EXHIBIT 10.1
JOINT VENTURE AND
JOINT CONTRIBUTION AGREEMENT
THIS JOINT VENTURE AND JOINT CONTRIBUTION AGREEMENT (the "AGREEMENT")
is made and entered into effective as of June 26, 2003, by and among Active IQ
Technologies, Inc., a Minnesota corporation ("ACTIVE IQ"), Hawk Precious
Minerals Inc., a corporation organized under the laws of the Canadian Province
of Ontario ("HAWK"), and Hawk Precious Minerals USA, Inc., a Minnesota
corporation and wholly owned subsidiary of Hawk ("HAWK SUB"), in connection with
the formation and organization of a joint-venture limited liability company to
be organized under the laws of the State of Minnesota (the "COMPANY").
INTRODUCTION
X. Xxxx is a party to those certain Heads of Agreement by and among
Hawk and Kwagga Gold (Proprietary) Limited, a corporation existing under the
laws of the Republic of South Africa (such entity is hereinafter referred to as
"KWAGGA"), and AfriOre International (Barbados) Limited, dated June 4, 2003 (the
"KWAGGA AGREEMENT").
B. Pursuant to the Kwagga Agreement, Hawk has obtained certain rights
with respect to certain lands located in the Republic of South Africa, including
the right to fund and participate in all operations conducted on, and at least a
35% interest in the profits derived from, such lands for the purpose of
exploring for and exploiting base and/or precious metals discovered therein, if
any (such purpose shall be hereinafter referred to as the "PROJECT").
X. Xxxx wishes to assign its rights in, to and under the Kwagga
Agreement, and thereby acquire a partner in its participation in the Project, in
exchange for agreements to assume Hawk's obligations to contribute capital to
the enterprise by and between Hawk and Kwagga, and for an issuance of certain
securities of Active IQ, as described herein, pursuant to an exemption from the
registration requirements under the Securities Act of 1933, as amended.
D. For the above purposes, Hawk and Active IQ have entered into a
Letter of Intent dated June 4, 2003 (the "LETTER OF INTENT") outlining the terms
and conditions for the formation and operation of a joint-venture limited
liability company to be organized under the laws of the State of Minnesota, the
members of which shall be Active IQ and Hawk Sub (Active IQ and Hawk Sub are
collectively referred to hereinafter as the "MEMBERS"); in exchange for the
contributions and transactions described herein, each Member will receive a 50%
membership interest in the Company in the form of membership units (the "UNITS")
pursuant to the terms of this Agreement.
E. The parties wish to enter into an Agreement with respect to the
formation of and contribution of capital and property to the Company, in the
form of this Agreement, in order to effect the transactions contemplated by the
Letter of Intent.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing facts and premises
which are hereby made a part of this Agreement, the mutual promises of the
Members contained herein, the mutual benefits to be gained by the performance of
this Agreement, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Members, intending to be
legally bound, hereby agree as follows:
ARTICLE 1
CONTRIBUTIONS AND MEMBERSHIP INTERESTS
1.1 Contribution by Active IQ.
(a) Subject to the terms and conditions of this Agreement,
Active IQ shall make a contribution to the Company in an amount equal
to Two Million One Hundred Thousand Dollars and No/100 ($2,100,000.00)
(the "ACTIVE IQ CONTRIBUTION") in the following manner:
(i) Five Hundred Thousand Dollars and No/100
($500,000.00) at the Closing (as defined in Section 2.1);
(ii) One Million Dollars and No/100 ($1,000,000.00)
on or prior to the First Funding Date (as defined in Section
3.3 of the Member Control Agreement, as defined below); and
(iii) Six Hundred Thousand Dollars and No/100
($600,000.00) on or prior to the Second Funding Date (as
defined in Section 3.3 of the Member Control Agreement, as
defined below).
(b) The above-described installments of the Active IQ
Contribution shall be payable on the respective dates for contribution,
in U.S. dollars, by wire transfer of immediately available funds to an
account mutually agreed upon by the Members prior to Closing.
(c) On the Closing Date (as defined in Section 2.1) and in
exchange for the Active IQ Contribution, Active IQ shall receive
2,100,000 million Units of the Company in the manner provided in
Section 2.2(c) of this Agreement, and described in Section 3.2 of the
member control agreement by and among the Members and Company, dated
June 26, 2003 (the "MEMBER CONTROL AGREEMENT"), a copy of which Member
Control Agreement is attached hereto as Exhibit A to this Agreement and
hereby incorporated by reference as a part of this Agreement.
1.2 Contribution by Hawk Sub.
(a) Subject to the terms and conditions of this Agreement,
Hawk Sub shall make a contribution to the Company of all of its rights,
title and interest in, to and under the Kwagga Agreement, as the same
shall have been assigned on or prior to the Closing Date by Hawk to
Hawk Sub pursuant to Section 1.3 below.
(b) Subject to the terms and conditions of this Agreement,
Hawk Sub shall make a contribution to the Company of all of its rights,
title and interest in, to and under the Oxide Zone Rights (as such term
is defined in Section 3.1(k) below) (the contributions by Hawk Sub of
the Kwagga Agreement, described above in paragraph (a), and Oxide Zone
Rights described in this paragraph (b), are collectively referred to
hereinafter as the "HAWK SUB CONTRIBUTION;" and are referred to
collectively with the Active IQ Contribution as THE "CONTRIBUTIONS"),
as the same shall have been assigned on or prior to the Closing Date by
Hawk to Hawk Sub pursuant to Section 1.3 below. The parties acknowledge
and understand that Hawk Sub's contribution of the Oxide Zone Rights
will, initially upon the Effective Date, consist of rights to obtain a
mining lease as, if and when Hawk (i) obtains such a mining lease with
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respect to the property located near Hawk Junction, Ontario or (ii)
determines that it is otherwise legally entitled to assign an ownership
interest in the Oxide Zone Rights.
(c) On the Closing Date and in exchange for the Hawk Sub
Contribution, Hawk Sub shall receive 2,100,000 million Units of the
Company in the manner provided in Section 2.2(c) of this Agreement, and
described in Section 3.2 of the Member Control Agreement.
(d) In addition to the issuance of Company Units described
above, Hawk Sub shall receive, as additional consideration and
incentive for the Hawk Sub Contribution hereunder, the issuance of
common stock of Active IQ, $0.01 par value per share (the "COMMON
STOCK"), described in Section 1.5 below.
1.3 Hawk Agreement to Assign. Subject to the terms and conditions of
this Agreement, Hawk hereby agrees to assign the Kwagga Agreement and the Oxide
Zone Rights (as and to the extent contemplated in Section 1.2) to Hawk Sub on or
prior to the Closing, and to cause Hawk Sub to make the Hawk Sub Contribution
described in Section 1.2 above. The assignments of the Kwagga Agreement and the
Oxide Zone Rights shall be effected by the execution and delivery of assignments
in the form attached hereto as Exhibit B.
1.4 Third Party Consents. Notwithstanding anything in this Agreement to
the contrary, this Agreement shall not constitute an assignment of or an
agreement to assign any asset, claim or right or any benefit arising under or
resulting from any such asset, claim or right if an attempted assignment thereof
or an agreement to assign such asset, claim or right, without the consent of a
third party, would (a) constitute a breach or other contravention of the rights
of such third party, (b) be ineffective with respect to any party to an
agreement concerning such asset, claim or right, or (c) in any way adversely
affect the rights of the Company under such asset, claim or right. To the extent
any asset, claim or right may not be assigned to the Company by reason of the
absence of any such consent, the Company shall not be required to assume any
duties, obligations or liabilities arising under such asset, claim or right.
1.5 Private Placement of Active IQ Common Stock. On the Closing Date
and subject to the terms and conditions of this Agreement, Active IQ shall issue
Three Million Seven Hundred Fifty Thousand (3,750,000) original-issue shares of
Common Stock (the "SHARES") to Hawk Sub as additional consideration to enter
into this Agreement and make the Hawk Sub Contribution as described in Section
1.2(d) (the issuance of the Shares is referred to hereinafter as the "PRIVATE
PLACEMENT"). Active IQ shall deliver the Shares to Hawk Sub on a
delivery-against-payment basis on the Closing Date, and shall cause a
certificate representing the Shares to be executed and delivered to Hawk Sub, at
the address set forth in Section 8.1 below, no later than 14 calendar days after
the Closing Date.
All parties understand and acknowledge that the Private Placement, and
Active IQ's obligation to issue Shares to Hawk Sub, are expressly conditioned on
the representations and warranties of Hawk Sub set forth in Section 3.2.
ARTICLE 2
CLOSING
2.1 Closing.
(a) The closing of the Contributions described herein shall
take place at the offices of Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP, 3300
Xxxxx Fargo Center, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000, at 10:00 a.m., Minneapolis time, on June 26, 2003, or as soon as
practicable thereafter but in no event to occur after June 27, 2003
(the "CLOSING"), or at such other place or different time or day as may
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be mutually acceptable to the parties to this Agreement; provided,
however, that all conditions to the Closing, as provided in this
Agreement, have been met to the reasonable satisfaction of, or waived
by, the particular party whose rights have been compromised by the
failure to meet any such condition. The date and time on which the
Closing occurs shall be referred to herein as the "CLOSING DATE."
(b) On the Closing Date, the Parties shall execute and deliver
(as appropriate) this Agreement and all of the Ancillary Documents, as
defined in Section 2.2 below, contemplated by this Agreement and shall
perform the Contributions. After all of the appropriate documents have
been executed and the required Contributions have been performed, the
Company shall register the above-referenced number of Units in the
respective names of Active IQ and Hawk Sub in the Company's required
records under the Minnesota limited liability company act (the "LLC
ACT").
2.2 Ancillary Documents. At the Closing, the parties will enter into
the following agreements, execute and deliver the following instruments, and/or
cause the following instruments to be executed and delivered (collectively, the
"ANCILLARY DOCUMENTS"):
(a) Assignments of Kwagga Agreement. Hawk shall deliver, or
shall have delivered prior to the Closing Date, an assignment of the
Kwagga Agreement pursuant to which all of Hawk's right, title and
interest in, to and under the Kwagga Agreement are assigned to Hawk
Sub, in form and substance agreeable to Active IQ in its sole
discretion; and Hawk Sub shall deliver an assignment of the Kwagga
Agreement pursuant to which all of Hawk Sub's right, title and interest
in, to and under the Kwagga Agreement are assigned to the Company, in
form and substance agreeable to Active IQ in its sole discretion.
(b) Assignments of Oxide Zone Rights. Hawk shall deliver, or
shall have delivered prior to the Closing Date, an assignment of (or
agreement to assign) the Oxide Zone Rights pursuant to which all of
Hawk's right, title and interest in, to and under such Oxide Zone
Rights are assigned to Hawk Sub, in form and substance agreeable to
Active IQ in its sole discretion; and Hawk Sub shall deliver to the
Company an assignment of all of Hawk Sub's rights with respect to the
Oxide Zone Rights, in form and substance agreeable to Active IQ in its
sole discretion.
(c) Written Action by the Board of Directors of the Company.
Those individual persons selected by the respective Members to serve as
directors of the Company shall execute a written action of the
Company's board of directors, in a form mutually agreed upon by the
parties, completing the process of organizing the Company under the LLC
Act, including but not limited to the valuation and acceptance of the
Contributions by each of the Members to the Company, the adoption of
Company bylaws, and the issuance of Units to Active IQ and Hawk Sub in
exchange for the Contributions.
(d) Member Control Agreement. The Members shall execute and
deliver a Member Control Agreement with respect to the Company, in a
form mutually agreed upon by the parties, governing the relationship
among the Members and the Company and, inter alia, the restrictions on
the transfer of Company Units.
(e) Resignations. Active IQ shall cause to be delivered the
written resignations of a sufficient number of directors serving on the
board of directors of Active IQ, such resignations to be effective
immediately prior to the Closing, in furtherance of the representation
and warranty of Active IQ contained in Section 3.3(l) herein.
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(f) Active IQ Management. The board of directors of Active IQ
shall execute a written action pursuant to which the board of directors
shall: (i) appoint two additional directors to serve on Active IQ's
board of directors, both of whom shall be chosen by Hawk; (ii) appoint
a third additional director, who shall be agreed upon by Hawk and
Active IQ prior to Closing, to serve on Active IQ's board of directors;
and (iii) appoint three new corporate officers to the positions of
Chief Executive Officer, Chief Financial Officer and Secretary, all as
mutually agreed upon by Hawk, Hawk Sub and Active IQ.
2.3 Wire Transfer of Active IQ Contribution. On the Closing Date, the
first installment of the Active IQ Contribution, described in Section 1.1(a)(i),
shall be payable by wire transfer of immediately available funds to an account
mutually agreed upon by the Members prior to Closing.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
To induce the parties to enter into this Agreement and to make the
Contributions and engage in the other transactions described herein, the parties
hereby represent and warrant to each other party to this Agreement as follows:
3.1 Representations and Warranties of Hawk and Hawk Sub. Hawk and Hawk
Sub hereby jointly and severally represent and warrant to Active IQ:
(a) Organization; Good Standing, Etc. Hawk is a corporation
duly organized, validly existing and in good standing under the laws of
the Canadian Province of Ontario, and has the requisite power and
authority to carry on its business as it is now being conducted and as
it is proposed to be conducted. Hawk Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Minnesota, and has the requisite power and authority to carry
on its business as it is now being conducted and as it is proposed to
be conducted.
(b) Charter Documents. Copies of the articles of
incorporation, certificate of incorporation and bylaws, including all
amendments thereto (collectively, the "CHARTER DOCUMENTS"), of Hawk
have been delivered to legal counsel for Active IQ prior to the
execution of this Agreement, and are true and complete copies of the
duly and legally adopted Charter Documents in effect as of the date of
this Agreement. Copies of the corresponding Charter Documents (i.e.,
articles of organization, certificate of organization and bylaws),
including all amendments thereto have to have been delivered to legal
counsel for Active IQ prior to the execution of this Agreement, and are
true and complete copies of the duly and legally adopted Charter
Documents in effect as of the date of this Agreement.
(c) Due Authorization. This Agreement and the Ancillary
Documents have been duly authorized by all necessary corporate action
on behalf of Hawk, have been duly executed and delivered by authorized
officers of Hawk, are valid and binding agreements on the part of Hawk
and are enforceable against Hawk in accordance with their respective
terms. Similarly, this Agreement and the Ancillary Documents have been
duly authorized by all necessary company action on behalf of Hawk Sub,
have been duly executed and delivered by authorized officers of Hawk
Sub, are valid and binding agreements on the part of Hawk Sub and are
enforceable against Hawk Sub in accordance with their respective terms.
(d) No Conflict. Neither the execution and the delivery of
this Agreement or the Ancillary Documents, nor the consummation or
performance of any of the transactions contemplated by this Agreement
or any of the Ancillary Documents (such transactions collectively
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referred to hereinafter as the "CONTEMPLATED TRANSACTIONS") will
directly or indirectly (with or without notice or lapse of time): (i)
contravene, conflict with or result in a violation of or default under
any provision of the Charter Documents of Hawk or Hawk Sub or any
resolution adopted by the shareholders of Hawk or Hawk Sub; (ii)
contravene, conflict with or result in a violation of or default under,
or give any Governmental Body (as defined below) or other Person (as
defined below) the right to challenge any of the Contemplated
Transactions or to exercise any remedy or obtain any relief under, any
legal requirement or any order to which Hawk or Hawk Sub is subject;
(iii) contravene, conflict with or result in a violation of or default
under any of the terms or requirements of, or give any Governmental
Body the right to revoke, withdraw, suspend, cancel, terminate or
modify any Governmental Authorization (as defined below) held by Hawk
or Hawk Sub or that otherwise relates to the business of Hawk or Hawk
Sub; or (iv) contravene, conflict with or result in a violation or
breach of or default under any provision of, or give any Person the
right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate or
modify any contract or other arrangement to which Hawk or Hawk Sub is a
party or by which Hawk or Hawk Sub is bound. Except as set forth on
Schedule 3.1(d) hereof, neither Hawk nor Hawk Sub will be required to
give any notice to or obtain any consent from any Person in order for
Hawk or Hawk Sub to consummate the Contemplated Transactions.
Furthermore, neither the assignment of the Kwagga Agreement by Hawk or
Hawk Sub, or Hawk Sub Contribution will cause a violation of any laws
regarding fraudulent transfer or conveyance, or similar laws to which
Hawk or Hawk Sub are subject.
For the purposes of this Agreement, the term "GOVERNMENTAL
AUTHORIZATION" means any approval, certificate, consent, franchise,
license, permit, registration, variance, waiver or other authorization
issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any legal
requirement. The term "GOVERNMENTAL BODY" means any (i) nation, xxxxx,
xxxx, xxxx, xxxxxxx, xxxxxxxx or other jurisdiction of any nature; (ii)
federal, state, provincial, local, municipal, foreign or other
government; or (iii) governmental or quasi-governmental agency, branch,
department, official or entity and any court or other tribunal; (iv)
multi-national organization or body; or (v) body entitled to exercise
any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature. Finally, the
term "PERSON" means any individual, partnership, corporation, limited
liability company, association, joint-stock company, trust, joint
venture, unincorporated organization or association or a governmental
entity (or any department, agency or political subdivision thereof).
(e) Rights, Title and Interest; Encumbrances. After the Hawk
Sub Contribution, the Company will own all of the rights, title and
interest originally vested in and held by Hawk and Hawk Sub with
respect to the Kwagga Agreement, and neither (i) the Kwagga Agreement,
or (ii) any of the rights of Hawk or Hawk Sub in, to and under the
Kwagga Agreement, subject to any pledge, lease, lien, charge, security
interest, encumbrance or restriction of any kind.
(f) Litigation; Governmental Proceedings. Except as set forth
on Schedule 3.1(f) hereof, there are no legal actions, suits,
arbitrations or other legal, administrative or governmental proceedings
or investigations (any of the foregoing are a "PROCEEDING") pending or
threatened against Hawk, Hawk Sub or any of their respective properties
or business, or any officer or director of Hawk or Hawk Sub in their
capacity as such, and neither Hawk, Hawk Sub nor any officer or
director of such parties are aware of any facts that are reasonably
expected to result in or form the basis for any such Proceeding.
Neither Hawk nor Hawk Sub are in default with respect to any judgment,
order or decree of any court or any Governmental Body.
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(g) Compliance with Applicable Laws and Other Instruments. The
properties, business and operations of Hawk and Hawk Sub have been and
are being conducted in all material respects in accordance with all
applicable laws, rules and regulations of all Governmental Bodies to
which such parties are subject. Neither the execution nor delivery of,
nor the performance of or compliance with, this Agreement or Ancillary
Documents, nor the consummation of the Contemplated Transactions will,
with or without the giving of notice or passage of time (or both),
result in any breach of, or constitute a default under any agreement or
other instrument to which the Hawk or Hawk Sub are a party or by which
they or any of their respective properties, assets or rights is bound
or affected. Neither Hawk nor Hawk Sub is in violation of its Charter
Documents, nor are the Parties in violation of, or in default under,
any lien, indenture, mortgage, lease, agreement, instrument, commitment
or arrangement in any material respect. Hawk and Hawk Sub are not
subject to any restriction that would prohibit them from entering into
or performing their obligations under this Agreement or the Ancillary
Agreements.
(h) Licenses. Immediately prior to and immediately following
the Closing, Hawk and Hawk Sub do and will possess, from the
appropriate Governmental Bodies, all licenses, permits, authorizations,
approvals, franchises and rights that (i) are necessary for them to
engage in the business they currently conduct, and (ii) if not
possessed by them or the Company, would not have a material adverse
effect on the Company. Neither Hawk nor Hawk Sub have any reasonable
basis to conclude that they, or, after the Hawk Sub Contribution, the
Company, will not be able to obtain any license, permit, authorization,
approval, franchise and right that may be required for the Company to
assert any rights under the Kwagga Agreement and the Project.
(i) Absence of Restrictive Agreements. Other than Kwagga, no
Person, other than Hawk or Hawk Sub has any claim of any kind
whatsoever in respect of the Kwagga Agreement. Furthermore, there are
no agreements or other obligations by which Hawk or Hawk Sub is bound,
which restrict the ability of Hawk or Hawk Sub to enter into this
Agreement, to form, organize or operate the Company, or to perform any
of the Contemplated Transactions.
(j) No Brokers or Finders. Except for Boston Financial
Partners, no Person has or will have, as a result of any contractual
undertaking by Hawk or Hawk Sub, any right, interest or valid claim
against Hawk or Hawk Sub for any commission, fee or other compensation
as a finder or broker, or in any similar capacity, in connection with
the Contemplated Transactions, specifically including the Kwagga
Agreement.
(k) Oxide Zone Rights. Hawk and Hawk Sub are, pursuant to
Sections 1.2 and 1.3, assigning their entire rights, title and interest
in, under and to, and otherwise associated and in connection with, any
mining claims insofar as they relate, and are limited to, that portion
of the mineral resource located on the "Holdsworth Property" (as such
term is described in the Report on the Holdsworth Gold Prospect Wawa
Area, Ontario, for Hawk Junction Capital Corp., dated October 2002, and
authored by Xxxxxxx X. Xxxxx, P. Xxx., hereinafter referred to as the
"REPORT," a copy of which all parties to this Agreement acknowledge to
have received prior to Closing) and comprising the "Black Sand Zone"
overlying the "Algoma Iron Formation" (as both terms are described in
the Report). The foregoing rights are herein referred to as the "OXIDE
ZONE RIGHTS." Furthermore, Hawk represents and warrants that the Oxide
Zone Rights comprise a portion of, at the very least, a mining claim
giving it the right to explore for valuable mineral deposits and apply
for an exclusive mining lease with respect to the property located near
Hawk Junction, Ontario.
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3.2 Representations and Warranties of Hawk Sub. Hawk Sub hereby
represents and warrants to and covenants and agrees with Active IQ as follows:
(a) Member Control Agreement. Hawk Sub understands and
acknowledges that by performing the Hawk Sub Contribution and executing
and delivering the Member Control Agreement, Hawk Sub will become bound
by the terms of the Member Control Agreement, including those
provisions restricting a Member's ability to buy, sell or otherwise
transfer their Company Units.
(b) Investment Representations with regard to Private
Placement. Hawk Sub hereby represents and warrants to the Company and
to Active IQ, respectively, with respect to the Hawk Sub Contribution
and the concomitant investments by Hawk Sub in Company Units and the
Shares (such Units and Shares are collectively referred to herein as
the "SECURITIES"), as follows:
(i) Hawk Sub is acquiring the Securities for its own
account, for investment purposes only and not with a view
towards or in connection with the public sale or distribution
thereof in violation of the Securities Act of 1933, as amended
(the "SECURITIES ACT");
(ii) Hawk Sub understands that the Securities are
being offered and sold by the Company and Active IQ in
reliance on an exemption from the registration requirements of
the Securities Act and equivalent state securities and "blue
sky" laws, and that both the Company and Active IQ are relying
upon the accuracy of, and Hawk Sub's compliance with, Hawk
Sub's representations, warranties and covenants set forth in
this Agreement to determine the availability of such exemption
and the eligibility of Hawk Sub to purchase the Securities;
(iii) Hawk Sub understands that the Securities have
not been approved or disapproved by the United States
Securities and Exchange Commission (the "COMMISSION") or any
state securities commission;
(iv) Hawk Sub understands that there will be no
market for the Units, that there are significant restrictions
on the transferability of the Securities, and that, for these
and other reasons, Hawk Sub may be unable to liquidate an
investment in the Securities for an indefinite period of time;
and
(c) Restrictions on Resale; Rule 144. Hawk Sub understands and
acknowledges that, upon issuance pursuant to Section 1.5, the
Securities will not be registered under the Securities Act or any state
securities laws by reason of the availability of an exemption from the
registration requirements of the Securities Act pursuant to Section
4(2) thereof or Rules 505 or 506 promulgated under the Securities Act
and applicable state securities laws, and that the reliance of Active
IQ upon these exemptions is predicated in part upon this representation
by Hawk Sub. Hawk Sub further understands and acknowledges that the
Securities may not be transferred or resold without (i) registration
under the Securities Act and any applicable state securities laws or
(ii) an exemption from the requirements of the Securities Act and
applicable state securities laws. Hawk Sub understands and acknowledges
that (i) an exemption from such registration is not presently available
pursuant to Securities Act Rule 144 promulgated by the Commission, (ii)
Active IQ makes no commitment to become or remain eligible for Rule
144, and (iii) Hawk Sub may not sell any Securities acquired hereunder
pursuant to Rule 144 prior to the expiration of a one-year period (or
such shorter period as the Commission may hereafter adopt) after the
acquisition of such Securities.
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(d) Restrictive Legend. Hawk Sub acknowledges and agrees that,
upon issuance of the Shares pursuant to this Agreement, certificates
representing the Shares shall have endorsed thereon legends in
substantially the following form (and a stop-transfer order may be
placed against transfer of the Shares until such legend has been
removed):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND WITHOUT A VIEW TO THEIR DISTRIBUTION
AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SHARES UNDER THE SECURITIES ACT OR, IN THE
OPINION OF COUNSEL SATISFACTORY TO THE ISSUING
CORPORATION, AN EXEMPTION FROM REGISTRATION IS
AVAILABLE UNDER APPLICABLE SECURITIES LAWS.
3.3 Representations and Warranties of Active IQ. Active IQ hereby
represents and warrants to Hawk Sub:
(a) Member Control Agreement. Active IQ understands and
acknowledges that by performing the Active IQ Contribution and
executing and delivering the Member Control Agreement, Active IQ will
become bound by the terms of the Member Control Agreement, including
those provisions restricting a Member's ability to buy, sell or
otherwise transfer their Company Units.
(b) Organization; Good Standing, Etc. Active IQ is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Minnesota, and has the requisite power and
authority to carry on its business as it is now being conducted and as
it is proposed to be conducted.
(c) Charter Documents. Copies of Active IQ's Charter Documents
have been delivered to legal counsel for Hawk prior to the execution of
this Agreement, and are true and complete copies of the duly and
legally adopted Charter Documents in effect as of the date of this
Agreement.
(d) Due Authorization. This Agreement and the Ancillary
Documents have been duly authorized by all necessary corporate action
on behalf of Active IQ, have been duly executed and delivered by
authorized officers of Active IQ, are valid and binding agreements on
the part of Active IQ and are enforceable against Active IQ in
accordance with their respective terms.
(e) Capitalization. As of June 26, 2004, the Company's
authorized capital stock consists of 150,000,000 shares of capital
stock; of which 13,307,181 shares of Common Stock are issued and
outstanding. All of the issued and outstanding shares of Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable. As of the date of this Agreement, the Company has
outstanding stock options to purchase 2,805,545 shares of Common Stock,
and outstanding warrants to purchase 9,269,301 shares of Common Stock.
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(f) Valid Issuance. The Shares to be issued to Hawk Sub in the
Private Placement, when issued and paid for pursuant to the terms of
this Agreement (i.e., upon the performance by Hawk Sub of the Hawk Sub
Contribution), will be duly authorized and validly issued and
outstanding, fully paid, nonassessable and free and clear of all
pledges, liens, encumbrances and restrictions other than those
restrictions relating to the Securities Act.
(g) Litigation; Governmental Proceedings. Except as set forth
on Schedule 3.3(g) hereof, there are no Proceedings pending or
threatened against Active IQ or any of their respective properties or
business, or any officer or director of Active IQ in their capacity as
such, and neither Active IQ nor any of its officers or directors are
aware of any facts that are reasonably expected to result in or form
the basis for any such Proceeding. Active IQ is not in default with
respect to any judgment, order or decree of any court or any
Governmental Body.
(h) No Conflict. Neither the execution and the delivery of
this Agreement or the Ancillary Documents, nor the consummation or
performance of any of the Contemplated Transactions will directly or
indirectly (with or without notice or lapse of time): (i) contravene,
conflict with or result in a violation of or default under any
provision of the Charter Documents of Active IQ or any resolution
adopted by the shareholders of Active IQ; (ii) contravene, conflict
with or result in a violation of or default under, or give any
Governmental Body or other Person the right to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any
relief under, any legal requirement or any order to which Active IQ is
subject; (iii) contravene, conflict with or result in a violation of or
default under any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend, cancel,
terminate or modify any Governmental Authorization held by Active IQ or
that otherwise relates to the business of Active IQ; or (iv)
contravene, conflict with or result in a violation or breach of or
default under any provision of, or give any Person the right to declare
a default or exercise any remedy under, or to accelerate the maturity
or performance of, or to cancel, terminate or modify any contract or
other arrangement to which Active IQ is a party or by which Active IQ
is bound. Except as set forth on Schedule 3.3(h) hereof, Active IQ will
not be required to give any notice to or obtain any consent from any
Person in order for Active IQ to consummate the Contemplated
Transactions.
(i) Compliance with Applicable Laws and Other Instruments. The
properties, business and operations of Active IQ have been and are
being conducted in all material respects in accordance with all
applicable laws, rules and regulations of all Governmental Bodies.
Neither the execution nor delivery of, nor the performance of or
compliance with, this Agreement or Ancillary Documents, nor the
consummation of the Contemplated Transactions will, with or without the
giving of notice or passage of time (or both), result in any breach of,
or constitute a default under any agreement or other instrument to
which Active IQ is a party or by which it or any of its properties,
assets or rights is bound or affected. Active IQ is not in violation of
its Charter Documents, nor is it in violation of, or in default under,
any lien, indenture, mortgage, lease, agreement, instrument, commitment
or arrangement in any material respect. Active IQ is not subject to any
restriction that would prohibit it from entering into or performing its
obligations under this Agreement or the Ancillary Agreements.
(j) No Brokers or Finders. Except for Boston Financial
Partners and Xxxxx X. Xxxxx (the fees for which, if any, will be paid
by Hawk) no Person has or will have, as a result of any contractual
undertaking by Active IQ, any right, interest or valid claim against
Active IQ for any commission, fee or other compensation as a finder or
broker, or in any similar capacity, in connection with the Contemplated
Transactions.
10
(k) Absence of Restrictive Agreements. There are no agreements
or other obligations by which Active IQ is bound, which restrict the
ability of Active IQ to enter into this Agreement, to form, organize or
operate the Company, or to perform any of the Contemplated
Transactions.
(l) Board of Directors; Management. As of the Closing, Active
IQ's board of directors shall consist of no more than two persons.
Three additional directors shall be appointed to serve on the board of
directors of Active IQ pursuant to the written action described in
Section 2.2(f).
ARTICLE 4
CONDITIONS TO CLOSING
The obligation of each party to this Agreement to close the
Contemplated Transactions is subject to the fulfillment or waiver, on or prior
to the Closing Date, of the conditions set forth in this Article 4, as follows:
4.1 Representations and Warranties. Each party's obligation to close
the Contemplated Transactions is subject to the truth and accuracy, in all
respects, of the representations and warranties of each other party, made to and
for the benefit such party, under this Agreement as of the Closing Date with the
same effect as though made on and as of such date.
4.2 Ancillary Documents. Each party's obligation to close the
Contemplated Transactions is subject to the execution and delivery, at the
Closing, of all Ancillary Documents by all parties thereto.
4.3 Supporting Documents. Legal counsel for each of the parties to this
Agreement shall have received the following: (a) a copy of resolutions of the
other parties' board of governors or directors, as the case may be, authorizing
and approving the execution, delivery and performance of this Agreement and any
Ancillary Documents to which it is a party; all such resolutions shall be
certified by a corporate or company officer of the delivering party; and (b)
copies of Charter Documents, certified by the governmental agencies responsible
for the filing and certification of such Charter Documents.
4.4 Consents and Approvals. No party shall be obligated to close the
Contemplated Transactions unless, on or prior to the Closing Date, the parties
shall have received all consents and approvals necessary to consummate the
Contemplated Transactions.
4.5 Certificate of Officers. Each party's obligation to close the
Contemplated Transactions is subject to the delivery, by each other party who
made a representation and warranty to and for the benefit of such party, of a
certificate, dated as of the Closing Date, executed by the delivering party's
Chief Executive Officer or similar officer, certifying to the delivering party's
satisfaction of the conditions specified in Sections 4.1 through 4.4.
4.6 Composition of Board of Directors. Each party's obligation to close
the Contemplated Transactions is subject to the mutual agreement of Hawk and
Active IQ with respect to the third new director to be appointed by mutual
agreement of such parties pursuant to the written action of the board of
directors of Active IQ to be delivered at Closing, as contemplated by Section
2.2(f).
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ARTICLE 5
COVENANTS
5.1 No Publicity. The parties agree that, except as required by
applicable law, they will not make any press releases or other announcements
prior to or at the time of Closing with respect to the Contemplated Transactions
without the prior approval of the other Party, which approval will not be
unreasonably withheld or delayed.
5.2 Claims of Shareholders or Equity Interest Holders. The parties
agree that any Proceeding brought by a shareholder or equity interest holder of
any of the parties against another party to this Agreement as a result of the
Contemplated Transactions shall be defended by the party whose shareholder or
equity interest holder brings the Proceeding.
5.3 Stop Transfer Instructions; Legends. Active IQ agrees that no
instruction, other than the instructions referred to in this Section 5.3 and
customary stop-transfer instructions prior to the registration and sale of the
Shares pursuant to an effective Securities Act registration statement, shall be
given to its transfer agent for the Shares. The Shares shall otherwise be freely
transferable on the Company's books and records as and to the extent provided in
this Agreement and applicable law. Nothing contained in this Section 5.3 shall
affect in any way Hawk Sub's (or any subsequent transferee's) obligations and
agreement to comply with all applicable securities laws upon resale of any
Shares. If at any time Hawk Sub provides Active IQ with an opinion of counsel
reasonably satisfactory to Active IQ that registration of the resale by Hawk Sub
of any Shares is not required under the Securities Act and that the removal of
restrictive legends is permitted under applicable law, then Active IQ shall
permit the transfer of such Shares and promptly instruct its transfer agent to
issue one or more certificates for Common Stock without any restrictive legends
endorsed thereon.
5.4 Oxide Zone Rights. Hawk agrees to use reasonable efforts to
promptly determine the precise nature and extent of its mining claim with
respect to the Oxide Zone Rights, specifically including whether the mining
claim is patented or unpatented.
ARTICLE 6
REGISTRATION RIGHTS
6.1 Piggyback Registration.
(a) Active IQ covenants to and agrees with Hawk Sub that, if
at any time following the commencement of the Registration Period, as
defined in paragraph (c) below, (i) Active IQ proposes to file a
registration statement under the Securities Act (expressly excluding
amendments to currently filed but not yet effective registration
statements, if any and any inappropriate forms for piggyback
registration such as Forms X-0, X-0 or their successor forms) with
respect to any class of security in connection with either a primary
registration on behalf of Active IQ itself or a secondary registration
on behalf of holders of securities, and (ii) the registration statement
may be used for registration of the Shares, then Active IQ will give
written notice to Hawk Sub at least 30 days prior to the filing of such
registration statement and will include in such registration statement
the Shares to the extent that Hawk Sub provides a written request for
inclusion therein within 20 days after receipt of the Active IQ's
written notice.
(b) Active IQ will use its best efforts, through its officers,
directors, auditors and counsel, to cause to become effective such
registration statement as promptly as practicable. At such time after
the filing of the registration statement when the Commission indicates,
either orally or in writing, that it is willing to entertain requests
for acceleration of effectiveness of such registration statement,
12
Active IQ shall promptly request that the effectiveness of such
registration statement be accelerated; provided, however, that Active
IQ shall not have an obligation to register Shares if such Shares are
already then covered by an existing registration statement.
(c) For purposes of this Article 6, the term "REGISTRATION
PERIOD" shall mean the period of time following the Closing after which
(i) Active IQ has raised an aggregate of at least $2.0 million in gross
proceeds from one or more public offerings of equity securities,
including for this purpose so-called "PIPE" transactions, and (ii) the
closing sales price of Active IQ Common Stock is at least One Dollar
and No/100 ($1.00) per share of Common Stock for a minimum of 20
consecutive trading days.
6.2 Subsequently Issued Shares. The piggyback registration rights of
Hawk Sub set forth in Section 6.1 above shall include any shares of Active IQ
Common Stock issued to Hawk Sub in connection with the purchase and sale of all
of Hawk Sub's remaining membership interest in the Company pursuant to Section
8.7 of the Member Control Agreement, and all such shares of Common Stock shall
be considered "Shares" for all purposes of this Article 6.
6.3 Certain Limitations.
(a) Notwithstanding anything else to the contrary contained in
this Article 6, if a greater number of shares of Common Stock are
offered for participation in a proposed offering than, in the
reasonable opinion of the managing underwriter of such proposed
offering, if any, can be accommodated without adversely affecting the
proposed offering, then the amount of Shares (including shares of
Common Stock registrable under Section 6.2 above) shall be
proportionately reduced together with the securities of other selling
shareholders participating in the registration to the extent deemed
satisfactory by the managing underwriter.
(b) Active IQ's obligation to include any Shares in a
registration statement is contingent upon the cooperation of Hawk Sub
in the preparation and filing of any such registration statement, such
cooperation to include the furnishing of information concerning Hawk
Sub for inclusion in such registration statement.
6.4 Fees and Expenses. Active IQ shall bear all expenses and fees
incurred in connection with the preparation, filing and amendments, if any, of
any registration statement under which Hawk Sub exercises its rights to
piggyback registration under this Article 6; provided, however, that Hawk Sub
shall pay all fees, disbursements and expenses of any counsel or expert it
retains and all underwriting discounts and commissions, filing fees and any
transfer or other taxes relating to the Shares included in a registration
statement of Active IQ.
6.5 Length of Effectiveness. Active IQ shall prepare and file with the
Commission such amendments (including post-effective amendments) to any
registration statement under which Shares are being registered, and supplements
thereto, as may be necessary to keep such registration statement continuously
effective and in compliance with the provisions of the Securities Act applicable
thereto so as to permit the prospectus forming part of the registration
statement to be current and useable by Hawk Sub for resales of the Shares for a
two-year period after the date on which such registration statement is first
declared effective by the Commission, or, if shorter, two years after the date
of issuance of the Shares or when all the Shares covered by the registration
statement have been sold pursuant thereto in accordance with the plan of
distribution provided in the prospectus, transferred pursuant to Rule 144 under
the Securities Act, or otherwise transferred in a manner that results in the
delivery of new securities not subject to transfer restrictions under the
Securities Act.
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ARTICLE 7
INDEMNIFICATION
7.1 Indemnification. Each party shall indemnify and hold harmless (each
an "INDEMNIFYING PARTY") the others (the party or parties to be indemnified in
any particular case is collectively referred to hereinafter as an "INDEMNIFIED
PARTY") from, against and in respect of any and all Damages, as defined below,
losses, deficiencies, liabilities, costs and expenses resulting from, relating
to or arising out of any (a) misrepresentation, (b) breach of a representation
or warranty or (c) non-fulfillment of any agreement or covenant hereunder on the
part of such Indemnifying Party. Moreover, each Indemnifying Party will
indemnify and hold harmless an Indemnified Party hereto from, against and in
respect of any and all actions, suits, proceedings, demands, assessments,
judgments, costs (including reasonable attorneys' fees) and legal and other
expenses incident to any of the foregoing or to the enforcement of this Section.
As used in this Article 7, the term "DAMAGES" means all actual damages
suffered or incurred by an Indemnified Party, including without limitation all
compensatory damages, but excluding any consequential or punitive damages.
7.2 Survival. All of the indemnity obligations herein shall survive the
Closing for a period of three years from the Closing Date.
7.3 Claims for Indemnification. All claims for indemnification under
this Agreement shall be asserted and resolved as follows:
(a) Third Party Claims. In the event that any claim or demand
for which one party would be liable to the other hereunder is asserted
against or sought to be collected by a third party (a "THIRD PARTY
CLAIM"), the Indemnified Party shall promptly notify the Indemnifying
Party in writing of such Third Party Claim, specifying the nature of
such claim or demand and the amount or the estimated amount thereof to
the extent then feasible (which estimate shall not be conclusive of the
final amount of such claim or demand) (the "CLAIM NOTICE"); provided,
however, that failure of an Indemnified Party to give notice as
provided in this Section 7.3(a) shall relieve the Indemnifying Party of
its obligations hereunder to the extent that the Indemnifying Party
actually has been prejudiced by such failure to give notice.
Thereafter, the Indemnified Party shall deliver to the Indemnifying
Party, as promptly as practicable and, in any event, within ten days
after such Indemnified Party's receipt thereof, copies of all notices
and other documents relating to the Third Party Claim.
In addition:
(i) The Indemnifying Party will have 30 days from its
receipt of the Claim Notice (the "NOTICE PERIOD") to assume or
cause the assumption of the defense thereof with counsel
selected by the Indemnifying Party (provided such counsel is
not reasonably objected to by the Indemnified Party).
(ii) Should the Indemnifying Party elect to assume or
cause the assumption of the defense of a Third Party Claim,
the Indemnifying Party will not be liable to the Indemnified
Party for any legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof
unless the Indemnifying Party has agreed in writing to pay
such fees and expenses.
(iii) If the Indemnifying Party assumes the defense
of a Third Party Claim, then, as long as the Indemnifying
Party is reasonably contesting such claim in good faith, the
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Indemnified Party shall not admit any liability with respect
to, or settle, compromise or discharge any Third Party Claim
without the Indemnifying Party's prior written consent, and
the Indemnified Party will agree to any settlement, compromise
or discharge of the Third Party Claim the Indemnifying Party
may recommend which releases the Indemnified Party in
connection with such Third Party Claim. Notwithstanding the
foregoing, the Indemnified Party shall have the right to pay
or settle any such claim, provided that in such event it shall
waive any right to indemnity therefor by the Indemnifying
Party. If the Indemnifying Party assumes the defense of a
Third Party Claim, then the Indemnifying Party shall not,
without the Indemnified Party's prior written consent, settle
or compromise any Third Party Claim or consent to the entry of
any judgment which does not include as an unconditional term
thereof the delivery by the claimant or plaintiff to the
Indemnified Party of a written release from all liability in
respect of such Third Party Claim.
(iv) The amount that an Indemnifying Party shall be
obligated to reimburse an Indemnified Party in connection with
any Third Party Claim shall be reduced by the amount of the
insurance benefits, if any, obtained by the Indemnified Party
(or for its benefit) by reason of the matter giving rise to
such Claim.
(v) The amount that any Indemnifying Party shall be
obligated to reimburse an Indemnified Party in connection with
any Third Party Claim shall be reduced by an amount equal to
any income tax benefits obtained by such party (or for its
benefit) as a result of the event giving rise to the
Indemnifying Party's obligation to make the reimbursement,
after taking into account (1) any insurance benefits described
in the preceding paragraph and (2) the income tax treatment of
the Indemnified Party's receipt of such insurance benefits and
reimbursement.
(b) Other Claims. In the event that a party should have a
claim against another party hereunder which does not involve a Third
Party Claim, the Indemnified Party shall promptly notify the
Indemnifying Party in writing of the claim, specifying the nature of
such claim or demand and the amount or the estimated amount thereof to
the extent then feasible (which estimate shall not be conclusive of the
final amount of such claim or demand); provided, however, that failure
of an Indemnified Party to give notice as provided in this Section
7.3(b) shall relieve the Indemnifying Party of its obligations
hereunder to the extent that the Indemnifying Party actually has been
prejudiced by such failure to give notice. If the Indemnifying Party
does not notify the Indemnified Party within 30 days after receipt of
notice thereof that the Indemnifying Party disputes such claims, the
amount of such claim shall be conclusively deemed a liability of the
Indemnified Party hereunder.
ARTICLE 8
GENERAL PROVISIONS
8.1 Notices. All notices required to be given by this Agreement shall
be made in writing either: (a) by personal or commercial courier delivery to the
party requiring notice and securing a written receipt, or (b) by mailing the
notice to the last known address of the party requiring notice, by registered
mail, return-receipt requested. Notice shall be treated as given when personally
received or, if sent as provided above, the effective date of the notice shall
be the date of the written receipt received upon delivery in clause (a) above or
(except in the event of a mail strike) the date the notice is sent pursuant to
clause (b) above.
15
Such notices will be given to a party at the address set forth below:
If to Active IQ: Active IQ Technologies, Inc.
000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer
If to Hawk: Hawk Precious Minerals Inc.
000 - 000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: President
If to Hawk Sub: Hawk Precious Minerals USA, Inc.
404 - 000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Chief Executive Officer
Any party to this Agreement may, at any time by giving five days prior
written notice to the other parties, designate any other address in substitution
of the foregoing address. All notices, offers, demands, certificates or other
communications required or permitted under this Agreement shall be in writing,
signed by the Person giving the same.
8.2 Consent and Waiver. No consent under and no waiver of any provision
of this Agreement on any one occasion shall constitute a consent under or waiver
of any other provision on said occasion or on any other occasion, nor shall it
constitute a consent under or waiver of the consented-to or waived provision on
any other occasion. No consent or waiver shall be enforceable unless it is in
writing and signed by the party against whom such consent or waiver is sought to
be enforced.
8.3 Entire Agreement. Except for the Articles of Organization of the
Company, the Company bylaws, the Member Control Agreement with respect to the
Company, and any other Ancillary Documents, this Agreement constitutes the
entire agreement among the parties with respect to the Company and the joint
venture contemplated hereby. It supersedes any prior agreement or understanding
among them, and it may not be modified or amended in any manner other than as
set forth herein.
8.4 Oral Changes, Waivers, Etc. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only pursuant to a written statement signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.
8.5 Governing Law; Jurisdiction and Venue. This Agreement and the
rights of the parties hereunder shall be governed by, interpreted and enforced
in accordance with the laws of the State of Minnesota without regard to the
principles of conflicts-of-law. Each of the parties hereto consents to the
exclusive jurisdiction of the federal courts whose districts encompass any part
of the City of Minneapolis or the state courts of the State of Minnesota sitting
in the City of Minneapolis in connection with any dispute arising in connection
with the Contemplated Transactions. Each party hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may effectively do so, any
defense of an inconvenient forum or improper venue to the maintenance of such
action or proceeding in any such court and any right of jurisdiction on account
of its place of residence or domicile. Each party hereto irrevocably and
unconditionally consents to the service of any and all process in any such
action or proceeding in such courts by the mailing of copies of such process by
certified or registered airmail at its address specified in Section 8.1. Each
party hereto agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
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8.6 Binding Effect. Except as herein otherwise specifically provided,
this Agreement shall be binding upon and inure to the benefit of the parties and
their legal representatives, heirs, administrators, executors, successors and
permitted assigns.
8.7 Number and Gender. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural and pronouns stated in either the masculine, the
feminine, or the neuter gender shall include the masculine, feminine and neuter.
8.8 Interpretation. All references herein to Articles, Sections and
paragraphs refer to Articles, Sections and paragraphs of this Agreement, unless
the context of such reference indicates otherwise. All Article, Section and
paragraph headings are for reference purposes only and shall not affect the
interpretation of this Agreement.
8.9 Severability. If any provision of this Agreement or the application
of such provision to any Person or circumstances, shall be held invalid, the
remainder of the Agreement, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
8.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement binding
on all parties. Facsimile and electronically transmitted signatures shall be
valid and binding to the same extent as original signatures. Each party shall
become bound by this Agreement immediately upon signing and delivering any
counterpart, independently of the signature of any other party. Nevertheless, in
making proof of this Agreement, it will be necessary to produce only one copy
signed by the party to be charged.
8.11 Further Assurances. Each party hereby agrees to execute and
deliver such additional documents and instruments and to perform such additional
acts as may be necessary or appropriate to effectuate, carry out and perform all
of the terms, provisions and conditions of this Agreement and the Contemplated
Transactions.
8.12 No Third Party Beneficiary. This Agreement is made solely and
specifically among and for the benefit of the parties hereto and their
respective successors and assigns, and no other Person will have any rights,
interest or claims hereunder or be entitled to any benefits under or on account
of this Agreement as a third-party beneficiary or otherwise; provided, however,
that all representations and warranties of the parties contained in Article 3
shall also inure to the benefit of the Company upon the Closing.
8.13 Incorporation by Reference. Each of the exhibits, schedules and
other appendices attached to this Agreement and referred to herein is hereby
incorporated into this Agreement by reference, unless this Agreement expressly
otherwise provides.
8.14 Discretion. Whenever a Person may take action under this Agreement
is his, her or its "sole discretion," "sole and absolute discretion" or
"discretion," or under a grant of similar authority or latitude, such Person
shall be entitled to consider any factors and interests as it desires, including
its own interests.
8.15 Arbitration. If any controversy or claim arising out of this
Agreement cannot be settled by the parties hereto and, if applicable, the
Company (the "disputants"), the controversy or claim shall be resolved pursuant
17
to informal arbitration by an arbitrator selected under and conducted pursuant
to the Commercial Rules of the American Arbitration Association (as then in
effect for expedited proceedings) and located in Minneapolis, Minnesota; and the
arbitration shall be conducted in that same location under such rules.
Notwithstanding the foregoing, no disputant shall be required to seek
arbitration regarding any cause of action that would entitle such disputant to
injunctive relief. Each of the disputants shall be entitled to present evidence
and argument to the arbitrator. The arbitrator shall have the right only to
interpret and apply the provisions of this Agreement (including other applicable
agreements) and may not change any of such provisions. The arbitrator shall
permit reasonable pre-hearing discovery of facts, to the extent necessary to
establish a claim or a defense to a claim, subject to supervision by the
arbitrator.
The determination of the arbitrator shall be conclusive and binding
upon the parties and a court judgment upon the same may be entered in any court
having competent jurisdiction thereof. The arbitrator shall give written notice
to the disputants stating the arbitrator's determination, and shall furnish to
each disputant a signed copy of such determination. The expenses of arbitration
shall be borne equally by the opposing disputants or as the arbitrator shall
otherwise equitably determine.
8.16 Litigation Expense. If any disputant (as defined in Section 8.15,
and including all disputants opposing one or more other disputants as one party)
is made or shall become a party to any litigation (including arbitration)
commenced by or against another disputant involving the enforcement of any of
the rights or remedies of such disputant, or arising on account of a default of
the other disputant in its performance of any of the other disputant's
obligations hereunder, then the prevailing disputant in such litigation shall
receive from the other disputant all costs incurred by the prevailing disputant
in such litigation, plus reasonable attorneys' fees to be fixed by the court or
arbitrator (as applicable), with interest thereon from the date of judgment or
arbitrator's decision at the rate of ten percent (10%) or, if less, the maximum
rate permitted by law.
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IN WITNESS WHEREOF, the undersigned have set their hands to this Joint
Venture and Joint Contribution Agreement to be effective as of the date first
set forth above.
ACTIVE IQ TECHNOLOGIES, INC.
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
XXXXXXX X. XXXXXXX, Chief Executive Officer
HAWK PRECIOUS MINERALS INC.
/s/ X. Xxxxx White
------------------------------------------------
X. XXXXX WHITE, President
HAWK PRECIOUS MINERALS USA, INC.
/s/ X. Xxxxx White
------------------------------------------------
X. XXXXX WHITE, Chief Executive Officer
Pursuant to Item 601(b)(2) of Regulation S-K, certain Schedules and Exhibits
have been omitted from this Agreement. The Registrant will furnish a copy of any
omitted Schedule or Exhibit to the Commission upon request.
