AMENDED EXCHANGE AGREEMENT
EXCHANGE AGREEMENT ("AGREEMENT") dated as of this 3RD day of December,
2002 by and among CITY NETWORK, INC., a company incorporated in the British
Virgin Islands ("CITY NETWORK"), the Shareholders of CITY NETWORK identified on
Schedule I hereto who execute counterpart signature pages to this agreement (the
"CITY NETWORK SHAREHOLDERS"), Investment Agents, Inc., a Nevada corporation
("IVAG"), XXXXXX XXX XXXXXXX ("XXXXXXX"), XXXXXXX XXXXXX XXXX ("ACHA") and
XXXXXX X. XXXXXXXXXX ("PANGANIBAN")(Xxxxxxx, Acha and Panganiban collectively,
the "IVAG PRINCIPALS").
RECITALS
WHEREAS, the CITY NETWORK Shareholders hold 12,000,000 ordinary shares
of CITY NETWORK (the "CITY NETWORK SHARES"), which constitute 100% of the issued
and outstanding shares of CITY NETWORK.
WHEREAS, the CITY NETWORK Shareholders, the IVAG Principals and IVAG
desire to effect the exchange of the CITY NETWORK Shares for 12,000,000 shares
of common stock of IVAG (the "IVAG SHARES") upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, representations, warranties and agreements hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1. DEFINITIONS:
When used herein, the following terms shall have the meanings set forth
below:
"AFFILIATE" means, with respect to any given Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. The term "control"
(including, with correlative meaning, the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"ASSETS" means all properties, assets, Contracts, business, goodwill
and rights of a person as a going concern, of every kind, nature, character and
description, tangible and intangible, wherever located and whether or not
carried or reflected on the books and records of IVAG or City Network.
"CONTRACT" means any contract, agreement, lease, license, arrangement,
commitment, sales order, purchase order or any claim or right or any benefit or
obligation arising thereunder or resulting therefrom and currently in effect,
whether oral or written.
"DOLLARS" and "$" means dollars in lawful currency of the United States
of America.
"EMPLOYEE BENEFIT PLAN" means any (i) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (ii) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (iii) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (iv) Employee Welfare Benefit Plan or
material fringe benefit plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(1).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" shall mean the United States Securities Exchange Act of
1934, as amended.
"EXPORT CONTROL LAWS" shall mean all laws, now or hereafter in effect,
and in each case as amended or supplemented from time to time, and any judicial
or administrative interpretations thereof, relating to the export or re-export
of commodities and technologies. Export Control Laws include, but are not
limited to, the Export Administration Act of 1979 (24 U.S.C. xx.xx. 2401-2420);
the International Emergency Economic Powers Act (50 U.S.C. xx.xx. 1701-1706);
the Trading with the Enemy Act (50 U.S.C. xx.xx. 1 ET SEQ); the Arms Export
Control Act (22 U.S.C. xx.xx. 2778, 2779); and the International Boycott
Provisions of Section 999 of the Code.
"GAAP" shall mean generally accepted accounting principles in the
United States as of the date of this Agreement consistently applied.
"INTELLECTUAL PROPERTY" means any and all (i) inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (ii)
trademarks, service marks, trade dress, logos, trade names, and corporate names,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (iii) copyrightable works,
whether or not registered, all copyrights, and all applications, registrations,
and renewals in connection therewith, (iv) mask works and all applications,
registrations, and renewals in connection therewith, (v) trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, blueprints, sketches,
storyboards, models, engineering drawings, specifications, customer and supplier
lists, pricing and cost information, and business and marketing plans and
proposals), (vi) computer software (including data and related documentation),
(vii) other proprietary rights and Know-how, (viii) copies and tangible
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embodiments thereof (in whatever form or medium) and (ix) licenses and
sublicenses granted and obtained with respect thereto, and rights thereunder.
"KNOW-HOW" means any and all technical knowledge, proprietary rights,
patented or unpatented inventions, trade secrets, analytical methodology,
processes, data and all other information or experience possessed by, as the
case may be, IVAG or CITY NETWORK, or which IVAG or CITY NETWORK have the right
to use.
"LIABILITIES" means any direct or indirect liability, indebtedness,
claim, loss, damage, deficiency, obligation or responsibility, fixed or unfixed,
xxxxxx or inchoate, liquidated or unliquidated, secured or unsecured, accrued,
absolute, known or unknown, contingent or otherwise.
"LIEN" means any mortgage, lien, pledge, charge, security interest,
license, lease, claim, restriction, option, conditional sale or installment
Contract or encumbrance of any kind.
"PERSON" shall include an individual, a partnership, a corporation, a
limited liability company or a division or business unit thereof, a trust, an
unincorporated organization, a government or any department or agency thereof
and any other entity.
"SECURITIES ACT" shall mean the United States Securities Act of 1933,
as amended.
1.2. ACCOUNTING TERMS. Unless specifically defined herein,
accounting terms shall have the meaning specified by GAAP.
ARTICLE II.
EXCHANGE OF SHARES
2.1. DELIVERY OF CITY NETWORK SHARES. Upon the terms and subject to
the conditions of this Agreement, on the Closing Date, the CITY NETWORK
Shareholders shall sell, transfer, assign and convey to IVAG, and IVAG shall
acquire, the CITY NETWORK Shares, and the CITY NETWORK Shareholders shall
deliver to IVAG share certificates representing the number of CITY NETWORK
Shares set forth opposite each such CITY NETWORK Shareholder's name on Schedule
I, duly endorsed to IVAG or accompanied by stock powers duly executed in proper
form for transfer.
2.2. ISSUANCE OF IVAG SHARES. In consideration of and in exchange
for the CITY NETWORK Shares, IVAG shall, at the Closing, issue to the CITY
NETWORK Shareholders, and the CITY NETWORK Shareholders shall acquire, the
number of IVAG Shares set forth opposite each CITY NETWORK Shareholder's name on
Schedule I, and IVAG shall deliver to the CITY NETWORK Shareholders share
certificates representing newly issued IVAG Shares.
2.3. ESCROW OF SHARES. Prior to the Closing, the CITY NETWORK Share-
holders shall deliver to Xxxxx Xxxxxxx LLP (the "Escrow Agent") the
certificate(s) representing the CITY NETWORK Shares and IVAG shall deliver to
the Escrow Agent the certificate(s) representing the IVAG Shares. The Escrow
Agent shall release the certificates representing the IVAG Shares to the CITY
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NETWORK Shareholders and the certificates representing the CITY NETWORK Shares
to IVAG upon Closing.
ARTICLE III.
CLOSING
3.1. CLOSING. The closing (the "CLOSING") of the transactions contem-
plated hereby shall be held at the offices of Xxxxx Xxxxxxx LLP located at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m., local time, on or
before December 31, 2002 or within five (5) days after the conditions contained
in Articles VII and VIII have been satisfied or waived or at such other place
and time as may be agreed upon by the parties hereto. The time and date of the
Closing is referred to herein as the "CLOSING DATE." At the Closing, in addition
to the exchange of the CITY NETWORK Shares and the IVAG Shares, the parties
hereto shall deliver such certificates, opinions and other documents as are
specified in Articles VII and VIII.
3.2. TRANSFER TAXES. Each of the CITY NETWORK Shareholders and IVAG, as
the case may be, shall be responsible for any transfer and similar taxes
assessed or payable by each of them in connection with the sale and transfer of
the CITY NETWORK Shares or issuance of the IVAG Shares, as the case may be, and
the transactions contemplated hereby.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
OF CITY NETWORK
CITY NETWORK represents and warrants to, and agrees with, IVAG as
follows:
4.1. ORGANIZATION.
(a) CITY NETWORK is a corporation duly organized, validly
existing and in good standing under the laws of the British Virgin Islands. CITY
NETWORK has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted. CITY
NETWORK is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the property owned, leased or operated
by CITY NETWORK or the nature of the business conducted by it makes such
qualification necessary. CITY NETWORK has heretofore made available to IVAG
true, accurate and complete copies of City Network's Memorandum and Articles of
Association as in effect on the date hereof and minutes of all meetings of the
stockholders and directors of CITY NETWORK held through and including the date
of this Agreement. CITY NETWORK is not in violation of any of the provisions of
its Memorandum and Articles of Association.
(b) CITY NETWORK has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors and, if necessary, the stockholders of CITY
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NETWORK and no other corporate proceedings on the part of CITY NETWORK are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by CITY NETWORK and the CITY NETWORK Shareholders and constitutes the
legal, valid and binding obligations of CITY NETWORK and the CITY NETWORK
Shareholders, enforceable against each of them in accordance with its terms.
4.2. CAPITALIZATION. CITY NETWORK has authorized capital stock of
15,000,000 ordinary shares, par value $0.29 per share, of which 12,000,000
shares are issued and outstanding as of the date hereof. All issued and
outstanding shares of capital stock of CITY NETWORK have been duly authorized,
validly issued, fully paid, nonassessable and are free of preemptive rights.
There are no other convertible securities, options, warrants, subscription calls
or other rights or agreements, arrangements or commitments obligating CITY
NETWORK to issue, transfer or sell any of its securities. None of such issued
and outstanding shares is the subject of any voting trust agreement or other
agreement relating to the voting thereof or restricting in any way the sale or
transfer thereof.
4.3. SHARE OWNERSHIP. The CITY NETWORK Shareholders have full and
valid title and control of the CITY NETWORK Shares free and clear of any Lien.
None of the CITY NETWORK Shares are the subject of any voting trust agreement or
other agreement relating to the voting thereof or restricting in any way the
sale or transfer thereof except for this Agreement.
4.4. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby will not, (i) conflict
with or violate any law, regulation, court order, judgment or decree, (ii)
violate or conflict with the Memorandum and Articles of Association of CITY
NETWORK, or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination or cancellation of any Contract,
permit, license or franchise to which CITY NETWORK or the CITY NETWORK
Shareholders are bound or affected, except for conflicts, violations, breaches
or defaults which, in the aggregate, would not have a material adverse effect on
the business, operations, Assets, Liabilities, condition (financial or
otherwise), results of operations or prospects (a "MATERIAL ADVERSE EFFECT") of
CITY NETWORK or the CITY NETWORK Shareholders.
(b) The execution, delivery or performance of this Agreement
does not, and the consummation of the transactions contemplated hereby will not,
require any notice, report or other filing with any governmental authority,
domestic or foreign, or require any waiver, consent, approval or authorization
of any Person or any governmental or regulatory authority, domestic or foreign.
4.5. [Intentionally Omitted].
4.6. REAL AND PERSONAL PROPERTY. CITY NETWORK has good and
marketable title to, or valid leasehold or license interests in, all real
property or other Assets used or held for use in the conduct of its business,
including, without limitation, the Assets reflected on its books and records or
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acquired after the date thereof (other than those which have been disposed of in
the ordinary course of business since such date), free and clear of any Liens,
other than Liens for taxes not yet due and payable. All of the real property and
Assets owned or leased by CITY NETWORK are in all material respects in working
condition and repair, ordinary wear and tear excepted.
4.7. NO UNDISCLOSED LIABILITIES. CITY NETWORK has had no direct or
indirect Liabilities, whether due or to become due, or arising out of
transactions entered into, or any state of facts existing on the date hereof
which would have a Material Adverse Effect on CITY NETWORK.
4.8. ABSENCE OF CERTAIN CHANGES. [Intentionally omitted]
4.9. LITIGATION. No material investigation or review by any govern-
mental entity or regulatory body, foreign or domestic, with respect to CITY
NETWORK is pending or, to the knowledge of CITY NETWORK, threatened against CITY
NETWORK, and no governmental entity or regulatory body has advised CITY NETWORK
of an intention to conduct the same. There is no claim, action, suit,
investigation or proceeding pending or, to the knowledge of CITY NETWORK,
threatened against or affecting CITY NETWORK at law or in equity or before any
federal, state, municipal or other governmental entity or regulatory body, or
which challenges the validity of this Agreement or any action taken or to be
taken by CITY NETWORK pursuant to this Agreement. As of the date hereof, CITY
NETWORK is not subject to, nor is there in existence, any outstanding judgment,
award, order, writ, injunction or decree of any court, governmental entity or
regulatory body relating to CITY NETWORK which would have a Material Adverse
Effect on CITY NETWORK.
4.10. CONTRACTS. CITY NETWORK has previously provided IVAG access to
true, correct and complete copies of all material Contracts to which CITY
NETWORK is a party. As to such Contracts, (i) there are no existing breaches or
defaults by CITY NETWORK thereunder or, to the knowledge of CITY NETWORK, by the
other parties to such Contracts; (ii) no event, act or omission has occurred or,
as a result of the consummation of the transactions contemplated hereby, will
occur which (with or without notice, lapse of time or the happening or
occurrence of any other event) would result in a default by CITY NETWORK
thereunder or give cause for termination thereof, provided that insofar as the
foregoing representation involves the actions or omissions of parties other than
CITY NETWORK, it shall be limited to the knowledge of CITY NETWORK; (iii) none
of them will result in any loss to CITY NETWORK upon completion or performance
thereof; and (iv) none of the parties to Contracts have expressed an indication
to CITY NETWORK of their intention to cancel, renegotiate or exercise or not
exercise any option under any such Contracts as a result of the consummation of
the transactions contemplated hereby.
4.11. INTELLECTUAL PROPERTY.
(a) CITY NETWORK owns or has the right to use pursuant to
license, sublicense, agreement, or permission all Intellectual Property
necessary for the operation of the business of CITY NETWORK as proposed to be
conducted. CITY NETWORK has taken all commercially reasonable action to maintain
and protect each item of Intellectual Property that it owns or uses.
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(b) CITY NETWORK has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of third parties, and CITY NETWORK has not received any charge,
complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation or violation (including any claim that CITY
NETWORK must license or refrain from using any Intellectual Property rights of
any third Person). To the knowledge of CITY NETWORK, no third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of any of CITY NETWORK.
4.12. LICENSES, PERMITS AND CONSENTS; COMPLIANCE WITH APPLICABLE LAW.
(a) CITY NETWORK has all licenses and permits which indivi-
dually or in the aggregate are material to the conduct of the business of CITY
NETWORK or any of its employees by reason of such employee's activities on
behalf of CITY NETWORK under applicable law or by any federal, state, local or
foreign governmental entity or regulatory body for the operation of the business
of CITY NETWORK, and all of such listed licenses and permits are in full force
and effect as of the date hereof. CITY NETWORK has not received notice and, to
the knowledge of CITY NETWORK, there is no reason to believe, that any
appropriate authority intends to cancel or terminate any of such licenses or
permits or that valid grounds for such cancellation or termination currently
exist.
(b) CITY NETWORK is not in violation or breach of any, and the
business and operations of CITY NETWORK comply in all material respects and are
being conducted in accordance with, all material governing laws, regulations and
ordinances applicable thereto and CITY NETWORK is not in material violation of
or in material default under, any judgment, award, order, writ, injunction or
decree of any court, arbitration tribunal, governmental entity or regulatory
body.
4.13. TAX MATTERS. CITY NETWORK has filed all tax returns required to
be filed by it (or has filed appropriate extensions therefor), has paid all
taxes due whether identified on the tax returns or otherwise other than those
being contested in good faith, and has made appropriate provision for any taxes
not yet due, and all such tax returns were true, correct and complete. None of
the tax returns described in the preceding sentence or otherwise filed by CITY
NETWORK contains or will contain a disclosure statement under Section 6661 of
the Code or any similar provision of state, local, foreign or other law. No
assets of CITY NETWORK, and no Assets used in the business of CITY NETWORK, are
subject to any Liens for taxes.
4.14. EXPORT CONTROL AND RELATED MATTERS. CITY NETWORK is in
compliance in all material respects with all United States Export Control Laws,
and is in compliance in all material respects with all foreign Export Control
Laws. CITY NETWORK has all necessary authority under the Export Control Laws to
conduct operations including, but not limited to, (i) all licenses for any
pending export transactions, (ii) all licenses and clearances for the disclosure
of information to foreign persons and (iii) all registrations with government
agencies with authority to implement the Export Control Laws.
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4.15. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS. CITY NETWORK and its
respective predecessors have at all times complied with, and CITY NETWORK is
presently in compliance with, all material environmental, health, and safety
requirements required by applicable United States law.
4.16. SECURITIES LAW ACKNOWLEDGMENTS. The CITY NETWORK Shareholders
acknowledge that the IVAG Shares are, and will be, offered and sold to the CITY
NETWORK Shareholders in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws. The CITY
NETWORK Shareholders will not sell or otherwise transfer the IVAG Shares without
registration under the Securities Act or an exemption therefrom, and fully
understand and agree that the CITY NETWORK Shareholders or any such transferee
must bear the economic risk of holding the IVAG Shares for an indefinite period
of time because, among other reasons, the IVAG Shares have not been registered
under the Securities Act or under the securities laws of certain states and,
therefore, cannot be resold, pledged, assigned or otherwise disposed of unless
the securities are subsequently registered under the Securities Act and under
the applicable securities laws of such states or unless an exemption from such
registration is available in the opinion of counsel for the holder, which
counsel and opinion are reasonably satisfactory to counsel for IVAG. The CITY
NETWORK Shareholders are acquiring the IVAG Shares for the account of the CITY
NETWORK Shareholders for investment and not with a view to resale or
distribution except in compliance with the Securities Act.
4.17. REGULATION S EXEMPTION. Each CITY NETWORK Shareholder under-
stands that the IVAG Shares are being offered and sold to it in reliance on an
exemption from the registration requirements of United States federal and state
securities laws under Regulation S promulgated pursuant to the Securities Act
and that IVAG is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgements and understandings of each CITY NETWORK
Shareholder set forth herein in order to determine the applicability of such
exemptions and the suitability of each CITY NETWORK Shareholder to acquire the
IVAG Shares. In this regard, each CITY NETWORK Shareholder represents, warrants
and agrees that:
(a) Each CITY NETWORK Shareholder is not a U.S. Person
(as defined below) and is not an affiliate (as defined in Rule 501(b) under the
Securities Act) of the Seller. A "U.S. person" means any one of the following:
(i) any natural person resident in the United States;
(ii) any partnership or corporation organized or incorporated
under the laws of the United States;
(iii) any estate of which any executor or administrator is a
U.S. person;
(iv) any trust of which any trustee is a U.S. person;
(v) any agency or branch of a foreign entity located in the
United States;
(vi) any non-discretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary for the
benefit or account of a U.S. person;
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(vii) any discretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary organized,
incorporated or (if an individual) resident in the United States; and
(viii) any partnership or corporation if:
(1) organized or incorporated under the laws of any
foreign jurisdiction; and
(2) formed by a U.S. person principally for the
purpose of investing in securities not
registered under the Securities Act, unless
it is organized or incorporated, and owned,
by accredited investors (as defined in Rule
501(a) under the Securities Act) who are not
natural persons, estates or trusts.
(b) At the time of the origination of contact concerning this
Agreement and the date of the execution and delivery of this Agreement, each
CITY NETWORK Shareholder was outside of the United States.
(c) Each CITY NETWORK Shareholder will not, during the period
commencing on the date of acquisition of the IVAG Shares and ending on the first
anniversary of such date, or such shorter period as may be permitted by
Regulation S or other applicable securities law (the "Restricted Period"),
offer, sell, pledge or otherwise transfer the shares in the United States, or to
a U.S. person or for the account or benefit of a U.S. person, or otherwise in a
manner that is not in compliance with Regulation S.
(d) Each CITY NETWORK Shareholder will, after expiration of
the Restricted Period, offer, sell, pledge or otherwise transfer the IVAG Shares
only pursuant to registration under the Securities Act or an available exemption
therefrom and, in accordance with all applicable state and foreign securities
laws.
(e) No CITY NETWORK Shareholder has engaged in and prior to
the expiration of the Restricted Period will not engage in, any short selling of
or any hedging transaction with respect to the IVAG Shares within the United
States, including without limitation, any put, call or other option transaction,
option writing or equity swap.
(f) No CITY NETWORK Shareholder nor any person acting on its
behalf has engaged, nor will, during the Restricted Period, engage in any
directed selling efforts to any U.S. person with respect to the IVAG Shares and
each CITY NETWORK Shareholder and any Person acting on such Person's behalf have
complied and will comply with the "offering restrictions" requirements of
Regulation S under the Securities Act.
(g) The transactions contemplated by this Agreement have not
been pre-arranged with a buyer located in the United States or with a U.S.
person, and are not part of a plan or scheme to evade the registration
requirements of the Securities Act.
(h) No CITY NETWORK Shareholder nor any person acting on such
CITY NETWORK Shareholder's behalf has undertaken or carried out any activity for
the purpose of, or that could reasonably be expected to have the effect of,
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conditioning the market in the United States, its territories or possessions,
for any of the IVAG Shares. Each CITY NETWORK Shareholder agrees not to cause
any advertisement of the Shares to be published in any newspaper or periodical
or posted in any public place and not to issue any circular relating to the IVAG
Shares, except such advertisements that include the statements required by
Regulation S under the Securities Act, and only offshore and not in the United
States or its territories, and only in compliance with any local applicable
securities laws.
(i) Each certificate representing the IVAG Shares shall be
endorsed with the following legends, in addition to any other legend required to
be placed thereon by applicable federal or state securities laws:
(A) "THE SHARES ARE BEING OFFERED TO INVESTORS
WHO ARE NOT U.S. PERSONS (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT OF
1933, AS AMENDED ("THE SECURITIES ACT")) AND
WITHOUT REGISTRATION WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT IN RELIANCE UPON REGULATION S
PROMULGATED UNDER THE SECURITIES ACT."
(B) "TRANSFER OF THESE SHARES IS PROHIBITED,
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, PURSUANT TO REGISTRATION UNDER
THE SECURITIES ACT, OR PURSUANT TO AVAILABLE
EXEMPTION FROM REGISTRATION. HEDGING
TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT."
(j) Each CITY NETWORK Shareholder consents to IVAG making a
notation on its records or giving instructions to any transfer agent of IVAG in
order to implement the restrictions on transfer of the Shares set forth in this
Section 4.17.
(k) Each CITY NETWORK Shareholder agrees that it will not
transfer the IVAG Shares, and IVAG shall not be required to transfer the shares
unless the transferee executes a representation letter in form satisfactory to
IVAG.
4.18. FINDER'S FEE. There is no investment banker, broker, finder or
other intermediary which has been retained by, or is authorized to act on behalf
of, CITY NETWORK, who might be entitled to any fee or commission from CITY
NETWORK, IVAG or their Affiliates upon the consummation of the transactions
contemplated hereby.
4.19. ACCURACY OF REPRESENTATIONS. The representations and warranties
made by CITY NETWORK and the CITY NETWORK Shareholders in this Agreement, and in
any certificate or Schedule referenced hereby or attached hereto, do not
contain, and will not contain, any statement which is false or misleading with
respect to any material fact and do not and will not omit to state a material
fact required to be stated herein or therein or necessary in order to make the
statements contained herein or therein not materially false or misleading. There
is no material fact or condition which could have a Material Adverse Effect on
CITY NETWORK which has not been set forth in this Agreement or described in the
Schedules hereto.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES
OF IVAG AND THE IVAG PRINCIPALS
IVAG and each of the IVAG Principals, jointly and severally, represent
and warrant to, and agree with, CITY NETWORK and the CITY NETWORK Shareholders
as follows:
5.1. ORGANIZATION; AUTHORITY.
(a) IVAG is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada. IVAG has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. IVAG is duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction in
which the property owned, leased or operated by IVAG or the nature of the
business conducted by it makes such qualification necessary. IVAG has heretofore
made available to CITY NETWORK true, accurate and complete copies of IVAG's
Articles of Incorporation and By-Laws as in effect on the date hereof and
minutes of all meetings of the stockholders and directors of IVAG held through
and including the date of this Agreement. IVAG is not in violation of any of the
provisions of its Articles of Incorporation or By-Laws. IVAG has no subsidiaries
or any equity interest in any other Person.
(b) IVAG has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors and, if necessary, the stockholders of IVAG and no other
corporate proceedings on the part of IVAG are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby.
(c) This Agreement has been duly authorized, executed and
delivered by IVAG and the IVAG Principals and constitutes the legal, valid and
binding obligations of each of them, enforceable against each of them in
accordance with its terms. The issuance of the IVAG Shares have been duly
authorized by all required corporate action on the part of IVAG. The IVAG Shares
when issued and paid for in accordance with this Agreement, will be validly
issued, fully paid and nonassessable, with no personal liability attaching to
the ownership thereof and will be free and clear of all Liens.
5.2. CAPITALIZATION. IVAG has authorized capital stock of 25,000,000
shares of Common Stock, par value of $.001 per share, of which 1,970,000 are
issued and outstanding as of the date hereof. A copy of the current stockholder
list is attached hereto as Schedule 5.2. All issued and outstanding shares of
capital stock of IVAG have been duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. There are no convertible
securities, options, warrants, subscription calls or other rights or agreements,
arrangements or commitments obligating IVAG to issue, transfer or sell any of
its securities. All of such shares have been issued in compliance with all
Federal and State securities law. None of such issued and outstanding shares is
the subject of any voting trust agreement or other agreement relating to the
voting thereof or restricting in any way the sale or transfer thereof.
11
5.3. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby will not, (i) conflict
with or violate any law, regulation, court order, judgment or decree, (ii)
violate or conflict with the Articles of Incorporation or By-Laws of IVAG, or
(iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination or cancellation of any Contract, permit, license or
franchise to which IVAG is bound or affected, except for conflicts, violations,
breaches or defaults which, in the aggregate, would not have a Material Adverse
Effect on IVAG.
(b) The execution, delivery or performance of this Agreement
does not, and the consummation of the transactions contemplated hereby will not,
require any notice, report or other filing with any governmental authority,
domestic or foreign, or require any waiver, consent, approval or authorization
of any Person or any governmental or regulatory authority, domestic or foreign.
5.4. SEC REPORTS; FINANCIAL STATEMENTS.
(a) IVAG has previously delivered to CITY NETWORK true and
complete copies of its Form 10-KSB for the fiscal year ended February 28, 2002
and its Forms 10-QSB for the quarters ended May 31, 2002 and August 31, 2002
(the "SEC REPORTS"), and all other documents (other than preliminary material)
that IVAG was required to file with the SEC since the filings of its Form
10-KSB. Prior to the Closing Date, IVAG will have furnished CITY NETWORK with
true and complete copies of any additional SEC Reports required to be filed by
IVAG, if any, with the SEC prior to the Closing Date. As of their respective
filing dates, all of IVAG's reports filed with the SEC, including the SEC
Reports complied, in all material respects with the requirements of the Exchange
Act or the Securities Act, as the case may be, and none of the SEC Reports
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not misleading,
except to the extent corrected by a subsequently filed SEC Document.
(b) The financial statements of IVAG, including the notes
thereto, included in the SEC Reports, comply as to form in all material respects
with applicable accounting requirements and with respect to the published
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles consistently applied and fairly
present the financial position of IVAG at the dates thereof and for the periods
to which they relate.
(c) Except and as to the extent reflected in the August 31,
2002 balance sheet of IVAG included in its August 31, 2002 10-QSB, IVAG did not
have any direct or indirect Liabilities, whether due or to become due, or
arising out of transactions entered into, or any state of facts existing, on or
prior to August 31, 2002 which would be required to be reflected on the August
31, 2002 balance sheet in accordance with GAAP.
(d) IVAG has not conducted any material business operations
since inception.
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5.5. REAL AND PERSONAL PROPERTY.
(a) IVAG does not own any real property or lease any property
which is material to the operation of its business, would result in any material
liability if the lease were terminated prior to the expiration of the term
thereof or would interfere with the business of IVAG if it was required to
vacate such premises.
(b) IVAG has good and marketable title to, or valid leasehold
or license interests in, all other Assets used or held for use in the conduct of
its business, including, without limitation, the Assets reflected on the books
and records or acquired after the date thereof (other than those which have been
disposed of in the ordinary course of business since such date), free and clear
of any Liens, Liens reflected on its books and records and Liens for Taxes not
yet due and payable. All of the Assets owned or leased by IVAG are in all
material respects in good condition and repair, ordinary wear and tear excepted,
and well maintained. There are no material capital expenditures currently
contemplated or necessary to maintain the current business of IVAG.
5.6. NO UNDISCLOSED LIABILITIES. Except as set forth in IVAG's
financial statements IVAG had no direct or indirect Liabilities, whether due or
to become due, or arising out of transactions entered into, or any state of
facts existing, on the date hereof.
5.7. ABSENCE OF CERTAIN CHANGES. Since August 31, 2002 there has
been no material adverse change in the condition (financial or otherwise),
Assets, Liabilities, results of operations, business or prospects of IVAG, and
nothing has occurred relative to the business or prospects of IVAG which would
have a Material Adverse Effect on the future business of IVAG.
5.8. TAX MATTERS. IVAG has filed all tax returns required to be
filed by it (or has filed appropriate extensions therefor), has paid all taxes
due whether identified on the tax returns or otherwise, and has made appropriate
provision in the IVAG Financial Statements for any taxes not yet due, and all
such tax returns were true, correct and complete. None of the tax returns
described in the preceding sentence or otherwise filed by or on behalf of IVAG
contains or will contain a disclosure statement under Section 6661 of the Code
or any similar provision of state, local, foreign or other law. No assets of
IVAG, and no Assets used in the business of IVAG, are subject to any Liens for
taxes.
5.9. ENTIRE BUSINESS. No portion of the business of IVAG is con-
ducted by any Affiliate of IVAG or any third party and all of the Assets
necessary for the conduct of the business of IVAG as presently conducted are
owned by IVAG. All such Assets are exclusively owned or leased and used by IVAG
and its customers.
5.10. LITIGATION. No material investigation or review by any govern-
mental entity or regulatory body, foreign or domestic, with respect to IVAG is
pending or, to the knowledge of IVAG, threatened against IVAG, and no
governmental entity or regulatory body has advised IVAG of an intention to
conduct the same. There is no claim, action, suit, investigation or proceeding
pending or, to the knowledge of IVAG, threatened against or affecting IVAG at
law or in equity or before any federal, state, municipal or other governmental
entity or regulatory body, or which challenges the validity of this Agreement or
any action taken or to be taken by IVAG pursuant to this Agreement. As of the
13
date hereof, IVAG is not subject to, nor is there in existence, any outstanding
judgment, award, order, writ, injunction or decree of any court, governmental
entity or regulatory body relating to IVAG which would have a Material Adverse
Effect on IVAG.
5.11. EMPLOYEE BENEFIT PLANS. IVAG does not maintain or contribute
to, or is required to maintain or contribute to any Employee Benefit Plan. To
the knowledge of IVAG, IVAG does not contribute to, ever has contributed to, or
ever has been required to contribute to, any Multiemployer Plan or has any
Liability (including withdrawal Liability) under any Multiemployer Plan. IVAG
does not maintain or ever has maintained or contribute, ever has contributed, or
ever has been required to contribute to any Employee Welfare Benefit Plan
providing medical, health, or life insurance or other welfare-type benefits for
current or future retired or terminated employees, their spouses, or their
dependents (other than in accordance with Code Section 4980B).
5.12. CONTRACTS. IVAG has previously made available to CITY NETWORK
access to true, correct and complete copies of all material Contracts to which
IVAG is a party. As to such Contracts, (i) there are no existing breaches or
defaults by IVAG thereunder or, to the knowledge of IVAG, by the other parties
to such Contracts; (ii) no event, act or omission has occurred or, as a result
of the consummation of the transactions contemplated hereby, will occur which
(with or without notice, lapse of time or the happening or occurrence of any
other event) would result in a default by IVAG thereunder or give cause for
termination thereof, provided that insofar as the foregoing representation
involves the actions or omissions of parties other than IVAG, it shall be
limited to the knowledge of IVAG; (iii) none of them will result in any loss to
IVAG upon completion or performance thereof; and (iv) none of the parties to
Contracts have expressed an indication to IVAG of their intention to cancel,
renegotiate or exercise or not exercise any option under any such Contracts as a
result of the transactions contemplated hereby.
5.13. INTELLECTUAL PROPERTY.
(a) IVAG owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property necessary for the
operation of the businesses of IVAG and as proposed to be conducted. IVAG has
taken all necessary action to maintain and protect each item of Intellectual
Property that it owns or uses.
(b) To the best knowledge of IVAG, IVAG has not interfered
with, infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties and IVAG has not received any
charge, complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation or violation (including any claim that either
IVAG must license or refrain from using any Intellectual Property rights of any
third Person). To the knowledge of IVAG, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of any Person.
14
5.14. LICENSES, PERMITS AND CONSENTS; COMPLIANCE WITH APPLICABLE LAW.
(a) IVAG has all licenses and permits which individually or in
the aggregate are material to the conduct of the business of IVAG or any of its
employees by reason of such employee's activities on behalf of IVAG under
applicable law or by any federal, state, local or foreign governmental entity or
regulatory body for the operation of the business of IVAG, and all of such
listed licenses and permits are in full force and effect as of the date hereof.
IVAG has not received notice and, to the knowledge of IVAG, there is no reason
to believe, that any appropriate authority intends to cancel or terminate any of
such licenses or permits or that valid grounds for such cancellation or
termination currently exist.
(b) IVAG is not in violation or breach of any, and the
business and operations of IVAG comply in all material respects and are being
conducted in accordance with, all governing laws, regulations and ordinances
applicable thereto and IVAG is not in violation of or in default under, any
judgment, award, order, writ, injunction or decree of any court, arbitration
tribunal, governmental entity or regulatory body.
5.15. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS IVAG and its respec-
tive predecessors have at all times complied with, and IVAG is presently in
compliance with, all environmental, health, and safety requirements required by
applicable law.
5.16. FINDER'S FEE. There is no investment banker, broker, finder or
other intermediary which has been retained by, or is authorized to act on behalf
of, IVAG or their respective Affiliates who might be entitled to any fee or
commission from IVAG, CITY NETWORK or their respective Affiliates upon the
consummation of the transactions contemplated hereby or thereafter.
5.17. ACCURACY OF REPRESENTATIONS. The representations and warranties
made by IVAG in this Agreement, and in any certificate or Schedule referenced
hereby or attached hereto, do not contain, and will not contain, any statement
which is false or misleading with respect to any material fact and do not and
will not omit to state a material fact required to be stated herein or therein
or necessary in order to make the statements contained herein or therein not
materially false or misleading. There is no material fact or condition which
could have a Material Adverse Effect on IVAG which has not been set forth in
this Agreement or described in the Schedules hereto.
ARTICLE VI.
COVENANTS
6.1. CONDUCT OF BUSINESS OF IVAG AND CITY NETWORK. From the date
hereof to the Closing Date, each of CITY NETWORK and IVAG shall, and the IVAG
Principals shall cause IVAG to:
(i) conduct its business only in the ordinary course and
in substantially the same manner as heretofore conducted;
15
(ii) maintain and keep its Assets in good repair, working
order and condition, except for ordinary wear and tear;
(iii) use its best efforts to maintain and preserve its
business organization intact, retain its present employees so that they
will be available after the Closing Date, and maintain its relation-
ships with its customers so that they will be preserved after the
Closing Date; and
(iv) not take any action which would cause the representa-
tions and warranties set forth herein to be untrue or which would have
a Material Adverse Effect on the business of CITY NETWORK or IVAG, as
the case may be.
6.2. NO SOLICITATION. Neither CITY NETWORK, IVAG or the IVAG Princi-
pals shall, and each shall direct and otherwise cause their respective officers,
directors, partners, financial advisors, counsel, agents and Affiliates of such
party not to, (i) directly or indirectly solicit, encourage or facilitate
(including by way of furnishing any non-public information concerning CITY
NETWORK or IVAG, as the case may be) the submission of proposals or offers from
any Person other than CITY NETWORK and IVAG relating to any acquisition or
purchase of all or a material part of the stock or assets of, or any merger,
consolidation or business combination with, CITY NETWORK or IVAG, as the case
may be (an "ACQUISITION PROPOSAL"), or (ii) participate in any discussions or
negotiations regarding, or furnish any non-public information to any Person
other than the other parties hereto in connection with, any Acquisition Proposal
by any Person other than CITY NETWORK, IVAG or their respective Affiliates, as
the case may be.
6.3. ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Between the date of this Agreement and the Closing Date,
CITY NETWORK, on the one hand, and IVAG and the IVAG Principals, on the other
hand, shall give to the other(s) and their respective lenders, officers,
directors, financial advisors, counsel and other agents access to all offices of
CITY NETWORK or IVAG, as the case may be, and to all of its respective books and
records, permit them to make such inspections as they may require and shall
cause City Network's or IVAG's respective officers, directors and employees to
furnish the other(s) and their prospective lenders, officers, directors,
financial advisors, counsel and other agents with such financial and operating
data and other information with respect to the business and properties of CITY
NETWORK and IVAG or their prospective lenders, officers, directors, financial
advisors, counsel and other agents may from time to time reasonably request, and
as may be necessary to establish the performance by the parties hereto of their
covenants under this Agreement and the accuracy of their representations and
warranties herein, and in connection with the preparation of any filing or
submission to any governmental entity or regulatory body.
(b) CITY NETWORK, on the one hand, and IVAG and the IVAG Prin-
cipals, on the other hand, shall hold, and shall use commercially reasonable
efforts to cause their respective officers, directors, partners, prospective
lenders, financial advisors, counsel and other agents to hold, in strict
confidence, unless compelled to disclose by judicial or administrative process,
or, in the opinion of their counsel, by other requirements of law, all documents
and information concerning CITY NETWORK or IVAG, as the case may be, furnished
to the other in connection with the transactions contemplated by this Agreement
(except to the extent that such information can be shown to have been (i) in the
16
public domain through no fault of CITY NETWORK or any of their respective
Affiliates on the one hand, or IVAG or any of their Affiliates, on the other
hand; or (ii) later lawfully acquired without the breach of any other agreement
by a party hereto or their respective officers, directors, partners, financial
advisors, counsel and other agents from other sources) and will not release or
disclose such information to any other Person, except its officers, directors,
prospective lenders, financial advisors, counsel and other agents in connection
with this Agreement. If the transactions contemplated by this Agreement are not
consummated, such confidence shall be maintained as hereinbefore provided, and,
if requested by any party hereto case may be, the other(s) will, and will cause
its officers, directors, partners, prospective lenders, financial advisors,
counsel and other agents to, return to the requesting party all copies of
written information furnished by or on its behalf to the other(s) or their
respective officers, directors, prospective lenders, financial advisors, counsel
and other agents.
6.4. BEST EFFORTS. Subject to the terms and conditions herein pro-
vided, each party hereto agrees to use commercially reasonable efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations, including
making all required submissions or filings with governmental entities and
regulatory bodies, to consummate and make effective the transactions
contemplated by this Agreement. If, at any time after the Closing Date, any
further action is necessary or desirable to carry out the purposes of this
Agreement, the parties hereto or their officers, directors or representatives
shall take all such necessary action. Each party hereto shall execute any
additional instruments necessary to consummate the transactions contemplated
hereby.
6.5. CONSENTS. Each party hereto shall use their best efforts to
obtain, at its expense, all consents, approvals and waivers of third Persons or
governmental entities or regulatory bodies required to consummate the
transactions contemplated hereby.
6.6. PUBLIC ANNOUNCEMENTS. Each of the parties hereto will consult
with one another before issuing any press release or otherwise making any public
statement with respect to the transactions contemplated hereby and shall not,
except as may be required by law or any listing agreements with any national
securities exchange, issue any such press release or make any such public
statement without the approval of one another.
6.7. CONTINUED EFFECTIVENESS OF REPRESENTATIONS AND WARRANTIES. From
the date hereof until the Closing Date, each of the parties shall use their
respective best efforts to conduct such parties' affairs in such a manner so
that, except as otherwise contemplated or permitted by this Agreement, the
representations and warranties contained in Articles IV and V shall continue to
be true and correct on and as of the Closing Date as if made on the Closing Date
and the parties shall promptly notify the others of any event, condition or
circumstance occurring from the date hereof through the Closing Date that would
constitute a violation or breach such party of any of such representations and
warranties.
6.8. EXPENSES. Except as otherwise provided herein, whether or not
the transactions contemplated hereby are consummated, all expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
the obligation of the party incurring such expenses.
17
6.9. POST EXCHANGE CAPITALIZATION. Immediately following the
Closing Date, the capitalization of IVAG, on a fully diluted basis, shall be as
set forth in Schedule 6.9.
6.10. RECAPITALIZATION. Prior to the Closing Date, IVAG shall declare
a 21.18644 for 1 dividend on its issued and outstanding common stock; provided
that, prior to declaration of such dividend, the IVAG Principals shall surrender
1,380,000 shares of common stock to the IVAG treasury.
ARTICLE VII.
CONDITIONS PRECEDENT TO PERFORMANCE
OF IVAG
The obligations of IVAG under this Agreement are subject to the
following conditions which may be waived in whole or in part by IVAG at its
election:
7.1. BRING DOWN OF REPRESENTATIONS AND WARRANTIES. The representa-
tions and warranties of CITY NETWORK and the CITY NETWORK Shareholders in this
Agreement shall be true and correct in all material respects on the date hereof
and shall also be true and correct in all material respects on the Closing Date
with the same force and effect as if made on and as of the Closing Date, and
CITY NETWORK and the CITY NETWORK Shareholders shall have performed or complied
in all material respects with all agreements, conditions and covenants required
by this Agreement to be performed or complied with by them on or before the
Closing Date.
7.2. AUTHORITY. CITY NETWORK shall have delivered to IVAG a certifi-
cate of the Secretary of CITY NETWORK, certifying to the resolutions of the
Board of Directors of CITY NETWORK authorizing the transactions contemplated
hereby and certifying that such resolutions have not been revoked, suspended or
amended and remain in full force and effect. IVAG shall have received all
documents it may reasonably request relating to the existence of CITY NETWORK
and the authority of CITY NETWORK to enter into this Agreement and to consummate
the transactions contemplated hereby.
7.3. RELEASES. IVAG shall have received releases from each of its
directors and officers referenced in Section 8.2 from all claims such directors
and officers may have against IVAG as of the Closing Date.
7.4. MATERIAL ADVERSE CHANGES. There shall not have been, and on the
Closing Date there shall not be in existence, any event, condition or state of
facts which could reasonably be expected to result in, any material adverse
change in the condition (financial or otherwise), Assets, Liabilities, results
of operations, business or prospects of CITY NETWORK, and IVAG shall have
received a certificate of the President of CITY NETWORK to the foregoing effect.
18
7.5. CONSENTS. CITY NETWORK shall have obtained all approvals,
authorizations and consents required to consummate the transactions contemplated
hereby upon terms and subject to conditions satisfactory to IVAG in its sole
discretion and such approvals, authorizations and consents shall be in full
force and effect. IVAG shall have been furnished with appropriate evidence,
reasonably satisfactory to it and its counsel, of the granting of such
approvals, authorizations and consents.
7.6. INJUNCTION. There shall be no effective injunction, writ or
preliminary restraining order of any nature issued by a court or governmental
agency of competent jurisdiction directing that the transactions provided for
herein or any of them not be consummated as herein provided or which is
reasonably likely to have any material adverse effect of the condition
(financial or otherwise), Assets, Liabilities, results of operations, business
or prospects of CITY NETWORK, taken as a whole.
ARTICLE VIII.
CONDITIONS PRECEDENT TO PERFORMANCE
OF CITY NETWORK AND THE CITY NETWORK SHAREHOLDERS
8.1. BRING DOWN OF REPRESENTATIONS AND WARRANTIES. The representa-
tions and warranties of IVAG and the IVAG Principals contained in this Agreement
shall be true and correct in all material respects on the date hereof and shall
also be true and correct in all material respects on and as at the Closing Date
with the same force and effect as if made on and as of the Closing Date, and
IVAG shall have performed or complied in all material respects with all
agreements, conditions and covenants required by this Agreement to be performed
or complied with by them on or before the Closing Date.
8.2. RESIGNATIONS; SURRENDER OF STOCK. IVAG shall have received the
resignations of all directors and officers of IVAG not designated by CITY
NETWORK effective as of the Closing Date and the IVAG Principals shall have
surrendered 1,380,000 shares to the treasury of IVAG prior to declaration of the
dividend described in Section 6.10.
8.3. APPOINTMENT OF DIRECTORS. Tiao-Xxxx Xxx, Hung-Xxx Xxx,
Yu-Xxxx Xxx, Xxx-Xxx Xxx, Xxxx-Xxx Xxx and Xxxx-Xx Xxxxxx shall have been
appointed to serve on the Board of Directors of IVAG.
8.4. RELEASES. IVAG shall have received releases from each of its
directors and officers from all claims which such directors and officers may
have against IVAG as of the Closing Date.
8.5. CONSENTS. All approvals, authorizations and consents required
by IVAG to consummate the transactions contemplated hereby shall have been
obtained on terms and conditions satisfactory to CITY NETWORK in its sole
discretion and shall be in full force and effect, and CITY NETWORK shall have
been furnished with appropriate evidence, reasonably satisfactory to it and its
counsel, of the granting of such approvals, authorizations and consents.
19
8.6. INJUNCTION. There shall be no effective injunction, writ or
preliminary restraining order of any nature issued by a court or governmental
agency of competent jurisdiction directing that the transactions provided for
herein or any of them not be consummated as herein provided.
ARTICLE IX.
NATURE AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS
All statements contained herein or in any certificate, schedule or
other document delivered pursuant hereto shall be deemed representations and
warranties by the party delivering the same. All representations and warranties
and covenants shall survive the Closing Date. All representations and warranties
contained in this Agreement and in the disclosure schedules or in any
certificates or other documents delivered pursuant hereto shall not be deemed to
be waived or otherwise affected by any prior knowledge of, or any investigation
made by or on behalf of, any party hereto. All covenants and agreements shall
survive the consummation of the transactions contemplated hereby.]
ARTICLE X.
INDEMNIFICATION
(a) CITY NETWORK hereby agrees to indemnify and hold harmless
IVAG and its respective Affiliates from and against any Liabilities, damages,
losses, claims, Liens, costs or expenses (including reasonable attorneys' fees)
of any nature (any or all of the foregoing are herein referred to as "LOSS")
insofar as a Loss (or actions in respect thereof), whether existing or accruing
prior or subsequent to the Closing Date, arises out of or is based upon any
misrepresentation (or alleged misrepresentation) or breach (or alleged breach)
of any of the warranties, covenants or agreements made by CITY NETWORK and the
CITY NETWORK Shareholders in this Agreement or in any certificate, Schedule,
document or Exhibit referenced hereby or attached hereto.
(b) IVAG and the IVAG Principals hereby agree to indemnify and
hold harmless CITY NETWORK and the CITY NETWORK Shareholders from and against
any Liabilities, damages, losses, claims, Liens, costs or expenses (including
reasonable attorneys' fees) of any nature insofar as a Loss (or actions in
respect thereof), whether existing or accruing prior or subsequent to the
Closing Date, arises out of or is based upon any misrepresentation (or alleged
misrepresentation) or breach (or alleged breach) of any of the warranties,
covenants or agreements made by IVAG or the IVAG Principals in this Agreement or
in any certificate, Schedule, document or Exhibit referenced hereby or attached
hereto.
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ARTICLE XI.
TERMINATION; AMENDMENT; WAIVER
11.1. TERMINATION. This Agreement and the transactions contem-
plated hereby may be terminated at any time prior to the Closing:
(a) by mutual written agreement of CITY NETWORK, the CITY
NETWORK Shareholders and IVAG;
(b) by CITY NETWORK and the CITY NETWORK Shareholders, on the
one hand, or IVAG, on the other hand, as the case may be, if the Closing shall
not have occurred on or before December 31, 2002 so long as the party
terminating this Agreement pursuant to this Section 11.1 has not made any
material misrepresentation or materially breached a covenant, agreement or
warranty contained herein;
(c) by IVAG, on the one hand, or CITY NETWORK and the CITY
NETWORK Shareholders, on the other hand, if (i) the transactions contemplated
hereby shall violate any non-appealable final order, decree or judgment of any
court or governmental entity or regulatory body having competent jurisdiction or
(ii) there shall be a statute, rule or regulation which makes the transactions
contemplated hereby illegal or otherwise prohibited; or
(d) by CITY NETWORK and the CITY NETWORK Shareholders, on the
one hand, and IVAG and the IVAG Principals, on the other hand, in the event the
other makes a material misrepresentation or breaches a covenant, agreement or
warranty set forth in this Agreement, but such non-misrepresenting or
non-breaching party's election to terminate shall not limit, waive or prejudice
such party's remedies at law or in equity.
In the event this Agreement is terminated as provided in Section
11.1(a), (b) or (c), this Agreement shall become void and of no further force
and effect and no party hereto shall have any further liability to any other
party hereto, except that Sections 4.18, 5.16, 6.2, 6.3, 6.6 and 6.8 shall
survive and continue in full force and effect notwithstanding termination.
11.2. AMENDMENT. This Agreement may be amended by action taken by
the parties hereto by an instrument in writing.
11.3. EXTENSION; WAIVER. At any time prior to the Closing Date, CITY
NETWORK, the CITY NETWORK Shareholders, IVAG and the IVAG Principals may (i)
extend the time for the performance of any of the obligations or other acts of
the other; (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document, certificate or writing delivered pursuant
hereto or thereto; and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by or on behalf of such party.
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ARTICLE XII.
MISCELLANEOUS
12.1. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, together with all
Schedules and Exhibits, constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all other prior agreements
and understandings, both written and oral, among the parties or between any of
them with respect to the subject matter hereof. All references to Sections,
Exhibits and Schedules shall be deemed references to such parts of this
Agreement unless the text requires otherwise. This Agreement shall not be
assigned by operation of law or otherwise.
12.2. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made as of
the date delivered or mailed if delivered in person, by telecopy, cable,
telegram or telex, or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties as follows:
if to IVAG:
Investment Agents, Inc.
0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx
Fax: (000) 000-0000
Attn: Xxxxxx Xxx Xxxxxxx
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxx X. Xxxxxxx, Inc.
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
if to CITY NETWORK:
#000 Xxxx Xxx Xxxx 0x-0
Xxxxxx, Xxxxxx ROC 110
Fax: 000-0-0000-0000
Attn: Tiao-Xxxx Xxx
with a copy to:
Xxxxx Xxxxxxx LLP
1251 Avenue of the Americas
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
22
or to such other address as the Person to whom notices is given may have
previously furnished to the others in writing in the manner set forth above.
12.3. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to applicable principles of conflicts of laws thereof.
12.4. PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, its successors and assigns.
12.5. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
12.6. SPECIFIC PERFORMANCE. Irreparable damage would occur if any
of the provisions of this Agreement were not performed in accordance with the
terms hereof, and the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or equity.
12.7. CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing in the
Schedules shall be deemed adequate to disclose an exception to a representation
or warranty made herein unless the Schedule identifies the exception with
reasonable particularity and describes the relevant facts in reasonable detail.
Without limiting the generality of the foregoing, the mere listing (or inclusion
of a copy) of a document or other item shall not be deemed adequate to disclose
an exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document or other
item itself). The parties intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any party has
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the party has not breached shall not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty, or covenant.
12.8. SEVERABILITY. The provisions of this Agreement are severable
and, in the event that any court of competent jurisdiction shall determine that
any one or more of the provisions or part of a provision contained therein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement and the terms thereof
shall be reformed and construed as if such invalid or illegal or unenforceable
23
provision, or part of a provision, had never been contained herein, and such
provisions or part reformed so that it would be valid, legal and enforceable to
the maximum extent possible.
12.9. INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, or
individually, as the case may be, all as of the day and year first above
written.
CITY NETWORK, INC.
By: /s/ TIAO-XXXX XXX
________________________________________
Name:
Title:
[typed name and title omitted but
know to be the President of City
Network, Inc.]
INVESTMENT AGENTS, INC.
By: /s/ XXXXXX XXX XXXXXXX
________________________________________
Name: Xxxxxx Xxx Xxxxxxx
Title: President
CITY NETWORK, INC. SHAREHOLDERS
By: /s/ TIAO-XXXX XXX By: /s/ YUN-XXX XXXXX
________________________________________ ____________________________
Xxxx-Xxxx Xxx Xxx-Xxx Xxxxx
/s/ YU-XXXX XXX /s/ CHUN-XXXXX XXX-XXXX
________________________________________ ____________________________
Yu-Xxxx Xxx Chun-Xxxxx Xxx-Xxxx
/s/ YU-XXXX XXX
________________________________________
Yu-Xxxx Xxx
IVAG PRINCIPALS
By: /s/ XXXXXX XXX XXXXXXX
________________________________________
Xxxxxx Xxx Xxxxxxx
/s/ XXXXXXX XXXXXX XXXX
________________________________________
Xxxxxxx Xxxxxx Xxxx
/s/ XXXXXX X. XXXXXXXXXX
________________________________________
Xxxxxx X. Xxxxxxxxxx
25
