SHARE PURCHASE AGREEMENT made as of the 24th day of August 2006
SHARE
PURCHASE AGREEMENT made as of the 24th day of August 2006
AMONG
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All
Shareholders of Taiwan Halee International Co. Ltd.
(hereinafter referred to as the “Vendors”)
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| OF THE FIRST PART | ||
-
and
-
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Xxxxx
Xxxx-Xxxx
(hereinafter referred to as the "Founder”)
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OF THE SECOND
PART
|
-
and
-
|
TransAKT
Taiwan Limited,
a
corporation incorporated under the laws of Taiwan (hereinafter
referred to
as the "Purchaser”)
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| OF THE THIRD PART | ||
-
and
-
| TransAKT Ltd., a corporation incorporated under the laws of the Province of Alberta (hereinafter referred to as "TransAKT Ltd." | ||
| OF THE FOURTH PART | ||
WHEREAS
the
Vendors are shareholders of Taiwan Halee International Co. Ltd., a corporation
incorporated under the laws of Taiwan (hereinafter called the
“Corporation”);
AND
WHEREAS
the
authorized capital of the Corporation consists of 6,000,000 common shares,
of
which 6,000,000 have been issued and are outstanding as fully paid and
non-assessable;
AND
WHEREAS
Vendors
own and control all of the aforesaid issued and outstanding common shares,
and
the Purchaser has agreed with the Vendors to purchase all of the issued and
outstanding shares owned and controlled by the Vendors in the capital stock
of
the Corporation;
THIS
AGREEMENT WITNESSETH
that in
consideration of the covenants, agreements, warranties and payments herein
set
out and provided for, the parties hereto hereby respectively covenant and agree
as follows:
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1.
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Purchased
Shares
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Subject
to the terms and conditions hereof, the Vendors covenant and agree to sell,
assign, and transfer to the Purchaser and the Purchaser covenants and agrees
to
purchase from the Vendors all (and not less than all) of the issued and
outstanding shares in the capital stock of the Corporation (the “Purchased
Shares”) for the purchase price (the “Purchase Price”) payable as set out in
Article 2 hereof.
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2.
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Purchase
Price
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(1)
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The
Purchase Price shall be the sum of Five Million United States dollars
(US$5,000,000).
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| (2) |
The
Purchase Price shall be payable to or to the order of the Vendors
by the
delivery of:
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| (i) |
US$500,000
(the "Cash Payment"), paid as to US$200,000 on or prior to Closing,
and
US$300,000 in debt obligations of TransAKT Ltd., as set out in Schedule
"I", deliverable at the Closing;
and
|
| (ii) |
Fifty
Million (50,000,000) common voting shares (the "Share Payment"),
issued
from the treasury of TransAKT Ltd., with a deemed value of US$0.09
per
share, deliverable at the Closing.
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3.
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Closing
Arrangements
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(1)
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The
closing (the "Closing") of this transaction shall take place at the
offices of the Corporation, located at Xx.0, Xxxx 000, Xxx .0, Xxx-Xxxx
Xx., Xxxx-Xxx Xxxxxxx, XXXXXX XXXXXX, XXXXXX on
August 31,
2006
or at such other date(s) as the parties hereto may agree (the “Closing
Date”).
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(2)
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On
the Closing Date, upon fulfillment of all the conditions set out
herein,
the Vendors shall deliver to the Purchaser the certificates representing
all the Purchased Shares duly endorsed in favour of the
Purchaser.
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(3)
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On
the Closing Date, upon fulfillment of all the conditions set out
herein,
the Purchaser shall deliver to the Vendors the Cash Payment and the
certificates representing all the Payment Shares duly registered
in favour
of the Vendors.
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4.
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Representations
and Warranties of the
Vendors
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With
respect to, and only to, each Vendor's personal shareholdings in the
Corporation, each Vendor represents and warrants as follows as of the date
hereof and as of the Closing Date and acknowledges that the Purchaser is relying
upon such representations and warranties in connection with the purchase by
the
Purchaser of the Purchased Shares:
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(1)
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All
of the Vendors, and the shareholdings of each individual Vendor,
are
listed on Schedule "H"the Corporation are as follows, and such shares
are
owned by the Vendors, are held with good and marketable title, free
and
clear of all mortgages, liens, charges, security interests, adverse
claims, pledges, encumbrances and demands
whatsoever.
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(2)
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The
entering into of this agreement and the transactions contemplated
hereby
will not result in the violation of any of the terms and provisions
of any
indenture or other agreement, written or oral, to which any of the
Vendors
may be a party.
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(3)
|
This
agreement has been duly executed and delivered by each of the Vendors
and
is a valid and binding obligation of each of the Vendors enforceable
in
accordance with its terms.
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5.
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Representations
and Warranties of the
Founder
|
The
Founder covenants, represents and warrants as follows as of the date hereof
and
as of the Closing Date and it acknowledges that the Purchaser is relying upon
such covenants, representations and warranties in connection with the purchase
by the Purchaser of the Purchased Shares:
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(1)
|
The
Founder is, and has been for 10 years, a director and President of
the
Corporation, and as a result thereof has firsthand knowledge of the
affairs of the Corporation represented and warranted
herein.
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(2)
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The
authorized capital of the Corporation consists of 6,000,000 common
voting
shares without par value of which 6,000,000 have been duly issued
and are
outstanding as fully paid and
non-assessable.
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(3)
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No
person, firm or corporation has any agreement or option or any right
(whether by law, pre-emptive or contractual and including convertible
securities, warrants or convertible obligations of any nature) for
the
purchase or the issue of either the Purchased Shares or any unissued
shares in the capital stock of the
Corporation.
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(4)
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The
entering into of this agreement and the transactions contemplated
hereby
will not result in the violation of any of the terms and provisions
of the
constating documents or by-laws of the Founder or of any indenture
or
other agreement, written or oral, to which the Founder may be a
party.
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(5)
|
This
agreement has been duly executed and delivered by the Founder and
is a
valid and binding obligation of the Founder enforceable in accordance
with
its terms.
|
| (6) |
To
the Founder’s knowledge, there are no existing or threatened legal actions
or claims against the Corporation.
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| (7) | As at August 31 2006, there is approximately US$400,000 in the Corporation’s bank accounts. |
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(8)
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Absence
of Changes - Since May 1, 2006 there has not
been:
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(i)
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any
Material change in the condition or operations of the Corporation
other
than changes in the ordinary and normal course of business and other
than
changes resulting from a general deterioration of markets in the
industries in which the Corporation is engaged;
or
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(ii)
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any
damage, destruction or loss, labour trouble or other event, development
or
condition of any character (whether or not covered by insurance)
materially and adversely affecting the
Corporation.
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(9)
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Absence
of Unusual Transactions - Except as listed in schedule “C”, since May 1,
2006 the Corporation has carried on the Business in its usual and
ordinary
course, and in particular the Corporation has
not:
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(i)
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transferred,
assigned, sold or otherwise disposed of any of the assets shown in
its
audited financial statements except in the ordinary and usual course
of
business;
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(ii)
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discharged
or satisfied any lien or encumbrance, or paid any obligation or liability
(fixed or contingent) other than liabilities included in the balance
sheet
to its audited financial statements and liabilities incurred since
the
date of the audited financial statements in the ordinary and normal
course
of business;
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(iii)
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suffered
an extraordinary loss, or waived any rights of material value, or
entered
into any material commitment or transaction not in the ordinary and
usual
course of business;
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(iv)
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made
any general wage or salary increases or other payments in respect
of
personnel which it employs except in the ordinary course of
business;
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(v)
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declared
or paid any dividends or declared or made any other distribution
on any of
its securities or shares of any class, and has not directly or indirectly,
redeemed, purchased or otherwise acquired any of its securities or
shares
of any class or has agreed to do
so;
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(vi)
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made
any capital expenditure, except in the usual and ordinary course
of
business, and no capital expenditure will be made or authorized after
the
date of this Agreement by the Corporation with respect to the business
without the prior written consent of the
Purchaser;
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(vii)
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mortgaged,
pledged, subjected to lien, granted a security interest in or otherwise
encumbered any of the assets of the Corporation other than in favour
of
the Corporation’s bank;
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(viii)
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incurred
or assumed any obligation or liability (fixed or contingent), except
secured and unsecured current obligations and liabilities incurred
in the
ordinary and normal course of business, particulars of which have
been
disclosed in writing to the Purchaser or its
representatives;
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(ix)
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except
as provided in this Agreement, issued or sold any shares in its capital
or
any warrants, bonds, debentures or other securities of the Corporation
or
issued, granted or delivered any right, option or other commitment
for the
issuance of any such securities;
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(x)
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amended
or changed or taken any action to amend or change its Articles or
by-laws;
or
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(xi)
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authorized
or agreed or otherwise become committed to do any of the
foregoing.
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| (10) |
Senior
Management - There are set forth in Schedule "D" those members
of the
Corporation's management that are deemed to be key
personnel.
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(11)
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Material
contracts - There are set forth in Schedule "F" a list of all of
the
Corporation's material contracts, which are available for review
on a
confidential basis by the Purchaser prior to the
Closing.
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(12)
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Intellectual
property - All patents, trade-marks, trade names, brand names, trade
designs, service marks and copyrights and all licenses and similar
rights
and property which are necessary or incidental to the conduct of
the
business as the same is presently being carried on are listed in
Schedule
“G”, and are valid and subsisting and held by the Corporation with good
and marketable title and are in good standing free and clear of all
security interests, claims, liens, objections and infringements of
every
nature and kind and all registrations therefor have been kept renewed
and
are in full force and effect. The operations of the business, the
manufacture, storage, use and sale by it of its products and the
provision
by it of its services do not involve infringements or claimed infringement
of any patent, trademark, trade name or copyright. No employee of
the
Corporation owns, directly or indirectly in while or in part, any
patent,
trade-xxxx, trade name, brand name, copyright, invention, process,
know-how, formula or trade secret which the Corporation is presently
using
or the use of which is necessary for the
Business.
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| (13) |
Inventories
- The inventories are in good and merchantable condition and are
usable or
saleable in the ordinary course of business for the purposes for
which
they are intended and are carried on the books of the Corporation
at the
lower of cost and net realizable
value.
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(14)
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Undisclosed
Liabilities - The Corporation has no liabilities (whether accrued,
absolute, contingent or otherwise) of any kind except liabilities
incurred
in the ordinary course of business since June 30, 2006 which are
not
inconsistent with past practice, are not, in the aggregate, material
and
adverse to the business, assets, financial condition or results of
operations of the Corporation, and do not materially violate any
covenant
contained in this Agreement or constitute a material misrepresentation
or
breach of warranty made in or pursuant to this Agreement. Without
limiting
the foregoing, there were reflected or reserved against in the Audited
Financial Statements all material liabilities of a type required
to be so
reflected or reserved against under generally accepted accounting
principles applied consistently with prior years by the Corporation which
the Founder knows or had reasonable grounds to know there was a basis
for
asserting against the Corporation.
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| (15) |
The
audited financial statements of the Corporation dated June 7, 2006,
a copy
of which is attached hereto as Schedule “A”, prepared by FEC, Chartered
Accountants, fairly represent the financial position of the Corporation
as
at December 31, 2005. The Founder represents that the tax loss carry
forwards set forth in Schedule “A” are correct as to their amount and
expiry. The Founder makes no representations or warranties and assumes
no
responsibility as to the usability by the Purchaser of such tax losses
nor
as to any fees, interest charges or penalties that may arise from
the
actual or attempted use of such tax losses by the
Purchaser.
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6.
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Representations
and Warranties of the
Purchaser
|
The
Purchaser covenants, represents and warrants as follows as of the date hereof
and as of the Closing Date and it acknowledges that the Vendors are relying
upon
such covenants, representations and warranties in connection with the purchase
by the Purchaser of the Purchased Shares:
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(1)
|
The
authorized capital of TransAKT Ltd. consists of an unlimited number
of
common voting shares without par value, and an unlimited number of
preferred shares, of which 27,712,619 common voting shares have been
duly
issued and are outstanding as fully paid and non-assessable. In addition
there are approximately Ten Million Seven Hundred Thousand (10,700,000)
common voting shares reserved for issuance under outstanding warrants,
TransAKT Ltd.'s stock option plan, and performance compensation
agreements. There are no preferred shares issued or outstanding or
reserved for issuance to any party.
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(2)
|
The
entering into of this agreement and the transactions contemplated
hereby
will not result in the violation of any of the terms and provisions
of the
constating documents or by-laws of the Purchaser or of any indenture
or
other agreement, written or oral, to which the Purchaser may be a
party.
|
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(3)
|
This
agreement has been duly executed and delivered by the Purchaser and
is a
valid and binding obligation of the Purchaser enforceable in accordance
with its terms.
|
| (4) |
To
the Purchaser’s knowledge, there are no existing or threatened legal
actions or claims against the Purchaser or TransAKT
Ltd.
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| (5) |
The
audited financial statements of TransAKT Ltd.dated April 23, 2006,
a copy
of which is attached hereto as Schedule “B”, prepared by Daunheimer &
Dow LLP, Chartered Accountants, fairly represent the financial position
of
TransAKT Ltd. as at December 31,
2005.
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7.
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Covenants
of the Vendors
|
With
respect to, and only to, each Vendor's personal shareholdings in the
Corporation, each Vendor covenants and agrees with the Purchaser that on or
before the Closing Date, it will take all necessary steps and proceedings to
permit all of the Vendor's Purchased Shares to be duly and regularly transferred
to the Purchaser.
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8.
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Covenants
of the Founder
|
The
Founder covenants and agrees with the Purchaser that on or before the Closing
Date, it will do or will cause to be done the following:
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(1)
|
Arrange
for one director of the Corporation to resign from the board and
for the
remaining board members to nominate in place of the resigning director
a
nominee of the Purchaser, such resignation and nomination to be effective
as at the Closing Date.
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(3)
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Arrange
for all of the key personnel specified in Schedule "D" to enter into
and
deliver at Closing a personal services contract (as set out in Schedule
"E"), in which they shall agree to continue to work for the Corporation,
and to not engage in competition with the Corporation, for a specified
period of time.
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9.
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Covenants
of the Purchaser
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The
Purchaser covenants and agrees with Vendors that on, before or following the
Closing Date, it will do or will arrange for three directors of TransAKT Ltd.
to
resign from the board and for the remaining board members to nominate in place
of the resigning directors three nominees of the Founder, such resignations
and
nominations to be effective as at the Closing Date
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10.
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Survival
of Representations and
Warranties
|
The
representations and warranties of the Vendors, the Founder and the Purchaser
contained in this agreement and contained in any document or certificate given
pursuant hereto shall survive the closing of the purchase and sale of the
Purchased Shares herein provided for, for a period of two years from the Closing
Date.
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11.
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Indemnification
|
The
Founder hereby indemnifies and saves the Corporation and the Purchaser harmless
of and from any cause or claim arising with respect to the Corporation or its
activities prior to the Closing Date that has not otherwise been disclosed
to
the Purchaser prior to the Closing Date. Founder shall remain liable to defend
at its expense any such actions or claims that may arise with respect to the
Corporation or its activities, concerning the time period prior to the Closing
Date. Such indemnity is conditional upon Purchaser not entering into any claim
or action in an adverse position to the Founder or the Corporation.
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12.
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Notices
|
Any
notice, direction or other instrument required or permitted to be given to
the
Vendors, or to the Founder, hereunder shall be in writing and may be given
by
mailing the same postage prepaid or delivering the same addressed to the Vendors
or the Founder at their addresses set out in clause 4.
Any
notice, direction or other instrument required or permitted to be given to
the
Purchaser hereunder shall be in writing and may be given by mailing the same
postage prepaid or delivering the same addressed to the Purchaser
at:
Xxxxx
000, 0000 - 0xx
Xxxxxx
XX
XXXXXXX,
XXXXXXX
X0X
0X0
Any
notice, direction or other instrument aforesaid if delivered, shall be deemed
to
have been given or made on the date on which it was delivered or if mailed,
shall be deemed to have been given or made on the fifth business day following
the day on which it was mailed.
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13.
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Costs
|
Each
of
the parties hereto shall pay its own legal, accounting and other costs and
expenses associated with this transaction and this agreement.
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14.
|
Entire
Agreement
|
This
agreement, and the agreements identified herein to be entered into infurtherance
of this agreement, constitutes the entire agreement between the parties hereto.
There are not and shall not be any verbal statements, representations,
warranties, undertakings or agreements between the parties hereto and this
agreement may not be amended or modified in any respect except by written
instrument signed by the parties hereto.
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15.
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Proper
Law of Contract
|
This
agreement shall be construed and enforced in accordance with, and the rights
of
the parties shall be governed by, the laws of Taiwan, and each of the parties
hereto hereby irrevocably submits and attorns to the jurisdiction of the courts
of Taiwan.
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16.
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Benefit
and Binding Nature of the
Agreement
|
This
agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns.
IN
WITNESS WHEREOF this agreement has been executed by the parties
hereto.
VENDORS
|
______________________________
LIN
XX XXXXXX
|
______________________________
witness
|
|
______________________________
PAN
XX XXXX
|
______________________________
witness
|
|
______________________________
PAN
WAN-I
|
______________________________
witness
|
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______________________________
PAN
XX XXXX
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______________________________
witness
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______________________________
XXXXX
XXXXX HUEI
|
______________________________
witness
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______________________________
XXX
XXXX XXXXX
|
______________________________
witness
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|
______________________________
XXXXX
XXXX AN
|
______________________________
witness
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______________________________
CHENG
XXXX XXXX
|
______________________________
witness
|
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______________________________
XXXXX
XX XXX XXXX
|
______________________________
witness
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______________________________
XXXXX
XXXX XXXX
|
______________________________
witness
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|
______________________________
XXXXX
KO PU
|
______________________________
witness
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|
______________________________
XXXXX
XXX HSIEN
|
______________________________
witness
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FOUNDER
|
______________________________
CHENG
XXXX XXXX
|
______________________________
witness
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TransAKT
Taiwan Limited
per:
|
TransAKT
Ltd.
per:
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|
___________________________
President
|
___________________________
President
|
Schedule
“A”, attached to and forming part of a Share Purchase Agreement made as
of
the
24th
day of August 2006 among All Shareholders of Taiwan Halee
International
Co.
Ltd.,
Xxxxx Xxxx-Xxxx, TransAKT Taiwan Limited and TransAKT Ltd.
Audited
financial statements of the Corporation dated ____________, 200___
Schedule
“B”, attached to and forming part of a Share Purchase Agreement made as
of
the
24th
day of August 2006 among All Shareholders of Taiwan Halee
International
Co.
Ltd.,
Xxxxx Xxxx-Xxxx, TransAKT Taiwan Limited and TransAKT Ltd.
Audited
financial statements of TransAKT Ltd. dated April 23, 2006
Schedule
“C”, attached to and forming part of a Share Purchase Agreement made as
of
the
24th
day of August 2006 among All Shareholders of Taiwan Halee
International
Co.
Ltd.,
Xxxxx Xxxx-Xxxx, TransAKT Taiwan Limited and TransAKT Ltd.
Transactions
of the Corporation not in the ordinary course of business
Schedule
“D”, attached to and forming part of a Share Purchase Agreement made as
of
the
24th
day of August 2006 among All Shareholders of Taiwan Halee
International
Co.
Ltd.,
Xxxxx Xxxx-Xxxx, TransAKT Taiwan Limited and TransAKT Ltd.
Key
Personnel of the Corporation
Schedule
“E”, attached to and forming part of a Share Purchase Agreement made as
of
the
24th
day of August 2006 among All Shareholders of Taiwan Halee
International
Co.
Ltd.,
Xxxxx Xxxx-Xxxx, TransAKT Taiwan Limited and TransAKT Ltd.
Form
of
personal services contract for key personnel of the Corporation
Schedule
“F”, attached to and forming part of a Share Purchase Agreement made as
of
the
24th
day of August 2006 among All Shareholders of Taiwan Halee
International
Co.
Ltd.,
Xxxxx Xxxx-Xxxx, TransAKT Taiwan Limited and TransAKT Ltd.
Material
Contracts
Schedule
“G”, attached to and forming part of a Share Purchase Agreement made as
of
the
24th
day of August 2006 among All Shareholders of Taiwan Halee
International
Co.
Ltd.,
Xxxxx Xxxx-Xxxx, TransAKT Taiwan Limited and TransAKT Ltd.
Intellectual
property of the Corporation
Schedule
“H, attached to and forming part of a Share Purchase Agreement made as
of
the
24th
day of August 2006 among All Shareholders of Taiwan Halee
International
Co.
Ltd.,
Xxxxx Xxxx-Xxxx, TransAKT Taiwan Limited and TransAKT Ltd.
The
Vendors, their shareholdings of the Corporation, and their
entitlement
ot shares of TransAKT Ltd. on Closing
Schedule
"I", attached to and forming part of a Share Purchase Agreement made as
of
the
24th
day of August 2006 among All Shareholders of Taiwan Halee
International
Co.
Ltd.,
Xxxxx Xxxx-Xxxx, TransAKT Taiwan Limited and TransAKT Ltd.
PROMISSORY
NOTE
| US$300,000.00 | August 31, 2006 |
FOR
VALUE
RECEIVED TRANSAKT LTD., a body corporate incorporated under the laws of the
Province of Alberta, does PROMISE TO PAY TO ______________ the sum of THREE
HUNDRED THOUSAND DOLLARS ($300,000.00), without interest, in full six months
from the date of this document.
The
undersigned waives presentment for payment, notice of protest, demand for
payment and notice of non-payment.
| TransAKT Ltd. | ||
| |
|
|
| per: | ||
|
Xxxxx Xx, President |
||
