Purchase and Sale Covenant
On the basis of the warranties, representations and covenants of the Purchaser
and Vendors in this Agreement and subject to the fulfilment of any condition
that has not been waived by the party entitled to the benefit thereof, the
Purchaser will purchase from the Vendors and the Vendors will sell the Vendors'
Shares to the Purchaser at the closing herein provided for (the "Closing") on
the terms and conditions herein set forth.
2.2 Purchase Price
Subject to the terms and conditions of this Agreement, the price for the
Vendors' Shares is $95,000 payable by the issuance to the Vendors 4,885,000
voting common shares in the capital of the Purchaser (the "Pubco Shares"), and
the Purchaser will issue to the Vendors the Pubco Shares in the following
amounts on the Closing Date:
Vendor Number of Shares
------ ----------------
Xxxxx Xxxxxxx 2,442,500
Xxxxxx Xxxx 2,442,500
3. VENDORS' REPRESENTATIONS AND WARRANTIES
3.1 Corporate and Share Representations
The Vendors represent and warrant that:
(a) Incorporation. The Company is a corporation duly incorporated, organized
and existing under the Company Act (British Columbia), is not a
reporting company, and is a valid and subsisting company in good
standing with respect to filing of annual reports with the Registrar of
Companies of British Columbia;
(b) Authorized Capital. The authorized capital of the Company is 1,000,000
shares divided into 500,000 Class A common shares without par value and
500,000 Class B preference shares without par value of which there are
issued and outstanding as fully paid and non-assessable 200,000 Class A
common shares and zero Class B preference shares;
(c) Ownership. The facts and information contained in the recitals to this
Agreement are true in every respect;
(d) Valid Issuance. The Vendors' Shares are validly issued and outstanding
as fully paid and non-assessable in the capital of the Company and have
been issued in compliance with all applicable laws;
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(e) Liens. The Vendors' Shares are free and clear of all Liens other than
those restrictions on transfer contained in the articles of the Company;
(f) Authority. The Vendors have good and sufficient right and authority to
enter into this Agreement on the terms and conditions herein set forth
and to implement this Agreement and, in particular, to transfer to the
Purchaser the legal title and beneficial ownership of the Vendors'
Shares free and clear of all Liens other than those restrictions on
transfer contained in the articles of the Company;
(g) No Options, etc. Except pursuant to an Asset Purchase and Sale Agreement
made as of the 10th day of September, 1998 between Xxxxxxxxxx.xxx Inc.
and the Company and two promissory notes each in the amount of $100,000
issued by the Company to Mr. Xxx Para, no Person, other than the
Purchaser, has any right, present or future, contingent or absolute
(whether by law, pre-emptive or contract), to purchase the Vendors'
Shares or to require the Company to issue any share in its capital and
no triggering event has occurred under the Family Relations Act (British
Columbia) which gives a Person any right to the Vendors' Shares of that
Vendor;
(h) Other Investments. The Company does not own, and is not a party to any
agreement to acquire, directly or indirectly, any shares in the capital
of, any partnership interest in or any other equity interests in, any
Person, and the Company has no agreement to acquire, lease, or
amalgamate with any other business operations;
(i) Directors and Officers. The directors and officers of the Company
together with their position are as follows:
(1) Director, President and Chief Executive Officer: Xxxxx Xxxxxxx
(2) Director, Executive Vice President and Secretary: Xxxxxx Xxxx
3.2 Financial and Tax Representations
The Vendors represent and warrant that:
(a) Liabilities. There are no liabilities or material adverse changes in the
affairs, contingent or otherwise, known or unknown, of the Company which
are not
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disclosed or reflected herein and except those incurred in the ordinary
course of its business; and
(b) Tax Status. Under the provisions of the Income Tax Acts of Canada and
British Columbia, the Company has been since incorporation and is now a
Canadian-controlled private corporation.
3.3 Asset Representations
The Vendor represents and warrants that:
(a) Business. The Business is the only material business operation carried
on by the Company at present;
(b) Title. The Company has good and marketable title to and possession of
all assets used by the Company in carrying out its Business free and
clear of all Liens;
(c) Equipment. The equipment and machinery used by the Company in its
Business constitutes all of the equipment and machinery used by the
Company in its Business, were purchased new, since their purchase have
been maintained in a manner recommended by their manufacturers and
installers and are in normal operating condition and in a state of
reasonable maintenance and repair; and
(d) Intellectual Property. The Company owns, licenses or uses the
Intellectual Property and neither the Company nor the Vendors are aware
of any infringement of the Intellectual Property of the Company and are
not aware of any infringement by the Company of any intellectual
property of any other Person.
3.4 Contractual Representations
The Vendors represent and warrant that:
(a) Contracts. The Company does not have any contracts, agreements, pension
plans, profit sharing plans, bonus plans, undertakings or arrangements
either oral, written or implied with any Person including employees,
agents, lessees, licensees, suppliers, officers or directors which are
material to the Company or which cannot be terminated on less than one
month's notice or which require any payments by the Company on
termination and the Company has complied with the terms and conditions
of all agreements to which it is a party and is not aware of any
defaults by the Company or the other party to any such agreement;
(b) Litigation. There are no actions, suits, judgments, investigations or
proceedings outstanding or pending or, to the best knowledge of the
Vendors, threatened against or affecting the Company at law or at
equity;
(c) Compliance with Laws. The Company is not in breach of Applicable Laws to
which it is subject or which apply to it;
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(d) Indebtedness by Vendors. Neither the Vendors nor any officer, director,
employee or shareholder of the Company are now indebted or under
obligation to the Company on any account whatsoever;
(e) Indebtedness to Vendors. The Company is not indebted or under any
obligation to the Vendors or their Associates on any account whatsoever;
and
(f) Canadian Resident. The Vendors are residents of Canada for all purposes
of the Income Tax Act of Canada.
3.5 Employee Representations
The Vendors represent and warrant that the Company has 2 employees and that as
of the date hereof, the Company has made offers of employment to 5 additional
persons.
3.6 General Vendor Representations
The Vendors represent and warrant that:
(a) No Conflict. The making of this Agreement and the completion of the
transactions contemplated hereby and the performance of and compliance
with the terms hereof does not conflict with or result in the breach of,
or the acceleration of, any terms, provisions or conditions of or
constitute a default under the memorandum or articles of the Company or
any indenture, mortgage, deed of trust, agreement, lease, franchise,
certificate, or other instrument to which the Company or the Vendors are
a party or are bound;
(b) Full Disclosure. None of the Vendors' representations, warranties or
statements contained in this Agreement contain any untrue statement of
fact or omit to state any fact necessary in order to make any such
representations, warranties or statements not misleading and all
information relating to the Company which is known or would, on
reasonable enquiry, be known to the Vendors and which may be material to
a purchase for value of the Vendors' Shares has been disclosed in
writing to the Purchaser and any such information arising on or before
the Closing Date will forthwith be disclosed in writing to the
Purchaser;
(c) Enforceability. This Agreement has been duly executed and delivered by
each of the Vendors and is a legal, valid and binding obligation of each
Vendor, enforceable against the Vendors by the Purchaser in accordance
with its terms.
3.7 Certificates
All certificates of each Vendor delivered to the Purchaser and its
representatives pursuant to this Agreement, and the information contained in
each, will be deemed to be part of the representations and warranties of the
Vendors contained in this Section 3.
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4. PURCHASER'S REPRESENTATIONS AND WARRANTIES
4.1 Purchaser's Representations and Warranties
The Purchaser represents and warrants that:
(a) Incorporation. The Purchaser is a corporation duly incorporated,
organized and existing under the laws of the state of Nevada and is a
valid and subsisting company in good standing in all respects under the
laws of the State of Nevada;
(b) Authorized Capital. The authorized capital of the Purchaser is
100,000,000 common shares with a par value of $.001 per share and as of
the date hereof, there are or will be at the Closing Date validly issued
and outstanding as fully paid and non-assessable 9,500,000 common
shares;
(c) Authority. The Purchaser has good and sufficient right and authority to
enter into this Agreement on the terms and conditions herein set forth
and to implement and perform its obligations under this Agreement and,
in particular, to issue to and provide the Vendors with the legal title
and beneficial ownership of the Pubco Shares free and clear of all Liens
other than those restrictions on transfer set forth under Rule 144 of
the Rules and Regulations of the Securities and Exchange Commission of
the United States;
(d) Other Investments. The Purchaser does not own, and is not a party to any
agreement to acquire, directly or indirectly, any shares in the capital
of, any partnership interest in or any other equity interests in, any
Person, and the Purchaser has no agreement to acquire, lease, or
amalgamate with any other business operations;
(e) Registration Status. The shares of the Purchaser have been registered
with the National Association of Securities Dealers (the "NASD") and
have been approved by the NASD for listing and quotation on the NASD
Over the Counter Bulletin Board;
(f) Directors and Officers. The directors and officers of the Purchaser
together with their position are as follows:
(1) Director and President: Xxxxx Xxxxxxx
(2) Director, Secretary and Treasurer: Xxxxx Para
4.2 Financial Representations
The Purchaser represents and warrants that:
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(a) Liabilities. There are no liabilities or material adverse changes in the
affairs, contingent or otherwise, known or unknown, of the Purchaser
which are not disclosed or reflected herein and except those incurred in
the ordinary course of its business; and
(b) Assets. The Purchaser does not own or lease any assets or properties.
4.3 Contractual Representations
The Purchaser represents and warrants that:
(a) Contracts. The Purchaser does not have any contracts, agreements,
pension plans, profit sharing plans, bonus plans, undertakings or
arrangements either oral, written or implied with any Person including
employees, agents, lessees, licensees, suppliers, officers or directors
which are material to the Purchaser or which cannot be terminated on
less than one month's notice or which require any payment by the
Purchaser on termination and the Purchaser has complied with the terms
and conditions of all agreements to which it is a party and is not aware
of any defaults by the Purchaser or the other party to any such
agreement
(b) Litigation. There are no actions, suits, judgments, investigations or
proceedings outstanding or pending or, to the best knowledge of the
Purchaser, threatened against or affecting the Purchaser at law or at
equity;
(c) Compliance with Laws. The Purchaser is not in breach of Applicable Laws
to which it is subject or which apply to it;
(d) Indebtedness by Directors and Officers. No officer, director, employee
or shareholder of the Purchaser is now indebted or under obligation to
the Purchaser on any account whatsoever; and
(e) Indebtedness to Directors and Officers. The Purchaser is not indebted or
under any obligation to any officer, director, employee or shareholder
of the Purchaser on any account whatsoever except for CDN $2,000.00 to
Xxxxx Xxxxxxx.
4.4 Employee Representations
The Purchaser represents and warrants that the Purchaser has no employees.
4.5 General Vendor Representations
The Purchaser represents and warrants that:
(a) No Conflict. The making of this Agreement and the completion of the
transactions contemplated hereby and the performance of and compliance
with the terms hereof does not conflict with or result in the breach of,
or the acceleration of, any terms, provisions or conditions of or
constitute a default under the
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constating documents of the Purchaser or any indenture, mortgage, deed
of trust, agreement, lease, franchise, certificate, or other instrument
to which the Purchaser is a party or is bound;
(b) Full Disclosure. None of the Purchaser's representations, warranties or
statements contained in this Agreement contain any untrue statement of
fact or omit to state any fact necessary in order to make any such
representations, warranties or statements not misleading and all
information relating to the Purchaser which is known or would, on
reasonable enquiry, be known to the Purchaser and which may be material
to a purchase for value of the Pubco Shares has been disclosed in
writing to the Vendors and any such information arising on or before the
Closing Date will forthwith be disclosed in writing to the Vendors;
(c) Enforceability. This Agreement has been duly executed and delivered by
the Purchaser and is a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser by the Vendors in
accordance with its terms.
4.6 Certificates
All certificates of the Purchaser delivered to the Vendors and their
representatives pursuant to this Agreement, and the information contained in
each, will be deemed to be part of the representations and warranties of the
Purchaser contained in this Section 4.
5. COVENANTS
5.1 Vendors' Covenants
During the Interim Period, the Vendors will cause the Company to carry on its
business in the ordinary and normal course in a prudent, businesslike, and
efficient manner and substantially in accordance with the procedures and
practices in effect on the date hereof and the Vendors will cause the Company
to:
(a) use its best efforts to preserve and maintain the goodwill of its
Business;
(b) do all necessary repairs and maintenance to its assets and take
reasonable care to protect and safeguard those assets; and
(c) cause to be carried out prior to January 20, 1999 an audit of the books
of the Company all in accordance with GAAP.
5.2 Purchaser's Covenants
During the Interim Period, the Purchaser will carry on its business in the
ordinary and normal course in a prudent, businesslike, and efficient manner and
substantially in accordance with the procedures and practices in effect on the
date hereof. Without limiting the generality of the foregoing, during the
Interim Period the Purchaser will not, without the prior consent in writing of
the Purchaser:
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(a) enter into any contract or assume or incur any liability relating to or
in any way affecting its business;
(b) waive or surrender any material right in connection with its business;
(c) make any capital expenditures or commitment therefor in connection with
its business;
(d) issue shares in its capital or options or rights to purchase shares in
its capital such that the total number of issued and outstanding shares
in the capital of the Purchaser will exceed 15,194,800 shares on a fully
diluted basis including the Pubco Shares;
(e) pay or declare any dividends, make any distributions, or redeem or
repurchase any of the Purchaser's shares; or
(f) alter the constating documents of the Purchaser
and the Purchaser will:
(g) use its best efforts to preserve and maintain the goodwill of its
business; and
(h) use its best efforts to raise and have in its account, prior to the
Closing Date, funds in an amount not less than $850,000 which funds will
be free and clear of any Liens; and
(i) cause to be carried out prior to January 20, 1999 an audit of its books
all in accordance with U.S. GAAP.
5.3 Access for Due Diligence
During the Interim Period, the Purchasers will, and the Vendors will cause the
Company to, at all reasonable times prior to the Closing Date to permit
representatives of all parties full access to the books and records of the
Purchaser and the Company including all contracts and agreements, minute books
and share registers and to give the parties and their representatives such
copies and information with respect thereto as may be reasonably required and to
permit the parties to make such audit of the books of account of the Company and
the Purchaser as any individual party may see fit. The Purchaser will, and the
Vendors will cause the Company to, cause its senior officers to discuss and
answer fully any and all questions relating to the business and affairs of the
Company or the Purchaser. The provisions of this Section 5.3 are without
prejudice to the warranties and representations of the Vendors and the Purchaser
set forth in Sections 3 and 4 of this Agreement and the conditions set forth in
Section 6 of this Agreement.
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5.4 Non-Competition and Employment
On the Closing Date, each Vendor will enter into a non-competition agreement and
an employment agreement in a form to be mutually consented to by each of the
parties, such consent not to be unreasonably withheld.
5.5 Notice of Untrue Representation or Warranty
The Vendors will promptly notify the Purchaser, and the Purchaser will promptly
notify the Vendors, if any representation made by it in this Agreement or any
Ancillary Agreement become untrue or incorrect during the Interim Period and
such notice will set out particulars of the untrue or incorrect representation
and details of any actions being taken to rectify that state of affairs.
5.6 Transfer of the Purchased Shares
The Vendors will take all necessary corporate steps and corporate proceedings to
permit good and marketable title to the Vendors' Shares to be duly and validly
transferred and assigned to the Purchaser at the Closing, free of all Liens. The
Purchaser will take all necessary corporate steps and corporate proceedings to
permit good and marketable title to the Pubco Shares to be duly and validly
transferred and assigned to the Vendors at the Closing, free of all Liens other
than those restrictions on transfer set forth under Rule 144 of the Rules and
Regulations of the Securities and Exchange Commission of the United States.
5.7 Confidentiality
If for any reason the transaction herein provided for is not consummated, the
Purchaser will not and will not permit its Associates to:
(a) directly or indirectly, use for their own purposes any information,
trade secrets or confidential data relating to the Company or the
Business (including the customers of the Business, its operations or the
methods of conducting the Business) discovered or acquired by the
Purchaser or its authorized representatives as a result of the Vendors
making available to the Purchaser or its authorized representatives any
of the information and materials in connection with the transaction
contemplated under this Agreement;
(b) disclose, divulge or communicate, orally, in writing or otherwise, any
such information, trade secrets or confidential data to any other
Person;
and upon request by the Vendors, the Purchaser will forthwith return to the
Company or destroy all materials or documents containing any such information,
trade secrets or confidential data.
5.8 Vendor's Acknowledgement Respecting Pubco Shares
Each of the Vendors hereby acknowledge and agree that the Pubco Shares to be
issued to them pursuant to the terms of this Agreement will be issued pursuant
to Rule 144 of the Rules and
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Regulations of the Securities and Exchange Commission of the United States and
that the certificates representing such Pubco Shares will bear the following
legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1993, as amended
("Act"). Such shares have been acquired for investment and may
not be publicly offered or sold in absence of: (1) effective
registration statement for such shares under the Act; (2)
opinions of counsel to the Company prior to any proposed
transfer to the effect that registration is not required under
the Act; or (3) a letter presented to the Company, prior to
any proposed transfer, from the staff of the Securities and
Exchange Commission, to the effect that it will not take any
enforcement action if the proposed transfer is made without
registration under the Act."
5.9 Business Matters
On or immediately after the Closing Date, the Purchaser will take such
reasonable actions as may be required to cause the resignation of one director
of its board of directors and appoint the Vendors in replacement thereof. To the
extent that Applicable Laws permit, the Vendors may appoint two additional
directors to the board of the Purchaser immediately after Closing.
6. CONDITIONS OF CLOSING
6.1 Purchaser's Conditions of Closing
The Purchaser's obligation to carry out the terms of this Agreement and to
complete the purchase referred to in Section 2.1 hereof is subject to the
conditions, each waivable unilaterally by the Purchaser at its election, that:
(a) the Purchaser will have completed its due diligence of the Company the
result of which is satisfactory to the Purchaser acting reasonably;
(b) the representations and warranties of the Vendors contained in this
Agreement or in any certificate or other document delivered to the
Purchaser pursuant hereto will be true and correct in all material
respects on or as of the Closing Date with the same force and effect as
if such representations and warranties had been made on and as of the
Closing Date;
(c) all the obligations of the Vendors under this Agreement and the
Ancillary Agreements to be performed at or before the Closing will have
been so performed;
(d) at the Closing Date, there will have been no material adverse change in
the affairs, assets, liabilities, financial condition or business
(financial or otherwise) of the Company since the date hereof;
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(e) no action or proceeding by law or in equity will be pending or
threatened by any Person to enjoin or prohibit:
(1) the purchase and sale of the Vendors' Shares contemplated hereby or
the right of the Purchaser to own the Vendors' Shares; or
(2) the right of the Company to conduct its operations and carry on its
business in the normal course as its business and its operations
have been carried on in the past; and
(f) the results of the audit of the Company will be satisfactory to the
Purchaser acting reasonably.
6.2 Vendors' Conditions of Closing
The obligation of the Vendors to carry out the terms of this Agreement and to
complete the sale referred to in Section 2.1 hereof is subject to the
conditions, each waivable unilaterally by the Vendors at their election, that:
(a) the Vendors will have completed their due diligence of the Purchaser the
result of which is satisfactory to each Vendor acting reasonably;
(b) as at the Closing Date no more than 15,194,800 shares, including the
Pubco Shares, in the capital of the Purchaser will be issued and
outstanding on a fully diluted basis;
(c) at the Closing Date, the Purchaser will have in its account funds in an
amount not less than $850,000 which funds will be free and clear at any
Liens;
(d) the representations and warranties of the Purchaser contained in this
Agreement or in any certificate or other document delivered to the
Vendors pursuant hereto will be true and correct in all material
respects on or as of the Closing Date with the same force and effect as
if such representations and warranties had been made on and as of the
Closing Date; and
(e) all the obligations of the Purchaser under this Agreement and the
Ancillary Agreements to be performed at or before the Closing will have
been so performed;
(f) at the Closing Date, there will have been no material adverse change in
the affairs, assets, liabilities, financial condition or business
(financial or otherwise) of the Purchaser since the date hereof;
(g) no action or proceeding by law or in equity will be pending or
threatened by any Person to enjoin or prohibit:
16
(1) the issuance of the Pubco Shares contemplated hereby or the right
of the Vendors to own the Pubco Shares; or
(2) the right of the Purchaser to conduct its operations and carry on
its business in the normal course as its business and its
operations have been carried on in the past; and
(h) the results of the audit of the Purchaser will be satisfactory.
7. CLOSING
7.1 Closing Date
The closing date is, and the Closing of the purchase and sale contemplated by
this Agreement will take place at 10:00 a.m. on January 22, 1999 ("Closing
Date") at the offices of Messrs. Bull, Housser & Xxxxxx, 3000 - 1055 West
Georgia Street, Vancouver, British Columbia, or such earlier or later date or
other place as the parties hereto may agree in writing.
7.2 Closing Documents
At the Closing, the Vendors will tender and cause and procure to be tendered
such documents, agreements or certificates as the Purchaser may reasonably
require pursuant to and which are consistent with the terms of this Agreement
and the Purchaser will tender and cause and procure to be tendered such
documents, agreements or certificates as each Vendor may reasonably require
pursuant to and which are consistent with the terms of this Agreement.
7.3 Closing
The Closing will be effected by:
(a) the delivery to the Vendors of the items tendered by the Purchaser; and
(b) the delivery to the Purchaser of the items tendered by the Vendors.
7.4 Waiver
The conditions set forth in Section 6.1 of this Agreement are for the exclusive
benefit of the Purchaser and may be waived by the Purchaser in writing in whole
or in part at or prior to the Closing and the conditions set forth in Section
6.2 of this Agreement are for the exclusive benefit of the Vendors and may be
waived by the Vendors in writing in whole or in part at or prior to the Closing.
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8. INDEMNIFICATION
8.1 Vendors' Indemnification
The Vendors will indemnify and save harmless the Purchaser from and against any
and all losses, claims, damages (including interest, penalties, fines and
monetary sanctions) liabilities and costs ("Damages") incurred or suffered by
the Purchaser by reason of, resulting from, in connection with, or arising in
any manner whatsoever out of the breach of any warranty or covenant or the
inaccuracy of any representation of the Vendors contained or referred to in this
Agreement or in any Ancillary Agreement.
8.2 Purchaser's Indemnification
The Purchaser will indemnify and save harmless each of the Vendors from and
against any and all Damages incurred or suffered by the Vendors by reason of,
resulting from, in connection with, or arising in any manner whatsoever out of
the breach of any warranty or covenant or the inaccuracy of any representation
of the Purchaser contained or referred to in this Agreement or in any Ancillary
Agreement.
8.3 Costs
For the purposes of this Section 8, "costs" includes lawyers' (on a solicitor
and his own client basis), accountants' fees and expenses, court costs, costs of
investigation and all other out-of-pocket expenses.
9. GENERAL
9.1 Termination Without Notice
This Agreement will terminate without any requirement for notice or action by
any of the parties if the Closing has not taken place by January 31, 1999.
9.2 Survival of Representations
The representations, warranties, covenants and agreements of the parties
contained in this Agreement will survive the closing of the transactions
contemplated herein and remain in full force and effect notwithstanding any
waiver by the Purchaser, the Company or either or both of the Vendors unless
such waiver was made after notice in writing by the notifying party to all other
parties to this Agreement setting forth the breach.
9.3 Public Announcements and Post Closing Confidentiality
The parties will consult with each other before issuing any press release or
making any other public announcement with respect to this Agreement or the
transactions contemplated herein and neither the Vendors nor the Purchaser will
issue any press release or make any public announcement without the prior
consent of the other except to the extent required by law.
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9.4 Assignment
No party will assign this Agreement, or any part of this Agreement, without the
consent of the other party, which consent may be unreasonably withheld or
delayed. Any purported assignment without the required consent is not binding or
enforceable against any party.
9.5 Enurement
This Agreement enures to the benefit of and binds the parties and their
respective successors, heirs, executors, administrators, personal and legal
representatives and permitted assigns.
9.6 Notices
Each notice to a party required by this Agreement must be given in writing. A
notice may be given by delivery to an individual or by fax, and will be validly
given if delivered on a Business Day to an individual at the following address,
or, if transmitted on a Business Day by fax addressed to the following party:
(a) if to either or both of the Vendors:
Name: Xxxxx Xxxxxxx
Address: 000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Fax No.: (000) 000-0000
with a copy to:
Name: Xxxxxx Xxxx
Address: 00000 00xx Xxxxxx
Xxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Fax No.: (000) 000-0000
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with a copy to:
Name: Bull, Housser & Xxxxxx
Address: 3000 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxx X. XxXxxx
Fax No.: (000) 000-0000
(b) if to the Purchaser:
Name: Powertech, Inc.
Address: c/o 311 - 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxx Xxxxxxx
Fax No.: (000) 000-0000
or to any other address, fax number or individual that the party designates. Any
notice:
(c) if validly delivered, will be deemed to have been given when delivered;
(d) if validly transmitted by fax before 3:00 p.m. (local time at the place
of receipt) on a Business Day, will be deemed to have been given on that
Business Day, and
(e) if validly transmitted by fax after 3:00 p.m. (local time at the place
of receipt) on a Business Day, will be deemed to have been given on the
Business Day after the date of the transmission.
9.7 Waivers
No waiver of any provision of this Agreement is binding unless it is in writing
and signed by all the parties to this Agreement except that any provision which
does not give rights or benefits to particular parties may be waived in writing,
signed only by those parties who have rights under, or hold the benefit of, the
provision being waived if those parties promptly send a copy of the executed
waiver to all other parties. No failure to exercise, and no delay in exercising,
any right or remedy under this Agreement will be deemed to be a waiver of that
right or remedy. No waiver of any breach of any provision of this Agreement will
be deemed to be a waiver of any subsequent breach of that provision or of any
similar provision.
9.8 Further Assurances
Before and after the Closing Date, each party will execute and deliver promptly
at the other party's expense and request all further documents and take all
further action reasonably necessary or
20
appropriate to give effect to the provisions and intent of this Agreement and to
complete the transactions contemplated by this Agreement.
9.9 Counterparts
This Agreement and all documents contemplated by or delivered under or in
connection with this Agreement may be executed and delivered in any number of
counterparts with the same effect as if all parties had all signed and delivered
the same document and all counterparts will be construed together to be an
original and will constitute one and the same agreement.
9.10 Delivery by Fax
Any party may deliver an executed copy of this Agreement by fax but that party
will immediately dispatch by delivery in person to the other parties an
originally executed copy of this Agreement.
9.11 Amendments
Except as permitted for certain waivers in Section 9.6, no amendment,
supplement, restatement or termination of any provision of this Agreement is
binding unless it is in writing and signed by each Person that is a party to
this Agreement at the time of the amendment, supplement, restatement or
termination.
9.12 Submission to Jurisdiction
Each of the parties irrevocably submits to the jurisdiction of the courts of
British Columbia in any action, suit or proceeding and each party to this
Agreement waives, and will not assert by way of motion, as a defence, or
otherwise, in any action, suit or proceeding, any claim that:
(a) that party is not subject to the jurisdiction of the courts of British
Columbia;
(b) the action, suit or proceeding is brought in an inconvenient forum;
(c) the venue of the action, suit or proceeding is improper; or
(d) any subject matter of the action, suit or proceeding may not be
enforced in or by the courts of British Columbia.
In any suit or action brought to obtain a judgment for the recognition or
enforcement of any final judgment rendered in an action, suit or proceeding, no
party to this Agreement will seek any review with respect to the merits of any
action, suit or proceeding, whether or not that party appears in or defends the
action, suit or proceeding.
9.13 Costs
The Purchaser will reimburse the Vendors and the Company all reasonable costs
incurred by them in connection with this Agreement including legal, accounting
and other professional fees.
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9.13 Entire Agreement
This Agreement and all documents contemplated by or delivered under or in
connection with this Agreement, constitute the entire agreement between the
parties with respect to the subject matter of this Agreement and supersede all
prior agreements, negotiations, discussions, undertakings, representations,
warranties and understandings, whether written or oral, express or implied,
statutory or otherwise.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the date
and year first above written.
POWERTECH, INC.
Per: /s/ illegible
----------------------
Authorized Signatory
SIGNED, SEALED AND DELIVERED by XXXXX XXXXXXX in )
the presence of: )
)
)
/s/ XXXXXX X. XxXXXX ) /s/ XXXXX XXXXXXX (seal)
----------------------------------------------------- ------------------------------------------------
Name ) XXXXX XXXXXXX
XXXXXX X. XxXXXX )
----------------------------------------------------- )
Address )
BARRISTER & SOLICITOR )
----------------------------------------------------- )
)
BULL, HOUSSER & XXXXXX )
----------------------------------------------------- )
)
3000, 0000 XXXX XXXXXXX XXXXXX )
----------------------------------------------------- )
)
XXXXXXXXX, XX X0X 0X0 )
----------------------------------------------------- )
)
PHONE 000-0000 )
----------------------------------------------------- )
)
)
----------------------------------------------------- )
Occupation )
)
22
SIGNED, SEALED AND DELIVERED by XXXXXX XXXX in )
the presence of: )
)
)
/s/ XXXXXX X. XxXXXX ) /s/ XXXXXX XXXX (seal)
----------------------------------------------------- ------------------------------------------------
Name ) XXXXXX XXXX
XXXXXX X. XxXXXX )
----------------------------------------------------- )
Address )
BARRISTER & SOLICITOR )
----------------------------------------------------- )
)
BULL, HOUSSER & XXXXXX )
----------------------------------------------------- )
)
3000, 0000 XXXX XXXXXXX XXXXXX )
----------------------------------------------------- )
)
XXXXXXXXX, XX X0X 0X0 )
----------------------------------------------------- )
)
PHONE 000-0000 )
----------------------------------------------------- )
)
)
----------------------------------------------------- )
Occupation )
)
LIST OF SCHEDULES
Schedule Description
-------- -----------
1.1(l) Intellectual Property
SCHEDULE 1.1(L)
Intellectual Property
A. All Intellectual Property in the ProbeNet network monitoring technology as
assigned to the Company by Xxxxxx Xxxx and Xxxxxxxxxx.xxx Inc. on December 23,
1998 and further developed by the Company.
