Exhibit 2.4
THIS PURCHASE AND SALE AGREEMENT is made as of the 27th day of March,
2002,
BETWEEN:
SIDEWARE SYSTEMS INC., a corporation validly
subsisting under the laws of the Yukon Territory
and having an office at Suite 200 - 000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxxx X0X 0X0
("Sideware")
AND:
SYD ENTERPRISES LTD., a company validly subsisting
under the laws of British Columbia and having an
office at Suite 1620 - 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
(the "Vendor")
AND:
CHALK MEDIA CORP., a company validly subsisting
under the laws of British Columbia and having an
office at Suite 1600 - 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
(the "Purchaser")
WHEREAS:
A. The Vendor is a wholly owned subsidiary of Sideware;
B. The Vendor is the recorded and beneficial owner of the Purchased
Shares; and
C. The Vendor has agreed to sell and the Purchaser has agreed to
purchase the Purchased Shares, all on the terms and conditions of
this Agreement.
NOW THEREFORE WITNESSETH that in consideration of the
premises and of the mutual covenants and agreements set forth herein,
the parties hereto covenant and agree as follows:
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ARTICLE 1
DEFINITIONS AND INTERPRETATION
Definitions
1.01 In this Agreement, including the recitals hereto, the
following words and phrases shall have the following meanings:
(a) "Agreement" means this agreement, including the Schedules hereto,
and all amendments made hereto by written agreement between
Sideware, the Vendor and the Purchaser;
(b) "Assets" means all of the property and assets of the Chalk Group
of every kind and description;
(c) "Business" means the business carried on by the Chalk Group of
creating and producing multi-media content, communication tools
and messaging strategies aimed at educating employees, sales
channels and other end users and includes, without limitation,
the production of the "Xxxx Xxxxx Computer Show" for television;
(d) "Xxxxx.xxx Holding" means Xxxxx.xxx Network (Holding) Corporation,
a corporation validly subsisting under the laws of the State of
Delaware, USA having its registered office in the State of
Delaware c/o Corporation Trust Centre, 1209 Orange Street,
Wilmington, Delaware, USA 19801, County of New Castle;
(e) "Xxxxx.xxx Holding Common Shares" means the shares of Common Stock
with a par value of $0.0001 in the capital of Xxxxx.xxx Holding;
(f) "Xxxxx.xxx Network Corporation" means Xxxxx.xxx Network
Corporation, a corporation validly subsisting under the laws of
the State of Delaware, USA having an office at 000 - 0000 Xxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0;
(g) "Chalk Group" means the Chalk group of companies consisting of
Xxxxx.xxx Holding, Xxxxx.xxx Network Corporation, Chalk Holdings
Inc., Chalk Productions Incorporated and New Century Digital
Broadcasting Corporation;
(h) "Chalk Holdings Inc." means Chalk Holdings Inc., a corporation
validly subsisting under the Canada Business Corporations Act
(Canada) having its registered office at 19th Floor, 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0;
(i) "Chalk Media Common Shares" means the Common Shares without par
value in the capital of the Purchaser;
(j) "Chalk Media Warrants" means the 500,000 non-transferable share
purchase warrants to be issued to the Vendor pursuant to
subsection 2.02(b), each of which will entitle the Vendor to
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purchase one Chalk Media Common Share for an exercise price of
$0.25 US per share at any time prior to July 20, 2003;
(k) "Chalk Productions Incorporated" means Chalk Productions
Incorporated, a company validly subsisting under the laws of the
Province of British Columbia, Canada having its registered office
at 19th Floor, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0;
(a) "Closing" means the closing of the transactions contemplated by
this Agreement in accordance with Article 6;
(b) "Xxxxx Xxxxx Employment Contract" means the employment contract
entered into as of August 31, 2001 between Xxxxx.xxx Holding and
Xxxxx Xxxxx, a copy of which is attached to this Agreement as
Schedule "B";
(c) "Encumbrance" means any mortgage, charge, pledge, security
interest, lien, encumbrance, action, claim, demand and equity of
any nature whatsoever or howsoever arising and any rights or
privileges capable of becoming any of the foregoing;
(d) "Financial Statements" means, collectively:
(i) the audited consolidated financial statements of Xxxxx.xxx
Holding for its fiscal year ended December 31, 2001; and
(ii) the unaudited internally prepared financial statements of
Xxxxx.xxx Holding for the period ended February 28, 2002;
attached to this Agreement as Schedule "A";
(e) "Governmental Authority" means any federal, provincial, state,
municipal, county or regional government or governmental
authority, domestic or foreign, and includes any department,
commission, bureau, board, administrative agency or regulatory
body of any of the foregoing;
(f) "GST" means goods and services tax levied under Part IX of the
Excise Tax Act (Canada);
(g) "Income Tax Act" means the Income Tax Act (Canada), as amended
from time to time;
(h) "Material Contracts" means those contracts, engagements and
commitments described in Schedule "D" to this Agreement;
(i) "New Century Digital Broadcasting Corporation" means New Century
Digital Broadcasting Corporation a company validly subsisting
under the laws of British Columbia having its registered office at
19th Floor, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0;
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(j) "Permitted Encumbrances" means those charges and encumbrances
charging the Assets or some portion thereof, if any, which are
specified as "Permitted Encumbrances" in Schedule "E" to this
Agreement;
(k) "Person" includes a firm, corporation or other entity;
(l) "Purchased Shares" means the 21,925,050 Xxxxx.xxx Holding Common
Shares to be sold by the Vendor and purchased by the Purchaser in
accordance with this Agreement; and
(m) "Social Services Tax" means social services tax levied under the
Social Service Tax Act (British Columbia).
Captions and Section Numbers
1.02 The headings and section references in this Agreement are for
convenience of reference only and do not form a part of this Agreement
and are not intended to interpret, define or limit the scope, extent or
intent of this Agreement or any provision thereof.
Extended Meanings
1.03 The words "hereof", "herein", "hereunder" and similar
expressions used in any clause, paragraph or section of this Agreement
shall relate to the whole of this Agreement and not to that clause,
paragraph or section only, unless otherwise expressly provided.
Number and Gender
1.04 Whenever the singular or masculine or neuter is used in this
Agreement, the same shall be construed to mean the plural or feminine or
body corporate where the context of this Agreement or the parties hereto
so require.
Section References
1.05 Any reference to a particular "article", "section",
"subsection" or other subdivision is to the particular article, section
or other subdivision of this Agreement.
Governing Law
1.06 This Agreement and all matters arising hereunder shall be
governed by, construed and enforced in accordance with the laws of the
Province of British Columbia and all disputes arising under this
Agreement shall be referred to the Courts of the Province of British
Columbia.
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Severability of Clauses
1.07 In the event that any provision of this Agreement or any part
thereof is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Currency
1.08 All sums of money to be paid or calculated pursuant to this
Agreement shall be paid or calculated in currency of the United States
of America unless otherwise expressly stated.
Statutes
1.09 Unless otherwise stated, any reference to a statute includes
and 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
supplement or supersede such statute or such regulations.
No Contra Proferentum
1.10 The language in all parts of this Agreement shall in all
cases be construed as a whole and neither strictly for nor strictly
against any of the parties.
Schedules
1.11 The schedules attached hereto are hereby incorporated into
this Agreement and form a part hereof. All terms defined in this
Agreement shall have the same meaning in such schedules. The schedules
to this Agreement are as follows:
Schedule "A" Financial Statements
Schedule "B" Xxxxx Xxxxx Employment Contract
Schedule "C" Xxxxx.xxx Holding - Options, Warrants and
Convertible Securities
Schedule "D" Material Contracts
Schedule "E" Permitted Encumbrances
Schedule "F" Actions, Suits and Proceedings
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ARTICLE 2
PURCHASE AND SALE OF PURCHASED SHARES
Purchase and Sale
2.01 Upon the terms and conditions of this Agreement, the Vendor
hereby agrees to sell and the Purchaser agrees to purchase 21,925,050
Xxxxx.xxx Holding Common Shares free and clear of all liens, charges and
Encumbrances whatsoever.
Purchase Price for the Purchased Shares
2.02 The purchase price payable by the Purchaser to the Vendor for
the Purchased Shares shall be $0.09122 US per share or $2,000,003 US in
the aggregate which shall be paid by the Purchaser in full on Closing by
the Purchaser:
(a) allotting and issuing to the Vendor 21,925,050 Chalk Media Common
Shares at an issue price of $0.09122 US per Chalk Media Common
Share; and
(b) issuing to the Vendor 500,000 non-transferable share purchase
warrants, each of which will entitle the Vendor to purchase one
Chalk Media Common Share for an exercise price of $0.25 US per
share at any time prior to July 20, 2003.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE VENDOR AND SIDEWARE
Representations and Warranties - General
3.01 The Vendor and Sideware hereby jointly and severally
represent and warrant to the Purchaser, with the intent that the
Purchaser shall rely thereon in entering into this Agreement and in
concluding the transactions contemplated hereby, that:
(a) the Vendor has full power, authority, right and capacity to enter
into this Agreement on the terms and conditions herein contained,
to sell, assign and transfer the legal and beneficial title to
the Purchased Shares to the Purchaser, to carry out the
transactions contemplated hereby and to duly observe and perform
all of its covenants and obligations under this Agreement. The
Vendor and its board of directors and Sideware, as the sole
shareholder of the Vendor, have taken all necessary or desirable
actions, steps and corporate and other proceedings to approve or
authorize, validly and effectively, the entering into, the
execution, delivery and performance of this Agreement and the sale
and transfer of the Purchased Shares by the Vendor to the
Purchaser;
(b) Sideware has full power, authority, right and capacity to enter
into this Agreement on the terms and conditions herein contained,
to carry out the transactions contemplated hereby and to duly
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observe and perform all of its covenants and obligations under
this Agreement. Sideware and its shareholders and board of
directors have taken all necessary or desirable actions, steps and
corporate and other proceedings to approve or authorize, validly
and effectively, the entering into, the execution, delivery and
performance of this Agreement by Sideware;
(c) this Agreement has been duly and validly executed and delivered
by each of the Vendor and Sideware and constitutes a legal, valid
and binding obligation of each of the Vendor and Sideware
enforceable in accordance with its terms;
(d) the Vendor owns the Purchased Shares as the registered and
beneficial owner thereof, free and clear of any Encumbrance
whatsoever and:
(i) the Vendor does not have any liability or indebtedness,
whether disclosed or undisclosed, absolute or contingent,
to any Person which constitutes, or may constitute, by
operation of law or otherwise, an Encumbrance on any of
the Purchased Shares at Closing or thereafter; and
(ii) no Person has any agreement or option, present or future,
contingent, absolute or capable of becoming an agreement
or option or which with the passage of time or the
occurrence of any event could become an agreement or
option to acquire the Purchased Shares, or any of them;
(e) to the best of the knowledge, information and belief of the Vendor
or Sideware, after due enquiry, there is no claim or litigation
pending or threatened with respect to the Purchased Shares;
(f) each of the Vendor and Sideware are not insolvent, have not
committed any act of insolvency, and have not made any voluntary
assignment or proposal under applicable laws relating to
insolvency and no bankruptcy petition has been filed or presented
against the Vendor or Sideware;
(g) each of the Vendor and Sideware are resident within Canada within
the meaning of the Income Tax Act;
(h) the performance by the Vendor and Sideware of this Agreement will
not be in violation of any agreement to which either the Vendor or
Sideware is a party and will not give any Person any right to
terminate or cancel any agreement or any right enjoyed by the
Vendor or Sideware in relation to the Purchased Shares, nor result
in the creation nor imposition of any Encumbrance or restriction
of any nature whatsoever in favour of any third party upon or
against the Purchased Shares;
(i) on Closing, neither the Vendor nor Sideware will be a party to,
bound by or subject to any indenture, mortgage, lease, agreement,
instrument, statute, regulation, order, judgment, decree or law
which would be violated, contravened or breached by or under which
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any default would occur as a result of the execution and delivery
by the Vendor or Sideware of this Agreement or the performance by
the Vendor or Sideware of any of the terms hereof;
(j) the documents, records and descriptions provided by the Vendor and
Sideware to the Purchaser in writing concerning the Chalk Group do
not contain any untrue statements of any material fact and do not
fail to state any facts necessary to make such written statements
not misleading; and
(k) all negotiations relating to this Agreement have been carried on
by the Vendor and Sideware directly with the Purchaser and there
are no brokerage fees, commissions or other fees or amounts which
are or may become payable to any third party in connection with
the execution and delivery of this Agreement and the completion of
the transactions contemplated hereby which are not disclosed in
this Agreement.
Representations and Warranties - Chalk Group
3.02 The Vendor and Sideware hereby jointly and severally
represent and warrant to the Purchaser, with the intent that the
Purchaser shall rely thereon in entering into this Agreement and in
concluding the transactions contemplated hereby, with respect to the
Chalk Group that:
(a) the companies comprising the Chalk Group are the owners of and
have good and marketable title to all of the Assets, including
without limitation, all Assets reflected in the Financial
Statements or acquired by such companies after preparation of the
unaudited Financial Statements dated February 28, 2002, free and
clear of all Encumbrances whatsoever, except for:
(i) the Assets disposed of, utilized or consumed since the
February 28, 2002 Financial Statements in the ordinary course
of the Business;
(ii) the Encumbrances disclosed or reflected in the Financial
Statements together with the Permitted Encumbrances;
(iii) liens for taxes not yet due and payable; and
(iv) the Permitted Encumbrances;
(b) none of the Assets are in the possession of or under the control
of any other Person;
(c) the Financial Statements have been prepared in accordance with
accounting principles generally accepted in Canada applied on a
basis consistent with prior fiscal periods. The Financial
Statements present fairly the financial position of the Chalk
Group as at the date thereof and fairly state loss and deficit for
the periods covered thereby;
(d) except to the extent reflected or reserved against in the
Financial Statements or incurred subsequent to the date thereof in
the ordinary and usual course of the Business, the companies
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comprising the Chalk Group do not have any outstanding
indebtedness or any liabilities or obligations (whether accrued,
contingent or otherwise);
(e) save and except as disclosed to the Purchaser in writing since the
date of the balance sheet included in the unaudited Financial
Statements dated February 28, 2002, there has not been:
(i) any changes in the condition or operations of the
Business, Assets or financial affairs of the Chalk Group
which are, individually or in the aggregate, materially
adverse; or
(ii) any damage, destruction or loss or other event,
development or condition, of any character (whether or not
covered by insurance) which is not generally known or
which has not been disclosed to the Purchaser, which has
or may materially and adversely affect the Business,
Assets, properties or future prospects of the Chalk Group;
(f) all material financial transactions of the companies comprising
the Chalk Group have been accurately recorded in the books and
records of such companies and such books and records fairly
present the financial position and the corporate affairs of the
companies comprising the Chalk Group;
(g) Since the internally prepared unaudited Financial Statements dated
February 28, 2002, the companies comprising the Chalk Group have
not:
(i) transferred, assigned, sold or otherwise disposed of any
of the Assets shown in the Financial Statements to any
Person which is not affiliated or associated with the
Chalk Group or cancelled any debts or claims except in
each case in the ordinary and usual course of business;
(ii) incurred or assumed any obligation or liability (fixed or
contingent), except unsecured current obligations and
liabilities incurred in the ordinary and normal course of
business;
(iii) discharged or satisfied any Encumbrance, or paid any
obligation or liability (fixed or contingent), other than
current liabilities or the current portion of long term
liabilities disclosed in the Financial Statements or
current liabilities incurred since the date thereof in the
ordinary and normal course of business;
(iv) declared or made, or committed to make, any payment of any
dividend or other distribution in respect of any of their
shares or purchased or redeemed any of their shares or
split, consolidated or reclassified any of their shares;
(v) suffered any operating loss or any material extraordinary
loss or entered into any material commitment or
transaction not in the ordinary and usual course of
business;
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(vi) waived or surrendered any right of substantial value;
(vii) made any gift of money or of any property or assets to any
Person, or made any agreement or promise to do so;
(viii) amended or changed or taken any action to amend or change
their constating documents;
(ix) except as expressly disclosed in this Agreement, increased
or agreed to increase the pay of, or paid or agreed to pay
any pension, bonus, share of profits or other similar
benefit of, any director, employee or officer or former
director, employee or officer;
(x) except as expressly disclosed in this Agreement, made
payments of any kind to or on behalf of the Vendor or any
affiliate or associate of the Vendor or under any
management agreement save and except business related
expenses and salaries in the ordinary course of business
and at the regular rates payable to them;
(xi) mortgaged, pledged, subjected to lien, granted a security
interest in or otherwise encumbered any of the Assets or
property, whether tangible or intangible; or
(xii) authorized or agreed or otherwise have become committed to
do any of the foregoing;
(h) save and except as disclosed in writing to the Purchaser, the
accounts receivable shown in the Financial Statements or acquired
subsequent to the date thereof have been recorded by in accordance
with usual accounting practices. The reserves taken for doubtful
or bad accounts is adequate based on past experience and is
consistent with the accounting procedures used by the companies
comprising the Chalk Group in previous fiscal periods. There is
nothing which would indicate that any such reserve is not adequate
or that a higher reserve should be taken;
(i) the companies comprising the Chalk Group do not own or possess any
assets other than the Assets described in the Financial
Statements;
(j) to the best of the knowledge of the Vendor, none of the companies
comprising the Chalk Group is party to, bound by or subject to any
indenture, mortgage, lease, agreement, instrument, judgment or
decree which would be violated or breached by, or under which
default would occur or which could be terminated, cancelled or
accelerated, in whole or in part, as a result of the execution and
delivery of this Agreement or the consummation of any of the
transactions provided for herein;
(k) to the best of the knowledge of the Vendor, after due enquiry,
there is not any suit, action, litigation, arbitration proceeding
or governmental proceeding, including appeals and applications for
review, in progress, pending or threatened against, or relating to
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an of the companies comprising the Chalk Group or affecting the
Assets or the Business which might materially and adversely affect
the Assets, Business, future prospects or financial condition of
such companies, and there is not presently outstanding against any
of the companies comprising the Chalk Group any judgment, decree,
injunction, rule or order of any court, governmental department,
commission, agency, instrumentality or arbitrator save and except
as disclosed in Schedule "F" to this Agreement;
(l) the companies comprising the Chalk Group have made all of the
payments due and owing under the Permitted Encumbrances up to and
including the date of this Agreement in accordance with the terms
and conditions of the Permitted Encumbrances, and have not
committed any default under the terms and conditions of the
Permitted Encumbrances save and except as have been disclosed in
writing to the Purchaser;
(m) each of the companies comprising the Chalk Group:
(i) has filed in a timely manner all workers' compensation
returns, corporation capital tax returns, commodity tax
returns, and other reports and information required to be
filed with all applicable government authorities, agencies
or regulatory bodies;
(ii) has paid all taxes (including all federal, provincial,
state and local taxes, assessments or other imposts in
respect of its income, business, assets or property) and
all interest and penalties thereon, for all previous years
and all required instalment payments due for the current
fiscal year have been paid; and
(iii) has provided adequate reserves for all taxes for the
periods covered by, and such reserves are reflected in,
the Financial Statements;
and there is no agreement, waiver or other arrangement providing
for an extension of time with respect to the filing of any tax
return, or payment of any tax, governmental charge or deficiency
by any of such companies nor is there any action, suit,
proceeding, investigation or claim now threatened or pending in
respect of, or discussion underway with any Governmental Authority
relating to, any such tax or governmental charge or deficiency;
(n) the companies comprising the Chalk Group hold all permits and
licenses, consents and authorities issued by any Governmental
Authority which are necessary or desirable in connection with the
conduct and operation of the Business and the ownership or leasing
of the Assets and the conduct and operation of the Business as the
same are now owned, leased, conducted or operated and none of such
companies is in breach of or in default under any term or
condition of any thereof;
(o) there has not been any default in any term, condition, provision
or obligation to be performed under any of the Material Contracts,
each of which is in good standing and in full force and effect,
unamended;
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(p) save and except for such Encumbrances which may be imposed by
statute in favour of any Governmental Authority, there is no
indebtedness to any Person which might, by operation of law or
otherwise, now or hereafter constitute or be capable of forming an
Encumbrance, except a Permitted Encumbrance, upon any of the
Assets;
(q) none of the Companies comprising the Chalk Group has made any
collective bargaining agreement or other agreement with a trade
union, labour union or other employees' association or made
commitments or conducted negotiations with any trade union, labour
union or other employees' association with respect to any future
agreements, and the Vendor is not aware of any current attempt to
organize or establish any trade union, labour union or other
employees' association in connection with the Business and no part
of the Business has been certified as a unit appropriate for
collective bargaining;
(r) save and except pursuant to applicable labour legislation and any
management contract set out in Schedule "D", there is no
employment or management contract, commitment or arrangement,
whether written, oral or implied, relating to any of the companies
comprising the Chalk Group which:
(i) contains any specific agreement as to notice of termination
or severance pay in lieu thereof; or
(ii) cannot be terminated without cause upon giving such
reasonable notice as may be required by law without the
payment of, or any indebtedness in respect of, any bonus,
damages, share of profits or penalty;
(s) save and except as disclosed in Schedule "D", none of the
employees of the companies comprising the Chalk Group have the
benefit of any pension, deferred compensation or profit sharing
plan or similar plan;
(t) the following agreements pertaining to the Chalk Group have been
cancelled and terminated and are of no further force or effect:
(i) the Voting Trust Agreement dated January 26, 2000 made
between Xxxxx Xxx Xxxxx, CML Global Capital Ltd., Xxxxxxx
Agerbo and Xxxxx.xxx Holding;
(ii) the Support Agreement dated January 26, 2000 made between
Xxxxx.xxx Holding and Chalk Productions Incorporated;
(iii) the Put Agreement dated January 26, 2000 made between Xxxxx
Xxx Xxxxx, CML Global Capital Ltd., Xxxxxxx Agerbo and
Xxxxx.xxx Holding; and
(iv) the Shareholders' Agreement dated May 5, 1999 made between
Xxxxx Xxx Xxxxx, Canadian Maple Leaf Financial Corporation
and Chalk Productions Incorporated, as amended by the
Amending Shareholders' Agreement dated January 26, 2000 made
between Xxxxx Xxx Xxxxx, CML Global Capital Ltd., Xxxxxxx
Agerbo and Xxxxx.xxx Holding.
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Representations and Warranties - Xxxxx.xxx Holding
3.03 The Vendor and Sideware hereby jointly and severally
represent and warrant to the Purchaser, with the intent that the
Purchaser shall rely thereon in entering into this Agreement and in
concluding the transactions contemplated hereby, with respect to
Xxxxx.xxx Holding that:
(a) Xxxxx.xxx Holding:
(i) is a corporation duly incorporated, organized, subsisting and
in good standing under the laws of the State of Delaware; and
(ii) has the corporate power to own its assets and to carry on its
business;
(b) the authorized capital of Xxxxx.xxx Holding consists of 75,000,000
shares of capital stock, with each share having a par value of
$0.0001, divided into 50,000,000 shares of Common Stock of which
26,790,251 shares of Common Stock have been validly issued and
are outstanding as fully paid and non-assessable, and 25,000,000
shares of Preferred Stock which may be issued in one or more
series, of which no shares of Preferred Stock are issued and
outstanding;
(c) save and except as set out in Schedule "C" to this Agreement, no
Person has any agreement or option, present or future, contingent,
absolute or capable of becoming an agreement or option or which
with the passage of time or the occurrence of any event could
become an agreement or option:
(i) to require Xxxxx.xxx Holding to issue any further or other
shares in its capital or any other security convertible or
exchangeable into shares in its capital or to convert or
exchange any securities into or for shares in the capital of
Xxxxx.xxx Holding;
(ii) for the issue or allotment of any of the authorized but
unissued shares in the capital of Xxxxx.xxx Holding;
(iii) to require Xxxxx.xxx Holding to purchase, redeem or otherwise
acquire any of the issued and outstanding shares in the
capital of Xxxxx.xxx Holding; or
(iv) to acquire any of the Purchased Shares;
(d) as at the date of this Agreement, Xxxxx.xxx Holding has five
directors and the names and positions of all of the directors and
officers of Xxxxx.xxx Holding are as follows:
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Xxxxx Xxxxx - Director
Xxxxx Xxxxxxxxxx - Director, President and Chief Executive Officer
Xxxxxxx Xxxxxxx - Director and Chief Financial Officer
Xxxxxxx Agerbo - Director and Chief Operating Officer
Xxxx Xxxxxxxxxx - Director and Executive Vice President
Xxxxxxxxxxx Xxxxx - Vice President Sales and Marketing
X.X. Xxxxxxx - Vice President Productions and Engineering
Xxxxxxx Xxxxxx - Secretary;
(e) to the best of the knowledge of the Vendor, Xxxxx.xxx Holding has
kept the records required to be kept by the Delaware General
Corporation Law and any other applicable corporate legislation and
such records are complete and accurate and contain all minutes of
all meetings of directors and members of Xxxxx.xxx Holding.
Representations and Warranties - Chalk Productions Incorporated
3.04 The Vendor and Sideware hereby jointly and severally
represent and warrant to the Purchaser, with the intent that the
Purchaser shall rely thereon in entering into this Agreement and in
concluding the transactions contemplated hereby, with respect to Chalk
Productions Incorporated, that:
(a) Chalk Productions Incorporated:
(i) is a company duly incorporated, organized, subsisting and
in good standing under the laws of British Columbia;
(ii) has the corporate power to own its assets and to carry on
its business;
(b) the authorized capital of Chalk Productions Inc. consists of
50,000,100 shares divided into 100 common shares with a par value
of $1.00 CDN each, of which 100 common shares are issued and
outstanding, and 50,000,000 Exchangeable Shares without par value,
of which no Exchangeable Shares are issued and outstanding;
(c) Xxxxx.xxx Holding is the registered and beneficial holder of all
of the issued and outstanding common shares in the capital of
Chalk Productions Incorporated;
(d) no Person has any agreement or option, present or future,
contingent, absolute or capable of becoming an agreement or option
or which with the passage of time or the occurrence of any event
could become an agreement or option:
(i) to require Chalk Productions Incorporated to issue any
further or other shares in its capital or any other security
convertible or exchangeable into shares in its capital or to
convert or exchange any securities into or for shares in the
capital of Chalk Productions Incorporated;
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(ii) for the issue or allotment of any of the authorized but
unissued shares in the capital of Chalk Productions
Incorporated;
(e) as at the date of this Agreement, Chalk Productions Incorporated
has three directors and the names and positions of all of the
directors and officers of Chalk Productions Incorporated are as
follows:
Xxxxx Xxxxxxxxxx - Director, President and Chief Executive Officer
Xxxxxxx Xxxxxxx - Director, Secretary and Chief Financial Officer
Xxxxx Xxxxx - Director;
(f) to the best of the knowledge of the Vendor, Chalk Productions
Incorporated has kept the records required to be kept by the
Company Act and any other applicable corporate legislation and
such records are complete and accurate and contain all minutes of
all meetings of directors and members of Chalk Productions
Incorporated.
Representations and Warranties - New Century Digital Broadcasting
Corporation
3.05 The Vendor and Sideware hereby jointly and severally
represent and warrant to the Purchaser, with the intent that the
Purchaser shall rely thereon in entering into this Agreement and in
concluding the transactions contemplated hereby, with respect to New
Century Digital Broadcasting Corporation, that:
(a) New Century Digital Broadcasting Corporation:
(i) is a company duly incorporated, organized, subsisting and in
good standing under the laws of British Columbia;
(ii) has the corporate power to own its assets and to carry on its
business;
(b) the authorized capital of New Century Digital Broadcasting
Corporation consists of 2,000,000 shares divided into 1,000,000
Class A shares without par value, of which 440,000 Class S shares
are issued and outstanding, and 1,000,000 Class B shares with a
par value of $0.01 CDN each, of which 100 Class B shares are
issued and outstanding;
(c) Chalk Holdings Inc. is the registered and beneficial holder of all
of the issued and outstanding Class A shares and Class B shares in
the capital of New Century Digital Broadcasting Corporation;
(d) no Person has any agreement or option, present or future,
contingent, absolute or capable of becoming an agreement or option
or which with the passage of time or the occurrence of any event
could become an agreement or option:
(i) to require New Century Digital Broadcasting Corporation to
issue any further or other shares in its capital or any other
security convertible or exchangeable into shares in its
16
capital or to convert or exchange any securities into or for
shares in the capital of New Century Digital Broadcasting
Corporation;
(ii) for the issue or allotment of any of the authorized but
unissued shares in the capital of New Century Digital
Broadcasting Corporation;
(e) as at the date of this Agreement, New Century Digital Broadcasting
Corporation has three directors and the names and positions of all
of the directors and officers of New Century Digital Broadcasting
Corporation:
Xxxxx Xxxxxxxxxx - Director, President and Chief Executive Officer
Xxxxxxx Xxxxxxx - Director and Chief Financial Officer
Xxxxx Xxxxx - Director
Xxxxxxx Xxxxxx - Secretary
Xxxxxxx Agerbo - Chief Operating Officer;
(f) to the best of the knowledge of the Vendor, New Century Digital
Broadcasting Corporation has kept the records required to be kept
by the Company Act and any other applicable corporate legislation
and such records are complete and accurate and contain all minutes
of all meetings of directors and members of New Century Digital
Broadcasting Corporation.
Representations and Warranties - Xxxxx.xxx Network Corporation
3.06 The Vendor hereby represents and warrants to the Purchaser,
with the intent that the Purchaser shall rely thereon in entering into
this Agreement and in concluding the transactions contemplated hereby,
with respect to Xxxxx.xxx Network Corporation, that:
(a) Xxxxx.xxx Network Corporation:
(i) is a corporation duly incorporated, organized, subsisting
and in good standing under the laws of the State of
Delaware; and
(ii) has the corporate power to own its assets and to carry on
its business;
(b) the authorized capital of Xxxxx.xxx Network Corporation consists
of 3,000 shares having a par value of $0.0001 US per share, all of
which are designated as Common Stock, of which one share of Common
Stock is issued and outstanding;
(c) Xxxxx.xxx Holding is the registered and beneficial holder of the
sole issued and outstanding share of Common Stock of Xxxxx.xxx
Network Corporation;
(d) no Person has any agreement or option, present or future,
contingent, absolute or capable of becoming an agreement or option
or which with the passage of time or the occurrence of any event
could become an agreement or option:
17
(i) to require Xxxxx.xxx Network Corporation to issue any further
or other shares in its capital or any other security
convertible or exchangeable into shares in its capital or to
convert or exchange any securities into or for shares in the
capital of Xxxxx.xxx Network Corporation;
(ii) for the issue or allotment of any of the authorized but
unissued shares in the capital of Xxxxx.xxx Network
Corporation;
(e) as at the date of this Agreement, Xxxxx.xxx Network Corporation
has three directors and the names and positions of all of the
directors and officers of Xxxxx.xxx Network Corporation:
Xxxxx Xxxxxxxxxx - Director, President and Chief Executive Officer
Xxxxxxx Xxxxxxx - Director and Chief Financial Officer
Xxxxx Xxxxx - Director
Xxxxxxx Xxxxxx - Secretary
Xxxxxxx Agerbo - Chief Operating Officer;
(f) to the best of the knowledge of the Vendor, Xxxxx.xxx Network
Corporation has kept the records required to be kept by the
Delaware General Corporation Law and any other applicable
corporate legislation and such records are complete and accurate
and contain all minutes of all meetings of directors and members
of Xxxxx.xxx Network Corporation.
Representations and Warranties - Chalk Holdings Inc.
3.07 The Vendor hereby represents and warrants to the Purchaser,
with the intent that the Purchaser shall rely thereon in entering into
this Agreement and in concluding the transactions contemplated hereby,
with respect to Chalk Holdings Inc., that:
(a) Chalk Holdings Inc.:
(i) is a corporation duly incorporated, organized, subsisting
and in good standing under the laws of Canada;
(ii) has the corporate power to own its assets and to carry on
its business;
(b) the authorized capital of Chalk Holdings Inc. consists of an
unlimited number of common shares, of which 4,200,000 common
shares are issued and outstanding;
(c) Chalk Productions Incorporated is the registered and beneficial
holder of all of the issued and outstanding common shares in the
capital of Chalk Holdings Inc.,
(d) no Person has any agreement or option, present or future,
contingent, absolute or capable of becoming an agreement or option
or which with the passage of time or the occurrence of any event
could become an agreement or option:
18
(i) to require Chalk Holdings Inc., to issue any further or other
shares in its capital or any other security convertible or
exchangeable into shares in its capital or to convert or
exchange any securities into or for shares in the capital of
Chalk Holdings Inc.;
(ii) for the issue or allotment of any of the authorized but
unissued shares in the capital of Chalk Holdings Inc.;
(e) as at the date of this Agreement, Chalk Holding Inc., has
directors and the names and positions of all of the directors and
officers of Chalk Holding Inc.,:
Xxxxx Xxxxxxxxxx - Director, President and Chief Executive Officer
Xxxxxxx Xxxxxxx - Director, Secretary and Chief Financial Officer
Xxxxx Xxxxx - Director
(f) to the best of the knowledge of the Vendor, Chalk Holding Inc.,
has kept the records required to be kept by the Canada Business
Corporations Act and any other applicable corporate legislation
and such records are complete and accurate and contain all minutes
of all meetings of directors and members of Chalk Holding Inc.
Representations and Warranties in Closing Documents
3.08 All statements contained in any certificate or other
instrument delivered by or on behalf of the Vendor or Sideware pursuant
hereto or in connection with the transactions contemplated hereby shall
be deemed to be representations and warranties by the Vendor and
Sideware under this Agreement.
Survival of Representations and Warranties
3.09 The representations and warranties of the Vendor and Sideware
contained in this Article 3 shall survive the completion of the
transactions contemplated by this Agreement and shall continue in full
force and effect for the benefit of the Purchaser thereafter,
notwithstanding any independent enquiry or investigation by the
Purchaser.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Representations and Warranties
4.01 The Purchaser hereby represents and warrants to the Vendor
and Sideware, with the intent that they shall rely thereon in entering
into this Agreement and in concluding the transactions contemplated
hereby, that:
19
(a) the Purchaser is a company duly incorporated, validly subsisting
and in good standing under the laws of British Columbia;
(b) the Purchaser has full power, authority, right and capacity to
enter into this Agreement and to carry out the transactions
contemplated hereby and to duly observe and perform all of its
covenants and obligations herein set forth;
(c) this Agreement has been duly and validly executed and delivered by
the Purchaser and constitutes a legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as may be limited by laws of
general application affecting the rights of creditors;
(d) neither the execution or delivery of this Agreement, or the other
agreements and instruments contemplated hereby, nor the completion
of the transactions contemplated hereby will constitute or result
in the breach of or default under any terms, provisions or
conditions of, or conflict with, violate or cause any, or give to
any Person or Governmental Authority any right of, after the
giving of a notice or the lapse of time or otherwise,
acceleration, termination or cancellation in or with respect to
any of the following:
(i) any constating documents, charter documents or by-laws of the
Purchaser or any resolution of the directors or shareholders
of the Purchaser;
(ii) any indenture, mortgage, deed of trust, agreement, contract,
lease, franchise, certificate, consent, authority,
registration or other instrument or commitment to which the
Purchaser is a party or is subject, or by which it is bound
or from which it derives benefit; or
(iii) any law, judgment, decree, order, injunction, rule, statute
or regulation of any court, arbitrator or Governmental
Authority by which the Purchaser is bound or from which it
derives benefit;
(f) all negotiations relating to this Agreement have been carried on
by the Purchaser directly with the Vendor and there are no
brokerage fees, commissions or other fees or amounts which are or
may become payable to any third party in connection with the
execution and delivery of this Agreement and the completion of the
transactions contemplated hereby which has not been disclosed in
this Agreement;
(g) the 21,925,050 Chalk Media Common Shares to be allotted and issued
by the Purchaser to the Vendor in payment of the purchase price
for the Purchased Shares will, on Closing, be duly and validly
allotted and issued to the Vendor as fully paid and non-assessable
shares in the capital of the Purchaser;
(h) the Chalk Media Warrants to be issued by the Purchaser in payment
of the purchase price for the Purchased Shares will, on Closing,
be duly and validly issued to the Vendor and the Purchaser shall
20
have allotted 500,000 Chalk Media Common Shares for issuance to
the Purchaser upon exercise of the Chalk Media Warrants; and
(i) it is presently the Purchaser's intention to "go public" and seek
a listing on the Canadian Venture Exchange, the Toronto Stock
Exchange or another recognized stock exchange located in North
America.
Survival
4.02 The representations and warranties contained in section 4.01
shall survive the completion of the transactions contemplated by this
Agreement and shall continue in full force and effect for the benefit of
the Vendor and Sideware thereafter, notwithstanding any independent
enquiry or investigation by the Vendor or Sideware.
Indemnity
4.03 The Purchaser covenants to indemnify and hold harmless the
Vendor and Sideware from and against any loss, claims, damages,
liability, expenses and costs, including any payment made in good faith
in settlement of any claim or potential claim, arising from any of the
representations and warranties set forth in section 4.01 being incorrect
or breached.
ARTICLE 5
COVENANTS OF THE VENDOR AND SIDEWARE
Covenants
5.01 The Vendor and Sideware jointly and severally covenant and
agree with the Purchaser that they will:
(a) procure and obtain all such consents, approvals, releases and
discharges as may be required to effect the transactions
contemplated hereby;
(b) take or cause to be taken all proper steps, actions and corporate
proceedings to enable the Vendor to transfer a good and marketable
title to the Purchased Shares to the Purchaser, free and clear of
all Encumbrances whatsoever;
(c) on Closing, execute and deliver to the companies comprising the
Chalk Group a release of any and all claims that the Vendor or
Sideware may have against each of such companies including,
without limitation, a release of any inter-company credit balances
in favour of the Vendor or Sideware; and
21
(d) use their best commercial efforts to cooperate with the Purchaser
should the Purchaser elect to "go public" and seek a listing on
the Canadian Venture Exchange, the Toronto Stock Exchange or any
other recognized stock exchange located in North America.
Indemnity
5.02 The Vendor and Sideware jointly and severally covenant and
agree to indemnify and hold harmless the Purchaser from and against:
(a) any and all loss, damages, expenses, costs and deficiencies
resulting from any misrepresentation, misstatement, breach of
warranty or the non-fulfilment of any covenant on the part of the
Vendor or Sideware under this Agreement or under any document or
instrument delivered pursuant hereto or in connection herewith;
and
(b) any and all claims, actions, suits, proceedings, demands,
assessments, judgments, charges, penalties, costs and expenses
(including any payment made in good faith in settlement of any
claim or potential claim, and including the full amount of any
reasonable legal expenses invoiced to any of the companies
comprising the Chalk Group) which arise or are made or claimed
against or are suffered or incurred by the companies comprising
the Chalk Group or the Purchaser, as the case may be, in respect
of any of the foregoing.
ARTICLE 6
CLOSING
Closing
6.01 The closing of the purchase and sale of the Purchased Shares
and the other transactions contemplated by this Agreement shall be
completed concurrently with the execution and delivery of this
Agreement.
Closing Documents
6.02 At Closing, the Vendor and Sideware shall deliver or cause to
be delivered to the Purchaser the following:
(a) a share certificate or share certificates representing the
Purchased Shares, duly endorsed for transfer to the Purchaser;
(b) a certified copy of resolutions of the directors of Xxxxx.xxx
Holding approving the transfer of the Purchased Shares by the
Vendor to the Purchaser
22
(c) evidence satisfactory to the Purchaser that Xxxxx.xxx Holding's
corporate records have been updated to disclose that the Purchased
Shares have been transferred to the Purchaser and that the
Purchaser is the registered holder thereof;
(d) a certified copy of resolutions of the directors of the Vendor
duly passed, with a certification that it has not been rescinded
and continues to be in effect, which authorizes the execution and
delivery of this Agreement and the completion of the transactions
contemplated hereby;
(e) a certified copy of a special resolution of Sideware, in its
capacity as the sole shareholder of the Vendor, duly passed, with
a certification that it has not been rescinded and continues to be
in effect, which authorizes the execution and delivery of this
Agreement and the completion of the transactions contemplated
hereby;
(f) a certified copy of resolutions of the directors of Sideware duly
passed, with a certification that it has not been rescinded and
continues to be in effect, which authorizes the execution and
delivery of this Agreement and the completion of the transactions
contemplated hereby;
(g) a release of any and all claims that the Vendor or Sideware may
have against each of the companies comprising the Chalk Group,
duly executed by each of the Vendor and Sideware, including,
without limitation, a release of any inter-company credit balances
in favour of the Vendor or Sideware;
(h) all such other documents and instruments as the Purchaser may
reasonably require.
6.03 At Closing, the Purchaser shall deliver or cause to be
delivered to the Vendor and Sideware, the following:
(a) to the Vendor, a share certificate or share certificates
representing 21,925,050 Chalk Media Common Shares duly registered
in the name of the Vendor, in payment of the purchase price for
the Purchased Shares;
(b) to the Vendor, a certificate or certificates representing the
Chalk Media Warrants duly registered in the name of the Vendor, in
payment of the purchase price for the Purchased Shares;
(c) to the Vendor and Sideware, a certified copy of resolutions of the
directors of the Purchaser duly passed, with a certification that
it has not been rescinded and continues to be in effect, which
authorizes the execution and delivery of this Agreement and the
completion of the transactions contemplated hereby including,
without limitation, the issuance to the Vendor of 21,925,050 Chalk
Media Common Shares and the Chalk Media Warrants;
(d) to the Vendor, copies of the Purchaser's Register of Allotments
and Register of Members duly completed and showing the Vendor as
the registered holder of 21,925,050 Chalk Media Common Shares and
that 500,000 Chalk Media Common Shares have been allotted for
issuance upon exercise of the Chalk Media Warrants;
23
(e) to the Vendor and Sideware, a release of any and all claims that
each of the companies comprising the Chalk Group may have against
Vendor or Sideware, duly executed by each of such companies,
including, without limitation, a release of any inter-company
credit balances in favour of each of such companies;
(i) all such other documents and instruments as the Vendor or Sideware
may reasonably require.
ARTICLE 7
GENERAL PROVISIONS
Notices
7.01 All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if delivered by hand or mailed postage prepaid addressed as
follows:
To Sideware:
Sideware Systems Inc.
Xxxxx 000 - 000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxxx X0X 0X0
To the Vendor:
Syd Enterprises Ltd.
Suite 1620 - 000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
To the Purchaser:
Chalk Media Corp.
Suite 1600 - 000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
or to such other address as may be given in writing by the parties and
shall be deemed to have been received, if delivered by hand, on the date
of delivery and if mailed as aforesaid to the addresses set out above
then on the fifth business day following the posting thereof provided
that if there shall be between the time of mailing and the actual
receipt of the notice a mail strike, slowdown or other labour dispute
which might affect the delivery of the notice by the mails, then the
notice shall only be effective if actually delivered.
24
Non-Merger
7.02 Notwithstanding the completion of the transactions
contemplated by this Agreement, the waiver of any condition contained
herein (unless such waiver expressly releases a party of any such
representation, warranty, covenant or agreement) or any investigation
made by any of the parties, the representations, warranties, covenants
and agreements of the parties set forth in this Agreement shall survive
the Closing and will remain in full force and effect.
Time of Essence
7.03 Time is hereby expressly made of the essence of this
Agreement with respect to the performance by the parties of their
respective obligations under this Agreement.
Binding Effect
7.04 This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and assigns.
Entire Agreement
7.05 This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and shall supersede
all previous expectations, understandings, communications,
representations and agreements whether verbal or written between the
parties with respect to the subject matter hereof.
Further Assurances
7.06 Each of the parties hereto hereby covenants and agrees to
execute such further and other documents and instruments and do such
further and other things as may be necessary or desirable to implement
and carry out the intent of this Agreement.
Assignment
7.07 None of the parties may assign or transfer their respective
rights under this Agreement.
25
Amendments
7.08 No amendment to this Agreement shall be valid unless it is
evidenced by a written agreement executed by all of the parties hereto.
Legal and Other Expenses
7.09 Each party shall be responsible for their own legal and other
fees, inclusive of GST and Social Service Tax, which may be incurred in
contemplation of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement
as of the day and year first above written.
SIDEWARE SYSTEMS INC.
Per: /s/ Xxxxx X. Xxxxxx
Authorized Signatory
SYD ENTERPRISES LTD.
Per: /s/ Xxxxx X. Xxxxxx
Authorized Signatory
CHALK MEDIA CORP.
Per: /s/ Xxxxx Xxxxxxxxxx
Authorized Signatory
>PAGE>
Schedule "A"
Financial Statements
Schedule "B"
Xxxxx Xxxxx Employment Contract
THIS EMPLOYMENT CONTRACT (the "Agreement") is entered into as of
August 31, 2001 between:
XXXXX.XXX NETWORK (HOLDING) CORPORATION,
having a business office at 000-0000 Xxxxxxxx Xxxxxx,
Xxxxxxx
X0X 0X0
(the "Company")
and
XXXXX XXXXX, of 00000 Xxxxxx Xxxx, Xx Xxxxxx,
Xxxxxxx Xxxxxxxx X0X 0X0
("Chalk")
Recitals
A. WHEREAS, the Company is engaged in the business of producing
both a television program and airline vignettes aimed at
educating the public as to the different uses, functions and
capabilities of computers, electronics and other high
technology equipment;
B. WHEREAS, the Company is also engaged in the business of
providing e-training services through the vehicle of the world
wide web and other mediums;
C. WHEREAS, in order to achieve its corporate and business
objectives, the Company desires to hire Chalk to be the
founder and television personality for the Company's
television programs, airline vignettes and e-training
services;
D. WHEREAS, Chalk is experienced in, and knowledgeable concerning
the aspects of the business of the Company; and
E. WHEREAS, the Company and Chalk mutually desire to agree upon
the terms of Chalk's future employment with the Company and,
in addition thereto, to agree as to certain benefits of said
employment;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Term. The term of this Agreement shall commence on the 31st day
of July, 2001 and shall continue through to the 31st day of July, 2006
unless terminated in accordance with the provisions of this Agreement.
2. Titles and Duties. Chalk shall perform diligently and
conscientiously those duties as are customarily rendered by and
required of a founder and television personality, including without
limitation:
(a) appearing as a performer on television, internet, and
other video content produced by the Company and its
subsidiaries;
(b) participating in the development and marketing of the
television, internet, and other video content produced by
the Company and its subsidiaries;
(c) providing information and assistance to the Company's
Board of Directors; and
(d) such other duties as the Company's Board of Directors
may reasonably require, including but not limited to
performing duties either for the Company or any of its
present or future subsidiaries
(collectively and individually the "Duties").
3. Exclusive Employment. Subject to normal and reasonable absence
for reasons of illness, accident and/or incapacity, Chalk shall devote
his attention and energies to the business of the Company on a full
time basis and shall not, during the term of this Agreement, be
engaged in any other business activity, excepting only those
activities set out in Schedule A attached hereto, whether or not such
business activity is pursued for gain, profit or other pecuniary
advantage, that will interfere with his Duties. With prior written
approval of the Board of Directors of the Company, such approval not
to be unreasonably withheld or delayed, Chalk may serve on the boards
of directors of other companies.
4. Change of Duties. Provided the Company is not in default of this
Agreement, the Company has, in its sole discretion, the right from
time to time to set or alter the Duties of the job where such
variation shall not materially affect the duties set out in paragraph
2 and where such variation shall not result in the reassignment of
Chalk to a new location outside of the greater Vancouver area.
5. Compensation. During the term of his employment, Chalk will
be paid a base salary on the first and fifteenth day of each month at
an annual rate of $250,000 CND dollars (the "Base Salary"), subject to
increase from time to time by the Board of Directors of the Company.
In addition, Chalk may be entitled to the following stock options:
(a) Upon the occurrence of an initial public offering, options in
the Company commensurate with Chalk's position and responsibility
at that time; and
(b) Options in Sideware Systems Inc. (in the event that Sideware
Systems Inc. acquires a controlling interest in the Company).
The prices and vesting schedules for the foregoing options shall be
determined in accordance with the customary practices of the optionor,
and in accordance with the regulation of any stock exchange on which
the shares of the optionor or any other regulatory body with
jurisdiction over the optionor.
6. Bonus. In addition to the Base Salary, Chalk may receive a
discretionary bonus in such form and amounts and at such times as the
Company may determine in its sole discretion.
7. Expenses. The Company shall reimburse Chalk for all reasonable
expenses incurred by him in the course of performing his duties under
this Agreement which are consistent with the Company's policies in
effect from time to time with respect to travel, entertainment and
other business expenses, subject to the Company's customary
requirements with respect to reporting and documentation of such
expenses.
8. Automobile. During the term of this Agreement, Chalk shall be
entitled to participate in all of the Company's employee benefit
programs for which senior executive employees of the Company are
generally eligible. In addition, the Company shall provide Chalk with
an automobile allowance of $950.00 per month.
9. Vacation. Chalk shall be entitled to a vacation period each year
of four weeks, during which time his compensation shall be paid in
full.
10. Disability. The Company shall have the right to terminate this
Agreement upon Chalk's total permanent disability, as defined herein.
For the purposes of this Agreement, the phrase "total permanent
disability" shall mean the inability of Chalk to perform his duties
hereunder for a continuous period of more than four months, such
determination to be made by the Company in its sole discretion.
11. Cause. The Company may, pursuant to the following procedure,
discharge Chalk for good cause. For the purposes hereof, the term
"cause" includes, but is not limited to:
A. Chalk's (i) fraud, felonious conduct or dishonesty or (ii)
willful misconduct or gross negligence in the performance of
his duties hereunder; or
B. Chalk's breach of any material provision of this Agreement
where such breach is not cured by Chalk within a twenty-one
day period after notice by the Company.
Upon the occurrence of what the Company believes to be good cause, the
Company shall give Chalk written notice of the reason or cause for
discharge twenty-one days prior to the proposed date of discharge,
which shall be effective on such date.
12. Trade Secrets. Chalk acknowledges that certain of the Company's
products and services are proprietary in nature and shall have been
manufactured, assembled and marketed through the use of customer
lists, supplier lists, trade secrets, methods of operation and other
confidential information possessed by the Company and disclosed in
confidence to Chalk (hereinafter "Trade Secrets") which may not be
easily accessible to other persons in the trade. Chalk also
acknowledges that he will have substantial and ongoing contact with
the Company's customers and suppliers and will hereby gain knowledge
of customer needs and preferences, sources of supply, methods of
assembly and other valuable information necessary for the success of
the Company's business. Chalk therefore, covenants and agrees (all of
which covenants and agreements shall survive termination of this
Agreement regardless of the reason therefore) that Chalk shall not at
any time during the term of this Agreement or any time subsequent to
its termination disclose to any person or entity, or use for personal
gain any of the Trade Secrets or any other confidential information of
or pertaining to the Company or its products and services. Chalk
further agrees that he shall not either during the term of the
Agreement or subsequent to termination or expiration hereof,
regardless of the reason therefore, disclose or otherwise reveal any
Trade Secrets to any person, either directly or indirectly, whether or
not for compensation or other remuneration, except for in the ordinary
course of business while performing duties on behalf of the Company.
13. Non Solicitation of Employees. Chalk shall not, within an
eighteen month period following the termination of this Agreement,
regardless of the reason therefore, solicit any person then or
theretofore employed by the Company or appointed as a representative
of the Company to join Chalk as a partner, co-venturer, employee,
investor or otherwise, in any substantial business activity
whatsoever.
14. Non Solicitation of Clients. Chalk shall not, within an eighteen
month period following the termination of this Agreement, regardless
of the reason therefore, solicit, induce, aid or suggest to any client
of the Company to leave or terminate such contractual relationships as
currently exist with the Company.
15. Non Competition. Provided this Agreement is not terminated by
Chalk as a result of a default on the part of the Company, which
default has not been remedied within 21 days of Chalk providing notice
of said default to the Company, then for a period of eighteen months
immediately following the termination of this Agreement Chalk shall
not engage in the following activities:
A. performing on the television, the internet or on the radio as
a means to explain or teach the different uses, functions,
capabilities of computers, electrical equipment or other high
technology related equipment subject only to those activities
set out in Schedule A;
B. lend the Chalk name out to any other business for any reason
whatsoever;
C. act as a director or an executive in an e-training or computer
training business; or
D. either individually or in partnership or in conjunction with
any other person or firm, association, syndicate, company or
corporation, as principal, agent, shareholder or in any other
manner whatsoever carry on or be engaged in, concerned with or
interested in, directly or indirectly, any business
competitive with the business of the Company or any of its
subsidiaries or affiliates and shall not canvass, solicit or
deal in a manner competitive with the business of the Company
or its subsidiaries.
16. Injunctive Relief. Chalk expressly agrees and acknowledges that
any breach or threatened breach of him by paragraphs 12, 13, 14 and 15
herein, and each of them, will cause irreparable damage to the
Company, for which monetary damages will be an inadequate remedy, and
that the damages flowing from such breach are not readily susceptible
to being measured in monetary terms. Accordingly, in addition to all
of the Company's rights and remedies under this Agreement, including,
but not limited to, the right to recovery of monetary damages from
Chalk, the Company shall be entitled to seek an issuance by any court
of competent jurisdiction of temporary, preliminary and permanent
injunctions, without bond, enjoining any such breach or threatened
breach by Chalk.
17. Reasonable Terms. The Company has bargained for the covenants
set forth in this Agreement in consideration for the experience,
knowledge and information Chalk will gain and the substantial
compensation Chalk will earn under this Agreement. Chalk acknowledges
that the covenants set forth in this Agreement will not in any way
preclude Chalk, upon termination of this Agreement, from engaging in a
lawful profession, trade or business.
18. Place of Performance. It is contemplated that Chalk shall
perform his principal duties in Greater Vancouver, British Columbia,
except for temporary or emergency assignments.
19. Company Reputation. Chalk agrees that he will at no time take
any action or make any statement that could discredit the reputation
of the Company or its products or services. Further, Chalk will use
his reasonable commercial best efforts in performing the terms of this
Agreement and will act in a loyal and trustworthy manner.
20. Governing Law. This Agreement shall be subject to and governed
by the laws of the province of British Columbia and the federal laws
of Canada applicable therein, irrespective of the fact that Chalk may
become a resident of a different province.
21. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the Company and Chalk and their respective heirs,
legal representatives, executors, administrators, successors and
assigns.
22. Severability. If any portion or portions of this Agreement shall
be, for any reason, invalid or unenforceable, the remaining portion or
portions shall nevertheless be valid, enforceable and carried into
effect, unless to do so would clearly violate the present legal and
valid intention of the parties hereto.
23. Survival. Paragraphs 12, 13, 14 and 15 shall survive and
continue in full force in accordance with their terms notwithstanding
any termination of this Agreement.
24. Headings. The headings of this Agreement are inserted for
convenience only and are not to be considered in construction of the
provisions hereof.
25. Use of Name. Provided this Agreement is not terminated by
Chalk as a result of a default on the part of the Company, which
default has not been remedied within 21 days of Chalk providing notice
of said default to the Company, then during the Term of this Agreement
and for a period of 10 years thereafter, the Company and any of its
subsidiaries shall be entitled to:
(a) continue to use the name "Chalk" in their corporate names
or any business style or trademark used by them to
describe their business; and
(b) continue to produce and publish a television show under
the name of the "Xxxx Xxxxx Computer Show" or any similar
name incorporating the name "Chalk"; and
(c) continue to use the name "Chalk" in the production,
publication, and marketing of any television, radio, or
internet graphical, audio or video content reasonably
related to the business of the Company or its
subsidiaries.
Provided that such use of the "Chalk" name shall be applied to
such business activities for which a reasonably high standard of
professional ethics apply.
26. Settlement of Accounts. The parties acknowledge and agree that:
(a) the Company and its subsidiaries have from time to time
utilized the personal residence of Chalk as a film set for the
Company's productions, and have from time to time paid rent
therefore;
(b) the Company and Chalk did not fully define their respective
obligations for costs relating to use of the Chalk residence
as a film set;
(c) as a result of the foregoing, disputes have arisen between
Chalk and the Company as to the indebtedness, if any, of Chalk
to the Company; and
(d) in June 2001, Chalk made payments totaling $175,000 to the
Company on account of any indebtedness of Chalk to the
Company.
Chalk and the Company hereby agree that following the payment
described in (d), as at June 30, 2001, no indebtedness exists as
between Chalk and the Company or as between Chalk and any of the
Company's subsidiaries. Each party releases the other from any and
all claims that exists with respect to said indebtedness as at June
30, 2001.
27. Provided the Company shall not be in default of this Agreement,
the Company shall have the right to assign this Agreement, and all of
the rights and privileges under it, to any subsidiary of the Company
without Chalk's prior consent.
28. This Agreement contains the entire contract of the parties with
respect to the subject matter hereof and supersedes all prior
agreements or understandings, including, without limitation,
agreements or understandings between Chalk and the Company or Chalk
and a subsidiary of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first written above.
"Xxxxx Xxxxx"
XXXXX XXXXX
XXXXX.XXX NETWORK (HOLDING) CORPORATION
"Xxxxx Xxxxx" President
Per: Authorized Signatory
SCHEDULE A
To Xxxxx Xxxxx Employment Agreement
Xxxx Xxxxx may continue to perform the following activities during the
term of this Agreement;
1. public speaking engagements to promote Xxxxx Xxxxx which are
not in competition with the business of the Company and do not
interfere with Chalk's Duties as set out in the Agreement;
2. engaging in television and radio interviews and appearances to
promote Xxxxx Xxxxx which are not in competition with the
business of the Company and do not interfere with Chalk's
Duties as set out in the Agreement; and
3. publishing articles, journals and other written documents
authored by Xxxxx Xxxxx to promote Xxxxx Xxxxx which are not
in competition with the business and do not interfere with
Chalk's Duties as set out in the Agreement;
Schedule "C"
Xxxxx.xxx Holding - Options, Warrants and Convertible Securities
The outstanding special warrants as at March 27, 2002 were as follows:
Special Warrant Holder Number of Special Date
Warrants Issued
-----------------------------------------------------------------------
1. Xxxxx Xxxx 31,576 November 6, 2000
2. Marino's Markets Ltd. 32,551 November 6, 2000
3. Cubix Investments Inc. 662,500 November 6, 2000
4. Xxxxxxx Xxxxxx 32,248 November 6, 2000
5. Xxxxxxx Xxxxxx 39,750 November 6, 2000
6. Xxxx X. Holdings Ltd. 132,500 November 6, 2000
7. Sailaway Holdings Ltd. 31,576 November 6, 2000
8. T. Ventures Ltd. Partnership 100,000 November 6, 2000
9. Xxxxxx and Xxxx Xxxxxxx 31,576 November 6, 2000
10. Dr. Gratio Xxxxx 31,576 November 6, 2000
11. Global Renaissance Fund Inc. 50,350 November 6, 2000
12. Sideware Systems Inc. 100,000 November 6, 2000
13. Canaccord Capital Corporation 203,072 November 6, 2000
14. Cubix Investments Inc. 150,000 February 15, 2001
15. Cubix Investments Inc. 512,500 March 23, 2001
16. Canaccord Capital Corporation 9,000 February 15, 2001
17. Canaccord Capital Corporation 380,750 March 23, 2001
---------------------------------------------
Total 2,531,525
=============================================
The outstanding common warrants as at March 27, 2002 were as follows:
(a) Xxxxxxxx & Xxxxxxxx LLP have 107,531 common warrants
issued on July 31, 2000;
(b) Sprucefield Management have 40,000 common warrants issued
on July 31, 2000; and
(c) EOP Operating Limited Partnership have 2,500 warrants
issued on January 21, 2000.
The outstanding stock options as of March 27, 2002 were as follows:
Optionee No. of Options
Andsten, Xxxxx 25,000
Xxxxxxx, Xxxxxx 2,700
Xxxxx, Xxxxxxxxxxx 35,000
Xxxxxxxx, Xxxx 5,000
Xxxxxx, Xxxxx 35,000
Xxxx, Xxxx 32,000
Xxx, Xxxxx 7,200
Xxxxx, Xxxxxxx 4,500
Agerbo, Xxxx 100,000
Agerbo, Xxxx 45,000
Amicus Investments 30,000
Xxxxxxx, Xxxxxx 100,000
Xxxxx, Xxxxx 110,000
Xxxxxxxx, Xxxxxxx 80,000
Xxxxx, Xxxxx 30,000
Xxxxxxxxxx, Xxxx 125,000
Xxxxxx, Xxxxxx 40,000
Xxxxxxx, XX 200,000
Outstanding Number 1,006,400
Schedule "D"
Material Contracts
Capital Leases
Supplier
Leaseline Telephone 04/13/03 750.80
Pemberton Leasing 1 Equipment 12/14/03 909.72
Pemberton Leasing 2 Equipment 12/27/03 650.94
Pemberton Leasing 3 Equipment 12/31/03 1,236.90
Pemberton Leasing 4 Equipment 10/01/04 714.26
Pemberton Leasing 5 Equipment 11/15/04 703.96
Steelcase Office Furniture 12/31/03 3,528.84
--------
8,495.41
--------
Operating Leases
Burnaby office lease 7,347 square ft 11/29/02 10,809.27
Toronto office lease 05/31/02 3,531.00
Office security system 02/01/03 134.50
Location security system 02/01/03 540.42
---------
15,015.19
---------
Other Agreements
Globix Content Hosting 11/29/02 1,600.00
Group Telecom Hosting 11/30/02 1,681.00
Location Rental 30 days notice 15,000.00
Xxxxx Xxxxxx claim 08/01/02 3,000.00
---------
21,281.00
---------
44,791.61
=========
Customer Contracts
1. Canon Canada contract for video campaign in the amount of
$10,000;
2. Microtek Labs Inc. contract for interactive content in the
amount of $39,500;
3. Minds@work contract for interactive content in the amount of
$7,998;
4. D-Link contract for interactive content in the amount of
$75,000;
5. Verizon contract for interactive content in the amount of
$60,785;
6. Adventus contract for CD product in the amount of $512;
7. 3H (Samsung) contract for inflight content in the amount of
$32,300;
8. Infocus contract for inflight content in the amount of
$21,600;
9. Hitachi contract for inflight content in the amount of
$22,000;
10. Serebra contract for Web content;
11. Crystal Decisions contract for CD product in the amount of
$10,000;
12. Sony contract for inflight content in the amount of $20,000;
and
13. Powersport contract for TV in the amount of $20,800.
Employment Contracts
1. Five year term Employment Agreement with Xxxxx Xxxxx;
2. Five year term Employment Agreement with Xxxxxxx Agerbo;
3. Employment Agreement with Xxxxxxxxxxx Xxxxx;
4. Employment Agreement with Xxx Xxxxxxxx;
5. Employment Agreement with Xxxxx Xxx;
6. Employment Agreement with Xxxxx Xxxxxx;
7. Employment Agreement with Xxxx Del Xxxxxxx; and
8. Employment Agreement with Xxxxxx Xxxxxx-Xxxx
Schedule "E"
Permitted Encumbrances
Capital Leases
Supplier
Leaseline Telephone 04/13/03 750.80
Pemberton Leasing 1 Equipment 12/14/03 909.72
Pemberton Leasing 2 Equipment 12/27/03 650.94
Pemberton Leasing 3 Equipment 12/31/03 1,236.90
Pemberton Leasing 4 Equipment 10/01/04 714.26
Pemberton Leasing 5 Equipment 11/15/04 703.96
Steelcase Office Furniture 12/31/03 3,528.84
--------
8,495.41
========
Schedule "F"
Actions, Suits and Proceedings
1. Xxxxx Xxxxx Xxxxxx v. Xxxxx.xxx Network Corporation and New
Century Digital Broadcasting Corporation and Xxxxx Xxx Xxxxx.
fs