SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT is made effective as at the 26th day of
February, 1999.
BETWEEN:
QFG HOLDINGS LIMITED, on behalf of itself and on behalf of the
other shareholders of e-Auction Global Trading Inc.
(hereinafter called the "Vendor"),
AND:
KAZARI INTERNATIONAL INC., a Nevada Corporation, a company
whose common shares are eligible for trading on the NASDAQ OTC
system
(hereinafter called the "Purchaser")
AND:
e-AUCTION GLOBAL TRADING INC., a company duly incorporated
under the laws of Barbados
(hereinafter called the "Company")
WHEREAS:
A. The Vendor either holds the proxy to vote or is the owner of 34,500,000
common shares of e-Auction Global Trading Inc. (the "Company"), representing all
of the issued and outstanding shares in the capital of e-Auction;
B. The Vendor, on behalf of itself and on behalf of the other shareholders of
e-Auction executed a binding letter of intent dated February 26, 1999 with the
Purchaser pursuant to which the Purchaser has agreed to purchase all of the
issued and outstanding shares in the capital of e-Auction in exchange for
34,500,000 common shares of the Purchaser being issued from treasury to the
shareholders of e-Auction on a one for one basis;
C. Based upon the representations and warranties set forth herein, the Vendor
has agreed to sell to the Purchaser the Vendor's Shares (as hereinafter defined)
and the Purchaser has agreed to purchase the same from the Vendor, on the terms
and conditions and for the consideration set forth herein;
WITNESSETH THAT in consideration of the premises and of the respective
warranties, representations, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE 1
INTERPRETATION AND DEFINITIONS
1.1 DEFINITIONS
For all purposes of this Agreement:
(i) "BUSINESS" means the business carried on by the Company which
primarily involves the provision of an electronic auction
service;
(ii) "CLOSING" means the definition set forth in Article 6.1 hereof;
(iii) "CLOSING DATE" means the date of the Closing referred to in
Article 6.1 hereof;
(iv) "COMPANY" means e-Auction Global Trading Inc.;
(v) "INTELLECTUAL PROPERTY" means all rights to and interests in:
(a) all business and trade names, corporate names, brand names
and slogans Related to the Business;
(b) all inventions, patents, patent rights, patent applications
(including all reissues, divisions, continuations,
continuations-in-part and extensions of any patent or patent
application), industrial designs and applications for
registration of industrial designs Related to the Business;
(c) all copyrights and trade marks (whether used with wares or
services and including the goodwill attaching to such trade
marks), registrations and applications for trade marks and
copyrights (and all future income from such trade marks and
copyrights) Related to the Business;
(d) all rights and interests in and to processes, lab journals,
notebooks, data, trade secrets, designs, know-how, product
formulae and information, manufacturing, engineering and
other drawings and manuals, technology,
blue prints, research and development reports, agency
agreements, technical information, technical assistance,
engineering data, design and engineering specifications, and
similar materials recording and evidencing expertise or
information Related to the Business;
(e) all of the intellectual property listed in Schedule 2.1;
(f) all other intellectual and industrial property rights
throughout the world Related to the Business;
(g) all licenses of the intellectual property listed in items
(a) to (f) above;
(h) all future income and proceeds from any of the intellectual
property listed in items (a) to (f) above and the licenses
listed in item (g) above; and
(i) all rights to damages and profits by reason of the
infringement of any of the intellectual property listed in
items (a) to (g) above.
(vi) "PAYMENT SHARES" means 34,500,000 common shares without par
value in the capital of the Purchaser described in Article 5.2
hereof;
(vii) "PURCHASER" means Kazari International Inc.;
(vii) "RELATED TO THE BUSINESS" means, directly or indirectly, used
in, arising from or relating in any manner to the Business;
(viii) "VENDOR" means QFG Holdings Limited; and
(ix) "VENDORS SHARES" means the 34,500,000 shares in the capital of
the Company as set forth in Article 2.1(i) hereof.
1.2 INTERPRETATION
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(i) "this Agreement" means this Agreement and all Schedules attached
hereto;
(ii) any reference in this Agreement to a designated "Article",
"Section", "Schedule" or other subdivision refers to the
designated Article, Section, Schedule or other subdivision of
this Agreement;
(iii) the words "herein" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision of this
Agreement;
(iv) the word "including", when following any general statement term
or matter, is not to be construed to limit such general
statement, term or matter to the specific items or matters set
forth immediately following such word or to similar items or
matters, whether or not non-limited language (such as "without
limitation" or "but not limited to" or words of similar import)
is used with reference thereto but rather refers to all other
items or matters that could reasonably fall within the broadest
possible scope of such general statement, term or matter;
(v) any reference to a statute includes and, unless otherwise
specified herein, is a reference to such statute and to the
regulations made pursuant thereto, with all amendments made
thereto and in force from time to time, and to any statute or
regulations that may be passed which has the effect of
supplementing or superseding such statute or such regulation;
and
(vi) words importing the masculine gender include the feminine or
neuter gender and words in the singular include the plural, and
vice versa.
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE VENDORS AND THE COMPANY
2.1 REPRESENTATIONS AND WARRANTIES
The Vendor and the Company represent and warrant, jointly and
severally, to the Purchaser, as continuing representations and warranties which
are true and correct on the date hereto or, if any such representation and
warranty is expressed to be made and given in respect of a particular date other
than the date hereto, then such representation and warranty shall be true and
correct on the earlier of such date or the Closing Date, and all representations
and warranties herein shall be true and correct on each day thereafter to and
including the Closing Date with the same effect as if made and given on and as
of each such day that:
(i) each of the following is the beneficial and recorded owner of
such number of common shares in the capital of the Company as is
hereinafter set opposite each Vendor's name (collectively the
"Vendor's Shares");
NAME OF VENDOR NO. OF SHARES
-------------- -------------
Platinum Capital Management Inc. 2,500,000
Platinum Capital Management Inc. 1,000,000
in trust for Xxxx Xxxxxxx
Zorba Holdings Limited 1,500,000
e-Auction Global Trading Inc. (BVI) 1,500,000
QFG Holdings Limited 4,000,000
China Capital Financial Corp 1,500,000
Web CCB (BVI) 750,000
CCS Technologies Inc. 750,000
Hartford Holdings Limited 3,000,000
BFM Enterprises Inc. 1,500,000
Xxxx Xxxxxxx in trust for the 16,500,00
Shareholders of Sanga International
Inc.
(ii) the Vendor's Shares are free and clear of any liens, charges,
claims, options, set-offs, encumbrances, voting agreements,
voting trusts, escrow restrictions or other limitations or
restrictions of any nature whatsoever, except as expressly
provided for or disclosed herein;
(iii) the Vendor's Shares represent 100% of the Company's issued and
outstanding share capital;
(iv) no person, firm or corporation has any right, agreement or
option, present or future, contingent or absolute, or any
right capable of becoming a right, agreement or option to
purchase or otherwise acquire any of the Vendor's Shares;
(v) the Vendor has the full and absolute right, power and
authority to enter into this Agreement on the terms and
subject to the conditions herein set forth, to carry out the
transactions contemplated hereby and to transfer, or cause to
be transferred, on the Closing Date, legal and beneficial
title and ownership of the Vendor's Shares to the Purchaser.
(vi) the Company is duly incorporated, validly existing and in good
standing under the laws of Barbados and in each other
jurisdiction in which it carries on business or hold assets
and the Company has the necessary corporate capacity to carry
on the business which it now carries on in such jurisdictions
and to own the assets which it now owns;
(vii) the authorized capital of the Company consists of an unlimited
number of common shares without par value, of which a total of
34,500,000 common shares have been validly issued, are
outstanding and are fully paid and non-assessable;
(viii) no person, firm or corporation has any right, agreement or
option, present or future, contingent or absolute, or any
right capable of becoming a right, agreement or option to
require the Company to issue any shares in its capital or to
convert any securities of the Company or of any other company
into shares in the capital of the Company;
(ix) the corporate records of the Company, as required to be
maintained by it under its statute of incorporation and
constating documents, are accurate, complete and up-to-date in
all material respects and all material transactions of the
Company have been promptly and properly recorded in their
books or filed with their records;
(x) the Company does not have any liability, due or accruing,
contingent or absolute, and is not directly or indirectly
subject to any guarantee, indemnity or other contingent or
indirect obligation with respect to the obligation of any
other person or company, other than any such liability,
guarantee, indemnity or obligation incurred or assumed by it
in the course of their normal and ordinary day to day business
and no such liability, guarantee, indemnity or obligation has
been paid or discharged by the Company other than in the
course of their normal and ordinary day to day business;
(xi) the Company does not beneficially own, directly or indirectly,
shares in any other corporate entity;
(xii) the Company has good and marketable title to all of its
assets, and such assets are free and clear of any material
financial encumbrances;
(xiii) the Company holds all permits, licenses, consents and
authorizations issued by any government or governmental
authority which are necessary in connection with the operation
of its business and the ownership of its properties and
assets;
(xiv) the Company has filed all necessary tax returns in all
jurisdictions required to be filed by them, all returns
affecting workers, compensation with the appropriate agency,
corporation capital tax returns, if required, and any other
material reports and information required to be filed by the
Company with any governmental authority; the Company has paid
all income, sales and capital taxes payable by them as and
when due; the Company has withheld and remitted to tax
collection authorities such taxes as are required by law to be
withheld and remitted as and when due; the Company has paid
all instalments of corporate taxes due and payable, and there
is not presently outstanding and nor does the Company expect
to receive any notice of re-assessment from any applicable tax
collecting authority;
(xv) the Company has not declared or paid any dividends of any kind
or declared or made any other distributions of any kind
whatsoever including, without limitation, by way of
redemption, repurchase or reduction of its authorized capital;
(xvi) the Company has not engaged in any transaction or made any
disbursement or assumed or incurred any liability or
obligation or made any commitment, including, without
limitation, any forward purchase commitment or similar
obligation, to make any expenditure which would materially
affect their operations, property, assets or financial
condition;
(xvii) the Company has not waived or surrendered any right of
substantial value and has not made any gift of money or of any
of its property or assets;
(xviii) the Company has carried on business in the normal course;
(xix) the Vendor has entered into a letter agreement ("Letter
Agreement") dated February 2, 1999 with Xxxxxxx Investment
Corporation ("Xxxxxxx") pursuant to which the Vendor is to
obtain from Xxxxxxx all of the issued and outstanding shares
in the capital of Xxxxxxx International Foreign Corporation
("JFX"), a copy of such Letter Agreement has been previously
delivered to the Purchaser. The Letter Agreement is in full
force and effect and neither party thereto is in breach of any
provision. The Vendor is entitled to the full benefit and
advantage of the Letter Agreement in accordance with its
terms. The Vendor has not received any notice of default by
the Vendor or a dispute between the Vendor and any other party
in respect of the Letter Agreement and the parties are
continuing to proceed to a closing. There has not occurred any
event which, with the lapse of time or giving of notice or
both, would constitute a default under the Letter Agreement by
the Vendor or any other party to the Letter Agreement. At or
before the closing of the transaction contemplated in the
Letter Agreement, the Vendor shall immediately transfer and
assign absolutely all of the shares of JFX to the Company. The
Vendor hereby assigns all of its interest in the Letter
Agreement to the Company. Except as described above, the
Company does not have outstanding any material continuing
contractual obligations whatsoever relating to or affecting
the conduct of its business or any of its property or assets
or for the purchase, sale or leasing of any property other
than those contracts entered into by the Company in the course
of their normal and ordinary day to day business;
(xx) there are no material management contracts or consulting
contracts to which the Company is a party or by which either
is bound, and no amount is payable or has been agreed to be
paid by the Company to any persons as remuneration, pension,
bonus, share of profits or other similar benefit and no
director, officer or member, or former director, officer or
member, of the Company, nor any associate or affiliate of any
such person, has any claim of any nature against, or is
indebted to, the Company;
(xxii) the Company is not in default under or in breach of, or
would, after notice or lapse of time or both, be in default
under any contract, agreement, indenture or other instrument
to which it is a party or by which it is bound nor will the
consummation of the transactions contemplated hereby conflict
with, constitute a default under, result in a breach of,
entitle any person or company to a right of termination under,
or result in the creation or imposition of any lien,
encumbrance or restriction of any nature whatsoever upon or
against the property or assets of the Company, under their
constating documents, any contract, agreement, indenture or
other instrument to which the Company is a party or by which
either is bound, any law, judgment, order, writ, injunction or
decree of any court, administrative agency or other tribunal
or any regulation of any governmental authority, and all such
contracts, agreements, indentures, or other instruments are in
good standing and the Company is entitled to all benefits
thereunder;
(xxiii) there are no claims threatened or against or affecting the
Company nor are there any actions, suits, judgments,
proceedings or investigations pending or, threatened against
or affecting the Company, at law or in equity, before or by
any Court, administrative agency or other tribunal or any
governmental authority;
(xviii) Intellectual Property:
(a) Schedule 2.1 lists the Intellectual Property and such
Intellectual Property is sufficient to allow the Company
to conduct the Business. The Vendor obtained the
Intellectual Property pursuant to an asset purchase
agreement dated the 1st day of February, 1999 between
the Vendor and Generated Solutions (1993) Ltd. and an
asset purchase agreement dated the 1st day of February,
1999 between the Vendor and National Electronic
Marketing Inc., copies of such agreements have been
previously provided to the Purchaser, which transactions
have closed and the Intellectual Property has been
transferred. The Vendor has further transferred all of
its rights
to the Intellectual Property to the Company and such
transfer has been completed.
(b) The Company is the owner of the Intellectual Property
and is entitled to the exclusive and uninterrupted use
of the Intellectual Property without payment of any
royalty or other fees. No Person has any right, title or
interest in any of the Intellectual Property and all
such persons have waived their moral rights in any
copyright works within the Intellectual Property. The
Company has diligently protected its legal rights to the
exclusive use of the Intellectual Property.
(c) The Company has not permitted or licensed any Person to
use any of the Intellectual Property.
(d) No person has challenged the Company's rights to any of
the Intellectual Property.
(e) Neither the use of the Intellectual Property nor the
conduct of the Business has infringed or currently
infringes upon the industrial or intellectual property
rights of any other person.
(f) No other person has infringed the Company's rights to
the Intellectual Property.
(g) There is no government prohibition or restriction on the
use of Intellectual Property.
(h) Neither the Company, the Vendor or any of the other
shareholders of the Company are aware of any
infringement by the Company of any registered patent,
trademark or copyright;
(xix) the Company shall obtain and maintain until the Closing Date
such insurance against loss or damage to their assets and with
respect to public liability as is reasonably prudent for
companies carrying on businesses similar to that of the
Company;
(xx) the Vendor has duly and validly authorized, executed and
delivered this Agreement; and
(xxi) the Vendor has the power and capacity to enter into this
Agreement and to carry out its obligations hereunder.
2.2 COVENANTS OF THE VENDOR AND THE COMPANY
Each of the Vendor and the Company, joint and severally,
covenant and agree with the Purchaser that:
(i) both before and after the Closing Date, each of the Vendor and
the Company shall execute and do all such further deeds, acts,
things and give such assurances as may be required in the
reasonable opinion of the Purchaser's counsel for more
perfectly consummating the transactions contemplated hereby
and referenced herein.
2.3 COVENANTS OF THE COMPANY
The Company covenants and agrees with the Purchaser that the
Company shall not, prior to the Closing Date, except with the prior consent of
the Purchaser:
(i) make or permit to be made any employment contracts or other
arrangements with any directors, officers, agents, servants or
employees of the Company;
(ii) make or assume or permit to be made or assumed any commitment,
obligation or liability which is outside of the usual and
ordinary course of the business of the Company, and for the
purpose of carrying on the same, but the Company will operate
its properties and carry on its business as heretofore and
will maintain all of its properties, rights and assets in good
standing, order, and repair;
(iii) declare or pay any dividends or make any other distributions
or appropriations of profits or capital or make any other
distributions or appropriations of its profits or of its
capital;
(iv) create or assume any indebtedness other than in the ordinary
course of business or guarantee the obligations of any third
party other than in the ordinary course of its business; or
(v) sell or otherwise in any way alienate or dispose of or
encumber any of its assets;
provided however, that the Company shall, both before and after the Closing
Date, execute and do all such further deeds, acts, things and give such
assurances as may be required in the reasonable opinion of the Purchaser's
counsel for more perfectly consummating the transactions contemplated herein,
and shall, without limitation, use its best efforts to obtain any approvals from
third parties as may be required to all of the transactions contemplated hereby
and referenced herein.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE PURCHASER
3.1 REPRESENTATIONS AND WARRANTIES
The Purchaser represents and warrants to the Vendor, as
continuing representations and warranties which are true and correct on the date
hereof or, if any such representation and warranty is expressed to be made and
given in respect of a particular date other than the date hereof, then such
representation and warranty shall be true and correct on such date, and all
representations and warranties herein shall be true and correct on each day
thereafter to and including the Closing Date with the same effect as if made and
given on and as of each such day, that:
(i) subject to fulfilment of the conditions hereinafter
enumerated, the Purchaser has the power and capacity to enter
into this Agreement and to carry out its obligations
hereunder;
(ii) the Purchaser has duly and validly authorized, executed and
delivered this Agreement;
(iii) the Purchaser is a company duly incorporated, validly existing
and in good standing under the laws of Nevada, United States
and has the necessary corporate capacity and is fully
qualified in the State of Nevada and each other jurisdiction
in which it carries on business or holds assets to carry on
the business which it now carries on and to hold the assets
which it now holds;
(iv) the authorized capital of the Purchaser consists of 40,000,000
common shares without par value, of which 5,320,000 shares
have been validly issued and are outstanding and are fully
paid and non-assessable;
(v) no person or company has any right, agreement or option,
present or future, contingent or absolute, or any right
capable of becoming a right, agreement or option to require
the Purchaser to issue any share in its capital or to convert
any securities of the Purchaser of any other company into
shares in its capital;
(vi) the Purchaser holds all permits, licenses, consents and
authorities issued by any government or governmental authority
which are necessary in connection with the operations of its
business and of the ownership of its business and of the
ownership of its properties and assets;
(vii) the Purchaser has filed all necessary federal and provincial
tax returns affecting workers compensation with the
appropriate agency, corporation capital tax
returns and any other reports and information required to be
filed by the Purchaser with any governmental authority; the
Purchaser has paid all federal, state and foreign income,
sales and capital taxes payable by it; the Purchaser has
withheld and remitted the appropriate taxes to the Internal
Revenue Service or any other applicable governmental
authority; the purchaser has paid all instalments of corporate
taxes due and payable, and there is not presently outstanding
any notice of re-assessment from the Internal Revenue Service
or any applicable tax collecting authority;
(viii) the Purchaser has not declared or paid any dividends of any
kind nor declared nor made any other distributions of any kind
whatsoever including, without limitation, by way of redemption
or repurchase of the Purchaser's common shares or deduction of
capital;
(ix) the Purchaser has no liability, due or accruing, contingent or
absolute, and is not directly or indirectly subject to any
guarantee, indemnity or other contingent or indirect
obligation with respect to the obligation of any other person
or company, other than any such liability, guarantee,
indemnity or obligation incurred or assumed by the Purchaser
in the course of its normal and ordinary day to day business
and no such liability, guarantee, indemnity or obligation has
been paid or discharged by the Purchaser after the date of the
Financial Statements of the Purchaser other than in the course
of the Purchaser's normal and ordinary day to day business;
(x) the Purchaser has not waived or surrendered any right of
substantial value and has not made any gift of money or of any
of its property or assets;
(xi) the Purchaser has carried on its business in the normal
course;
(xii) the Purchaser does not have outstanding any material
continuing contractual obligations whatsoever relating to or
affecting the conduct of its business or any of its property
or assets or for the purchase, sale or leasing of any property
other than those contracts entered into by it in the course of
its normal and ordinary day to day business;
(xiii) there are no material management contracts or consulting
contracts to which the Purchaser is a party or by which it is
bound, no amount is payable or has been agreed to be paid by
the Purchaser to any person as remuneration, pension, bonus,
share of profits or other similar benefit, and no director,
officer or member, or former director, officer or member, of
the Purchaser, nor any associate or affiliate of any such
person, has any claims of any nature against, or is indebted
to the Purchaser;
(xiv) the Purchaser is not in default under or in breach of, or
would, after notice or lapse of time or both, be in default
under or in breach of, and neither this Agreement nor the
consummation of the transactions contemplated hereby will
conflict with, constitute a default under, result in a breach
of, entitle any person or company to a right of termination
under, or result in the creation or imposition of any lien,
encumbrance or restriction of any nature whatsoever upon or
against the property or assets of the Purchaser, under its
constating documents, any contract, agreement, indenture or
other instrument to which it is a party or by which it is
bound, any law, judgment, order, writ, injunction or decree of
any court, administrative agency or other tribunal or any
regulation of any governmental authority, and all such
contracts, agreements, indentures, or other instruments are in
good standing and the Purchaser is entitled to all benefits
thereunder;
(xv) there are no actions, suits, proceedings or investigations
pending or, to the knowledge of the Purchaser, threatened
against or affecting the Purchaser, at law or in equity,
before or by any court, administrative agency or other
tribunal or any governmental authority;
(xvi) the Purchaser has good and marketable title or leasehold title
to all of its properties and assets and such properties and
assets are free and clear of any liens, charges or
encumbrances;
(xvii) the Purchaser does not beneficially own, directly or
indirectly, shares of any corporate entity or any interest in
a partnership, joint venture or other business entity;
(xviii) the Purchaser has filed annual reports and documents required
to be filed with the NASDAQ OTC market, the United States
Securities and Exchange Commission (but is not a reporting
company in any jurisdiction) and any other applicable
corporate or securities authority and is not in default of any
applicable law or regulation; and
(xix) At the Closing Date, the Payment Shares shall be issued and
outstanding as fully paid and non-assessable common shares of
the Purchaser duly registered in the names of those persons
listed in section 6.2 hereof, and such persons shall have good
and marketable title to the Payment Shares, free and clear of
all liens, encumbrances, charges or security interests
whatsoever.
3.2 COVENANTS OF THE PURCHASER
The Purchaser covenants and agrees with the Vendor that:
(i) the Purchaser will forthwith use its best efforts to obtain
the necessary approvals of any applicable regulatory
authorities of the terms of this Agreement; and
(ii) the Purchaser will, both before and after the Closing Date,
execute and do all such further deeds, things and assurances
as may be required in the reasonable opinion of the Vendor's
counsel for more perfectly consummating the transactions
contemplated hereby and referenced herein.
3.3 NEGATIVE COVENANTS
The Purchaser further covenants and agrees with the Vendors
that it will not, prior to the Closing Date, except with the prior consent of
the Vendor:
(i) make or assume any commitment, obligation or liability which
is outside of the usual and ordinary course of the business of
the Purchaser and for the purpose of carrying on the same, but
the Purchaser will operate its properties and carry on its
business as heretofore and will maintain all of its
properties, rights and assets in good order and repair;
(ii) declare or pay any dividends on its common shares or make any
other distributions or appropriations of profits or capital;
(iii) create or assume any indebtedness or guarantee the obligations
of any third party, other than in the ordinary course of its
business;
(iv) sell or otherwise in any way alienate or dispose of any of its
assets other than in the ordinary course of business; or
(v) issue any shares in its capital to any person.
ARTICLE 4
CONDITIONS
4.1 PURCHASER'S CONDITIONS
The obligations of the Purchaser to complete the transactions
contemplated hereby are subject to the following conditions (which are for the
exclusive benefit of the Purchaser) having been satisfied or expressly waived in
writing by the Purchaser:
(i) prior to the Closing Date neither the Vendor nor the Company
shall have breached any of the warranties and representations
of the Vendor and the Company set forth in this Agreement;
(ii) all of the covenants and agreements of the Vendors and the
Company to be observed or performed on or before the Closing
Date pursuant to the terms hereof shall have been duly
observed or performed;
(iii) all of the transactions contemplated by this Agreement, shall
have been properly and duly approved; and
(iv) on the Closing Date the Company shall have delivered to the
Purchaser a certificate of an officer or director of the
Company, dated the Closing Date and certifying the truth,
accuracy and correctness of the representations and warranties
contained in this Agreement and the other closing documents
referenced in sections 6.2(i) and (ii) hereof;
4.2 VENDOR'S CONDITIONS
The obligations of the Vendor to complete the transactions
contemplated hereby are subject to the following conditions (which are for the
exclusive benefit of the Vendor) having been satisfied or expressly waived in
writing by the Vendor:
(i) prior to or on the Closing Date the Purchaser shall not have
breached any breach of any of the warranties and
representations of the Purchaser set forth in this Agreement;
(ii) all of the covenants and agreements of the Purchaser to be
observed or performed on or before the Closing Date pursuant
to the terms hereof shall have been duly observed or
performed;
(iii) all of the transactions contemplated by this Agreement, shall
have been properly and duly approved; and
(iv) on the Closing Date the Purchaser shall have delivered to the
Vendor a certificate of an officer or director of the
Purchaser, dated the Closing Date and certifying the truth,
accuracy and correctness of the representations and warranties
contained in this Agreement and the rest of the closing
documents referenced in section 6.1(iii) hereof.
ARTICLE 5
PURCHASE AND SALE
5.1 PURCHASE AND SALE
Based upon the representations, warranties and covenants of
the parties herein contained and subject to the conditions herein contained, the
Purchaser hereby purchases and the Vendor hereby transfers, assigns and sells,
or will cause such transfer, assignment and sale, to the Purchaser on the
Closing Date, all rights, titles and interests in and to the Vendor's Shares
free and clear of all liens, charges and encumbrances.
5.2 CONSIDERATION
In consideration of the purchase and sale herein contemplated
and in complete satisfaction of the purchase price for the Vendor's Shares, the
Purchaser hereby agrees to issue to the Vendor and the other shareholders of the
Company, a total of 34,500,000 common shares without par value in the capital of
the Purchaser (the "Payment Shares") as follows:
Name of Vendor No. of Common Shares
-------------- --------------------
Platinum Capital Management Inc. 2,500,000
Platinum Capital Management Inc. 1,000,000
in trust for Xxxx Xxxxxxx
Zorba Holdings Limited 1,500,000
e-Auction Global Trading Inc. (BVI) 1,500,000
QFG Holdings Limited 4,000,000
China Capital Financial Corp 1,500,000
Web CCB (BVI) 750,000
CCS Technologies Inc. 750,000
Hartford Holdings Limited 3,000,000
BFM Enterprises Inc. 1,500,000
Xxxx Xxxxxxx in trust for the 16,500,00
Shareholders of Sanga International
Inc.
5.3 DELIVERY OF PAYMENT SHARES
The Purchaser shall deliver the Payment Shares to the Vendors
on the Closing Date in the following manner:
(i) the Purchaser shall deliver to the Vendor, or to its
direction, share certificates registered in the respective
names for such number of Payment Shares in the Purchaser as is
set opposite each name in Article 5.2 hereof.
5.4 HOLD PERIOD REQUIREMENT
The Vendor acknowledges and agrees that the Payment Shares
will be subject to applicable hold periods as provided under applicable United
States securities laws and regulations, and will be legended accordingly.
ARTICLE 6
CLOSING
6.1 CLOSING DATE
The completion of the transactions contemplated hereby (the
"Closing"), to be effective as at February 26, 1999, shall occur at the offices
of Blake, Xxxxxxx & Xxxxxxx, 00xx Xxxxx, 00 X'Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxx on
the Closing Date, which shall take place as soon as possible following the
execution of this Agreement on a date as agreed to between the Vendor and the
Purchaser.
6.2 DELIVERIES ON CLOSING
On the Closing Date:
(i) the Vendor shall:
1. deliver to the Purchaser a share certificate
representing 34,500,000 common shares of the Company,
duly recorded in the name of the Purchaser;
(ii) the Company and the Vendor shall deliver to the Purchaser the
following:
1. the certificate of an officer or director of the Company
contemplated in Article 4.1(iv) hereof;
2. a certified extract of a resolution of the directors of
the Company approving the transfer of the Vendor's
shares to the Purchaser;
3. the written resignations of each director and officer of
the Company;
4. share certificates representing the Vendors' Shares duly
endorsed for transfer.
(iii) the Purchaser shall deliver or cause to be delivered to the
Vendor the following:
1. share certificates representing the Payment Shares.
2. the certificate of an officer or director of the
Purchaser contemplated in Article 4.2(iv) hereof.
ARTICLE 7
MISCELLANEOUS
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All of the representations, warranties and, covenants of the
Vendor and the Company contained in Article 2 of the Agreement and the
representations, warranties and covenants of the Purchaser contained in Article
3 of this Agreement shall survive the Closing Date for a period of six (6)
months only and continue in full force and effect for that time for the benefit
of the party to which it was given regardless of any knowledge or investigation
by or on behalf of any party with respect thereto.
7.2 NON-MERGER
Each party hereby agrees that all provisions of this
Agreement, other than the representations, warranties and covenants of the
Vendor and Company in Article 2 and the Purchaser in Article 3 hereof (which
shall be subject section 7.1 hereof), shall forever survive the execution,
delivery and performance of this Agreement, Closing and the execution, delivery
and performance of any and all documents delivered in connection with this
Agreement.
7.3 INDEMNITY
The Vendor and the Company, jointly and severally, shall
indemnify and save the Purchaser harmless from any loss or damage sustained by
the Purchaser arising out of or in connection with any breach of any
representation, warranty, covenant, agreement or condition of the Vendor or the
Company contained herein, and the same rights shall apply to the Vendors against
the Purchaser mutatis mutandis.
7.4 NOTICE
Any notice, document or communication required or permitted to
be given hereunder shall be in writing at the addresses as indicated on the
execution page of this Agreement or such other addresses as the parties may
specify in writing.
Notices shall be effective and deemed to have been duly given
and received if delivered personally or by telecopier.
7.5 TIME
Time shall be of the essence hereof.
7.6 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the
parties hereto and supersedes all prior contracts, agreements and understandings
between the parties. There are no representations warranties, collateral
agreements or conditions affecting this transaction other than as are expressed
or referred to herein in writing.
7.7 CONSENT OF THE COMPANY AND THE PURCHASER
The Company and the Purchaser and the Vendor consent to the
transactions contemplated herein and hereby acknowledge and agree to execute and
perform all such further deeds, acts, things and give such assurances as may be
required in the reasonable opinion of counsel for more perfectly consummating
the transactions contemplated herein, and shall, without limitation, use their
best efforts to obtain as required, approval from such parties as may be
required to give their approval to the transactions contemplated hereby and
herein referenced.
7.8 GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario.
7.9 ENUREMENT
This Agreement shall enure to the benefit of and be binding
upon the respective heirs, successors and assigns of the parties hereto.
7.10 HEADINGS
The headings in this Agreement have been inserted for
convenience only, and do not define, limit, alter or enlarge the meaning of any
provision of this Agreement.
7.11 SCHEDULES
Wherever any term or conditions, expressed or implied, in such
schedules conflicts or is at variance with any term or conditions of this
Agreement, the terms or conditions of this Agreement shall prevail.
7.12 SEVERABILITY
If a provision of this Agreement is deemed to be wholly or
partly invalid, this Agreement will be interpreted as if the invalid provision
had not been a part thereof.
7.13 COUNTERPARTS
This Agreement may be executed in one or more counterparts
which, when so executed, by facsimile signature or otherwise, shall be read
together and be construed as one agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day
and year first set forth above.
QFG HOLDINGS LIMITED
Per:
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Address:
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Facsimile:
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KAZARI INTERNATIONAL INC.
Per:
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Address:
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Facsimile:
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E-AUCTION GLOBAL TRADING INC.
Per:
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Address:
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Facsimile:
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SCHEDULE 2.1
INTELLECTUAL PROPERTY
(i) Interactive Auction Software
The Auction Server - multi-threaded C++ Windows NT application that supports
multiple Java clients using its own communications protocol
The Client - a Java applet written in JDK 1.02
Administrative Web Pages
(ii) Bid and Offer Software
Active Server Pages - hosted on Windows NT Webserver (IIS 4.0)
(iii) Other
Microsoft Access Database and schema to support both types of auction
