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EXHIBIT 99.2
Agreement
THIS AGREEMENT is dated as of the 26th day of October, 1999
BY AND BETWEEN
CYCLONE FINANCING GROUP INC., a Canadian corporation with a
business address located at 000-00000 000xx Xxxxxx, Xxxxx Xxxxx,
XX, Xxxxxx X0X 0X0,
(Herein called "Investor") OF THE FIRST PART
AND:
XXXX XXXXXX, business Man residing at 0000 Xxxxxxxx Xxxxxx,
Xxx Xxxxx, XX, 00000 and XXXXXXXX XXXXXX, Business man residing at
0000 Xxxxxx Xxxxxx, Xxx Xxxxx, XX 00000 and HHPN DEVELOPMENT CORP.,
doing business at 0000 Xxxxxx Xxx Xxx Xx., Xxxxx 000, Xxx Xxxxx,
Xx., 00000
(Herein called the "Managers") OF THE SECOND PART
WHEREAS:
The Managers have developed a software program (Software) that
is used to develop database applications on the internet. The
program is currently known as DBPanacea' and offers significant
advantages over existing internet website database engines. In
addition, various other applications have been developed based on
the DBPanacea technology, including; an online auction template
system which can be duplicated worldwide without restriction, a
banner advertising management network, a sports game template, and
other back-end' template concepts and applications based on the
DBPanacea technology not herein disclosed and/or not yet developed.
(All versions of DBPanacea and all other applications developed
thus far and applications yet to be developed based on or
associated with DBPanacea technology and the intellectual property
of DBPanacea, including all patents, trademarks, copyrights and all
other associated assets, are herein jointly called the Products).
AND WHEREAS:
Xxxx Xxxxxx and Xxx Xxxxxx have incorporated a company called
HHPN DEVELOPMENT CORPORATION, referenced herein, which is a
Delaware corporation, which has been created for the purpose of
commercially exploiting the Products and which has an existing
revenue stream derived from custom web development and consulting.
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AND WHEREAS:
The Managers are the sole owners of the Products and the sole
owners of the Company (jointly called the Projects') and desire to
sell up to 100% of the total ownership in the Projects to the
Investor for a total sum of $177,500,000.00.
NOW THEREFORE WITNESSETH,
THAT in consideration of the premises and the covenants,
agreements, representations, warranties and payments herein
contained, the parties hereto covenant and agree as follows:
1. WARRANTIES AND REPRESENTATIONS:
a) The following are the only warranties and representations
by and between the parties:
b) The Managers warrant and represent to the Investor as
follows:
c) That to the best of their knowledge, the business plan
attached hereto (Business Plan) previously supplied to
the Investor, is true and contains an accurate
representation of the commercialization potential for
the Projects;
d) That they are the sole and exclusive owners of the
Projects, free and clear of any encumbrances, liens and
other charges and no other party has licence to sell or
reproduce the software;
e) That they have the right and authority to grant to the
Investor an exclusive option to purchase up to 100% of
the Projects;
f) The Software has certain powerful advantages over
existing competitive applications (Cold Fusion, Visual
Studio, JDeveloper, etc) including but not limited to;
platform independence, ease of use, lower learning curve
for developers, speed of development and lower overall
development costs derived from quicker development with
less costly development staff;
g) That they have committed their professional lives for a
minimum of the next two years exclusively to commercially
exploiting the Projects and currently work full time at
the Company and all contracts which the Managers take on
directly or indirectly shall be exclusively fulfilled by
the Company;
h) The total liabilities in the Projects do not exceed
$100,000.00 which is primarily back wages for the
Managers;
i) They are in the process of fulfilling a $200,000.00
contract for website development of which approximately
90% is gross profit;
j) The Company has 21 million shares issued and outstanding
of which the Managers own 100%.
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k) The Investor warrants and represents to the Managers as
follows:
l) That it has the right and authority to enter into this
agreement;
m) That is has the ability to fulfill this Agreement once
Option1 has been exercised.
2. GRANTING OF THE OPTION TO PURCHASE AND PAYMENT SCHEDULE:
The Managers hereby unconditionally grant the Investor the
exclusive and irrevocable right to purchase up to 100% of the
Projects for the total purchase price of up to one hundred and
seventy seven million and five hundred thousand ($177,500,000.00)
US dollars (The rights to purchase as described in this clause
shall herein be called Options1/2/3 as described herein).
a) OPTION 1. The Managers hereby unconditionally grant the
Investor the exclusive and irrevocable right to purchase 50% of the
Projects for the total purchase price of two and a half million
($2,500,000.00) US dollars (the Investment). (The right to purchase
as described in this clause shall herein be called Option1).
1. The Investor may exercise Option1 by issuing a notice in
writing to the Managers.
2. Once Option1 has been exercised, (a) an additional
agreement shall be put in place without unreasonable
delay by either party outlining in more detail the
purchase of the Projects as described herein and which
shall contain a clause relating to default and other
terms and conditions pertaining to that agreement, none
of which shall conflict with the spirit and intent of
this Agreement and (b) the Investment shall be paid to
the Managers within a reasonable time based on a
pre-defined payment schedule mutually agreed upon by the
Parties but the Investor shall not be obligated to pay
more than $200,000.00 per month towards the Investment
until the full Investment has been paid and (c) it is
agreed that the payments shall not be less than
$17,000.00 per month and (d) the Investor may, solely at
its discretion, exceed the $200,000.00 monthly maximum
payments referenced above;
3. Prior to Option1 being exercised, the Investor shall pay
the Managers a development fee of $10,000.00 per month
(Development Fee) to further develop the software and
business plan. Payments of the Development Fee shall
begin on December 9, 1999 and shall continue monthly
until Option1 has been exercised or until this Agreement
is terminated. In the event that the Option1 is not
exercised prior to the termination of this Agreement all
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Development Fees paid to the Managers shall be forfeited
by the Investor as total liquidated damages and the
Managers shall not seek nor be entitled to any other
damages;
4. If Option1 is not exercised prior to the termination of
this Agreement, then the Managers have the right to
immediately cancel Option2 and Option3 by written notice.
b) Option 2 The Investor may acquire an additional 25%
ownership in the Projects for an additional investment of
$50,000,000.00.
5. The Investor may exercise Option2 by issuing a notice in
writing to the Managers along with a check for
$50,000,000.00 made out to the Managers personally to be
used at their discretion;
6. Option 2 is non-cancelable and shall expire 24 months
after Option1 has been exercised.
c) Option 3 The Investor may acquire the final 25%
ownership in the Projects for an additional investment of
$125,000,000.00.
7. The Investor may exercise Option3 by issuing a notice in
writing to the Managers along with a check for
$125,000,000.00 made out to the Managers personally to be
used at their discretion.
8. Option 3 is non-cancelable and shall expire 24 months
after Option1 has been exercised.
3. DUE DILIGENCE:
a) The Investor shall have up to 120 days from the execution
date of this Agreement to complete its due diligence in
the commercial viability of the Projects (Due Diligence).
b) At any time during the term of this Agreement, the
Investor may elect to exercise Option1.
4. TERM AND CANCELATION:
a) The term of this Agreement shall be three hundred and
sixty five (365) days from the execution date of this
Agreement
b) The Agreement may be cancelled by the Managers anytime
after the 120 day Due Diligence period with five days
written notice.
c) The Investor may cancel this Agreement at anytime during
the 365 day term.
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d) The Agreement may not be cancelled by either party once
Option1 has been exercised.
5. USE OF FUNDS:
100% of the Investment derived from Option 1 is for working
capital to be used in accordance with the requirements of the
Business Plan or a reasonably revised business plan and/or the
further development and world commercialization of the Projects, or
for previously incurred liabilities not to exceed $100,000.00.
6. CONFIDENTIALITY AND EXCLUSIVITY:
a) Whereas all parties agree that the improper or
unauthorized use or disclosure of the terms and
conditions of this Agreement or unauthorized contact with
parties involved directly or indirectly with the Investor
would be highly detrimental and damaging to the Investor.
b) The Managers agree that neither they nor any of their
subsidiaries, divisions, employees, agents,
representatives, independent contractors or other persons
or organizations over which they have control, will at
any time during the term of this Agreement directly or
indirectly use or disclose any information pertaining to
the terms and conditions thereof, for any purposes which
are not associated with the Agreement or disseminate or
disclose any information to any person or organization
who or which are not directly involved in the Agreement
without prior written approval from the Investor.
c) The Managers agree that neither they nor their
subsidiaries, divisions, employees, agents or
representatives, independent contractors, or other
persons or organizations over which they have control
will attempt to do business with or obtain funding from
any party which the Investor has introduced them to for
a period of one (1) year after the expiry or termination
of this Agreement without the written approval of the
Investor.
d) That prior to the expiration or termination of this
Agreement, no other party will be granted the right to
purchase any part of the Projects without the expressed
written approval of the Investor.
e) Clauses 6a and 6b relating to confidentiality shall
survive the term of this agreement for an additional five
years.
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7. GOVERNING LAW AND DISPUTES:
The parties hereto agree that any disagreement or dispute
between them shall first be attempted to be remedied by mediation
or arbitration. In the event that agreement cannot be reached on
the appointment of an independent mediator or arbiter then the
parties hereto agree to accept the appointment of a mediator or
arbiter who shall be appointed, following application for such
appointment by the court. If the dispute cannot be remedied by
mediation or arbitration then this agreement shall be governed for
all purposes by the laws of the province of British Columbia. For
any disputes arising among the parties hereto, venue shall lie with
the court of competent jurisdiction in Vancouver, British Columbia.
The additional agreement referred to in clause 2.a.b.a shall also
contain a clause regarding governing law but shall be negotiated
once Option1 has been exercised and the jurisdiction shall not
necessarily be the same as is written herein (the province of
British Columbia jurisdiction applies only to this Agreement and
not necessarily to further agreements).
8. DUTIES AND RESPONSIBILITIES:
a) The following are the only Duties and Responsibilities by
and between the Parties hereto:
b) The Duties and Responsibilities of the Managers shall be
as follows:
c) To be wholly responsible to manage and operate the day to
day affairs of the Managers on a best efforts basis
and/or to further develop and commercially exploit the
Projects as per the business plan for the mutual benefit
and profit of the Investor and the Managers.
d) The Duties and Responsibilities of the Investor shall be
as follows:
e) To provide 2.5 million US dollars to the Managers under
the terms of this agreement once Option1 has been
exercised.
9. NOTICES AND PAYMENTS:
Any notice, election, payment, consent or other writing
required or permitted to be given hereunder shall be deemed to be
sufficiently given if delivered or mailed by registered mail or fax
to the parties at the addresses set out in the beginning of this
Agreement and any such notice shall be sufficiently given when
delivered by mail, on the third business day following the date of
mailing, or if faxed, on the next succeeding day following the
faxing thereof.
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10. SCHEDULES:
This Agreement constitutes the entire agreement between the
parties and there are no representations or warranties, expressed
or implied, statutory or otherwise and no agreements collateral
hereto, other than as expressly set forth or referred to herein.
11. TIME shall be of the essence in this Agreement.
12. CURRENCY of all funds mentioned in this agreement shall be in
US dollars.
13. SUCCESSOR AND ASSIGNS:
This Agreement shall endure to the benefit of and be binding
upon the parties hereto and their respective successors and
assigns.
14. SEVERABILITY:
Should any part of this Agreement be declared or held invalid
for any reason, such validity shall not affect the validity of the
remainder which shall continue in full force and effect and be
construed as if this Agreement had been executed without the
invalid portion and it is hereby declared that the intention of the
parties hereto that this Agreement should have been executed
without reference to any portion of which may be for any reason
hereinafter declared or held invalid.
15. BREACH AND REMEDIES:
The parties agree that great loss and irreparable harm would
be suffered in the event that the Investor or the Managers breach
any of the terms and conditions of this agreement. In the event
that such breach appears to be an imminent possibility, the parties
shall be entitled to all legal and equitable remedies afforded to
them or it by law as a result thereof, including, but not limited
to a temporary restraining order and permanent injunction to
prevent a breach or contemplated breach of the agreement, and may,
in addition to any and all forms of relief, recover all reasonable
costs and attorney's fees incurred in seeking any such remedy(ies).
16. ASSIGNMENT:
This Agreement may be assigned by either party without the
consent of the other parties.
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17. SUPERSEDES.
This Agreement supersedes and replaces all previous agreements
between the parties, verbal or written.
18. EXECUTION AND AGREEMENT:
This Agreement may be executed in several parts in the same
form and such parts as so executed shall together form one original
agreement, and such parts, if more than one, shall be read together
and construed as if all the signing parties hereto had executed one
copy of this agreement.
19. ACCEPTANCE BY FACSIMILE:
The parties agree that receipt of a fully executed copy of
this Agreement via facsimile transmission shall be binding and may
be used as admissible evidence that the party transmitting intends
to be bound by the terms set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be executed effective as of the date first above
written and have agreed to and initialed each page:
Authorized Signatures:
SIGNED, SEALED & DELIVERED )
By the authorized signatory of )
CYCLONE FINANCING GROUP INC. )
)
)
_____________________________
) Xxx Xxxxx
________________________________ )
Witness
SIGNED, SEALED & DELIVERED )
In the presence of )
)
)
)
______________________________
) Xxxx Xxxxxx
________________________________ )
Witness
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SIGNED, SEALED & DELIVERED )
In the presence of )
)
)
)
______________________________
) Xxxxxxxx Xxxxxx
________________________________ )
Witness
SIGNED, SEALED & DELIVERED )
By the authorized signatory of )
HHPN DEVELOPMENT CORP. )
)
)
)
_____________________________
) Xxxxxxxx Xxxxxx
________________________________ )
Witness
SIGNED, SEALED & DELIVERED )
By the authorized signatory of )
HHPN DEVELOPMENT CORP. )
)
)
)
_____________________________
) Xxxx Xxxxxx
________________________________ )
Witness
