SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT is made as at the 9th day of April, 2001.
AMONG:
Xxxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxx Xxxxxxx and Xxxx Xxxxxxxxx, all care of Xxxxx 0000, 000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx, X.X.X. 00000
(collectively called the "Vendors" and individually called a "Vendor")
OF THE FIRST PART
AND:
Xxxxxxxx.xxx Enterprises Inc., having an office at Suite 1500, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0
("Clipclop")
OF THE SECOND PART
AND:
USe-Store, LLC, a limited liability company duly incorporated under the laws of the State of California and having a place of business at Xxxxx 0000, 000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx, X.X.X. 00000
(the "Company")
OF THE third PART
WHEREAS:
A. The Company is engaged in the business of operating a virtual shopping mall on the Internet under the domain name xxx.XXx-Xxxxx.xxx;
B. The Vendors are each members holding all of the membership interests in the capital of the Company;
C. Clipclop wishes to acquire all of the Vendors' Interests (as defined herein) in exchange for the issuance of 15,000,000 shares in the common stock of Clipclop; and
D. Based upon the representations and warranties set forth herein, the Vendors have agreed to sell and Clipclop has agreed to acquire the Vendors' Interests on the terms and conditions and for the consideration set forth herein.
WITNESSES THAT in consideration of the premises and of the respective warranties, representations, covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE 1
INTERPRETATION AND DEFINITIONS
1.1 Interpretation
For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) this "Agreement" means this Agreement and all Schedules attached hereto;
(b) any reference in this Agreement to a designated "Article", "Section", "Schedule" or other subdivision refers to the designated Article, Section, Schedule or other subdivision of this Agreement;
(c) the words "herein" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision of this Agreement;
(d) the word "including", when following any general statement term or matter, is not to be construed to limit such general statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limited language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto but rather refers to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter;
(e) any reference to a statute includes and, unless otherwise specified herein, is a reference to such statute and to the regulations made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute or regulations that may be passed which has the effect of supplementing or superseding such statute or such regulation; and
(f) words importing the masculine gender include the feminine or neuter gender and words in the singular include the plural, and vice versa.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE VENDORS
2.1 Representations and Warranties of the Vendors
The Vendors represent and warrant, jointly and severally, to Clipclop, as continuing representations and warranties which are true and correct on the date hereto or, if any such representation and warranty is expressed to be made and given in respect of a particular date other than the date hereto, then such representation and warranty shall be true and correct on the earlier of such date or the Closing Date (as defined herein), and all representations and warranties herein shall be true and correct on each day thereafter to and including the Closing Date with the same effect as if made and given on and as of each such day, that:
|
Name of Vendor |
% of Total Membership |
|
Xxxxxxxx Xxxxxx |
31.25% |
|
Xxxxx Xxxx |
31.25% |
|
Xxxx X. Xxxxxxx |
25.00% |
|
Xxxx Xxxxxxxxx |
12.50% |
(c) the Vendors' Interests represent 100% of the Company's issued and outstanding membership interests;
(d) no person, firm or corporation has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option to purchase or otherwise acquire any of the Vendors' Interests;
(e) each Vendor has the full and absolute right, power and authority to enter into this Agreement on the terms and subject to the conditions herein set forth, to carry out the transactions contemplated hereby and to transfer to Clipclop on the Closing Date, legal and beneficial title and ownership of his portion of the Vendors' Interests;
(f) each of the Vendors acknowledges that the Exchange Shares (as defined herein) to be issued pursuant to this Agreement have not been registered pursuant to the securities laws of any jurisdiction and are being issued pursuant to exemptions from registration contained in the Securities Act (British Columbia)(the "B.C. Securities Act") and the United States Securities Act of 1933, as amended (the "1933 Act"), and the Exchange Shares may only be sold in a jurisdiction in accordance with the restrictions on resale prescribed under the laws of the jurisdiction in which such shares are sold, all of which may vary depending on the jurisdiction;
(g) each of the Vendors is aware that Clipclop is a "reporting issuer" as defined in the B.C. Securities Act and as a consequence the Exchange Shares are restricted from transfer within the province of British Columbia for a period of twelve (12) months after issuance; and
(h) each of the Vendors has duly and validly authorized, executed and delivered this Agreement.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE VENDORS AND THE COMPANY
3.1 Representations and Warranties
The Vendors and the Company represent and warrant, jointly and severally, to Clipclop, as continuing representations and warranties which are true and correct on the date hereof or, if any such representation and warranty is expressed to be made and given in respect of a particular date other than the date hereof, then such representation and warranty shall be true and correct on the earlier of such date or the Closing Date, and all representations and warranties herein shall be true and correct on each day thereafter to and including the Closing Date with the same effect as if made and given on and as of each such day, that:
(a) the Company is duly incorporated, validly existing and in good standing under the laws of the State of California and in each other jurisdiction in which they carry on business or hold assets and the Company has the necessary corporate capacity to carry on the business which they now carry on in such jurisdictions and to own the assets which they now own;
(b) all membership interests of the Company are held by the Vendors and represent 100% of the membership interests of the Company;
(c) no person, firm or corporation has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option to require the Company to issue any membership interests in its capital or to convert any securities of the Company or of any other company into membership interests in the capital of the Company;
(d) the members and officers of the Company are as follows:
|
Name |
Position |
|
Xxxxx Xxxx |
Secretary |
|
Xxxxxxxx Xxxxxx |
President |
|
Xxxx Xxxxxxxxx |
Vice-President |
|
Xxxx Xxxxxxx |
Vice-President |
(e) the corporate records of the Company, as required to be maintained by it under its statute of incorporation and constating documents, are accurate, complete and up-to-date in all material respects and all material transactions of the Company have been promptly and properly recorded in its books or filed with its records;
(f) the Company's financial statements for the period ending December 31, 2000 (the "Company's Financial Statements") are true and correct in every material respect, and have been prepared in accordance with generally accepted accounting principles and fairly reflect on a consolidated basis the business, property, assets and financial position of the Company as at the date of the Company's Financial Statements and the results of its operations for the period then ended;
(g) other than as disclosed to Clipclop, the Company does not have any liability, due or accruing, contingent or absolute, and is not directly or indirectly subject to any guarantee, indemnity or other contingent or indirect obligation with respect to the obligation of any other person or company not shown or reflected in the Company's Financial Statements, other than any such liability, guarantee, indemnity or obligation incurred or assumed by it in the course of their normal and ordinary day to day business and no such liability, guarantee, indemnity or obligation has been paid or discharged by the Company after the date of the Company's Financial Statements other than in the course of its normal and ordinary day to day business;
(h) the Company does not beneficially own, directly or indirectly, any securities of any kind whatsoever in any other corporate entity;
(i) the Company has good and marketable title to all of its assets, and such assets are free and clear of any financial encumbrances not disclosed in the Company's Financial Statements;
(j) the Company holds all permits, licenses, consents and authorizations issued by any government or governmental authority which are necessary in connection with the operation of its business and the ownership of its properties and assets and all such permits, licenses, consents and authorizations are in good standing and are not terminable on the basis of a transfer of ownership of the Vendors' Interests;
(k) the Company has filed all necessary tax returns in all jurisdictions required to be filed by it, all returns affecting workers, compensation with the appropriate agency, corporation capital tax returns, if required, and any other material reports and information required to be filed by the Company with any governmental authority; the Company has paid all income, sales and capital taxes payable by it as and when due; the Company has withheld and remitted to tax collection authorities such taxes as are required by law to be withheld and remitted as and when due; the Company has paid all instalments of corporate taxes due and payable, and there is not presently outstanding and nor does the Company expects to receive any notice of re-assessment from any applicable tax collecting authority;
(l) the Company has not declared or paid any distributions of any kind whatsoever including, without limitation, by way of redemption, repurchase or reduction of its authorized capital;
(m) there has been no material adverse change in the financial condition and position of the Company and no damage, loss destruction or other change in circumstances materially affecting the business, property or assets of the Company or its right or capacity to carry on business since the date of the Company's Financial Statements;
(n) after the date of the Company's Financial Statements, the Company has not engaged in any transaction or made any disbursement or assumed or incurred any liability or obligation or made any commitment, including, without limitation, any forward purchase commitment or similar obligation, to make any expenditure which would materially affect their operations, property, assets or financial condition;
(o) the Company has not waived or surrendered any right of substantial value and has not made any gift of money or of any of its property or assets;
(p) the Company has carried on business in the normal course;
(q) other than as disclosed to Clipclop, the Company does not have outstanding any material continuing contractual obligations whatsoever relating to or affecting the conduct of its business or any of its property or assets or for the purchase, sale or leasing of any property other than those contracts entered into by the Company in the course of their normal and ordinary day to day business, all of which are terminable on 30 days' notice without penalty;
(r) other than as disclosed to Clipclop, there are no management contracts or consulting contracts to which the Company is a party or by which it is bound, and save and except as disclosed in the Company's Financial Statements, no amount is payable or has been agreed to be paid by the Company to any persons as remuneration, pension, bonus, share of profits or other similar benefit and no officer or member, or former officer or member, of the Company, nor any associate or affiliate of any such person, has any claim of any nature against, or is indebted to the Company;
(s) the Company is not in default under or in breach of, or would, after notice or lapse of time or both, be in default under any contract, agreement, indenture or other instrument to which it is a party or by which it is bound nor will the consummation of the transactions contemplated hereby conflict with, constitute a default under, result in a breach of, entitle any person or company to a right of termination under, or result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever upon or against the property or assets of the Company, under its constating documents, any contract, agreement, indenture or other instrument to which the Company is a party or by which it is bound, any law, judgment, order, writ, injunction or decree of any court, administrative agency or other tribunal or any regulation of any governmental authority, and all such contracts, agreements, indentures, or other instruments are in good standing and the Company is entitled to all benefits thereunder;
(t) there are no claims threatened or against or affecting the Company nor are there any actions, suits, judgments, proceedings or investigations pending or, threatened against or affecting the Company, at law or in equity, before or by any Court, administrative agency or other tribunal or any governmental authority;
(u) neither the Company nor any of the Vendors are aware of any infringement by the Company of any registered patent, trademark or copyright;
(v) the Company shall obtain and maintain until the Closing Date such insurance against loss or damage to its assets and with respect to public liability as is reasonably prudent for companies carrying on businesses similar to that of the Company;
(w) the execution, delivery and performance of this Agreement has been duly and validly authorized and approved by the Company's board of directors, and the Company has the corporate power and authority to execute, deliver and perform this Agreement and such other instruments as appropriate to consummate the transactions herein contemplated, to perform and comply with all of the terms, covenants and conditions to be performed and complied with by the Company hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby;
(x) this Agreement constitutes a valid and binding obligation of the Company, and is enforceable against the Company in accordance with its terms, except as the enforceability may be affected by bankruptcy, insolvency or similar laws affecting creditor's rights generally or court applied equitable remedies;
(y) neither the Company nor any of the Vendors are aware of nor has either failed to disclosed to Clipclop any change, event or circumstance which would adversely affect the business or the assets of the Company or the prospects, operation or condition of the Company or which would reasonably be considered to reduce the value of the business of the Company or the value of Vendors' Interests to Clipclop;
(z) neither the Company nor any of the Vendors have made any untrue statement to Clipclop nor has either failed to state a material fact that is required to be stated or that is necessary to prevent a statement that is made from being materially false or misleading in the circumstances in which it was made;
(aa) all of the assets of the Company are in good working order and to the best of each of the Vendors' knowledge contain no latent defects;
(bb) the Vendors have disclosed to Clipclop all contracts, engagements and commitments, whether oral or written, relating to the Company; and
(cc) all alterations, if any, to the articles of incorporation of the Company since its incorporation have been duly approved by the shareholders of the Company.
3.2 Covenants of the Vendors and the Company
Each of the Vendors and the Company, joint and severally, covenant and agree with the Purchaser that:
(a) both before and after the Closing Date, each of the Vendors and the Company shall execute and do all such further deeds, acts, things and give such assurances as may be required in the reasonable opinion of Clipclop's counsel to consummate the transactions contemplated hereby and referenced herein; and
(b) each of the Vendors and the Company will give to Clipclop and its counsel, accountants and other representatives full access, during normal business hours throughout the period prior to the time of Closing, to all of the properties, books, contracts, commitments and records of the Company and will furnish to counsel for Clipclop during such period all such information as Clipclop or counsel for Clipclop may reasonably request.
3.3 Covenants of the Company
The Company covenants and agrees with Clipclop that the Company shall not, prior to the Closing Date, except with the prior written consent of Clipclop:
(a) make or permit to be made any employment contracts or other arrangements with any directors, officers, agents, servants or employees of the Company;
(b) make or assume or permit to be made or assumed any commitment, obligation or liability which is outside of the usual and ordinary course of the business of the Company, and for the purpose of carrying on the same, but the Company will operate its properties and carry on their businesses as heretofore and will maintain all of its properties, rights and assets in good standing, order, and repair;
(c) declare, pay or make any distributions or appropriations of profits or capital;
(d) create or assume any indebtedness other than in the ordinary course of business or guarantee the obligations of any third party; or
(e) sell or otherwise in any way alienate or dispose of or encumber any of its assets;
provided however, that the Company shall, both before and after the Closing Date, execute and do all such further deeds, acts, things and give such assurances as may be required in the reasonable opinion of Clipclop's counsel to consummate the transactions contemplated herein, and shall, without limitation, use its best efforts to obtain any approvals from third parties as may be required to all of the transactions contemplated hereby and referenced herein.
3.4 Covenants of the Vendors, the Company and Clipclop
Each of the Vendors, the Company and Clipclop covenant and agree to co-operate and do all such further deeds, acts, things and give such assurances as may be reasonably required in the circumstances to structure the transactions contemplated herein so that the sale of the Vendors' Interests can be made on a tax free or on a tax deferred roll-over basis, if reasonably available.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF CLIPCLOP
4.1 Representations and Warranties
Clipclop represents and warrants to the Vendors, as continuing representations and warranties which are true and correct on the date hereof or, if any such representation and warranty is expressed to be made and given in respect of a particular date other than the date hereof, then such representation and warranty shall be true and correct on such date, and all representations and warranties herein shall be true and correct on each day thereafter to and including the Closing Date with the same effect as if made and given on and as of each such day, that:
(a) Clipclop is a company duly incorporated, validly existing and in good standing under the laws of the Province of British Columbia, Canada and has the necessary corporate capacity and is fully qualified in the Province of British Columbia and each other jurisdiction in which it carries on business or holds assets to carry on the business which it now carries on and to hold the assets which it now holds;
(b) as of March 15, 2001, the authorized capital of Clipclop consists of 42,557,285 common shares without par value, of which shares have been validly issued and are outstanding and are fully paid and non-assessable;
(c) no person or company has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option to require Clipclop to issue any share in its capital or to convert any securities of Clipclop of any other company into shares in its capital other than as disclosed by Clipclop to the Vendors;
(d) Clipclop holds all permits, licenses, consents and authorities issued by any government or governmental authority which are necessary in connection with the operations of its business and of the ownership of its business and of the ownership of its properties and assets;
(e) Clipclop has filed all necessary federal and provincial tax returns affecting workers, compensation with the appropriate agency, corporation capital tax returns and any other reports and information required to be filed by Clipclop with any governmental authority; Clipclop has paid all federal, provincial and foreign income, sales and capital taxes payable by it; Clipclop has withheld and remitted the appropriate taxes to the Minister of National Revenue; Clipclop has paid all instalments of corporate taxes due and payable, and there is not presently outstanding any notice of re-assessment from the Minister of National Revenue or any applicable tax collecting authority;
(f) Clipclop has not declared or paid any dividends of any kind nor declared nor made any other distributions of any kind whatsoever including, without limitation, by way of redemption or repurchase of Clipclop's common shares or deduction of capital;
(g) Clipclop's Financial Statements for the period ended September 30, 2000 ("Clipclop's Financial Statements") are true and correct in every material respect, were prepared in accordance with generally accepted accounting principles and fairly reflect the business, property, assets and financial position of Clipclop as at the date of Clipclop's Financial Statements and the results of its operations for the period then ended and there are no liabilities of Clipclop, contingent or otherwise, not reflected in Clipclop's Financial Statements;
(h) there has been no material adverse change in the financial condition and position of Clipclop and no damage, loss destruction or other change in circumstances materially affecting the business, property or assets of Clipclop or its right or capacity to carry on business since the date of Clipclop's Financial Statements;
(i) Clipclop has no liability, due or accruing, contingent or absolute, and is not directly or indirectly subject to any guarantee, indemnity or other contingent or indirect obligation with respect to the obligation of any other person or company not shown or reflected in Clipclop's Financial Statements, other than any such liability, guarantee, indemnity or obligation incurred or assumed by Clipclop in the course of its normal and ordinary day to day business and no such liability, guarantee, indemnity or obligation has been paid or discharged by Clipclop after the date of Clipclop's Financial Statements other than in the course of Clipclop's normal and ordinary day to day business;
(j) Clipclop has not waived or surrendered any right of substantial value and has not made any gift of money or of any of its property or assets;
(k) Clipclop has carried on its business in the normal course;
(l) Clipclop does not have outstanding any material continuing contractual obligations whatsoever relating to or affecting the conduct of its business or any of its property or assets or for the purchase, sale or leasing of any property other than those contracts entered into by it in the course of its normal and ordinary day to day business;
(m) there are no management contracts or consulting contracts to which Clipclop is a party or by which it is bound, no amount is payable or has been agreed to be paid by Clipclop to any person as remuneration, pension, bonus, share of profits or other similar benefit, and no director, officer or member, or former director, officer or member, of Clipclop, nor any associate or affiliate of any such person, has any claims of any nature against, or is indebted to Clipclop;
(n) Clipclop is not in default under or in breach of, or would, after notice or lapse of time or both, be in default under or in breach of, and neither this Agreement nor the consummation of the transactions contemplated hereby will conflict with, constitute a default under, result in a breach of, entitle any person or company to a right of termination under, or result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever upon or against the property or assets of Clipclop, under its constating documents, any contract, agreement, indenture or other instrument to which it is a party or by which it is bound, any law, judgment, order, writ, injunction or decree of any court, administrative agency or other tribunal or any regulation of any governmental authority, and all such contracts, agreements, indentures, or other instruments are in good standing and Clipclop is entitled to all benefits thereunder;
(o) there are no actions, suits, proceedings or investigations pending or, to the knowledge of Clipclop, threatened against or affecting Clipclop, at law or in equity, before or by any court, administrative agency or other tribunal or any governmental authority;
(p) Clipclop has good and marketable title or leasehold title to all of its properties and assets shown or reflected in Clipclop's Financial Statements and such properties and assets are free and clear of any liens, charges or encumbrances;
(q) other than its two wholly owned subsidiaries as are indicated in Clipclop's Financial Statements, Clipclop does not beneficially own, directly or indirectly, shares of any corporate entity or any interest in a partnership, joint venture or other business entity;
(r) the execution, delivery and performance of this Agreement has been duly and validly authorized and approved by Clipclop's board of directors, and Clipclop has the corporate power and authority to execute, deliver and perform this Agreement and such other instruments as appropriate to consummate the transactions herein contemplated, to perform and comply with all of the terms, covenants and conditions to be performed and complied with by Clipclop hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby;
(s) this Agreement constitutes the valid and binding obligation of Clipclop, and is enforceable against Clipclop in accordance with its terms, except as the enforceability may be affected by bankruptcy, insolvency or similar laws affecting creditor's rights generally or court applied equitable remedies;
(t) Clipclop's execution, delivery and performance of this Agreement do not (i) conflict with or result in a breach of any of the terms, conditions or provisions of the articles of incorporation or bylaws of Clipclop or any judgment, order, injunction, decree, regulation or ruling of any court or other governmental authority to which Clipclop is subject or of any agreement or contract delivered pursuant hereto or any other material agreement or contract to which Clipclop is a party or is subject, or constitute a default thereunder, or (ii) give to others any rights of termination or cancellation of any agreement or contract listed on any schedule delivered pursuant hereto or any other material agreement or contract to which Clipclop is a party or is subject, or (iii) create any lien or encumbrance upon the assets of Clipclop, or (iv) require the consent, authorization or approval of any governmental agency, body, official or authority;
(u) the Exchange Shares when issued will be issued as fully paid and non-assessable shares free and clear of all liens, charges, claims or encumbrances;
(v) Clipclop is not aware nor has it failed to disclose to the Company and the Vendors any change, event or circumstance which would adversely affect the Exchange Shares or the business prospects, operation or condition of Clipclop or which would reasonably be considered to reduce the value of the Exchange Shares;
(w) Clipclop has not made any untrue statement to the Vendors nor has it failed to state a material fact that is required to be stated or that is necessary to prevent a statement that is made from being false or misleading in the circumstances in which it was made;
(x) Clipclop has disclosed all contracts, engagements and commitments, whether oral or written, relating to Clipclop; and
(y) the corporate records of Clipclop, as required to be maintained by it under its statute of incorporation and constating documents, are accurate, complete and up-to-date in all material respects and reflect all material transactions of Clipclop.
4.2 Negative Covenants
Clipclop further covenants and agrees with the Vendors that it will not, prior to the Closing Date, except with the prior written consent of such of the Vendors as may be designated by the Company:
(a) make or assume any commitment, obligation or liability which is outside of the usual and ordinary course of the business of Clipclop and for the purpose of carrying on the same, but Clipclop will operate its properties and carry on its business as heretofore and will maintain all of its properties, rights and assets in good order and repair;
(b) declare or pay any dividends on its common shares or make any other distributions or appropriations of profits or capital;
(c) create or assume any indebtedness or guarantee the obligations of any third party, other than in the ordinary course of its business; or
(d) sell or otherwise in any way alienate or dispose of any of its assets other than in the ordinary course of business.
ARTICLE 5
CONDITIONS
5.1 Clipclop's Conditions
The obligations of Clipclop to complete the transactions contemplated hereby are subject to the following conditions (which are for the exclusive benefit of Clipclop) having been satisfied or expressly waived in writing by Clipclop:
(a) prior to the Closing Date, neither the Vendors nor the Company shall have breached any of the warranties and representations of the Vendors and the Company set forth in this Agreement;
(b) all of the covenants and agreements of the Vendors and the Company to be observed or performed on or before the Closing Date pursuant to the terms hereof shall have been duly observed or performed;
(c) all of the transactions contemplated by this Agreement, shall have been approved by the members of the Company;
(d) on or before the Closing Date, or such later date as the parties hereto may agree in writing, each of the Company and Clipclop shall have received approval to this Agreement and the transactions contemplated herein from such third parties from whom approval is required; and
(e) on or before the Closing Date, or such later date as the parties hereto may agree in writing, counsel for Clipclop shall have performed a due diligence review of the Company and its affairs and Clipclop shall have been satisfied with the results thereof.
5.2 Vendors' Conditions
The obligations of the Vendors to complete the transactions contemplated hereby are subject to the following conditions (which are for the exclusive benefit of the Vendors) having been satisfied or expressly waived in writing by the Vendors:
(a) prior to or on the Closing Date, the Vendors shall not have become aware of any breach of any of the warranties and representations of Clipclop set forth in this Agreement;
(b) all of the covenants and agreements of Clipclop to be observed or performed on or before the Closing Date pursuant to the terms hereof shall have been duly observed or performed;
(c) all of the transactions contemplated by this Agreement, shall have been approved by the members of the Company;
(d) on or before the Closing Date, or such later date as the parties hereto may agree in writing, each of the Company and Clipclop shall have received approval to this Agreement and the transactions contemplated herein from such third parties from whom approval is required;
(e) on or before the Closing Date, or such later date as the parties hereto may agree in writing, counsel for the Vendors shall have performed a due diligence review of Clipclop and its affairs and the Vendors shall have been satisfied with the results thereof; and
(f) on or before the Closing Date, the Vendors shall have received and structured the transactions contemplated herein so that the sale of the Vendors' Interests can be made on a tax free or on a tax deferred roll-over basis, if reasonably available.
ARTICLE 6
PURCHASE AND SALE
6.1 Purchase and Sale
Based upon the representations, warranties and covenants of the parties herein contained and subject to the conditions herein contained, Clipclop hereby purchases and the Vendors hereby transfer, assign and sell to Clipclop on the Closing Date all of the Vendors' rights, titles and interests in and to the Vendors' Interests free and clear of all liens, charges and encumbrances.
In consideration of the purchase and sale herein contemplated and in complete satisfaction of the purchase price for the Vendors' Interests, Clipclop hereby agrees to issue to the Vendors (or to a nominee of any of the Vendors), an aggregate of 15,000,000 common shares (the "Exchange Shares") in the capital of Clipclop as follows:
|
Name of Vendor |
No. of |
|
Xxxxxxxx Xxxxxx |
4,687,500 |
|
Xxxxx Xxxx |
4,687,500 |
|
Xxxx Xxxxxxx |
3,750,000 |
|
Xxxx Xxxxxxxxx |
1,875,000 |
6.3 Delivery of Exchange Shares
Clipclop shall deliver to the Vendors within ten (10) days of the Closing Date share certificates registered in the respective names of the Vendors for such number of Exchange Shares as is set opposite each Vendor's name in Article 0 hereof.
ARTICLE 7
CLOSING
The completion of the transactions contemplated hereby (the "Closing") shall occur at the offices of Clark, Wilson, 800 - 000 Xxxx Xxxxxxx Xxxxxx Xxxxxxxxx, X.X. on April 15, 2001 (the "Closing Date"), or such later date as the parties hereto may agree in writing.
7.2 Deliveries on Closing
On the Closing Date:
(a)each of the Vendors shall:
(i) deliver to Clipclop certificates (if such certificates have been issued) representing such Vendor's portion of the Vendors' Interests duly executed and endorsed for transfer to Clipclop,
(ii) deliver an executed subscription agreement in connection with the issuance of the Exchange Shares, in form and substance satisfactory to counsel for Clipclop;
(b) the Company and the Vendors shall deliver to Clipclop the following:
(i) all books, records and accounts of the Company and any other information necessary for Clipclop to operate and manage the business of the Company and the assets owned by the Company,
(ii) the common seal(s) of the Company, if any,
(iii) satisfactory evidence that the members of the Company and the Vendors have approved the transfer of the Vendors' Interests to Clipclop,
(iv) satisfactory evidence that the Vendors' Interests have been transferred to Clipclop,
(v) necessary approvals from the Company and any third parties as may be required have been obtained and are in full force and effect with respect to the transfer of all the Vendors' Interests to Clipclop as contemplated herein, and
(vi) such other documents and instruments as counsel for Clipclop may reasonably require to effectuate or evidence the transactions contemplated hereby;
(c) Clipclop shall deliver or cause to be delivered to the Vendors share certificates representing the Exchange Shares.
ARTICLE 8
MISCELLANEOUS
8.1 Survival of Representations and Warranties
All of the representations, warranties, covenants and agreements of the Vendors and the Company herein and contained in any certificate, statement or other document delivered pursuant to or in connection herewith shall survive the Closing Date and continue in full force and effect for the benefit of the party to which it was given regardless of any knowledge or investigation by or on behalf of the Purchaser with respect thereto.
8.2 Indemnification by the Vendors
The Vendors will indemnify and hold harmless Clipclop from any liabilities relating to the Vendors' Interests and the Company accruing up to and including the day before the Closing Date and in particular, will ensure that the Company has paid all wages, holiday pay, income tax, pension plan, unemployment insurance and other compensation payable to or related to the employees.
8.3 Indemnification by Clipclop
Clipclop will indemnify and hold the Vendors harmless from any liabilities relating to the Exchange Shares and Clipclop accruing up to and including the day before the Closing Date and in particular, will ensure that Clipclop has paid all wages, holiday pay, income tax, pension plan, unemployment insurance and other compensation payable to or related to the employees.
8.4 Notice
Any notice, document or communication required or permitted to be given hereunder shall be in writing at the following addresses, or such other addresses as the parties may specify in writing:
To the Vendors:
Individually addressed to:
Xxxxx 0000, 000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
XXX
To Clipclop:
Xxxxx 0000
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
with a copy to:
Xxxxx, Xxxxxx
Barristers and Solicitors
000 - 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Attention: Xxxxxx X. Xxxx
Fax: (000) 000-0000
To the Company:
USe-Store LLC
Xxxxx 0000, 000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
XXX
Notices shall be effective and deemed to have been duly given and received if delivered personally or by telecopier.
8.5 Time
Time shall be of the essence hereof.
8.6 Entire Agreement
This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior contracts, agreements and understandings between the parties. There are no representations warranties, collateral agreements or conditions affecting this transaction other than as are expressed or referred to herein in writing.
8.7 Consent of the Company and Clipclop
The Company and Clipclop consent to the transactions contemplated herein and hereby acknowledge and agree to execute and perform all such further deeds, acts, things and give such assurances as may be required in the reasonable opinion of counsel for more perfectly consummating the transactions contemplated herein, and shall, without limitation, use their best efforts to obtain as required, approval from such parties as may be required to give their approval to the transactions contemplated hereby and herein referenced.
8.8 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia.
8.9 Enurement
This Agreement shall enure to the benefit of and be binding upon the respective heirs, successors and assigns of the parties hereto.
8.10 Headings
The headings in this Agreement have been inserted for convenience only, and do not define, limit, alter or enlarge the meaning of any provision of this Agreement.
8.11 Schedules
Wherever any term or conditions, expressed or implied, in such schedules conflicts or is at variance with any term or conditions of this Agreement, the terms or conditions of this Agreement shall prevail.
8.12 Severability
If a provision of this Agreement is deemed to be wholly or partly invalid, this Agreement will be interpreted as if the invalid provision had not been a part thereof.
8.13 Counterparts
This Agreement may be executed in one or more counterparts which, when so executed, by facsimile signature or otherwise, shall be read together and be construed as one agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day and year first set forth above.
EXECUTED BY XXXXXXXX XXXXXX in
the presence of:
Xxxx Xxxxxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
CFO
/s/ Xxxxxxxx Xxxxxx
XXXXXXXX XXXXXX
EXECUTED BY XXXXX XXXX in
the presence of:
Xxxx Xxxxxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
CFO
/s/ Xxxxx Xxxx
XXXXX XXXX
EXECUTED BY XXXX XXXXXXX in
the presence of:
Xxxx Xxxxxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
CFO
/s/ Xxxx Xxxxxxx
XXXX XXXXXXX
EXECUTED BY XXXXX XXXXXXXXX in
the presence of:
Xxxx Xxxxxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
CFO
/s/ Xxxxx Xxxxxxxxx
XXXXX XXXXXXXXX
XXXXXXXX.XXX ENTERPRISES INC.
Per:/s/ signed
Authorized Signatory
USe-STORE, LLC
Per: /s/ signed
Authorized Signatory
