STOCK
PURCHASE AGREEMENT
AMONG
XXXXXXX HAND, AS SELLER
AND
XXX XXXX, AS PURCHASER
September 28, 2001
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
ARTICLE II THE TRANSACTION 2
2.1 Stock Sale 2
2.2 Securities Law Matters 3
2.2.1 Private Offering 3
ARTICLE III REPRESENTATIONS AND WARRANTIES 3
3.1 Representation and Warranties of the Principal
Stockholder 3
3.1.1 Organization of Commodore; Foreign
Qualification 3
3.1.2 Capitalization; Ownership of Transferred
Shares 3
3.1.3 Subsidiaries 4
3.1.4 Real Estate 4
3.1.5 Authority Relative to the Closing
Documents; Enforceability 4
3.1.6 Title to Assets 4
3.1.7 Material Contracts 4
3.1.8 Labor Matters 4
3.1.9 Compliance with Other Instruments;
Consents 5
3.1.10 Financial Statements 5
3.1.11 Litigation 5
3.1.12 Brokerage 5
3.1.13 Permits 5
3.1.14 SEC Documents 5
3.1.15 Absence of Certain Changes or Events 6
3.1.16 Taxes 6
3.1.17 Compliance with Law and Government
Regulations 6
3.1.18 Trade Names and Rights 6
3.1.19 No Disqualifying Orders 6
3.1.20 Bank Accounts 7
3.1.21 Transaction with Affiliates 7
3.1.22 Stock Price Manipulation 7
3.1.23 OTCBB Status 7
3.1.24 Investment Company Act 7
3.1.25 Integration 7
3.1.26 SEC Correspondence 7
3.1.27 Effectiveness of Registration Statement
3.1.28 Full Disclosure 7
ARTICLE IV ADDITIONAL COVENANTS AND AGREEMENTS OF
THE PARTIES 7
4.1 Filing with Securities and Exchange Commission 7
4.2 Brokers or Finders 8
ARTICLE V CLOSING DELIVERIES 8
5.1 The Closing 8
5.2 Deliveries by the Principal Stockholder 8
5.2.1 Certified Resolutions 8
5.2.2 Charter Documents 8
5.2.3 Account Transfer Documents 8
5.2.4 Transferred Shares 8
5.2.5 USRPHC Certification 8
i
5.2.6 Resignations 8
5.2.7 Termination of Contracts 9
5.3 Deliveries by Purchaser 9
5.3.1 Purchase Price 9
5.3.2 Investment Letter 9
ARTICLE VI CONDITIONS PRECENDENT TO PURCHASER'S
OBLIGATION TO CLOSE 9
6.1 Confirmation from Transfer Agent 9
6.2 Accuracy of Representations 9
ARTICLE VII SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATION 9
7.1 Representations to Survive Closing 9
7.2 Indemnification 10
7.3 Enforcement of Indemnification Rights 10
6.3.1 Notification 10
6.3.2 Disputes 10
6.3.3 Time Limit 10
6.3.4 Ligation Procedure 10
7.4 Remedies Cumulative 11
ARTICLE VIII MISCELLANEOUS 11
8.1 Notices 11
8.2 Assignability and Parties in Interest 11
8.3 Expenses 11
8.4 Governing Law 11
8.5 Counterparts 12
8.6 Headings 12
8.7 Pronouns, Etc. 12
8.8 Complete Agreement 12
8.9 Modifications, Amendments and Waivers 12
8.10 Severability 12
ii
APPENDICES
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Description
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Appendix A Investment Letter
SCHEDULES
---------
Description
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Schedule 3.1.14 Commodore SEC Documents and Correspondence
Schedule 3.1.20 Commodore Bank Accounts
Schedule 5.2.1 Directors of Commodore Upon Closing
Schedule 5.2.3 Authorized Signatories for Commodore Bank
Accounts
EXHIBIT
Description
Exhibit 5.1 Escrow Agreement
iii
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") has been made
and entered into as of this 28th day of September, 2001, between
XXX XXXX, an individual resident of Germany ("Purchaser"), and
XXXXXXX HAND, an individual resident of Vancouver, Canada (the
"Principal Stockholder").
R E C I T A L S:
A. The parties hereto desire to effect a stock sale (the
"Stock Sale") pursuant to which Purchaser will purchase from the
Principal Stockholder an aggregate of 7,000,000 shares (the
"Transferred Shares") of the common stock of Commodore Minerals,
Inc., a Nevada corporation ("Commodore"), par value $.001 per
share (the "Commodore Stock"), to be purchased by Purchaser for
the consideration set forth herein.
B. Pursuant to the Stock Sale, the Principal Stockholder
will sell, and Purchaser will purchase, the Transferred Shares.
NOW, THEREFORE, in consideration of the mutual agreements
and covenants contained herein, the parties hereto agree as
follows and do thereby adopt this Agreement.
ARTICLE I
DEFINITIONS
The terms defined in this Article (except as otherwise
expressly provided in this Agreement) for all purposes of this
Agreement shall have the respective meanings specified in this
Article.
"Affiliate" shall mean any entity controlling or controlled
by another person, under common control with another person, or
controlled by any entity which controls such person.
"Agreement" shall mean this Agreement, and all the exhibits,
schedules and other documents attached to or referred to in the
Agreement, and all amendments and supplements, if any, to this
Agreement.
"Closing" shall mean the closing of the Transaction at which
the Closing Documents shall be exchanged by the parties, except
for those documents or other items specifically required to be
exchanged at a later time.
"Closing Date" shall mean October 5, 2001, or such other
date as agreed in writing to by the parties on which the Closing
occurs.
"Closing Documents" shall mean the papers, instruments and
documents required to be executed and delivered at the Closing
pursuant to this Agreement.
"Code" shall mean the Internal Revenue of 1986, or any
successor law, and regulations issued by the Internal Revenue
Service pursuant to the Internal Revenue Code or any successor
law.
"Encumbrance" shall mean any charge, claim, encumbrance,
community property interest, condition, equitable interest, lien,
option, pledge, security interest, right of first refusal, or
restriction of any kind, including any restriction on use, voting
(in the case of any security), transfer, receipt of income, or
exercise of any other attribute of ownership other than (a) liens
for taxes not yet due and payable, or (b) liens that secure the
ownership interests of lessors of equipment.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
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STOCK PURCHASE AGREEMENT - Page 1
Commodore Minerals, Inc.
"GAAP" shall mean United States generally accepted
accounting principles applied in a manner consistent with prior
periods.
"Investment Letter" shall mean the investment letter in the
form attached hereto as Appendix A.
"Material Adverse Effect" means any change (individually or
in the aggregate) in the general affairs, management, business,
goodwill, results of operations, condition (financial or
otherwise), assets, liabilities or prospects (whether or not the
result thereof would be covered by insurance) that would be
material and adverse to the designated party.
"Ordinary Course of Business" shall mean actions consistent
with the past practices of the designated party which are similar
in nature and style to actions customarily taken by the
designated party and which do not require, and in the past have
not received, specific authorization by the Board of Directors of
the designated party.
"Permits" shall mean any permit, license, exemption, order
or approval of any federal, state or local governmental entity
necessary for the conduct of the designated party's respective
business as currently conducted.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Taxes" shall include federal, state and local income taxes,
capital gains tax, value-added taxes, franchise, personal
property and real property taxes, levies, assessments, tariffs,
duties (including any customs duty), business license or other
fees, sales, use and any other taxes relating to the assets of
the designated party or the business of the designated party for
all periods up to and including the Closing Date, together with
any related charge or amount, including interest, fines,
penalties and additions to tax, if any, arising out of tax
assessments.
"Transaction" shall mean the Stock Sale contemplated by this
Agreement.
Terms Defined in Other Sections. The following terms are
defined elsewhere in this Agreement in the following Sections:
Term Section
---- -------
Affiliate Agreements 3.1.21
Commodore Introduction
Commodore Financial Statements 3.1.10.1
Commodore SEC Documents 3.1.14
Commodore Stock Recitals
OTCBB 3.1.23
Principal Stockholder Introduction
Purchase Price 2.1
Purchaser or Purchaser Recitals
Stock Sale Recitals
Transferred Shares Recitals
ARTICLE II
THE TRANSACTION
2.1. Stock Sale. Subject to the terms and conditions of the
Closing Documents, the Principal Stockholder hereby agrees to
sell, transfer and deliver to Purchaser, and Purchaser hereby
agree to purchase and accept, the Transferred Shares, in
consideration for an aggregate purchase price payable by
Purchaser to the
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STOCK PURCHASE AGREEMENT - Page 2
Commodore Minerals, Inc.
Principal Stockholder of THREE HUNDRED SEVENTY THOUSAND
DOLLARS ($370,000) ("Purchase Price").
2.2. Securities Law Matters.
2.1. Private Offering. Purchaser understands that the
Commodore Stock to be acquired and delivered to him pursuant to
terms of this Agreement will not be registered under the
Securities Act, but will be transferred in reliance upon
exemptions available for resales by Affiliates in private
transactions, and that the Principal Stockholder is relying upon
the truth and accuracy of the representations set forth in the
Investment Letter delivered concurrently with the execution of
this Agreement. Each certificate of Commodore Stock registered
in the name of each Purchaser pursuant to terms of this Agreement
shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE TRANSFERRED UNLESS
THEY ARE SO REGISTERED OR, IN THE OPINION OF
COUNSEL ACCEPTABLE TO THIS CORPORATION, SUCH
TRANSFER IS EXEMPT FROM REGISTRATION.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Principal
Stockholder. The Principal Stockholder hereby represents and
warrants to Purchaser that:
3.1.1. Organization of Commodore; Foreign
Qualification. Commodore is duly organized, validly existing,
and in good standing under the laws of the state of Nevada and
has all requisite corporate power, franchises, and licenses to
own its property and conduct the business in which it is engaged.
Each of Commodore and the Principal Stockholder have the full
power and authority (corporate or otherwise) to execute, deliver
and perform their respective obligations under this Agreement and
the Closing Agreements to which it is a party. Complete copies
of Commodore's Certificate of Incorporation, Bylaws, minutes,
transfer records and agreements, if any, among some or all of the
stockholders of Commodore have been delivered or made available
to Purchaser. Commodore is duly qualified and in good standing
as a foreign corporation in every jurisdiction in which such
qualification is necessary, except to the extent the failure to
be so qualified is not reasonably expected to result in a
Material Adverse Effect.
3.1.2. Capitalization; Ownership of Transferred
Shares.
3.1.2.1. Commodore has an authorized capital
stock consisting of 100,000,000 shares of common stock, par value
$0.001 per share, of which 13,544,000 shares are issued and
outstanding. All of the shares of Commodore Stock have been
validly issued, fully paid, are non-assessable, and were issued
in compliance with any preemptive or similar rights and in
compliance with applicable federal and state securities laws.
All shares held by the Principal Stockholder were issued in
compliance with the exemption set forth in Section 4(2) of the
Securities Act, and all other outstanding shares were issued in
compliance with the exemption set forth in Regulation S
promulgated under the Securities Act.
3.1.2.2. Commodore does not have any
outstanding subscriptions, options, rights, warrants,
convertible securities or other agreements or
commitments to issue, or contracts or any other
agreements obligating Commodore to issue, or to
transfer from treasury, any shares of its capital stock
or membership interests, as applicable, of any class or
kind, or securities convertible
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STOCK PURCHASE AGREEMENT - Page 3
Commodore Minerals, Inc.
into such stock or interests. No persons who are now
holders of Commodore Stock, and no persons who previously were
holders of Commodore Stock, are or ever were entitled to
preemptive rights other than persons who exercised or waived
those rights.
3.1.2.3. There is no outstanding vote, plan,
pending proposal or right of any person to cause any
redemption of Commodore Stock. Neither Commodore nor
any of its Affiliates, is under any obligation,
contract or other arrangement to register (or maintain
the registration of) any of its or their securities
under federal or state securities laws.
3.1.2.4. Neither Commodore nor the Principal
Stockholder is a party to any agreement, voting trust,
proxy or other agreement or understanding of any
character, whether written or oral, with any other
stockholders of Commodore with respect to or concerning
the purchase, sale or transfer or voting of the
Commodore Stock or any other security of Commodore.
3.1.2.5. Neither Commodore nor the Principal
Stockholder has any legal obligations, absolute or
contingent, to any other person or entity to sell the
assets, or any capital stock or any other security of
Commodore or any of its subsidiaries or affect any
merger, consolidation or other reorganization of
Commodore or any of its subsidiaries or to enter into
any agreement with respect thereto, except pursuant to
this Agreement.
3.1.2.6. The Principal Stockholder is the
sole beneficial and record holder of the Transferred
Shares. The Principal Stockholder holds the
Transferred Shares free and clear of any Encumbrance of
any kind whatsoever.
3.1.3. Subsidiaries. Commodore does not
have any subsidiaries (whether held directly or
indirectly) or any equity investment in any
corporation, partnership, joint venture or other
business.
3.1.4. Real Estate. Commodore does not own any
real estate or any interest in any real estate.
3.1.5. Authority Relative to the Closing
Documents; Enforceability. The Principal Stockholder is not
suffering from any legal disability which would (a) prevent him
from executing, delivering or performing his obligations under
the Closing Documents or consummating the Transaction, (b) make
such execution, delivery, performance or consummation voidable or
subject to necessary ratification, and (c) require the signature
or consent of any third party in connection therewith for the
Transaction to be binding and enforceable against the Principal
Stockholder and his property. The Closing Documents have been
duly and validly executed and delivered by the Principal
Stockholder and each constitutes the legal, valid and binding
obligation of the Principal Stockholder, enforceable against him
in accordance with their respective terms, except insofar as the
enforcement thereof may be limited by the Insolvency/Equity
Exceptions.
3.1.6. Title to Assets. Commodore has good and
marketable title in and to all of the assets and properties
reflected in the most recent Commodore Financial Statements, plus
all assets and properties purchased or acquired by Commodore
since the date of that Commodore Financial Statement, less all
assets and properties which Commodore has disposed of in the
Ordinary Course of Business, which assets and properties are free
and clear of any Encumbrance.
3.1.7. Material Contracts. Except as disclosed
in the Commodore SEC Documents, Commodore is not a party to or
bound by any agreement or contract.
3.1.8. Labor Matters. Except as disclosed in
the Commodore SEC Documents, there are presently no employment or
consulting contracts with, or covenants against competition by,
any present or former employees of Commodore. Commodore has no
employees.
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STOCK PURCHASE AGREEMENT - Page 4
Commodore Minerals, Inc.
3.1.9. Compliance with Other Instruments; Consents.
Neither the execution of any Closing Document nor the
consummation of the Transaction will conflict with, violate or
result in a breach or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a
default), or result in a termination of, or accelerate the
performance required by, or result in the creation of any
Encumbrance upon any assets of Commodore under any provision of
the Certificate of Incorporation or Organization, Bylaws,
indenture, mortgage, lien, lease, agreement, contract,
instrument, order, judgment, decree, statute, ordinance,
regulation or any other restriction of any kind or character to
which Commodore is bound.
3.1.10. Financial Statements.
3.1.10.1. Commodore's audited financial statements
(the "Commodore Financial Statements") for the year
ended November 30, 2000 and unaudited quarterly
financial statements for the three month periods ended
February 28, 2001 and May 31, 2001, copies of which
have been delivered to Purchaser, are true and complete
in all material respects, and have been prepared in
accordance with GAAP for the period covered by such
statements, and fairly present, in accordance with
GAAP, the properties, assets and financial condition of
Commodore, and results of its operations as of the
dates and for the periods covered thereby. Commodore
maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (a)
transactions are executed with management's
authorizations, (b) transactions are recorded as
necessary to permit preparation of financial statements
in accordance with GAAP and to maintain accountability
for assets, (c) access to assets is permitted only in
accordance with management's authorizations and (d) the
recorded accountability for assets if compared with
existing assets at reasonable intervals and appropriate
action is taken with respect to any difference.
Commodore has not engaged in any transaction,
maintained any bank account or used any corporate funds
except for transactions, bank accounts or funds which
have been and are reflected in the normally maintained
books and records. There has been no material adverse
change in the business operations, assets, properties,
prospects or condition (financial or otherwise) of
Commodore, taken as a whole, from that reflected in the
Commodore Financial Statements.
3.1.10.2. As of the date hereof, Commodore does
not have any debts, liabilities or obligations of any
nature, whether accrued, absolute, unmatured,
contingent, or otherwise, whether due or to become due,
that are not fully reflected in the Commodore Financial
Statements.
3.1.11. Litigation. There are no legal,
administrative, arbitration or other proceedings or
claims pending against Commodore, nor is Commodore
subject to any existing judgment which might affect the
financial condition, business, property or prospects of
Commodore; nor has Commodore received any inquiry from
an agency of the federal or of any state or local
government about the Transaction, or about any
violation or possible violation of any law, regulation
or ordinance affecting its business or assets.
3.1.12. Brokerage. No broker or finder has
rendered services to Commodore in connection with the
Transaction.
3.1.13. Permits. Commodore does not have any
Permits nor is it required to maintain any Permits.
3.1.14. SEC Documents. Commodore has furnished
or made available to Purchaser a true and complete copy of each
report, schedule, registration statement and proxy statement
filed by Commodore with the SEC, along with any correspondence
from or to the SEC relating to any such filing, since the
inception of Commodore (as such documents have since the time of
their filing been amended, the "Commodore SEC Documents"), a list
of which is attached as Schedule 3.1.14. Commodore has timely
filed with the SEC all
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STOCK PURCHASE AGREEMENT - Page 5
Commodore Minerals, Inc.
documents required to have been filed pursuant to the
Securities Act and the Exchange Act. As of their respective
dates, the Commodore SEC Documents complied in all material
respects with the requirements of the Securities Act, or the
Exchange Act, as the case may be, and the rules and regulations
of the SEC thereunder applicable to such Commodore SEC Documents,
and none of the Commodore SEC Documents 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
therein, in light of the circumstances under which they were
made, not misleading. The financial statements of Commodore
included in the Commodore SEC Documents comply as to form in all
material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect
thereto; are accurate, complete and in accordance with the books
and records of Commodore; have been prepared in accordance with
GAAP (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q of
the SEC) and fairly present (subject, in the case of the
unaudited statements, to normal, recurring audit adjustments) the
financial position of Commodore as and at the dates thereof and
the results of its operations and cash flows for the periods then
ended.
3.1.15. Absence of Certain Changes or Events. Since the
date of the latest Commodore Financial Statements, Commodore has
not (a) issued or sold any promissory note, stock, bond, option
or other security of which it was an issuer or other obligor, (b)
discharged or satisfied any Encumbrance or paid any obligation or
liability, whether absolute or contingent, direct or indirect,
(c) incurred or suffered to be incurred any liability or
obligation whatsoever, (d) caused or permitted any Encumbrance to
be created or arise on or in any of its properties or assets, (e)
declared or made any dividend, payment or distribution to
stockholders or purchased or redeemed or agreed to purchase or
redeem any shares of its capital stock, (f) reclassified its
shares of capital stock, (g) acquired any equity interest in any
other entity, or (h) entered into any agreement or transaction
except in connection with the execution and performance of this
Agreement. Commodore has not entered into any agreement to do any
of the foregoing action described in this Section 3.1.15.
3.1.16. Taxes.
3.1.16.1. Commodore either (a) has timely filed
with the appropriate taxing authority all Tax and information
returns required to have been filed by Commodore or (b) has
timely filed for any required extensions with regard to such
returns. All Taxes of Commodore have been paid (or estimated
Taxes have been deposited) to the extent such payments are
required prior to the date hereof or accrued on the books of
Commodore. The returns were correct when filed.
3.1.16.2. There are no pending investigations
of Commodore concerning any Tax returns by any federal,
state or local Taxing authority, and there are no
federal, state, local or foreign Tax liens upon any of
Commodore's assets.
3.1.17. Compliance with Law and Government
Regulations. Commodore is in compliance with, and is
not in violation of, applicable federal, state, local
or foreign statutes, laws and regulations (including
without limitation, any applicable environmental,
building, zoning or other law, ordinance or regulation)
affecting Commodore or its properties or the operation
of its business. Commodore is not subject to any order,
decree, judgment or other sanction of any court,
administrative agency or other tribunal.
3.1.18. Trade Names and Rights. Commodore does
not use any trade xxxx, service xxxx, trade name, or copyright in
its business, nor does it own any trade marks, trade xxxx
registrations or applications, trade names, service marks,
copyrights, copyright registrations or applications. No person
owns any trade xxxx, trade xxxx registration or application,
service xxxx, trade name, copyright or copyright registration or
application, the use of which is necessary or contemplated in
connection with the operation of Commodore business.
3.1.19. No Disqualifying Orders. Neither
Commodore, the Principal Stockholder nor any of their affiliates,
directors, officers or principals is subject to any disqualifying
order under the "Bad Boy" provisions
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STOCK PURCHASE AGREEMENT - Page 6
Commodore Minerals, Inc.
of the federal or any state's securities law. As used
herein, "Bad Boy" provisions include Rule 262 of Regulation A,
Rule 507 of Regulation D and other similar disqualifying
provisions of federal and state securities laws.
3.1.20. Bank Accounts. Commodore maintains only the bank
accounts listed on Schedule 3.1.20 hereto.
3.1.21. Transaction with Affiliates. Except as
set forth in the Commodore SEC Documents, neither (a) any
director or officer of Commodore, nor (b) the Principal
Stockholder (or any member of their immediate family) nor (c) any
Affiliate of either of the foregoing, in each such case either
(i) is a party to any contract or other business arrangement or
relationship of any kind with Commodore, or (ii) has an ownership
interest in any business (corporate or otherwise) that is a party
to, or in any property that is the subject of, business
arrangements or relationships of any kind with Commodore (such
arrangements, relationships or agreements listed in the Commodore
SEC Documents being referred to as "Affiliate Agreements").
3.1.22. Stock Price Manipulation. Neither
Commodore nor the Principal Stockholder has taken (and none will
take), directly or indirectly, any action designed to or that
would reasonably be expected to cause or result in stabilization
or manipulation of the price of the Commodore Stock.
3.1.23. OTCBB Status. Commodore is currently
eligible for trading on the Over-the-Counter Bulletin Board
("OTCBB") , and neither Commodore nor the Principal Stockholder
has any reason to believe that the current market makers for the
Commodore stock will cease to make a market in the Commodore
Stock following the Closing. Commodore shall take all necessary
action to continue to maintain its eligibility for quotation on
the OTCBB.
3.1.24. Investment Company Act. Commodore is
not, and upon completion of the Transaction will not be, subject
to registration as an investment company under the Investment
Company Act of 1940, as amended, and the rules and regulations
thereunder.
3.1.25. Integration. Commodore has not offered,
sold or issued any shares of Commodore Stock during the six-month
period preceding the Closing Date.
3.1.26. SEC Correspondence. Except for
correspondence with the SEC dated February 8, 2001, March 15,
2001, March 30, 2001 and April 19, 2001 relating to comments to
Commodore's Registration Statement on Form SB-2, true and correct
copies of which have been provided to Purchaser, Commodore has
not received any oral or written communication from the SEC
concerning Commodore or its status as a "public-company."
3.1.27. Effectiveness of Registration Statement.
Commodore's Registration Statement on Form SB-2 has been declared
effective by the SEC and remains currently in effect and the
prospectus included therein may be used by all persons entitled
to resell shares of Commodore Stock thereunder without any
amendments thereto.
3.1.28. Full Disclosure. None of the
representations and warranties made by the Principal Stockholder
herein, or in any Closing Document furnished or to be furnished
by him hereunder contains or will contain any untrue statement of
material fact, or omits any material fact, the omission of which
would be misleading.
ARTICLE IV
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES
4.1. Filing with Securities and Exchange Commission. Upon
the execution of this Agreement, the Principal Stockholder shall
cause Commodore to file with the SEC an Information Statement on
Schedule 14F (the
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STOCK PURCHASE AGREEMENT - Page 7
Commodore Minerals, Inc.
"Schedule 14F") disclosing the anticipated resignation of
the current directors of Commodore and appointment of Xxx Xxxx
and Xxxx Xxxxxx as directors of Commodore, in a form that will
satisfy the requirements of Rule 14f-1 of the Exchange Act, and
will promptly cause the Schedule 14F to be delivered to the
stockholders of Commodore. The parties shall use their best
efforts to cause the Schedule 14F to be filed with the SEC and
mailed to the stockholders of Commodore on or before October 1,
2001. The parties agree to cooperate in the preparation and
filing of such report or any other filings to be filed with the
SEC.
4.2. Brokers or Finders. Each party agrees to hold the
others harmless and to indemnify them against the claims of any
persons or entities claiming to be entitled to any brokerage
commission, finder's fee, advisory fee or like payment from such
other party based upon actions of the indemnifying party in
connection with the Transaction.
ARTICLE V
CLOSING DELIVERIES
5.1. The Closing. The Closing shall take place on or before
October 5, 2001 (unless such date is extended by the mutual
agreement of the parties). The Closing shall occur through an
escrow established with Computershare Trust Company of Canada
("Computershare") pursuant to an Escrow Agreement among
Computershare, Purchaser and the Principal Stockholder in the
form attached as Exhibit 5.1 hereto (the "Escrow Agent") at the
office of Computershare in Vancouver, British Columbia, Canada,
and that the Transaction contemplated hereby will proceed to
Closing, subject to the terms and conditions of the Escrow
Agreement.
5.2. Deliveries by the Principal Stockholder. The
Principal Stockholder hereby agrees to deliver, or cause to be
delivered, to Purchaser the following items, to be held pursuant
to the terms of the Escrow Agreement:
5.2.1. Certified Resolutions. Copies of the
resolutions, certified by the Secretary or an Assistant Secretary
of Commodore, dated on or before the date hereof of the Board of
Directors of Commodore (a) duly electing the persons set forth on
Schedule 5.2.1 to serve as directors of Commodore effective on
the business day following the expiration of the ten-day period
following the filing of the Schedule 14F with the SEC and mailing
thereof to the stockholders of Commodore (the "Resignation Date")
and (b) approving the terms of this Agreement for purposes of
Nev. Rev. Stat. Sec. 78.438(1) and 78.378 - 78.3793.
5.2.2. Charter Documents. Copies of (a) the
Certificate of Incorporation of Commodore, certified by the
Secretary of State of Nevada, and (b) good standing certificates
and certificates of existence from the Secretary of State of
Nevada, evidencing that Commodore is in existence and in good
standing under the laws of the State of Nevada.
5.2.3. Account Transfer Documents. All such
instruments as may be necessary to authorize persons identified
on Schedule 5.2.3 to become a signatory on the Commodore' bank
account listed on Schedule 3.1.20.
5.2.4. Transfer Agent Confirmation. Written
confirmation from the transfer agent for Commodore that it is in
possession of all stock certificates, stock powers, legal
opinions and all other documentation required by Commodore's
transfer agent to reissue the Transferred Shares in the name of
each Purchaser, containing only the legend set forth in Section
2.2.1., subject to the direction of Commodore required by Section
5.2.8.
5.2.5. USRPHC Certification. A certificate of
Commodore and the Principal Stockholder stating that Commodore is
not a U.S. real property holding corporation, as defined in
Section 897(c)(2) of the Code.
5.2.6. Resignations. A copy of the resignation
of the existing directors and officers of Commodore, to be
effective as of the Resignation Date.
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STOCK PURCHASE AGREEMENT - Page 8
Commodore Minerals, Inc.
5.2.7. Termination of Contracts. Evidence satisfactory
to Purchaser that (i) effective as of the Closing Date, the
Management Services Agreement between Commodore and W.F.C.
Management Corporation, and (ii) effective as of the Resignation
Date, the Option Agreement between Commodore and Xxxxxx X.
Xxxxxx, each has been terminated without any payment by, or
continuing liability to, Commodore.
5.2.8. Pacific Stock Direction. A direction of
Commodore to Pacific Stock Transfer Company to register the
Transferred Shares in the name of the Purchaser without
restrictive legend of any kind, except for the legend set forth
in paragraph 2.2.1 of this Agreement.
5.3. Deliveries by Purchaser. Purchaser hereby agree to
deliver to Computershare the following items, to be held pursuant
to the terms of the Escrow Agreement:
5.3.1. Purchase Price. The Purchase Price.
5.3.2. Investment Letter. The Investment
Letter, executed by each Purchaser.
ARTICLE VI
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE
Purchaser's obligation to purchase the Transferred Shares
and to take the other actions required to be taken by Purchaser
at the Closing is subject to the satisfaction, at or prior to
Closing, of each of the following conditions (any of which may be
waived by Purchaser, in whole or in part):
6.1. Confirmation from Transfer Agent. Purchaser shall have
received written confirmation from the Company's transfer agent
stating that such transfer agent has received all documents
necessary to register the transfer of all of the Transferred
Shares to Purchaser and to reissue one or more stock certificates
to Purchaser representing the Transferred Shares in the names of
Purchaser, without restrictive legend of any kind, except for the
legend set forth in paragraph 2.2.1 of this Agreement, subject to
the delivery of the direction required by Section 5.2.8.
6.2. Accuracy of Representations. All of Sellers'
representations and warranties in this Agreement (considered
collectively), and each of Sellers' representations and
warranties (considered individually), must have been accurate in
all material respects as of the date of this Agreement, and must
be accurate in all material respects as of the Closing Date as if
made on the Closing Date.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATION
7.1. Representations to Survive Closing. The
representations and warranties of the Principal Stockholder and
Purchaser contained herein or in any document furnished pursuant
hereto shall survive the Closing of the Transaction for a period
of one year following the Closing. Each party acknowledges and
agrees that, except as expressly set forth in this Agreement or
any Closing Document, no party has made (and no party is relying
on) any representation or warranties of any nature, express or
implied, regarding any or relating to any of the transactions
contemplated by this Agreement.
7.2. Indemnification. The Principal Stockholder agrees
to and does hereby indemnify, and agree to defend and hold
Purchaser harmless against any claims, actions, suits,
proceedings, investigations, losses, expenses, damages,
obligations, liabilities, judgments, fines, fees, costs and
expenses (including costs and reasonable attorneys' fees) and
amounts paid in settlement of any pending, threatened or
completed claim, action, suit,
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STOCK PURCHASE AGREEMENT - Page 9
Commodore Minerals, Inc.
proceeding or investigation (collectively "Loss" or
"Losses") which arise or result from or are related to (i) any
breach or failure of the Principal Stockholder to perform any of
his covenants or agreements set forth herein or in the Closing
Documents or (ii) the inaccuracy of any representation or
warranty made by the Principal Stockholder contained herein or in
the Closing Documents. Purchaser agree to and do hereby
indemnify, and agree to defend and hold the Principal Stockholder
harmless against any Loss or Losses which arise or result from or
are related to (i) any breach or failure of Purchaser to perform
any of his covenants or agreements set forth herein or in the
Closing Documents or (ii) the inaccuracy of any representation or
warranty made by Purchaser contained herein or in the Closing
Documents.
7.3. Enforcement of Indemnification Rights.
7.3.1. Notification. Any person or entity seeking
enforcement of indemnification rights hereunder shall notify each
potentially liable person or entity of (a) any payment made in
respect of any liability, obligation or claim to which the
foregoing indemnity applies, (b) any Loss which such person or
entity may sustain or incur, to which the foregoing indemnity
relates, and (c) any claim made or suit filed against such person
or entity or this Agreement. Such notification shall include a
specific demand for indemnification and defense if such person or
entity wishes to assert his or its indemnification rights
hereunder.
7.3.2. Disputes. If there is any dispute as to
the right to indemnification and defense hereunder, the disputing
party shall give the other party written notice of such dispute,
specifying in detail the basis of the dispute, not later than 20
days after receipt of demand for indemnification.
7.3.3. Time Limit. If there is no dispute as
to the right to indemnification with respect to any such demand
within such 20 day period, or upon resolution of any such dispute
by the parties or by a court, the person or entity entitled to
indemnification shall be promptly paid the amount of such demand,
the amount agreed to by the parties or the amount ordered by a
court.
7.3.4. Litigation Procedure. If a party
entitled to be indemnified pursuant to this Article VII notifies
the other party of the commencement of an action against it, the
party obligated to provide indemnification will be entitled, at
his or its own expense, to (a) participate in, and (b) except in
the case of a claim that relates to a tax liability, assume the
defense of the action. If the indemnifying party wishes to
assume the defense of that action, counsel selected by the
indemnifying party shall be reasonably satisfactory to the
indemnified party, and the indemnified party shall cooperate in
all reasonable respects, at its cost and expense, with the
indemnifying party and such counsel in the investigation and
defense of such action and any appeal arising therefrom. After
the indemnifying party shall notify the indemnified party of its
election to assume the defense of any such action, the
indemnifying party will not be liable to the indemnified party
under this Article VII for any legal fees or other expense
subsequently incurred by the indemnified party in connection with
the defense thereof. Even if the indemnifying party should
assume the defense of any such actions, the indemnified party
shall have the right at its expense to participate in the defense
thereof. If the indemnifying party assumes the defense of any
such actions, it shall not settle or otherwise compromise any
such action without the prior written consent of the indemnified
party. If the indemnifying party should fail or refuse to assume
the defense of any such action, the indemnifying party shall
jointly and severally reimburse the indemnified party for the
fees and expenses of counsel engaged by it to defend that action.
7.4. Remedies Cumulative. Persons or entities
entitled to indemnification hereunder shall be entitled to such
indemnification from time to time and shall be entitled to rely
upon one or more provisions of this Agreement without waiving its
right to rely upon any other provisions at the same time or any
other time.
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STOCK PURCHASE AGREEMENT - Page 10
Commodore Minerals, Inc.
ARTICLE VII
MISCELLANEOUS
8.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed
delivered if delivered by hand, by telecopier, by courier or
mailed by certified or registered mail, postage prepaid,
addressed as follows:
If to the Principal Stockholder:
Xxxxxxx Hand
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX, Xxxxxx X00 0X0
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
X'Xxxxx & Company
Suite 1880, Royal Centre
0000 X. Xxxxxxx Xxxxxx, Xxx 00000
Xxxxxxxxx, XX, Xxxxxx X0X 0X0
Telephone: 000-000-0000
Fax No.: 000-000-0000
If to Purchaser:
Mr. Xxx Xxxx
Unit 1809, 18/F., Modern Warehouse,
0 Xxxxx Xxx Xxxxxx, Xxxx Xxxx,
Xxxxxxx, Xxxx Xxxx
Telephone: (000) 0000 0000
Fax No.: (000) 0000 0000
with copy to:
Xxxxx & Xxxxxx LLP
Attn: J. Xxxxx Xxxxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone: 000.000.0000
Fax No.: 000.000.0000
8.2. Assignability and Parties in Interest.
This Agreement shall not be assignable by any of
the parties hereto without the consent of all
other parties hereto. This Agreement shall inure
to the benefit of and be binding upon the parties
hereto and their respective successors. Nothing
in this Agreement is intended to confer, expressly
or by implication, upon any other person any
rights or remedies under or by reason of this
Agreement.
8.3. Expenses. Each party shall, except as otherwise
specifically provided herein in any Exhibit hereto, bear its own
expenses and costs, including the fees of any attorney retained
by it, incurred in connection with the preparation of the Closing
Documents and consummation of the Transaction.
8.4. Governing Law. This Agreement shall be governed
by, and construed and enforced in accordance with, the laws of
the State of Nevada. Each of the parties hereto consents to the
personal jurisdiction of the federal and state courts in the
State of Nevada in connection with any action arising under or
brought with respect to this Agreement.
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STOCK PURCHASE AGREEMENT - Page 11
Commodore Minerals, Inc.
8.5. Counterparts. This Agreement may be executed as of the
same effective date in one or more counterparts, each of which
shall be deemed an original.
8.6. Headings. The headings and subheadings contained
in this Agreement are included solely for ease of reference, and
are not intended to give a full description of the contents of
any particular Section and shall not be given any weight whatever
in interpreting any provision of this Agreement.
8.7. Pronouns, Etc. Use of male, female and neuter
pronouns in the singular or plural shall be understood to include
each of the other pronouns as the context requires. The word
"and" includes the word "or". The word "or" is disjunctive but
not necessarily exclusive.
8.8. Complete Agreement. This Agreement, the
Appendices hereto, and the documents delivered pursuant hereto or
referred to herein or therein contain the entire agreement
between the parties with respect to the Transaction and, except
as provided herein, supersede all previous negotiations,
commitments and writings.
8.9. Modifications, Amendments and Waivers. This
Agreement shall not be modified or amended except by a writing
signed by each of the parties hereto. Prior to the Closing, the
Principal Stockholder may amend any of the disclosure schedules
referenced herein by giving the other party notice of such
amendments. If such amended disclosures reveal material adverse
information about Commodore, Purchaser may terminate this
Agreement without liability to the Principal Stockholder.
8.10. Severability. If any term or other provision
of this Agreement is invalid, illegal, or incapable of being
enforced by any rule of law or public policy, all other terms and
provisions of this Agreement will nevertheless remain in full
force and effect so long as the economic or legal substance of
the Transaction is not affected in any manner adverse to any
party hereto. Upon any such determination that any term or other
provision is invalid, illegal, or incapable of being enforced,
the parties hereto will negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as
closely as possible in any acceptable manner to the end that the
Transaction are consummated to the extent possible.
[signature page follows]
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STOCK PURCHASE AGREEMENT - Page 12
Commodore Minerals, Inc.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
PURCHASER:
/s/ XXX XXXX
---------------------------
XXX XXXX
PRINCIPAL STOCKHOLDER:
/s/ XXXXXXX HAND
---------------------------
XXXXXXX HAND
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Commodore Minerals, Inc.
