EXHIBIT 3.1
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SHARE EXCHANGE AGREEMENT
THIS AGREEMENT made as of the 15th day of January, 1996.
BETWEEN:
XXXXX XXXXXXXX,
(hereinafter called "Xxxxxxxx")
- and -
XXXXXXXXX X. XXX
(hereinafter called "Xxx"
- and -
TRANSWAY CAPITAL INC.
(hereinafter called "TCI"),
WITNESSES THAT:
WHEREAS:
X. Xxxxxxxx is the registered and beneficial owner of 500,000 of the issued
and outstanding common shares (the "Xxxxxxxx Shares") of CANTECH
COMPOSITES INC. (formerly known as CANTECH INVESTMENTS LTD.) ("CanTech")
X. Xxx is the registered and beneficial owner of 500,000 of the issued and
outstanding common shares (the "Xxx Shares") of CanTech;
C. TCI has agreed to exchange with Xxxxxxxx certain of the shares of TCI for
the Xxxxxxxx Shares and to exchange with Xxx certain of the shares of TCI
for the Xxx Shares;
NOW THEREFORE for and in consideration of the premises, the mutual covenants and
agreements to be kept and performed by each of the parties, the parties agree as
follows:
1 EXCHANGE OF SHARES
1.1 Delivery of Shares by Xxxxxxxx and Xxx
On the terms and subject to the conditions of this Agreement, on the
Closing Date (as defined in Article 2):
(a) Xxxxxxxx shall assign transfer and exchange with TCI the Xxxxxxxx
Shares for common shares of TCI which exchange will be on the basis set
forth in Section 1.2; and
(b) Xxx shal l assign transfer and exchange with TCI the Xxx Shares for
common shares of TCI which exchange will be on the basis set forth in
Section 1.3.
The Xxxxxxxx Shares and the Xxx Shares shall be free and clear of all
liens, security interests, claims, charges and encumbrances of any nature and
kind whatsoever.
1.2 Consideration for Exchange of Xxxxxxxx Shares
As consideration for the assignment and transfer by Xxxxxxxx to TCI of the
Xxxxxxxx Shares, TCI shall issue to Xxxxxxxx in exchange for the Xxxxxxxx
Shares:
(a) 500,000 previously unissued common shares of TCI (the "Xxxxxxxx Exchanged
Shares"); and
(b) 250,000 common share purchase warrants of TCI (the "Warrants"), each
Warrant entitling the holder thereof to purchase one (1) common share of
TCI at the price per share of $0.40 the certificate representing the said
Warrants being in the form of Schedule A attached hereto and being
exercisable for a period of one year from the Date of Closing (the
"Xxxxxxxx TCI Warrant").
The Xxxxxxxx Exchanged Shares and the common shares of TCI, if any, issued
pursuant to the Xxxxxxxx TCI Warrant shall be issued and allotted by TCI
to Xxxxxxxx as fully paid and non-assessable upon receipt by TCI of the
consideration therefor.
1.3 Consideration for Exchange of Xxx Shares
As Consideration for the assignment and transfer by Xxx to TCI of the Xxx
Shares, TCI shall issue to Xxx in exchange for the Xxx Shares:
(a) 500,000 previously unissued common shares of the TCI (the "Xxx Exchanged
Shares"); and
(b) 250,000 Warrants, each Warrant entitling the holder thereof to purchase
one (1) common share of TCI at the price per share of $0.40 the
certificate representing the said Warrants being in the form of Schedule A
attached hereto and being exercisable for a period of one year from the
Date of Closing (the "Xxx TCI Warrant").
The Xxx Exchanged Shares and the common shares of TCI, if any, issued pursuant
tot he Xxx TCI Warrant shall be issued and allotted by TCI to Xxxxxxxx as fully
paid and non-assessable upon receipt by TCI of the consideration therefor.
1.4 Section 85(1) Transfers
TCI agrees with each of Xxxxxxxx and Xxx that the exchange of the Xxx Shares and
the exchange of the Xxxxxxxx Shares for unissued common shares and warrants of
TCI shall each be completed in accordance with the rules contained in subsection
85(1) of the Income Tax Act, R.S.C. 1985, as amended (the "Act").
TCI, Xxx and Xxxxxxxx shall file such elections as may be necessary or advisable
in order that the transactions contemplated by this section 1 may be completed
in accordance with the rules set out in subsection 85(1) of the Act. TCI, Xxx
and Xxxxxxxx acknowledge and agree that they shall elect an amount in respect of
the respective sales and purchases of the Xxxxxxxx and Xxx Shares which amount
shall be the cost amount (within the meaning of the Act) of the Xxxxxxxx Shares
and the Xxx Shares, as the case may be, on the Closing Date.
If the Department of National Revenue should refuse to accept the purchase price
or any other amount elected or relied upon by TCI, Xxxxxxxx or Xxx in connection
with the sale and purchase of the Xxxxxxxx or Xxx Shares, and should suggest
some alternative amount or assess based upon some alternative amount, then:
(a) TCI of Xxxxxxxx or Xxx may challenge such alternative amount and
negotiate with the Department of national Revenue or object to the
appeal from any assessment issued by the said Department which relies on
such alternative amount. In the event of such negotiation, objection
and/or appeal by any one of TCI, Xxxxxxxx or Xxx, the other party to the
transaction being reviewed covenants to co-operate with the party
negotiating, objecting and/or appealing; and
(b) If as a result of such negotiation, object and/or appeal, it is
finally determined, whether by agreement with the Department of national
Revenue or as a result of a hearing by the Tax Court of Canada or any
higher tribunal that any amount elected or relied upon by the parties
hereto in connection with the purchase and sale of the Xxxxxxxx or Xxx
Shares was an amount (hereinafter referred to as the "final amount")
different from the amount elected or relied upon by the parties hereto,
TCI, Xxxxxxxx and Xxx covenant to accept the final amount, and:
(i) to adjust the purchase price and the method of payment therefor; and
(ii) to adjust any elected amount, so as to avoid any taxable capital
gain, deemed dividend or income accruing to TCI, Xxxxxxxx or Xxx in
respect of the transactions contemplated in this agreement.
2 CLOSING
2.1 Closing Date, Time and Place
(a) Subject to paragraph 2.1(b), the closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the
offices of Xxxxxx Xxxxxxx, Barristers and Solicitors, 0000-00 Xxxxx
Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx, on January 15, 1996.
(b) If Closing does not occur by the Closing Date, the date and time for
Closing may be extended by mutual agreement of Xxxxxxxx, Xxx and TCI.
Alternatively any party may terminate this Agreement by notice in
writing to the other parties, in which case this Agreement shall be of
no further force or effect.
2.2 Deliveries by Xxxxxxxx and Xxx
At the Closing, each of Xxxxxxxx and Xxx shall deliver to TCI:
(a)a resolution shall be passed by the Board of Directors of CanTech
authorizing the transfer of the Xxxxxxxx Shares and the Xxx Shares to
TCI;
(b)certificates representing the Xxxxxxxx Shares and the Xxx Shares
respectively duly endorsed in blank for transfer by Xxxxxxxx and Xxx
respectively to TCI;
(c) all corporate books and records of the CanTech; and
(d)such other documents and instruments as counsel for TCI may reasonably
require to effectuate or evidence the transactions contemplated hereby.
2.3 Deliveries and Action by TCI
At the closing, TCI shall deliver to Xxxxxxxx and Xxx:
a)certificates representing the Xxxxxxxx Exchanged Shares and the Xxx
Exchanged Shares;
b)an opinion of TCI's counsel in form and substance substantially the
same as the form of opinion attached as Schedule "G"; and
c)such other documents and instruments as counsel for Xxxxxxxx or Xxx may
reasonably require to effectuate or evidence the transactions
contemplated hereby.
3 REPRESENTATIONS AND WARRANTIES OF XXXXXXXX AND XXX
Xxxxxxxx and Xxx hereby severally and separately represent and warrant to TCI as
follows:
3.1 Authorized Capitalization, Outstanding Shares and Title
The authorized capital stock of the CanTech will, at the date of Closing consist
of an unlimited number of Common Shares of which only the Xxxxxxxx Shares and
the Xxx Shares will be issued and outstanding. All of the issued and outstanding
shares of the CanTech will have been duly authorized and validly issued as fully
paid and non-assessable shares. Xxxxxxxx will be the recorded and beneficial
owner of, and have legal title to, all of the Xxxxxxxx Shares free and clear of
all liens, pledges, charges, claims and other encumbrances and Xxx will be the
recorded and beneficial owner of, and have legal title to, all of the Xxx Shares
free and clear of all liens, pledges, charges, claims and other encumbrances.
3.2 Organization, Good Standing,, Power, Etc.
The CanTech is a corporation duly organized, validly existing and in good
standing under the laws of the Province of Ontario, is not required at the date
hereof to be authorized or licensed to do business as an extra-provincial or
foreign corporation in any other jurisdiction within or outside in any other
jurisdiction within or outside Canada) by reason of the nature of the business
conducted by it, has the requisite power and authority to own, lease and operate
its properties and assets and to carry on its business as currently conducted
and is a private company as defined by subsection (1) of The Securities Act
(Ontario).
3.3 Agreements Relating to Stock, Options, Warrants, Restrictions on Shares,
Etc.
None of CanTech, Xxxxxxxx or Xxx is a party to a party to any written or oral
agreement, understanding, arrangement or commitment or bound by any certificate
of incorporation, by-law or instrument including options, warrants or
convertible securities) which creates any rights in a person with respect to
shares of the capital stock or any other securities of the CanTech or which
relates to the voting of restricts the transfer of, requires the Can Tech,
Xxxxxxxx or Xxx to issue or sell, or create rights in any person with respect to
the capital stock or other securities of the CanTech for warrants or rights with
respect thereto) except for the right of the CanTech's bankers to require that
their prior consent be given to a change in control There exists no option or
other right purchase, or right to convert any securities or obligations into,
any shares of the capital stock or other securities of the CanTech.
3.4 Certificate of Incorporation and By-Laws: Officers and Directors
Complete and correct copies of the CanTech's certificate and Articles of
Incorporation as amended to date ("Articles of Incorporation") certified by the
appropriate official of the jurisdiction of incorporation, and its By-Laws as
amended to date ("By-Laws") certified by an officer of CanTech have been
delivered to TCI. Such Articles of Incorporation and ByLaws are in full force
and effect and the CanTech is not in violation of any of the provisions thereof.
A complete and correct list of all CanTech officers and directors has been
delivered to TCI.
3.5 No Subsidiaries
The CanTech has no interest, direct or indirect, in any other corporation,
company business, trust, partnership, limited partnership, joint venture or
other entity or association.
3.6 Authorizations and Enforceability
Xxxxxxxx and Xxx each has all requisite power, authority and capacity to enter
into, deliver and perform this Agreement and to consummate the transactions
contemplated hereby without first obtaining the consent of any other person or
body corporate.
3.7 Effect of Agreement, Etc.
The execution, delivery and performance of this Agreement by Xxxxxxxx and Xxx
and the consummation of the transactions contemplated hereby will not, with or
without the giving of notice or the lapse of time, or both, violate any
provision of law, statute, rule or regulation to which the CanTech, Xxxxxxxx or
Xxx is subject, including any Act of the Legislature of the Province of Ontario
governing family relations or the rights of a spouse.
3.8 Restrictions, Burdensome Agreements
None of CanTech, Xxxxxxxx or Xxx is a party to any agreement, debt instrument,
commitment or agreement and none of CanTech, Xxxxxxxx or Xxx nor any of their
respective properties and assets are subject to or bound or affected by any
charter, by-law or other corporate restriction, or any order, judgement, decree,
law, statute, ordinance, rule, regulation or other restriction of any kind or
character which would:
(a) prevent any of them from entering into this Agreement or from
consummating the transactions contemplated hereby: or
(b) adversely affect, or in the future adversely affect, the business,
properties, prospects or the condition, financial or otherwise, of
CanTech or accelerate the due date for payment of any liabilities of
CanTech.
3.9 Government and Other Consents
No consent, authorization or approval of or exemption by or filing with any
governmental, public or self-regulatory body or authority is required in
connection with the execution, delivery and performance by
Xxxxxxxx or Xxx of this Agreement or any of the instruments or agreements herein
referred to or the taking of any action herein contemplated.
3.10 Permits, Licenses, Compliance with Applicable Laws and Court Orders
CanTech has all requisite corporate power and authority, and all permits,
licenses, orders and approvals of governmental and administrative authorities to
own, lease and operate its properties and to carry on its business as presently
conducted. CanTech's conduct of its business does not violate or infringe any
domestic or foreign law, statute, ordinance or regulation currently in effect,
scheduled to come into effect or, to the knowledge of Xxxxxxxx or Xxx, proposed
to be adopted, the enforcement of which would adversely affect the financial
condition, results of operations, properties or business of CanTech. CanTech is
not aware of any default in any respect under any executive, legislative,
administrative or private (such as arbitrational ruling, order, writ, injunction
or decree.
3.11 Financial Statements, Absence of Undisclosed Liabilities
The financial statements of CanTech for the period ended October 31, 1995, which
are attached hereto as Schedule B are true and correct in all material respects
and present fairly the financial position of CanTech as of those dates, and the
results of its operations for the periods then ended, in accordance with
generally accepted accounting principles applied on a consistent basis with that
of the previous years and since then there has not been any adverse material
change has occurred in the financial position, condition or affairs of CanTech.
3.12 Title to Properties, Absence of Liens and Encumbrances, Etc.
CanTech owns and has good and marketable title to its properties, assets and
leases used in the business free and clear of all mortgages, security interests,
claims, liens, charges, encumbrances, restrictions on use or transfer or other
defects in title. No default or event of default exists and not event which,
with notice or lapse of time or both, would constitute a default, has occurred
and is continuing under the terms or provisions, express or implied, of any
agreement to which any of the properties of CanTech is subject, nor has CanTech
received notice of any claim of such default, nor has CanTech failed to comply
in any respect with any provision or condition of any such agreement. CanTech
has not received a notice of violation of any applicable law, ordinance,
regulation, order or requirement relating to its operations or its owned or
leased properties.
3.13 Royalty Payments
Except pursuant to the sublicense agreement attached as Schedule C, CanTech is
not obligated to pay any royalty or similar payments to any person, firm, or
corporation.
3.14 Associated Liabilities of CanTech
No officer, director, employee or shareholder of CanTech is indebted or under
any obligation to the CanTech on any account whatsoever.
3.15 Tax Liabilities
Except as set forth in the financial statements referred to in Section 3.11 or
which are accrued in the books and records of CanTech since October 31, 1995,
CanTech has no liability for income or sales or use taxes.
3.16 Agreements, Plans, Arrangements, Etc.
Except for the contracts set forth in Schedule D, CanTech is not a party to, nor
is CanTech or any of its properties and assets bound or affected by any oral or
written agreement of any sort, including without limitation:
(a) lease agreement (whether as lessor or lessee) relating to real or
personal property;
(b) license agreement, assignment or other contract (whether as licensor
or licensee, assignor or assignee) relating to trademarks, trade
names, patents, copyrights (or applications therefor), unpatented
designs or styles, know-how or technical assistance;
(c) employment or consulting agreement;
(d) agreement for the purchase or sale of goods, material, supplies,
machinery, capital assets or services;
(e) agreement with any labour union;
(f) agreement with any supplier, distributor, franchisor, dealer, sales
agent or representative;
(g) agreement with any manufacturer, supplier or customer with respect to
discounts or allowances;
(h) joint venture or partnership agreement with any other person;
(i) agreement for the borrowing or lending of money or guaranteeing,
indemnifying or otherwise becoming liable for the obligations or
liabilities of another;
(j) agreement with any bank, factor, financing company or similar
organization regarding the financing of accounts receivable or other
extensions or credit;
(k) agreement granting any lien, security interest or mortgage on any
property or asset of CanTech including, without limitation, any
factoring agreement for the assignment of accounts receivable;
(l) agreement for the construction or modification of any building or
structure or for the incurrence of any other capital expenditure;
(m) advertising agreement of any kind;
(n) agreement which restricts it from doing business anywhere in the world
(o) agreement, statute or regulation giving any party the right to
re-negotiate or require a reduction in prices or the re-payment of any
amount previously paid;
(p) any agreement to defend, indemnify and/or hold harmless any person;
(q) agreement, pension plan, profit sharing plan, bonus plan, undertaking
or arrangements, whether oral, written or implied, with the employees,
lessees, licensees, manager, accountants, suppliers, agents,
distributors, its officers or Directors or others which cannot be
terminated on not more than one (1) month's notice; or
(r) agreement to pay severance pay for separation allowances, except for
any requirement which may be applicable at law.
3.17 Litigation
There is no claim, action, suit, proceeding, arbitration, investigation or
inquiry pending or threatened against, relating to or affecting CanTech or any
of the assets, properties or businesses of CanTech or the transactions
contemplated by this Agreement which may have any adverse effect upon the
assets, properties or business of CanTech or the transactions contemplated by
this Agreement. There is not in existence at the date hereof any order,
judgement or decree of any court or other tribunal or any agency or
self-regulatory body to which CanTech or the business, properties or assets of
CanTech are subject or by which they are bound.
3.18 Intangible Property
CanTech owns or possesses licenses or other rights to use such intangible
properties and know-how and other proprietary information necessary to the
conduct of its business as presently conducted.
3.19 Books and Records
The minute book of CanTech contains complete and accurate records of all
meetings and accurately reflects all other corporate action of the shareholders
and directors (and committees thereof) of CanTech as of the date hereof and all
material transactions or property recorded and filed.
3.20 Resident
Each of Xxxxxxxx and Xxx is a resident of Canada within the meaning of Section
116 of the Income Tax Act of Canada.
3.21 No Finder
None of CanTech, Xxxxxxxx or Xxx has taken any action which would give to any
firm, corporation, agency or other person a right to a consultant's or finder's
fee or any type of brokerage commission in relation to or in connection with the
transactions contemplated by this Agreement.
4 REPRESENTATIONS AND WARRANTIES OF TCI
TCI represents and warrants to Xxxxxxxx and Xxx as follows:
4.1 Organization, Good Standings Power, Etc.
TCI is a corporation duly organized, validly existing and in good standing under
the laws of the Province of Ontario. TCI has all requisite corporate power and
authority to execute, deliver and perform this Agreement and consummate the
transactions contemplated herein.
4.2 Authorization of Agreement and Enforceability
The Agreement has been duly and validly authorized, executed and delivered by
TCI and constitutes a valid and binding obligation of TCI fully enforceable in
accordance with its terms.
4.3 Reporting Issuer
TCI is now and has been a reporting issuer for at least twelvemonths under the
Securities Act of Ontario and the regulations thereunder and is not in default
of any requirement under the Securities Act of Ontario and the regulations
thereunder. In particular, without limiting the foregoing, no material change
relating to TCI has occurred with respect to which the requisite material change
statement has not been filed with all relevant securities regulatory
authorities.
4.4 No Cease Trade Order
No order to cease trading in the securities of TCI or prohibiting the issue,
sale and delivery of the Xxx Exchanged Shares, the Xxxxxxxx Exchanged Shares,
the Xxx TCI Warrants and/or the Xxxxxxxx TCI Warrant has been issued and no
proceedings for such purpose are pending or threatened.
4.5 TCI's Listing
TCI's shares are quoted on the Canadian Dealer Network Inc. (the "CDN") and TCI
is in compliance with Ontario Securities Commission policy respecting the CDN.
4.6 No Breach
The execution and delivery of this Agreement, the performance of the terms
hereof, the issue, sale and delivery at closing of the Xxxxxxxx Exchanged Shares
and the Xxx Exchanged shares, and the issue and delivery of the requisite number
of shares of TCI upon exercise of the Xxxxxxxx TCI Warrant and the Xxx TCI
Warrant do not and will not result in the breach of, and do not create a state
of facts after which notice or elapse of time or both will result in a breach
of, and do not and will not conflict with, any of the terms, conditions or
provisions of: (a) any statute, rule or regulation applicable to TCI or any of
its subsidiaries, including, without limitation, any applicable securities law;
(b) the constating documents, by-laws or resolutions of TCI or any of its
subsidiaries; (c) any applicable administrative regulation, court judgement,
decree or order binding upon TCI or any of its subsidiaries; or (d) any
indenture, agreement or other
instrument to which TCI or any of its subsidiaries is a party or by which TCI or
any of its subsidiaries is bound.
4.7 Purchaser's Stock
(a) The authorized capital of TCI will be, immediately prior to Closing, an
unlimited number of common shares without nominal or par value, an unlimited
number of Class A Special Shares without par value and issuable in series
and an unlimited number of Class B special shares without par value, of
which only 6,335,919 common shares will be issued and outstanding (excluding
the shares required to be issued hereunder). There are existing 5,000,000
warrants of TCI (the "Existing Warrants") issued and outstanding each of
which entitles the holder thereof to purchase, on or before January 13,
1997, one common share of TCI at a price of $0.20. In addition, the Board of
TCI has approved the reservation for issuance of 1,000,000 Common Shares
under TCI's employees stock option plans which approval is subject to
shareholder approval. Except as set forth in this Section 4.3(a) or as
contemplated by this Agreement, there exists no option or other right to
purchase, or right to convert any securities or obligations into, any shares
of the capital stock or other securities of the TCI.
(b) All of the issued and outstanding shares of TCI have been duly authorized
and validly issued and are issued and allotted as fully paid and
non-assessable shares. All of the shares of TCI issued and allotted pursuant
to the Xxxxxxxx TCI Warrant or the Xxx TCI Warrant have been duly authorized
and will, upon receipt by TCI of the consideration therefor when issued, be
validly issued and allotted. Except as referred to in this Section 4.3 there
are no commitments plans or arrangements of any kind to issue and no
outstanding options, warrants convertible securities or other rights calling
for the issuance of or the purchase of any unissued shares of TCI.
4.8 Effect of Agreement, Consents, Etc.
No consent, authorization or approval or exemption by or filing with any
governmental or public body or authority is required in connection with the
execution, delivery and performance by TCI of this Agreement or the taking of
any action hereby contemplated except as may arise out of the Determination.
4.9 No Finder
There is no firm, corporation, agency or other person that is entitled to a
consultant's or finder's fee or any type of brokerage in connection with the
transactions contemplated by this Agreement.
4.10 Investment
TCI is acquiring the Xxxxxxxx Shares and the Xxx Shares for its own account and
not with a view to or for resale, and TCI has no present intention of
distributing or reselling to others any of the Xxxxxxxx Shares or the Xxx Shares
or granting any participation therein, except in compliance with all applicable
provincial securities laws.
4.11 Certificate of Incorporation, etc.
Complete and correct notarial copies of TCI's incorporating documents as amended
to date (the "Articles") certified by the appropriate official of the
jurisdiction of incorporation and copies of TCI's By-Laws as amended to date
(the "By-Laws") certified by an officer of TCI will be delivered at Closing by
TCI to Xxxxxxxx and Xxx. The Articles and By-Laws are in full force and effect
and TCI is not in violation of any of the provisions thereof.
4.12 Financial Statements, Absence of Undisclosed Liabilities
The audited financial statements for the period ended December 31, 1994 and the
unaudited financial statements of TCI for the period ended September 31, 1995,
which are attached hereto as Schedule E are true and correct in all material
respects and present fairly the financial position of TCI as of those dates,
and the results of its operations for the periods then ended, in accordance with
generally accepted accounting principles applied on a consistent basis with that
of the previous years and since September 30, 1995 no adverse material change
has occurred in the financial position, condition or affairs of TCI.
4.13 Accuracy of Filing Statements
The information to be set forth in any documents filed by TCI in connection with
the transactions contemplated by this Agreement will be complete and accurate of
the time of the filing and will not contain a mis-statement of material facts
nor will it omit any statement of any material fact necessary to make any
statement contained therein not misleading.
4.14 Transaction in the Ordinary Course
Since September 30, 1995, TCI has only operated its business in the ordinary
course and has not entered into any transactions with any person, firm or
corporation with which it does not deal at "arm's length".
4.15 Tax Filing
TCI has filed with the appropriate governmental agencies all tax returns
required to be filed up to the date of this Agreement and there are no unpaid
assessments and no notification has been received from any governmental
authority that it proposes to issue a reassessment to TCI in respect of any
taxes shown on those tax returns. All taxes required to be paid by TCI have been
paid within the time required therefore and all accrued liability for taxes, if
any, have been paid when due and all other liability for such taxes has been
provided for in the books and records of TCI.
4.16 Litigation
There are no claim, action, suit, proceeding, arbitration, investigation or
inquiry pending or threatened against, relating to or affecting, TCI or any of
the assets, properties or the business of TCI or the transaction contemplated by
this Agreement, nor is there any basis for any such claim, action, suit,
proceeding, arbitration, investigation or Enquirer which may have an adverse
effect upon the assets, properties or business of TCI or the transaction
contemplated by this agreement. Neither TCI nor any officer, director or
employee of TCI has been enjoined or barred by any order, judgement or decree of
any court or other tribunal or any agency or self-regulatory body from engaging
in or continuing in any conduct or practice which would be material to the
transaction contemplated by this Agreement. There exists no order, judgement or
decree of any court o other tribunal or any agency or self-regulatory body to
which TCI or the business, properties or assets of TCI are subject or by which
they are bound.
4.17 Investment Canada Act
TCI is a Canadian within the meaning of the Investment Canada Act.
5 ADDITIONAL COVENANTS OF THE PARTIES
5.1 Covenant of Confidentiality
Each of Xxxxxxxx and Xxx covenants not at any time to publish or disclose or
authorize, or permit any of their respective agents, or representatives or any
third party under their control to publish or disclose any information or other
data, including, without limitation, financial information, or business or
financial books, record or other information of or pertaining to TCI which has
been furnished by or on behalf of TCI in connection with this Agreement and
which is not otherwise publicly available, except as required by law, and except
for the purpose of obtaining any necessary consents to the transfer of the
Xxxxxxxx Shares or the Xxx Shares to TCI.
5.2 Covenant Not to Disclose
Each of Xxxxxxxx and Xxx covenants not to, unless and until this Agreement is
terminated, he at any time disclose or otherwise make known or available to any
person, firm, corporation, or other entity other than TCI or its affiliates, or
use for their own account, any information that relates to the CanTech, this
Agreement, the transactions contemplated hereby, the existing business of
CanTech or the reasonably contemplated or foreseeable business of CanTech,
including, but not limited to, trade secrets, formulae, marketing plans or
proposals, financial information, or any observations, data, written material,
records of documents used by or relating to the business of CanTech which are of
a confidential nature (collectively, the "Proprietary Information") for any
reason or purpose except this provision shall not prohibit Xxxxxxxx or Xxx from
making disclosure in their respective capacity as an officer or director of
CanTech provided such disclosures are for the benefit of CanTech and are made in
the ordinary course of CanTech's business. Proprietary Information includes any
such information ;whether or not such information was developed, devised or
otherwise created in whole or in part by the efforts of Xxxxxxxx or Xxx, and
whether or not it is a matter of public knowledge unless it became public
knowledge as a result of authorized disclosure to the general public.
5.3 Access to CanTech by TCI
Pending Closing, TCI and TCI's counsel, accountants and other professional
advisors shall have full access during normal business hours between the date
hereof and the Closing Date to all properties, books, contracts, commitments and
records of CanTech and shall furnish to TCI all such information regarding the
business, affairs and property of CanTech as TCI may reasonably request.
5.4 Access to TCI by Xxxxxxxx and Xxx
TCI shall permit Xxxxxxxx and Xxx and their counsel, accountants or other
representatives between the date hereof and the Date of Closing to have full
access during normal business hours to all properties, books, contract,
commitments and records of TCI and will furnish to Xxxxxxxx and Xxx all such
information as either of them may reasonably request.
5.4 TCI's Obligation to Provide Funding to CanTech
As soon as possible, and in any event within 12 months after Closing, TCI shall:
(a) raise not less than $1,500,000 in cash; and
(b)make a cash investment in CanTech of not less than $1,500,000 the
proceeds of which shall be applied and used to develop, manufacture,
market, distribute and sell the products (the "Sublicensed Products")
which it is authorized to manufacture, market, distribute and sell
pursuant to the Sublicense Agreement.
In addition, TCI shall provide to CanTech, or cause CanTech to raise, sufficient
additional funds to enable CanTech to properly and fully develop and exploit the
market for the Sublicensed Products.
6 CONDITIONS TO TCI's OBLIGATIONS
The obligations of TCI hereunder are subject to the fulfilment, at or prior to
the Closing, of each of the following conditions, any or all of which may be
waived in writing by TCI in its sole discretion.
6.1 Accuracy of Representations and Warranties
Each of the representations and warranties of Xxxxxxxx and Xxx contained in this
Agreement shall be true on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date, except as affected by
transactions contemplated hereby and each of Xxxxxxxx and Xxx shall have
delivered a certificate to that effect.
6.2 Performance of Covenants
Xxxxxxxx and Xxx shall have performed, complied and have caused the CanTech to
perform and comply, with all covenants, obligations and agreements to be
performed or complied with by them on or before the Closing Date Pursuant to
this Agreement.
6.3 Litigation, Etc.
(a) No Claims, Etc.
No claim, action, suit, proceeding, arbitration, investigation or hearing
or notice of hearing shall be pending or threatened against or affecting
TCI, CanTech, Xxxxxxxx or Xxx which would have a material adverse effect
upon CanTech or the transactions contemplated by this Agreement.
(b) No violations
Noviolation shall exist, or be alleged by any governmental authority to
exist, or any law, statute, ordinance or regulation, the enforcement of
which would materially adversely affect the financial condition, results
of operations, properties or business of CanTech.
(c) Laws, Etc.
No law, regulation or decree shall have been proposed, adopted or
promulgated, or have become effective, the enforcement of which would
materially adversely affect the ability of Xxxxxxxx or Xxx to consummate
the transactions contemplated by this Agreement.
6.4 Consents
Xxxxxxxx and Xxx shall have delivered to TCI all consents and approvals of all
persons and entities necessary for the performance of the transactions
contemplated by this Agreement.
6.5 Xxxxxxxx'x Employment Contract
Xxxxxxxx shall have confirmed that he employment contract attached as Schedule F
(the "Employment Contract") has been duly executed by Xxxxxxxx and CanTech and
is in full force and effect unamended as at Closing.
6.6 Determination
TCI shall be satisfied that the issuance of the Xxxxxxxx Exchanged Shards, the
Xxx Exchanged Shares and the Xxxxxxxx TCI Warrant and the Xxx TCI Warrant
required to be issued under this Agreement to Xxxxxxxx and Xxx respectively will
be exempt from prospectus requirements under the Ontario Securities Act and that
no exemption order under the Ontario Securities Act is required (the
"Determination").
6.7 Other Documents, Etc.
TCI shall have received from Xxxxxxxx and Xxx such other instruments, documents
and certificates certifying that CanTech is validly existing under the Province
of Ontario it shall reasonably request.
6.8 TCI to Continue to be Reporting Issuer
TCI will hereafter use its best efforts to continue to be a reporting issuer not
in default of any material requirement under applicable securities laws and
regulations of the province of Ontario.
7 CONDITIONS TO XXXXXXXX'X AND XXX'X OBLIGATIONS
The obligations of Xxxxxxxx and Xxx hereunder are subject to the fulfilment, at
or prior to the Closing, of each of the following conditions, any or all of
which may be waived in writing by Xxxxxxxx and Xxx in their sole discretion.
7.1 Accuracy of Representations and Warranties
Each of the representations and warranties of TCI contained in this Agreement
shall be true on and as of the Closing Date with the same force and effect as
though made on and as of the Closing Date, except as
affected by transactions contemplated hereby and TCI shall have delivered a
certificate of a senior office to that effect.
7.2 Performance of Covenants
TCI shall have performed and complied with all covenants, obligations and
agreements to be performed or complied with by it on or before the Closing Date
pursuant to this Agreement.
7.3 Litigation, Etc.
No claim, action, suit, proceeding, arbitration, investigation or hearing or
notice of hearing shall be pending or threatened against or affecting the TCI
which might result or has resulted either in an action to enjoin or prevent or
delay the consummation of the transactions contemplated by this Agreement.
7.4 Satisfaction with the Determination
Xxxxxxxx and Xxx shall be satisfied that the Determination is correct.
7.5 Xxxxxxxx Employment Contract
TCI shall have acknowledged and confirmed the Employment Contract and shall have
executed and delivered to Xxxxxxxx the covenant attached as Schedule H.
7.6 Funding Arrangements for CanTech
Xxxxxxxx and Xxx shall be satisfied that TCI has made the necessary arrangements
or has a feasible plan in place to,
(a) raise not less than $1,500,000; and
(b) to make a cash investment in CanTech of not less than $1,500,000
within 12 months after Closing, the proceeds of which shall be applied
and used to develop, manufacture, market, distribute and sell the
Sublicensed Products.
7.7 Arrangements Regarding Existing Warrants
On or before Closing, TCI shall have entered into arrangements with the holders
of the Existing Warrants such that neither the exercise by the holders of any of
the Existing Warrants nor any trades of the shares of TCI issued pursuant to any
of the Existing Warrants do not adversely affect the market for the shares in
TCI. Such arrangements shall be satisfactory to Xxxxxxxx and Xxx.
8 TERMINATION
This Agreement may be terminated prior to the Closing Date:
(a) By Xxxxxxxx and Xxx or TCI if the Closing has not taken place on or
before November 30, 1995 provided however that such termination shall
not relieve any party from liability if such party, as of the
termination date, is in breach of any of the provisions of this
Agreement.
(b) By TCI, if on the Closing Date any of the conditions set forth in
Article 6 have not been satisfied, or waived by TCI.
(c) By Xxxxxxxx or Xxx, if on the Closing Date any of the conditions set
forth in Article 7 have not been satisfied or waived by Xxxxxxxx or
Xxx, as the case may be.
9 INDEMNIFICATION
9.1 Survival of Representation, Warranties and Indemnification
All representations, warranties, covenants and agreements herein contained on
the part of each of Xxxxxxxx, Xxx and TCI shall survive the Closing provided
that such representations and warranties except with respect to tax matters
(which shall continue until the expiry of the applicable statute of limitations,
and claims based on fraud which shall not expire) shall only survive until the
day is 2 years from the
Closing Date after which time if no claim shall have been made hereunder against
a party hereto with respect to any incorrectness in or breach of any
representation or warranty made herein by such party, such party shall have no
further liability hereunder with respect to such representation and warranty.
9.2 Limitation on Liability
No breach of any representation or warranty shall give rise to a claim by either
Xxxxxxxx, Xxx or TCI against the other unless the amount determined to be owing
by either of them to the other as a result thereof would exceed $10,000 for any
single breach or if the amount at issue would when added to the sum of all prior
amounts in respect of which a claim would otherwise be made, total in excess of
$25,000 in ;which case all of the amounts then at issue shall be recoverable.
10 GENERAL
10.1 Expenses, Etc.
TCI shall pay all reasonable costs, fees and expenses incurred by each party to
this Agreement to his, her or its respective legal counsel and accountants and
other experts.
10.2 Waiver
No Action taken pursuant to this Agreement, including any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the party taking
such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
10.3 Binding Effect, Benefits
This Agreement shall enure to the benefit of and shall be binding upon the
parties hereto and their respective heirs, personal representatives, successors
and assigns.
10.4 Notice
All notices, requests, demands and other communications which are required to be
or may be given under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person or transmitted ;by telex, or other
telecommunication facility or on receipt after dispatch by certified or
registered first class mail, postage prepaid, return receipt requested, to the
party to whom the same is so given or made as follows:
(a) if to Xxxxxxxx, to:
00 Xxxxxxxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
(b) if to Xxx, to:
R.R.#1
Delhi, Ontario
N4B 2W4
(c) if to TCI, to:
Xxxxx 000
00 Xx. Xxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: President
Fax: 000-000-0000
Or to such other address as any party may designate by giving notice to the
other parties hereto.
10.5 Entire Agreement, Amendment
This Agreement (including all Schedules attached hereto) constitutes the entire
agreement and supersedes all prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter hereof
and may not be amended, modified or terminated unless in a written instrument
executed by the party or parties sought to be bound.
10.6 Headings
The section and other headings contained in this Agreement are for reference
purposes only and shall not be deemed to be part of this Agreement or to affect
the meaning or interpretation of this Agreement.
10.7 Counterparts
This Agreement may be executed in any number of counterparts, each of which,
when executed, shall be deemed to be an original and all of which together shall
be deemed to be one and the same instrument.
10.7 Gender, Singular and Plural
Any reference in this Agreement in the masculine gender shall include the
feminine and neuter genders, and vice versa, as appropriate. Any reference in
this Agreement in the singular shall mean the plural, and vice versa, as
appropriate.
10.8 Governing Law
This Agreement shall be construed as to both validity and performance and
enforced in accordance with and governed by the laws of the Province of Ontario.
10.9 Time of Essence
Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date on the first page hereof.
SIGNED, SEALED AND DELIVERED )
In the presence of )
) __________________________ l/s
) Xxxxx Xxxxxxxx
)
)
) __________________________ l/s
) Xxxxxxxxx X. Xxx
)
)
TRANSWAY CAPITAL INC.
Per: ______________________
Name:
Title:
