URANIUM POWER CORPORATION
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WESTERN CANADIAN MINT INC.
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BULLION FUND INC., XXXXX XXXXXX, XXXXX XXXXXX, XXXXX VAN DER XXXXX,
XXXXXXX VAN DER VLIET, XXXX XXXXXX, XXXXX GARDEN AND XXXXXXX XXXXX
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AMERICAN OILSANDS COMPANY INC.
PURCHASE AND SALE AGREEMENT
November 8, 2004
TABLE OF CONTENTS
PAGE NO.
ARTICLE I
INTERPRETATION
1.1 Defined Terms.....................................................1
1.2 Best of Knowledge.................................................3
1.3 Currency..........................................................3
1.4 Choice of Law and Attornment......................................3
1.5 Interpretation Not Affected by Headings or Party Drafting.........4
1.6 Number and Gender.................................................4
1.7 Time of Essence...................................................4
1.8 Inclusive Terminology.............................................4
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale.................................................4
2.2 Purchase Price....................................................5
2.3 Non-Payment of Purchase Price.....................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties by the Vendors.....................5
3.2 Additional Representations and Warranties by the Vendors..........6
3.3 Representations and Warranties by the Purchaser..................14
ARTICLE IV
SURVIVAL AND LIMITATIONS OF REPRESENTATIONS AND WARRANTIES
4.1 Survival of Representations and Warranties by the Vendors........15
4.2 Survival of Representations and Warranties by Purchaser..........16
ARTICLE V
COVENANTS
5.1 Covenants by the Vendors.........................................16
5.2 Covenants by the Purchaser.......................................17
ARTICLE VI
CONDITIONS
6.1 Conditions to the Obligations of the Purchaser...................17
6.2 Waiver or Termination by Purchaser...............................19
6.3 Conditions to the Obligations of the Vendors.....................19
6.4 Waiver or Termination by Vendors.................................20
ARTICLE VII
CLOSING
7.1 Closing Arrangements.............................................20
7.2 Documents to be Delivered........................................20
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnity by the Vendors.........................................22
8.2 Indemnity by the Purchaser.......................................22
8.3 Provisions Relating to Indemnity Claims..........................23
ARTICLE IX
GENERAL PROVISIONS
9.1 Further Assurances...............................................25
9.2 Remedies Cumulative..............................................25
9.3 Notices..........................................................25
9.4 Counterparts.....................................................26
9.5 Legal and Other Professional Fees................................26
9.6 Public Disclosures...............................................27
9.7 Assignment.......................................................27
9.8 Entire Agreement.................................................27
9.9 Successors and Assigns...........................................27
9.10 Waiver...........................................................27
9.11 Amendments.......................................................27
9.12 Survival.........................................................27
9.13 Severability.....................................................28
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the 8th day of November, 2004;
AMONG:
URANIUM POWER CORPORATION, a body corporate having an office in
Vancouver, British Columbia (hereinafter the "PURCHASER")
AND:
WESTERN CANADIAN MINT INC., a body corporate having an office in
Calgary, Alberta (hereinafter "WCM")
AND:
BULLION FUND INC., XXXXX XXXXXX, XXXXX XXXXXX, XXXXX VAN DER XXXXX,
XXXXXXX VAN DER VLIET, XXXX XXXXXX, XXXXX GARDEN AND XXXXXXX XXXXX,
a body corporate having an office in or individuals resident in
Calgary, Alberta (hereinafter individually referred to as a "VENDOR"
and collectively referred to as the "VENDORS")
AND:
AMERICAN OILSANDS COMPANY INC., a body corporate having an office in
Calgary, Alberta (hereinafter "AOC")
WHEREAS:
A. The Vendors are the registered and beneficial owners of all of the issued
and outstanding shares in the capital of WCM, and WCM is the registered
and beneficial owner of the sole issued and outstanding share in the
capital of AOC; and
B. The Purchaser wishes to acquire the Purchased Shares (as defined herein)
from the Vendors, and the Vendors wish to sell the Purchased Shares to the
Purchaser, on the terms and subject to the conditions set forth in this
Agreement;
NOW THEREFORE, in consideration of the respective covenants, agreements,
representations, warranties and indemnities herein contained and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged) the parties hereby covenant and agree as follows.
ARTICLE I
INTERPRETATION
1.1 DEFINED TERMS
Whenever used in this Agreement, unless there is something in the subject
matter or context inconsistent therewith, the following words and terms will
have the indicated meanings and grammatical variations of such words and terms
will have corresponding meanings:
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(a) "ACT" means the Business Corporations Act (Alberta), as in effect on
the date hereof;
(b) "ARM'S LENGTH" has the meaning ascribed thereto in the ITA;
(c) "AEPEA" has the meaning ascribed thereto in SECTION 3.2(O);
(d) "BUSINESS" means the business carried on by AOC, which has to date
been restricted to holding a 51% interest in the Permits and to the
negotiation of an operating agreement relating thereto with Powermax
Energy Inc.;
(e) "BUSINESS DAY" means any day, other than a day that is a Saturday, a
Sunday or a day on which banks in Calgary, Alberta are not generally
open for business;
(f) "CEPA" has the meaning ascribed thereto in SECTION 3.2(O);
(g) "CLOSING" has the meaning ascribed thereto in SECTION 7.1;
(h) "CLOSING DATE" means November 30, 2004, or such other date as the
parties may mutually agree upon;
(i) "CLOSING TIME" means 2:00 p.m. (Calgary time) on the Closing Date or
such other time on the Closing Date as the parties may mutually
agree upon;
(j) "CONTRACT" means any agreement, indenture, contract, lease, deed of
trust, licence, option, instrument or other commitment, whether
written or oral;
(k) "EMPA" has the meaning ascribed thereto in SECTION 3.2(O);
(l) "ENCUMBRANCES" means mortgages, charges, pledges, security
interests, liens, encumbrances, actions, rights and claims, adverse
interests, acquisition rights of third parties, demands and equities
of any nature whatsoever or howsoever arising, and any rights or
privileges capable of becoming any of the foregoing;
(m) "ENVIRONMENTAL LAWS" has the meaning ascribed thereto in SECTION
3.2(O);
(n) "ENVIRONMENTAL PERMITS" has the meaning ascribed thereto in SECTION
3.2(O);
(o) "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means the accounting
principles prescribed, recommended or promulgated from time to time
by the Canadian Institute of Chartered Accountants, as contained in
the CICA Handbook, which are applicable as at the date on which any
calculation made hereunder is to be effective or as at the date of
any financial statements referred to herein, as the case may be, and
in the absence of a specific recommendation contained in the CICA
Handbook, such accounting principles as are generally accepted in
practice;
(p) "GOVERNMENTAL CHARGES" has the meaning ascribed thereto in SECTION
3.2(M);
(q) "HAZARDOUS SUBSTANCE" has the meaning ascribed thereto in SECTION
3.2(O);
(r) "INDEMNITY CLAIM" has the meaning ascribed thereto in SECTION 8.3;
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(s) "INITIAL FINANCING" means the financing to be undertaken by the
Purchaser in order to raise the necessary capital to (i) undertake
all, or a portion of the first winter's exploration program on the
Lands, and (ii) make the payments contemplated in Section 2.2;
(t) "ITA" means the Income Tax Act (Canada);
(u) "LANDS" means those lands as described in Schedule "A" to the
Agreement of Purchase and Sale dated September 29, 2004 between the
Purchaser and Powermax Energy Inc.;
(v) "MISREPRESENTATION" has the meaning ascribed thereto in the
Securities Act (Alberta);
(w) "PERMITS" means those oilsands permits related to the Lands as
described in Schedule "A" to the Agreement of Purchase and Sale
dated September 29, 2004 between the Purchaser and Powermax Energy
Inc.;
(x) "PERSON" includes any individual, corporation, company, partnership,
limited partnership, firm, joint venture, syndicate, association,
trust, government, governmental agency or board or commission or
authority;
(y) "PURCHASE PRICE" has the meaning ascribed thereto in SECTION 2.2;
(z) "PURCHASED SHARES" means all of the shares in the capital of WCM
owned by the Vendors;
(aa) "RELEASE" has the meaning ascribed thereto in SECTION 3.2(O);
(bb) "UNAUDITED FINANCIAL STATEMENTS" means the most recent unaudited
financial statements of each of WCM and AOC;
(cc) "URANIUM SHARES" means common shares in the capital of the
Purchaser, as presently constituted; and
(dd) "WARRANTY CLAIM" means a claim made by either the Purchaser or the
Vendors based on or with respect to the inaccuracy or
non-performance or non-fulfillment or breach of any representation
or warranty made by the other in this Agreement or in any document
or certificate given in order to carry out the transaction provided
for herein;
1.2 BEST OF KNOWLEDGE
Any reference herein to "THE BEST OF THE KNOWLEDGE" of a party will be
deemed to mean the actual knowledge of such party and the knowledge that such
party would have had if it had conducted a thorough inquiry into the relevant
subject matter.
1.3 CURRENCY
Unless otherwise indicated, all dollar amounts referred to in this
Agreement are stated in Canadian currency.
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1.4 CHOICE OF LAW AND ATTORNMENT
This Agreement, and each of the agreements, documents and instruments to
be delivered at Closing under or in connection with this Agreement (to the
extent no choice of law is specified therein), shall be governed by and
construed in accordance with the laws of the Province of Alberta and the laws of
Canada applicable therein. The parties agree that the courts of the Province of
Alberta will have jurisdiction to determine all disputes and claims arising
between the parties in respect of this Agreement (and such other agreements,
documents and instruments) and the matters contemplated hereby (and thereby) and
each of the parties hereby irrevocably attorns to the jurisdiction of such
courts.
1.5 INTERPRETATION NOT AFFECTED BY HEADINGS OR PARTY DRAFTING
The division of this Agreement into articles, sections, paragraphs and
clauses and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement. The terms
"THIS AGREEMENT", "HEREOF", "HEREIN", "HEREUNDER" and similar expressions refer
to this Purchase and Sale Agreement and not to any particular article, section,
paragraph, clause or other portion hereof and include any agreement or
instrument supplementary or ancillary hereto. Unless otherwise indicated, any
reference in this Agreement to an Article, Section, Recital, Paragraph or Clause
refers to the specified Article, Section, Recital, Paragraph or Clause of this
Agreement. The parties hereto acknowledge that their respective legal counsel
have reviewed and participated in settling the terms of this Agreement, and the
parties hereby agree that any rule of construction to the effect that any
ambiguity is to be resolved against the drafting party shall not be applicable
in the interpretation of this Agreement.
1.6 NUMBER AND GENDER
Whenever used in this Agreement, unless there is something in the subject
matter or context inconsistent therewith:
(a) words importing the singular number include the plural and vice
versa; and
(b) words importing the use of any gender shall include all genders.
1.7 TIME OF ESSENCE
Time shall be of the essence hereof.
1.8 INCLUSIVE TERMINOLOGY
Whenever used in this Agreement, the words "includes" and "including" and
similar terms of inclusion shall not, unless expressly modified by the words
"only" or "solely", be construed as terms of limitation, but rather shall mean
"includes but is not limited to" and "including but not limited to", so that
references to included matters shall be regarded as illustrative without being
either characterizing or exhaustive.
ARTICLE II
PURCHASE AND SALE
2.1 PURCHASE AND SALE
On the terms and subject to the fulfillment of the conditions set out
herein, the Vendors will, at Closing, sell, assign and transfer the Purchased
Shares to the Purchaser, free and clear of all Encumbrances and with all rights
and benefits attaching thereto, and the Purchaser will purchase and accept the
Purchased Shares from the Vendors and pay the Purchase Price to the Vendors in
the manner contemplated by SECTION 2.2.
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2.2 PURCHASE PRICE
The total aggregate consideration (the "Purchase Price") payable by the
Purchaser for all of the Purchased Shares will be cash in the amount of
$1,500,000 and the issuance of 2,000,000 Uranium Shares, to be satisfied as
follows:
(a) as to the sum of $300,000, by way of a deposit, which amount the
Vendors acknowledge having received prior to the date hereof;
(b) as the sum of $250,000, by the delivery of a certified cheque, which
amount the Vendors acknowledge having received prior to the date
hereof;
(c) as to the sum of $950,000, by way of delivery of a certified cheque,
bank draft or money order in the amount of $950,000 payable to the
Vendors on the Closing Date; and
(d) the issuance of an aggregate of 2,000,000 Uranium Shares to the
Vendors on the Closing Date.
2.3 NON-PAYMENT OF PURCHASE PRICE
Notwithstanding Section 2.2 above, in the event that all or a portion of
the Purchase Price is not paid to the Vendors as provided for in Section 2.2,
the Vendors, in their sole discretion, shall have the option to elect to
terminate this Agreement by repaying the Purchaser any and all amounts advanced
to the Vendors pursuant to Section 2.2 hereof within 90 days of the date of
notice of such election. If the Vendors elect to exercise their option to
terminate this Agreement but fail to repay the Purchaser such amounts within the
90 day period, then the following will apply:
(a) the Purchaser may pay to the Vendors any amounts outstanding
pursuant to Section 2.2 in which case this Agreement shall remain in
full force and effect and the parties will be obligated to complete
the transactions contemplated by this Agreement in accordance with
the terms hereof; or
(b) the Vendors may repay the Purchaser any and all amounts advanced to
the Vendors pursuant to Section 2.2 in which case this Agreement
shall be terminated and of no further force or effect,
provided that the party that first complies with subparagraph (a) or (b) above
shall be determinative. In the event that the Agreement is terminated in
accordance with this Section 2.3, it is acknowledged that neither the Purchaser
nor any person claiming by or through it shall have any claim, direct or
indirect, contingent or otherwise, for AOC's 51% interest in the Permits or
against the Vendors, WCM, AOC or the directors, officers or shareholders of any
of the foregoing, as applicable, with respect to the subject matter hereof.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES BY THE VENDORS, WCM AND AOC
The Vendors, WCM and AOC hereby severally represent and warrant to the
Purchaser as follows and acknowledge that, notwithstanding any independent
searches or investigations that may be undertaken by or on behalf of the
Purchaser, the Purchaser is relying upon the accuracy of each of such
representations and warranties in connection with the execution and delivery of
this Agreement and its purchase of the Purchased Shares hereunder. For
certainty, the representations and warranties of the Vendors, WCM and AOC are
several, not joint and several, and each of the parties comprising the Vendors
shall only be legally responsible for and to the extent that breaches of
representations and warranties, if any, are attributable to the particular
Vendor in question. Further, the aggregate liability for breaches of any terms
of this Agreement, including representations and warranties, shall, in respect
of each Vendor, be capped at an amount equal to the portion of the cash proceeds
from the sale of the Purchased Shares actually received by the Vendor in
question, which cash proceeds are being distributed on a pro rata basis. The
representations and warranties of the Vendors are as follows:
(a) the Purchased Shares are validly issued and outstanding as fully
paid and non-assessable shares;
(b) the Vendors are the legal and beneficial owner of the Purchased
Shares and the Purchased Shares are free and clear of all
Encumbrances;
(c) there are no shares issued and outstanding in the capital of WCM,
other than the Purchased Shares, and no shares issued and
outstanding in the capital of AOC other than the 1 Class A Common
Share legally and beneficially owned by WCM;
(d) the Vendors have good title and absolute authority to sell, assign
and transfer the Purchased Shares to the Purchaser;
(e) each of the Vendors has taken all necessary or desirable actions,
steps and corporate and other proceedings to approve and authorize
the transactions contemplated by this Agreement and each of the
Vendors has the requisite corporate power and capacity to execute
and deliver this Agreement, to perform its obligations hereunder and
to complete the transactions provided for herein;
(f) the execution and delivery of this Agreement by the Vendors and the
performance by the Vendors of their obligations hereunder have been
duly approved and authorized and this Agreement is a legal, valid
and binding obligation of each of the Vendors, enforceable against
them in accordance with its terms, subject to:
(i) bankruptcy, insolvency, moratorium, reorganization and other
laws relating to or affecting the enforcement of creditors'
rights generally; and
(ii) the general principles of equity, including that equitable
remedies such as the remedies of specific performance and
injunctive relief, may only be granted in the discretion of a
court; and
(g) the Vendors are not non-residents of Canada within the meaning of
Section 116 of the ITA.
3.2 ADDITIONAL REPRESENTATIONS AND WARRANTIES BY THE VENDORS, WCM AND AOC
The Vendors, WCM and AOC also represent and warrant to the Purchaser as
follows and acknowledge that, notwithstanding any independent searches or
investigations that may be undertaken by or on behalf of the Purchaser, the
Purchaser is relying upon the accuracy of each of such representations and
warranties in connection with the execution and delivery of this Agreement and
its purchase of the Purchased Shares hereunder.
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(a) CORPORATE PROCEEDINGS. Each of the Vendors, WCM and AOC has taken
all necessary or desirable actions, steps and corporate and other
proceedings, as applicable, to approve and authorize the transfer of
the Purchased Shares to the Purchaser.
(b) NO OTHER PURCHASE AGREEMENT OR COMMITMENTS. No person has any
agreement, option, understanding or commitment (written or verbal),
or any right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an agreement, option or commitment
(including convertible securities, warrants or convertible
obligations of any nature), for:
(i) the purchase, subscription, allotment or issuance of, or
conversion into, any unissued shares in the capital of WCM or
AOC or any other securities of WCM or AOC;
(ii) the purchase or acquisition by any other means of any of the
Purchased Shares from the Vendors (other than the Purchaser);
or
(iii) the purchase or acquisition by any other means from WCM or AOC
of any of their respective undertaking, property or assets,
other than in the ordinary course of business.
(c) CONTRACTUAL AND REGULATORY APPROVALS. Neither of the Vendors, WCM
nor AOC is under any obligation, contractual or otherwise, to
request or obtain the consent of any person, and no permits,
licenses, certifications, authorizations or approvals of, or
notifications to, any federal, provincial, municipal or local
government or governmental agency, board, commission or authority
are required to be obtained by any of them:
(i) in connection with the execution and delivery of this
Agreement, the performance by them of their respective
obligations hereunder or the completion of the transaction
provided for herein;
(ii) to avoid the loss of any permit, license, certification or
other authorization; or
(iii) in order that the authority, right and qualification of WCM or
AOC to carry on business in the ordinary course and in the
same manner as presently conducted remains in good standing
and in full force and effect as of and following the Closing
Date.
(d) STATUS AND LICENCES.
(i) Each of WCM and AOC is a body corporate duly incorporated and
validly existing in all respects under the laws of the
Province of Alberta. Each of WCM and AOC has all necessary
corporate power and capacity to own its properties and assets
and to carry on its business as it is now being conducted.
(ii) Each of WCM and AOC is duly licensed, registered and qualified
to carry on its business as it is now being conducted, is
up-to-date in the filing of all required corporate returns and
other notices and filings and is otherwise in good standing in
all respects, in each jurisdiction in which:
(A) it owns or leases property; or
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(B) the nature or conduct of its business or any part
thereof, or the nature of its properties or any part
thereof, makes such qualification necessary or desirable
to enable its business to be carried on as now conducted
or to enable its properties and assets to be owned,
leased and operated by it. WCM and AOC carry on business
only in Alberta and, in the case of AOC, Saskatchewan.
Neither WCM nor AOC have carried on business in any
other provinces of Canada nor any jurisdiction outside
of Canada.
(e) COMPLIANCE WITH CONSTATING DOCUMENTS, AGREEMENTS AND LAWS. The
completion of the transactions provided for herein, will not
constitute or result in a violation or breach of or default under,
or cause the acceleration of any obligations of either WCM or AOC,
under:
(i) any provision of its articles, by-laws or other constating
documents;
(ii) the terms of any agreement (written or oral), indenture,
instrument or understanding or any other obligation or
restriction to which it is a party or by which it is bound; or
(iii) any term or provision of any license, permit or similar
authorization or any order of any court, governmental
authority or regulatory body or any law or regulation of any
jurisdiction applicable to it.
(f) CORPORATE RECORDS. The corporate records and minute books of WCM and
AOC, all of which will be provided to the Purchaser prior to the
Closing Date, are and will at the Closing Date be materially
complete, accurate and up to date.
(g) SHAREHOLDERS' AGREEMENTS, ETC. There are no shareholders'
agreements, pooling agreements, voting trusts or other similar
agreements with respect to the ownership or voting of any of the
Purchased Shares.
(h) FINANCIAL STATEMENTS.
(i) The Unaudited Financial Statements have or will prior to the
Closing Date have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis,
are true, correct and complete in all material respects and
present fairly the financial condition of WCM and AOC as at
the dates thereof and results of their consolidated operations
and cash flows for the periods to which such financial
statements relate.
(ii) The consolidated financial condition of WCM and AOC is now and
at the Closing Date will be at least as good as the financial
condition reflected in the Unaudited Financial Statements.
(i) LIABILITIES. WCM and AOC have no liabilities (contingent or
otherwise) of any kind whatsoever, and there is no basis for the
assertion against WCM or AOC of any liabilities of any kind, other
than:
(i) liabilities disclosed, reflected or provided for in the
Unaudited Financial Statements;
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(ii) liabilities incurred since the date of the Unaudited Financial
Statements that were incurred in the ordinary course of
business and, in the aggregate, are not material to the
Business; and
(iii) other liabilities disclosed in this Agreement.
(j) LONG TERM INDEBTEDNESS. Except as disclosed in this Agreement or the
Unaudited Financial Statements, neither WCM nor AOC has any bonds,
debentures, mortgages, promissory notes or other indebtedness
outstanding that matures more than one year after the date of the
creation or issuance of the same, and neither corporation is under
any obligation to create or issue any bonds, debentures, mortgages,
promissory notes or other indebtedness maturing more than one year
after the date of their creation or issuance.
(k) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
Unaudited Financial Statements, neither WCM nor AOC has:
(i) incurred any obligation or liability (fixed or contingent),
except trade or business obligations incurred in the ordinary
course of business, which, individually and in the aggregate,
are not material to the Business;
(ii) paid or satisfied any obligation or liability (fixed or
contingent), except:
(A) current liabilities reflected or provided for in the
Unaudited Financial Statements;
(B) current liabilities incurred since the date of the
Unaudited Financial Statements in the ordinary course of
business; and
(C) payments pursuant to obligations under loan agreements
or other contracts or commitments described in this
Agreement;
(iii) created any Encumbrance upon any of its properties or assets,
except as described in this Agreement;
(iv) sold, assigned, transferred, leased or otherwise disposed of
any of its properties or assets, except in the ordinary course
of business;
(v) purchased, leased or otherwise acquired any properties or
assets, except in the ordinary course of business;
(vi) waived, cancelled or written-off any rights, claims, accounts
receivable or any amounts payable to it, except in the
ordinary course of business;
(vii) entered into any transaction or contract, except in the
ordinary course of business;
(viii)terminated, discontinued, closed or disposed of any facility
or business operation, except in the ordinary course of
business;
(ix) made any material change with respect to any method of
management, operation or accounting in respect of the
Business;
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(x) suffered any damage, destruction or loss (whether or not
covered by insurance) that has materially adversely affected
or could materially adversely affect the Business;
(xi) made or incurred any material change in, or become aware of
any event or condition that is likely to result in a material
change in, the Business or its relationships with its
customers, suppliers or employees; or
(xii) authorized, agreed or otherwise become committed to do any of
the foregoing.
(l) DIVIDENDS AND DISTRIBUTIONS. Since incorporation, neither WCM nor
AOC has declared or paid any dividend or made any other distribution
in respect of any of its securities, or redeemed or purchased or
otherwise acquired any of its securities, or reduced its authorized
or issued capital, or agreed to any of the foregoing.
(m) TAX MATTERS.
(i) For purposes of this Agreement, the term "GOVERNMENTAL
CHARGES" means and includes all taxes, customs duties, rates,
levies, assessments, reassessments and other charges, together
with all penalties, interest and fines with respect thereto,
payable to any federal, provincial, municipal, local or other
government or governmental agency, authority, board, bureau or
commission, domestic or foreign.
(ii) Each of WCM and AOC has duly and on a timely basis prepared
and filed all tax returns and other documents required to be
filed by it in respect of all Governmental Charges and such
returns and documents were complete and correct.
(iii) Each of WCM and AOC has paid all Governmental Charges that
were due and payable by it on or before the date hereof. AOC
has no liability for Governmental Charges other than those
provided for in the Unaudited Financial Statements and those
arising in the ordinary course of business since the date of
the Unaudited Financial Statements.
(iv) Canadian federal and provincial income tax assessments have
been issued to each of WCM and AOC covering all past periods
up to and including its last fiscal year end. There are no
actions, suits, proceedings, investigations, enquiries or
claims made or now pending or, to the best of the knowledge of
the Vendors, threatened against either WCM or AOC in respect
of Governmental Charges.
(v) There are no agreements, waivers or other arrangements
providing for any extension of time with respect to the filing
of any tax return or other document or the payment of any
Governmental Charges by WCM or AOC, or the period for any
assessment or reassessment of Governmental Charges.
(vi) Each of WCM and AOC has withheld from each amount paid or
credited to any person the amount of any Governmental Charges
required to be withheld therefrom and has remitted such
Governmental Charges to the proper tax or other receiving
authorities within the time periods required under applicable
law.
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(vii) Each of WCM and AOC is a Canadian-controlled private
corporation, as defined in the ITA.
(n) LITIGATION. There are no actions, suits or proceedings against, or,
to the best of the knowledge of the Vendors, pending or threatened,
by or against or affecting WCM or AOC, at law or in equity, or
before or by any court or any federal, provincial, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
(o) ENVIRONMENTAL MATTERS.
(i) For the purposes of this Agreement, the following words and
terms will have the indicated meanings:
(A) "ENVIRONMENTAL LAWS" means all applicable statutes,
regulations, ordinances, by-laws, interim directives,
information letters, guidelines, standards and codes and
all international treaties and agreements, now or
hereafter in force or existence in Canada (whether
federal, provincial or municipal) relating to the
protection and preservation of the environment,
occupational health and safety, product safety, product
liability or Hazardous Substances, including, without
limitation, the Environmental Protection and Enhancement
Act (Alberta), as amended from time to time (the
"AEPEA"), the Environmental Management and Protection
Act (Saskatchewan), as amended from time to time (the
"EMPA") and the Canadian Environmental Protection Act
(1999) (Canada), as amended from time to time (the
"CEPA").
(B) "ENVIRONMENTAL PERMITS" includes all orders, permits,
certificates, approvals, consents, registrations and
licenses issued by any competent authority under
Environmental Laws.
(C) "HAZARDOUS SUBSTANCE" means, collectively, any waste,
hazardous substance, toxic substance, hazardous waste,
oilfield waste, dangerous oilfield waste or dangerous
goods as defined under any Environmental Laws or
pollutant, or any other substance that, when released to
the environment, is likely to cause, at some immediate
or future time, material harm or degradation to the
environment or material risk to human health.
(D) "RELEASE" means any release, spill, leak, emission,
discharge, xxxxx, dumping, escape or other disposal that
is or has been made in contravention of any
Environmental Laws.
-12-
(ii) To the actual knowledge WCM or AOC after reasonable
investigation, and to the actual knowledge of the Vendors,
without investigation, the operation of the Business, the
property and assets owned or used by WCM and AOC and the use,
maintenance and operation thereof has been and is in
compliance with all Environmental Laws. To the actual
knowledge of the WCM and AOC, after reasonable investigation,
and to the actual knowledge of the Vendors, without
investigation, WCM and AOC have complied with all reporting
and monitoring requirements under all Environmental Laws. None
of WCM, AOC or the Vendors has received any notice of any
non-compliance with any Environmental Laws, and neither WCM
nor AOC have been prosecuted or convicted of an offence for
non-compliance with any Environmental Laws or been fined or
otherwise sentenced or settled such prosecution short of
conviction. Neither WCM nor AOC have received any claim or
demand from any person or authority regarding breach or
alleged breach of any Environmental Laws or costs of clean up
of any hazardous substance or notice of any such claim or
demand and there are no grounds on which any such claim or
demand could be made with any reasonable likelihood of
success.
(iii) To the actual knowledge WCM and AOC, after reasonable
investigation, and to the actual knowledge of the Vendors,
without investigation, no Environmental Permits are necessary
to conduct the Business to date in accordance with applicable
laws and to own its properties and assets and the operation of
such Business, the properties and assets owned by WCM and AOC
have been and are in compliance with all Environmental
Permits.
(iv) To the actual knowledge of WCM and AOC, and to the actual
knowledge of the Vendors, without investigation, there are no
Hazardous Substances located on any of the properties or
assets owned or used by, or previously owned or used by WCM or
AOC, and no Release of any Hazardous Substances has occurred
on or from such properties and assets or has resulted from the
operation of the Business or the conduct of any other
activities of WCM or AOC. Neither WCM nor AOC have used any of
their respective properties or assets to produce, generate,
store, handle, transport or dispose of any Hazardous
Substances.
(v) To the actual knowledge WCM and AOC, and to the actual
knowledge of the Vendors, without investigation, there are no
underground or surface storage tanks or urea formaldehyde foam
insulation, asbestos, polychlorinated biphenyls (PCBs) or
radioactive substances located on or in any of the properties
or assets owned or used by WCM or AOC. Neither WCM nor AOC
have conducted or caused to be conducted an environmental
audit, assessment or study of any of its properties or assets
used in the conduct of the Business.
(p) TITLE TO ASSETS. Each of WCM and AOC is the legal and beneficial
owner of, and has good and marketable title to, all of their
respective properties and assets, including, without limitation, the
properties and assets reflected in the Unaudited Financial
Statements and all properties and assets acquired by WCM or AOC
since the date of the Unaudited Financial Statements, free and clear
of all Encumbrances, except for:
(i) the Encumbrances disclosed or reflected in the Unaudited
Financial Statements; and
(ii) liens for taxes not yet due and payable; and
(iii) with respect to the Permits, the Vendors do not warranty title
but do represent and warrant that, to the best of the Vendors
knowledge, information and belief, after due investigation,
AOC has not disposed of any interest in or to the Permits and
accordingly AOC beneficially holds a 51% working interest in
and to the Permits.
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(q) SUBSIDIARIES AND OTHER INTERESTS. AOC is a wholly owned subsidiary
of WCM. Other than AOC, WCM has no subsidiaries and owns no
securities issued by, or any equity or other ownership interest in,
any person. AOC has no subsidiaries and owns no securities issued
by, or any equity or other ownership interest in, any person.
(r) PARTNERSHIPS OR JOINT VENTURES. Other than as previously disclosed
to the Purchaser, neither WCM nor AOC is a partner or participant in
any partnership, joint venture, profit-sharing arrangement or other
similar association of any kind, or a party to any agreement under
which it agrees to carry on any part of a business or any other
activity in such manner or by which it agrees to share any revenue,
profit or expenses with any other person.
(s) RESTRICTIONS ON DOING BUSINESS. Neither WCM nor AOC is a party to or
bound by any agreement that would restrict or limit its right to
carry on any business or activity or to solicit business from any
person or in any geographical area or otherwise to conduct the
Business as it may determine or desire. Neither WCM nor AOC is
subject to any legislation or any judgment, order or requirement of
any court or governmental authority that is not of general
application to persons carrying on a business similar to the
Business. To the best of the knowledge of the Vendors, there are no
facts or circumstances that could materially adversely affect the
ability of AOC to continue to operate the Business as presently
conducted by it following the completion of the transactions
contemplated by this Agreement.
(t) OUTSTANDING AGREEMENTS. Neither WCM nor AOC is a party to or bound
by any outstanding or executory contract, except for contracts
described or referred to in this Agreement and contracts made in the
ordinary course of business.
(u) GOOD STANDING OF AGREEMENTS. Neither WCM nor AOC is in default or
breach of any of its obligations under any one or more of the
contracts to which it is a party or by which it is bound and there
exists no state of facts that, after notice or lapse of time or
both, would constitute such a default or breach. All such contracts
are now in good standing and in full force and effect without
amendment thereto; WCM and AOC are entitled to all benefits
thereunder and, to the best of the knowledge of the Vendors, the
other parties to such contracts are not in default or breach of any
of their obligations thereunder. There are no contracts under which
the rights of WCM or AOC (or the performance by WCM or AOC) are
dependent upon or supported by the guarantee of or any security
provided by any other person. To the best of the knowledge of the
Vendors, WCM and AOC and the other parties to all contracts to which
WCM or AOC is a party, have the capacity to perform all of their
respective obligations under such contracts.
(v) EMPLOYMENT AGREEMENTS. Neither WCM nor AOC is a party to any written
or oral employment, service or consulting agreement, except for oral
employment agreements that are of indefinite term and without any
special arrangements or commitments with respect to the continuation
of employment or payment of any particular amount upon termination
of employment or engagement.
(w) COMPLIANCE WITH LAWS. Neither WCM nor AOC is in violation of any
federal, provincial, municipal or other law, regulation or order of
any government or governmental or regulatory authority, domestic or
foreign.
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(x) DISCLOSURE. No representation or warranty contained in SECTION 3.1
or SECTION 3.2, and no statement contained in any certificate, list,
summary or other document provided, or to be provided, to the
Purchaser pursuant hereto, or in connection with the transaction
provided for herein, contains or will contain any untrue statement
of a material fact, or to the actual knowledge of the Vendors,
without investigation, omits or will omit to state any material fact
which is necessary in order to make the statements contained therein
not misleading.
3.3 REPRESENTATIONS AND WARRANTIES BY THE PURCHASER
The Purchaser hereby represents and warrants to the Vendors as follows and
acknowledges that the Vendors are relying upon the accuracy of each of such
representations and warranties in connection with the sale, assignment and
transfer of the Purchased Shares by the Vendors to the Purchaser hereunder. The
aggregate liability of the Purchaser for breaches of any terms or conditions of
this Agreement is capped at $1,500,000. The Purchaser's representations and
warranties are as follows:
(a) CORPORATE AUTHORITY AND BINDING OBLIGATION. The Purchaser is a
corporation duly incorporated and validly subsisting under the laws
of Colorado. The Purchaser has the corporate power and capacity to
enter into this Agreement and to purchase the Purchased Shares from
the Vendors in the manner provided for herein and to perform all of
the Purchaser's obligations under this Agreement. The Purchaser and
its board of directors has or will have taken all necessary or
desirable actions, steps and corporate and other proceedings to
approve or authorize, validly and effectively, the entering into and
the execution, delivery and performance of, this Agreement and the
purchase of the Purchased Shares from the Vendors. This Agreement is
a legal, valid and binding obligation of the Purchaser, enforceable
against it in accordance with its terms, subject to:
(i) bankruptcy, insolvency, moratorium, reorganization and other
laws relating to or affecting the enforcement of creditors'
rights generally; and
(ii) the general principles of equity, including that equitable
remedies, such as the remedies of specific performance and
injunctive relief, may only be granted in the discretion of a
court.
(b) COMPLIANCE WITH CONSTATING DOCUMENTS, AGREEMENTS AND LAWS. The
execution, delivery and performance of this Agreement and each of
the other agreements contemplated or referred to herein by the
Purchaser and the completion of the transaction provided for herein,
will not constitute or result in a violation or breach of or default
under:
(i) any term or provision of any of the articles, by-laws or other
constating documents of the Purchaser;
(ii) the terms of any contract to which the Purchaser is a party or
by which it is bound; or
(iii) subject to obtaining applicable regulatory consents, any term
or provision of any licenses or registrations of the Purchaser
or any order of any court, governmental authority or
regulatory body or any applicable law or regulation of any
jurisdiction.
-15-
(c) CONDUCT OF BUSINESS. The Purchaser is (prior to giving effect to the
transactions provided for in this Agreement) conducting its business
in all material respects in compliance with all applicable laws,
rules and regulations in the jurisdictions in which its business is
carried on.
(d) LITIGATION. There are no actions, proceedings or investigations
pending or, to the best of the knowledge of the Purchaser,
threatened by or against or affecting the Purchaser, at law or in
equity, or before or by any federal, provincial, municipal or other
government department, commission, board or agency, domestic or
foreign, that in any way materially adversely affects the Purchaser
or the condition (financial or other) of the Purchaser or which
affects or may materially affect the capacity of the Purchaser to
complete the transaction provided for in this Agreement.
ARTICLE IV
SURVIVAL AND LIMITATIONS OF REPRESENTATIONS AND WARRANTIES
4.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES BY THE VENDORS
The representations and warranties made by the Vendors in this Agreement,
or in any document or certificate given in order to carry out the transaction
provided for herein, will survive Closing and the purchase and sale of the
Purchased Shares and, notwithstanding such Closing or any investigation made by
or on behalf of the Purchaser or any other person or any knowledge of the
Purchaser or any other person, shall continue in full force and effect for the
benefit of the Purchaser, subject to the following provisions:
(a) except as provided in (b) and (c) of this Section, no Warranty Claim
may be made or brought by the Purchaser after the date which is one
year following the Closing Date;
(b) notwithstanding anything else contained in this Agreement or
elsewhere, each of the parties comprising the Vendor shall only be
liable for breaches of representations and warranties relating to
the Vendor in question and,
(c) any Warranty Claim which is based upon or relates to the tax
liability of WCM or AOC for a particular taxation year may be made
or brought by the Purchaser at any time prior to the expiration of
the period (if any) during which an assessment, reassessment or
other form of recognized document assessing liability for tax,
interest or penalties in respect of such taxation year under
applicable tax legislation could be issued (or, in the case of any
such assessment or reassessment, until the issues in dispute have
been fully resolved) assuming that WCM, AOC and the Purchaser do not
file any waiver or similar document extending such period as
otherwise determined; and
(d) any Warranty Claim which is based upon or relates to title to the
Purchased Shares or which is based upon intentional
misrepresentation or fraud by the Vendors may be made or brought by
the Purchaser at any time for the maximum period permitted by law.
After the expiration of the period of time referred to in (a) of this
Section, the Vendors will be released from all obligations and liabilities in
respect of the representations and warranties made by the Vendors in this
Agreement, or in any document or certificate given in order to carry out the
transaction provided for herein, except with respect to any Warranty Claims made
by the Purchaser in writing and in good faith (with particulars as to the nature
of the Warranty Claim, to the extent then known) prior to the expiration of such
period and subject to the rights of the Purchaser to make any claim permitted by
(b) and (c) of this Section.
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4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES BY PURCHASER
The representations and warranties made by the Purchaser in this
Agreement, or in any document or certificate given in order to carry out the
transaction provided for herein, will survive Closing and the purchase and sale
of the Purchased Shares and, notwithstanding such Closing or any investigation
made by or on behalf of the Vendors or any other person or any knowledge of the
Vendors or any other person, shall continue in full force and effect for the
benefit of the Vendors, subject to the following provisions:
(a) except as provided in (b) and (c) of this Section, no Warranty Claim
may be made or brought by the Vendors after the date which is two
years following the Closing Date;
(b) any Warranty Claim which is based upon or relates to the tax
liability of the Purchaser for a particular taxation year may be
made or brought by the Vendors at any time prior to the expiration
of the period (if any) during which an assessment, reassessment or
other form of recognized document assessing liability for tax,
interest or penalties in respect of such taxation year under
applicable tax legislation could be issued (or, in the case of any
such assessment or reassessment, until the issues in dispute have
been fully resolved) assuming that the Purchaser does not file any
waiver or similar document extending such period as otherwise
determined; and
(c) any Warranty Claim which is based upon or relates to intentional
misrepresentation or fraud by the Purchaser may be made or brought
by the Purchaser at any time for the maximum period permitted by
law.
After the expiration of the period of time referred to in (a) of this
Section, the Purchaser will be released from all obligations and liabilities in
respect of the representations and warranties made by the Purchaser in this
Agreement, or in any document or certificate given in order to carry out the
transaction provided for herein, except with respect to any Warranty Claims made
by the Vendors in writing and in good faith (with particulars as to the nature
of the Warranty Claim, to the extent then known) prior to the expiration of such
period and subject to the rights of the Vendors to make any claim permitted by
(b) and or (c) of this Section.
ARTICLE V
COVENANTS
5.1 COVENANTS BY THE VENDORS
The Vendors covenant to and with the Purchaser as follows:
(a) SATISFACTION OF CONDITIONS ETC.: Each of the Vendors will take all
actions within its control to ensure that the representations and
warranties in SECTIONS 3.1 AND 3.2 remain true and correct in all
material respects at the Closing Time.
(b) TRANSFER OF PURCHASED SHARES. At or before the Closing Time, the
Vendors shall cause all necessary steps and proceedings to be taken
in order to permit the Purchased Shares to be duly and regularly
transferred to the Purchaser.
(c) DUE DILIGENCE. In order to enable the Purchaser to complete its
proper due diligence, the Vendors shall give to the Purchaser and
its counsel, accountants and other representatives access during
normal business hours to the facilities, assets and personnel of the
Business, shall furnish to the Purchaser and such representatives
all such additional documents (the identification of which shall be
certified by an officer of the Vendor furnishing the same, if
requested), financial information and other information with respect
to any of the Business or the assets as the Purchaser may from time
to time reasonably request. The Vendors agree that no investigation
by the Purchaser or its representatives shall affect or limit the
scope of the Vendors' representations and warranties herein or limit
the Vendors' liability for any breach of such representations and
warranties; provided, however, that the Purchaser shall promptly
disclose to the Vendors any breaches of the Vendors' representations
and warranties that come to the attention of the Purchaser during
the Purchaser's due diligence review;
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(d) AUDIT. The Vendors shall cooperate with, and provide all reasonable
assistance to, the Purchaser with respect to any audits of prior
fiscal periods of WCM and AOC that may be required after the Closing
Date in order to permit the Purchaser to comply with requests from
regulatory authorities; provided, however, that any such audits
shall be at the expense of the Purchaser.
(e) POST CLOSING TAX MATTERS. The Purchaser shall be entitled (and the
Vendors shall permit the Purchaser) to prepare and file or cause to
be prepared and filed all tax returns for WCM and AOC for all
periods ending on or prior to the Closing Date (to the extent not
filed prior to Closing). The Vendors shall cooperate fully, and to
the extent reasonably requested by the Purchaser, in connection with
the preparation and filing of any such tax returns and any audit,
litigation or other proceeding with respect to Governmental Charges
in connection with all tax returns or filing periods ending on or
before the Closing Date.
5.2 COVENANTS BY THE PURCHASER
The Purchaser covenants to and with the Vendors that the Purchaser will
take all actions within its control to ensure that the representations and
warranties in SECTION 3.3 remain true and correct in all material respects at
the Closing Time.
ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
Notwithstanding anything herein contained, the obligation of the Purchaser
to complete the transactions provided for in this Agreement will be subject to
the fulfillment of each of the following conditions at or prior to the Closing
Time, and the Vendors covenant to use their best efforts to ensure that such
conditions are fulfilled.
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES AND PERFORMANCE OF
COVENANTS. The representations and warranties of the Vendors
contained in this Agreement shall be true and accurate on the date
hereof and at the Closing Time with the same force and effect as
though such representations and warranties had been made as of the
Closing Time. In addition, the Vendors shall have complied with all
covenants and agreements herein agreed to be performed or caused to
be performed by it at or prior to the Closing Time. In addition,
each of the Vendors shall have delivered to the Purchaser a
certificate (in a form reasonably acceptable to the Purchaser)
confirming that the facts with respect to each of the
representations and warranties of the Vendors set out herein are
true and correct at the Closing Time and that the Vendors have
performed all covenants and agreements required to be performed by
it hereunder.
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(b) MATERIAL ADVERSE CHANGE. As of the Closing Date, there shall have
been no change in the Business (as reflected in the Unaudited
Financial Statements), howsoever arising, except changes that have
occurred in the ordinary course of business and that, individually
or in the aggregate, have not affected (and are not reasonably
expected to affect) the Business in any material adverse way.
(c) NO RESTRAINING PROCEEDINGS. No order, decision or ruling of any
court, tribunal or regulatory authority having jurisdiction shall
have been made, and no action or proceeding shall be pending or
threatened that, in the reasonable opinion of the Purchaser, is
likely to result in an order, decision or ruling:
(i) to disallow, enjoin, prohibit or impose any limitations or
conditions on the purchase and sale of the Purchased Shares
contemplated hereby or the right of the Purchaser to own the
Purchased Shares and enjoy all rights of ownership therein; or
(ii) to impose any limitations or conditions that may have an
adverse effect on the Business.
(d) CONSENTS. All consents required to be obtained in order to carry out
the transactions provided for herein in compliance with all laws and
agreements binding upon the parties hereto shall have been obtained
and all necessary regulatory approvals shall have been obtained in a
form and on terms, if any, acceptable to the Purchaser.
(e) SATISFACTORY DUE DILIGENCE. The Purchaser, acting reasonably, shall
be satisfied with the results of its due diligence review of the
Business and the assets of WCM and AOC.
(f) DOCUMENTS. The Vendors shall have executed and delivered to the
Purchaser the documents set forth in SECTION 7.2(A), in form and
substance reasonably satisfactory to the Purchaser.
(g) TRANSFER OF PURCHASED SHARES. All necessary steps and proceedings
shall have been taken to permit the Purchased Shares to be duly and
regularly transferred to and registered in the name of the
Purchaser.
(h) BOARD APPROVAL. The board of directors of the Purchaser shall have
approved this Agreement and all of the transactions contemplated
hereby.
(i) LEGAL MATTERS. All actions, proceedings, instruments and documents
required to implement this Agreement, or instrumental thereto, and
all legal matters relating to the purchase of the Purchased Shares,
shall have been approved as to form and legality by Purchaser's
counsel, acting reasonably.
(j) ENCUMBRANCES. All Encumbrances on assets of WCM and AOC shall have
been discharged or arrangements satisfactory to the Purchaser shall
have been made to discharge the same within a reasonable period of
time following Closing.
(k) INITIAL FINANCING. The Purchaser, acting reasonably, shall have
completed the Initial Financing.
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6.2 WAIVER OR TERMINATION BY PURCHASER
The conditions contained in SECTION 6.1 are inserted for the exclusive
benefit of the Purchaser and may be waived in whole or in part by the Purchaser
at any time. The Vendors acknowledge that the waiver by the Purchaser of any
condition or any part of any condition shall constitute a waiver only of such
condition or such part of such condition, as the case may be, and shall not
constitute a waiver of any covenant, agreement, representation or warranty made
by the Vendors herein that corresponds or is related to such condition or such
part of such condition, as the case may be. If any of the conditions contained
in SECTION 6.1 is not fulfilled or complied with as herein provided, the
Purchaser may, at its option, terminate the Purchaser's obligations under this
Agreement by notice in writing to the Vendors and in such event the Purchaser
shall be released from all obligations hereunder and, unless the condition or
conditions that have not been fulfilled are reasonably capable of being
fulfilled or caused to be fulfilled by the Vendors, then the Vendors shall also
be released from all obligations hereunder, provided that SECTIONS 1.4 AND 9.5
will survive any such termination.
6.3 CONDITIONS TO THE OBLIGATIONS OF THE VENDORS
Notwithstanding anything herein contained, the obligation of the Vendors
to complete the transactions provided for herein will be subject to the
fulfillment of all of the following conditions at or prior to the Closing Time,
and the Purchaser will use its best efforts to ensure that such conditions are
fulfilled.
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES AND PERFORMANCE OF
COVENANTS. The representations and warranties of the Purchaser
contained in this Agreement will be true and accurate on the date
hereof and at the Closing Time with the same force and effect as
though such representations and warranties had been made as of the
Closing Time. In addition, the Purchaser shall have complied with
all covenants and agreements herein agreed to be performed or caused
to be performed by it at or prior to the Closing Time. In addition,
the Purchaser shall have delivered to the Vendors a certificate (in
a form reasonable acceptable to the Vendors) confirming that the
facts with respect to each of the representations and warranties of
the Purchaser set out herein are true and correct at the Closing
Time and that the Purchaser has performed each of the covenants and
agreements required to be performed by it hereunder.
(b) NO RESTRAINING PROCEEDINGS. No order, decision or ruling of any
court, tribunal or regulatory authority having jurisdiction shall
have been made, and no action or proceeding shall be pending or
threatened that, in the reasonable opinion of the Vendors, is likely
to result in an order, decision or ruling, to disallow, enjoin or
prohibit the purchase and sale of the Purchased Shares contemplated
hereby.
(c) CONSENTS. All consents required to be obtained in order to carry out
the transactions provided for in compliance with all laws and
agreements binding upon the parties hereto shall have been obtained.
(d) NO MATERIAL CHANGES. As at the Closing Date, there shall be no
material adverse changes in the business, affairs or financial
condition of the Purchaser, except as may result from the
transactions provided for in this Agreement.
(e) BOARD APPROVAL. The board of directors of each of the Vendors, WCM
and AOC, as applicable, shall have approved this Agreement and all
of the transactions contemplated hereby.
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6.4 WAIVER OR TERMINATION BY VENDORS
The conditions contained in SECTION 6.3 are inserted for the exclusive
benefit of the Vendors and may be waived in whole or in part by the Vendors at
any time. The Purchaser acknowledges that the waiver by the Vendors of any
condition or any part of any condition shall constitute a waiver only of such
condition or such part of such condition, as the case may be, and shall not
constitute a waiver of any covenant, agreement, representation or warranty made
by the Purchaser herein that corresponds or is related to such condition or such
part of such condition, as the case may be. If any of the conditions contained
in SECTION 6.3 is not fulfilled or complied with as herein provided, the Vendors
may at their option, terminate the Vendors' obligations under this Agreement by
notice in writing to the Purchaser and in such event the Vendors shall be
released from all obligations hereunder and, unless the condition or conditions
that have not been fulfilled are reasonably capable of being fulfilled or caused
to be fulfilled by the Purchaser, then the Purchaser shall also be released from
all obligations hereunder, provided that SECTIONS 1.4 AND 9.5 shall survive any
such termination.
ARTICLE VII
CLOSING
7.1 CLOSING ARRANGEMENTS
Subject to fulfillment of the conditions set out herein, closing of the
transaction provided for herein shall occur at the Closing Time, at the offices
of TingleMerrett LLP, 1250, 000 - 0xx Xxxxxx X.X., Xxxxxxx, Xxxxxxx, X0X 0X0, or
at such other place as the parties may agree in writing (the "CLOSING").
7.2 DOCUMENTS TO BE DELIVERED
At or before the Closing Time, the Vendors shall execute, or cause to be
executed, and shall deliver, or cause to be delivered, to the Purchaser, all
agreements, instruments, notices, certificates and other documents that are to
be delivered by the Vendors pursuant to this Agreement, in form reasonably
satisfactory to the Purchaser and the Purchaser shall execute, or cause to be
executed, and shall deliver, or cause to be delivered, to the Vendors, in form
reasonably satisfactory to the Vendors all share certificates and all
agreements, instruments, notices, certificates and other documents and
instruments that the Purchaser is to deliver or cause to be delivered pursuant
to this Agreement, including the following.
(a) Vendors' Documents:
(i) all share certificates representing the Purchased Shares, duly
endorsed for transfer to the Purchaser or to such nominee of
the Purchaser as the Purchaser may direct;
(ii) duly issued share certificate(s) representing the Purchased
Shares, in the name of the Purchaser or in the name of such
nominee as the Purchaser may direct;
(iii) duly executed resignations of each person who is a director or
officer of WCM or AOC, to the extent specified by the
Purchaser;
(iv) duly executed releases from the Vendors, to the extent
specified by the Purchaser;
(v) all consents, waivers, releases and authorizations required to
enable the transfer of the Purchased Shares to the Purchaser;
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(vi) a certified copy of such resolutions of the directors of each
of the Vendors as may be required in order to authorize the
execution, delivery and performance of this Agreement;
(vii) a duly executed certificate signed by each of the Vendors,
dated as at the Closing Date, certifying that as at the
Closing Time, the representations and warranties of the
Vendors contained in this Agreement are true and correct and
that all covenants and agreements required hereby to be
performed or complied with by the Vendors prior to or at the
Closing have been performed and complied with, except as
otherwise specifically agreed to in writing by the Purchaser;
(viii)all corporate records, minute books, accounting records and
other documents, agreements or records of or pertaining to WCM
and AOC;
(ix) the corporate seals, if any, of WCM and AOC;
(x) discharges of all guarantees granted by WCM or AOC in respect
of obligations of the Vendors and its associates and
affiliates, if any; and
(xi) all such other documents and instruments as the Purchaser may
reasonably require.
(b) Purchaser's Documents:
(i) a certified cheque, bank draft or money order in the amount of
$950,000 payable to the Vendors as provided for in subsection
2.2(c) hereof;
(ii) share certificates representing the Uranium Shares to be
issued as provided for in subsection 2.2(d) hereof:
(iii) a certified copy of such resolutions of the directors of the
Purchaser as may be required in order to authorize the
execution, delivery and performance of this Agreement;
(iv) a duly executed certificate of an officer of the Purchaser,
dated as at the Closing Date, certifying that as at the
Closing Time, the representations and warranties of the
Purchaser contained in this Agreement are true and correct as
if made at the Closing Time and that all covenants and
agreements required by this Agreement to be performed or
complied with by the Purchaser prior to or at the Closing have
been performed and complied with, except as otherwise
specifically agreed to by the Vendors; and
(v) all such other documents and instruments as the Vendors may
reasonably require.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNITY BY THE VENDORS
(a) Subject to SECTION 8.3, the Vendors hereby agree to severally
indemnify and save the Purchaser harmless from and against any
claims, demands, actions, causes of action, damages, losses,
deficiencies, costs, liabilities and expenses that may be made or
brought against the Purchaser or that the Purchaser may suffer or
incur as a result of, in respect of or arising out of:
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(i) any non-performance or non-fulfillment of any covenant or
agreement of the Vendors contained in this Agreement or in any
document delivered by the Vendors in order to carry out the
transaction provided for herein;
(ii) any misrepresentation, inaccuracy, incorrectness or breach of
any representation or warranty made by the Vendors in this
Agreement or in any document or certificate given in order to
carry out the transaction provided for herein; and
(iii) all costs and expenses including, without limitation, legal
fees on a solicitor-and-his own client basis, incidental to or
in respect of the foregoing.
(b) The obligations of indemnification by the Vendors pursuant to
paragraph (a) of this Section will be:
(i) subject to the limitations referred to in SECTION 4.1 with
respect to (i) the survival of the representations and
warranties by the Vendors; (ii) the fact that the
representations and warranties of the Vendors are several and
not joint and several, and that each Vendor is legally
responsible only for and to the extent that breaches of
representations and warranties, if any, are attributable to
the particular Vendor in question; and (iii) the aggregate
liability attributable to each Vendor for breaches of any
terms of this Agreement be capped at an amount equal to the
pro rata cash proceeds from the sale of the Purchased Shares
attributable to the Vendor in question; and
(ii) subject to SECTION 8.3.
8.2 INDEMNITY BY THE PURCHASER
(a) Subject to SECTION 8.3, the Purchaser hereby agrees to indemnify and
save the Vendors harmless to a maximum aggregate indemnity of
$1,500,000 from and against any claims, demands, actions, causes of
action, damages, losses, deficiencies, costs, liabilities and
expenses that may be made or brought against the Vendors or which
the Vendors may suffer or incur as a result of, in respect of or
arising out of:
(i) any non-performance or non-fulfillment of any covenant or
agreement of the Purchaser contained in this Agreement or in
any document delivered by the Purchaser in order to carry out
the transaction provided for herein;
(ii) any misrepresentation, inaccuracy, incorrectness or breach of
any representation or warranty made by the Purchaser in this
Agreement or in any document or certificate given in order to
carry out the transaction provided for herein; and
(iii) all costs and expenses including, without limitation, legal
fees on a solicitor-and-his own client basis, incidental to or
in respect of the foregoing.
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(b) The obligations of indemnification by the Purchaser pursuant to
paragraph (a) of this Section will be:
(i) subject to the limitations referred to in SECTION 4.2 with
respect to the survival of the representations and warranties
by the Purchaser; and
(ii) subject to SECTION 8.3.
8.3 PROVISIONS RELATING TO INDEMNITY CLAIMS
The following provisions will apply to any claim by the Purchaser for
indemnification by the Vendors pursuant to this Agreement and to any claim by
the Vendors for indemnification by the Purchaser pursuant to this Agreement
(hereinafter, in this SECTION 8.3, the party making a claim for indemnification
will be referred to as the "INDEMNIFIED PARTY" and the party against whom the
claim for indemnification is made will be referred to as the "INDEMNIFYING
PARTY". Any such claim for indemnity will be referred to as the "INDEMNITY
CLAIM").
(a) Promptly after becoming aware of any matter that may give rise to an
Indemnity Claim, the Indemnified Party will provide to the
Indemnifying Party written notice of the Indemnity Claim specifying
(to the extent that information is available) the factual basis for
the Indemnity Claim and the amount of the Indemnity Claim or, if an
amount is not then determinable, an estimate of the amount of the
Indemnity Claim, if an estimate is feasible in the circumstances,
provided, however, that no delay on the part of the Indemnified
Party in notifying the Indemnifying Party will relieve the
Indemnifying Party from its obligation to indemnify the Indemnified
Party unless (and only to the extent) that the Indemnifying Party is
prejudiced by such delay.
(b) If an Indemnity Claim relates to an alleged liability to any other
person (hereinafter, in this SECTION 8.3, called a "THIRD PARTY
LIABILITY"), including without limitation any governmental or
regulatory body or any taxing authority, which is of such a nature
that the Indemnified Party is required by applicable law to make a
payment to a third party before the relevant procedure for
challenging the existence or quantum of the alleged liability can be
implemented or completed, then the Indemnified Party may,
notwithstanding SECTIONS 8.3(C) AND 8.3(D), make such payment and
forthwith demand reimbursement for such payment from the
Indemnifying Party; provided that, if the alleged liability to the
third party as finally determined upon completion of settlement
negotiations or related legal proceedings is less than the amount
that is so paid by the Indemnifying Party, then the Indemnified
Party will, forthwith following such final determination and receipt
of the overpaid amount from the third party, pay to the Indemnifying
Party the amount by which the amount of the liability, as finally
determined, is less than the amount that was so paid by the
Indemnifying Party.
(c) The Indemnified Party will not negotiate, settle, compromise or pay
(except in the case of payment of a judgment) any Third Party
Liability in respect of which it has or proposes to assert an
Indemnity Claim, except with the prior consent of the Indemnifying
Party (which consent shall not be unreasonably withheld or delayed),
unless there is a reasonable possibility that such Third Party
Liability may materially and adversely affect the Indemnified Party
(whether directly or indirectly), in which case the Indemnified
Party will have the right, after notifying the Indemnifying Party,
to negotiate, settle, compromise or pay such Third Party Liability
without prejudice to its rights of indemnification hereunder.
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(d) With respect to any Third Party Liability, provided the Indemnifying
Party: (i) admits the Indemnified Party's right to indemnification
for the amount of such Third Party Liability that may at any time be
determined or settled within 10 days of receipt of notice of the
Third Party Liability from the Indemnified Party; (ii) provides the
Indemnified Party with evidence reasonably satisfactory to the
Indemnified Party that the Indemnifying Party will have the
financial resources to defend Third Party Liability and fulfill its
indemnification obligations hereunder; and (iii) conducts the
defense of the Third Party Liability actively and diligently and
provided further that: (iv) the action or other proceeding
respecting prosecution of the Third Party Liability involves only a
claim for money damages and not a claim for equitable relief; and
(v) settlement of, or an adverse judgment with respect to the Third
Party Liability is not, in the good faith judgment of the
Indemnified Party, likely to establish a precedential custom or
practice materially adverse to the continuing business interests of
the Indemnified Party, then in any legal, administrative or other
proceedings in connection with the matters forming the basis of the
Third Party Liability, the following procedures will apply:
(i) except as contemplated by PARAGRAPH 8.3(D)(III), the
Indemnifying Party will have the right to assume carriage of
any related legal, administrative or other proceedings through
counsel of its choice reasonably satisfactory to the
Indemnified Party, but the Indemnified Party will have the
right and will be given the opportunity to participate in the
defence of the Third Party Liability, to consult with the
Indemnifying Party in the settlement of the Third Party
Liability and the conduct of related legal, administrative and
other proceedings (including consultation with counsel);
(ii) the Indemnifying Party will co-operate with the Indemnified
Party in relation to the Third Party Liability, will keep the
Indemnified Party fully advised with respect thereto, will
provide the Indemnified Party with copies of all relevant
documentation as it becomes available, will provide the
Indemnified Party with access to all records and files
relating to the defence of the Third Party Liability and will
meet with representatives of the Indemnified Party at all
reasonable times to discuss the Third Party Liability; and
(iii) notwithstanding PARAGRAPHS 8.3(D)(I) AND (II), the
Indemnifying Party will not settle the Third Party Liability
or conduct any legal, administrative or other proceedings in
any manner that could, in the reasonable opinion of the
Indemnified Party have a material adverse affect on the
Indemnified Party, except with the prior written consent of
the Indemnified Party.
(e) If, with respect to any Third Party Liability, any of the conditions
set forth in the opening sentence of SECTION 8.3(D) is or becomes
unsatisfied, or in the event that the Indemnifying Party does not
act to diligently defend against such Third Party Liability or
declines to assume carriage of the applicable legal,
administrational or other proceedings, then the following provisions
will apply:
(i) the Indemnified Party, at its discretion, may assume carriage
of the settlement or of any legal, administrative or other
proceedings relating to the Third Party Liability and may
defend or settle the Third Party Liability on such terms as
the Indemnified Party, acting in good faith, considers
advisable; and
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(ii) any cost, lost, damage or expense incurred or suffered by the
Indemnified Party in the settlement of such Third Party
Liability or the conduct of any legal, administrative or other
proceedings will be added to the amount of the Indemnity
Claim.
ARTICLE IX
GENERAL PROVISIONS
9.1 FURTHER ASSURANCES
Each of the Vendors and the Purchaser hereby covenants and agrees that at
any time and from time to time after the date hereof it will, at its expense and
upon the request of the other, do, execute, acknowledge and deliver or cause to
be done, executed, acknowledged and delivered all such further acts, deeds,
assignments, transfers, conveyances and assurances as may be required for the
better carrying out and performance of all the terms of this Agreement.
9.2 REMEDIES CUMULATIVE
The rights and remedies of the parties under this Agreement are cumulative
and in addition and without prejudice to and not in substitution for any rights
or remedies provided by law. Any single or partial exercise by any party hereto
of any right or remedy for default or breach of any term, covenant,
representation, warranty or condition of this Agreement does not waive, alter,
affect or prejudice any other right or remedy to which such party may be
entitled, at law or in equity, for the same default or breach.
9.3 FINDER'S FEES
The Vendors confirm that there is a finder's fee payable by the Vendors in
connection with the transactions as contemplated by this Agreement, which
finder's fee is to be paid in full and satisfied at Closing by way of the
assignment and transfer to the finder of the 2 million Uranium Shares referred
to in subsection 2.2(d) hereof. The Purchaser agrees, upon receipt of a written
direction from the Vendors and without further consideration, to facilitate the
transfer or issuance of such shares to the finder.
9.4 NOTICES
(a) Any notice, designation, communication, request, demand or other
document, required or permitted to be given or sent or delivered
hereunder to any party hereto shall be in writing and shall be
sufficiently given or sent or delivered if it is (i) delivered
personally to an officer or director of such party; (ii) sent to the
party entitled to receive it by registered mail, postage prepaid,
mailed in Canada; or (iii) sent by facsimile.
(b) Notices shall be sent to the following addresses or facsimile
numbers:
(i) in the case of the Vendors at:
X/X XxxXxxxxxx Xxx XXX
Xxxxx 0, 880 - 16th Avenue N.W.
Calgary, Alberta T2R 1J9
Attention: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
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(ii) in the case of the Purchaser at:
Xxxxx 000, 000 Xxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Attention: President
Facsimile: (000) 000-0000
with a copy to:
TingleMerrett LLP
0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxx Helper
Facsimile: (000) 000-0000
or to such other address or facsimile number as the party entitled
to or receiving such notice, designation, communication, request,
demand or other document shall, by a notice given in accordance with
this Section, have communicated to the party giving or sending or
delivering such notice, designation, communication, request, demand
or other document.
(c) Any notice, designation, communication, request, demand or other
document given or sent or delivered as aforesaid shall (i) if
delivered as aforesaid, be deemed to have been given, sent,
delivered and received on the date of delivery; (ii) if sent by mail
as aforesaid, be deemed to have been given, sent, delivered and
received on the fourth Business Day following the date of mailing,
unless at any time between the date of mailing and the fourth
Business Day thereafter there is a discontinuance or interruption of
regular postal service, whether due to strike or lockout or work
slowdown, affecting postal service at the point of dispatch or
delivery or any intermediate point, in which case the same shall be
deemed to have been given, sent, delivered and received in the
ordinary course of the mails, allowing for such discontinuance or
interruption of regular postal service; and (iii) if sent by
facsimile, be deemed to have been given, sent, delivered and
received on the date the sender receives the confirmation of
transmission.
9.5 COUNTERPARTS
This Agreement may be executed in several counterparts, including by way
of facsimile transmission, each of which, when so executed, shall be deemed to
be an original and such counterparts together shall constitute one and the same
agreement.
9.6 LEGAL AND OTHER PROFESSIONAL FEES
Each of the Purchaser and the Vendors agrees that it shall be responsible
for and will pay all costs incurred by it in connection with all matters
relating to this Agreement, including without limitation all legal, accounting,
tax and financial advisory fees. Notwithstanding the foregoing, the Purchaser
agrees, if Closing occurs, to pay at the Closing the professional fees incurred
by the Vendors to a maximum of $10,000 plus disbursements and GST.
9.7 PUBLIC DISCLOSURES
Except as may be required by law, no public disclosure of the transaction
provided for herein will be made by any party without consent and approval of
the other parties. The parties agree to cooperate in connection with all
publicity and press releases relating to the transaction provided for in this
Agreement. Specifically, the Purchaser agrees that any press releases proposed
to be issued prior to the Closing Date shall require the approval of the
Vendors, such approval not to be unreasonably withheld.
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9.8 ASSIGNMENT
Neither the Purchaser nor the Vendors may assign, transfer or otherwise
dispose of all or any part of its rights or obligations hereunder without the
prior written consent of the other parties, provided that the Purchaser shall be
entitled to transfer all of its rights and obligations hereunder to an affiliate
of the Purchaser (as defined in the Act) without the prior written consent of
the other parties hereto.
9.9 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto
and supersedes all prior agreements, representations, warranties, statements,
promises, information, arrangements and understandings, whether oral or written,
express or implied, with respect to the subject matter hereof, including,
without limitation, the Agreement in Principal.
9.10 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and permitted assigns.
9.11 WAIVER
Any party hereto that is entitled to the benefits of this Agreement may,
and has the right to, waive any provision or condition hereof at any time on or
prior to the Closing Time; provided however, that such waiver shall be evidenced
by written instrument duly executed and delivered on behalf of such party.
9.12 AMENDMENTS
No modification of or amendment to this Agreement may be made unless
agreed to by the parties in writing.
9.13 SURVIVAL
The parties hereby agree that the provisions of this Agreement shall
survive the completion of the transaction provided for herein and that none of
such provisions shall merge on Closing or the transfer of the Purchased Shares
to the Purchaser.
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9.14 SEVERABILITY
If any provision of this Agreement is illegal, invalid or unenforceable in
whole or in part, such illegality, invalidity or unenforceability shall not
affect the legality, validity or enforceability of the remainder hereof. Any
provision of this Agreement that is held to be illegal, invalid or unenforceable
in any jurisdiction shall be illegal, invalid or unenforceable in that
jurisdiction without affecting any other provision hereof in that jurisdiction
or the legality, validity or enforceability of the provision in any other
jurisdiction, and to this end the provisions hereof are declared to be
severable.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first written above.
URANIUM POWER CORPORATION WESTERN CANADIAN MINT INC.
Per: Per:
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Per: Per:
--------------------------------------------- ------------------------------------------
BULLION FUND INC. AMERICAN OILSANDS COMPANY INC.
Per: Per:
--------------------------------------------- ------------------------------------------
Per: Per:
--------------------------------------------- ------------------------------------------
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Witness to the signature of Xxxxx Xxxxxx Xxxxx Xxxxxx
------------------------------------------------------- --------------------------------------------------
Witness to the signature of Xxxxx Xxxxxx AnitaWalter
------------------------------------------------------- --------------------------------------------------
Witness to the signature of Xxxxx Van Der Xxxxx Xxxxx Van Der Vliet
------------------------------------------------------- --------------------------------------------------
Witness to the signature of Xxxxxxx Van Der Xxxxx Xxxxxxx Van Der Vliet
------------------------------------------------------- --------------------------------------------------
Witness to the signature of Xxxx Xxxxxx Xxxx Xxxxxx
------------------------------------------------------- --------------------------------------------------
Witness to the signature of Xxxxx Garden Xxxxx Garden
------------------------------------------------------- --------------------------------------------------
Witness to the signature of Xxxxxxx Xxxxx Xxxxxxx Xxxxx
