EXHIBIT 10.12
________________________________________________________________________________
SHARE PURCHASE AGREEMENT
Dated Effective the 30th day of September, 2003.
__________________________________
XXXXXXX INVESTMENTS LTD.
- AND -
XXXXXXX INTERNATIONAL RESOURCES INC.
- AND -
LOGICAL SEQUENCE INCORPORATED
- AND -
_______________________
THE VENDORS OF LOGICAL SEQUENCE INCORPORATED SHARES
___________________
______________________________
___________________
________________________________________________________________________________
TABLE OF CONTENTS
Page Number
ARTICLE 1.
INTERPRETATION
Section 1.1 DEFINITIONS 2
Section 1.2 EXPANDED MEANINGS 4
Section 1.3 ENTIRE AGREEMENT 5
Section 1.4 HEADINGS AND TABLE OF CONTENTS 5
Section 1.5 SEVERABILITY 5
Section 1.6 SCHEDULES 5
ARTICLE 2.
PURCHASE AND SALE
Section 2.1 PURCHASE AND SALE 6
Section 2.2 BREAKUP FEE 6
ARTICLE 3.
PRIOR TRANSACTIONS AND PAYMENT
Section 3.1 TRANSACTIONS PRIOR TO CLOSING 6
Section 3.2 PAYMENT OF PURCHASE CONSIDERATION 6
Section 3.3 OPTION TO ACQUIRE LOGICAL SHARES 7
ARTICLE 4.
REPRESENTATIONS
Section 4.1 REPRESENTATIONS OF THE VENDOR 7
Section 4.2 REPRESENTATIONS OF THE PURCHASER 13
ARTICLE 5
VENDOR'S COVENANTS
Section 5.1 COVENANTS OF THE VENDOR 17
ARTICLE 6.
NO MERGER AND SURVIVAL
Section 6.1 NON-MERGER 18
Section 6.2 SURVIVAL 18
ARTICLE 7.
INDEMNITY
Section 7.1 INDEMNITY 18
ARTICLE 8.
PRE-CLOSING MATTERS
Section 8.1 COVENANTS OF THE VENDORS 19
Section 8.2 COVENANTS OF THE PURCHASER 19
Section 8.3 EXAMINATION AND INVESTIGATION BY PURCHASER 20
Section 8.4 EXAMINATION AND INVESTIGATION BY VENDORS 20
Section 8.5 CORPORATION'S FINANCIAL STATEMENTS 20
ARTICLE 9.
NON-DISCLOSURE AND USE OF INFORMATION
Section 9.1 USE OF CORPORATION'S INFORMATION 21
Section 9.2 USE OF PURCHASER'S INFORMATION 22
Section 9.3 PRESS RELEASES 23
ARTICLE 10.
CONDITIONS PRECEDENT TO THE PERFORMANCE UNDER THIS AGREEMENT
Section 10.1 PURCHASER'S CONDITIONS 23
Section 10.2 VENDORS' CONDITIONS 25
Section 10.3 RIGHTS OF THE PURCHASER 25
Section 10.4 RIGHTS OF THE VENDORS 26
Section 10.5 RIGHTS OF TERMINATION 26
ARTICLE 11.
CLOSING
Section 11.1 PLACE OF CLOSING AND CLOSING TIME 26
Section 11.2 DELIVERIES BY VENDORS 26
Section 11.3 DELIVERIES OF PURCHASER AT CLOSING 27
Section 11.4 CLOSING ESCROW 27
ARTICLE 12.
MISCELLANEOUS
Section 12.1 GOVERNING LAW AND ATTORNMENT 27
Section 12.2 TIME OF THE ESSENCE 28
Section 12.3 NOTICES 28
Section 12.4 PRIOR AGREEMENTS 29
Section 12.5 FURTHER ASSURANCES 29
Section 12.6 ENUREMENT 29
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made effective the 30th day of September, 2003.
XXXXXXX INVESTMENTS LTD. a corporation incorporated under the laws of the
Province of Alberta, and having an office at the City of Calgary, Alberta
(HEREIN CALLED THE "PURCHASER")
- and -
XXXXXXX INTERNATIONAL RESOURCES INC.. a corporation incorporated under the
laws of the State of Nevada, U.S.A., (herein called "XXXXXXX")
- and -
LOGICAL SEQUENCE INCORPORATED., a corporation incorporated under the laws
of the Province of Ontario, (herein called "LOGICAL")
- and -
Those Parties hereto who are herein defined
as and who are Vendors under this Agreement
(herein collectively called the
"Vendors " and individually a "Vendor")
WHEREAS the Vendors wish to sell and convey their respective Vendor's
Rights to the Purchaser and the Purchaser wishes to purchase and receive such
Vendor's Rights from such Vendors in exchange for the Purchase Consideration.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
premises hereto and the mutual covenants, warranties, representations,
agreements and payments herein set forth, the Parties hereto agree as follows:
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ARTICLE 1.
INTERPRETATION
Section 1.1 DEFINITIONS
In this Agreement, including the premises hereto, this clause and any
Schedules hereto, the words and phrases set forth below shall have the meaning
ascribed thereto below, namely:
"Business Day" means a day other than a Saturday or Sunday or a statutory
holiday in the City of Calgary, in the Province of Ontario.
"Closing Date" means October 31, 2003 or such other date as the parties may
mutually determine.
"Closing Time" means 10: a.m. on the Closing Date or as agreed upon by the
parties.
"Corporation" means Logical Sequence Incorporated
"Corporation's Assets" means all the Property owned or held by the Corporation
or to which the Corporation is entitled as more particularly described in
Schedule "A".
"Corporation's Financial Statements" means the most recent unaudited financial
statements of the Corporation dated March 31st , 2003 and September 30th , 2003,
copies of which are attached as Schedule "B".
"Corporation's Shares" means the common voting shares in the capital of the
Corporation, as the same exist at the date hereof and at the Closing Date.
"Dollar" or "$" means dollars of the lawful currency of Canada unless otherwise
stated.
"Exchangeable Shares" means those authorized shares by the Purchaser the terms
of which are set out in Schedule "E" attached hereto and which shall be issued
to the Vendor as Purchase Consideration pursuant to section 3.2 hereof and in
accordance with the terms of the Exchangeable Share Provisions;
"Interim Period" means the period of time between the execution and Closing Date
of this Agreement and the time of closing all other related transactions as
contemplated by Article 3 hereof;
"Option Shares" means those shares of the Corporation held by a Vendor that are
not being purchased pursuant to this Agreement and that are subject to the
option provided to Xxxxxxx as contemplated by section 3.3 hereof;
"Property" means the interests of the Corporation or the Purchaser, as the case
may be, in and to all property, assets and rights, including, without limiting
the generality of the foregoing, the entire interest of such Party in and to:
(a) all contracts, agreement, documents, production sales contracts, books,
records and reports relating to the provision of products and services to
its customers and any and all rights in relation thereto;
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(b) all intellectual property and rights developed, acquired or incorporated
into the products and services of the Corporation or the Purchaser, as the
case may be, or purchased in the course of carrying on the business of the
Corporation or the Purchaser, as the case may be.
"Party" or "Parties" means a party or parties to and bound by this Agreement.
"Permitted Encumbrances" means, in respect of the Corporation's Assets or the
Purchaser's Assets, as the case may be:
(c) inchoate liens, taxes, assessments or governmental charges which are due or
which are not delinquent;
(d) inchoate liens incurred or created in the ordinary course of business as
security in favour of any other person who is conducting the development or
operation of the property to which such liens relate for the Corporation's
or the Purchaser's share of the costs and expenses of such development or
operation, as the case may be, the payment of which is not then due;
"Person" means any individual, corporation, body corporate, partnership, joint
venture, association, group, trust, or other legal entity and includes any duly
constituted government of or in Canada and any minister, department, commission,
board, bureau, agency, authority, instrumentality or court and the like of any
such government.
"Purchase Consideration" means One Dollar ($1.00) and that number of the
Purchaser's Exchangeable Shares that equals the Purchase Price as calculated in
accordance with section 3.2.3.
"Purchase Price" means the Exchangeable Shares to be issued to the Vendors as
calculated in accordance with section 3.2.3.
"Purchaser's Assets" means the Property owned or held by the Purchaser or to
which the Purchaser is entitled.
"Xxxxxxx" means Xxxxxxx International Resources Inc., a Nevada Corporation,
whose common shares trade on the NASD, OTC Bulletin Board Market in the United
States of America.
"Xxxxxxx Financial Statements" means the most recent audited and unaudited
financial statements of Xxxxxxx dated the fiscal year ending June 30th , 2003 a
copy of which is attached as Schedule "C".
"Xxxxxxx Shares" means the common shares in the capital stock of Xxxxxxx, to be
issued from the Treasury of Xxxxxxx for the Purchase Consideration at the
Closing Date.
"Regulations" means all applicable statutes, laws, rules, orders, regulations,
directives or other instruments (and all applicable requirements thereunder) of
any governmental agencies or authorities in Canada or the United States of
America having jurisdiction over the Parties, the Corporation, the Corporation's
Assets, the Purchaser's Assets, or the specific property or matter in question,
in effect from time to time. "Vendor" means each of those shareholders of
Logical as set out on Schedule "D" hereto and "Vendors" means all or any of
them.
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"Vendor's Rights" means, in respect of a Vendor:
(a) the Vendor's Shares,
(b) other securities issued by the Corporation and held by the Vendor (other
than options granted to employees, consultants, officers or directors all
of which shall be exercised prior to the Closing Date and acquired
hereunder),
(c) amounts owing to the Vendor, by the Corporation, whether presently due or
otherwise,
(d) dividends declared but not paid prior to the Closing Date, and
(e) rights to acquire any securities of the Corporation, from the Corporation
or from any other Person, howsoever granted or acquired.
"Vendor's Shares" means, in respect of a Vendor, the Corporation's Shares owned
by the Vendor, or to which the Vendor is entitled which are the subject of this
Agreement and more particularly as set out on Schedule"D" hereto.
Section 1.2 EXPANDED MEANINGS
Unless the context otherwise necessarily requires, the following provisions
shall govern the interpretation of this Agreement:
(a) words used herein importing the singular number only shall include the
plural and vice versa, and words importing the use of any gender shall
include all genders;
(b) the terms "in writing" or "written" include printing, typewriting, or
any electronic means of communication by which words are capable of
being visually reproduced at a distant point of reception, including
by telecopier or telex; and
(c) references herein to any agreement or instrument, including this
Agreement, shall be deemed to be references to the agreement or
instrument as varied, amended, modified, supplemented or replaced from
time to time, and any specific references herein to any enactment
shall be deemed to be references to such enactment as the same may be
amended or replaced from time to time.
(d) "this Agreement" "the Agreement" "hereto", "herein", "hereby",
"hereunder", "hereof" and similar expressions refer to this Share
Purchase Agreement and not to any particular Article, Section,
Subsection, clause, subdivision or other portion hereof and include
any and every instrument amending, supplementing or replacing this
agreement.
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Section 1.3 ENTIRE AGREEMENT
This Agreement together with the agreements and other documents to be
executed and delivered pursuant hereto, constitute the entire agreement between
the Parties and supersedes all other prior agreements, understandings,
negotiations and discussions, whether oral or written, of the Parties and there
are no warranties, representations, covenants or other agreements between the
Parties except as specifically set forth herein. No supplement, modification or
waiver or termination of this Agreement shall be binding unless executed in
writing by the Party to be bound thereby. No waiver of any of the provisions of
this Agreement shall be valid unless in writing and no such waiver shall
constitute nor be deemed to constitute a waiver of any other provisions (whether
or not similar) nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
Section 1.4 HEADINGS AND TABLE OF CONTENTS
The division of this Agreement into articles, sections and other
subdivisions, the provision of a table of contents and the insertion of headings
are for convenience of reference only and shall not affect or be utilized in the
construction or interpretation hereof.
Section 1.5 SEVERABILITY
If any one or more of the provisions or parts thereof contained in this
Agreement should be or become invalid, illegal or unenforceable in any respect
in any jurisdiction, the remaining provisions or parts thereof contained herein
shall be and shall be conclusively deemed to be, as to such jurisdiction,
severable therefrom and:
(a) the validity, legality or enforceability of such remaining provisions
or parts thereof shall not in any way be affected or impaired by the
severance of the provisions or parts thereof severed; and
(b) the invalidity, illegality or unenforceability of any provision or any
part thereof contained in this Agreement in any jurisdiction shall not
effect or impair such provision or part thereof or any other
provisions of this Agreement in any other jurisdiction.
Section 1.6 SCHEDULES
The following are the Schedules referred to and incorporated in this
Agreement, which are deemed to be a part hereof:
Schedule "A" - Corporation's Assets
Schedule "B" - Corporation's Financial Statements
Schedule "C" - Xxxxxxx Financial Statements
Schedule "D" - List of Vendors, the Vendor's Shares and the Option Shares
Schedule "E"- Exchangeable Share Terms
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ARTICLE 2.
PURCHASE AND SALE
Section 2.1 PURCHASE AND SALE
Subject to the terms and conditions of this Agreement, each Vendor hereby
sells, assigns, transfers and conveys to the Purchaser and the Purchaser
purchases and acquires from each Vendor its Vendor's Rights, effective as of
September 30th, 2003, to have and hold the same together with all benefits and
advantages to be derived therefrom, absolutely, subject only to the terms and
conditions of this Agreement, at and for the Purchase Consideration equal to the
Purchase Price.
Section 2.2 BREAKUP FEE
The Vendors each agree to pay $2,000 to the Purchaser, as liquidated
damages, for failing to consumate the transaction as agreed to herein. The
Purchaser agrees to pay to each of the Vendors, $2,000, as liquidated damages,
for failing to consumate the transaction as agreed to herein.
ARTICLE 3
PRIOR TRANSACTIONS AND PAYMENT
Section 3.1 TRANSACTIONS PRIOR TO CLOSING
During the Interim Period, the Purchaser and Xxxxxxx shall complete and
execute all such documentation related to the Incorporation of the Purchaser and
the issuance by the Purchaser of Exchangeable Shares. Xxxxxxx agrees that it
shall pay any costs associated with the planning of, giving effect to or
resulting from any of the transactions required to effect a more favorable tax
result whether such costs are on the account of the Purchaser, the Vendors or
Logical except that the Purchaser shall be responsible for costs associated only
with respect to the creation of any shares of the Purchaser which will allow the
exchange for Vendors shares. The parties hereto agree to execute all such
further documents and agreements, give such further assurances and undertake
such further action as 2may be necessary to give effect thereto including the
execution of the Support Agreement between Xxxxxxx and the Purchaser and the
Voting Trust and Exchange Agreement between Xxxxxxx and the Purchaser
Section 3.2 PAYMENT OF PURCHASE CONSIDERATION
Purchase Consideration equal to the Purchase Price shall be payable by the
Purchaser and Xxxxxxx to the Vendor by:
3.2.1 the payment of One Dollar ($1.00) by the Purchaser; and
3.2.2 the issuance to the Vendor, from the treasury of the Purchaser
as to one (1) Exchangeable Share for each one (1) of the
Vendor's Shares as set out on Schedule "D" hereto.
3.2.3 the Purchase Consideration will be calculated at the 3 day
average closing price for Xxxxxxx Shares on the NASD, OTC
Bulletin Board Market as of the Closing Date:
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Section 3.3 OPTION TO ACQUIRE ADDITIONAL LOGICAL SHARES
Each of the Vendors hereby provides to Xxxxxxx an option to purchase from
the Vendor any other shares of Logical that are not Vendor's Shares and that are
held by such Vendor upon the following terms:
3.3.1 Xxxxxxx shall have the right to purchase some or all of the
remaining Logical shares held by each Vendor for a price of
Two ($2.00) dollars in US funds for each Optioned Share
purchased;
3.3.2 Xxxxxxx shall have the unfettered right to exercise this
option at any time upon 30 days written notice within a period
of two years from the Closing Date; and
3.3.3 each Vendor shall not during the term of this option sell,
pledge, hypothecate, loan or otherwise dispose of any Logical
shares held by such Vendor and which are subject to this
option unless such third party agrees in writing to be bound
by the terms of this option and only in such case shall
Xxxxxxx agree to such sale, pledge, hypothecation, loan or
other disposition by the Vendor.
ARTICLE 4
REPRESENTATIONS
Section 4.1 REPRESENTATIONS OF THE VENDOR
Each Vendor hereby separately represents and warrants to and with the
Purchaser in respect of its Vendor's Rights that:
4.1.1 Restrictions - There are no restrictions in either the
constating documents or the by-laws of the Corporation, each
as amended, nor are there any collateral agreements or rights
of first refusal or other pre-emptive rights of purchase,
which would arise by reason of the execution of this
Agreement, completion of the sale or otherwise and affect the
transferability of the Vendor's Rights from the Vendor to the
Purchaser.
4.1.2 Title to the Vendor's Rights - The Vendor has good and
marketable title to the Vendor's Rights, free and clear of any
mortgages, liens, charges, security interests, adverse claims,
pledges, encumbrances, options, pre-emptive rights of purchase
(such as rights of first refusal), restrictions, claims or
demands of any kind or nature whatsoever.
4.1.3 Assets of the Corporation - Other than the Corporation's
Assets and as disclosed in the Corporation's Financial
Statements, the Corporation has no property, assets or
undertakings of any nature or kind whatsoever.
4.1.4 Insurance - During the period from the date of the
Corporation's Financial Statements until the Closing Time:
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(a) the Corporation's Assets shall be insured by the Corporation
against loss or damage under contracts of insurance with
reputable insurers which insurance is customary for the
Corporation's business; and
(b) all third Party insurable liabilities of the Corporation shall be
insured against on an occurrence basis under the contracts of
insurance.
4.1.5 Policies of Insurance - In connection with any and all policies
of insurance:
(a) neither the Vendor nor the Corporation:
(i) has misrepresented or omitted to disclose to the insurers
thereunder or in connection therewith any material fact or
is in default with respect to any of the provisions
contained in any such insurance policy,
(ii) has failed to give any notice or present any claim under any
such policy in due and timely fashion, and no such claim is
outstanding and in dispute,
(b) the Corporation is the named insured with loss payable to it on
those policies owned by it or obtained for their benefit; and
(c) there is no outstanding request, notice or order from any insurer
for any modification to or remedial action in respect of any of
the insured assets or premises included in the Corporation's
Assets.
4.1.6 Capital Structure - The authorized share capital of the
Corporation consists only of an unlimited number of common
shares of which only Ten Million(10,000,000) shares are issued
and outstanding as fully paid and non-assessable and an
unlimited number of 4%, $100 par value voting preferred shares
of which Fifty Thousand (50,000) are issued and outstanding as
fully paid and non assessable. No securities, options,
warrants or other rights to purchase shares or other
securities of the Corporation have been authorized or agreed
to be issued or are outstanding except as contemplated by this
Agreement.
4.1.7 Financial Statements of the Corporation - The Corporation's
Financial Statements have been prepared in accordance with
applicable law and with generally accepted accounting
principles consistently applied and present fairly the
financial position as at the dates indicated and the results
of operation of the Corporation for the period indicated and
no material adverse change in such financial position or such
results of operations has occurred since the date thereof.
4.1.8 No Undisclosed Liabilities - The Corporation is not subject to
any liability or liabilities, absolute or contingent, which
individually or in the aggregate are material, and which are
not disclosed, or which are in excess of the amounts disclosed
or reserved for in, the balance sheet of the Corporation or
which are not otherwise disclosed in this Agreement, other
than liabilities of the same nature as those set forth in the
Corporation's Financial Statements or disclosed herein and
reasonably incurred in the usual and ordinary course of
business to the Closing Date, provided that the same do not
materially and adversely affect the financial position of the
Corporation.
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4.1.9 Material Contracts - To the knowledge of the Vendor after
reasonably enquiry, the Corporation is not in default under
any material contract, nor is the Vendor aware of any default
by any other Party under any material contract, and the Vendor
is not aware of any facts or circumstances which would, with
the giving of notice or the lapse of time, give rise to a
default by the Corporation under a material contract.
4.1.10 Taxes - With respect to its taxes:
(a) the Corporation has or will within six months of the Closing
Date:
(i) file all tax returns required to be filed by it in all
applicable jurisdictions,
(ii) make and remitted all required or desirable deductions or
withholdings at source, and
(iii) pay all taxes, levies, assessments, reassessments,
penalties, interest and fines due and payable by it;
(b) all such tax returns properly reflect, and do not in any respect
understate, the taxable income or the liability for taxes of the
Corporation in the relevant tax year or calendar year;
(c) adequate provision has been made in the Corporation's Financial
Statements for all taxes, governmental charges, and assessments,
whether relating to income, sales, real or personal property, or
other types of taxes, governmental charges, or assessments,
including interest and penalties thereon, payable in respect of
the business or assets of the Corporation or otherwise, for all
relevant periods;
(d) Canadian federal and provincial income tax assessments have been
issued to the Corporation covering all past periods up to and
including the Corporation's last fiscal year ending, and such
assessments, if any amounts were owing in respect thereof, have
been paid;
(e) assessments for all other applicable federal and provincial taxes
and levies have been issued and any amounts owing thereunder have
been paid;
(f) there are no actions, suits or other proceedings or
investigations or claims in progress, pending or threatened
against the Corporation in respect of any taxes, governmental
charges, or assessments and, in particular, there are no
currently outstanding reassessments or written enquiries that
have been issued or raised by any governmental authority relating
to any such taxes, governmental charges and assessments;
(g) to the knowledge of the Vendor and the Corporation, there is no
basis for any adverse reassessment by any taxing authority for
any year remaining open for reassessment; and
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(h) the Corporation has not waived any statutory period for
assessment of any tax.
Without limiting the generality of the foregoing, the
Corporation is in absolute compliance with all
registration, timely reporting, and remittance
obligations in respect of all provincial and federal
sales tax legislation and of the goods and services tax.
4.1.11 No Indebtedness to Corporation - The Vendor is not indebted
to the Corporation.
4.1.12 Accounts Receivable Collectible - All accounts receivable are
bona fide, good and collectable without set off or
counterclaim and all such accounts receivable shall be paid in
a timely fashion subject to a reasonable reserve for bad
debts.
4.1.13 Amounts In Trust - There are no amounts deposited in trust,
for the benefit of any third party, with the Corporation as at
the date hereof.
4.1.14 Shareholder's Equity - The total shareholders equity in the
Corporation will, on the Closing, be exactly as stated in the
definition of Vendor's Shares in section 1.1 of this
Agreement.
4.1.15 No Material Adverse Change - There has been no material
adverse change in the business, assets, liabilities or
financial condition of the Corporation since date of the
Corporation's Financial Statements.
4.1.16 Distributions to Shareholders - Since the date of the
Corporation's Financial Statements, the Corporation has not
declared or made any payment of any dividend or other
distribution in respect of any shares in its capital or
purchased or redeemed any such shares or effected any
subdivision, consolidation, reclassification or other
modification of its share capital which has not been approved
in writing by the Purchaser prior to the Closing.
4.1.17 Withholding Amounts - The Corporation has withheld all amounts
required to be withheld, including without limiting the
generality of the foregoing, all amounts required to be
withheld under the Income Tax Act (Canada), for unemployment
insurance and for the Canada Pension Plan and any other
amounts required by law to be withheld from any payments made
to any of their officers, directors and employees, and has
paid the same to the proper taxing authority or receiving
offices all in connection with the Corporation's Assets or the
business of the Corporation.
4.1.18 Corporate Records - the corporate records and minute books of
the Corporation contain all minutes of the meetings of
directors and shareholders of the Corporation are complete,
accurate and up-to-date and the stock register of the
Corporation is complete and accurate in all material respects.
4.1.19 Breach of Order - The Corporation is not in, and has not
received notice of any, material default under any order,
writ, injunction or decree of any court or governmental agency
or authority having jurisdiction, nor any agreement or
obligation by which the Corporation is bound or to which it is
subject and which materially affects or relates to the
Corporation.
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4.1.20 No Subsidiaries - The Corporation does not have any interest
(either directly or indirectly) in any other entity, nor is it
a Party to or bound by any agreement to acquire such an
interest.
4.1.21 Employees - There are no written employment contracts or
incentive plans in effect between the Corporation and any
employee in respect of which either the Corporation or the
Purchaser shall have any obligations subsequent to Closing
Date.
4.1.22 Guarantee and Indemnity Agreements - Other than as disclosed
to the Purchaser, the Corporation is not a party as guarantor
or indemnitor to any agreements of guarantee or indemnity for
debts or obligations of the Vendor or any other person, with
the exception of such guarantees and indemnities as are usual
in the software development industry and applicable under
operating or similar agreements to which the Corporation is a
party or by which it is bound, and with respect to any such
guarantees or indemnities, the Corporation has not received
notice from any person claiming or threatening a claim for
recovery of any amounts pursuant thereto.
4.1.23 Debt Instruments - Other than as disclosed to the Purchaser
and as set out in its financial statements, the Corporation
will not have any outstanding bonds, debentures, mortgages,
notes or other evidence of indebtedness other than trade
debts, trade accounts or similar obligations entered into in
the ordinary course of the Corporation's business (to a
maximum aggregate amount of $1,000.00), and the Corporation is
not under any obligation to create or issue any bonds,
debentures, mortgages, notes or other indebtedness.
4.1.24 Incentive Payments - The Corporation has not received any
incentives, credits, grants or other governmental assistance
pursuant to the Regulations in effect at the relevant time
which will have to be repaid by the Corporation, or if accrued
in the books and records of the Corporation, will be
disallowed.
4.1.25 Workers' Compensation - All payments due to The Workers'
Compensation Board (or similar body in any other jurisdiction)
in respect of the Corporation are current.
4.1.26 Bank Accounts - All information with respect to all deposits
of money with any bank, trust company, treasury branch or
other entity empowered or authorized to receive and hold
deposits of money and includes any and all deposit
certificates or receipts or other instrument of like tenor,
held for or in the name of the Corporation, has been provided
to the Purchaser.
4.1.27 Execution of Agreement - The execution and delivery of this
Agreement and each and every agreement or document to be
executed and delivered hereunder and the consummation of the
transactions contemplated herein will not violate, nor be in
conflict with, any provision of any agreement or instrument to
which the Vendor is a party or is bound, or any judgment,
decree, order, statute, rule or regulation applicable to the
Vendor.
4.1.28 Binding Obligation - This Agreement has been duly executed and
delivered by the Vendor and constitutes legal, valid and
binding obligations of the Vendor enforceable in accordance
with its terms.
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4.1.29 Broker's Fees - The Vendor has not incurred any obligation or
liability, contingent or otherwise, for brokers' or finders'
fees in respect of this transaction for which the Purchaser
shall have any obligation or liability.
4.1.30 Residency - The Vendor is not a non-resident of Canada within
the meaning of the Income Tax Act (Canada).
4.1.31 Defaults under Statutes - The Corporation has not received any
notices of any breach of any statutes, regulations, rules,
orders and directives, including but not limited to those
pertaining to environmental matters, of all governmental
agencies, departments and authorities having jurisdiction over
the business of the Corporation.
4.1.32 Operating Records - The books and records of the Corporation
disclose all material transactions entered into by the
Corporation or on its behalf to the Closing Date.
4.1.33 Deterrence - Except for information relating to general
economic climate and general industry conditions and any
changes of law, Vendor has no information or knowledge of any
fact relating to the Vendor's Rights, the Corporation's
business or the Corporation's ownership and operation of the
Corporation's Assets not disclosed to the Purchaser which, if
known to the Purchaser, might reasonably be expected to deter
the Purchaser from completing the transactions herein
contemplated.
4.1.34 Title - The Vendor does not warrant title to the Corporation's
Assets, provided however, the Vendor does represent and
warrant that the Corporation has done anything whereby any
of the Corporation's interest in and to the Corporation's
Assets may be cancelled or determined, nor have they
encumbered or alienated same and the Corporation's Assets
shall be, at the Closing Date, free and clear of all liens,
encumbrances, adverse claims, demands and royalties created
by, through or under the Vendor or the Corporation except for
the Permitted Encumbrances or as expressly set forth in
Schedule "A". Except as otherwise provided herein, neither
the Vendor nor the Corporation has received notice of any
material defect in the Corporation's title to the
Corporation's Assets.
4.1.35 Notices of Default - To the best of the Vendor's knowledge,
information and belief the Corporation has received no notices
of default relating to the Corporation's Assets or any of
them.
4.1.36 Lawsuits - The Corporation is not a party to any action, suit
or other legal, administrative or arbitration proceeding or
government investigation, actual or threatened, which might
reasonably be expected to result in impairment or loss of the
Corporation's interest in the Corporation's Assets or any part
thereof, and there is no particular circumstance, matter or
thing known to the Vendor which could reasonably be
anticipated to give rise to any such action, suit or other
legal, administrative or arbitration proceeding or government
investigation.
4.1.37 Financial Commitments - There are not financial commitments
which are outstanding or due, or that hereafter may become due
in respect of the Corporation or the Corporation's Assets, or
operations in respect of the Corporation's Assets and which
shall become the responsibility of the Purchaser.
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4.1.38 Pre-emptive Rights - To the best of the Vendor's knowledge,
information and belief, all rights of first refusal or other
pre-emptive rights applicable to any disposition of the
Corporation's Assets have been waived or satisfied in all
respects.
4.1.39 No Other Assets or Obligations - The Corporation has no other
assets, obligations or liabilities, other than the
Corporation's Assets, and as disclosed in Schedule "A" and
Schedule "B" hereto.
Section 4.2 REPRESENTATIONS OF THE PURCHASER AND XXXXXXX
The Purchaser and Xxxxxxx hereby separately represent and warrant to and
with each Vendor in respect of the purchase of the Vendors' Rights that:
4.2.1 Organization of Purchaser and Xxxxxxx - Each of the Purchaser
and Xxxxxxx is a corporation duly organized and existing under
the laws of its jurisdiction of incorporation and the laws of
those jurisdictions in which it is required to be registered.
4.2.2 Corporate Authority - The Purchaser and Xxxxxxx have all
requisite power and authority to enter into this Agreement, to
purchase and pay for and accept title to the Vendor's Rights
on the terms described herein and to perform the Purchaser's
and Xxxxxxx' other obligations under this Agreement.
4.2.3 Execution of Agreement - The execution and delivery of this
Agreement and each and every agreement or document to be
executed and delivered hereunder and the consummation of the
transactions contemplated herein will not violate, nor be in
conflict with, any provision of this agreement or instrument
to which the Purchaser and Xxxxxxx is a party or is bound, or
any judgment, decree, order, statute, rule or regulation
applicable to the Purchaser and Xxxxxxx or the constating
documents or bylaws of the Purchaser and Xxxxxxx.
4.2.4 Binding Obligation - This Agreement has been duly executed and
delivered by the Purchaser and Xxxxxxx and constitutes a
legal, valid and binding obligation of the Purchaser and
Xxxxxxx enforceable in accordance with its terms.
4.2.5 Broker's Fees - The Purchaser and Xxxxxxx has not incurred any
obligation or liability, contingent or otherwise, for brokers'
or finders' fees in respect of this transaction for which the
Vendor shall have any obligation or liability.
4.2.6 Capital Structure - The authorized share capital of the
Purchaser and Xxxxxxx consists of:
(a) for the Purchaser an unlimited number of Common Shares,
and an unlimited number of Exchangeable Shares, of
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which only 100 Purchaser's Common Shares are issued and
outstanding as fully paid and non-assessable. No other
securities, options, warrants or other rights to
purchase shares or other securities of the Purchaser
have been authorized or agreed to be issued or are
outstanding except as contemplated by this Agreement.
(b) The authorized share capital of Xxxxxxx consists only of
unlimited number of common shares of which, as of September
29th, 2003 there were 17,214,100 shares issued and outstanding
and on a fully diluted basis there were 20,062,125 issued.
4.2.7 Purchaser and Shannon's Financial Statements - The Purchaser
and Shannon's Financial Statements have been prepared in
accordance with applicable law and with Generally Accepted
Accounting Principles consistently applied and present fairly
the financial position as at the dates indicated and the
results of operation of the Purchaser and Xxxxxxx for the
period indicated and no material adverse change in such
financial position or such results of operations has occurred
since the date thereof.
4.2.8 No Undisclosed Liabilities - The Purchaser and Xxxxxxx are not
subject to any liability or liabilities, absolute or
contingent, which individually or in the aggregate are
material, and which are not disclosed, or which are in excess
of the amounts disclosed or reserved for in, the balance sheet
of the Purchaser and Xxxxxxx or which are not otherwise
disclosed in this Agreement, other than liabilities of the
same nature as those set forth in the Purchaser and Shannon's
Financial Statements or disclosed herein and reasonably
incurred in the usual and ordinary course of business to the
Closing Date, provided that the same do not materially and
adversely affect the financial position of the Purchaser
and Xxxxxxx.
4.2.9 Material Contracts - To the knowledge of the Purchaser and
Xxxxxxx after reasonably enquiry, the Purchaser and Xxxxxxx is
not in default under any material contract, nor is the
Purchaser and Xxxxxxx aware of any default by any other party
under any material contract, and the Purchaser and Xxxxxxx is
not aware of any facts or circumstances which would, with the
giving of notice or the lapse of time, give rise to a default
by the Purchaser and Xxxxxxx under a material contract.
4.2.10 Taxes - With respect to its taxes:
(a) Xxxxxxx has or will within six months from the Closing Date:
(i) file all tax returns required to be filed by it in all
applicable jurisdictions,
(ii) make and remitted all required or desirable deductions or
withholdings at source, and
(iii) paid or pay all taxes, levies, assessments, reassessments,
penalties, interest and fines due and payable by it;
(b) all such tax returns properly reflect, and do not in any respect
understate, the taxable income or the liability for taxes of
Xxxxxxx in the relevant tax year or calendar year;
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(c) adequate provision has been made in the Purchaser and Shannon's
Financial Statements for all taxes, governmental charges, and
assessments, whether relating to income, sales, real or personal
property, or other types of taxes, governmental charges, or
assessments, including interest and penalties thereon, payable in
respect of the business or assets of the Purchaser and Xxxxxxx or
otherwise, for all relevant periods;
(d) there are no actions, suits or other proceedings or
investigations or claims in progress, pending or threatened
against the Purchaser and Xxxxxxx in respect of any taxes,
governmental charges, or assessments and, in particular, there
are no currently outstanding reassessments or written
enquiries that have been issued or raised by any governmental
authority relating to any such taxes, governmental charges and
assessments;
(e) to the knowledge of the Purchaser and Xxxxxxx, there is no
basis for any adverse reassessment by any taxing authority for
any year remaining open for reassessment; and
(f) the Purchaser and Xxxxxxx have not waived any statutory period
for assessment of any tax.
4.2.11 Accounts Receivable Collectible - All accounts receivable are
bona fide, good and collectable without set off or
counterclaim and all such accounts receivable shall be paid in
a timely fashion.
4.2.12 Amounts In Trust - There are no amounts deposited in trust,
for the benefit of any third party, with the Purchaser or
Xxxxxxx as at the date hereof.
4.2.13 No Material Adverse Change - There has been no material
adverse change in the business, assets, liabilities or
financial condition of Xxxxxxx since date of Shannon's
Financial Statements.
4.2.14 Distributions to Shareholders - Since the date of Xxxxxxx'
Financial Statements, Xxxxxxx has not declared or made any
payment of any dividend or other distribution in respect of
any shares in its capital or purchased or redeemed any such
shares or effected any subdivision, consolidation,
reclassification or other modification of its share capital
which has not been approved in writing by Xxxxxxx prior to the
Closing.
4.2.15 Withholding Amounts - Xxxxxxx has withheld all amounts
required to be withheld, including without limiting the
generality of the foregoing, all amounts required to be
withheld under the Income Tax Act (Canada), for unemployment
insurance and for the Canada Pension Plan and any other
amounts required by law to be withheld from any payments made
to any of their officers, directors and employees, and has
paid the same to the proper taxing authority or receiving
offices all in connection with Xxxxxxx' Assets or the
Business.
4.2.16 Corporate Records - the corporate records and minute books of
the Purchaser and Xxxxxxx contain all minutes of the meetings
of directors and shareholders of the Purchaser and Xxxxxxx are
complete, accurate and up-to-date and the stock register of
the Purchaser and Xxxxxxx is complete and accurate in all
material respects.
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4.2.17 Guarantee and Indemnity Agreements - The Purchaser and Xxxxxxx
is not a party as guarantor or indemnitor to any agreements of
guarantee or indemnity for debts or obligations.
4.2.18 Debt Instruments - At Closing the Purchaser and Xxxxxxx will
not have any outstanding bonds, debentures, mortgages, notes
or other evidence of indebtedness other than trade debts,
trade accounts or similar obligations entered into in the
ordinary course of the Purchaser and Shannon's business (to a
maximum aggregate amount of $1,000.00), and the Purchaser and
Xxxxxxx is not under any obligation to create or issue any
bonds, debentures, mortgages, notes or other indebtedness
other than as disclosed to the Vendor.
4.2.19 Incentive Payments - The Purchaser and Xxxxxxx have not
received any incentives, credits, grants or other governmental
assistance pursuant to the Regulations in effect at the
relevant time which will have to be repaid by the Purchaser
and Xxxxxxx, or if accrued in the books and records of the
Purchaser and Xxxxxxx, will be disallowed.
4.2.20 Workers' Compensation - All payments due to The Workers'
Compensation Board (or similar body in any other jurisdiction)
in respect of the Purchaser and Xxxxxxx are current.
4.2.21 Bank Accounts - All information with respect to the any and
all deposits of money with any bank, trust company, treasury
branch or other entity empowered or authorized to receive and
hold deposits of money and includes any and all deposit
certificates or receipts or other instrument of like tenor,
held for or in the name of the Purchaser and Xxxxxxx, have
been provided to the Purchaser and Xxxxxxx.
4.2.22 Defaults under Statutes - The Purchaser and Xxxxxxx have not
received any notices of any breach of any statutes,
regulations, rules, orders.
4.2.23 Operating Records - The books and records Xxxxxxx disclose all
material transactions entered into by Xxxxxxx or on its behalf
to the Closing Date.
4.2.24 Deterrence - Except for information relating to general
economic climate and general industry conditions and any
changes of law, the Purchaser and Xxxxxxx has no information
or knowledge of any fact relating to the Purchaser and
Shannon's business or the Purchaser and Shannon's ownership
and operation of the Purchaser and Shannon's Assets not
disclosed to the Vendors which, if known to the Vendors, might
reasonably be expected to deter the Vendors from completing
the transactions herein contemplated.
4.2.25 Lawsuits - The Purchaser and Xxxxxxx are not a party to any
action, suit or other legal, administrative or arbitration
proceeding or government investigation, actual or threatened,
which might reasonably be expected to result in impairment or
loss of the Purchaser and Shannon's interest in the Purchaser
and Xxxxxxx' Assets or any part thereof, and there is no
particular circumstance, matter or thing known to the
Purchaser and Xxxxxxx which could reasonably be anticipated to
give rise to any such action, suit or other legal,
administrative or arbitration proceeding or government
investigation.
17
4.2.26 Financial Commitments - There are no financial commitments
which are outstanding or due, or that hereafter may become due
in respect of Xxxxxxx and Xxxxxxx'x Assets, or operations in
respect of Shannon's Assets and which shall become the
responsibility Xxxxxxx that have not been disclosed by
Xxxxxxx.
4.2.27 No Other Assets or Obligations - Xxxxxxx has no other assets,
obligations or liabilities, other than Shannon's Assets as
disclosed in Schedule "C" hereto.
ARTICLE 5
VENDOR'S COVENANTS
Section 5.1 COVENANTS OF THE VENDOR
Each Vendor hereby separately covenants to and with the Purchaser as
follows.
5.1.1 Tax Returns and Other Records - The Vendor shall cause the
Corporation to deliver to the Purchaser any information,
books, accounts, records, tax returns or other data and
information relating to the Corporation on or as soon after
the Closing Date as reasonably possible.
5.1.2 Filing Tax Information - The Vendor shall cause the
Corporation to complete and file on a timely basis all
returns, forms and elections required to be filed by the
Corporation in respect of its taxation year ending immediately
before the Closing Date and shall cause the Corporation to pay
any tax, interest or penalties payable in respect thereof and
the expenses of the preparation and filing of same.
5.1.3 Securities Law Compliance Regarding Purchaser's Securities
Received - The Vendor acknowledges that the Purchaser's
securities acquired hereunder may be subject to resale
restrictions under applicable securities legislation and
policies and hereby agrees that the Vendor will comply with
all relevant securities legislation and policies concerning
any resale of such securities and will consult with the
Vendor's own legal advisors with respect to complying with all
applicable restrictions applying to any such resale.
5.1.4 Compliance for this Trade - If required by applicable
securities legislation, policy or order of any securities
commission, stock exchange or other regulatory authority,
subject always to the conditions precedent contained in
section 10.2.2 hereof, the Vendor will execute, deliver, file
and otherwise assist the Purchaser in filing, such reports,
undertakings and other documents with respect to this
transaction.
5.1.5 Compliance with Future Stock Exchange Requirements - Subject
always to the conditions precedent contained in section
10.2.2 hereof, the Vendor agrees that if the Vendor is
required by any stock exchange or securities commission to
give any undertakings, to file any personal information or to
escrow all or any of the Purchaser's Common Shares received
hereunder in order for the Purchaser or any successor
corporation to meet the requirements of such stock exchange or
securities commission in connection with any offering or
listing of shares of the Purchaser or successor corporation,
the Vendor will give all such undertakings, file such personal
information and/or enter into such escrow as shall be required
for such purpose.
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ARTICLE 6
NO MERGER AND SURVIVAL
Section 6.1 NON-MERGER
The covenants, representations and warranties set forth in Articles 4 and 5
shall be deemed to apply to all assignments, conveyances, transfers and
documents conveying any of the Vendor's Rights from the Vendor to the Purchaser
and there shall not be any merger of any covenant, representation or warranty in
such assignments, transfers or documents notwithstanding any rule of law, equity
or statute to the contrary and all such rules are hereby waived.
Section 6.2 SURVIVAL
The covenants, representations and warranties set forth in Articles 4. and
5. shall survive the closing of the purchase and sale of the Vendor's Rights
and, notwithstanding such closing or any investigation made by or on behalf of
the Vendor or the Purchaser, shall continue in full force and effect for the
benefit of the other Party, provided, however, that:
6.2.1 the covenants, representations and warranties of the Vendor,
Xxxxxxx or the Purchaser, except those relating to the tax
liability of the Corporation, Xxxxxxx or the Purchaser, as the
case may be, shall terminate at the expiry of one year
following the Closing Date;
6.2.2 those covenants, representations and warranties of the Vendor,
Xxxxxxx or the Purchaser relating to the tax liability of the
Corporation, Xxxxxxx or the Purchaser, as the case may be,
shall, unless resulting from any misrepresentations made or
fraud committed in filing a return or supplying information
for the purposes of any Regulations or any other legislation
imposing tax on the Corporation, Xxxxxxx or the Purchaser,
as the case may be, terminate at the expiry of the last of the
limitation periods contained in the applicable Regulations or
any other legislation imposing tax on the Corporation
subsequent to the expiry of which an assessment, reassessment,
or other form of recognized document assessing liability for
any year ended or deemed to have ended prior to the Closing
Date cannot be issued to the Corporation, Xxxxxxx or the
Purchaser, as the case may be; and
6.2.3 there shall be no limit on the covenants, representations and
warranties of the Vendor or Xxxxxxx relating to tax liability
of the Corporation or Xxxxxxx as the case may be based upon
any misrepresentations made or fraud committed in filing a
return or in supplying information for the purposes of any
Regulations or other legislation imposing tax on the
Corporation or Xxxxxxx.
ARTICLE 7
INDEMNITY
Section 7.1 INDEMNITY
The Vendors shall jointly and severally indemnify and save the Purchaser
and the Corporation, or both, harmless from and against any loss whatsoever
arising out of, under or pursuant to:
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7.1.1 and all claims, liabilities, contracts, undertakings and
arrangements of the Corporation, including, without limiting
the generality of the foregoing, any liabilities for federal,
provincial, sales, excise, income, corporate and any other
taxes of the Corporation, existing at the Closing Date and not
disclosed in, provided for or included in the Corporation's
Financial Statements save and except those liabilities;
7.1.2 disclosed in this Agreement or any Schedule hereto, or
7.1.3 accruing or incurred in the ordinary course of business
subsequent to the date of the Corporation's Financial
Statements and up to the Closing Date; and
7.1.4 any and all reassessments for income tax, sales tax, excise
tax and any interest or penalty for any period ending on or
before the Closing Date for which no adequate reserve has been
provided in the Corporation's Financial Statements in respect
of any matter arising prior to the Closing Date.
ARTICLE 8
PRE-CLOSING MATTERS
Section 8.1 COVENANTS OF THE VENDORS
During the period from the date hereof to the Closing Time:
8.1.1 each Vendor shall use its best efforts to cause all of the
conditions for the benefit of the Purchaser to be fulfilled
at or before the Closing Time;
8.1.2 no Vendor shall submit or entertain any offers from any other
Person in respect of and shall not enter into discussions with
any other Person relating to a proposed disposition by the
Vendors of any interest in the Corporation or a disposition by
the Corporation of the Corporation's Assets or any part
thereof; and
8.1.3 no Vendor shall permit, cause or acquiesce in the issuance of
any securities by the Corporation to any Person.
Section 8.2 COVENANTS OF THE PURCHASER AND XXXXXXX
During the period from the date hereof to the Closing Time:
8.2.1 the Purchaser and Xxxxxxx shall use their best efforts to
cause all of the conditions for the benefit of the Vendors to
be fulfilled at or before the Closing Time;
8.2.2 the Purchaser shall not submit or entertain any offers from
any other Person in respect of and shall not enter into
discussions with any other Person relating to a proposed
disposition by the Purchaser of any interest in the Purchaser
or a disposition by the Purchaser of the Purchaser's Assets or
any part thereof; and
20
8.2.3 the Purchaser shall not permit, cause or acquiesce in the
issuance of any securities by the Purchaser to any Person,
except pursuant to the exercise of existing rights.
Section 8.3 EXAMINATION AND INVESTIGATION BY PURCHASER
The Vendors shall permit or cause the Corporation to permit employees,
advisors and representatives of the Purchaser full and complete access to all
facilities and premises and all current and historical records and information
of every nature and kind within the Vendors' or the Corporation's possession or
control which relate to the acquisition, exploration, development, construction,
operation, maintenance, or ownership of any of the Corporation's Assets or the
conduct of its business or with respect to the incorporation, organization,
operations, or financial position of the Corporation or the acquisition or
ownership of the shares of the Corporation for the purposes of reviewing same
and such employees, advisors, and representatives shall be permitted to make
copies of such records and information as they may deem advisable. Each Vendor
shall use his best efforts to make available, or cause the Corporation to make
available, to the Purchaser any pertinent information that is possessed by
another Person or which is relevant to acquisition, exploration, development,
construction, operation, maintenance, and ownership of the Corporation's Assets
or the conduct of its business. The Purchaser and its employees, advisors, and
representatives shall be entitled to make copies of such information as they
reasonably consider necessary. the Vendors shall not require the return or
destruction of any information prior to the Closing Time.
Section 8.4 EXAMINATION AND INVESTIGATION BY VENDORS
The Purchaser and Xxxxxxx shall permit employees and advisors and
representatives of the Vendors full and complete access to all facilities and
premises and all current and historical records and information of every nature
and kind within the Purchaser's or Xxxxxxx' possession or control which relate
to the acquisition or ownership of any of the Purchaser's Assets or Xxxxxxx
Shares or the conduct of their business or with respect to the incorporation,
organization, operations, or financial position of the Purchaser or Xxxxxxx or
the acquisition or ownership of the Xxxxxxx Shares for the purposes of reviewing
same and such employees, advisors, and representatives shall be permitted to
make copies of such records and information as they may deem advisable. The
Purchaser and Xxxxxxx shall use their best efforts to make available to the
Vendors any pertinent information that is possessed by another Person or which
is relevant to acquisition and ownership of the Purchaser's Assets or the
Xxxxxxx Shares or the conduct of their business. The Vendors and their
employees, advisors, and representatives shall be entitled to make copies of
such information as they reasonably consider necessary. The Purchaser and
Xxxxxxx shall not require the return or destruction of any information prior to
the Closing Time.
Section 8.5 CORPORATION'S FINANCIAL STATEMENTS
To the extent not previously delivered, the Vendors shall cause the
Corporation as soon as practical, to deliver the Corporation's Financial
Statements to the Purchaser.
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ARTICLE 9
NON-DISCLOSURE AND USE OF INFORMATION
Section 9.1 USE OF CORPORATION'S INFORMATION
Notwithstanding the obligations of the Vendors to provide information to
the Purchaser pursuant to Article 8 hereof:
9.1.1 the Vendors and the Corporation shall not be under any
obligation to give such access or furnish such information if
to do so would cause the Corporation to be in violation of any
confidentiality agreement with any Person, if such Person has
refused to permit the release of such information to the
Purchaser following exercise by the Corporation of its best
efforts to obtain consent to such release when the exercise of
such best efforts was requested by the Purchaser;
9.1.2 any information provided to the Purchaser or any employee,
advisor and representative of the Purchaser hereunder which is
not publicly disclosed, is confidential or is proprietary in
nature ("the Corporation's Information") shall be kept
confidential and shall not, without the prior written consent
of the Corporation, be disclosed by a recipient in any manner
whatsoever, in whole or in part, and shall not be used by the
Purchaser or any such employee, advisor or representative
(other than in connection with this transaction) or following
the termination of this Agreement in the acquisition of any
securities of the Corporation or any of the Corporation's
Assets in another transaction for a period of one year
following the termination of this Agreement. The
Corporation's Information shall be revealed only to employees,
advisors and representatives who need to know it for the
purpose of implementing the transaction who will be informed
of the confidential nature of the Corporation's Information
and agree to act in accordance herewith;
9.1.3 the term the Corporation's Information shall not include
information which:
(a) is or becomes generally available to the public other than as
a result of a disclosure by the Purchaser or any other
recipient of the Corporation's Information hereunder, or
(b) is or becomes available to the Purchaser or any other
recipient of the Corporation's Information hereunder on a
non-confidential basis from a source other than the
Corporation which is not prohibited from disclosing such
Corporation's Information to the Purchaser by a legal,
contractual or fiduciary obligation to the Corporation; and
9.1.4 in the event that the Purchaser or any other recipient of the
Corporation's Information hereunder becomes legally obliged to
disclose any of the Corporation's Information, the Purchaser
shall provide the Corporation with prompt notice of such
obligation (and in any event not less than 24 hours prior to
the time that such the Corporation's Information is required
to be disclosed) so that the Corporation may seek a protective
order or other appropriate remedy and/or waive compliance with
this Subsection. In the event that such protective order or
other remedy is not obtained, or that the Corporation waives
compliance with this Subsection, the Purchaser or any other
recipient of the Corporation's Information hereunder shall
furnish only that portion of the Corporation's Information
which is legally required to be disclosed and exercise their
best efforts to obtain reliable assurance that confidential
treatment will be accorded the Corporation's Information.
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Section 9.2 USE OF PURCHASER'S INFORMATION
Notwithstanding the obligations of the Purchaser and Xxxxxxx to provide
information to the Vendors pursuant to Article 8 hereof:
9.2.1 the Purchaser or Xxxxxxx shall not be under any obligation to
give such access or furnish such information if to do so would
cause the Purchaser or Xxxxxxx to be in violation of any
confidentiality agreement with any Person, if such Person has
refused to permit the release of such information to the
Purchaser following exercise by the Purchaser of its best
efforts to obtain consent to such release when the exercise of
such best efforts was requested by the Purchaser;
9.2.2 any information provided to the Vendors or the Corporation
or any employee, advisor and representative of the Vendors
or the Corporation hereunder which is not publicly
disclosed, is confidential or is proprietary in nature ("the
Purchaser's Information") shall be kept confidential and
shall not, without the prior written consent of the
Purchaser, be disclosed by a recipient in any manner
whatsoever, in whole or in part, and shall not be used by
the Vendors or the Corporation or any such employee, advisor
or representative (other than in connection with this
transaction) or following the termination of this Agreement
in the acquisition of any securities of the Purchaser or any
of the Purchaser's Assets in another transaction for a
period of one year following the termination of this
Agreement. The Purchaser's Information shall be revealed
only to employees, advisors and representatives who need to
know it for the purpose of implementing the transaction who
will be informed of the confidential nature of the
Purchaser's Information and agree to act in accordance
herewith;
9.2.3 the term the Purchaser's Information shall not include
information which:
(a) is or becomes generally available to the public other than as
a result of a disclosure by the Vendors or the Corporation or
any other recipient of the Purchaser's Information hereunder,
or
(b) is or becomes available to the Vendors or the Corporation or
any other recipient of the Purchaser's Information hereunder
on a non-confidential basis from a source other than the
Purchaser which is not prohibited from disclosing such
Purchaser's Information to the Vendors or the Corporation by a
legal, contractual or fiduciary obligation to the Purchaser;
and
(c) in the event that the Vendors or the Corporation or any
other recipient of the Purchaser's Information hereunder
becomes legally obliged to disclose any of the Purchaser's
Information, the Vendors or the Corporation shall provide
the Purchaser with prompt notice of such obligation (and in
any event not less than 24 hours prior to the time that such
the Purchaser's Information is required to be disclosed) so
that the Purchaser may seek a protective order or other
appropriate remedy and/or waive compliance with this
Subsection. In the event that such protective order or other
remedy is not obtained, or that the Purchaser waives
compliance with this Subsection, the Vendors, the
Corporation or any other recipient of the Purchaser's
Information hereunder shall furnish only that portion of the
Purchaser's Information which is legally required to be
disclosed and exercise their best efforts to obtain reliable
assurance that confidential treatment will be accorded the
Purchaser's Information.
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Section 9.3 PRESS RELEASES
All press releases or other similar public written communications of any
sort by Xxxxxxx or the Corporation relating to this transaction and this
Agreement and the method of release for publication thereof, will be subject to
the approval of Xxxxxxx. Xxxxxxx will deal expeditiously with a request for
approval of such a written communication. The Vendors and the Purchaser will
cooperate in relation to other public communications with respect to their
respective businesses or this transaction with a view to achieving consistency
in the content of such communication and ensuring that such communications are
consistent with this Agreement.
ARTICLE 10
CONDITIONS PRECEDENT TO THE PERFORMANCE UNDER THIS AGREEMENT
Section 10.1 PURCHASER'S CONDITIONS
The obligation of the Purchaser to complete the purchase of the Vendor's
Rights shall be subject to the satisfaction of, or compliance with, at or before
the Closing Time, each of the following conditions (each of which is hereby
acknowledged to be inserted for the exclusive benefit of the Purchaser and may
be unilaterally waived by the Purchaser in whole or in part):
10.1.1 Truth and Accuracy of Representations - All of the
representations and warranties of the Vendors set forth in
this Agreement shall be true and correct as at the Closing
Time with the same force and effect as though made at the
Closing Time except to the extent affected by the transactions
contemplated by this Agreement.
10.1.2 Satisfactory Due Diligence - All requests for information
about the Vendors and the Corporation shall have been
responded to by the Vendors and the Corporation to the
satisfaction of the Purchaser in its sole discretion and the
Purchaser shall have received all documentation required to be
delivered to the Purchaser at or before the Closing Time in
accordance with this Agreement.
10.1.3 Compliance with Agreement - All of the terms, covenants,
agreements and conditions of this Agreement to be complied
with or performed by the Vendors at or before the Closing Time
shall have been complied with or performed.
10.1.4 Receipt of Closing Documentation - The Purchaser shall have
received all documentation required to be delivered to the
Purchaser at or before the Closing Time in accordance with
this Agreement.
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10.1.5 Approvals - All approvals relating to the consummation of the
transactions hereby contemplated shall have been obtained from
the relevant regulatory bodies;
10.1.6 Discharges - All liens, charges, encumbrances, security
interests and other claims, whatsoever, registered or made by
any Person on or against the Vendor's Rights shall have been
discharged or provision therefor, satisfactory to the
Purchaser shall have been made at or before the Closing Time.
10.1.7 Legal Formalities - All actions and proceedings and all
instruments and documents required to implement this Agreement
or any other agreements incidental thereto, and all other
legal matters relating to the purchase of the Vendor's Rights
by the Purchaser shall have been approved as to form and
legality by counsel for the Purchaser.
10.1.8 Condition of Corporation's Financial Statements - The
Purchaser shall have received the Corporation's Financial
Statements in accordance with Section 8 and shall be satisfied
with the financial condition of the Corporation based on the
contents of the Corporation's Financial Statements.
10.1.9 No Change of Laws - After the date hereof and prior to the
Closing Time, there shall have been no change in the laws in
force in any jurisdiction in which any of the Corporation's
business is carried on, or any of the Corporation's Assets
are located including, without limitation, amendment to or
repeal of existing statutes, regulations, rules or policies
and enactment or implementation of new statutes,
regulations, rules or policies, nor the occurrence of any
general or specific event which, in the opinion of the
Purchaser, could materially adversely affect the
Corporation's Assets, the conduct of its business, or the
transactions contemplated herein or the ability of the
Corporation to conduct, expand or develop its business or to
own or operate the Corporation's Assets after the Closing
Time, and no such change shall have been proposed.
10.1.10 Concurrent Closings - All of the conditions precedent to the
obligations of the Purchaser to complete the transactions
herein contemplated or contemplated in the other agreements
contemplated or required hereby and Schedules hereto shall
have been fulfilled or satisfactorily performed in accordance
therewith including, without limitation, the delivery of all
documents required to be delivered thereunder.
10.1.11 No Change in Operations - Except as agreed to in writing by
the Purchaser, the Corporation shall not and the Vendors shall
take such steps as may be necessary to cause the Corporation
not to:
(a) acquire or agree to acquire any assets or acquire or
agree to acquire by amalgamating, merging or
consolidating with, purchasing substantially all of the
assets of or otherwise, any business or any
corporation, partnership, association or other business
organization or division thereof;
(b) and will not agree to sell, lease or otherwise dispose
of or grant any option with respect to any of its
assets;
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(c) guarantee the payment of indebtedness or incur
indebtedness for money borrowed or issue any debt
securities; or
(d) grant any director, any officer or any employee who has
a policy making function or who manages a principal
business unit, any increase in compensation or in
severance or termination pay (whether or not such
compensation or pay is payable in cash), or enter into
any employment agreement with any such director,
officer or employee, or hire or promote any Person.
10.1.12 No Damage - No destruction, material damage,
appropriation, expropriation or seizure of any of the
Corporation's Assets or Vendor's Rights or of all
Corporation's Assets shall have occurred.
Section 10.2 VENDORS' CONDITIONS
The obligation of each Vendor to complete the sale of the Vendor's Rights
shall be subject to the satisfaction of, or compliance with, at or before the
Closing Time, each of the following conditions (each of which is hereby
acknowledged to be inserted for the exclusive benefit of each Vendor and may be
unilaterally waived by each Vendor in whole or in part):
10.2.1 Truth and Accuracy of Representations - All of the
representations and warranties of the Purchaser and Xxxxxxx
set forth in this Agreement shall be true and correct as at
the Closing Time with the same force and effect as though made
at the Closing Time.
10.2.2 Performance of Obligations - All of the terms, covenants,
agreements and conditions of this Agreement to be complied
with or performed by the Purchaser or Xxxxxxx at or before the
Closing Time shall have been complied with or performed.
Section 10.3 RIGHTS OF THE PURCHASER AND XXXXXXX
If any of the conditions for the exclusive benefit of the Purchaser and
Xxxxxxx as set forth in Section 10 shall not have been fulfilled at or prior to
the Closing Time, the Purchaser and Xxxxxxx shall be entitled, by notice to the
Vendors prior to the time of completion of the Closing:
10.3.1 to terminate their obligations hereunder and this
Agreement effective as of the time of such notice; or
10.3.2 to proceed with the Closing as contemplated by Article 11.
If no such notice is given prior to the completion of the Closing, the
Purchaser and Xxxxxxx shall be deemed to have elected to proceed with the
Closing as contemplated by Article 11.
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Section 10.4 RIGHTS OF THE VENDORS
If any of the conditions for the exclusive benefit of the Vendors set
forth in Section 10.2 shall not have been fulfilled at or prior to the Closing
Time, the Vendors shall be entitled, by notice to the Purchaser and Xxxxxxx
prior to the time of completion of the Closing:
10.4.1 to terminate their obligations hereunder and this
Agreement effective as of the time of such
notice; or
10.4.2 to proceed with the Closing as contemplated by Article 11.
If no such notice is given prior to the completion of the Closing, the Vendors
shall be deemed to have elected to proceed with the Closing as contemplated by
Article 11.
Section 10.5 RIGHTS OF TERMINATION
If this Agreement has been terminated pursuant to Section 10.3.1 or
Section 10.4.1 hereof, all Parties to this Agreement shall be released from all
their obligations under this Agreement, save and except with respect to pay a
break up fee as set out in Section 2.2 of this Agreement.
ARTICLE 11
CLOSING
Section 11.1 PLACE OF CLOSING AND CLOSING TIME
The Closing shall take place at the Closing Time at the offices of the
Purchaser or at such other place as may be agreed upon by the Vendors and the
Purchaser; PROVIDED HOWEVER, if the Parties are diligently pursuing completion
of the conditions precedent to Closing, the Parties hereby agree that the Time
for Closing shall be extended for such reasonable period as shall be necessary
to complete such matters.
Section 11.2 DELIVERIES BY VENDORS
At the Closing Time and at the place of the Closing, each Vendor shall:
11.2.1 deliver to the Purchaser certificates or other instruments
representing or evidencing the Vendor's Rights duly endorsed
for transfer or assignment to the Purchaser;
11.2.2 deliver to the Purchaser a certified copy of a resolution of
the directors of the Corporation consenting to the transfer of
the Vendor's Rights and authorizing the registration of such
transfer on the appropriate registers of the Corporation;
11.2.3 deliver to the Purchaser one or more certificates or other
instruments representing or evidencing the Vendor's Rights,
registered in the name of the Purchaser duly signed by the
proper officers of the Corporation and evidence satisfactory
to the Purchaser that it is registered as the holder thereof
on the appropriate registers of the Corporation;
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11.2.4 deliver to the Purchaser at the Closing Time the resignations
of all of the directors and officers of the Corporation
effective immediately upon the delivery thereof, together with
a complete release and discharge by such directors and
officers of any and all claims against the Corporation which
may have arisen prior to the Closing Time;
11.2.5 deliver to the Purchaser a certificate signed by each Vendor
to the effect that the representations and warranties of the
Vendor herein contained are true and correct as at the Closing
Time;
11.2.6 deliver to the Purchaser such other documents as the
Purchaser may reasonably request.
Section 11.3 DELIVERIES OF PURCHASER AND XXXXXXX AT CLOSING
At the Closing Time and at the Place of Closing, the Purchaser and Xxxxxxx
shall deliver to each Vendor:
11.3.1 deliver to each Vendor one or more certificates or other
instruments representing or evidencing the Purchase
Consideration herein payable to each Vendor, in accordance
with Section 3.1 hereof;
11.3.2 certified resolutions of the Purchaser and Xxxxxxx authorizing
the transactions contemplated hereby;
11.3.3 a certificate signed by an officer of the Purchaser and a
certificate for an officer of Xxxxxxx to the effect that the
representations and warranties of the Purchaser and Xxxxxxx,
as the case may be, herein contained are true and correct as
at the Closing Time; and
11.3.4 such other documents as Vendors may reasonably request.
Section 11.4 CLOSING ESCROW
All payments or documents delivered by any Person at the Closing Time shall
be deemed not to have been delivered until each of the Vendors, the Purchaser
and Xxxxxxx has declared that it is satisfied with the form and substance of the
payments or documents to be delivered to such Person and all conditions to the
delivery or release of any payments or documents to be delivered at the Closing
Time by Parties other than the Vendors or the Purchaser shall have been
satisfied.
ARTICLE 12
MISCELLANEOUS
Section 12.1 GOVERNING LAW AND ATTORNMENT
This Agreement shall, in all respects, be subject to and be interpreted,
construed and enforced in accordance with the laws in effect within the Province
of Alberta. Each Party hereby expressly attorns to the jurisdiction of the
courts of the Province of Alberta and all courts of appeal therefrom.
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Section 12.2 TIME OF THE ESSENCE
Time shall in all respects be of the essence of this Agreement.
Section 12.3 NOTICES
The address for notices of each of the Parties shall be as follows:
XXXXXXX INVESTMENTS LTD.
0000 - 000 0 Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxx Xxxxx
Facsimile No: (403) 538 - 0003
Telephone No.: (403) 538 - 3706
XXXXXXX INTERNATIONAL RESOURCES, INC.
0000 - 000 0 Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxx Xxxxx
Facsimile No.: (403) 538 - 0003
Telephone No.: (403) 538 - 3706
LOGICAL SEQUENCE INCORPORATED
192 Xxxxxx Xxxxxxx Drive, Unit 14
Dartmouth Nova Scotia B3B 1N4
Attention: Xxxxx X. Xxxxxxx
Facsimile No.: (902) 481 - 7224
Telephone No.: (902) 468 - 7177 Ext. 1003
Each of the Parties may from time to time change their address for service
herein by giving written notice to the other Party. Any notice, required or
contemplated hereunder, may be served by personal service upon an officer or
director of a Party or by telecopy, facsimile transmission or mailing the same,
except during periods of actual or anticipated postal disruptions, by prepaid
registered post in a properly addressed envelope addressed to the Party at its
address for service hereunder, as the same may be amended from time to time in
accordance herewith. Any notice given by service upon an officer or director of
a Party shall be deemed to be given on the date of such service. Any notice
given by mail shall be deemed to be given to and received by the addressee on
the fifth Business Day after the mailing thereof. Any notice given by telecopy
or facsimile transmission shall be deemed to be given to and received by the
addressee on the next Business Day after the sending thereof.
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Section 12.4 PRIOR AGREEMENTS
This Agreement shall supersede and replace any and all prior agreements
between the Parties relating to the sale and purchase of the Vendor's Rights and
may be amended only by written instrument signed by all Parties.
Section 12.5 FURTHER ASSURANCES
Each Party hereto shall, from time to time, and at all times hereafter at
the request of any other Party hereto, but without further consideration, do all
such further acts and execute and deliver all such further instruments, notices,
releases and documents as shall be reasonably required in order to fully perform
and carry out the terms hereof.
This instrument states the entire agreement between the Parties.
Section 12.6 ENUREMENT
This Agreement shall be binding upon and shall enure to the benefit of and
be binding upon the Parties and their respective successors, receivers,
receiver-managers, trustees and permitted assigns, as the case may be.
The remainder of this page has been left blank intentionally.
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IN WITNESS WHEREOF the Parties hereto have duly executed this Agreement
effective as of the date first above written.
Xxxxxxx Investments Ltd.
Per: /s/ Xxxxx Xxxxx
----------------------------------
Xxxxx Xxxxx
Authorized Signing Officer
Xxxxxxx International Resources Inc.
Per: /s/ Xxxxx Xxxxx
----------------------------------
Xxxxx Xxxxx
Authorized Signing Officer
Logical Sequence Incorporated
Per: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Xxxxx X. Xxxxxxx
Authorized Signing Officer
All Vendors Individually as per the Schedule "D"
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