THIS DEBT SETTLEMENT AGREEMENT ("this Agreement") made and effective as of
and from September 15, 1999.
BETWEEN:
VOICE MOBILITY INTERNATIONAL, INC., a body corporate,
incorporated under the laws of the State of Nevada, United States
of America, having an office at 701 - 543 Granville Street, in
the City of Vancouver, in the Province of British Columbia
(hereinafter referred to as "International")
OF THE FIRST PART
AND:
MARITIME TEL & TEL LIMITED, a body corporate, incorporated under
the laws of the Province of Nova Scotia and having its Head
Office at 0xx Xxxxx, Xxxxxxx Xxxx Xxxxxxxx, 0000 Xxxxx Xxxxx
Street, in the City of Halifax, Province of Nova Scotia
(hereinafter referred to as "MTT")
OF THE SECOND PART
AND:
VOICE MOBILITY INC., a body corporate, incorporated under the
Canada Business Corporations Act, and having its Head Office at
000 - 000 Xxxxxxxxx Xxxxxx, xx the City of Vancouver, Province of
British Columbia
(hereinafter referred to as "VMI")
OF THE THIRD PART
W H E R E A S:
A. MTT is party to an agreement, dated March 26, 1999, with VMI (the "MTT
Agreement"), pursuant to which MTT has been extensively involved in the
development of VMI's products and in researching and developing markets for
VMI's products, and anticipated future products.
B. International has closed an agreement with the owners of 100% of the issued
shares of VMI pursuant to which it has, through a subsidiary, acquired
those shares thereby making VMI indirectly the wholly owned subsidiary of
International.
C. The common stock of International are traded electronically on the
Over-The-Counter Bulletin Board (the "BB") administered by the National
Association of Securities Dealers.
D. Pursuant to the understandings between MTT and VMI prior to the MTT
Agreement, the work being done for VMI by MTT was all at the expense of
VMI, and MTT and VMI have agreed in the MTT Agreement that the total
charges by MTT for its work for VMI are settled at $500,000 Cdn. (the "VMI
Debt").
E. International is now willing to assume responsibility for the VMI Debt.
F. MTT is desirous of acquiring 1,428,571 voting shares of the common stock of
International (the "International Shares") on the terms hereinafter
contained.
G. Being a company publicly traded in the United States the International
Shares are subject to all the applicable laws and regulations of the United
States of America and its various States (hereinafter called the "U.S.
Laws").
NOW THEREFORE, in consideration of the premises and the covenants and
agreements hereinafter contained and other good and valuable consideration, the
receipt and sufficiency is hereby acknowledged, the parties hereto (the
"Parties") agree as follows:
1. International agrees with MTT that International hereby assumes
responsibility for the repayment of the VMI Debt and will issue
International Shares to MTT in satisfaction thereof.
2. MTT agrees that it will accept, in full satisfaction of the VMI Debt,
International Shares.
3. The International Shares are voting shares of the common stock of
International as they are constituted on this date. The International
Shares, when issued, will be issued as fully paid and non-assessable, free
of all liens, charges and encumbrances but will be "restricted" in that
they may not be sold or otherwise transferred in the absence of an
effective registration statement filed with the United States Securities
and Exchange Commission ("SEC") or an exemption therefrom.
4. Upon the issuance of the International Shares and the delivery of a
certificate therefor to MTT, the VMI Debt shall be wholly and
unconditionally deemed assigned to International and MTT shall have no
further interest in the VMI Debt.
5. It shall also be a condition of the assignment of the VMI Debt to
International that the Board of Directors of International shall have
appointed, as a Director of International, a person who shall have earlier
been designated by MTT in writing. Although such appointment shall be made
at any time and from time to time during the term of this Agreement, in the
event the appointment is not made on or before September 30, 1999 or the
requirements of subparagraphs (a) or (b) are not completed, the assignment
shall be effective notwithstanding the failure of MTT to appoint a
director. The appointment of MTT's nominee shall be subject to the prior:
(a) submission to International of a written consent of the nominee to act
as a director of International - which shall include a declaration
that the nominee is not, to the best of his knowledge and belief,
disqualified from acting pursuant to the provisions of any applicable
statutes, rules or regulations;
(b) delivery by MTT's nominee of such biographical and historical data as
International may reasonably request or
require so that it can satisfy applicable disclosure requirements.
It is understood that the initial appointment will not be subject to a
meeting of shareholders of International but that subsequent appointments or
appointments for subsequent periods will be subject to the normal voting
procedures applicable.
6. International covenants and warrants in favour of MTT that:
(a) it is a corporation duly incorporated pursuant to the laws of the
State of Nevada, United States of America, and is in good standing and
in full satisfaction of all of its obligations pursuant to the laws
and regulations of the said State;
(b) the International Shares are quoted for trading on the BB and it is in
full compliance with all applicable rules and requirements of the NASD
and the U.S. Laws;
(c) International is unrestricted in its right to enter into this
Agreement, and is not restricted from entering into this Agreement or
satisfying its obligations hereunder by the terms of any other
agreement to which it is a party or any outstanding orders or
judgments.
(d) International shall immediately make application to the securities
regulatory authorities of the Province of Nova Scotia, Canada to get
whatever approvals may be required to enable it to complete and close
this Agreement and to permit MTT to resell the International Shares at
the expiry of any hold period applicable to it under the laws of the
said Province. International will also bona fide use its best efforts
to prosecute such application to get the said approvals as soon as
possible following the execution of this Agreement. Further,
International agrees to include the International Shares in the first
registration statement it files with the SEC under the Securities Act
of 1933 and to use its best efforts to have such registration
statement declared effective.
(e) All necessary consents and approvals have been obtained by
International, and International has completed all necessary corporate
actions, including obtaining the approval of its directors, as
necessary, to authorize and permit it to enter into this Agreement and
to issue the International Shares;
(f) International shall maintain its quote on the BB or higher status
electronic trading facilities of the NASD or on a national exchange in
the United States for a period of not less than three (3) years
following the date of issue of the International Shares;
(g) The authorized capital of International consists of 50,000,000 voting
common shares with par value of $0.001 each of which at the date
hereof, and before giving effect to the issue of the International
Shares, 8,871,750 been duly issued and are outstanding, and 1 million
Preferred shares with par value of $0.001 each, none of which are
issued.
(h) No person has as of June 30, 1999 any option, warrant, right, call,
commitment, conversion right, right of exchange or other agreement or
any right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an option, warrant, right, call, commitment,
conversion right, right of exchange or other agreement except as
detailed in Schedule "A" hereto;
(i) There were no shareholder loans outstanding at June 30, 1999 except as
disclosed in Schedule "B" hereto;
(j) Since its incorporation, International has not, directly or
indirectly, declared or paid any dividends or declared or made any
other distribution on any of its shares of any class and has not,
directly or indirectly, redeemed, purchased or otherwise acquired any
of its shares of any class or agreed to do so.
(k) Except as disclosed to MTT, or pursuant to the agreement disclosed in
Clause B, International has no subsidiaries or agreements of any
nature to acquire any subsidiary or acquire or lease any other
business operations.
(l) The corporate records of International are complete and accurate and
all corporate proceedings and actions reflected therein have been
conducted or taken in compliance with all applicable laws and with the
constituent documents, charter or by-laws of International, and
without limiting the generality of the foregoing,
(i) the minute books contain complete and accurate minutes of all
meetings of the directors and shareholders of International held
since the incorporation of International, and all such meetings
were duly called and held;
(ii) the minute books contain all written resolutions passed by the
directors and shareholders of International and all such
resolutions were duly passed;
(iii)the share certificate books, register of shareholders and
register of transfers of International are complete and accurate,
and all such transfers have been duly completed and approved and
any tax payable in connection with the transfer of any securities
of International has been duly paid; and
(iv) the registers of directors and officers are complete and accurate
and all former and present directors and officers of
International were duly elected or appointed, as the case may be.
(m) International has all necessary corporate power to enter into and
perform its obligations under this agreement. The execution, and
delivery and performance by International of this agreement and the
consummation of the transactions contemplated thereby:
(i) have been duly authorized by all necessary corporate action on
the part of International; and
(ii) do not (or would not with the giving of notice, the lapse of time
or the happening of any other event or condition) result in a
violation or a breach of, or a default under or give rise to a
right of termination, greater rights or increased costs,
amendment or cancellation or the acceleration of any obligation
under: (A) any charter or by-law instruments of International;
(B) any contracts or instruments to which International is a
party or by which International is bound; or (C) any laws
applicable to it.
(n) This Agreement constitutes legal, valid and binding obligations of
International enforceable against it in accordance with its terms,
subject only to the following qualifications:
(i) an order of specific performance and an injunction are
discretionary remedies and, in particular, may not be available
where damages are considered an adequate remedy;
(ii) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other similar
laws generally affecting the enforceability of creditors' rights;
and
(iii)such approval order or other approval is obtained from the Nova
Scotia Securities Commission as may be required to make the
closing of this Agreement by the Parties in full and legal
compliance with the laws and regulations of the Province of Nova
Scotia.
(o) International is not subject to, or a party to, any charter or by-law
restriction, any law, any claim, any contract or instrument, any
encumbrance or any other restriction of any kind or character which
would prevent the consummation of the transactions contemplated by
this agreement or compliance by International with the terms,
conditions and provisions hereof or thereof or the continued operation
of its business by International after the date hereof on
substantially the same basis as heretofore operated or which would
restrict the ability of MTT to acquire any of the International
Shares, except for the necessity of obtaining such approvals as may be
required in the Province of Nova Scotia, Canada.
(p) All accounting and financial books and records of International have
been fully, properly and accurately kept and
completed in all material respects.
(q) The financial statements of International attached hereto as Schedule
"C" have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with those of
previous fiscal years and present fairly the assets, liabilities,
(whether accrued, absolute, contingent or otherwise) and financial
position of International as at the date of the statements - namely
March 31, 1999.
(r) The financial statements of VMI attached hereto as Schedule "D" have
been prepared in accordance with generally accepted accounting
principles applied on a basis consistent with those of previous fiscal
years and present fairly the assets, liabilities (whether accrued,
absolute, contingent or otherwise) and financial position of VMI as at
the date of the statements - December 31, 1998.
(s) International has filed or caused to be filed, within the times and
within the manner prescribed by law, all tax returns and tax reports
which are required to be filed by or with respect to International.
The information contained in such returns and reports is correct and
complete and such returns and reports reflect accurately all liability
for taxes of International for the periods covered thereby. All taxes
and assessments (including interest and penalties) that are or may
become payable by or due from International have been fully paid or
fully disclosed and fully provided for in the books and records, and
the financial statements of International. No examination of any tax
return of International is currently in progress, there are no
outstanding agreements or waivers extending the statutory period
providing for an extension of time with respect to the assessment or
re-assessment of tax or the filing of any tax return by, or any
payment of any tax by International, and there are no claims now
threatened or pending against International in respect of taxes or any
matters under discussion with any governmental entity relating to
taxes.
(t) Since the date of the financial statements attached as Schedule "D",
the business of International has been carried on in the ordinary
course there has been no change in the affairs, assets, liabilities,
business, prospects, operations or conditions of International or its
business, financial or otherwise, except as has been disclosed to MTT.
(u) International is conducting its business in compliance with all
applicable laws of each jurisdiction in which its business is carried
on, except for acts of non-compliance which in the aggregate are not
material.
(v) International owns, holds, possesses or lawfully uses in the operation
of its business all authorizations which are in any manner necessary
for it to conduct its business as presently or previously conducted or
for the ownership and use of its assets, free and clear of all
encumbrances and in compliance with all laws applicable thereto.
International is not in default, nor has it received any notice of any
claim in default, with respect to any such authorizations. All such
authorizations are renewable by their terms or in the ordinary course
of business without the need for International to comply with any
special qualification or procedures or to pay any amounts other than
routine filing fees. None of such authorizations will be adversely
affected by the consummation of the transactions contemplated hereby.
(w) International has provided MTT a list of all contracts of
International and VMI which are material to the operation of its
business or which involve the expenditure of more than $10,000 each or
which have a term left to run of more than three (3) years (the
"Material Contracts"). Except as disclosed by MTT, International is
not party to or bound by:
(i) any benefit plans or any collective agreements;
(ii) any agreement or commitment relating to the borrowing of money;
(iii)any guarantee or other contingent liability in respect of any
indebtedness or other liability or obligation of any other person
(other than the endorsement of negotiable instruments for
collection in the ordinary course of its business);
(iv) any contract or commitment limiting the freedom of International
to engage in any line of business or to compete with any other
person;
(v) any licensing or other contract or commitment relating to
intellectual properties used by International in the conduct of
its business;
(vi) any agreement or commitment not entered into in the ordinary
course of its business; and
(vii)any agreement or arrangement with any person with whom
International (or their present or former directors, officers and
employees) does not deal at arm's length.
(x) International is in compliance with all laws respecting employment and
employment practices, terms and conditions of employment, pay equity
and wages and hours and has not and is not engaged in any unfair
labour practice.
(y) No unfair labour practice, complaint or grievance against
International is pending or, to the best of the knowledge of
International, threatened before any labour relations board or similar
governmental entity with respect to its business.
(z) There is no labour strike, dispute, slowdown or stoppage actually
pending or involving or, to the best of the knowledge of
International, threatened against International with respect to its
business.
(aa) No union representation question exists respecting the employees of
International in connection with its business and no collective
bargaining agreement is in place or currently being negotiated by
International.
(bb) International maintains insurance policies with responsible insurers
as are appropriate to its business and assets in such amounts and
against such risks as are customarily carried and insured against by
prudent owners of comparable businesses and assets. All such policies
of insurance coverage are in full force and effect. International is
not in default with respect to any of the provisions contained in any
such insurance policy and has not failed to give any notice or present
any claim under any such insurance policy in due and timely fashion.
(cc) There is no action, suit or proceeding, at law or in equity, by any
person, nor any arbitration, administrative or other proceeding by or
before (or to the best of the knowledge of International any
investigation by) any governmental entity pending, or, to the best of
the knowledge of International, threatened against or affecting
International or any of its properties or rights or any of the assets,
and International does not know of any valid basis for any such
action, suit, proceeding, arbitration or investigation. International
is not subject to any judgment, order or decree entered in any lawsuit
or proceeding.
(dd) International has not made any assignment for the benefit of its
creditors nor has any receiving order been made against it under the
bankruptcy or insolvency laws of any jurisdiction or similar laws of
any other jurisdiction, nor has any petition for such an order been
served upon it, nor has it attempted to take the benefit of any
legislation with respect to financially distressed debtors, nor, after
giving effect to this financing, is insolvent within the meaning of
any bankruptcy or insolvency laws which are applicable to, or have
jurisdiction over, International.
(ee) None of this Agreement or any documentation or any certificate or
statement in writing which has been supplied by or on behalf of
International or by any of the directors, officers or employees of
International in connection with the transactions contemplated hereby
contains any untrue statement of a material fact, or omits any
statement of a material fact necessary in order to make the statements
contained herein or therein not misleading. There is no fact known to
International which materially and adversely affects the affairs,
businesses, prospects operations or conditions of International,
financial or otherwise, or its business or the assets, which has not
been set forth in this agreement.
7. MTT covenants and warrants in favour of International that:
(a) MTT is a company incorporated and existing under the laws of Nova
Scotia.
(b) MTT has all necessary corporate power to enter into and to perform its
obligations under this agreement. The execution, delivery and
performance by MTT of this Agreement and the consummation of the
transactions contemplated thereby have been duly authorized by all
necessary corporate action on the part of MTT. This agreement
constitutes legal, valid and binding obligations of MTT enforceable
against it in accordance with its terms.
(c) MTT is not subject to, or a party to, any charter or by-law
restriction, any law, any claim, any contract or instrument, any
encumbrance or any other restriction of any kind or character which
would prevent consummation of the transactions contemplated by this
agreement.
(d) Subject to section 12 hereof, MTT is acquiring the International
Shares as principal for its own account, not for the benefit of any
other person or company.
(e) MTT is resident in the Province of Nova Scotia.
8. MTT undertakes that it will execute or cause to be executed and delivered
to International, and assist International in filing on a timely basis any
report or undertaking with any securities commission, stock exchange or
other regulatory authority which may be required by applicable securities
legislation and stock exchange rules in connection with its acquisition of
the International Shares.
9. This Agreement is subject to the Closing occurring on or before December
31, 1999. If the Closing has not occurred by the said date either Party may
at any time thereafter give notice to the others terminating this
agreement. If the issuance and delivery of the International Shares does
not occur by December 31, 1999 VMI shall pay to MTT the VMI Debt upon
demand.
10. The acquisition of the International Shares by MTT is subject to the
following terms and conditions for the exclusive benefit of MTT to be
fulfilled or performed on or before the VMI Closing Date:
(a) The representations, warranties and covenants of International
contained herein shall be true and correct on and as of the Time of
Closing with the same force and effect as such representations,
warranties and covenants have been made as of such time.
(b) International shall comply with all covenants and agreements herein
agreed to be performed by it at or prior to the Time of Closing.
(c) International shall cause a favourable legal opinion dated at the Time
of Closing to be delivered by its lawyer to MTT to the effect that
International is duly incorporated, organized and validly subsisting,
that the International Shares have been validly issued as fully paid
and non assessable in compliance with all securities law requirements,
that this Agreement is a valid, binding and enforceable obligation of
International under the laws of the State of Nevada, together with
such other matters as MTT may reasonably require.
11. The closing of this Agreement shall take place on the VMI Closing Date at
such place and time as shall be agreed to by the parties or, in the absence
of such agreement, at the offices of VMI detailed on the first page of this
Agreement, the date the Closing is completed being hereinafter called the
"Time of Closing".
12. At the Time of Closing, International shall deliver to MTT duly executed
certificates representing the International Shares issued as fully paid and
non-assessable registered in the name of MTT or such associated, affiliated
or subsidiary company as MTT shall designate by notice to International.
The registered holder will give written confirmation that it will be bound
by the terms of this Agreement as the same may be applicable to it.
13. MTT agrees that it will not sell, on any one day, more than 25,000
International Shares without having given notice to VMI of its intent or
wish to sell such shares at least 5 business days prior to such day.
14. All covenants, representations, warranties and indemnities made herein
shall survive the closing of this Agreement.
15. The Parties agree to do, execute and deliver, or cause to be done, executed
and delivered, all such further assignments, documents, acts, matters and
things as, from time to time, may be reasonably required to give effect to
this agreement and the obligations of the parties hereunder.
16. Time shall be of the essence of this Agreement and of each and every part
hereof.
17. This Agreement may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to
constitute one and the same instrument.
18. This Agreement shall be interpreted according to the laws of the State of
Nevada and the laws of the United States of America applicable therein.
19. Any notice which is required to be given hereunder shall be given in
writing and will be effectively given if the same is:
(a) delivered or mailed by prepaid registered or certified post to the
address of the intended recipient set forth at the top of this
Agreement;
(b) delivered to a director or officer of the intended recipient; Provided
that in the case of a notice being given by MTT, it may not be given
to a Director or Officer of VMI or International who was appointed or
elected to that position as a nominee of MTT; or
(c) sent be telecopier (fax) to the intended recipient at the following
numbers:
MTT (000) 000-0000
International: (000) 000-0000
VMI: (000) 000-0000
provided that any Party may give notice to the other parties of new
addresses or new fax numbers to be used for the purpose of this
provision. Any notice which is delivered shall be deemed to have been
given on the date of delivery. Any notice which is sent by telecopier
shall be deemed to be given on the first weekday following the date
upon which the telecopied message is transmitted. Any notice that is
sent by prepaid mail shall be deemed to have been given on the 5th
weekday after the date upon which the notice is mailed from a Post
Office in Canada.
20. None of the Parties may assign any of their rights hereunder without the
prior written consent of the other parties, such consent not to be
unreasonably withheld.
21. This Agreement shall enure to the benefit of and be binding upon the
Parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF the Parties hereto have caused this agreement to be
executed by their duly authorized officers as and
from the day and year first above written.
VOICE MOBILITY INTERNATIONAL, INC.
Per: /s/ Xxxxx X. Xxxxxx
President - Xxxxx X. Xxxxxx
Per: /s/ Xxxxxxx X. Xxxxx
Secretary - Xxxxxxx X. Xxxxx
MARITIME TEL & TEL LIMITED
Per: /s/ Xxxxx X. Xxxxxxxxx
VOICE MOBILITY INC.
Per: /s/ X. Xxxxxx
X. Xxxxxx - President
Per: /s/ W. E. Xxxxx
W.E. Xxxxx - Secretary
