THIS AGREEMENT made as of the 28th day of February 2002. B E T W E E N: AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC., a corporation incorporated pursuant to the laws of the State of Delaware (hereinafter called "AEAC") OF THE FIRST PART JANG DUK JIN,...
Exhibit 10
THIS AGREEMENT made as of the 28th day of February 2002.
B E T W E E N:
AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC., a corporation incorporated pursuant to the laws of the State of Delaware
(hereinafter called "AEAC")
OF THE FIRST PART
JANG XXX XXX, XXXXX XX JIN, FMG and XXXXX XXX XXXX all of Seoul, Korea
(hereinafter collectively referred to as the "Vendors")
OF THE SECOND PART
- and -
CYPER ENTERTAINMENT INC., a corporation incorporated pursuant to the laws of Republic of Korea
(hereinafter called "Cyper")
OF THE THIRD PART
WHEREAS the Vendors are the owners, or representatives authorized to sell by the owners, of 1,235,000 common shares in the capital of Cyper, being 100% of the issued and outstanding shares of Cyper (the "Sold Shares");
AND WHEREAS the Vendors desires to sell and AEAC desires to purchase the Sold Shares as hereinafter defined, on the terms and conditions set forth;
WITNESSETH THAT in consideration of the covenants, agreements, warranties and payments herein set forth and provided for, the parties hereto respectively covenant and agree as follows:
1.0 Defined Terms
1.1 Where used herein or in any amendments hereto, the following terms shall have the following meanings respectively:
1.1.1 "Closing", "Date of Closing" or "Time of Closing" each mean the time and date of
the completion of the transaction of purchase and sale herein contemplated which
will be 2:00 o'clock in the afternoon (Eastern Standard Time) on or before the 22nd day of March at the Place of Closing or such other time and date as the parties may agree in writing.
1.1.2 "Place of Closing" shall be at the offices of AEAC, 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx X0X 0X0
1.1.3 "AEAC Business" means the business now and heretobefore carried on by AEAC
1.1.4 "Cyper Business" means the business of Cyper now and heretobefore carried on by Cyper.
1.1.5 Schedule "A" shall form part of this Agreement
2.0 Purchase and Sale of Shares
2.1 In consideration of the issue by AEAC to the Vendors on Closing of Twenty Million (20,000,000) fully paid and nonassessable common shares without par value in the capital of AEAC (the "Purchased Shares") which may carry restrictions as set out by the U.S. Securities and Exchange Act of 1933, the Vendors agree to sell, assign and transfer unto AEAC and AEAC agrees to purchase from the Vendors the Sold Shares. The number of Sold Shares acquired by AEAC shall be one hundred percent (100%) of the issued and outstanding shares of Cyper as at Closing. The value of the Purchased Shares reflects a valuation of Cyper of a minimum of One Million Dollars ($1,000,000.00) based AEAC's share price being $0.05 per share.
3.0 Representations of Warranties of AEAC
3.1 AEAC hereby covenants, represents and warrants to the Vendors and to Cyper as of Closing (unless otherwise stated) as follows:
3.1.1 AEAC is a corporation duly incorporated, organized and validly existing and is in good standing under the laws of the State of Delaware and has corporate power to own its properties and interests and to carry on its business in each jurisdiction where it carries on business.
3.1.2 The authorized capital of AEAC consists of Seventy Million (70,000,000) shares of which Fifty Million (50,000,000) shares with a par value of $0.0001 are common stock and Twenty Million (20,000,000) shares with a par value of $0.0001 are preferred stock. Currently, there are 6,868,566 common shares issued and outstanding, all of which are fully paid and non-assessable
3.1.3 Except as otherwise described herein, no other person, firm or body corporate has any agreement, option, right or privilege (whether pre-emptive or contractual) capable of becoming an agreement (including convertible securities, warrants or convertible obligations of any nature) for any purchase, subscription, or issuance of any of the unissued shares of the capital of AEAC, save and except for the current directors and officers of AEAC and three (3) former employees of the Company who have options to purchase shares in AEAC.
3.1.4 AEAC is not a party to any agreement of guarantee, indemnification or assumption of the obligations of a third party or other like commitment.
3.1.5 AEAC is a reporting issuer in good standing under the laws of the United States Securities Commission and is up-to-date in all its filings.
3.1.6 Any corporate actions taken by AEAC which require shareholder authorization will be validly and duly authorized.
3.1.7 The books and records of AEAC fairly set out and disclose in all material respects and in accordance with generally accepted accounting principles applied on a basis consistent with all financial periods prior to Closing its financial position up to September 30, 2001.
3.1.8 The corporate records and minute books of AEAC contain a complete and accurate record of all resolutions of its Directors and Shareholders passed since its incorporation and all resolutions have been passed in accordance with its Articles of Incorporation, Articles of Amendment, By-laws and the relevant laws of the State of Delaware.
3.1.9 No dividends or other distributions on any shares of AEAC have been declared, paid or authorized since September 30, 2001 or will be declared, paid or authorized up to the Closing.
3.1.10 AEAC is not under any agreement to create or issue any bonds, debentures, mortgages, notes or other indebtedness.
3.1.11 There is no action, suit or proceeding pending or threatened against AEAC or affecting AEAC at law or in equity.
3.1.12 AEAC in carrying on its business is not knowingly in substantial breach of any laws, regulations, orders, rulings or policies of any governmental authority having jurisdiction.
3.2 AEAC acknowledges and confirms that the Vendors are relying on the covenants, representations and warranties set out in Paragraph 3.1 in connection with the purchase and sale of the Purchased Shares.
4.0 Representations and Warranties of Cyper
4.1 Cyper hereby covenants, represents and warrants to AEAC as at the date hereof and as at Closing (unless otherwise stated):
4.1.1 The Vendors own, or are authorized to sell, all of the issued and outstanding shares of Cyper.
4.1.2 Cyper is duly incorporated, organized and in good standing and has the corporate power to carry on its business and is duly qualified and in good standing in each jurisdiction in which it carries on business.
4.1.3 The authorized capital of Cyper consists of 50,000,000 common shares of which 1,235,000 common shares are issued and outstanding, all being fully paid and non-assessable and no other shares of any class have been issued.
4.1.4 The corporate records and minute books of Cyper contain complete and accurate records of all resolutions of the Directors and Shareholders passed since its incorporation, and all resolutions have been passed in accordance with the Articles of Incorporation and By-laws therefor and the applicable statute law. The share certificate books, registers of Shareholders, registers of transfers and registers of Directors of Cyper are complete and accurate.
4.1.5 (a) Cyper is not under any agreement to create or issue any bonds, debentures, mortgages, notes or other indebtedness not disclosed herein.
(b) Cyper is not a party to any material contract, written employment or agency agreement or other like commitment, expressed or implied, written or oral, unless made in the usual and ordinary course of business or which is specifically disclosed herein. Cyper is not in default of or in breach of any material contract, agreement or commitment and all such material contracts, agreements or commitments are in good standing, and there is no default or claim of default by any party thereto.
(c) There is no action, suit or proceeding pending or threatened against Cyper at law or in equity not disclosed herein which would have a material adverse financial impact.
(d) In carrying on its business, Cyper is not knowingly in material breach of any laws, regulations, orders, rulings or policies of any governmental authority having jurisdiction whether federal, state or municipal.
(e) Cyper is not now in default or in breach of any material contract, agreement or like commitment.
Cyper acknowledges and confirms that AEAC is relying on the covenants, representations and warranties set out in this Paragraph 4.1 in connection with the purchase by AEAC of the Sold Shares.
4.2 The Vendors hereby represent and warrants to AEAC that as of the date hereof and unless otherwise stated as of Closing:
4.2.1 All of the Sold Shares are owned or authorized to sell by the Vendors as the beneficial owners of record, with a good and marketable title thereto, free and clear of all mortgages, liens, charges, security interests, adverse claims, pledges, encumbrances and demands of any kind whatsoever.
4.2.2 No person, firm or corporation has any agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase from the Vendors any of the Sold Shares.
4.2.3 No person, firm or corporation has any agreement or option or any right or privilege, whether by law, pre-emptive or contractual, capable of becoming an agreement including convertible securities, warrants or convertible obligations of any nature for the purchase, subscription, allotment or issuance of any of the unissued shares in the capital stock of any securities of Cyper, except that Industrial Bank of Korea hold convertible bonds, amount of KRW 980,000,000, issued on the 26th day of December 2000, exercisable at the price of KRW 3,500 per share.
4.2.4 The books and records of Cyper fairly and correctly set out and disclose in all material respects the financial position of Cyper as of that date, and there have been no material changes as of the date hereof and all material financial transactions of Cyper relating to its business have been accurately recorded in such books and records.
4.2.5 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 respective constating documents or by-laws of Cyper or any indenture or other agreement written or oral to which Cyper and/or the Vendors may be parties, and that the entering into of this agreement and the transactions contemplated hereby will not result in the violation of any law or regulation which may be material to its business or to the transactions herein contemplated and the Vendors consent to the transfer of the Sold Shares to AEAC and releases any claim to any right of first refusal or options to purchase the Sold Shares.
5.0 Survival of Representations and Warranties
5.1 All warranties and representations set forth in this Agreement shall not merge on Closing but shall survive Closing and shall continue to be and remain binding upon the parties hereto. In the event that any one or more of the warranties and representations of any party hereto (the "Defaulting Party") shall not have been fulfilled or at Closing shall be untrue, the other party shall have the right to withdraw from the contract resulting from the execution of this Agreement without liability or obligation.
6.0 Conditions of Closing
6.1 The sale and purchase of the Sold Shares are subject to the following terms and conditions being fulfilled or performed prior to or at Closing:
6.1.1 All of the covenants, representations and warranties of AEAC set forth in Paragraph 3.1 hereof shall be complete and correct at and as of Closing, as though such covenants, representations and warranties were made at and as of Closing.
6.1.2 All the covenants, representations and warranties of Cyper set forth in Paragraph 4.1 hereof shall be complete and correct at and as of Closing, as though such covenants, representations and warranties were made at and as of Closing.
6.1.3 All of the covenants, representations and warranties of the Vendors set forth in Paragraph 4.2 hereof shall be complete and correct at and as of Closing, as though such covenants, representations and warranties were made at and as of Closing.
6.1.4 AEAC shall make available to the authorized representatives of the Vendors, at all reasonable times from the date hereof to Closing, all books, accounts, records, Financial Statements, income tax assessments for all past fiscal periods, charter documents, minute books and other corporate records, contracts, leases, insurance policies and similar instruments and will allow such representatives of the Vendors reasonable access to its premises during normal business hours.
6.1.5 Cyper shall forward to the authorized representatives of AEAC copies of all books, accounts, records, Financial Statements, income tax assessments for all past fiscal periods, charter documents, minute books and other corporate records, contracts, leases, insurance policies and similar instruments as required by such representatives of AEAC.
6.1.6 AEAC represents that it has full power and authority to issue and deliver the Purchased Shares to the Vendors and that all necessary legal or other corporate proceedings to be taken by AEAC to make the same effective have been taken.
6.1.7 The Vendors represent that they have full power and authority to sell, transfer, assign and deliver the Sold Shares to AEAC and that all necessary legal or other corporate proceedings to be taken to make the same effective have been taken and that the directors of Cyper have approved this purchase and sale and all of its terms and conditions.
6.1.8 The By-Laws of AEAC state that the Board of Directors of AEAC shall consist of a maximum of seven (7) Directors, however, such number may be fixed from time to time. Xxxxxx Xxxxxxxx shall remain as a Director of AEAC and shall be entitled to nominate one (1) other Director to the Board. Any additional nomination of Directors to the Board shall be at the discretion of the Vendors, subject to applicable laws.
6.1.9 If any one or more of the conditions set forth in Paragraphs 6.1.1 to 6.1.9 inclusive to be fulfilled by AEAC are not fulfilled by AEAC on or before Closing, then the Vendors may waive any or all of such condition or conditions without prejudice to the fulfilment of any other condition or conditions or his rights hereunder and may require AEAC to complete the purchase and sale or in the alternative withdraw from this contract without further obligation or liability.
6.1.10 If any one or more of the conditions set forth in Paragraphs 6.1.1 to 6.1.9 inclusive to be fulfilled by Cyper or the Vendors are not fulfilled on or before Closing then AEAC may waive such condition or conditions without prejudice to the fulfilment of any other condition or conditions and may require Cyper and the Vendors to complete the purchase and sale or in the alternative withdraw from this contract without further obligation or liability.
7.0 Closing
7.1 On closing the matters hereinafter set out shall be completed:
7.1.1 All the conditions to be fulfilled by AEAC in Paragraph 6.1, if not specifically waived by Cyper and/or the Vendors, shall be fulfilled.
7.1.2 All the conditions to be fulfilled by the Vendors in Paragraph 6.1, if not specifically waived by AEAC, shall be fulfilled.
7.1.3 All necessary steps and proper corporate proceedings shall be taken to permit the Sold Shares to be duly and regularly transferred to AEAC.
7.1.4 At the Time of Closing, the Vendors shall deliver to AEAC certificates representing all the Sold Shares.
7.1.5 At the Time of Closing, AEAC shall deliver to the Vendors share certificates representing the Purchased Shares. This delivery shall be contingent upon AEAC receiving auditied financial statements of Cyper for the two (2) fiscal years on or before Closing, as well as an independent, third party valuation report prepared by a qualified valuator confirming a valuation of Cyper at a minimum of One Million Dollars $1,000,000.00. Cyper hereby promises to deliver the above-mentioned audited financial statement until the 10th day of March in its initial draft and the 13th day of March in its final edition.
7.1.6 At the Time of Closing, the Vendors shall deliver to AEAC the Sold Shares. In addition, the lawyer of Cyper will deliver to the counsel for AEAC a legal opinion that the representations and warranties set out in Paragraphs 4.1 and 4.2 are true and correct as at Closing.
8.0 Return of Documents
8.1 In the event that this transaction shall not be closed in accordance with the provisions hereof, Cyper and the Vendors shall return to AEAC all books, accounts, records and other data of AEAC that are in their possession, and also any copies thereof which shall have been made and AEAC shall return to Cyper and the Vendors all books, accounts, records and other data of Cyper and the Vendors that are in its possession, and also any copies thereof which shall have been made.
9.0 Further Assurances Only
9.1 The parties hereto shall and will execute such further and other papers and documents and do and perform and cause to be done and performed such further acts and things as are necessary in order to give full effect to this Agreement and to every part thereof.
10.0 Notice
10.01 Any notice required or permitted to be given for the purposes of this Agreement shall be in writing and shall be sufficiently given if personally delivered, sent by facsimile transmission or sent by telegram or registered letter, postage prepaid and:
(a) If to AEAC, addressed to it at:
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax: 000-000-0000
(b) If to the Vendors, addressed to them at:
c/o Jong Xxx Xxx
Asia Investment Partners, Inc.
Samdong Xxxx
0000-0 Xxxxxx-0-xxxx, Xxxxxx-xx
Xxxxx, Xxxxx
Fax: 00-0-000-0000
(c) If to Cyper addressed to it at:
c/o Jong Xxx Xxx
Asia Investment Partners, Inc.
Samdong Xxxx
0000-0 Xxxxxx-0-xxxx, Xxxxxx-xx
Xxxxx, Xxxxx
Fax: 00-0-000-0000
and if mailed, such notice shall be deemed to have been given on the fifteenth business day following the day on which it is mailed, provided however, if at the time of mailing any of such notice, normal postal service shall have been interrupted through strikes or other similar irregularities, then such notice shall be deemed to have been received on the fifteenth day following the resumption of normal mail service. If served, such notice shall be deemed to be received on the date so served.
11.0 General Provisions
11.1 Time shall be of the essence of this Agreement and of every part thereof.
11.2 This Agreement shall not be assignable by AEAC or the Vendors and shall be binding upon each of the parties hereto and their respective heirs, executors, administrators or successors.
11.3 This agreement constitutes the entire agreement between the parties and, except as herein stated and in the instruments and documents to be executed and delivered pursuant hereto, contains all the representations and warranties of the respective parties. There are no verbal statements, representations, warranties, undertakings or agreements between the parties. This Agreement may not be amended or modified in any respect, except by a written instrument signed by all parties.
11.4 Unless stated otherwise in this Agreement, all covenants, terms and obligations, representations and warranties of this Agreement shall survive the Closing and remain in full force and effect notwithstanding such Closing.
11.5 The Closing shall take place on the Date of Closing at the Place of Closing.
11.6 The headings and marginal descriptions of all paragraphs herein are inserted for convenience of reference only and shall not affect the constructions or interpretations of this Agreement.
11.7 Whenever the singular or masculine is used in this Agreement they shall mean and include the plural, masculine, neutral and feminine or vice versa, as the context of the Agreement shall require.
11.8 All amounts referred to in this Agreement shall be in United States dollars, unless otherwise specified.
11.9 This Agreement may be executed in counterpart, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Such counterparts shall together constitute one and the same instrument. A faxed copy signed by the parties hereto shall be considered an original copy of the Agreement.
11.10 This Agreement shall be construed in accordance with the laws of the Province of Ontario.
11.11 The Parties acknowledge that all documents provided or required to be provided herein which are not in English shall be accompanied by a certified English translation.
11.12 The Parties acknowledge that Xxxx Xxxxx shall receive a finders' fee equal to five percent (5%) of the number of shares issued to the Vendors payable in restricted shares of AEAC.
IN WITNESS WHEREOF the corporate parties hereto have hereunto affixed their corporate seals duly attested by the hands of the proper officers in their respective behalves and the individual parties have hereunto set their hands and seals.
SIGNED, SEALED AND DELIVERED AMERICAN ELECTRIC AUTOMOBILE COMPANY, INC.
Per:___________________________
A.S.O.
CYPER ENTERTAINMENT INC.
Per:_____________________________
A.S.O.
________________________________
JANG XXX XXX
________________________________
XXXXX XX JIN
FMG
Per:________________________________
A.S.O.
___________________________________
XXXXX XXX XXXX
SCHEDULE "A"
This is Schedule "A" to the Agreement dated February 28th between American Electric Automobile Company Inc., Jang Xxx Xxx, Xxxxx Xx Jin, FMG, Xxxxx Xxxx Xxxxx and Cyper Entertainment Inc. and specifies further terms and conditions of the Agreement.
1. Cyper Entertainment America Inc. (or another Canadian corporation with such name as approved by the Government of Canada ("Cyper America") will be incorporated pursuant to the laws of the Dominion of Canada to act as Cyper Entertainment Inc.'s North American subsidiary. AEAC's purchase of the Sold Shares Of Cyper will include 100% of the shares of Cyper America to the effect that both Cyper and Cyper America will be wholly-owned subsidiaries of AEAC.
2. Cyper's attorney will provide further details regarding Cyper's outstanding debts to Industrial Bank of Korea, Hana Bank and Nice Storm Media to the satisfaction of AEAC and its attorneys.
3. Cyper's attorney will provide further details regarding the Convertible Debenture being held by Industrial Bank of Korea, with amended terms to the satisfaction of AEAC and its attorneys.
4. Cyper and/or Cyper America will provide AEAC with $20,000 on closing to cover AEAC's annual auditor's fees.
5. Bisell Investments Inc. ("Bisell") will enter into a consulting agreement with AEAC for an intial 12 month period commencing May 1, 2002 wherein Bisell will receive $10,000 per month for the ongoing administration, compliance, fund raising and maintenance of AEAC as a publicly traded company. Such fees shall be financed to AEAC by Cyper/Cyper America.
6. In the event that Cyper/Cyper America do not provide sufficient funding in order to satisfy AEAC's public company compliance requirements with respect to auditing, administration and additional legal fees for a minimum of 12 months from the /closing, then Bisell shall have the right at its sole discretion and subject to regulatory compliance, to require AEAC to return the Sold Shares to the Vendors and the Vendors shall be required to return the Purchased Shares to AEAC, which Purchased Shares shall be returned to AEAC's treasury.
7. The current directors and officers of AEAC shall be entitled to receive compensation for management services provided from October 1, 2001 up to and including the Closing Date, such compensation to be provided in the form of shares of AEAC.
8. The Closing shall take place on or before March 22, 2002.
AMERICAN ELECTRIC
AUTOMOBILE COMPANY INC.
Per:__________________________.
A.S.O.
CYPER ENTERTAINMENT INC.
Per:__________________________.
A.S.O.
______________________________.
JANG XXX XXX
______________________________.
XXXXX XX JIN
FMG
Per:__________________________.
A.S.O.
______________________________.
JEONG XXX XXXX
