THIS AGREEMENT dated for reference the 5th day of May, 1998
BETWEEN:
LAXARCO HOLDING LIMITED, a Company incorporated pursuant to
the laws of the Republic of Cyprus and having a mailing address at Office
000, Xxxxxxx 0, X.X. Xxx 0000, Xxxxxxx, Xxxxxx
OF THE FIRST PART
(herein referred to as "Laxarco")
AND:
CARBON RESOURCES LIMITED, a Company incorporated pursuant to
the laws of the Republic of Cyprus and having a mailing address at Office
000, Xxxxxxx 0, X.X. Xxx 0000, Xxxxxxx, Xxxxxx
OF THE SECOND
PART
(herein referred to as "Carbon")
AND:
AUTOMATED TRANSFER SYSTEMS CORPORATION, a Company
incorporated pursuant to the laws of the State of Colorado and having its
registered and records office at 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx
OF THE THIRD
PART
(herein referred to as the "Company")
AND:
STONE CANYON RESOURCES LTD., a Company incorporated pursuant
to the laws of the Province of Alberta and having its registered and records
office at 0000 Xxxxx Xxxxxxxx Xxxxxx, 000-0xx Xxxxxx X.X., Xxxxxxx,
Xxxxxxx
OF THE FOURTH
PART
(herein referred to as "Stone Canyon")
WHEREAS:
Laxarco is the registered and beneficial owner of all of the issued and
outstanding shares in the capital stock of Carbon (the "Carbon Shares");
and
Carbon holds the rights in and to certain patents for the development of the
SYNGEN technology as appended hereto as Schedule "A"; and
Carbon holds a 100% interest in a Heads of Agreement executed by and
between Laxarco and the N.D. Xxxxxxxx Institute and appended hereto as
Schedule "B"; and
Laxarco and the Company wish to effect an exchange of 75%
(Seventy-Five Percent) of the organised shares of common stock of Carbon,
being a total of 3,750 shares, for 10,000,000 restricted shares of the
common stock of the Company and the parties to this Agreement have
agreed to the share exchange subject to the terms and conditions set out
below; and
The Company has agreed to be bound by all agreements between Laxarco
and Carbon as properly disclosed to the Company by such parties; and
The parties to this Agreement wish to make provisions for the advancement
of funds from the Company prior to the Effective Date and to make
arrangements for the repayment of those funds; and
Stone Canyon is the controlling shareholder of the Company and in order to
enduce certain of the shareholders of Laxarco to conclude the transactions
as anticipated by this Agreement, Stone Canyon has entered into an option
agreement with said shareholders to option certain shares of the Company
presently held by Stone Canyon; and
As consideration for Stone Canyon completing the option agreement, the
Company wishes to grant to Stone Canyon, upon the fulfilment of the
transactions contemplated by this Agreement, the right to cause the
Company to transfer to Stone Canyon all of the issued and outstanding
common shares of Stone Canyon Resources Inc. which is the wholly owned
subsidiary of the Company, holding certain oil and gas assets.
NOW THEREFOR THIS AGREEMENT WITNESSES that for and in
consideration of the mutual premises and the mutual covenants and
agreements contained herein, the parties covenant and agree each with the
other as follows:
DEFINITIONS
For all purposes of the Agreement:
"Effective Date" means the date that this Agreement is approved by the
shareholders of the Company and the articles of exchange are filed with the
State of Colorado;
"Shareholder Approval" means the requisite shareholder approvals required
by each of the parties to this Agreement;
"Escrow Agreement" means that Agreement dated of even date herewith
between the Company, Laxarco and Xxxxxx & Associates to be substantially
in the form attached hereto as Schedule "C";
"Escrow Holder" means Xxxxxx & Associates, a professional law
corporation;
"Contracts" means all of the commitments, agreements, contracts,
instruments, leases and other documents entered into by the parties to this
Agreement by which the parties to this Agreement are bound or to which
the parties to this Agreement or the Business Assets of the parties are
subject (other than the Permitted Liens) and which are enumerated and
described in Schedule's "E" and "M";
"Company's Shares" means the fully paid and non-assessable shares of
common stock of the Company to be allotted and issued to Laxarco
pursuant to Article 2 hereof, and which will be held in escrow pursuant to
the terms of the Escrow Agreement;
"Shareholders Meeting" means the general meeting of the shareholders of
the Company to be called pursuant to Article 9.2(b);
"Successful Completion" means the successful completion of the 2 bbl per
day pilot unit that incorporated the SYNGEN technology and the
Xxxxxxx-Tropsch technology, as further described in the Heads of
Agreement appended as Schedule "B" hereto. "Successful Completion" in
this case is taken to mean that the SYNGEN pilot unit will operate on
natural gas feedstock which may be in whole or in part gas from a city gas
main to produce a synthesis gas which the Xxxxxxx-Tropsch unit will then
convert into a hydrocarbon product, other gases, and water vapor. The
hydrocarbon product shall have a preponderance of the carbon chain
distribution in the gasoline fraction (eg. Hexanes and higher) and heavier.
Such distribution will be determined by a mole balance based on
chromatographic analysis. It is mutually recognised that the 2 bbl per day
unit is a "Proof of Concept" unit and the results of its operation will be used
to optimise the operating parameters for the larger Demonstration unit. The
parties agree to verification of results by an Independent Valuator to be
appointed by the parties.
"Independent Valuator" means that person agreed to by the parties to this
Agreement whose qualifications and business experience are of such a
standard so as to qualify that person to examine and prepare an evaluation
of the technology to be developed pursuant to this Agreement, and render
an opinion as to whether the "Proof of Concept" has been fulfilled and the
Independent Valuator will recommend the construction of the Larger
Demonstration Unit.
"Larger Demonstration Unit" means a skid mounted mini plant having both
a SYNGEN and Xxxxxxx-Tropsch conversion system to produce nominally
100 bbl a day stream of unseparated hydrocarbon liquids. The plant will not
include any product fractionation or treating processes. Its function is to
demonstrate to prospective clients the efficiencies and operating parameters
to be expected in a commercial sized unit. The plant may or may not
include provision for generation of requirements such as power, enriched
air, etc.
"Termination Date" means the day that is thirty (30) days after the last day
of the month in which all of the Company's Approvals as defined in Section
6.1 (b) hereof, are received;
"Carbon Shares" means a total of 3,750 shares of the organised shares in the
capital of Carbon, to be exchanged by Laxarco with the Company, and
being 75% (Seventy-Five) of the organised shares of Carbon, 5,000 shares
being all of the issued and outstanding organised shares of Carbon;
"Share Exchange" shall mean the exchange of the Company's Shares for the
Carbon Shares as contemplated herein.
In this Agreement, except as otherwise expressly provided:
"Agreement" means this agreement, including the preamble and the
schedules hereto, as it may from time to time be supplemented or amended
in effect;
all references in this Agreement, to a designated "Section" or other
subdivision or to a schedule is to the designated Section or other
subdivision of, or Schedule to, this Agreement;
the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Section
or other subdivision or Schedule;
the headings are for convenience only and do not form a part of this
Agreement and are not intended to interpret, define, or limit the scope,
extent or intent of this Agreement or any provision hereof;
the singular of any term includes the plural, and vice versa, the use of any
term is equally applicable to any gender and where applicable a body
corporate; the word "or" is not exclusive and the word "including" is not
limiting, whether or not non-limiting language, such as "without limitation"
or "but not limited" to or words of similar import, is used with reference
thereto;
any accounting term not otherwise defined has the meanings assigned to it
in accordance with generally accepted accounting principals applicable to
the United States of America;
any reference to a statute includes and is a reference to that statute and to
the regulations made pursuant thereto, with all amendments made thereto
and in force from time to time, and to any statute or regulations that may be
passed which has the effect of supplementing or superceding that statute or
regulations;
where any representation or warranty is made "to the knowledge of" any
Person, such Person will not be liable for a misrepresentation or breach of
warranty by reason of the fact, state of facts, or circumstances in respect of
which the representation or warranty is given being untrue if such Person
proves:
that such Person conducted a reasonable investigation so as to provide
reasonable grounds for a belief that there had been no misrepresentation or
breach of warranty; and
that fact, state of facts, or circumstances could not reasonably be expected
to have been determined as a result of that reasonable investigation,
irrespective of the actual investigation conducted by such Person;
except as otherwise provided, any dollar amount referred to in this
Agreement is
in U.S. funds; and
any other term defined within the text of this Agreement has the meanings
so ascribed.
The following are the Schedules to this Agreement:
Schedule Description
A. Patents
Heads of Agreement
Escrow Agreement
Authorised and Issued Capital of the Company
Liabilities and Permitted Liens of the Company
Outstanding Stock Options and Warrants of the Company
Audited Financial Statements of the Company
Contracts of the Company
Closing Warranty and Certificate of the Company
Agreements of Carbon
Unaudited, Prepared by Management Financial Statements of Carbon
Authorised and Issued Capital of Carbon
Permitted Liens of Carbon
Closing Warranty and Certificate of Laxarco
Bank Information for the Company
SHARE EXCHANGE
Subject to the terms and conditions hereof and the requisite shareholder
approvals, as at the Effective Date, the Company shall exchange the
Company's Shares for the Carbon Shares.
The Company' Shares shall be held in escrow in the manner required by the
Escrow Agreement and shall be released in the manner provided therein.
ADVANCEMENT AND REPAYMENT OF FUNDS
The parties hereto acknowledge that funds for the ongoing business of
Carbon will be required prior to the Effective Date and the Company has
agreed to advance funds prior to closing by way of loans to Carbon.
Upon the advancement of funds, by the Company to Carbon, Carbon and
Laxarco will execute promissory notes in favor of the Company for the
funds advanced, on the following terms:
Interest rate of 2% per annum calculated annually and repayable, on
demand, 12 months from the date of the advance of funds;
Upon closing the Company and Carbon will re-execute loan agreements for
the aggregate amount advanced by the Company pursuant to Section 3.1 on
terms to be negotiated between the Company and Carbon.
CLOSING
The completion of the Share Exchange will take place at the Effective Date
at such place as each of the parties to this Agreement may agree to;
The Effective Date shall occur no later than 90 days from the date of
execution of this Agreement, and this Agreement shall be voidable
thereafter at the option of the Company or Laxarco upon thirty (30) days
notice in writing to the parties hereto, such election not to be unreasonably
exercised. This Agreement will terminate on the effective date of such
notice of termination and except for the provisions of Sections 3.2 and 3.3 ,
shall thereafter be null and void;
In the event that this Agreement is terminated pursuant to Section 4.2
above, and either Laxarco or the Company has not used its best efforts to
complete the transactions contemplated by this Agreement, then
notwithstanding any other provision of this Agreement
if the Company failed to use its best efforts, the Company shall be liable for
and shall pay all costs and expenses incurred by Laxarco and the Company
in connection with this Agreement; and
if Laxarco failed to used its best efforts, Laxarco will be liable for and shall
pay all costs and expenses incurred by the Company and Laxarco in
connection with this Agreement.
5.0 TRANSACTION EXPENSES
Except as provided in Section 4.3, each party to this Agreement shall bear
all costs and expenses incurred by him or it in negotiating and preparing this
Agreement and in closing and carrying out the transactions contemplated by
this Agreement. Unless otherwise expressly provided herein, all costs and
expenses related to satisfying any condition or fulfilling any covenant
contained in this Agreement shall be borne by the party whose responsibility
it is to satisfy the condition or fulfil the covenant in question.
APPROVALS
The obligations of the parties to complete the exchange of shares shall be
subject to the following:
the passing of the resolutions by the shareholders of the Company
contemplated by Article 9.2 (b) at the Shareholders Meeting ( the
"Company's Approvals");
the passing of the resolutions by the shareholders of Laxarco authorizing
Laxarco to enter into and conclude this Agreement ( the "Laxarco
Resolutions");
6.2 The Company, Laxarco, and Carbon shall use their best and
reasonable efforts to obtain the required Approvals prior to the Closing.
7.0 THE COMPANY WARRANTIES AND REPRESENTATIONS
7.1 The Company warrants and represents to the parties to this
Agreement, with the intent that the parties to this Agreement will rely
thereon in entering into this Agreement and in concluding the Share
Exchange contemplated herein that:
the Company is a company duly incorporated, validly existing and presently
in good standing under the laws of the State of Colorado and has the
power, authority and capacity to enter into this Agreement and to carry out
its terms;
the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby has been duly and validly authorised by all
necessary corporate action on the part of the Company, and this Agreement
constitutes a legal, valid and binding obligation of the Company in
accordance with its terms except as limited by laws of general application
affecting the rights of creditors;
To the knowledge of the Company, the Company has filed all reports and
documents required to be filed with the Registrar of Companies for the
State of Colorado, and is not in default of any requirements of the Company
Act of the State of Colorado;
The directors and officers of the Company as of the date of execution of
this Agreement are:
Directors:
Xxxxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxxxxxxx Xxxxxxxx
Officers:
Xxxxxxx Xxxxxxx - President
Xxxxxxxxxx Xxxxxxxx - Secretary/Treasurer
the authorised capital of the Company consists of 50,000,000 common
shares with a par value of $0.002 per share of which 9,989,669 common
shares are issued and outstanding as fully paid and non-assessable as of the
date of this Agreement;
upon completion of the Share Exchange Laxarco shall be the beneficial and
registered holder of the Company's Shares as fully paid and non-assessable,
free and clear of all liens, charges and encumbrances and restrictions on
transfer save and except those prescribed in the Escrow Agreement and
those which may be imposed by the regulatory authorities or under
applicable securities law;
there are no options, warrants, rights or agreements outstanding with
respect to the issued or unissued shares of the Company except as disclosed
in Schedule "F";
there are no existing agreements of any nature or kind whatsoever to which
the Company is a party, except those disclosed by the Company, true copies
of which have been delivered to Carbon and Laxarco;
as at the date of this Agreement, there are no liabilities, contingent or
otherwise, including assessed or unassessed income tax liabilities nor is
there any undisclosed litigation, proceeding or investigation pending or
threatened against the Company, its property or business, nor does the
Company know or have ground to know of any basis for any litigation,
proceeding or investigation against the Company, its properties or business;
the Company has all corporate power and authority to carry on its business
as presently carried on;
the Company's financial statements as set out in Schedule "G" were
prepared in accordance with generally accepted accounting principles
applied on a basis consistent with prior years, are true and correct in every
material respect and present fairly and accurately the financial condition of
the Company as at the Company's Statement Date and the results of its
operations for the year ended on the Company's Statement Date; no
material changes have occurred since the Company's statement date;
there is no indebtedness of the Company which is not disclosed or reflected
in the Company's Financial Statements, other than indebtedness incurred in
the ordinary course of business since the statement date;
the Company has not guaranteed, or agreed to guarantee, any Indebtedness
or other obligation of any person or entity except as described in Schedule
"E" attached hereto;
there are not any shareholders of the Company indebted to the Company
and the Company is not indebted to any of its shareholders except as set out
in Schedule "E" attached hereto;
the Company is not subject to any collective bargaining agreement, pension
or retirement plan, bonus or profit sharing scheme or other employee benefit
plan, agreement or arrangement affecting employees;
the Company has no bank, trust, savings, checking or other accounts or
deposits, safety deposit boxes of other depositories except as set out in
Schedule "O" which Schedule is a true and complete list showing the name
of each bank, trust company or other financial institution in which the
Company has accounts, deposits or safety deposit boxes and the names of
all persons authorised to draw thereon or have access thereto;
all taxes and other assessments which the Company is required by law to
withhold or to collect have been duly recorded, withheld and collected and
have been paid over to the proper governmental authorities or held by them
for such payment;
the Company is not subject to any mortgage, lien, lease, agreement,
instrument or any other restriction of any kind or character which would
prevent the consummation of the transactions contemplated by this
Agreement, or would result in the breach of any term or provision of, or
constitute a default under any obligation binding on the Company;
the minute books and corporate records of the Company contain a true and
complete record of all resolutions of the directors and shareholders and all
records required to be maintained under the Colorado Revised Statutes;
all alterations to the Articles of the Company since its incorporation have
been duly approved by the shareholders of the Company and registered with
the Registrar of Companies for the State of Colorado;
the Company is not in breach of any statute, regulation or by-law applicable
to the Company or its operations;
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 indebtedness under, any terms, provisions or conditions of, or
constitute default under the Articles of the Company or any indenture,
mortgage, deed of trust, agreement, lease, franchise, certificate, consent,
permit, licence, authority or other instrument to which the Purchaser is a
party or is bound or any judgement, decree, order, rule or regulation of any
court or administrative body by which the Company is bound, or, of any
statute or regulation applicable to the Company;
the Company has been assessed for federal and state income tax for all years
to and including the fiscal year of the Company ended on the Statement
Date, and the Company has withheld and remitted to the Internal Revenue
Service, or other applicable tax collecting authority all amounts required to
be remitted to the Internal Revenue Service or other tax collecting authority
respecting payment to employees or to non-residents, or otherwise and has
paid all instalments of corporate taxes due and payable;
all tax returns, filings and reports of the Company required by law to be
filed prior to the date hereof including all state and federal income tax
returns, all returns and filings pertaining to compensation of employees of
the Company for job related injuries required pursuant to any state or
federal law and any other tax returns applicable to the Company have been
filed and are true, complete and correct, and all taxes and other government
charges including all income, excise, sales, business and property taxes and
other rates, charges, assessment, levies, duties, taxes, contributions, fees
and licences required to be paid have been paid, and if not required to be
paid as at the date hereof, have been accrued in the Financial Statements;
adequate provision has been made for taxes payable by the Company for
which tax returns are not yet required to be filed and there are no
agreements, waivers or other arrangements providing for an extension of
time with respect to the filing of any tax return by or payment of any tax,
governmental charge or deficiency by the Company, and to the knowledge
of the Company and its officers, directors or employees, there are no
contingent tax liabilities or any grounds which would prompt a
re-assessment;
the Company has made all elections required to be made under applicable
income tax legislation in the United States of America, Canada or other tax
legislation in connection with any distributions by the Company and all such
elections were true and correct and in the prescribed forms and were made
within the prescribed time periods; and
the Company has no employment, consulting or management contract or
commitment with any Person, including those with any director or officer of
the Company, whether oral, written, or implied, except as disclosed in
Schedule "H" .
LAXARCO'S WARRANTIES AND REPRESENTATIONS
Laxarco warrants and represents to the Company, with the intent that the
Company will rely thereon in entering into this Agreement and in
concluding the Share Exchange contemplated herein that:
Laxarco is the registered holder and beneficial owner of the Carbon Shares,
free and clear of all Liens, and Laxarco has no other interest, legal or
beneficial, direct or indirect, in any other shares in the capital of Carbon, or
in the business or the business assets save for those disclosed in Schedule
"J" hereto;
Laxarco has the power and capacity and good and sufficient right and
authority to enter into this Agreement on the terms and conditions herein
set forth and to transfer the legal and beneficial title and ownership of
Carbon Shares to the Company;
the authorised and issued capital of Carbon is as described in Schedule
"L", Carbon Shares are validly issued and outstanding as fully paid and
non-assessable;
Save for the interest of Laxarco, in and to 25% of the income derived from
the Patents and Heads of Agreement, more particularly described in
Schedule "J" hereto, no Person has any agreement, right or option,
consensual or arising by law, present or future, contingent or absolute, or
capable of becoming an agreement, right or option:
to require Carbon to issue any further or other shares in its capital or any
other security convertible or exchangeable into shares in its capital or to
convert or exchange any securities into or for shares in the capital of
Carbon;
for the issue or allotment of any of the authorised but unissued shares in the
capital of Carbon;
to require Carbon to purchase, redeem or otherwise acquire any of the
issued and outstanding shares in the capital of Carbon; or
to purchase or otherwise acquire any shares in the capital of Carbon;
Carbon is a corporation duly incorporated, validly existing and in good
standing under the laws of the Republic of Cyprus;
The President of Carbon is Xxxxxx X. Xxxxxx;
All alterations, if any, to the Articles and By-laws of Carbon since its
incorporation have been duly approved by the shareholders of Carbon and
registered with the governmental authority having jurisdiction;
Carbon has the power, authority and capacity to carry on the business as
presently conducted by it;
Carbon has the power, authority and capacity to own and use all of the
business assets;
Carbon owns and possesses and has good and marketable title to and
possession of all the business assets free and clear of all liens, except the
Permitted Liens as per Schedule "M" appended hereto;
Carbon does not own or possess any asset other than those of the business
assets owned by Carbon and does not have any interest in the assets or
business of any other person;
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 indebtedness under, any terms, provisions or conditions of, or
constitute default under the Articles or By-Laws of Carbon or any
indenture, mortgage, deed of trust, agreement, lease, franchise, certificate,
consent, permit, licence, authority or other instrument to which Carbon is a
party or is bound or any judgement, decree, order, rule, or regulation of any
court of administrative body by which Carbon is bound, or, to the
knowledge of any statute or regulation applicable to Carbon;
the Financial Statements were prepared in accordance with generally
accepted accounting principles applicable in Cyprus, are true and correct in
every material respect and present fairly and accurately the financial
condition and position of Carbon as at the Statement Date and the results of
their operations to that date;
there is no indebtedness of Carbon which is not disclosed or reflected in the
Financial statements, other than Indebtedness incurred in the ordinary
course of business since the Statement Date;
all material transactions of Carbon have been promptly and properly
recorded or filed in or with its respective books and records, and the minute
book of Carbon contains all records required to be kept pursuant to
applicable legislation pertaining to corporations in Carbon's jurisdiction of
incorporation;
the name of each present employee of Carbon, the duration of the
employment of each such employee with Carbon and the remuneration and
benefit obligations of Carbon in respect of each such employee has been
disclosed to the Company, and the full amounts of salaries, pensions,
bonuses, commissions and other remuneration of any nature, including
accrued vacation pay, severance pay and unpaid earned wages of the
present or former officers, directors, employees, salesmen, consultants and
agents of Carbon, as at the Effective Date, will have been paid up to the
Effective Date;
There are no pension, profit sharing, incentive, bonus or similar plans or
other compensation plans affecting Carbon and Carbon has no unfunded or
unpaid liability in respect of any such plans;
Carbon has no contract, agreement, undertaking, or arrangement, whether
oral, written or implied, and does not have any outstanding agreement,
contract or commitment (whether written or oral) whatsoever relating to or
affecting the conduct of the business or any of the business assets or for the
purchase, sale or lease of any of the business assets other than the contracts
and the permitted liens;
there is no basis for and there are no actions, suits, judgements,
investigations or proceedings outstanding or pending or to the knowledge
of Laxarco threatened against or affecting Carbon at law or in equity or
before or by any court or federal, provincial, state, municipal or other
governmental authority, department, commission, board, tribunal, bureau or
agency and neither is Carbon a party to or threatened with any litigation;
Carbon:
is not in breach of any of the terms, covenants, conditions, or provisions of,
is not in default under, or has done or omitted to do anything which, with
the giving of notice or lapse of time or both, would constitute a breach of or
a default under any contract;
is not in breach or default under any judgement injunction, or other order
or aware of any judicial, administration, governmental, or other authority or
arbitrator by which Carbon is bound or to which Carbon or any business
assets are subject;
and Carbon has not received notice that any default, breach, or violation is
being alleged;
Carbon has not guaranteed, or agreed to guarantee any indebtedness or
other obligation of any Person; and
since the Statement Date:
no dividends of any kind or other distribution on any shares of Carbon have
been declared or paid by Carbon;
there has been no material adverse change in the financial condition or
position of Carbon, and no damage, loss or destruction materially affecting
the business assets or the right, capacity or ability of Carbon to carry on the
business;
Carbon has conducted the business in the usual and normal manner and has
maintained the business assets in good standing; and
Carbon has not waived or surrendered any right of material value.
COVENANTS OF THE PARTIES
Between the date of this Agreement and the Effective Date, Laxarco:
will cause Carbon to afford to the Company and its authorised
representatives access during normal business hours to all books, contracts,
commitments, records of Carbon and will furnish such copies (certified if
requested) thereof and other information as the Company may reasonably
request and will take such steps as may be necessary to permit the Company
and its authorised representatives to make such audit of the books of
account of Carbon and such physical verification of the Business Assets as
the Company may reasonably see fit;
will diligently take all reasonable steps to obtain prior to the Effective Date,
all consents and approvals required to complete the transactions
contemplated herein in accordance with the terms and conditions hereof
including any consents, waivers, and approvals as requested by the
Company or the Company's solicitor;
will do any and all things reasonably necessary and use their best efforts
assist and fully co-operate with the Company in its effort to obtain the
approvals within the time limited hereunder;
will cause Carbon to conduct its business and affairs diligently and only in
the ordinary course, and preserve and maintain the goodwill of the
Company, the business assets and the business; and
will not permit Carbon to make or agree to make any payment to any
director, officer, employee or agent of Carbon except in the ordinary course
of business and at the regular rate of salary and commission for such person
or as reasonable reimbursement for expenses incurred by such person in
connection with the business of Carbon.
Between the date of this Agreement and the Effective Date, the Company
will:
afford to Laxarco and its authorised representatives access during normal
business hours to all books contracts, commitments, records of the
Company and will furnish such copies (certified if requested) thereof and
other information as Laxarco may reasonably request, and will take such
steps as may be necessary to permit the Company and its authorised
representatives to make such audit of the books of account of the Company
and such physical verification of the assets of the Company as Laxarco may
reasonably see fit;
call a general meeting of its shareholders to be held as soon as practicable
after execution hereof to consider and, if thought fit, approve resolutions
respecting the following matters together with such amendments as Laxarco
may specify prior to the date notice of such meeting is mailed to the
Company's shareholders:
approval of the exchange of the Company's Shares for the Carbon Shares,
the total organized shares of Carbon being 5,000 organized shares; and
such other matters pertaining to the transactions contemplated herein as
may be reasonably requested by the Company or Carbon, the form of proxy
materials for the meeting to be completed to the satisfaction of Carbon, as
advised by the Company;
deliver written confirmation of each of the foregoing, if any, to Carbon; and
attend to all corporate matters to carry out and implement this Agreement
as soon as possible.
9.3 The Company and Laxarco shall each complete their own due
diligence investigations contemplated by subparagraphs 9.1 (a) and 9.2(a)
herein respectively in order to satisfy themselves of the accuracy of each
other's representations and warranties hereunder, within thirty (30) days of
the date of this Agreement, and shall each deliver to the other written
confirmation of their satisfactory completion of such investigations.
Notwithstanding any such investigations, the representations and warranties
of any party hereto shall survive the Closing Date and the Closing, and shall
continue in full force and effect.
9.4 The parties agree to make or cause the Company to make such joint
elections under the Income Tax Act with respect to the exchange of the
Company's shares or any other matters as may be reasonably requested by
Laxarco and to execute and file such documents as may be necessary to
give effect thereto.
NON-MERGER
The representations, warranties, covenants and agreements of Laxarco and
Carbon contained herein and those contained in the documents and
instruments delivered pursuant hereto will be true at and as of the Effective
Date as though made at the Effective Date and will survive the Effective
Date, and notwithstanding the completion of the transactions herein
contemplated, the waiver of any condition contained herein (unless such
waiver expressly releases Laxarco or Carbon of such representation,
warranty, covenant or agreement), or any investigation by the Company, the
same will remain in full force and effect.
The representations, warranties, covenants and agreement of the Company
contained herein and those contained in the documents and instruments
delivered pursuant hereto will be true at and as of the Effective Date as
though made at the Effective Date and will survive the Effective Date, and
notwithstanding the completion of the transactions herein contemplated, the
waiver of any condition contained herein (unless such waiver expressly
releases the Company of such representation, warranty, covenant or
agreement), or any investigation by Laxarco, the same will remain in full
force and effect.
CONDITIONS PRECEDENT
The obligations of the Company to consummate the transactions herein
contemplated are subject to the fulfilment of each of the following
conditions at the times stipulated:
the representations and warranties of Laxarco and Carbon contained herein
are true and correct in all respect at and as of the Effective Date except as
may be in writing disclosed to and approved by the Company; and
all covenants, agreements and obligations hereunder on the part of Laxarco
to be performed or complied with at or prior to the Closing, including
Laxarco's obligation to deliver the documents and instruments herein
provided for, have been performed and complied with at and as of the
Effective Date.
The conditions set forth in Section 11.1 are for the exclusive benefit of the
Company and may be waived by the Company in writing in whole or in part
at any time.
The obligations of Laxarco to consummate the transactions herein
contemplated are subject to the fulfilment of each of the following
conditions at the times stipulated, that:
the representations and warranties of the Company contained herein are true
and correct in all material respects at and as of the Closing except as may be
in writing disclosed to and approved by Laxarco; and
all covenants, agreements and obligations hereunder on the part of the
Company to be performed or complied with at or prior to the Effective
Date, including in particular the Company's obligations to deliver the
documents and instruments herein provided for, have been performed and
complied with as at the Closing.
The conditions set forth in Section 11.3 are for the exclusive benefit of
Laxarco and may be waived by Laxarco in whole or in part at any time.
12.0 TRANSACTIONS OF LAXARCO AT THE EFFECTIVE DATE
At the Effective Date, Laxarco will execute and deliver or cause to be
executed and delivered all documents, instruments, resolutions and share
certificates as are necessary to effectively transfer and assign the Carbon
Shares to the Company free and clear of all Liens, including;
share certificates representing the Carbon Shares registered in the name of
Laxarco, duly endorsed for transfer to the Company;
the Escrow Agreement, duly executed by the Board of Directors of
Laxarco;
certified copies of resolutions of directors of Laxarco authorizing the
transfer of the Carbon shares and the registration of the Carbon Shares in
the name of the Company and authorizing the issue of new share certificates
in the name of the Company;
duly issued share certificates registered in the name of the Company
representing 3,750 organized shares in the capital of Carbon, the total
organized shares in the capital of Carbon being 5,000 organized shares;
a Closing Warranty and Certificate of Laxarco confirming that the
conditions to be satisfied by the Company, unless waived, set out in Section
11.1 have been satisfied at the Effective Date and that all representations
and warranties of Laxarco and Carbon contained in this Agreement are true
at and as of the Effective Date in the form attached as Schedule "N".
13.0 TRANSACTIONS OF THE COMPANY AT THE EFFECTIVE
DATE
The Company will deliver or cause to be delivered the following at the
Effective Date:
copies of all written Approvals;
share certificates to the escrow agent representing the Company's Shares
duly registered in the name of Laxarco;
written confirmation of the escrow agent that the Company's Shares have
been issued to Laxarco, and are being held by the escrow agent pursuant to
the terms of the Escrow Agreement;
a Closing Warrant and Certificate from the Board of Directors of the
Company confirming that the conditions to be satisfied by the Company,
unless waived, set out in Section 11.3 have been satisfied at the Effective
Date and that all representations and warranties of the Company contained
in this Agreement are true at and as of the Effective Date in the form
attached as Schedule "I";
the Escrow agreement duly executed by the Company and the Escrow
Agent;
copies, certified if requested, of all minutes and consent resolutions of the
directors of the Company authorising the Company to:
enter into and fulfil the terms of this Agreement;
issue such number of common shares in the capital stock of the Company to
complete the Share Exchange Agreement;
execute and deliver the Escrow Agreement;
appoint such persons as directors and officers of the Company as at the date
at which the shares are released from the escrow agreement to Laxarco as
Laxarco may direct, save for one director from the present board of
directors of the Company to remain on the newly constituted board of
directors;
TRANSFER OF STONE CANYON SHARES
The Company, upon written notice from Stone Canyon and pursuant to the
fulfilment of the conditions of this Agreement including but not limited to
the release of the Company's Shares to Laxarco, will deliver to Stone
Canyon all of the issued and outstanding shares of Stone Canyon Resources
Inc. owned by the Company, that being 2,901,007 shares for $1.00 and
other good and valuable consideration.
POST CLOSING AGREEMENTS, COVENANTS AND OBLIGATIONS
Laxarco will indemnify and hold harmless the Company from and against:
any and all losses, damages or deficiencies resulting from any
misrepresentation, breach of warranty or non-fulfilment of any covenant on
the part of Laxarco under this Agreement or from any misrepresentation in
or omission from any certificate or other instrument furnished or to be
furnished to the Company hereunder; and
any and all actions, suits, proceedings, demands, assessments, judgements,
costs and legal and other expenses incidental to any of the foregoing.
The Company will indemnify and hold harmless Laxarco and Carbon from
and
against:
any and all losses, damages or deficiencies resulting from any
misrepresentation , breach of warranty or non-fulfilment of any covenant on
the part of the Company under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished to Laxarco and Carbon hereunder; and
any and all actions, suits, proceedings, demands, assessments, judgements,
costs and legal and other expenses incidental to any of the foregoing.
Laxarco hereby agrees and covenants to conduct all further investigations,
development and research to reach the Successful Completion of the
technology as defined in this Agreement.
Upon Successful Completion of the technology as verified by the
Independent Valuator the Company will direct the release of the ATNY
Shares to Laxarco on terms as provided in the Escrow Agreement.
16.0 TIME OF THE ESSENCE
Time is of the essence of this Agreement.
17.0 FURTHER ASSURANCES
17.1 The parties will execute and deliver such further documents and
instruments and do all such acts and things as may be reasonably necessary
or requisite to carry out the full intent and meaning of this Agreement and
to effect the transactions contemplated by this Agreement.
18.0 SUCCESSORS AND ASSIGNS
This Agreement will enure to the benefit and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns. This Agreement may not be assigned by any party hereto
without the prior written consent of all parties to this Agreement.
COUNTERPARTS
19.1 This Agreement may be executed in several counterparts, each of
which will be deemed to be an original and all of which will together
constitute one and the same instrument.
20.0 NOTICE
20.1 All notices, requests, demands and other communications required
or permitted hereunder, or desired to be given with respect to their rights or
interest herein, assigned or reserved, shall be deemed to have been properly
given or delivered, when delivered personally or sent by registered mail or
sent by electronic communication with all postage or other charges fully
prepaid, and addressed to the parties respectively as follows:
To Laxarco:
Laxarco Holding Limited
Office 000, Xxxxxxx 0,
X.X. Xxx 0000
Xxxxxxx, Xxxxxx
To the Company:
Automated Transfer Systems Corporation
#000-000-00xx Xxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
To the Escrow Agent:
Xxxxxx & Associates
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Or such other address as any Person may specify by notice in writing to the
other.
Any notice delivered on a business day, or sent by electronic communication
on a business day, will be deemed conclusively to have been effectively
given on the date notice was delivered or transmitted.
Any notice sent by prepaid registered mail will be deemed conclusively to
have been effectively given on the tenth business day after posting; but if at
the time of posting or between the time of posting and the tenth business
day thereafter there is a strike, lockout or other labour disturbance affecting
postal service, then the notice will not be effectively given until actually
delivered.
AGENTS
21.1 Laxarco warrants to the Company that no agent or other
intermediary has been engaged by Laxarco in connection with the share
exchange herein contemplated; and the Company warrrants to Laxarco that
no agent or other intermediary has been engaged by the Company in
connection with the share exchange herein contemplated.
22.0 PROPER LAW
22.1 This Agreement will be governed by and construed in accordance
with the laws of the State of Colorado and the parties will attorn to
jurisdiction of the Courts thereof.
IN WITNESS WHEREOF the parties hereto have set their hand and seal as
of the day and year first above written.
SIGNED, SEALED and DELIVERED
by AUTOMATED TRANSFER SYSTEMS
CORPORATION in the presence of:
/S/ XXXXXXX XXXXXXX
AUTOMATED TRANSFER SYSTEMS CORPORATION
/S/ XXXXXXX XXXXXXX
SIGNED, SEALED and DELIVERED
by LAXARCO HOLDING LIMITED
in the presence of:
//S/ ANDREAS PIFANIS
LAXARCO HOLDING LIMITED
/S/ XXXXXXXXX XXXXXX
SIGNED, SEALED and DELIVERED
by CARBON RESOURCES LIMITED
in the presence of:
/S/ XXXXXX XXXXXX
CARBON RESOURCES LIMITED
/S/ XXXXXX XXXXXX
SIGNED, SEALED and DELIVERED
by STONE CANYON RESOURCES LTD.
in the presence of:
/S/ XXXXXXX XXXXXXX
XXXXX CANYON RESOURCES LTD.
/S/ XXXXXXXXXX XXXXXXXX
