FINANCING AGREEMENT
THIS AGREEMENT dated for reference January 28, 1999, is among Sonora Capital
Corp., a British Columbia company of 0000-000 Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X.,
X0X 0X0, and fax (000) 000-0000 ("Sonora"); and Xxxxx Xxxxx, Xxxxx Xxxxxx and
Xxxxx Xxxxxx, all of 0000 - 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X., X0X 0X0, and
fax (000) 000-0000 and Helpful By Design, Inc., a Canadian company of 000-000
Xxxx Xxxxxxxx, Xxxxxxxxx, X.X., X0X 0X0 ("HBD"); and Xxxxx Xxxxx, of Suite 200,
0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, X.X., X0X 0X0, and fax 000-0000 (the
"Principal"); and Topclick Corporation, a Delaware corporation of Xxxxx 000,
0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, X.X., X0X IH4, and fax (000) 000-0000
("Topclick").
WHEREAS the Financing Group has agreed to organize a $2-million financing of
Topclick through a company trading publicly on the NASD OTC Electronic Bulletin
Board and the shareholders of Topclick have agreed to exchange all of their
shares in Topclick for shares in the public company, FOR VALUABLE CONSIDERATION,
the receipt and sufficiency of which are acknowledged, the parties agree that:
INTERPRETATION
1. The definitions in the recitals are part of this agreement.
2. In this agreement:
a. "Advance" means an advance of funds by the Financing Group to Topclick of
$150,000, bearing interest at the rate of 10 per cent per year, calculated
and compounded monthly from the date of advance.
b. "Business Plan" means the business plan of Topclick delivered to the
Financing Group in January, 1999.
c. "Closing" means a date no later than 14 days from the Date of Discovery.
d. "Company" means the Parent and Topclick jointly.
e. "Date of Discovery" means the date on which Topclick's legal representative
receives the corporate records of the Parent in order to conduct Due
Diligence.
f. "Due Diligence" means Topclick's review of the Parent
g. "Effective Date" means the day on which Topclick signs this agreement.
h. "Escrow Agent" means Jeffs & Company Law Corporation, 0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX.
j. "Financial Statements" means Topclick's financial statements made up to the
most recent month end in accordance with accounting principles generally
accepted in the United States.
k. "Financing means $2 million for the development of Topclick as described in
the Business Plan.
l. "Financing Group" means a group of investors represented by Sonora.
m. "Financing Period" means the period of time between the date of this
agreement and the day on which the Financing is completed.
n. "Founders" means HBD and the Principal.
o. "Founders' Shares" means all of the shares of Topclick that are owned by
the Founders.
p. "NASD OTC BB" means the over-the-counter electronic bulletin board of NASD
Regulations, Inc.
q. "Parent" means a company whose shares are quoted on the NASD OTC BB.
PAGE 2
r. "Reg. S Offering" means a share offering of 400,000 shares of the Parent at
$2.50 per share under the Regulation S prospectus exemption of the United
States Securities Act of 1933.
s. "Reg. S Shares" means the shares issued under the Reg. S Offering.
t. "Rule 504 Offering" means a share offering of 3,857,500 shares of the
Parent at $0.25469 per share under Rule 504 of the United States Securities
Act of 1933.
u. "Stock Exchange Agreement" means the stock exchange agreement attached as
exhibit B.
v. "S" means United States dollars.
TERMS AND CONDITIONS OF THE FINANCING
The Parent
3. The Financing Group will identify and organize the Parent for the purpose
of this agreement and will ensure that the Parent is in good standing in,
and complies with the laws of, its incorporating jurisdiction.
Advancing the Financing
4. The Financing Group will provide the Financing according to the schedule
set out in Table 1. If the Parent fails the due diligence test and an
alternative parent is accepted, then each date of advance is extended by
thirty days.
Table 1
Financing schedule
------------------------------------------------------------------------------------------------------------------------------------
Date (approx) Amount Notes
------------------------------------------------------------------------------------------------------------------------------------
a. Effective Date $ 150,000 The Advance
------------------------------------------------------------------------------------------------------------------------------------
b. February 17, 1999 1,000,000 Proceeds of the Rule 504 Offering to the Parent
Escrow Shares placed in escrow
------------------------------------------------------------------------------------------------------------------------------------
c. February 28, 1999 Exchange of shares of Topclick for shares of the Parent
------------------------------------------------------------------------------------------------------------------------------------
d. February 28, 1999 1,000,000 Proceeds of the Reg. S Offering to the Parent and Escrow Shares released
------------------------------------------------------------------------------------------------------------------------------------
e. February 28, 1999 (150,000) Repayment of Advanced
------------------------------------------------------------------------------------------------------------------------------------
Total Financing $ 2,000,000
------------------------------------------------------------------------------------------------------------------------------------
5. The Financing Group may accelerate the Financing schedule set out in Table
1.
The Advance
6. If Topclick discovers a material deficiency with their Due Diligence, they
must:
a. provide written notice to the Financing Group on Closing; and
b. allow Financing Group fourteen days to find an alternative parent,
which will be subject to Due Diligence that must be completed within
ten days and, if a material deficience is discovered, Topclick can
decide not to proceed with the Financing and convert the Advance and
any accrued interest into shares of common stock at a price of $1.00
per share.
and this agreement terminates.
7. If Topclick decides to proceed with the Financing, the Parent will repay
the Advance and any accrued interest on February 28, 1999 from the proceeds
of the Reg. S. Offering.
PAGE 3
8. If Topclick decides not to proceed with the Financing after having accepted
the Parent, then Topclick must repay the Advance and accrued interest
within fourteen days of Topclick's notifying the Financing Group that it
does not intend to complete the Financing.
9. The Advance must be secured by a promissory note in the form attached as
exhibit A.
10. The shareholders of Topclick are not personally liable for repaying the
Advance.
Right of first refusal on additional financing
11. The Company will give the Financing Group the right of first refusal for
the twelve months following Closing to provide additional financing by
giving the Financing Group a written notice of the terms and conditions of
its requirements and its proposed use of proceeds at least one month before
it requires the financing. The Financing Group must notify the Company in
writing within ten days of its receiving the Company's notice whether it
intends to exercise its right to provide the additional financing. If the
Financing Group refuses to provide the additional financing, the Company
may complete the additional financing with another party. This right of
first refusal ends if the Financing Group refuses to provide the additional
financing.
Investor Relations
12. The Financing Group at its own cost will conduct all of the Parent's
investor relations during the Financing Period or for six months, whichever
ends later, and at the end of every month will deliver to the Parent a
report of the previous month's investor relations activities and its
proposal for the next month's activities so that the Parent and the
Principal can be prepared to participate in or respond to inquiries arising
from the investor relations activities. The Financing Group may retain the
services of a firm of its choosing and approved by the Parent to provide
the investor relation services. All investor relations services will comply
with all applicable laws and regulations. All public and investor relations
releases will be submitted to the Parent for approval before they are
distributed.
13. The Principal will make himself available to appear on reasonable notice
before investment groups in North America and Europe and will provide the
information and material that the Financing Group requests during the
Financing Period. The Parent will pay the reasonable travel and
accommodation costs for both the Principal and the Financing Group for
their appearances at investor relations events, provided those costs have
been approved by the Parent.
Directors and Officers of the Parent
14. The Principal, if he is not already, will become a director of the Parent
on Closing.
15. The Financing Group may nominate a person to attend all meetings of the
Parent's board of directors for the period of one year from Closing. The
Parent may, however, exclude the nominees from any confidential or
privileged portions of each meeting.
Escrow Shares
Reg. S Offering
18. The Reg. S Shares will be subject to the provisions of Rule 144 of the
Securities Act of 1933, and will be subject to a 12 month hold period from
the date of Closing.
19. The Financing Group will ensure that the subscribers to the Reg. S Offering
agree to the following provisions:
PAGE 4
a. The Parent will have the option to buy the Reg S. Shares at any time
during the twenty-four months following the Closing at a price per
share that is equal to the average closing price of the Parent's
shares for the ten trading days preceding the day on which the option
is exercised. To exercise this option, the Parent must deliver a
written notice to the shareholders setting out the place and time for
the Reg S. Shares to be exchanged for payment. This option may be
exercised in whole or in part and from time to time.
b. From the expiry of the hold period to the end of the option, the Reg
S. shareholders may sell their shares but must give the Parent thirty
days' written notice of their intention. The Parent may buy the
offered shares at the exercise price in the foregoing paragraph within
thirty days of the date of the shareholder's written notice. If the
Parent does not exercise this option, the shareholder may sell the
shares elsewhere.
CONDITIONS PRECEDENT
20. As conditions precedent to the advancing of the Financing other than the
Advance, as set out in table 1:
a. Topclick will deliver to the Financing Group the Financial Statements
and true copies of any of its material contracts and its charter
documents.
b. The Founders and Topclick will sign the Stock Exchange Agreement and
the Founders will deliver their Founders shares to the Escrow Agent
duly endorsed for transfer to the Parent in accordance with the terms
of the Stock Exchange Agreement.
c. The shareholders of Topclick will sign the Stock Exchange Agreement
and tender their shares on Closing.
d. The representations and warranties of the Principal and Topclick must
be true and correct in all material respects.
21. Any or all of these conditions precedent may be waived by the Financing
Group in its sole discretion.
POSITIVE COVENANTS
The Company
22. During the Term, the Parent and Topclick will:
a. maintain their corporate existence;
b. assume and take an assignment of any outstanding options to purchase
their shares by February 15, 1999.
c. carry on their business in a proper and businesslike manner in
accordance with good business practices, prudently manage their cash
resources, and keep proper books of account in accordance with
generally accepted accounting principles; and
d. deliver to the Financing Group any other information, excluding
confidential and insider information, that the Financing Group
reasonably requests.
The Principal
23. The Principal will, at all times during the currency of this agreement:
a. devote his best effort to the business of Topclick and the Parent;
b. ensure that all of Topclick's assets and liabilities are limited to
Topclick and that the Parent has no liabilities or potential
liabilities except those that relate to the Parent's own
administration and the liabilities that the Parent must assume under
this agreement;
c. as directors of the Parent, ensure that the Parent does everything
that it must do under this agreement; and
PAGE 5
d. ensure that the remaining shareholders of Topclick tender their shares
by Closing in response to an offer to purchase to be submitted by the
Parent.
NEGATIVE COVENANTS
24. Neither Topclick nor the Parent during the Financing period, without the
written consent of the Financing Group, will:
a. authorize the issuance of or issue any of its shares or other
securities except those authorized by this agreement;
b. authorize any changes to their respective charter documents;
c. cause any of its assets to be encumbered; or
x. xxxxx any options to directors, officers and employees that may be
exercised during the 12 months from February 12, 1999.
REPRESENTATIONS AND WARRANTIES
The Financing Group
25. The Financing Group represents and warrants that each of them has the
experience and expertise required to negotiate and finalize the Financing
and to conduct an investor relations program.
The Principal
26. The Principal represents and warrants that:
a. Nothing in the Business Plan is proprietary to his employers or former
employers, and his providing his expertise and services to Topclick is
not an infringement of intellectual property rights owned by any
person or company.
b. The Business Plan truly and accurately reflects the business of
Topclick and the intentions of the Principal.
The Founders
27. The Founders represent and warrant that:
a. They own the Founders's Shares free of any claim or potential claim by
any person and have the right to transfer them as described in this
agreement.
b. They have no rights to acquire additional shares of Topclick.
Topclick
28. Topclick represents and warrants that:
a. It is a corporation incorporated and in good standing under the laws
of Delaware.
b. Its authorized capital is 50 million common shares with par value of
$0.001, and 5 million preferred shares with par value $0.001.
c. It will have 7,700,000 fully paid and non-assessable shares in its
capital stock issued and outstanding by February 14, 1999, and any
shares issued between January 28, 1999 and February 14, 1999 were
issued at a price of not less than $1.00 per share.
PAGE 6
d. No person will have an outstanding right to acquire any shares of
Topclick after February 15, 1999.
e. It has the legal capacity and its directors' authority to make and
perform this agreement.
f. The Financial Statements fairly and correctly disclose in all material
respects the financial position of Topclick at the end of the period
to which they are made up.
g. It has incurred no liabilities and entered into no contracts since the
date of the Financial Statements that are not disclosed in writing to
the Financing Group.
h. It has conducted no business except the business that is described in
the Business Plan.
i. No claims against it or any of its current or former directors or
officers are before any court or regulatory authority or are pending
or threatened, and it is not aware of any ground for any claim that
might succeed.
OTHER PROVISIONS
29. The Founders and Topclick acknowledge that this agreement was prepared for
the Financing Group by Jeffs & Company Law Corporation and that it may
contain terms and conditions onerous to them. They expressly acknowledge
that the Financing Group has given them adequate time to review this
agreement and to seek and obtain independent legal advice, and they
represent to the Financing Group that they have in fact sought and obtained
independent legal advice and are satisfied with all the terms and
conditions of this agreement.
30. This is the entire agreement among the parties and replaces any earlier
understandings and agreements, whether written or oral.
31. Time is of the essence of this agreement.
32. This agreement is governed by the laws of British Columbia and must be
litigated in the courts of British Columbia. The relationships and
transactions contemplated by this agreement must comply with the laws and
regulations applicable to the relationships and transactions.
33. Any notice that must be given or delivered under this agreement must be in
writing and delivered by hand or transmitted by fax to the address or fax
number given for the party on page 1 and is deemed to have been received
when it is delivered by hand or transmitted by fax unless the delivery or
transmission is made after 4:00 p.m., or on a non-business day where it is
received, in which case it is deemed to have been delivered or transmitted
on the next business day. Any payments of money must be delivered by hand
or wired as instructed in writing by the receiving party. Any delivery of a
thing other than a written notice or money must be delivered by hand to the
receiving party's address.
34. None of the parties may assign this agreement or any part of it to another
party.
35. Any amendment of this agreement must be in writing and signed by the
parties.
36. This agreement enures to the benefit of and binds the parties and their
respective successors, heirs and permitted assignees.
37. No failure or delay of the Financing Group in exercising any right under
this agreement operates as a waiver of the right. The Financing Group's
rights under this agreement are cumulative and do not preclude the
Financing Group from relying on or enforcing any legal or equitable right
or remedy.
38. If any provision of this agreement is, illegal or unenforceable under any
law, the remaining provisions remain legal and enforceable.
39. This agreement may be signed in counterparts and delivered to the parties
by fax, and the counterparts together are deemed to be one original
document.
PAGE 7
THE PARTIES' SIGNATURES below are evidence of their agreement.
Sonora Capital Corp. by its authorized signatory:
/s/ [ILLEGIBLE] /s/ Xxxxx Xxxxx
--------------------------------- ---------------------------------
Authorized signatory Xxxxx Xxxxx
Helpful By Design, Inc. by its authorized signatory:
/s/ [ILLEGIBLE] /s/ Xxxxx Xxxxx
--------------------------------- ---------------------------------
Xxxxx Xxxxx
Authorized signatory
Topclick Corporation by its authorized /s/ Xxxxx Xxxxxx
signatory: ---------------------------------
Xxxxx Xxxxxx
/s/ [ILLEGIBLE]
--------------------------------- /s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx
Exhibit A
To the Financing Agreement dated for reference January 28, 1999
Between Topclick and Sonora
(the "Financing Agreement")
PROMISSORY NOTE
Principal amount: $150,000
FOR VALUED RECEIVED from Aero Atlantic Ltd., Topclick Corporation, a Delaware
corporation with a business address at Xxxxx 000, 0000 Xxxx 0xx Xxxxxx,
Xxxxxxxxx, X.X. X0X 0X0, and fax (000) 000-0000 ("Borrower"), promises to pay to
Jeffs & Company Law Corporation in trust at Xxxxx 000, 0000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxx, X.X., X0X 0X0, from the proceeds of the Reg. S Offering ("Maturity")
the sum of $150,000 of lawful money of the United States (the "Principal Sum")
together with interest calculated on the Principal Sum at the rate of 10 per
cent per year from February 5, 1999, before and after Maturity, default and
judgment.
Interest must be calculated and is payable at the Maturity.
The Principal Sum outstanding together with all accrued and unpaid interest is
due and payable immediately according to paragraph 8 of the Financing
Agreement.
The Borrower waives presentment, protest, notice of protest and notice of
dishonour of this promissory note.
THIS REPLACES THE PROMISSORY NOTE PURSUANT TO CANCELLED AGREEMENT DATED FEBRUARY
4, 1997 AND THE TIME 16:40:27.
Topclick Corporation
/s/ [ILLEGIBLE]
--------------------------------
Authorized signatory
ADDENDUM TO THE FINANCING AGREEMENT
THIS AGREEMENT dated for reference February 17, 1999, is among Sonora Capital
Corp., a British Columbia company of 0000-000 Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X.,
X0X 0X0, and fax (000) 000-0000 ("Sonora"); and Xxxxx Xxxxx, Xxxxx Xxxxxx and
Xxxxx Xxxxxx, all of 0000-000 Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X., X0X 0X0, and fax
(000) 000-0000; and Helpful By Design, Inc., a Canadian company of 000-000 Xxxx
Xxxxxxxx, Xxxxxxxxx, X.X. X0X 0X0 ("HBD"); and Xxxxx Xxxxx, of Suite 200, 1636
Xxxx 0xx Xxxxxx, Xxxxxxxxx, X.X., X00 0X0, and fax (000) 000-0000 (the
"Principal"); and Topclick Corporation, a Delaware corporation of Xxxxx 000,
0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, X.X., X0X 0X0, and fax (000) 000-0000
("Topclick").
WHEREAS the parties executed a financing agreement dated for reference January
28, 1999 (the "Financing Agreement") and have agreed to modify certain terms,
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are
acknowledged, the parties agree that:
1. The definition in the recitals and in the Financing Agreement and are part
of this agreement.
2. Where any provisions of this addendum conflict with the provisions of the
Financing Agreement, the provisions of this addendum prevail.
3. The parties will use their best efforts in good faith to implement the
terms of the Financing Agreement and this addendum.
Escrow Shares
4. The Financing Group will deliver share certificates for 742,000 shares from
the Rule 504 Offering (the "504 Escrow Shares") to the Escrow Agent to be
held in escrow.
5. The Parent will comply with the new listing requirements of the OTC
Bulletin Board issued on or about January 6, 1999, by the NASD, by filing
the appropriate document and must notify the Escrow Agent in writing of the
filing, both within 60 days of the Closing. If the Parent does not deliver
the written notice within the time specified, then the Escrow Agent will
release the 504 Escrow Shares to the Financing Group. If the Parent
provides the written notice within the time specified, the Escrow Agent
will release the 504 Escrow Shares to the Financing Group on the earlier of
a. the date on which the SEC approves the Documents, and
b. 120 days from Closing.
The Financing
6. The Financing must be completed according to the terms of this addendum.
7. The Rule 504 Offering is reduced to $982,500. The Parent has completed the
504 Offering and deposited the proceeds in trust with the Escrow Agent who
will pay them to the order of the Parent when Xxxxx Xxxxx becomes the
director of the Parent.
8. The Reg. S Offering is increased to an offering of 400,000 common shares of
the Parent for $1,017,500 and must be completed on or by the Closing.
9. Topclick must repay the Advance on Closing from the proceeds of the Reg S
Offering.
THE PARTIES' SIGNATURE on page 2 are evidence of their agreement.
PAGE 2 OF 2
ADDENDUM TO THE FINANCING AGREEMENT
Sonora Capital Corp. by its authorized signatory:
/s/ [ILLEGIBLE] /s/ Xxxxx Xxxxx
--------------------------------- ---------------------------------
Authorized signatory Xxxxx Xxxxx
Topclick Corporation by its authorized
signatory: /s/ Xxxxx Xxxxx
---------------------------------
Xxxxx Xxxxx
/s/ [ILLEGIBLE]
--------------------------------- /s/ Xxxxx Xxxxxx
Authorized signatory ---------------------------------
Xxxxx Xxxxxx
Helpful By Design, Inc. its authorized signatory:
/s/ Xxxxx Xxxxxx
/s/ [ILLEGIBLE] ---------------------------------
--------------------------------- Xxxxx Xxxxxx
Authorized signatory
EXHIBIT "B"
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT ("Agreement") is made and entered into in
counterparts effective the 10th day of February, 1999, by and between TopClick
Corporation, a Delaware corporation ("TopClick"); Sonora Capital Corp., a
British Columbia corporation ("Sonora"); TopClick International, Inc., a
Delaware corporation ("Parent Corporation"); and the shareholders of the issued
and outstanding shares of the $.001 par value common stock of TopClick
(collectively, the "TopClick Shareholders").
RECITALS
A. TopClick is a corporation recently formed, duly organized, validly
existing, and in good standing pursuant to the laws of the State of Delaware.
TopClick owns and operates the TopClick website, a unique information retrieval
guide for Internet users. The TopClick website contains the first comprehensive
Internet "superguide" to the major Internet guides, designed to help Internet
users find the answers to their searches more quickly and effectively than they
can through conventional single guides or search engines.
B. The Parent Corporation is a corporation duly organized, validly
existing, and in good standing pursuant to the laws of the State of Delaware.
The Parent Corporation participates in the Over-The-Counter Bulletin Board
electronic quotation service ("OTC Bulletin Board"), which is an electronic
quotation medium for securities traded outside of the Nasdaq Stock Market.
C. TopClick Shareholders own of record and beneficially all of the shares
of the issued and outstanding capital stock of TopClick as specified on Exhibit
"A" attached hereto and incorporated herein by this reference as though
specified completely at length herein.
D. Sonora Capital Corp., a British Columbia corporation; Xxxxx Xxxxx; Xxxxx
Xxxxxx; Xxxxx Xxxxxx; Helpful by Design, Inc., a Canadian corporation; and
TopClick have entered into a Financing Agreement dated, for reference, January
28, 1999 ("Financing Agreement"). This Agreement contemplates the exchange of
consideration by and between the parties to the Financing Agreement.
E. The TopClick Shareholders, and each of them, desire to assign, transfer,
convey, deliver and set over to the Parent Corporation all of the right, title
and interest of the TopClick Shareholders in and to their shares of TopClick's
$.001 par value common stock (the "TopClick Shares") in exchange for certain
shares of the Parent Corporations's $.001 par value common stock ("the Parent
Corporation Shares"), as specified on Exhibit "B" attached hereto and
incorporated herein by this reference as though specified completely at length
herein.
F. The Parent Corporation desires to acquire from the TopClick Shareholders
all of their right, title and interest in and to the TopClick Shares in exchange
for the issuance by the Parent Corporation to the TopClick Shareholders of the
Parent Corporation Shares, as specified herein.
G. The parties believe that the transaction contemplated by the provisions
of this Agreement will enhance and improve their respective business objectives
and opportunities.
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL BE
DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS,
PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN
THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED
LEGALLY AND EQUITABLY.
1
THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT AND WARRANT AS
FOLLOWS:
1. Exchange Transaction.
1.1 Exchange of TopClick Shares. Upon the terms and subject to all of the
conditions specified by the provisions of this Agreement and upon the
performance by the parties of their obligations specified by the provisions
of this Agreements and the Financing Agreement, the TopClick Shareholders,
and each of them, shall assign, transfer, convey, exchange, set over, and
deliver to the Parent Corporation on and as of the Closing Date of this
Agreement, all of the TopClick Shares, by delivering and surrendering to
the Parent Corporation at the Closing the certificates evidencing and
representing ownership of the TopClick Shares, duly endorsed for transfer
or accompanied by stock powers duly executed by the TopClick Shareholders,
and each of them.
1.2 Issuance of Parent Corporation Shares for TopClick Shares. As
consideration for the exchange, assignment, transfer, conveyance, setting
over, and delivery by the TopClick Shareholders of the TopClick Shares, the
Parent Corporation shall issue and deliver to each TopClick Shareholder, on
and as of the Closing Date, that number of Parent Corporation Shares which
is appropriate for such TopClick Shareholder, which number shall be
determined as follows:
1.2.1 For every seven (7) shares of his or her TopClick $.001 par
value common stock, each TopClick Shareholder shall receive eight
shares of Parent Corporation $.001 par value common stock issued
pursuant to an exemption from registration provided for in Section
3(b) of the Securities Act of 1933, as amended, and Rule 504 of
Regulation D promulgated thereunder (the "Rule 504 Shares"); and
No fractional shares shall be issued as a result of this Agreement; Shares
to be issued pursuant to the 7:1 ratio provided herein shall be rounded to the
nearest whole share.
The Parent Corporation contemplates the preparation and filing of a
Registration Statement with the Securities and Exchange Commission and other
appropriate regulators and associations, and further contemplates that the
Parent Corporation's $.001 par value common stock shall become "unrestricted"
for trading purposes.
Accordingly, the TopClick Shareholders, who will, pursuant to this
Agreement, become the shareholders of the Parent Corporation, agree that the
Rule 144 Shares shall be subject to the following restriction: 5% of the shares
will become tradeable every month for 20 months on the later of (1) the date
that such shares have become "unrestricted" for trading purposes, or (2) the
121st day following the Closing Date of this Agreement.
1.3 The Closing. The closing of the transaction contemplated by the
provisions of this Agreement ("Closing") shall occur and take at the
offices of TopClick commencing at 10:00 A.M. local time on February 10,
1999 ("Closing Date").
1.4 Delivery of Certificates to TopClick Shareholders. The Parent
Corporation shall deliver to the TopClick Shareholders the certificates
evidencing the Rule 144 Shares as soon as practicable after the Closing.
2
2. Restrictive Legend. Each certificate evidencing or representing the
Parent Corporation Shares issued to the TopClick Shareholders shall have
displayed prominently on the face thereof the appropriate restrictive legend.
3. Publicity. All notices, releases, and other forms of publicity or
disclosure regarding the transaction contemplated by the provisions of this
Agreement shall be planned, coordinated, drafted, and prepared by and between
TopClick and the Parent Corporation jointly. No party shall act unilaterally in
the preparation or dissemination of any notices, releases, or other forms of
publicity or disclosure without the prior written approval of the other parties.
4. Further Assurances. Each party shall take any and all action necessary,
appropriate, or advisable to (i) execute and discharge such party's
responsibilities and obligations created by the provisions of this Agreement or
(ii) further effectuate, perform, and carry out the intents and purposes of this
Agreement and the transaction contemplated by the provisions of this Agreement
and the Financing Agreement.
5. Expenses. Each party shall pay any and all costs and expenses incurred
or to be incurred by such party in negotiating and preparing this Agreement and
carrying out the intents and purposes of and consummating and closing the
transaction contemplated by the provisions of this Agreement.
6. Assignment. No party shall have the right, without the consent of all
the other parties, to assign, transfer, sell, pledge, hypothecate, delegate, or
otherwise transfer, whether voluntarily, involuntarily or by operation of law,
any of such party's right or obligations created by the provisions of this
Agreement, nor shall the parties' rights be subject to encumbrance or the claim
of creditors. Any such purported assignment, transfer, or delegation shall be
null and void.
7. Successors in Interest. This Agreement shall obligate and inure to the
benefit of each party, its representatives, successors, assigns, partners,
agents, employees, directors, officers, shareholders, attorneys, subsidiaries,
affiliates, and all persons acting by, through, under, or in concert with any of
them, and each of them. Whenever, in this Agreement, a reference to any party is
made, such reference shall be deemed to include the representatives, successors,
assigns, partners, agents, employees, directors, officers, shareholders,
attorneys, subsidiaries, affiliates, and all persons acting by, through, under
or in concert with such party.
8. Third Party Beneficiaries. Except as expressly specified by the
provisions of this Agreement, this Agreement shall not be construed to confer
upon or give to any person, other than the parties hereto, any right, remedy or
claim pursuant to, or by reason of, this Agreement or of any term or condition
of this Agreement.
9. Execution in Counterparts. This Agreement may be prepared in multiple
copies and forwarded to each of the parties for execution, and, for purposes of
executing this Agreement, facsimile signature are as valid as original
signatures.
10. Captions and Interpretations. Captions of the articles, sections, and
paragraphs of this Agreement are for convenience and reference only, and the
words specified in those captions shall in no way be held to explain, modify,
amplify, or aid in the interpretation, construction, or meaning of the
provisions of this Agreement. The language in all parts to this Agreement, in
all cases, shall be construed in accordance with fair meaning of that language,
as if that language was prepared by all parties and not strictly for or against
any party. Each party and counsel for such party have reviewed this Agreement.
The rule of construction, which requires a court to resolve any ambiguities
against the drafting party, shall not apply in interpreting the provisions of
this Agreement.
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11. Entire Agreement. This Agreement and the exhibits to this Agreement are
the final written expression and the complete and exclusive statement of all the
agreements, conditions promises, representations, warranties, and covenants
between the parties with respect to the subject matter of this Agreement, and
this Agreement supersedes all prior or contemporaneous agreements, negotiations,
representations, warranties, covenants, understandings, and discussions by,
between and among the parties, their respective representatives, and any other
person, with respect to the subject matter specified in this Agreement. This
Agreement may be amended only by an instrument in writing which expressly refers
to this Agreement and specifically states that such instrument is intended to
amend this Agreement and is signed by each of the parties. Each of the parties
represents, warrants, and covenants that, in executing this Agreement, such
party has relied solely on the terms, conditions, and provisions specified in
this Agreement. Each of the parties additionally represents, warrants, and
covenants that in executing and delivering this Agreement, such party has placed
no reliance whatsoever on any statement, representation, warranty, covenant, or
promise of any other party, or any other person, not specified expressly in this
Agreement, or upon the failure of any party or any other person to make any
statement, representation, warranty, covenant, or disclosure of any nature
whatsoever. The parties have included this section to preclude (i) any claim
that any party was in any manner whatsoever induced fraudulently to enter into,
execute, and deliver this Agreement, and (ii) the introduction of parol evidence
to vary, interpret, supersede, modify, amend, annul, supplement, or contradict
the terms, conditions, and provisions of this Agreement. The provisions of each
of the schedules to this Agreement, by this reference, are made a part of this
Agreement as though specified completely and specifically at length in this
Agreement. No provision of any schedule to this Agreement shall supersede or
annul the terms, conditions, and provisions of this Agreement, unless the matter
specified in any such schedule shall explicitly so provide to the contrary. In
the event of any ambiguity or uncertainty in meaning or understanding between
the provisions of this Agreement proper and any schedule to this Agreement, the
terms, conditions, and provisions of this Agreement shall prevail and control in
all respects.
12. Severability. In the event any part of this Agreement, for any reason,
is determined by a court of competent jurisdiction to be invalid, such
determination shall not affect the validity of any remaining portion of this
Agreement, which remaining portion shall remain in complete force and effect as
if this Agreement had been executed with the invalid portion thereof eliminated.
It is hereby declared the intention of the parties that they would have executed
the remaining portion of this Agreement without including any such part, parts,
or portion which, for any reason, may be hereafter determined to be invalid.
13. Waiver. No waiver of any covenant, condition, or limitation specified
in this Agreement shall be valid unless such waiver is made in writing and duly
executed by the party making such waiver. No waiver of any provision of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision
of this Agreement, whether or not similar, nor shall any waiver constitute a
continuing waiver.
14. Governmental Rules and Regulations. The transaction and relationship
contemplated by the provisions of this Agreement are, and shall remain, subject
to any and all present and future orders, rules, and regulations of each duly
constituted authority and agency which has or acquires jurisdiction of that
transaction and relationship.
15. Number and Gender. Whenever the singular number is used in this
Agreement and, when required by the context, the same shall include the plural,
and vice versa; the masculine gender shall include the feminine and the neuter
genders, and vice versa. As used in this Agreement, the word "person" shall
include individual, company, sole proprietorship, corporation, joint venture,
association, joint stock company, fraternal order, cooperative, league, club,
society, organization, trust, estate, governmental agency, political subdivision
or authority, firm, municipality, congregation, partnership, or other form of
entity. As used in this Agreement, the word "affiliate," as it relates to a
person, shall be
4
defined as and mean a parent, spouse, brother or sister, or natural or adopted
lineal descendent or spouse of such descendent of such person, and any
proprietorship, corporation, partnership, congregation, organization, firm,
estate, association, league, club, society, joint venture, trust or other form
of entity in which such person or parent, spouse, brother or sister, or natural
or adopted lineal descendent or spouse of such descendent or such person may
have an equity or beneficial interest or in which such person or parent, spouse,
brother or sister, or natural or adopted lineal descendent or spouse of such
descendent of such person is a proprietor, partner, officer, director,
shareholder, employee, consultant, independent contractor, owner, co-venturer,
employer, agent, representative, settlor, or beneficiary.
15. Reservation of Rights. The failure of any party at any time or times
hereafter to require strict performance by any other party of any of the
warranties, representations, covenants, terms, conditions, and provisions
specified in this Agreement shall not waive, affect of diminish any rights of
such party failing to require strict performance to demand strict compliance and
performance therewith and with respect to any other provisions, warranties,
representations, covenants, terms, and conditions specified in this Agreement.
16. Survival of Covenants, Representations and Warranties. All covenants,
representations, and warranties made by each party to this Agreement shall be
deemed made for the purpose of inducing the other parties to enter into,
execute, and deliver this Agreement. The representations, warranties, and
covenants specified in this Agreement shall survive the Closing and shall
survive any investigation by any party whether before or after the execution of
this Agreement.
17. Concurrent Remedies. No right or remedy specified in this Agreement
conferred on or reserved to the parties is exclusive of any other right or
remedy specified in this Agreement or by law or equity provided or permitted;
but each such right and remedy shall be cumulative of, and in addition to, every
other right and remedy specified in this Agreement or now or hereafter existing
at law or in equity or by statute or otherwise, and each such right and remedy
may be enforced concurrently therewith or from time to time. The termination of
this Agreement for any reason whatsoever shall not prejudice any right or remedy
which any party may have, either at law, in equity or pursuant to the provisions
of this Agreement.
18. Force Majeure. If any party to this Agreement is rendered unable,
completely or partially, by the occurrence of an event of "force majeure"
(hereafter defined) to perform such party's obligations created by the
provisions of this Agreement, such party shall give to the other parties to this
Agreement prompt written notice of the event of "force majeure" with reasonably
complete particulars concerning such event; thereupon, the obligations of the
party giving such notice, so far as those obligations are affected by the event
of "force majeure," shall be suspended during, but no longer than, the
continuance of the event of "force majeure." The term "force majeure," as
contemplated by the provisions of this Section 31, is defined as and means any
act of nature, strike, lockout or other industrial disturbance, act of the
public enemy, war, blockage, public, riot, civil disturbance, lightening, fire,
storm, flood, explosion, governmental action, earthquake, governmental delay,
restraint or inaction, unavailability of equipment, and any other cause or
event, whether of the nature enumerated specifically in this Section 31, or
otherwise, which is not within the control of the party claiming such
suspension. The party affected by such event of "force majeure" shall use all
reasonable diligence to resolve, eliminate, and terminate the event of "force
majeure" as quickly as practicable.
19. Consent to Agreement. By executing this Agreement, each party, for
himself, represents that such party has read or caused to be read this Agreement
in all particulars and consents to the rights, conditions, duties, and
responsibilities imposed upon such party pursuant to the provisions of this
Agreement. Each party represents, warrants, and covenants that such party enters
into, executes, and delivers this Agreement of his free will and with no threat,
undue influence, menace, coercion, or duress,
5
whether economic or physical. Moreover, each party represents, warrants, and
covenants that such party executes this Agreement acting on such party's own
independent judgment and upon the advice of such party's counsel.
20. Conditions Precedent. This Agreement contemplates the effectuation of
all the terms and conditions of the Financing Agreement by all the parties
thereto. The parties hereto acknowledge that TopClick is currently performing
due diligence relating to the Parent Corporation. The representations and
warranties of all parties to the Financing Agreement must be true and correct in
all material respects as conditions precedent to this Agreement. The positive
and negative covenants of all parties to the Financing Agreement must be true
and correct in all material respects as conditions precedent to this Agreement.
IN WITNESS WHEREOF the parties have executed this Stock Exchange Agreement
effective the date specified in the preamble of this Agreement.
TopClick Corporation, Shareholder:
a Delaware Corporation
By:
------------------------- ------------------------------
Its:
------------------------- ------------------------------
Sonora Capital Corp., TopClick International, Inc.,
a British Columbia corporation a Delaware corporation
By: By:
------------------------- -------------------------
Its: Its:
------------------------- -------------------------
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CANCELLATION OF AGREEMENT
The undersigned, being the parties to a financing agreement dated for reference
January 28, 1999 and footnoted with the date of February 4, 1999 and the time
16:40:27, agree to cancel that agreement effective immediately.
Dated February 17, 1999.
Sonora Capital Corp. by its authorized
signatory:
/s/ Xxxxx Xxxxx
/s/ [ILLEGIBLE] ------------------------------
------------------------------ Xxxxx Xxxxx
Helpful By Design, Inc. by its authorized
signatory:
/s/ Xxxxx Xxxxx
/s/ [ILLEGIBLE] ------------------------------
------------------------------ Xxxxx Xxxxx
Authorized signatory
/s/ Xxxxx Xxxxxx
TopClick Corporation by its authorized ------------------------------
signatory: Xxxxx Xxxxxx
------------------------------ /s/ Xxxxx Xxxxxx
Authorized signatory ------------------------------
Xxxxx Xxxxxx
