THIS SECOND AMENDED OPTION AGREEMENT dated the 1st day of June, 2001,
is made
BETWEEN:
ALFA UTILITY SERVICES, INC., a corporation incorporated under the laws
of the state of Delaware; (hereinafter called the "Optionor")
- and -
XXXXXXX INDUSTRIES LTD., a corporation incorporated under the laws of
the province of Ontario; (hereinafter called the "Optionee")
SECOND AMENDED OPTION AGREEMENT
WHEREAS the Optionee is the holder of Five Hundred (500) Class "A"
Preference Shares in Alfa Utility Services Inc. ("Alfa Canada");
AND WHEREAS this Amended Option Agreement adds the Section 2.02, last
sentence deferral of exchange option exercisability until June 1, 2003, having
previouly added the Section 2.2 redemption waiver until June 1, 2003;
AND WHEREAS the Optionor desires to grant to the Optionee an option to
exchange all or part of its Class "A" Preference Shares of Alfa Canada into
Common Shares of the Optionor at an exchange rate of Four Thousand (4,000)
Common Shares for each One (1) Class "A" Preference Shares exchanged; and,
NOW THEREFORE in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
Interpretation
1.0 DEFINITIONS
As used in this Agreement, the following words and phrases shall have
the following meanings:
(a) "Closing Date" means the date 10 days after the exercise by the
Optionee of its rights to exchange the Shares hereunder;
1.2 EXTENDED MEANINGS
In this Agreement, words importing the singular number include the
plural and vice versa and words importing the masculine gender include
the feminine and neuter genders.
1.3 HEADINGS
Articles and section headings are not to be considered part of this
Agreement and are included solely for convenience of reference and are
not intended to be full or accurate descriptions of the contents
thereof.
ARTICLE II
Option for Exchange of Shares
2.0 OPTION FOR EXCHANGE OF SHARES
The Optionor hereby grants to the Optionee the irrevocable right to
exchange all or part of its Class "A" Preference Shares of Alfa Canada
for Common Shares of the Optionor (the "Exchange Option") at the rate
of One (1) Class "A" Preference Share of Alfa Canada for Four Thousand
(4,000) Common Shares of the Optionor. The Optionee shall give the
Optionor ten (10) days notice in writing of the exercise of this
Option. This Option shall be open for a period of five (5) years and
may be exercised with respect to all or part of the Optionee's Class
"A" Preference Shares at any time or times during the said five (5)
year term by the Optionee. This Option will expire on May 31, 2006. The
parties hereto agree and covenant that this exchange option cannot be
exercised until June 1, 2003.
2.1 EXCHANGE OF SHARES
On the Closing Date and subject to the terms and conditions hereof, the
Optionor and Optionee shall exchange the Shares as set out in Section
2.0 above.
2.2 REDEMPTION OF SHARES
The parties hereto agree and covenant that they shall not redeem the
Class "A" Preference Shares of Alfa Canada for a period of two (2)
years from the date hereof. A legend shall be hand printed or typed
conspicuously on the face of each present and future Class A
certificate until June 1, 2003 to the effect of "Not redeemable until
June 1, 2003, per the issuer's June 1, 2001 Amended Option Agreement
from Alfa Utility Services, Inc., a Delaware corporation."
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ARTICLE III
Representations and Warranties
3.0 REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR
The Optionor hereby represents and warrants as follows in favour of the
Optionee and hereby acknowledges and confirms that the Optionee is
relying upon such representations and warranties in connection with the
Exchange Option:
(a) the Optionor is not insolvent, has not committed an act of
bankruptcy, proposed a compromise or arrangement to its
creditors generally, had any petition for a receiving order in
bankruptcy filed against it, taken any proceeding with respect
to a compromise or arrangement, taken any proceeding to have
itself declared bankrupt, taken any proceeding to have a
receiver appointed over any part of its assets, had any
encumbrancer take possession of any of its property, or had
any execution or distress become enforceable or become levied
upon any of its property;
3.1 REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE
The Optionee hereby represents and warrants as follows and hereby
acknowledges and confirms that the Optionor is relying upon such
representations and warranties in connection with the Exchange Option:
(a) the Optionee is not insolvent, has not committed an act of
bankruptcy, proposed a compromise or arrangement to its
creditors generally, had any petition for a receiving order in
bankruptcy filed against its, taken any proceeding with
respect to a compromise or arrangement, taken any proceeding
to have its self declared bankrupt or to wind-up, taken any
proceeding to have a receiver appointed over any part of its
assets, had any encumbrancer take possession of any of its
property, or had any execution or distress become enforceable
or become levied upon any of its property.
ARTICLE IV
Covenants
4.0 COVENANTS OF THE OPTIONOR
The Optionor hereby covenants in favour of the Optionee that:
(a) it will cause all necessary steps and proceedings to be taken
to permit the Common Shares to be duly and regularly issued
and transferred to the Optionee on the Closing Date in
exchange for Class "A" Preference Shares of Alfa Canada.
4.1 COVENANTS OF THE OPTIONEE
The Optionee hereby covenants in favour of the Optionor that:
(a) it will transfer and endorse over in favour of the Optionor any
Class "A" Preference Shares in Alfa Canada to be exchanged for
Common Shares of the Optionor
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ARTICLE V
Closing Matters
5.0 CONDITIONS OF CLOSING FOR THE OPTIONOR'S BENEFIT
The Optionor shall not be obliged to complete the "Exchange Option"
herein unless on the Closing Date, the following conditions have been
satisfied, it being understood that the said conditions are included
for the exclusive benefit of the Optionor and may be waived in writing
in whole or in part by the Optionor at any time:
(a) the Optionee shall have delivered to the Optionor the Class "A"
Preference Shares of Alfa Canada to be exchanged for Common
Shares; and
(b) the Optionee shall have performed all obligations required to be
performed under this Agreement.
5.1 CONDITIONS OF CLOSING FOR THE OPTIONEE'S BENEFIT
The Optionee shall not be obliged to complete the Exchange Option
herein unless on the Closing Date, the following conditions have been
satisfied, it being understood that the said conditions are included
for the exclusive benefit of the Optionee and may be waived in whole or
in part by the Optionee at any time:
(a) the Optionor shall have delivered to the Optionee, duly endorsed
for transfer sufficient Common Shares of the Optionor issued as
paid and non-assessable to complete the Exchange Option;
(b) the Optionor shall have performed all obligations required to be
performed under this Agreement.
ARTICLE VI
General Contract Provisions
6.1 FURTHER AND OTHER ACTS
The parties hereto covenant and agree to sign such other papers, cause
such meetings to be held, resolutions passed and by-laws enacted,
exercise their vote and influence, do and perform and cause to be done
and performed such further and other acts and things as may be
necessary or desirable in order to give full effect to this Agreement
and every part hereof.
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6.2 GOVERNING LAW
This Agreement shall be governed by the laws of Canada to the extent
they apply and by the laws of the province of Ontario.
6.3 TIME OF ESSENCE
Time shall be of the essence of this Agreement and of every part hereof
and no extension or variation of this Agreement shall operate as a
waiver of this provision.
6.4 ENTIRE AGREEMENT
This Agreement shall constitute the entire agreement between the
parties hereto with respect to all of the matters herein and supersedes
all prior and contemporaneous agreements, understandings, negotiations
and discussions, whether oral or written, of the parties. This
Agreement shall not be amended except by a memorandum in writing signed
by the parties hereto and any amendment hereof shall be null and void
and shall not be binding upon any party which has not given its consent
as aforesaid.
6.5 SUCCESSORS AND ASSIGNS
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators,
successors and assigns.
6.6 SURVIVAL
The representations, warranties and covenants contained herein shall
survive the Closing Date and shall not be merged upon the completion of
the transfers contained herein.
IN WITNESS WHEREOF the parties hereto have duly executed this
Agreement.
SIGNED, SEALED AND ) ALFA UTILITY SERVICES, INC.
DELIVERED in the ) Per:
presence of )
) /s/ XXXXXX XXXXXX
---------------------------
-------------------- ) XXXXXX XXXXXX - President
Signature: )
) XXXXXXX INDUSTRIES LTD.
____________________ ) Per:
Name: )
____________________ ) /s/ XXXXXX XXXXXX
Signature: ) ---------------------------
-------------------- ) XXXXXX XXXXXX - President
Name: )
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