EXHIBIT 10.46
SHARE EXCHANGE AGREEMENT
MADE EFFECTIVE AS OF THE 7th DAY OF AUGUST 2000 (the "Effective Date"),
BETWEEN: E*Comnetrix Inc. (formerly, USV Telemanagement, Inc.), a company
incorporated under the laws of the Canada and having an office at 000 Xxxxxxxxx
Xxxxxxx, Xxxxxxxx X, Xxxxx 000, Xxxx Xxxxxx, XX 00000 ("E*Comnetrix");
AND: XXXXXX XXXXXX ("Karwat"), of 0000 Xxxxx Xxxxxx , Xxxxxxx, XX 00000,
and the shareholders who execute and deliver this Agreement;
(collectively, the "Shareholders" and individually, a "Shareholder");
AND: EXSTREAM DATA, INC., a California corporation having an office at 000
Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000 ("EXSTREAM");
WHEREAS:
A. The authorized share capital of EXSTREAM consists of 5,000,000 shares
of common stock of which 570,317 are issued and outstanding (each an
"EXSTREAM Share" and collectively, the "EXSTREAM Shares").
B. EXSTREAM has granted stock options (the "Options") exercisable to
acquire 38,355 EXSTREAM Shares, to the persons and subject to the
vesting, exercise and expiry terms set forth on Schedule B, attached
hereto and incorporated by this reference. EXSTREAM has granted no
warrants or other securities convertible into its common stock;
C. Each Shareholder legally and beneficially owning the number of shares
and the percentage of the issued and outstanding EXSTREAM Shares, set
beside such shareholder's on Schedule A; attached hereto and
incorporated by this reference;
D. The Shareholders legally and beneficially own Moving Bytes, Inc., a
Nevada corporation ("Moving Bytes") and will transfer to E*Comnetrix
ownership of Moving Bytes prior to the Share Exchange;
E. The Shareholders and E*Comnetrix have agreed to exchange the EXSTREAM
Shares for common shares of E*Comnetrix, on the terms and conditions
described in this Agreement (the "Share Exchange"); and
F. Certain Shareholders set forth on Schedule C (the "Pooling
Shareholders") will place a total of 1,400,000 common shares of
E*Comnetrix, in the amounts set forth beside each Pooling Shareholder's
name, into escrow under the terms of an Escrow Agreement (the "Escrow
Agreement"), attached hereto as Exhibit 1.3, to compensate E*Comnetrix
pursuant to the indemnification obligations of EXSTREAM.
NOW, THEREFORE, in consideration of the covenants and representations set forth
herein, and for other good and valuable consideration, the parties agree as
follows:
1. SHARE EXCHANGE
1.1 Subject to the terms and conditions of this Agreement, the Shareholders
shall transfer at least Fifty One (51%) of the EXSTREAM Shares to E*Comnetrix in
exchange for common shares of E*Comnetrix (the "E*Comnetrix Shares"), each one
EXSTREAM Share shall be exchanged for 5.25 E*Comnetrix Shares (the "Exchange
Ratio") with any fractional E*Comnetrix Shares rounded down to the nearest whole
share.
1.2 Except as expressly noted otherwise, the transactions contemplated
under this Agreement shall be completed (the "Completion") at the offices of
E*Comnetrix at 000 Xxxxxxxxx Xxx., Xxx. 000X, Xxxx Xxxxxx, Xxxxxxxxxx 9494 or at
such other place as may be agreed between the parties, at 5 p.m. local time in
Pacific time, or at such other time as may be agreed between the parties, (the
"Time of Closing") on or before September 15, 2000, or on such other date as may
be agreed between the parties (the "Closing Date").
1.3 At the Closing Date, E*Comnetrix shall agree to assume all of the
Options then outstanding, whether vested or unvested. EXSTREAM shall cause the
holders of EXSTREAM Options to consent to the assumption of the Options by
E*Comnetrix in a letter addressed to E*Comnetrix in substantially the form
attached hereto as Exhibit 1.2. Each such Option so assumed by E*Comnetrix under
this Agreement shall be governed by, and shall be subject to, the terms and
conditions set forth in the documents governing such Option as such documents
may be amended prior to the Closing, except that (i) such Option will be
exercisable for that number of whole E*Comnetrix Shares equal to the product of
the number of shares of the EXSTREAM Shares that were issuable upon exercise of
such Option immediately prior to the Closing multiplied by the Exchange Ratio
and rounded down to the nearest whole number of E*Comnetrix Shares, and (ii) the
per share exercise price for the E*Comnetrix Shares issuable upon exercise of
such assumed Option will be equal to the quotient determined by dividing the
exercise price per share of the EXSTREAM Shares at which such Option was
exercisable immediately prior to the Closing by the Exchange Ratio, rounded up
to the nearest whole cent, and (iii) such Option terms and condition may be
amended to comply with the E*Comnetrix 2000 stock option plan (the "E*Comnetrix
Stock Option Plan"). Within 10 business days after the Closing, E*Comnetrix will
issue to each person who, immediately prior to the Closing was a holder of an
outstanding Option a document consistent with this Agreement and such Option
evidencing the foregoing assumption of such Option by E*Comnetrix. E*Comnetrix
shall use its reasonable best efforts to qualify such Option under the
E*Comnetrix Stock Option Plan.
1.4 As soon as practicable after the Closing Date, E*Comnetrix shall cause
to be delivered to the Escrow Agent (as defined in the Escrow Agreement attached
hereto as Exhibit 1.3) certificates representing a total of 1,400,000
E*Comnetrix Shares, which shall be registered in the name of the Escrow Agent as
nominee for each of the Pooling Shareholders in the amounts set forth beside
such Pooling Shareholder's name on Schedule C.
2. CONDITIONS PRECEDENT
2.1 E*Comnetrix's obligations to carry out the terms of this Agreement and
to complete its transactions contemplated under this Agreement are subject to
the fulfilment to the satisfaction of E*Comnetrix of each of the following
conditions that:
2
(a) as of the Time of Closing, each of the Shareholders and EXSTREAM
(collectively, the "EXSTREAM Group") shall have complied with all of
their respective covenants and agreements contained in this Agreement;
(b) at Closing, the EXSTREAM Group shall transfer, or will cause to be
transferred, to E*Comnetrix at least Fifty One percent (51%) of the
issued and outstanding EXSTREAM Shares (the percentage of the issued
and outstanding EXSTREAM Shares exchanged shall be referred to as the
"Exchange Percentage");
(c) as of the Time of Closing, the EXSTREAM Group shall have transferred,
or will cause to be transferred, to E*Comnetrix a percentage of the
issued and outstanding shares of Moving Bytes, Inc., a Nevada
corporation, equal to the Exchange Percentage;
(d) as of the Time of Closing, the representations and warranties of each
of the EXSTREAM Group contained in this Agreement or contained in any
certificates or documents delivered by any of them pursuant to this
Agreement shall be completely true as if such representations and
warranties had been made as of the Time of Closing;
(e) EXSTREAM shall have presented to E*Comnetrix audited financial
statements for the year ended December 31, 1999, and interim financial
statements for the fiscal period ended June 30, 2000, each to the
reasonable satisfaction of E*Comnetrix;
(f) EXSTREAM shall have obtained from each holder of the Options written
consent (in the form reasonably acceptable to E*Comnetrix) to the
assumption of the Options by E*Comnetrix;
(g) EXSTREAM shall have obtained from each member of its Board of
Directors, except for Karwat, a letter of resignation from the Board
of Directors of EXSTREAM effective with the Completion (in the form
reasonably acceptable to E*Comnetrix);
(h) Each of the Pooling Shareholders, E*Comnetrix and the Escrow Agent
shall have executed and delivered the Escrow Agreement; and
(i) E*Comnetrix shall have received an opinion from legal counsel of
EXSTREAM dated as of the Closing Date, addressed to E*Comnetrix, in
substantially the form attached hereto as Exhibit 2.1(i).
The conditions set forth above are for the exclusive benefit of E*Comnetrix and
may be waived by E*Comnetrix in whole or in part at any time at or before the
Time of Closing.
2.2 The Shareholders' obligations to carry out the terms of this Agreement
and to complete the transactions contemplated under this Agreement are subject
to the fulfilment to their satisfaction of each of the following conditions
that:
(a) as of the Time of Closing, E*Comnetrix shall have complied with all of
its covenants and agreements contained in this Agreement; and
(b) as of the Time of Closing, the representations and warranties of
E*Comnetrix contained in this Agreement or contained in any
certificates or documents delivered by it pursuant to this Agreement
shall be completely true as if such representations and warranties had
been made by E*Comnetrix as of the Time of Closing.
3
The conditions set forth above are for the exclusive benefit of the Shareholders
and may be waived by the Shareholders in whole or in part at or before the Time
of Closing.
2.3 The parties acknowledge and agree each with the other that this
Agreement and all of the transactions contemplated under this Agreement are
subject to receipt of any regulatory approvals that may be required under
applicable laws. If any such approvals are required but are not obtained by the
Closing Date, then this Agreement shall terminate and be of no further force or
effect.
3. COVENANTS, AGREEMENTS AND ACKNOWLEDGEMENTS
3.1 Each of the EXSTREAM Group jointly and severally covenants and agrees
with E*Comnetrix that each of the EXSTREAM Group shall:
(a) from and including the Effective Date through to and including the
Time of Closing, permit E*Comnetrix, through its directors, officers,
employees and authorized agents and representatives, at E*Comnetrix's
own cost, full access to the books, records and property of EXSTREAM
including, without limitation, all of the assets, contracts,
correspondence, accounts and minute books of EXSTREAM, so as to permit
E*Comnetrix to make such investigation ("E*Comnetrix's Investigation")
of EXSTREAM as E*Comnetrix considers advisable;
(b) provide to E*Comnetrix all such further documents, instruments and
materials and do all such acts and things as may be required by
E*Comnetrix to obtain any regulatory approvals that may be required
under applicable laws;
(c) from and including the Effective Date through to and including the
Time of Closing, do all such acts and things that may be necessary to
ensure that all of the representations and warranties of each of the
EXSTREAM Group contained in this Agreement or any certificates or
documents delivered by any of them pursuant to this Agreement remain
true and correct;
(d) from and including the Effective Date through to and including the
Time of Closing, preserve and protect all of the goodwill, assets,
business and undertaking of EXSTREAM and, without limiting the
generality of the foregoing, carry on the development of the assets of
EXSTREAM in a reasonable and prudent manner; and
(e) from and including the Effective Date through to and including the
Time of Closing, keep confidential all discussions and communications
(including all information communicated therein) between the parties,
and all written and printed materials of any kind whatsoever exchanged
by the parties, except only any information or material that:
(i) was in the public domain at the time of disclosure to a party
(the "Recipient");
(ii) was already in the possession of the Recipient prior to
disclosure, as demonstrated by the Recipient through tangible
evidence;
(iii)subsequently enters the public domain through no fault of the
Recipient or any officer, director, employee or agent of the
Recipient; or
4
(iv) is required to be disclosed by law or by a court or regulatory
authority of competent jurisdiction;
and, if so requested by E*Comnetrix, each of the EXSTREAM Group shall
arrange for any director, officer, employee, authorized agent or
representative of any member of the EXSTREAM Group to enter into, and
each of the EXSTREAM Group themselves shall enter into, a
non-disclosure agreement with E*Comnetrix in a form acceptable to
E*Comnetrix acting reasonably.
(f) not issue any shares or other securities of EXSTREAM or any of its
subsidiaries;
(g) not declare, pay, authorise or make any dividend, payment or
distribution of any kind or nature to its shareholders or redeemed or
purchased or otherwise acquire any of its capital stock or agree to do
so;
(h) not waive any rights of material value;
(i) not enter into any transaction or into any contracts or agreements or
modifications or cancellations thereof, other than in the ordinary
course of business;
(j) not make or authorise any payment to officers, directors or employees
in their capacity as such except in the ordinary course of business
and at rates of salary, bonus or other remuneration consistent with
remuneration of previous years; and
(k) not use any funds other than in the ordinary course of business as
theretofore carried on.
3.2 Each of the EXSTREAM Group jointly and severally covenants and agrees
with E*Comnetrix that, from and including the Effective Date through to and
including the Time of Closing, each of the EXSTREAM Group shall not:
(a) do any act or thing that would render any representation or warranty
of any of the EXSTREAM Group contained in this Agreement or any
certificates or documents delivered by any of them pursuant to this
Agreement untrue or incorrect; nor
(b) sell, encumber or dispose of, or negotiate with any other person in
respect of a sale, encumbrance or disposition of, the EXSTREAM Shares
or any other shares, goodwill, assets, business or undertaking of
EXSTREAM.
3.3 Each of the EXSTREAM Group jointly and severally acknowledges to and
agrees with E*Comnetrix that E*Comnetrix's Investigation shall in no way limit
or otherwise adversely affect the rights of E*Comnetrix as provided for
hereunder in respect of the representations and warranties of each of the
EXSTREAM Group contained in this Agreement or in any certificates or documents
delivered by any of them pursuant to this Agreement.
5
3.4 E*Comnetrix covenants and agrees with the EXSTREAM Group that E*Comnetrix
shall:
(a) use its reasonable best efforts to obtain any regulatory approvals for
this Agreement and the transactions contemplated hereunder required by
applicable laws on or before the Closing Date;
(b) from and including the Effective Date through to and including the
Time of Closing, do all such acts and things that may be necessary to
ensure that all of the representations and warranties of E*Comnetrix
contained in this Agreement or in any certificates or documents
delivered by it pursuant to this Agreement remain true and correct;
(c) use its reasonable best efforts to assume the Options as applicable,
under the E*Comnetrix Stock Option Plan, and to cause the E*Comnetrix
Stock Option Plan to be registered on Form S-8 under the Securities
Act of 1933, as amended (the "1933 Act");
(d) from and including the Effective Date through to and including the
Time of Closing, subject to its legal reporting obligations, keep
confidential all discussions and communications (including all
information communicated therein) between the parties, and all written
and printed materials of any kind whatsoever exchanged by the parties,
except only any information or material that:
(i) was in the public domain at the time of disclosure to a party
(the "Recipient");
(ii) was already in the possession of the Recipient prior to
disclosure, as demonstrated by the Recipient through tangible
evidence;
(iii)subsequently enters the public domain through no fault of the
Recipient or any officer, director, employee or agent of the
Recipient; or
(iv) is required to be disclosed by law or by a court or regulatory
authority of competent jurisdiction; and
and, if so requested by EXSTREAM, E*Comnetrix shall arrange for any
director, officer, employee, authorized agent or representative of
E*Comnetrix to enter into, and E*Comnetrix itself shall enter into, a
non-disclosure agreement with EXSTREAM in a form acceptable to
EXSTREAM acting reasonably.
3.5 E*Comnetrix covenants and agrees with the EXSTREAM Group that, from and
including the Effective Date through to and including the Time of Closing,
E*Comnetrix shall not do any act or thing that would render any representation
or warranty of E*Comnetrix contained in this Agreement or any certificates or
documents delivered by it pursuant to this Agreement untrue or incorrect.
4. REPRESENTATIONS AND WARRANTIES
4.1 For the Purposes of this Section 4, an individual will be deemed to
have "Knowledge" of a particular fact or other matter if:
(a) such individual is actually aware of such fact or other matter at the
time in question; and
6
A person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving as a director,
officer, partner, executor, or trustee of such Person (or in similar capacity)
has, or at any time had, "Knowledge" of such fact or other matter.
4.2 In order to induce E*Comnetrix to enter into this Agreement and
complete its transactions contemplated hereunder, Exstream and each of the
Shareholders, to the best of such Shareholder's Knowledge, represents and
warrants to E*Comnetrix that:
(a) EXSTREAM was duly incorporated under the laws of California and:
(i) is not a "reporting company" within the meaning of Section 12 of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and is not subject to any statutory registration or filing
requirements applicable to public reporting companies;
(ii) has the power, authority and capacity to enter into this
Agreement and carry out its terms; and
(iii)is in good standing with respect to the filing of all annual
reports required under the laws of California;
(b) the Directors and Officers of EXSTREAM are as follows:
(i) Xxxxxx Xxxxxx - Director, President, and Chief Financial Officer;
(ii) Xxx Xxxxx - Director and Secretary;
(iii) Xxxxxx Dumper - Director;
(iv) Xxxxx Raichyk - Director;
(v) Xxxx Xxx Xxxx - Director.
(c) the authorized and issued share capital of EXSTREAM is as set forth in
Recital A of this Agreement;
(d) except for the EXSTREAM Shares, there are no documents, instruments or
other writings of any kind whatsoever which constitute a security of
EXSTREAM and, except as is provided for by operation of this
Agreement, there are no options, agreements or rights of any kind
whatsoever to acquire directly or indirectly any other shares of
EXSTREAM;
(e) Attached hereto as Exhibit 4.2(e) are the true, accurate and correct
Articles of Incorporation and Bylaws of EXSTREAM, as amended (the
"Corporate Documents"), which have not been altered, and a certificate
of good standing for EXSTREAM as issued by the State of California and
dated within thirty (30) days of the Closing Date;
(f) all of the material transactions of EXSTREAM which are required to be
recorded or filed in or with the books or records of EXSTREAM have
been promptly and properly so recorded or filed and the minute books
of EXSTREAM contain all records of the meetings and proceedings of the
shareholders and directors of EXSTREAM its incorporation;
7
(g) EXSTREAM hold all licences and permits that are required for carrying
on its business in the manner in which such business has been carried
on;
(h) EXSTREAM is the registered and beneficial owner of all rights, title
and interest in and to all tangible and intangible property
(collectively the "Assets") associated with all business carried on by
EXSTREAM, including without limitation the internet domain names
"Xxxxxx.xxx", "XXXXXXXXxxxx.xxx", "Xxxxxxxxxxx.xxx" (the "Domain
Names") and the other assets listed on Schedule 4.2(h) to this
Agreement, subject only to such qualifications and limitations as are
indicated in Schedule 4.2(h);
(i) EXSTREAM has good and marketable exclusive title to each of the Assets
free and clear of all liens, charges and encumbrances of any kind
whatsoever save and except those specified as "Permitted Encumbrances"
on Schedule 4.2(i) to this Agreement, and in particular, at the
Closing:
(i) EXSTREAM will be the sole and exclusive legal and beneficial
owner of the Domain Names, free and clear of all encumbrances
whatsoever, and will not be a party to or bound by any contract
or any other obligation whatsoever that limits or impairs its
ability to sell, transfer, assign or convey, or that otherwise
affects, the Domain Names;
(ii) EXSTREAM will be the registered owner of the Domain Names, and
all fees or other costs associated with maintaining the
registration of the Domain Names will have been paid for the 2000
calendar year and the registration of the Domain Names will be in
good standing with InterNIC; and
(iii)no other person will have been granted any interest in or right
to use all or any portion of the Domain Names;
EXSTREAM owns or has the right to use, without payment to any other
person, all intellectual property ("IP") used in its business, or
portions thereof, free and clear of all liens or other encumbrances.
EXSTREAM has no notice or knowledge of any objection or claim being
asserted by any Person with respect to the ownership, validity,
enforceability or use of any such IP or challenging or questioning the
validity or effectiveness of any license relating thereto. The conduct
of EXSTREAM's business, as presently conducted and as proposed to be
conducted do not violate, conflict or infringe any contract, license,
patent, copyright, trademark, trade secret, or other intellectual
property rights, or privacy, publicity or similar rights of any other
person. There are no unresolved conflicts with, or pending claims of,
any other person, whether in litigation or otherwise, involving the
IP, and there are no liens or rights of any other person, including
moral rights, which would prevent EXSTREAM from fulfilling its
obligations under this Agreement. No activity of any employee of
EXSTREAM as or while an employee of EXSTREAM has caused a violation of
any trade secret of EXSTREAM;
(j) each item of machinery and equipment of any kind whatsoever comprised
in the Assets is in reasonable operating condition and in a state of
reasonable maintenance and repair taking into account its age and use;
(k) all deposit, savings, investment and brokerage accounts and safety
deposit boxes of EXSTREAM are listed on Schedule 4.2(k) attached
hereto;
8
(l) EXSTREAM has the corporate power to own the assets it owns, and to
carry on the business carried on by it, and is duly qualified to carry
on business in all jurisdictions in which it carries on business;
(m) the financial statements of EXSTREAM for the periods ending 31
December 1999 and June 30, 2000 (collectively, the "Financial
Statements"), copies of which are attached hereto as Schedule 4.2(m)
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis and are true and correct in
every material respect and present fairly and accurately the financial
position and results of the operations of EXSTREAM for the periods
then ended, and there has been no material adverse change to the
financial position of EXSTREAM since the date of the last of the
Financial Statements;
(n) save for any costs and expenses arising in the ordinary course of
business, all material outstanding liabilities, whether direct,
indirect, absolute, contingent or otherwise, whatsoever of EXSTREAM
have been disclosed in writing to E*Comnetrix prior to the Effective
Date, and except as otherwise disclosed in writing on Schedule 4.2
(n), the total liabilities of EXSTREAM do not exceed $300,000 USD.
(o) except as set forth on Schedule 4.2(o) of this Agreement:
(i) no dividends or other distributions of any kind whatsoever on any
shares in the capital of EXSTREAM has been made, declared or
authorized;
(ii) no new machinery or equipment of any kind whatsoever has been
ordered by, or installed or assembled on the premises of,
EXSTREAM;
(iii)EXSTREAM is not indebted to any of the Shareholders, except in
respect of miscellaneous expenses incurred on behalf of EXSTREAM
which do not exceed, in the aggregate, US$10,000;
(iv) none of the Shareholders or any other officer, director or
employee of EXSTREAM is indebted or under obligation to EXSTREAM
on any account whatsoever; and
(v) EXSTREAM has not guaranteed or agreed to guarantee any debt,
liability or other obligation of any kind whatsoever of any
person, firm or corporation of any kind whatsoever;
(p) since 31 December 1999, and up to the Effective Date except as set
forth on Schedule 4.2(p):
(i) there has not been any material adverse change of any kind
whatsoever in the financial position or condition of EXSTREAM, or
any damage, loss or other change of any kind whatsoever in
circumstances materially affecting the business or Assets of
EXSTREAM or the right or capacity of EXSTREAM to carry on its
business;
(ii) EXSTREAM has not waived or surrendered any right of any kind
whatsoever of material value;
9
(iii)except as may be expressly permitted under this Agreement,
EXSTREAM has not discharged, satisfied or paid any lien, charge
or encumbrance of any kind whatsoever or obligation or liability
of any kind whatsoever other than current liabilities in the
ordinary course of its business;
(iv) EXSTREAM has not issued authorised the issuancee of any shares or
other securities;
(v) EXSTREAM has not declared, paid, authorized or made any dividend,
payment or distribution of any kind or nature to its shareholders
or redeemed or purchased or otherwise acquired any of its capital
stock or agreed to do so;
(vi) EXSTREAM has not entered into any transaction or into any
contracts or agreements or modifications or cancellations
thereof, other than in the ordinary course of business; and
(vii)EXSTREAM has not made or authorized any payment to officers,
directors or employees in their capacity as such except in the
ordinary course of business and at rates of salary, bonus or
other remuneration consistent with remuneration of previous
years;
(q) the directors, officers, key employees and independent contractors and
consultants of EXSTREAM, and all of their compensation arrangements
with EXSTREAM, whether as directors, officers, employees, independent
contractors or consultants, are as listed on Schedule 4.2(q) to this
Agreement;
(r) no payments of any kind whatsoever have been made or authorized by
EXSTREAM directly or indirectly to or on behalf of any of the
Shareholders or any of the directors, officers, key employees,
independent contractors or consultants of EXSTREAM except in
accordance with those compensation arrangements specified on Schedule
4.2(r) to this Agreement;
(s) there are no pension, profit sharing, group insurance or similar plans
or other deferred compensation plans of any kind whatsoever affecting
EXSTREAM other than those, if any, specified on Schedule 4.2(s) to
this Agreement;
(t) EXSTREAM is not now, nor has it ever been, a party to any collective
agreement with any labour union or other association of employees of
any kind whatsoever, no collective bargaining agent has been certified
in respect of EXSTREAM, and there is no application pending for
certification of a collective bargaining agent in respect of EXSTREAM;
(u) the contracts and agreements included on Schedule 4.2(u) to this
Agreement to this Agreement (collectively the "Material Contracts")
constitute all of the material contracts and agreements of EXSTREAM;
(v) except as may be noted on the appropriate Schedule to this Agreement,
the Material Contracts are in good standing in all material respects
and not in default in any respect;
(w) EXSTREAM has not licensed, leased, transferred, disposed of or
encumbered any of the Assets in any way, or permitted any third party
access to any of the Assets the value of which may be compromised by
such access, including in particular the source code to
10
any computer software, any subscriber lists or any trade secret
information included in the Assets, except only in accordance with the
terms of the Material Contracts;
(x) no third party privacy or intellectual property rights, including
without limitation, copyright, trade secret or patent rights, were
violated in the creation, compilation or acquisition of, or are
violated by the use of, any of the Assets by EXSTREAM or by any party
through whom EXSTREAM acquired title or a license or to whom EXSTREAM
has granted a license in respect of the Assets, and in particular the
use of the Domain Names by EXSTREAM does not infringe upon or induce
or contribute to the infringement of any intellectual property rights,
domestic or foreign, of any other person;
(y) EXSTREAM is not in material breach of any applicable law, ordinance,
statute, regulation, by-law, order or decree of any kind whatsoever
including, without limitation, any applicable securities laws;
(z) all tax returns and reports of EXSTREAM that are required by law to
have been filed have been filed and are substantially true, complete
and correct and all taxes and other government charges of any kind
whatsoever of EXSTREAM have been paid or disclosed in writing to
E*Comnetrix before E*Comnetrix entered into this Agreement;
(aa) EXSTREAM has not:
(i) made any election under any applicable tax legislation with
respect to the acquisition or disposition of any property at
other than fair market value;
(ii) acquired any property for proceeds greater than the fair market
value thereof; or
(iii)disposed of anything for proceeds less than the fair market value
thereof;
(bb) EXSTREAM has made all elections required to have been made under any
applicable tax legislation in connection with any dividends or other
distributions made by EXSTREAM and all such elections were true and
correct and filed in the prescribed form and within the prescribed
time period;
(cc) adequate provision has been made for taxes payable by EXSTREAM for the
current period for which tax returns are not yet required to be filed
and there are no agreements, waivers or other arrangements of any kind
whatsoever providing for an extension of time with respect to the
filing of any tax return by, or payment of, any tax or governmental
charge of any kind whatsoever by EXSTREAM;
(dd) EXSTREAM does not have any contingent tax liabilities of any kind
whatsoever, and there are no grounds which would prompt a reassessment
of EXSTREAM, including for aggressive treatment of income or expenses
in earlier tax returns filed;
(ee) there are no amounts outstanding and unpaid for which EXSTREAM has
previously claimed a deduction under any applicable tax legislation;
(ff) EXSTREAM has made all collections, deductions, remittances and
payments of any kind whatsoever and filed all reports and returns
required by it to be made or filed under the provisions of all
applicable statutes requiring the making of collections, deductions,
remittances or payments of any kind whatsoever;
11
(gg) Except as otherwise disclosed in writing on Schedule 4.2 (gg) there
are no actions, suits, judgements, investigations or proceedings of
any kind whatsoever outstanding, pending or known to be threatened
against or affecting EXSTREAM at law or in equity or before or by any
federal, provincial, state, municipal or other governmental
department, commission, board, bureau or agency of any kind whatsoever
and there is no basis therefore;
(hh) EXSTREAM has good and sufficient power, authority and capacity to
enter into this Agreement and complete its respective transactions
contemplated under this Agreement on the terms and conditions set
forth herein;
(ii) EXSTREAM has taken all necessary or desirable actions, steps and
corporate and other proceedings to approve or authorise, validly and
effectively, the entering into of, and the execution, delivery and
performance of, this Agreement;
(jj) this Agreement has been duly executed and delivered by EXSTREAM and,
assuming the due authorisation, execution and delivery hereof by
E*Comnetrix and the Shareholders, constitutes a legal, valid and
binding obligation of EXSTREAM, enforceable against it in accordance
with its terms subject to:
(i) bankruptcy, insolvency, moratorium, reorganisation and other
laws relating to or affecting the enforcement of creditors'
rights generally; and
(ii) the fact that equitable remedies, including the remedies of
specific performance and injunction, may only be granted in
the discretion of a court;
(kk) except as disclosed to E*Comnetrix, EXSTREAM is not under any
obligation, contractual or otherwise, to request or obtain the consent
of any person, and no permits, licenses, certifications,
authorisations or approvals of, or notifications to, any federal,
state, municipal or local government or governmental agency, board,
commission or authority are required to be obtained by EXSTREAM in
connection with the execution, delivery or performance by EXSTREAM of
this Agreement or the completion of any of the transactions
contemplated herein, and complete and correct copies of any agreements
under which EXSTREAM is obligated to request or obtain any such
consent have been provided to E*Comnetrix;
(ll) the execution and delivery of this Agreement, the performance of its
obligations under this Agreement and the Completion will not:
(i) conflict with, or result in the breach of or the acceleration of
any indebtedness under, or constitute default under, any of the
Corporate Documents of EXSTREAM, or any of the terms of any
indenture, mortgage, agreement, lease, licence or other
instrument of any kind whatsoever to which any of the EXSTREAM
Group is a party or by which any of them is bound, or any
judgement or order of any kind whatsoever of any court or
administrative body of any kind whatsoever by which any of them
is bound; nor
(ii) result in the violation of any law or regulation applicable to
any of the EXSTREAM Group;
12
(mm) EXSTREAM has not incurred any liability for agency, brokerage,
referral or finder's fees, commissions or compensation of any kind
whatsoever with respect to this Agreement or any transaction
contemplated under this Agreement; and
(nn) the representations and warranties of the Shareholders contained in
this Agreement disclose all material facts known to each of them
specifically relating to the transactions contemplated under this
Agreement which, so far as the Shareholders are aware, materially and
adversely affect, or in the future may materially and adversely
affect, their respective abilities to perform their respective
obligations under this Agreement or the value of the EXSTREAM Shares
or the Assets.
(oo) EXSTREAM is in compliance in all material respects with all federal,
state and municipal environmental laws and regulations (the
"Environmental Laws"). The existing activities of EXSTREAM, its
business and its prior uses and activities and the uses and activities
of other property now or previously owned or operated by EXSTREAM,
comply and at all times have complied with all Environmental Laws.
EXSTREAM has filed all environmental reports and notifications
required to be filed under applicable laws and regulations;
4.3 In order to induce E*Comnetrix to enter into this Agreement and
complete its transactions contemplated hereunder, each of the Shareholders
represents and warrants to E*Comnetrix that, in respect of that Shareholder:
(a) that Shareholder has good and sufficient power, authority and capacity
to enter into this Agreement and complete the transactions
contemplated under this Agreement on the terms and conditions set
forth herein;
(b) that Shareholder has taken all necessary or desirable actions, steps
and corporate and other proceedings to approve or authorise, validly
and effectively, the entering into of, and the execution, delivery and
performance of, this Agreement;
(c) this Agreement has been duly executed and delivered by that
Shareholder and, assuming the due authorisation, execution and
delivery hereof by E*Comnetrix, EXSTREAM and the other Shareholders,
constitutes a legal, valid and binding obligation of that Shareholder,
enforceable against it in accordance with its terms subject to:
(i) bankruptcy, insolvency, moratorium, reorganisation and other laws
relating to or affecting the enforcement of creditors' rights
generally; and
(ii) the fact that equitable remedies, including the remedies of
specific performance and injunction, may only be granted in the
discretion of a court;
(d) except as disclosed to E*Comnetrix, that Shareholder is not under any
obligation, contractual or otherwise, to request or obtain the consent
of any person, and no permits, licenses, certifications,
authorisations or approvals of, or notifications to, any federal,
state, municipal or local government or governmental agency, board,
commission or authority are required to be obtained by that
Shareholder in connection with the execution, delivery or performance
by that Shareholder of this Agreement or the completion of any of the
transactions contemplated herein, and complete and correct copies of
any agreements under which that Shareholder is obligated to request or
obtain any such consent have been provided to E*Comnetrix;
13
(e) the EXSTREAM Shares indicated in Recital A of this Agreement opposite
his, her or its name are and will on the Closing Date immediately
prior to Completion be validly issued and outstanding fully paid and
non-assessable common shares of EXSTREAM registered in the name of,
and legally and beneficially owned by, that Shareholder, free and
clear of all voting restrictions, trade restrictions, liens, claims,
charges or encumbrances of any kind whatsoever;
(f) the Shareholder has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks
of an investment in the E*Comnetrix Shares and is able to bear the
economic risk of loss of the Shareholder's entire investment;
(g) E*Comnetrix has provided to the Shareholder the opportunity to ask
questions and receive answers concerning the terms and conditions of
the issuance of the E*Comnetrix Shares and the Shareholder has had
access to such information concerning E*Comnetrix as the Shareholder
has considered necessary or appropriate in connection with the
investment decision to acquire the E*Comnetrix Shares;
(h) the Shareholder is acquiring the E*Comnetrix Shares for the
Shareholder's own account, for investment purposes only and not with a
view to any resale, distribution or other disposition of the
E*Comnetrix Shares in violation of applicable United States securities
laws;
(i) the Shareholder has not agreed to acquire the E*Comnetrix Shares as a
result of any form of general solicitation or general advertising,
including advertisements, articles, notices or other communications
published in any newspaper, magazine or similar media or broadcast
over radio, or television, or any seminar or meeting whose attendees
have been invited by general solicitation or general advertising;
(j) The Shareholder understands and agrees that the E*Comnetrix Shares
have not been and will not be registered under the 1933 Act, and the
Shares are being offered and issued by E*Comnetrix to the Shareholder
in reliance upon Rule 506 of Regulation D under the 1933 Act; and
(k) upon the issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the 1933 Act or
applicable U.S. state laws and regulations, the certificates
representing the E*Comnetrix Shares will bear a legend in
substantially the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"). THESE SECURITIES MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
THE COMPANY, (B) IN COMPLIANCE WITH THE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY
RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (C) IN
A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE
1933 ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS
GOVERNING THE OFFER AND
14
SALE OF SECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE,
FURNISHED TO THE COMPANY AN OPINION OF COUNSEL, OF
RECOGNISED STANDING, OR OTHER EVIDENCE OF EXEMPTION,
REASONABLY SATISFACTORY TO THE COMPANY."
4.4 The representations and warranties of EXSTREAM and each of the
Shareholders contained in this Agreement shall be true at the Time of Closing as
though they were made at the Time of Closing, and they shall survive the
Completion and remain in full force and effect thereafter for the benefit of
E*Comnetrix.
4.5 Each of the Shareholders acknowledges and agrees that:
(a) the E*Comnetrix Shares have not been and will not be registered
under the 1933 Act or the securities laws of any state of the
United States or other jurisdiction and that the exchange
contemplated hereby is being made in reliance on the
Shareholder's representations and warranties regarding the
circumstances required for an exemption from such registration
requirements;
(b) the issuance of the E*Comnetrix Shares has not been approved or
disapproved by the United States Securities and Exchange
Commission, any state securities agency, or any foreign
securities agency, E*Comnetrix has no obligation to register the
E*Comnetrix Shares under the 1933 Act;
(c) E*Comnetrix shares are registered under the Exchange Act; and
(d) if the Shareholder decides to offer, sell or otherwise transfer
any of the E*Comnetrix Shares, he will not offer, sell or
otherwise transfer any of the E*Comnetrix Shares directly or
indirectly, unless:
(i) the sale is to E*Comnetrix;
(ii) the sale is made pursuant to the exemption from the
registration requirements under the 1933 Act provided by
Rule 144 thereunder and in accordance with any applicable
state securities or "Blue Sky" laws;
(iii)the E*Comnetrix Shares are sold in a transaction that does
not require registration under the 1933 Act or any
applicable state laws and regulations governing the offer
and sale of securities, and he has prior to such sale
furnished to E*Comnetrix an opinion of counsel to that
effect reasonably satisfactory to E*Comnetrix; or
(iv) The E*Comnetrix shares are registered by E*Comnetrix under
the 1933 Act and all applicable state and other securities
laws.
(e) Shareholders have not traded in the common stock of E*Comnetrix
and will refrain from trading in or selling short any shares in
the common stock of E*Comnetrix or entering into any derivative
transactions of same prior to the Closing Date.
4.6 Each of the Shareholders consents to E*Comnetrix making a notation on
its records or giving instructions to any transfer agent of E*Comnetrix to
implement the restrictions on transfer set forth and described herein.
15
4.7 Each of the Shareholders acknowledges and accepts that there may be
material tax consequences to a Shareholder in respect of an acquisition or
disposition of the E*Comnetrix Shares, and that E*Comnetrix gives no opinion and
makes no representation with respect to the tax consequences to the Shareholder
under United States, state, local or foreign tax law in respect of the
Shareholder's acquisition or disposition of the E*Comnetrix Shares.
4.8 In order to induce the Shareholders to enter into this Agreement and
complete the transactions contemplated hereunder, E*Comnetrix represents and
warrants to the Shareholders that, except as disclosed to EXSTREAM prior to the
Effective Date:
(a) E*Comnetrix was and remains duly incorporated and validly existing
under the laws of Canada, and E*Comnetrix is in good standing with
respect to all filings required by Industry Canada, the Canada
Business Corporations Act and the British Columbia Securities
Commission and as of the Effective date. As of the Effective Date
E*Comnetrix has issued 10,899,277 common shares, no preferred shares
and has outstanding 3,350,000 share purchase options and 250,000 stock
appreciation rights;
(b) the E*Comnetrix Shares to be issued on Completion will be, when
issued, validly issued as fully paid and non-assessable;
(c) E*Comnetrix has good and sufficient power, authority and capacity to
enter into this Agreement and complete its transactions contemplated
under this Agreement on the terms and conditions set forth herein;
(d) E*Comnetrix has taken all necessary or desirable actions, steps and
corporate and other proceedings to approve or authorise, validly and
effectively, the entering into of, and the execution, delivery and
performance of, this Agreement;
(e) this Agreement has been duly executed and delivered by E*Comnetrix
and, assuming the due authorisation, execution and delivery hereof by
EXSTREAM and the Shareholders, constitutes a legal, valid and binding
obligation of E*Comnetrix, enforceable against it in accordance with
its terms subject to:
(i) bankruptcy, insolvency, moratorium, reorganisation and other laws
relating to or affecting the enforcement of creditors' rights
generally; and
(ii) the fact that equitable remedies, including the remedies of
specific performance and injunction, may only be granted in the
discretion of a court;
(f) E*Comnetrix is not under any obligation, contractual or otherwise, to
request or obtain the consent of any person, and no permits, licenses,
certifications, authorisations or approvals of, or notifications to,
any federal, state, municipal or local government or governmental
agency, board, commission or authority are required to be obtained by
E*Comnetrix in connection with the execution, delivery or performance
by E*Comnetrix of this Agreement or the completion of any of the
transactions contemplated herein, and complete and correct copies of
any agreements under which E*Comnetrix is obligated to request or
obtain any such consent have been provided to the EXSTREAM Group;
(g) the execution, delivery and performance of this Agreement and each of
the other agreements contemplated or referred to herein by
E*Comnetrix, and the completion of
16
the transactions contemplated hereby, will not constitute or result in
a violation or breach of or default under:
(i) any term or provision of any of the memorandum, articles or other
constating documents of E*Comnetrix; or
(ii) the terms of any indenture, agreement (written or oral),
instrument or understanding or other obligation or restriction to
which E*Comnetrix is a party or by which it is bound; or
(iii)any term or provision of any licenses, registrations or
qualifications of E*Comnetrix or any order of any court,
governmental authority or regulatory body or any applicable law
or regulation of any jurisdiction;
(h) E*Comnetrix is a reporting issuer pursuant to the 1933 Act or the
Exchange Act;
(i) E*Comnetrix has made all filings with the U.S. Securities and Exchange
Commission and all state securities regulators that it is required to
make (the "Public Reports"), each of the Public Reports complies with
United States securities laws in all material respects, and none of
the Public Reports, as of their respective dates, contained any untrue
statement of a material fact that would make the statements made
therein, in light of the circumstances under which they were made,
misleading;
(j) E*Comnetrix's financial statements for the year ended 31 December
1999, March 31, 2000 and June 30, 2000 ("E*Comnetrix Financial
Statements"), true copies of which are attached hereto as Schedule
4.8(j), have been prepared in accordance with generally accepted
accounting principles, are true, correct and complete in all respects
and present fairly the financial condition of E*Comnetrix as of the
date thereof, including the assets and liabilities of E*Comnetrix as
of the date thereof, and the expenses of E*Comnetrix for that fiscal
period;
(k) all financial transactions of E*Comnetrix have been recorded in the
financial books and records of E*Comnetrix in accordance with good
business practice, such financial books and records form the basis for
the E*Comnetrix Financial Statements and the E*Comnetrix Financial
Statements have been filed with the United States Securities Exchange
Commission;
(l) there are no actions, suits or proceedings, judicial or administrative
(whether or not purportedly on behalf of E*Comnetrix) pending or, to
the best of the knowledge of E*Comnetrix, threatened, by or against or
affecting E*Comnetrix, at law or in equity, or before or by any court
or any federal, provincial, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, and to the best of the knowledge of E*Comnetrix,
there are no grounds on which any such action, suit or proceeding
might be commenced with any reasonable likelihood of success;
(m) Subsequent to the respective dates as of which information is given in
the Public Reports and E*Comnetrix Financial Statements there has been
no material adverse change, or any fact known to E*Comnetrix, nor has
any agreement been entered into with any officer, director or insider
of the company, and not disclosed to the Shareholders that could
reasonably be expected to result in a material adverse change in the
business or financial
17
condition of E*Comnetrix except as set forth in Schedule 4.8(m) and
the documents listed therein (the "Documents") and except as disclosed
in the Public Reports and Schedule 4.8(m), there is no litigation or
governmental proceeding to which E*Comnetrix is a party or to which
any property of E*Comnetrix is subject or that is pending or, to the
best of the knowledge of E*Comnetrix, contemplated against E*Comnetrix
that might result in any material adverse change in the business or
financial condition of E*Comnetrix. Shareholders acknowledge and agree
they have been provided reasonable access to the Documents prior to
the Completion;
(n) E*Comnetrix has not declared or paid any dividend or made any other
distribution on any of its shares of any class, or redeemed or
purchased or otherwise acquired any of its shares of any class, or
reduced its authorized capital or issued capital, or agreed to do any
of the foregoing;
(o) E*Comnetrix is not subject to any obligation to make any investment in
or to provide funds by way of loan, capital contribution or otherwise
to any person;
(p) to the best of its knowledge, E*Comnetrix is not in violation of any
federal, state, municipal or other law, regulation or order of any
government or governmental or regulatory authority, domestic or
foreign;
(q) the representations and warranties and other factual statements of
E*Comnetrix contained in this Agreement, and all information in the
Schedules hereto, taken as a whole, do not contain any false statement
of material fact or omit to state a material fact necessary to prevent
the statements made herein and therein from being misleading; and
(r) to the best of the knowledge of E*Comnetrix, there are no proceedings
or investigations outstanding or threatened by any securities
regulatory authority against E*Comnetrix, its directors, officers or
shareholders, and there is no circumstance which exists which could
reasonably be expected to lead to an investigation against
E*Comnetrix, its directors, officers or shareholders; and
(s) E*Comnetrix has received a signed release from each Shareholder who is
a party to this Agreement in the form set forth in Schedule 6.1(f).
4.9 The representations and warranties of E*Comnetrix contained in this
Agreement shall be true at the Time of Closing as though they were made at the
Time of Closing, and they shall survive the Completion and remain in full force
and effect thereafter for the benefit of the Shareholder.
5. INDEMNITIES
5.1 Indemnities
(a) Notwithstanding the completion of the transactions contemplated
under this Agreement or E*Comnetrix's Investigation, the
representations, warranties and acknowledgements of any of the
Shareholders contained in this Agreement or any certificates or
documents delivered by any of them pursuant to this Agreement
shall survive the Completion and shall continue in full force and
effect thereafter for the benefit of E*Comnetrix. If any of the
representations, warranties or acknowledgements given by any of
the Shareholders is found to be untrue or there is a breach of
any covenant or agreement in this Agreement on the
18
part of any of the EXSTREAM Group, then the party or parties
responsible for any misrepresentation or breach of warranty,
acknowledgement, covenant or agreement shall jointly and
severally indemnify and save harmless E*Comnetrix from and
against any and all liability, claims, debts, demands, suits,
actions, penalties, fines, losses, costs (including legal fees,
disbursements and taxes as charged on a lawyer and own client
basis), damages and expenses of any kind whatsoever which may be
brought or made against E*Comnetrix by any person, firm or
corporation of any kind whatsoever or which may be suffered or
incurred by E*Comnetrix, directly or indirectly, arising out of
or as a consequence of any such misrepresentation or breach of
warranty, acknowledgement, covenant or agreement. Without in any
way limiting the generality of the foregoing, this shall include
any loss of any kind whatsoever which may be suffered or incurred
by E*Comnetrix, directly or indirectly, arising out of any
material assessment or reassessment levied upon EXSTREAM for tax,
interest and/or penalties relating to any period of business
operations up to and including the Closing Date and all claims,
demands, costs (including legal fees, disbursements and taxes as
charged on a lawyer and own client basis) and expenses of any
kind whatsoever in respect of the foregoing.
(b) Notwithstanding the completion of the transactions contemplated
under this Agreement or any investigation by the Shareholders,
the representations, warranties and acknowledgements of
E*Comnetrix contained in this Agreement or any certificates or
documents delivered by E*Comnetrix pursuant to this Agreement
shall survive the Completion and shall continue in full force and
effect thereafter for the benefit of the Shareholders. If any of
the representations, warranties or acknowledgements given by
E*Comnetrix is found to be untrue or there is a breach of any
covenant or agreement in this Agreement on the part of
E*Comnetrix, then E*Comnetrix shall indemnify and save harmless
the Shareholders from and against any and all liability, claims,
debts, demands, suits, actions, penalties, fines, losses, costs
(including legal fees, disbursements and taxes as charged on a
lawyer and own client basis), damages and expenses of any kind
whatsoever which may be brought or made against the Shareholders
by any person, firm or corporation of any kind whatsoever or
which may be suffered or incurred by the Shareholders, directly
or indirectly, arising out of or as a consequence of any such
misrepresentation or breach of warranty, acknowledgement,
covenant or agreement. Without in any way limiting the generality
of the foregoing, this shall include any loss of any kind
whatsoever which may be suffered or incurred by the Shareholders,
directly or indirectly, arising out of any material assessment or
reassessment levied upon E*Comnetrix for tax, interest and/or
penalties relating to any period of business operations up to and
including the Closing Date and all claims, demands, costs
(including legal fees, disbursements and taxes as charged on a
lawyer and own client basis) and expenses of any kind whatsoever
in respect of the foregoing. Subject to any regulatory approval
that may be required, each of the Shareholders may elect to
receive in lieu of a cash settlement, common shares at the simple
average closing price for the common shares of E*Comnetrix for
the 30 trading days preceding the date of any award ordered by a
court pursuant to this indemnity.
5.2 With the exception of claims based on fraud or intentional
misrepresentation, the indemnification obligations of each of the Shareholders
shall not exceed the E*Comnetrix Shares received by such Shareholder in exchange
for such Shareholder's EXSTREAM Shares pursuant to
19
Section 1.1 of this Agreement and the satisfaction of such indemnification
obligations shall be accomplished on a pro rata basis among parties involved in
any misrepresentation or breach of warranty, acknowledgement, covenant or
agreement as to their Exchange Shares issued pursuant to Section 1.1 of this
Agreement.
6. CLOSING
6.1 At the Time of Closing, the EXSTREAM Group shall deliver to
E*Comnetrix:
(a) certified true copies of the resolutions of the directors of EXSTREAM
evidencing that the directors of EXSTREAM have approved this Agreement
and all of the transactions of EXSTREAM contemplated hereunder,
specifically referring to:
(i) the exchange and transfer of the EXSTREAM Shares from the
Shareholders to E*Comnetrix as provided for in this Agreement;
(ii) the cancellation of the share certificates (the "Old Share
Certificates") representing the EXSTREAM Shares held as set forth
in Recital A of this Agreement; and
(iii)the issuance of a new share certificate (the "New Share
Certificate") representing the EXSTREAM Shares registered in the
name of E*Comnetrix;
(b) the Old Share Certificates;
(c) the New Share Certificate;
(d) all minute books and seals of EXSTREAM;
(e) all original and duplicate certificates evidencing registration
anywhere in the world of any interest in tangible or intangible
property included in the Assets;
(f) releases in the form of Schedule 6.1(f) to this Agreement (the
"Releases") from each of the Shareholders of all claims against
EXSTREAM for outstanding amounts owing by EXSTREAM on account of any
loans, bonuses, reimbursements, compensation, fees, royalties,
dividends or other consideration whatsoever;
(g) certificates of confirmation and investor certificates from each of
the Shareholders, in the form of Schedule 6.1(g) to this Agreement;
(h) the Escrow Agreement; and
(i) any other materials that are, in the opinion of the attorneys for
E*Comnetrix, reasonably required to complete the transactions
contemplated under this Agreement.
6.2 At the Time of Closing, E*Comnetrix shall deliver to the solicitors for
the Shareholders:
(a) true copies of the resolutions of the directors of E*Comnetrix,
evidencing that the directors of E*Comnetrix have approved this
Agreement and all of the transactions of E*Comnetrix contemplated
hereunder, including the issuance of the E*Comnetrix Shares in
exchange for the EXSTREAM Shares;
20
(b) a certificate of confirmation signed by a director or officer of
E*Comnetrix in the form of Schedule 6.2(c) to this Agreement.
6.3 Within ten business days subsequent to the Time of Closing E*Comnetrix
shall deliver to the solicitors for the Shareholders:
(a) share certificates representing the E*Comnetrix Shares registered in
the names of the Shareholders as jointly directed by the Shareholders
in writing; and
(b) share certificates representing the E*Comnetrix Shares registered in
the name of the Escrow Agent, as provided for in Section 5.2.
7. GENERAL
7.1 Time and each of the terms and conditions of this Agreement shall be of
the essence of this Agreement and any waiver by the parties of this paragraph
7.1 or any failure by them to exercise any of their rights under this Agreement
shall be limited to the particular instance and shall not extend to any other
instance or matter in this Agreement or otherwise affect any of their rights or
remedies under this Agreement.
7.2 The Schedules to this Agreement incorporated by reference and the
recitals to this Agreement constitute a part of this Agreement.
7.3 This Agreement constitutes the entire Agreement between the parties
hereto in respect of the matters referred to herein and there are no
representations, warranties, covenants or agreements, expressed or implied,
collateral hereto other than as expressly set forth or referred to herein.
7.4 The headings in this Agreement are for reference only and do not
constitute terms of the Agreement.
7.5 The provisions contained in this Agreement which, by their terms,
require performance by a party to this Agreement subsequent to the Closing Date
of this Agreement, shall survive the Closing Date of this Agreement.
7.6 No alteration, amendment, modification or interpretation of this
Agreement or any provision of this Agreement shall be valid and binding upon the
parties hereto unless such alteration, amendment, modification or interpretation
is in written form executed by the parties directly affected by such alteration,
amendment, modification or interpretation.
7.7 Whenever the singular or masculine is used in this Agreement the same
shall be deemed to include the plural or the feminine or the body corporate as
the context may require.
7.8 The parties hereto shall execute and deliver all such further documents
and instruments and do all such acts and things as any party may, either before
or after the Closing Date, reasonably require in order to carry out the full
intent and meaning of this Agreement.
7.9 Any notice, request, demand and other communication to be given under
this Agreement shall be in writing and shall be delivered by hand to the
appropriate party at the address as first set out above or to such other
addresses or by such other means as may be designated in writing by the parties
21
hereto in the manner provided for in this paragraph, and shall be deemed to have
been received on the date of delivery by hand, or if delivered by e-mail or
telecopy, then on the date transmission completes.
7.10 This Agreement shall be subject to, governed by, and construed in
accordance with the laws of the State of California, and the parties attorn to
the non-exclusive jurisdiction of the courts of the State of California for the
resolution of all disputes arising under this Agreement.
7.11 This Agreement may be signed by the parties in as many counterparts as
may be deemed necessary, each of which so signed shall be deemed to be an
original, and all such counterparts together shall constitute one and the same
instrument.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals as of the
Effective Date:
)
SIGNED, SEALED & DELIVERED )
by Xxxxxx Xxxxxx in the presence of: ) /s/ Xxxxxx Xxxxxx
) ------------------------------
Signature of Witness ) Xxxxxx Xxxxxx
Name: )
-----/s/ [Illegible]--------------- )
Address: )
-------------------------------- )
)
------------------------------------------ )
Occupation: )
----------------------------- )
SIGNED, SEALED & DELIVERED by )
Xxxxx Xxxxxxx in the presence of: )
)
___/s/ Xxxxx Park___ ) /s/ [Illegible]
Signature of Witness ) ------------------------------
) Xxxxx Xxxxxxx
Name: Xxxxx Xxxx )
----------------------------------- )
Address: 0000 Xxxxxxx Xxxxxx Xx. )
-------------------------------- )
Xxxxx Valley, CA )
------------------------------------------ )
Occupation: Engineer )
----------------------------- )
SIGNED, SEALED & DELIVERED by )
Xxxxxx Dumper in the presence of: )
) /s/ R. Dumper
Signature of Witness ) ------------------------------
) Xxxxxx Dumper
Name: /s/ [Illegible] )
----------------------------------- )
Address: )
-------------------------------- )
)
------------------------------------------ )
Occupation: )
----------------------------- )
22
SIGNED, SEALED & DELIVERED by )
Xxxxx Gorokin Morganster in the presence of: )
)
/s/ Xxxxx Xxxxxx )
Signature of Witness ) /s/ Xxxxx Gorokin Morganster
) ------------------------------
) Xxxxx Gorokin Morganster
Name: Xxxxx Xxxxxx )
----------------------------------- )
Address: 0000 Xxxxxx Xxx )
-------------------------------- )
Xxxxxxxxx, XX 00000 )
------------------------------------------ )
Occupation: Banker )
----------------------------- )
SIGNED, SEALED & DELIVERED by )
Xxxxxx Xxxxxxx in the presence of: )
)
/s/ Xxxxxxxxx Xxxxxxx ) /s/ Xxxxxx Xxxxxxx
Signature of Witness ) ------------------------------
) Xxxxxx Xxxxxxx
Name: Xxxxxxxxx Xxxxxxx )
----------------------------------- )
Address: 0000 Xxxxx Xxxxx Xxx )
-------------------------------- )
Xxxxxxx Xxxxx, XX 00000 )
------------------------------------------ )
Occupation: Personal Banking Officer )
----------------------------- )
SIGNED, SEALED & DELIVERED by )
Xxxxxxxx Design Group in the presence of: )
)
Signature of Witness ) ------------------------------
) Xxxxxxxx Design Group
Name: )
----------------------------------- )
Address: )
-------------------------------- )
)
------------------------------------------ )
Occupation: )
----------------------------- )
SIGNED, SEALED & DELIVERED by )
Xxxx Xxxxxxx in the presence of: )
)
/s/ Xxxxxxxx X. XxXxxxxx ) /s/ Xxxx Xxxxxxx
Signature of Witness ) ------------------------------
) Xxxx Xxxxxxx
Name: Xxxxxxx Space Center )
----------------------------------- )
Address: Federal Credit Union )
-------------------------------- )
000 Xxxxxxxxxxx Xxxx, Xxxxxxx Xxxxxx,XX 00000 )
------------------------------------------ )
Occupation: Supervisor )
----------------------------- )
23
SIGNED, SEALED & DELIVERED by )
Xxxx Xxxxxxx in the presence of: )
)
/s/ [Illegible] ) /s/ Xxxx Xxxxxxx
Signature of Witness ) ------------------------------
) Xxxx Xxxxxxx
Name: )
----------------------------------- )
Address: )
-------------------------------- )
)
------------------------------------------ )
Occupation: )
----------------------------- )
SIGNED, SEALED & DELIVERED by )
Xxxxx Xxxxx in the presence of: )
/s/ [Illegible] ) /s/ Xxxxx Xxxxx
Signature of Witness ) ------------------------------
) Xxxxx Xxxxx
Name: Xxxxxxx Xxxxxx )
----------------------------------- )
Address: 0000 Xxxxxx Xxx )
-------------------------------- )
Xxx Xxxxx, XX 00000 )
------------------------------------------ )
Occupation: Engineer )
----------------------------- )
SIGNED, SEALED & DELIVERED by )
Xxxxxxx Xxxxxx in the presence of: )
)
Signature of Witness ) ------------------------------
) Xxxxxxx Xxxxxx
Name: )
----------------------------------- )
Address: )
-------------------------------- )
)
------------------------------------------ )
Occupation: )
----------------------------- )
SIGNED, SEALED & DELIVERED by )
Xxxxxxx Xxxx in the presence of: )
) /s/ [Illegible]
Signature of Witness ) ------------------------------
) Xxxxxxx Xxxx
Name: /s/ [Illegible] )
----------------------------------- )
Address: )
-------------------------------- )
)
------------------------------------------ )
Occupation: )
----------------------------- )
24
EXECUTED by Exstream Data, Inc. by:
)
/s/ Xxxxxx Xxxxxx )
---------------------------------------- ) cs
Name: Xxxxxx Xxxxxx )
Title:President )
)
________________________________________ )
Name:___________________________________ )
Title:__________________________________ )
EXECUTED by E*Comnetrix Inc. )
)
by: /s/ [Illegible] )
------------------------------------ )
Xxxx Xxxxx )
President )
)
)
)
25
Schedule A - Shareholders of Exstream
Name Address Shares Percentage
Xxxxx Xxxxxxx 000 Xxxxxxx Xxxxx, Xxx #0 Xxxxxxxx Xxxx XX 00000 2,000 00.35%
Xxxxxx Dumper 00 Xxxxx Xxxxx Xxxxx, Xxxxxxx, XX 00000 12,000 02.10%
Xxxxx Xxxxxxxxxx 0000 Xxxx Xxx., Xxx# 000, Xxxxxxxxx, XX 00000 6,800 01.19%
Xxxxxx Xxxxxxx 000 Xxx Xxxxxxx, Xxxxxxx Xxxxx, XX 00000 5,000 00.88%
Xxxxxxxx Design Group 000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx, XX 00000 8,000 01.40%
Xxxx Xxxxxxx 0000 Xxxxx Xxxx Xxxx. Xxx # 0000, Xxxxxxxxxxxx, XX 00000 400 00.07%
Xxxx Xxxxxxx 000 Xxxxxxx Xxxx, Xxxxxxx, XX 00000 48,000 08.42%
Xxxxxx Xxxxxx 0000 Xxxxx Xxxxxx, Xxxxxxx, XX 00000 328,972 57.68%
Xxxxx Xxxxx 000 Xxxxx Xxxxxx, Xxx Xxxxx, XX 00000 2,000 00.35%
Xxxxxxx Xxxxxx 0 Xxxx Xxx, Xxx. 000, Xxx Xxxxxxxxx, XX 00000 47,453 08.32%
Xxxxxxx X. Xxxx 000 Xxxxxx Xxxx, Xxxxxxxx, XX 00000 109,692 19.23%
Schedule B - Stock Options of Exstream
Options Name Exercise Price Expiry Date Vesting Date
2852 Bass $5.25 7/1/03 7/1/01
500 Xxxxxxx $5.25 7/1/03 7/1/01
500 Xxxxxx $5.25 7/1/03 7/1/01
1000 Dumper $3.50 12/31/01 vested
000 Xxxxxxx $5.25 7/1/03 7/1/01
0000 Xxxxx $5.25 7/20/03 7/1/01
0000 Xxxxxxx $2.50 12/31/02 vested
00000 Xxxxxxx $2.50 12/31/02 vested
5703 Xxxxxx $3.50 6/26/03 12/30/00
2000 Xxxxxx $5.25 7/1/05 7/1/01
1000 Xxxxx $5.25 7/1/03 7/1/01
500 Xxxxx $5.25 7/1/05 7/1/01
500 XxXxxxxxx $5.25 9/20/03 7/1/01
500 Xxxxx $5.25 9/30/03 7/1/01
500 X'Xxxxxx $5.25 8/2/03 7/1/01
500 Xxxxx $5.25 7/1/03 7/1/01
500 Xxxxxxxxx $5.25 7/1/03 7/1/01
500 Valencia $5.25 7/1/03 7/1/01
1000 Xxx Xxxx $5.25 7/20/03 7/1/01
26
Schedule C
Name Escrowed Shares
Xxxxx Xxxxxxx 5,438
Xxxxxx Dumper 32,630
Xxxxx Xxxxxxxxxx 18,490
Xxxxxx Xxxxxxx 13,596
Xxxx Xxxxxxx 1,088
Xxxx Xxxxxxx 130,520
Xxxxxx Xxxxxx 894,529
Xxxxx Xxxxx 5,438
Xxxxxxx Xxxx 298,271
