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Exhibit 2.0
The Share Purchase Agreement dated December 20, 2000 between the Shareholders of
Cobratech Industries Inc,. and Unique Bagel Co., Inc. contains the following
schedules:
Schedule Description
--------- -----------
A Listing of Vendors
B Listing of Other Shareholders
1.1 (k) Intellectual Property
1.1 (q) Encumbrances -- none
1.1 (v) Subsidiaries
3.1 (i) Business Arrangements of the Company
3.1 (l) Copy of Memorandum and Articles of Cobratech Industries
Inc.
3.1 (m) List of Officers and Directors of Cobratech Industries
Inc.
3.2 (a) Consolidated Financial statements of Cobratech Industries
Inc. at October 15, 2000
3.4 (a) List of Material Agreements of Cobratech Industries Inc.
3.5 (g) List of Laid Off Employees -- none
4.2 (a) Financial Statement of Unique Bagel Co., at September 30,
2000
5.1 (h) Form of Share Purchase Agreement for Other Shareholders
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SHARE PURCHASE AGREEMENT
THIS AGREEMENT is dated for reference December 20, 2000.
AMONG
Those Persons Listed in Schedule A
(collectively the "Vendors" and individually by their full names)
AND:
COBRATECH INDUSTRIES INC., a British Columbia company with
an office at 1116 - 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0
(the "Company")
AND:
UNIQUE BAGEL CO., INC., a Delaware corporation with an office in
care of 00 Xxxx Xxxx, Xxxx X, Xxxx Xxxxxx, Xxxxxxxxxx, XXX 00000
(the "Purchaser")
WHEREAS:
A. The Vendors are the registered holders and beneficial owners of those
number of issued and outstanding shares of the Company set forth beside their
respective names in Schedule A.
B. Schedule B set forth the names of those Persons who are the registered
holders and beneficial owners of all of the issued and outstanding shares of the
Company not owned by the Vendors (the "Other Shareholders") and the number of
shares of the Company registered in the name of and beneficially owned by each
of such Persons.
C. The Vendors wish to sell, and the Purchaser wishes to purchase, the
Vendors' Shares.
D. The Purchaser wishes to purchase and the Vendors and the Company will
use their best efforts to cause the Other Shareholders to sell the Other
Shareholders' Shares to the Purchaser.
IN CONSIDERATION of the covenants and agreements in this Agreement, the parties
agree as follows:
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1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
(a) "AGREEMENT" means this agreement including any recitals and
Schedules to this agreement, as amended, supplemented or restated
from time to time;
(b) "ANCILLARY AGREEMENTS" means all agreements, certificates and
other instruments delivered or given pursuant to this Agreement;
(c) "APPLICABLE LAWS" in respect of any Person, property, transaction
or event, means all present and future laws, statutes,
regulations, treaties, judgments and decrees applicable to that
Person, property, transaction or event and, whether or not having
the force of law, all applicable official directives, rules,
consents, approvals, authorizations, guidelines, orders and
policies of any Governmental Authority having or purporting to
have authority over that Person, property transaction or event;
(d) "BUSINESS" means the marketing and selling of e-security,
e-business and e-financial products and services in Asia and the
provision of consulting services related thereto;
(e) "BUSINESS DAY" means a day other than a Saturday, Sunday or
statutory holiday in British Columbia. The Business Day will end
at 4:30 p.m. PST on that day;
(f) "CLOSING" has the meaning given to it in Section 2.1;
(g) "CLOSING DATE" has the meaning given to it in Section 7.1;
(h) "COMPANY" has the meaning given to it in Recital A;
(i) "GAAP" means generally accepted accounting principles in effect
in the United States of America as indicated;
(j) "GOVERNMENTAL AUTHORITY" means any domestic or foreign
government, including any federal, provincial, state, territorial
or municipal government, and any government agency, tribunal,
commission or other authority exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, government;
(k) "INTELLECTUAL PROPERTY" means, collectively, all right, title,
and interest of the Company in and to all copyrights, moral
rights, patents, trade-marks, trade names, business names,
know-how, licenses, trade secrets or confidential information,
industrial designs, integrated circuit topographies, plant
breeder's rights and other industrial or intellectual property,
whether
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registered or unregistered, including all improvements,
modifications or enhancements thereto, owned by, licensed to, or
used by, the Company in connection with the Business all as more
particularly described in Schedule 1.1(k);
(l) "INTERIM PERIOD" means the period between the date of this
Agreement and the Closing Date;
(m) "LIEN" means any mortgage, lien, charge, hypothec or encumbrance,
whether fixed or floating, on, or any security interest in, any
property, whether real, personal or mixed, tangible or
intangible, any pledge or hypothecation of any property, any
deposit arrangement, priority, conditional sale agreement, other
title retention agreement or equipment trust, capital lease or
other security arrangements of any kind (and including, in the
case of shares or other securities, shareholders agreements,
voting trust agreements and similar arrangements);
(n) "NOTICE" means any notice citation, directive, order, claim
litigation, investigation, proceeding, judgment, letter or other
communication, written or oral, actual or threatened, from any
Person;
(o) "OTHER SHAREHOLDERS" has the meaning given to it in Recital B;
(p) "OTHER SHAREHOLDERS' SHARES" means the Shares of the Other
Shareholders described in Recital B;
(q) "PERMITTED ENCUMBRANCES" means, with respect to the Business, the
Liens described in Schedule 1.1(q);
(r) "PERSON" means any natural person, sole proprietorship,
partnership, corporation, trust, joint venture, any Governmental
Authority or any incorporated or unincorporated entity or
association of any nature;
(s) "SEC" means the Securities and Exchange Commission of the United
States;
(t) "SECURITIES ACT" means the United States Securities Act of 1933.
(u) "SHARES" means the common shares without par value in the capital
of the Company;
(v) "SUBSIDIARIES" means the corporations listed in Schedule 1.1(v)
and "SUBSIDIARY" means any one of them;
(w) "TAX" or "TAXES" includes all present and future taxes, surtaxes,
duties, levies, imposts, rates, fees, assessments, withholdings,
dues and other charges of any nature imposed by any Governmental
Authority (including income, capital (including large
corporations), withholding, consumption, sales, use, transfer,
goods and services or other value-added, excise, customs,
anti-dumping, stumpage, countervail, net
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worth, stamp, registration, franchise, payroll, employment,
health, education, business, school, property, local improvement,
development, education development and occupation taxes,
surtaxes, duties, levies, imposts, rates, fees, assessments,
withholdings, dues and charges) together with all fines,
interest, penalties on or in respect of, or in lieu of or for
non-collection of, those taxes, surtaxes, duties, levies,
imposts, rates, fees, assessments, withholdings, dues and other
charges;
(x) "TIME OF CLOSING" means 10:00 a.m. on the Closing Date;
(y) "VENDORS' SHARES" means the Shares owned by the Vendors as more
particularly described in Recital A;
(z) "WRITTEN" includes printed, typewritten, faxed or otherwise
capable of being visibly reproduced at the point of reception and
"IN WRITING" has a corresponding meaning.
1.2 SECTION REFERENCES
Unless otherwise specified, references in this Agreement to "Sections" and
"Schedules" are to Sections of, and Schedules to, this Agreement.
1.3 STATUTORY REFERENCES
Unless otherwise specified, each reference to a statute is deemed to be a
reference to that statute, and to the regulations made under that statute, as
amended or re-enacted from time to time.
1.4 NUMBER AND GENDER
Unless otherwise specified, words importing the singular include the plural and
vice versa and words importing gender include all genders.
1.5 TIME OF DAY
Unless otherwise specified, references to time of day or date mean the local
time or date in Vancouver, British Columbia.
1.6 USE OF THE WORD "INCLUDING"
The word "INCLUDING" when following any general term or statement will not be
construed as limiting the general term or statement to the specific matter
immediately following the word "including" or to similar matters, and the
general term or statement will be construed as referring to all matters that
reasonably could fall within the broadest possible scope of the general term or
statement.
1.7 CURRENCY
All references to amounts of money mean lawful currency of the United States of
America.
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1.8 ACCOUNTING TERMS
An accounting term which is not otherwise defined has the meaning assigned to
it, and all accounting matters will be determined, in accordance with GAAP,
consistently applied.
1.9 GOVERNING LAW
This Agreement and each of the documents contemplated by or delivered under or
in connection with this Agreement are governed exclusively by, and are to be
enforced, construed and interpreted exclusively in accordance with, the laws of
British Columbia which will be deemed to be the proper law of this Agreement.
1.10 SEVERABILITY
Each provision of this Agreement is several. If any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any jurisdiction, the
illegality, invalidity or unenforceability of that provision will not affect:
(a) the legality, validity or enforceability of the remaining
provisions of this Agreement; or
(b) the legality, validity or enforceability of that provision in any
other jurisdiction;
except that if:
(c) on the reasonable construction of this Agreement as a whole, the
applicability of the other provision presumes the validity and
enforceability of the particular provision, the other provision
will be deemed also to be invalid or unenforceable; and
(d) as a result of the determination by a court of competent
jurisdiction that any part of this Agreement is unenforceable or
invalid and, as a result of this Section 1.8, the basic
intentions of the parties in this Agreement are entirely
frustrated, the parties will use all reasonable efforts to amend,
supplement or otherwise vary this Agreement to confirm their
mutual intention in entering into this Agreement.
1.11 TIME OF ESSENCE
Time is of the essence of this Agreement.
2. PURCHASE AND SALE
2.1 PURCHASE AND SALE COVENANT
On the basis of the warranties, representations and covenants of the Vendors in
this Agreement and subject to the fulfilment of any condition that has not been
waived by the party entitled to the benefit thereof, the Purchaser will purchase
from the Vendors and the Other Shareholders and the Vendors will sell the
Vendors' Shares and will use their best efforts to cause the Other
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Shareholders to sell the Other Shareholders' Shares to the Purchaser at the
closing herein provided for on the terms and conditions herein set forth.
2.2 PURCHASE PRICE
In consideration for the Vendors' Shares and the Other Shareholders' Shares
being purchased hereunder the Purchaser will issue to each of the Vendors and
each of the Other Shareholders on the Closing Date the number of shares of
common stock in the capital of the Purchaser (the "Purchaser Shares") set forth
beside their respective names in Schedules A and B.
3. VENDORS' REPRESENTATIONS AND WARRANTIES
3.1 CORPORATE AND SHARE REPRESENTATIONS
The Vendors represent and warrant that:
(a) INCORPORATION. The Company is a corporation duly incorporated,
organized and existing under the Company Act (British Columbia),
is not a reporting company, and is a valid and subsisting company
in good standing with respect to filing of annual reports with
the Registrar of Companies of British Columbia. Each Subsidiary
is a corporation duly incorporated, validly existing and in good
standing in the jurisdiction of its incorporation;
(b) CARRYING ON BUSINESS. The Company carries on business in British
Columbia and through a Subsidiary, in Japan and Hong Kong, and
does not carry on business in any other province or territory of
Canada or any other country;
(c) AUTHORIZED CAPITAL. The authorized capital of the Company is
200,000,000 Shares of which there are issued and outstanding as
fully paid and non-assessable 11,413,700 Shares;
(d) OWNERSHIP. The facts and information contained in the recitals to
this Agreement are true in every respect. All of the shares of
the Subsidiaries except as noted in Schedule 1.1(v) are owned by
the Company free and clear of all Liens.
(e) VALID ISSUANCE. The Vendors' Shares and the Other Shareholders'
Shares are validly issued and outstanding as fully paid and
non-assessable in the capital of the Company and have been issued
in compliance with all Applicable Laws;
(f) LIENS. The Vendors' Shares are free and clear of all Liens other
than those restrictions on transfer contained in the articles of
the Company;
(g) AUTHORITY. The Vendors have good and sufficient right and
authority to enter into this Agreement on the terms and
conditions herein set forth and to implement this Agreement and,
in particular, to transfer to the Purchaser the legal title and
beneficial ownership of the Vendors' Shares free and clear of all
Liens other than those restrictions on transfer contained in the
articles of the Company;
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(h) NO OPTIONS, ETC. No Person, other than the Purchaser, has any
right, present or future, contingent or absolute (whether by law,
pre-emptive or contract), to purchase the Vendors' Shares or to
require the Company or any Subsidiary to issue any share in its
capital and no triggering event has occurred under the Family
Relations Act (British Columbia) which gives a Person any right
to the Vendors' Shares of that Vendor;
(i) OTHER INVESTMENTS. The Company does not own, and is not a party
to any agreement to acquire, directly or indirectly, any shares
in the capital of, any partnership interest in or any other
equity interests in, any Person except the Subsidiaries, and the
Company and the Subsidiaries have no agreement to acquire, lease,
or amalgamate with any other business operations except that the
Company has agreed to enter into a joint venture with E-Financial
Xxxxx.xxx Inc. or as described in Schedule 3.1(i);
(j) BUSINESS OF THE COMPANY. The Business is the only material
business operation carried on by the Company and the Subsidiaries
at present and the Company and the Subsidiaries have sufficient
assets and properties to carry on the Business as is presently
conducted;
(k) CORPORATE POWERS. The Company and the Subsidiaries have the power
to own the properties owned by them and to carry on the
businesses carried on by them and they are duly qualified to
carry on business in British Columbia and every other
jurisdiction in which Business is being carried on;
(l) CHARTER DOCUMENTS. Schedule 3.1(l) is a true, correct and
complete copy of the Company's memorandum and articles currently
in effect;
(m) DIRECTORS AND OFFICERS. The directors and officers of the Company
and each Subsidiary together with their respective positions are
as set out in Schedule 3.1(m).
3.2 FINANCIAL AND TAX REPRESENTATIONS
The Vendors and the Company represent and warrant that:
(a) the audited consolidated financial statements of the Company for
the fiscal period ending October 15, 2000 attached to this
Agreement as Schedule 3.2(a) were prepared by the Company in
accordance with GAAP applied on a basis consistent with prior
years, are correct and accurate in every particular and present
fairly the financial condition and position of the Company as at
October 15, 2000 and the results of its operations for the period
from January 1, 2000 to October 15, 2000;
(b) there are no liabilities, contingent or otherwise, known or
unknown, of the Company or any Subsidiary which are not disclosed
or reflected in Schedule 3.2(a) except those incurred in the
ordinary course of the Business after
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the date of this Agreement and bridge financing to the Company in
the amount of $610,000.00 and there have been no payments after
the date of this Agreement of a liability of the Company or any
Subsidiary except in the ordinary course of business;
(c) since October 15, 2000 there has been no material adverse change
in the financial position or condition of the Company or any
Subsidiary except that the Company has borrowed by way of bridge
financing the sum of $610,0000.00 and no damage, loss, or
destruction materially affecting the business or property of the
Company or any Subsidiary or its right or capacity to carry on
business;
(d) neither the Company nor any Subsidiary has guaranteed, or agreed
to guarantee, any debt, liability or other obligation of any
Person;
(e) all tax returns and reports of each of the Company and Subsidiary
required by law to be filed prior to the date hereof have been
filed and are true, complete and correct and all taxes and other
government charges have been paid or accrued in the financial
statements attached hereto as Schedule 3.2(a);
(f) under the provisions of the Income Tax Acts of Canada and British
Columbia, the Company has been, since its incorporation, and is
now a Canadian-controlled private corporation;
(g) adequate provision has been made for taxes payable for the
current period for which tax returns are not yet required to be
filed, and there are no agreements, waivers or other arrangements
providing for an extension of time with respect to the filing of
any tax return by, or payment of, any tax, governmental charge or
deficiency by the Company or any Subsidiary; and
(h) the Vendors, the Company and its directors, officers and
employees are not aware of any contingent tax liabilities of the
Company or any Subsidiary or any grounds which will prompt
reassessment including aggressive treatment of income and
expenses in filing earlier tax returns.
3.3 ASSET REPRESENTATIONS
The Vendors and the Company represent and warrants that:
(a) TITLE. Except for the Permitted Encumbrances, the Company or the
Subsidiaries have good and marketable title or leasehold rights
to and possession of all assets used by the Company or the
Subsidiaries in carrying out the Business free and clear of all
Liens;
(b) EQUIPMENT. The equipment and machinery used by the Company or the
Subsidiaries in the Business constitutes all of the equipment and
machinery used
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by the Company or the Subsidiaries in the Business and are in
normal operating condition and in a state of reasonable
maintenance and good repair; and
(c) INTELLECTUAL PROPERTY. The Company owns, licenses or uses the
Intellectual Property and neither the Company nor the Vendors are
aware of any infringement of the Intellectual Property of the
Company and are not aware of any infringement by the Company of
any intellectual property of any other Person.
3.4 CONTRACTUAL REPRESENTATIONS
The Vendors and the Company represent and warrant that:
(a) CONTRACTS. Except as set forth in Schedule 3.4(a), neither the
Company nor the Subsidiaries have any contracts, agreements,
leases, licenses, pension plans, profit sharing plans, bonus
plans, undertakings or arrangements either oral, written or
implied with any Person including employees, agents, lessees,
licensees, suppliers, officers or directors which are material to
the Company and the Subsidiaries or which cannot be terminated on
less than one month's notice or which require any payments on
termination and the Company and the Subsidiaries have complied
with the terms and conditions of all agreements to which it is a
party and the Vendors are not aware of any defaults by the
Company, the Subsidiaries or any other party to any such
agreement;
(b) LITIGATION. There are no actions, suits, judgments,
investigations or proceedings outstanding or pending or, to the
best knowledge of the Vendors, threatened against or affecting
the Company or the Subsidiaries at law or at equity;
(c) COMPLIANCE WITH LAWS. The Company and the Subsidiaries are not in
breach of Applicable Laws to which it is subject or which apply
to it;
(d) INDEBTEDNESS BY VENDORS. Neither the Vendors nor any officer,
director, employee or shareholder of the Company or the
Subsidiaries are now indebted or under obligation to the Company
or the Subsidiaries on any account whatsoever except as disclosed
in Schedule 3.2(a);
(e) INDEBTEDNESS TO VENDORS. The Company and the Subsidiaries are not
indebted or under any obligation to the Vendors except as
disclosed in Schedule 3.2(a) and the sum of $90,0000.00 to each
of Xxxx Xxxxxxxx, Xxxxxxx Xxxxxx and Xxxx Xxxxxxxx; and
(f) CANADIAN RESIDENT. The Vendors are residents of Canada for all
purposes of the Income Tax Act of Canada.
3.5 EMPLOYEE REPRESENTATIONS
The Vendors and the Company represent and warrant that:
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(a) there are no employee benefit, pension or other similar plans
affecting or paid for by the Company or the Subsidiaries;
(b) the Company and the Subsidiaries have 14 employees;
(c) the Company is not a party to any collective agreement with any
trade union or other association of employees and no attempt has
been, or is being, made to organize or certify the employees of
the Company as a bargaining unit;
(d) the Company has not been certified by the Labour Relations Board,
or its predecessor, and the Company has not voluntarily
recognized any trade union or any other employee association as
bargaining agent for its employees;
(e) the Company is not a successor to any other legal entity in
respect of any collective agreement or proceeding under the
Labour Relations Code (British Columbia) or predecessor
enactments;
(f) no employees are on long term or short term disability or any
leave of absence and no employees are off work and in receipt of
workers' compensation benefits as of the date hereof;
(g) no employees are laid off except those employees listed in
Schedule 3.5(g); and
the consummation of the transactions contemplated by this Agreement will not
constitute an event under any Employee Plan or individual agreement with a
present or former employee that will or may result in any severance or other
payment or in the acceleration, vesting or increase in benefits with respect to
any present or former employee.
3.6 GENERAL VENDOR REPRESENTATIONS
The Vendors and the Company represent and warrant that:
(a) NO CONFLICT. The making of this Agreement and the completion of
the transactions contemplated hereby and the performance of and
compliance with the terms hereof does not conflict with or result
in the breach of, or the acceleration of, any terms, provisions
or conditions of or constitute a default under the memorandum or
articles of the Company or any indenture, mortgage, deed of
trust, agreement, licenses, lease, franchise, certificate, or
other instrument to which the Company, the Vendors or any
Subsidiary are a party or are bound;
(b) FULL DISCLOSURE. None of the Vendors' nor the Company's
representations, warranties or statements contained in this
Agreement contain any untrue statement of fact or omit to state
any fact necessary in order to make any such representations,
warranties or statements not misleading and all information
relating to the Company or the Subsidiaries which is known or
would, on reasonable enquiry, be known to the Vendors or the
Company and which may be
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material to a purchase for value of the Vendors' Shares has been
disclosed in writing to the Purchaser and any such information
arising on or before the Closing Date will forthwith be disclosed
in writing to the Purchaser;
(c) ENFORCEABILITY. This Agreement has been duly executed and
delivered by each of the Vendors and the Company and is a legal,
valid and binding obligation of each Vendor and the Company,
enforceable against the Vendors and the Company by the Purchaser
in accordance with its terms.
3.7 CERTIFICATES
All certificates of each Vendor or the Company delivered to the Purchaser and
its representatives pursuant to this Agreement, and the information contained in
each, will be deemed to be part of the representations and warranties of the
Vendors, contained in this Section 3.
4. PURCHASER'S REPRESENTATIONS AND WARRANTIES
4.1 PURCHASER'S REPRESENTATIONS AND WARRANTIES
The Purchaser represents and warrants that:
(a) INCORPORATION. The Purchaser is a corporation duly incorporated,
organized and existing under the laws of the State of Delaware
and is a valid and subsisting company in good standing in all
respects under the laws of the State of Delaware;
(b) AUTHORIZED CAPITAL. The authorized capital of the Purchaser is
40,000,000 shares of common stock with a par value of $.0001 per
share and upon completion of this transaction, there will be
validly issued and outstanding as fully paid and non-assessable
not greater than 16,500,000 shares of common stock.
(c) AUTHORITY. The Purchaser has good and sufficient right and
authority to enter into this Agreement on the terms and
conditions herein set forth and to implement and perform its
obligations under this Agreement and, in particular, to issue to
and provide the Vendors and the Other Shareholders with the legal
title and beneficial ownership of the Purchaser Shares free and
clear of all Liens other than those restrictions on transfer set
forth under Rule 144 of the Rules and Regulations of the SEC of
the United States or such other Applicable Laws;
(d) OTHER INVESTMENTS. The Purchaser does not own, and is not a party
to any agreement to acquire, directly or indirectly, any shares
in the capital of, any partnership interest in or any other
equity interests in, any Person, and the Purchaser has no
agreement to acquire, lease, or amalgamate with any other
business operations;
(e) DIRECTORS AND OFFICERS. The directors and officers of the
Purchaser together with their position are as follows:
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(1) Director and President: Xxxxx Paulsenbarg
4.2 FINANCIAL REPRESENTATIONS
The Purchaser represents and warrants that:
(a) FINANCIAL STATEMENT. The audited consolidated financial
statements of the Purchaser for the fiscal period ending
September 30, 2000 attached to this Agreement as Schedule 4.2(a)
were prepared by the Purchaser in accordance with GAAP applied on
a basis consistent with prior years, are correct and accurate in
every particular and present fairly the financial condition and
position of the Purchaser as at September 30, 2000 and the
results of its operations for the period from January 1, 2000 to
September 30, 2000;
(b) LIABILITIES. There are no liabilities or material adverse changes
in the affairs, contingent or otherwise, known or unknown, of the
Purchaser which are not disclosed or reflected in Schedule 4.2(a)
and except those incurred in the ordinary course of its business
since September 30, 2000;
(c) MATERIAL CHANGE. Since September 30, 2000, there has been no
material adverse change in the financial position of the
Purchaser and no damage loss, or destruction materially affecting
the business of the Purchaser or its right or capacity to carry;
and
(d) ASSETS. The Purchaser does not own or lease any assets or
properties.
4.3 CONTRACTUAL REPRESENTATIONS
The Purchaser represents and warrants that:
(a) CONTRACTS. The Purchaser does not have any contracts, agreements,
leases, licenses, pension plans, profit sharing plans, bonus
plans, undertakings or arrangements either oral, written or
implied with any Person including employees, agents, lessees,
licensees, suppliers, officers or directors which are material to
the Purchaser or which cannot be terminated on less than one
month's notice or which require any payment by the Purchaser on
termination and the Purchaser has complied with the terms and
conditions of all agreements to which it is a party and is not
aware of any defaults by the Purchaser or the other party to any
such agreement;
(b) LITIGATION. There are no actions, suits, judgments,
investigations or proceedings outstanding or pending or, to the
best knowledge of the Purchaser, threatened against or affecting
the Purchaser at law or at equity;
(c) COMPLIANCE WITH LAWS. The Purchaser is not in breach of
Applicable Laws to which it is subject or which apply to it;
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(d) INDEBTEDNESS BY DIRECTORS AND OFFICERS. No officer, director,
employee or shareholder of the Purchaser is now indebted or under
obligation to the Purchaser on any account whatsoever; and
(e) INDEBTEDNESS TO DIRECTORS AND OFFICERS. The Purchaser is not
indebted or under any obligation to any officer, director,
employee or shareholder of the Purchaser on any account
whatsoever.
4.4 EMPLOYEE REPRESENTATIONS
The Purchaser represents and warrants that the Purchaser has no employees.
4.5 GENERAL PURCHASER REPRESENTATIONS
The Purchaser represents and warrants that:
(a) NO CONFLICT. The making of this Agreement and the completion of
the transactions contemplated hereby and the performance of and
compliance with the terms hereof does not conflict with or result
in the breach of, or the acceleration of, any terms, provisions
or conditions of or constitute a default under the constating
documents of the Purchaser or any indenture, mortgage, deed of
trust, agreement, license, lease, franchise, certificate, or
other instrument to which the Purchaser is a party or is bound;
(b) FULL DISCLOSURE. None of the Purchaser's representations,
warranties or statements contained in this Agreement contain any
untrue statement of fact or omit to state any fact necessary in
order to make any such representations, warranties or statements
not misleading and all information relating to the Purchaser
which is known or would, on reasonable enquiry, be known to the
Purchaser and which may be material to a purchase for value of
the Purchaser Shares has been disclosed in writing to the Vendors
and any such information arising on or before the Closing Date
will forthwith be disclosed in writing to the Vendors;
(c) ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Purchaser and is a legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser by
the Vendors in accordance with its terms.
4.6 CERTIFICATES
All certificates of the Purchaser delivered to the Vendors and their
representatives pursuant to this Agreement, and the information contained in
each, will be deemed to be part of the representations and warranties of the
Purchaser contained in this Section 4.
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5. COVENANTS
5.1 VENDORS' COVENANTS
During the Interim Period, the Vendors will cause the Company and the
Subsidiaries to carry on the Business in the ordinary and normal course in a
prudent, businesslike, and efficient manner and substantially in accordance with
the procedures and practices in effect on the date hereof. Without limiting the
generality of the foregoing, the Vendors will cause the Company and the
Subsidiaries to not, without the prior consent in writing of the Purchaser:
(a) enter into any contract or assume or incur any liability relating
to or in any way affecting the Business;
(b) waive or surrender any material rights in connection with the
Business;
(c) make any capital expenditures or commitment therefor in
connection with its business;
(d) pay or declare any dividends, make any distributions, or redeem
or repurchase any of the shares in the capital of the Company or
any Subsidiary; or
(e) alter the constating documents of the Company or any Subsidiary;
and the Vendors will or will cause the Company and the Subsidiaries to:
(f) use its best efforts to preserve and maintain the goodwill of the
Business;
(g) do all necessary repairs and maintenance to its assets and take
reasonable care to protect and safeguard those assets; and
(h) use their best efforts to cause the Other Shareholders to sell
the Other Shareholders' Shares to the Purchaser and execute the
agreement attached hereto as Schedule 5.1(h).
5.2 PURCHASER'S COVENANTS
During the Interim Period, the Purchaser will carry on its business in the
ordinary and normal course in a prudent, businesslike, and efficient manner and
substantially in accordance with the procedures and practices in effect on the
date hereof. Without limiting the generality of the foregoing, during the
Interim Period the Purchaser will not, without the prior consent in writing of
the Vendors:
(a) enter into any contract or assume or incur any liability relating
to or in any way affecting its business;
(b) waive or surrender any material right in connection with its
business;
16
(c) make any capital expenditures or commitment therefor in
connection with its business;
(d) issue shares in its capital or options or rights to purchase
shares in its capital such that the total number of issued and
outstanding shares in the capital of the Purchaser as at the
Closing Date will exceed 16,500,000 shares on a fully diluted
basis including the Purchaser Shares;
(e) pay or declare any dividends, make any distributions, or redeem
or repurchase any of the shares in the capital of the Purchaser;
or
(f) alter the constating documents of the Purchaser;
and the Purchaser will use its best efforts to preserve and maintain the
goodwill of its business.
5.3 ACCESS FOR DUE DILIGENCE
During the Interim Period, the Purchasers will, and the Vendors will cause the
Company and the Subsidiaries to, at all reasonable times prior to the Closing
Date to permit representatives of all parties full access to the books and
records of the Purchaser, the Company and the Subsidiaries including all
contracts and agreements, minute books and share registers and to give the
parties and their representatives such copies and information with respect
thereto as may be reasonably required and to permit the parties to make such
audit of the books of account of the Company, the Subsidiaries and the Purchaser
as any individual party may see fit. The Purchaser will, and the Vendors will
cause the Company and the Subsidiaries to, cause its senior officers to discuss
and answer fully any and all questions relating to the business and affairs of
the Company, the Subsidiaries or the Purchaser. The provisions of this Section
5.3 are without prejudice to the warranties and representations of the Vendors
and the Purchaser set forth in Sections 3 and 4 of this Agreement and the
conditions set forth in Section 6 of this Agreement.
5.4 NOTICE OF UNTRUE REPRESENTATION OR WARRANTY
The Vendors will promptly notify the Purchaser, and the Purchaser will promptly
notify the Vendors, if any representation made by it in this Agreement or any
Ancillary Agreement become untrue or incorrect during the Interim Period and
such notice will set out particulars of the untrue or incorrect representation
and details of any actions being taken to rectify that state of affairs.
5.5 TRANSFER OF SHARES
The Vendors will take all necessary corporate steps and corporate proceedings to
permit good and marketable title to the Vendors' Shares to be duly and validly
transferred and assigned to the Purchaser at the Closing, free of all Liens. The
Purchaser will take all necessary corporate steps and corporate proceedings to
permit good and marketable title to the Purchaser Shares to be duly and validly
issued to the Vendors at the Closing as fully paid and non-assessable shares in
the capital of the Purchaser, free of all Liens other than those restrictions on
transfer set forth under Rule 144 of the Rules and Regulations of the SEC or
such other Applicable Laws.
17
5.6 CONFIDENTIALITY
If for any reason the transaction herein provided for is not consummated, the
Purchaser will not and will not permit its representatives to:
(a) directly or indirectly, use for their own purposes any
information, trade secrets or confidential data relating to the
Company, the Subsidiaries or the Business (including the
customers of the Business, its operations or the methods of
conducting the Business) discovered or acquired by the Purchaser
or its authorized representatives as a result of the Vendors
making available to the Purchaser or its authorized
representatives any of the information and materials in
connection with the transaction contemplated under this
Agreement;
(b) disclose, divulge or communicate, orally, in writing or
otherwise, any such information, trade secrets or confidential
data to any other Person;
and upon request by the Vendors, the Purchaser will forthwith return to the
Company or destroy all materials or documents containing any such information,
trade secrets or confidential data.
5.7 VENDORS' ACKNOWLEDGEMENT RESPECTING PURCHASER SHARES
Each of the Vendors hereby acknowledge and agree that the Purchaser Shares to be
issued to them pursuant to the terms of this Agreement have not been and will
not be registered under the Securities Act will be subject to Rule 144 of the
Rules and Regulations of the SEC ("Rule 144") and that the certificates
representing such Purchaser Shares will bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"). Such shares have been acquired for investment and may not
be publicly offered or sold in absence of: (1) effective
registration statement for such shares under the Act; (2)
opinions of counsel to the Company prior to any proposed transfer
to the effect that registration is not required under the Act; or
(3) a letter presented to the Company, prior to any proposed
transfer, from the staff of the Securities and Exchange
Commission, to the effect that it will not take any enforcement
action if the proposed transfer is made without registration
under the Act."
Each of the Vendors further acknowledge that:
(a) the Purchaser Shares to be acquired by him/her pursuant to this
Agreement will be acquired for his/her own account, for
investment only and not with a view to, or an intention of
,distribution thereof in violation of the Securities Act, or any
applicable state securities laws, and the Purchaser Shares will
not be disposed of in contravention of the Securities Act or any
applicable state securities laws;
(b) he/she has generally such knowledge and experience in business
and financial matters and with respect to investments in
securities or privately held companies
18
so as to enable him or her to understand and evaluate the risks
and benefits of his or her investment in the Purchaser Shares;
(c) he/she has no need for liquidity in his or her investment in the
Purchaser Shares and is able to bear the economic risk of his or
her investment in the Purchaser Shares for an indefinite period
of time and understands the Purchaser Shares have not been
registered or qualified under the Securities Act or any
applicable state securities laws, by reason of the issuance of
the Purchaser Shares in a transaction exempt from the
registration and qualification requirements of the Securities Act
or such state securities laws and, therefore, cannot be sold
unless subsequently registered or qualified under the Securities
Act or such state securities laws or an exemption from such
registration or qualification is available;
(d) he/she understands that the exemption from registration afforded
by Rule 144 (the provisions of which are known to the Vendors)
depends on satisfaction of various conditions and that, if
applicable, Rule 144 may only afford the basis for sales under
certain circumstances and only in limited amounts;
(e) he/she has been represented by counsel and/or advisors in
connection with the execution and delivery of this Agreement and
has had an opportunity to ask questions and receive answers
concerning the terms and conditions of the offering of the
Purchaser Shares and has had full access to or been provided with
all such other information concerning the Purchaser as he or she
has requested; and
(f) he/she acknowledges that resale of the Purchaser Shares will be
subject to restrictions under applicable British Columbia
securities legislation. The Purchaser Shares may be resold in
British Columbia only pursuant to an exemption from the
prospectus and registration requirements of British Columbia
securities legislation, pursuant to an exemption order granted by
the British Columbia Securities Commission or after the expiry of
a hold period following the date on which the Purchaser becomes a
reporting issuer under British Columbia securities legislation.
It is not anticipated that the transaction will be exempt from
the prospectus and registration requirements and the Purchaser
does not intend to file a prospectus or registration statement,
seek an exemption order or become a reporting issuer in British
Columbia. In addition, the Vendors, when reselling the Purchaser
Shares, may have reporting and other obligations under Applicable
Laws. Accordingly, the Vendors are advised to seek legal advice
with respect to such restrictions.
5.8 BUSINESS MATTERS
On or immediately after the Closing Date and to the extent that Applicable Laws
permit, the Vendors and the Purchaser will take such reasonable actions as may
be required to cause the composition of the board of directors of the Purchaser
to be comprised of five (5) directors three (3) of whom will be the nominees of
the Vendors.
19
5.9 FILING OF REGISTRATION STATEMENT
The parties will use their reasonable best efforts to cause the Purchaser to
prepare and file with the SEC an appropriate registration statement registering
the Purchaser Shares within 180 days after the Closing Date.
6. CONDITIONS OF CLOSING
6.1 PURCHASER'S CONDITIONS OF CLOSING
The Purchaser's obligation to carry out the terms of this Agreement and to
complete the purchase referred to in Section 2.1 hereof is subject to the
conditions, each waivable unilaterally by the Purchaser at its election, that:
(a) the Purchaser will have completed its due diligence of the
Company the result of which is satisfactory to the Purchaser
acting reasonably;
(b) the representations and warranties of the Vendors contained in
this Agreement or in any certificate or other document delivered
to the Purchaser pursuant hereto will be true and correct in all
material respects on or as of the Closing Date with the same
force and effect as if such representations and warranties had
been made on and as of the Closing Date;
(c) all the obligations of the Vendors under this Agreement and the
Ancillary Agreements to be performed at or before the Closing
will have been so performed;
(d) at the Closing Date, there will have been no material adverse
change in the affairs, assets, liabilities, financial condition
or business (financial or otherwise) of the Company since the
date hereof;
(e) shareholders of the Company holding not less than ninety percent
(90%) of the Shares have agreed to sell their Shares to the
Purchaser and those Other Shareholder selling their Shares have
duly executed the form of the agreement attached hereto as
Schedule 5.1(h) at or before the Closing;
(f) no action or proceeding by law or in equity will be pending or
threatened by any Person to enjoin or prohibit:
(1) the purchase and sale of the Vendors' Shares contemplated
hereby or the right of the Purchaser to own the Vendors'
Shares; or
(2) the right of the Company or any Subsidiary to conduct its
operations and carry on its business in the normal course as
its business and its operations have been carried on in the
past;
20
(g) any consents or approvals to this transaction from any Person
will have been obtained on or before the Closing Date; and
(h) the Purchaser will have filed an information statement pursuant
to Rule 00X xx xxx Xxxxxxxxxx Xxxxxxxx Xxx (Xxxxxx Xxxxxx) and
that a period of twenty (20) days has passed from the date of the
filing.
6.2 VENDORS' CONDITIONS OF CLOSING
The obligation of the Vendors to carry out the terms of this Agreement and to
complete the sale referred to in Section 2.1 hereof is subject to the
conditions, each waivable unilaterally by the Vendors at their election, that:
(a) the Vendors will have completed their due diligence of the
Purchaser the result of which is satisfactory to each Vendor
acting reasonably;
(b) as at the Closing Date, no more than 16,500,000 shares, including
the Purchaser Shares, in the capital of the Purchaser will be
issued and outstanding on a fully diluted basis;
(c) the representations and warranties of the Purchaser contained in
this Agreement or in any certificate or other document delivered
to the Vendors pursuant hereto will be true and correct in all
material respects on or as of the Closing Date with the same
force and effect as if such representations and warranties had
been made on and as of the Closing Date; and
(d) all the obligations of the Purchaser under this Agreement and the
Ancillary Agreements to be performed at or before the Closing
will have been so performed;
(e) at the Closing Date, there will have been no material adverse
change in the affairs, assets, liabilities, financial condition
or business (financial or otherwise) of the Purchaser since the
date hereof; and
(f) no action or proceeding by law or in equity will be pending or
threatened by any Person to enjoin or prohibit:
(1) the issuance of the Purchaser Shares contemplated hereby or
the right of the Vendors to own the Purchaser Shares; or
(g) the right of the Purchaser to conduct its operations and carry on
its business in the normal course as its business and its
operations have been carried on in the past.
21
7. CLOSING
7.1 CLOSING DATE
The closing date is, and the Closing of the purchase and sale contemplated by
this Agreement will take place at 10:00 a.m. on January 31, 2001 (the "CLOSING
DATE") at the offices of Messrs. Xxxxxxx Xxxxx, 19th Floor, 885 West Georgia
Street, Vancouver, British Columbia, or such earlier or later date or other
place as the parties hereto may agree in writing.
7.2 CLOSING DOCUMENTS
At the Closing, the Vendors will tender and cause and procure to be tendered
such documents, agreements or certificates as the Purchaser may reasonably
require pursuant to and which are consistent with the terms of this Agreement
and the Purchaser will tender and cause and procure to be tendered such
documents, agreements or certificates as each Vendor may reasonably require
pursuant to and which are consistent with the terms of this Agreement.
7.3 WAIVER
The conditions set forth in Section 6.1 of this Agreement are for the exclusive
benefit of the Purchaser and may be waived by the Purchaser in writing in whole
or in part at or prior to the Closing and the conditions set forth in Section
6.2 of this Agreement are for the exclusive benefit of the Vendors and may be
waived by the Vendors in writing in whole or in part at or prior to the Closing.
8. INDEMNIFICATION
8.1 VENDORS' INDEMNIFICATION
The Vendors will indemnify and save harmless the Purchaser from and against any
and all losses, claims, damages (including interest, penalties, fines and
monetary sanctions) liabilities and costs ("DAMAGES") incurred or suffered by
the Purchaser by reason of, resulting from, in connection with, or arising in
any manner whatsoever out of the breach of any warranty or covenant or the
inaccuracy of any representation of the Vendors contained or referred to in this
Agreement or in any Ancillary Agreement.
8.2 PURCHASER'S INDEMNIFICATION
The Purchaser will indemnify and save harmless each of the Vendors from and
against any and all Damages incurred or suffered by the Vendors by reason of,
resulting from, in connection with, or arising in any manner whatsoever out of
the breach of any warranty or covenant or the inaccuracy of any representation
of the Purchaser contained or referred to in this Agreement or in any Ancillary
Agreement.
22
8.3 COSTS
For the purposes of this Section 8, "costs" includes lawyers' (on a solicitor
and his own client basis), accountants' fees and expenses, court costs, costs of
investigation and all other out-of-pocket expenses.
9. GENERAL
9.1 TERMINATION WITHOUT NOTICE
This Agreement will terminate without any requirement for notice or action by
any of the parties if the Closing has not taken place by February 15, 2001.
9.2 SURVIVAL OF REPRESENTATIONS
The representations, warranties, covenants and agreements of the parties
contained in this Agreement will survive the closing of the transactions
contemplated herein and remain in full force and effect notwithstanding any
waiver by the Purchaser or the Vendors unless such waiver was made after notice
in writing by the notifying party to all other parties to this Agreement setting
forth the breach.
9.3 PUBLIC ANNOUNCEMENTS AND POST CLOSING CONFIDENTIALITY
The parties will consult with each other before issuing any press release or
making any other public announcement with respect to this Agreement or the
transactions contemplated herein and neither the Vendors nor the Purchaser will
issue any press release or make any public announcement without the prior
consent of the other except to the extent required by law.
9.4 ASSIGNMENT
No party will assign this Agreement, or any part of this Agreement, without the
consent of the other party, which consent may be unreasonably withheld or
delayed. Any purported assignment without the required consent is not binding or
enforceable against any party.
9.5 ENUREMENT
This Agreement enures to the benefit of and binds the parties and their
respective successors, heirs, executors, administrators, personal and legal
representatives and permitted assigns.
9.6 NOTICES
Each notice to a party required by this Agreement must be given in writing. A
notice may be given by delivery to an individual or by fax, and will be validly
given if delivered on a Business Day to an individual at the following address,
or, if transmitted on a Business Day by fax addressed to the following party:
23
(a) if to the Vendors:
At the address and number set forth in Schedule A.
(b) if to the Company:
Name: CobraTech Industries Inc.
Address: 0000 - 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxxxxx Xxxxxx
Fax No.: (000) 000-0000
(c) if to the Purchaser:
Name: Unique Bagel Co., Inc.
Address: c/o Lanham & Associates
Xxxx Echo, Unit A
Dove Canyon, California,
USA 92679
Attention: Xxxxxx Xxxxxx, Esq.
Fax No.: (000) 000-0000
or to any other address, fax number or individual that the party
designates. Any notice:
(d) if validly delivered, will be deemed to have been given when
delivered;
(e) if validly transmitted by fax before 3:00 p.m. (local time at the
place of receipt) on a Business Day, will be deemed to have been
given on that Business Day, and
(f) if validly transmitted by fax after 3:00 p.m. (local time at the
place of receipt) on a Business Day, will be deemed to have been
given on the Business Day after the date of the transmission.
9.7 WAIVERS
No waiver of any provision of this Agreement is binding unless it is in writing
and signed by all the parties to this Agreement except that any provision which
does not give rights or benefits to particular parties may be waived in writing,
signed only by those parties who have rights under, or hold the benefit of, the
provision being waived if those parties promptly send a copy of the executed
waiver to all other parties. No failure to exercise, and no delay in exercising,
any right or
24
remedy under this Agreement will be deemed to be a waiver of that right or
remedy. No waiver of any breach of any provision of this Agreement will be
deemed to be a waiver of any subsequent breach of that provision or of any
similar provision.
9.8 FURTHER ASSURANCES
Before and after the Closing Date, each party will execute and deliver promptly
at the other party's expense and request all further documents and take all
further action reasonably necessary or appropriate to give effect to the
provisions and intent of this Agreement and to complete the transactions
contemplated by this Agreement.
9.9 COUNTERPARTS
This Agreement and all documents contemplated by or delivered under or in
connection with this Agreement may be executed and delivered in any number of
counterparts with the same effect as if all parties had all signed and delivered
the same document and all counterparts will be construed together to be an
original and will constitute one and the same agreement.
9.10 DELIVERY BY FAX
Any party may deliver an executed copy of this Agreement by fax but that party
will immediately dispatch by delivery in person to the other parties an
originally executed copy of this Agreement.
9.11 AMENDMENTS
Except as permitted for certain waivers in Section 9.7, no amendment,
supplement, restatement or termination of any provision of this Agreement is
binding unless it is in writing and signed by each Person that is a party to
this Agreement at the time of the amendment, supplement, restatement or
termination.
9.12 SUBMISSION TO JURISDICTION
Each of the parties irrevocably submits to the jurisdiction of the courts of
British Columbia in any action, suit or proceeding and each party to this
Agreement waives, and will not assert by way of motion, as a defence, or
otherwise, in any action, suit or proceeding, any claim that:
(a) that party is not subject to the jurisdiction of the courts of
British Columbia;
(b) the action, suit or proceeding is brought in an inconvenient
forum;
(c) the venue of the action, suit or proceeding is improper; or
(d) any subject matter of the action, suit or proceeding may not be
enforced in or by the courts of British Columbia.
In any suit or action brought to obtain a judgment for the recognition or
enforcement of any final judgment rendered in an action, suit or proceeding, no
party to this Agreement will seek any review
25
with respect to the merits of any action, suit or proceeding, whether or not
that party appears in or defends the action, suit or proceeding.
9.13 COSTS
The Purchaser will reimburse the Vendors and the Company all reasonable costs
incurred by them in connection with this Agreement including legal, accounting
and other professional fees.
9.14 ENTIRE AGREEMENT
This Agreement and all documents contemplated by or delivered under or in
connection with this Agreement, constitute the entire agreement between the
parties with respect to the subject matter of this Agreement and supersede all
prior agreements, negotiations, discussions, undertakings, representations,
warranties and understandings, whether written or oral, express or implied,
statutory or otherwise.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the date
and year first above written.
SIGNED, SEALED AND DELIVERED by )
Xxxx Xxxxxxxx )
in the presence of: )
)
Name: )
---------------------------------------- )
)
)
Address: )
------------------------------------ )
) ---------------------------
) XXXX XXXXXXXX
)
---------------------------------------------- )
)
)
)
Occupation: )
----------------------------------- )
SIGNED, SEALED AND DELIVERED by )
Xxxx Xxxxxxxx )
in the presence of: )
)
Name: )
---------------------------------------- )
)
)
Address: )
------------------------------------ )
) ---------------------------
) XXXX XXXXXXXX
)
---------------------------------------------- )
)
)
Occupation: )
----------------------------------- )
26
SIGNED, SEALED AND DELIVERED by )
Xxxxxxx Xxxxxx )
in the presence of: )
)
Name: )
---------------------------------------- )
)
)
Address: )
------------------------------------ )
) --------------------------
) XXXXXXX XXXXXX
)
---------------------------------------------- )
)
)
Occupation: )
----------------------------------- )
COBRATECH INDUSTRIES INC.
Per:
----------------------------------
Authorized Signatory
UNIQUE BAGEL CO., INC.
Per:
----------------------------------
Authorized Signatory
