EXHIBIT 2.2
INTERNET SPORTS NETWORK, INC. PURCHASE OF
SHARES OF SPORTSMARK INC., SPORTSMARK PROMOTIONS, INC. &
CLASSROOM 2000 INC. AND ASSETS OF
SMP SPORTSMARK PROMOTIONS INTERNATIONAL, INC.
CLOSING DATE: FEBRUARY 5, 1999
SHARE PURCHASE AGREEMENT
MADE EFFECTIVE AS OF THE 1st DAY OF FEBRUARY, 1999 (the "Effective Date").
BETWEEN: XXXXX XXXX, of 0000 00xx Xxxxxx, X.X. Xxxxxxx, Xxxxxxx, X0X 0X0
("Xx. X. Xxxx"); XXXXXXX XXXXXX, of 000 Xxxxxx Xxx, X.X.
Xxxxxxx, Xxxxxxx, X0X 0X0 ("Xx. Xxxxxx"); and
XXXXXX XXXXX, of 000 Xxxxxxxxx Xxxxx, X.X. Xxxxxxx,
Xxxxxxx, X0X 2CZ ("Xx. Xxxxx");
(individually a "Vendor" and collectively the "Vendors")
AND: SPORTSMARK INC. (Corporate Access No. 203552690),
corporation incorporated under the laws of Alberta having a
registered office at 1050 - 00000 Xxxxxxxxx Xxxx X.X.,
Xxxxxxx, Xxxxxxx, X0X 0X0;
("Targetco")
AND: INTERNET SPORTS NETWORK, INC., a company incorporated under the
laws of Nevada having a place of business at #000 - 000 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0;
(the "Purchaser")
WHEREAS:
The authorized share capital of Targetco consists of Fifty (50) Class "A"
Common Voting Shares without par value, Fifty (50) Class "B" Common
Non-Voting Shares without par value, an unlimited number of Class "C" Voting
Shares and an unlimited number of Class "D" Preferred Non-Voting Shares, of
which only One Hundred (100) Class "C" Voting Shares and Twelve Hundred
(1,200) Class "D" Preferred Non-Voting Shares (collectively, the "Targetco
Shares") are issued and outstanding;
The Vendors are the registered and beneficial owners of the Targetco Shares
as follows:
Xx. X. Xxxx as to 45 Class "C" and 540 Class "D" Targetco Shares
Xx. Xxxxxx as to 45 Class "C" and 540 Class "D" Targetco Shares
Xx. Xxxxx as to 10 Class "C" and 120 Class "D" Targetco Shares
---------------------------------------------------
Total Targetco Shares: 100 Class "C" and 1,200 Class "D" Targetco Shares;
===================================================
The Vendors have agreed to sell the Targetco Shares to the Purchaser, and the
Purchaser has agreed to purchase the Targetco Shares from the Vendors, on the
terms and conditions set forth in this Agreement; and
The Purchaser has also agreed to purchase certain assets from SMP SportsMark
Promotions International Inc. ("SMPI"), a Barbados company, pursuant to the
terms of an Asset Purchase Agreement (the "SMPI Agreement") executed
contemporaneously with this Agreement, and the Purchaser has agreed to
purchase from SportsMark Holdings Inc. ("SMH") certain loans and the shares
of SportsMark Promotions Inc. ("Promotions"), a Delaware company, and
Classroom 2000 Inc. ("Classroom 2000") an Alberta company, pursuant to the
terms of a Share Purchase Agreement (the "SMH Agreement") executed
contemporaneously with this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants
and agreements herein contained, the parties hereto do covenant and agree
(the "Agreement") each with the other as follows:
1
1. PURCHASE AND SALE
1.1 Subject to the terms and conditions of this Agreement, the Vendors each
agree to sell their Targetco Shares to the Purchaser, and the Purchaser
agrees with each of the Vendors to purchase their Targetco Shares, on the
Closing Date for the sum of U.S.$730,000 (the "Purchase Price").
1.2 The Purchase Price shall be paid by the Purchaser to the Vendors as
follows:
Xx. X. Xxxx as to U.S.$328,500.00
Xx. Xxxxxx as to U.S.$328,500.00
Xx. Xxxxx as to U.S.$ 73,000.00
---------------
Total Cash Payment: U.S.$730,000.00
===============
1.3 The transactions contemplated under this Agreement shall be completed at
the offices of the Purchaser's solicitors, Messrs. Xxxxxxx & Xxxxxx, P.O. Box
48800, 2100-1111 West Georgia Street, Vancouver, British Columbia, or at such
other place as may be agreed upon by the parties in writing, at 11:00 o'clock
a.m. local time in Vancouver, British Columbia (the "Time of Closing") on 5
February 1999 or on such other date as may be determined in accordance with
this Agreement or by further agreement in writing between the parties (the
"Closing Date").
2. CONDITIONS PRECEDENT
2.1 The Purchaser's obligation to carry out the terms of this Agreement and
to complete its transactions contemplated under this Agreement is subject to
the fulfilment to the satisfaction of the Purchaser of each of the following
conditions that:
(a) by the Subject Removal Date (defined below), the Purchaser
shall have been able to complete the Purchaser's Investigation
(defined below) with results to its reasonable satisfaction;
(b) by the Subject Removal Date, the directors of the Purchaser
shall have approved of this Agreement and all of the
transactions contemplated under this Agreement, in their
absolute discretion;
(c) by the Closing Date, Targetco shall have entered into written
employment and non-competition agreements with each of the
Vendors and with Mr. Xxxxx Xxxx (the "Employment Agreements"),
substantially in the form which appears as Schedule "A" to
this Agreement;
(d) at the Time of Closing, the solicitors for the Vendors shall
provide an opinion dated as of the Closing Date, the form of
which appears as Schedule "B" to this Agreement;
(e) as of the Time of Closing, the Vendors and Targetco shall have
complied with all of their respective covenants and agreements
contained in this Agreement;
(f) as of the Time of Closing, the representations and warranties
of the Vendors or any one of them contained in this Agreement
or contained in any certificates or documents delivered by
them or any one of them pursuant to this Agreement shall be
completely true as if such representations and warranties had
been made by the Vendors as of the Time of Closing;
(g) at the Time of Closing, Targetco shall deliver to the
Purchaser lists of the names and contact information for at
least SEVEN HUNDRED AND FIFTY THOUSAND (750,000) different
people who at some time during the past three (3) years have
been bona fide subscribers for services from, or contestants
in games operated by, Targetco or Promotions (the "Participant
Lists"); and
(h) at the Time of Closing, the transactions contemplated under
the SMPI Agreement and the SMH Agreement shall complete
contemporaneously with the transactions contemplated herein.
2
The conditions set forth above are for the exclusive benefit of the Purchaser
and each may be waived by the Purchaser in whole or in part at or before the
time indicated for removal, without prejudice to any remedies that may
otherwise be available to the Purchaser.
2.2 The Vendors' respective obligations to carry out the terms of this
Agreement and to complete their respective transactions contemplated under
this Agreement are subject to the fulfilment to their satisfaction of each of
the following conditions that:
(a) at the Time of Closing, the solicitors for the Purchaser shall
provide an opinion dated as of the Closing Date, the form of
which appears as Schedule "C" to this Agreement;
(b) as of the Time of Closing, the Purchaser shall have complied
with all of its covenants and agreements contained in this
Agreement;
(c) at the Time of Closing, the representations and warranties of
the Purchaser contained in this Agreement or contained in any
certificates or documents delivered by it pursuant to this
Agreement shall be completely true as if such representations
and warranties had been made by the Purchaser as of the Time
of Closing; and
(d) at the Time of Closing, the transactions contemplated under
the SMPI Agreement and the SMH Agreement shall complete
contemporaneously with the transactions contemplated herein.
The conditions set forth above are for the exclusive benefit of each of the
Vendors and may be waived by each of them in whole or in part at or before
the Time of Closing, without prejudice to any remedies that may otherwise be
available to the Vendors.
2.3 The Subject Removal Date shall be 5 February 1999.
3. COVENANTS, AGREEMENTS AND ACKNOWLEDGMENTS
3.1 The Vendors and Targetco jointly and severally covenant and agree with
the Purchaser that the Vendors and Targetco shall:
(a) from and including the Effective Date through to and including
the Time of Closing, permit the Purchaser, through its
directors, officers, employees and authorized agents and
representatives (collectively the "Purchaser's
Representatives") at its own cost, full access to Targetco's
books, records and property including, without limitation, all
of the Assets, contracts and minute books of Targetco, so as
to permit the Purchaser to make such investigation (the
"Purchaser's Investigation") of Targetco as the Purchaser
deems necessary;
(b) from and including the Effective Date through to and including
the Time of Closing, do all such acts and things necessary to
ensure that all of the representations and warranties of the
Vendors or any one of them contained in this Agreement or any
certificates or documents delivered by them or any one of them
pursuant to this Agreement remain true and correct;
(c) from and including the Effective Date through to and including
the Time of Closing, preserve and protect the goodwill,
Assets, business and undertaking of Targetco and, without
limiting the generality of the foregoing, carry on the
business of Targetco in a reasonable and prudent manner;
(d) from and including the Effective Date through to and after the
Time of Closing, do all such acts and things necessary to
obtain any consents that may be required under the terms of
any of the Material Contracts listed on Schedule "H" in
respect of any assignment that may be deemed to occur on
transfer of the Targetco Shares; and
3
(e) from and including the Effective Date through to and after the
Time of Closing, keep confidential all discussions and
communications (including all information communicated
therein) between the parties, and all written and printed
materials of any kind whatsoever exchanged by the parties,
and, if so requested by the Purchaser, the Vendors and
Targetco shall arrange for any director, officer, employee,
authorized agent or representative of Targetco to enter into
and the Vendors themselves shall enter into a non-disclosure
agreement with the Purchaser in a form acceptable to the
Purchaser acting reasonably.
3.2 The Vendors and Targetco jointly and severally covenant and agree with
the Purchaser that, from and including the Effective Date through to and
including the Time of Closing, the Vendors and Targetco shall:
(a) not do any such act or thing that would render any
representation or warranty of the Vendors or any one of them
contained in this Agreement or any certificates or documents
delivered by them or any one of them pursuant to this
Agreement untrue or incorrect; and
(b) not negotiate with any other person in respect of a purchase
and sale of any of the Targetco Shares or any part of the
Assets, other than a sale of part of the Assets in the
ordinary course of Targetco's business.
3.3 The Vendors jointly and severally acknowledge to and agree with the
Purchaser that the Purchaser's Investigation shall in no way limit or
otherwise adversely affect the rights of the Purchaser as provided for
hereunder in respect of the representations and warranties of the Vendors
contained in this Agreement or in any certificates or documents delivered by
them pursuant to this Agreement.
3.4 The Purchaser covenants and agrees with the Vendors and with Targetco
that the Purchaser shall:
(a) from and including the Effective Date through to and including
the Time of Closing, do all such acts and things necessary to
ensure that all of the representations and warranties of the
Purchaser contained in this Agreement or any certificates or
documents delivered by it pursuant to this Agreement remain
true and correct;
(b) from and including the Effective Date through to and after the
Time of Closing and subject to any obligations imposed by law
or as a result of any application for listing on a stock
exchange, keep confidential all discussions and communications
(including all information communicated therein) between the
parties, and all written and printed materials of any kind
whatsoever exchanged by the parties, and, if so requested by
the Vendors or by Targetco, the Purchaser shall arrange for any
of the Purchaser's Representatives to enter into, and the
Purchaser itself shall enter into, a non-disclosure agreement
with the Vendors and Targetco in a form acceptable to the
Vendors and Targetco acting reasonably; and
(c) from and after the Time of Closing, cause Targetco to maintain
the keyman insurance referred to on Schedule "H", or
comparable replacement keyman insurance, in respect of each of
Xx. X. Xxxx, Xx. Xxxxxx and Xx. Xxxxx, respectively, for so
long as each continues to be employed by Targetco.
3.5 The Purchaser covenants and agrees with the Vendors and with Targetco
that, from and including the Effective Date through to and including the Time
of Closing, the Purchaser shall not do any such act or thing that would
render any representation or warranty of the Purchaser contained in this
Agreement or any certificates or documents delivered by it pursuant to this
Agreement untrue or incorrect.
3.6 Immediately following the Closing, the Purchaser shall cause Targetco to
increase the number of Targetco's directors to at least three, and appoint
Xx. X. Xxxx as a director of Targetco to serve until the next annual general
meeting of Targetco, subject to consent to act being received from Xx. X.
Xxxx, and subject always to the Articles of Targetco and applicable corporate
law.
4
3.7 Immediately following the Closing, the Purchaser shall cause Promotions
to increase the number of Promotion's directors to at least three, and
appoint Xx. X. Xxxx as a director of Promotions to serve until the next
annual general meeting of Promotions, subject to consent to act being
received from Xx. X. Xxxx, and subject always to the Articles of Promotions
and applicable corporate law.
3.8 Immediately following the Closing, the Purchaser shall cause Classroom
2000 to increase the number of Classroom 2000's directors to at least three,
and appoint Xx. Xxxxxx as a director of Classroom 2000 to serve until the
next annual general meeting of Classroom 2000, subject to consent to act
being received from Xx. Xxxxxx, and subject always to the Articles of
Classroom 2000 and applicable corporate law.
3.9 Immediately following the Closing, the Purchaser shall increase the
number of the Purchaser's directors to at least five, and appoint Xx. X. Xxxx
and Xx. Xxxxxx as directors of the Purchaser, to serve until the next annual
general meeting of the Purchaser, subject to consent to act being received
from Xx. X. Xxxx and Xx. Xxxxxx, and subject always to the Articles of the
Purchaser and applicable corporate law.
4. REPRESENTATIONS AND WARRANTIES
4.1 In order to induce the Purchaser to enter into this Agreement and
complete its transactions contemplated hereunder, the Vendors jointly and
severally represent and warrant to the Purchaser that:
(a) Targetco was and remains duly incorporated under the laws
of the Province of Alberta.
(b) Targetco:
(i) is a "private issuer" as that term is defined in the
SECURITIES ACT, Alberta (the "Securities Act");
(ii) does not maintain an office or mailing address, or have any
employees, agents or equipment (including any computer server
equipment) in any jurisdiction other than its jurisdiction of
incorporation; and
(iii) is in good standing with respect to the filing of annual
reports in the jurisdiction of its incorporation and in each
jurisdiction in which it carries on business;
(c) the authorized and issued share capital of Targetco is as set
forth in paragraphs A and B of the recitals to this Agreement;
(d) the Targetco Shares are validly issued and outstanding fully
paid and non-assessable common shares of Targetco registered
in the names of, and beneficially owned by, the Vendors as set
forth in paragraph B of the recitals to this Agreement free
and clear of all voting restrictions, trade restrictions,
liens, charges or encumbrances of any kind whatsoever;
(e) except for the Targetco Shares, there are no shares, options,
convertible debentures, documents, instruments or other
writings of any kind whatsoever which may constitute a
"security" of Targetco as that term is defined in the
Securities Act or any other applicable legislation and, except
as is provided for by operation of this Agreement, there are
no options, agreements or rights of any kind whatsoever to
acquire all or any part of the Targetco Shares or any interest
in them or in any other share capital of Targetco;
(f) the constating documents of Targetco have not been altered
since incorporation except in respect of the amendment to
Targetco's Articles filed on 18 February 1994;
(g) all of the material transactions of Targetco have been
promptly and properly recorded or filed in or with the books
or records of Targetco, and the minute books of Targetco
contain all records of the meetings and proceedings of
shareholders and directors of Targetco since its date of
incorporation;
5
(h) to the best of their knowledge, Targetco holds all licences
and permits that are required for carrying on its business in
the manner in which such business has been carried on;
(i) Targetco is the registered and beneficial owner of all
worldwide right, title and interest in and to the properties
and assets (collectively the "Assets") listed on Schedule "D"
to this Agreement, and such Assets represent all of the
property and assets used by Targetco and which are necessary
or useful in the conduct of its business;
(j) Targetco has the corporate power to own the Assets owned by it
and carry on the business carried on by it and Targetco is
duly qualified to carry on business in all jurisdictions in
which it carries on business;
(k) Targetco has good and marketable title to the Assets free and
clear of all liens, charges and encumbrances of any kind
whatsoever save and except those specified as "Permitted
Encumbrances" on Schedule "D" to this Agreement;
(l) to the best of their knowledge, no third party privacy or
intellectual property rights, including without limitation,
copyright, trade secret or patent rights, were violated in the
creation, compilation or acquisition of the Assets by Targetco
or by any party through whom Targetco acquired title;
(m) all machinery and equipment of any kind whatsoever comprised
in the Assets are in reasonable operating condition and in a
state of reasonable maintenance and repair taking into account
their age and use;
(n) all of the bank accounts and safety deposit boxes of Targetco
are listed on Schedule "D" to this Agreement;
(o) Targetco maintains insurance against loss of, or damage to,
the Assets by all insurable risks on a replacement cost basis
and reasonable insurance with respect to public liability for
a business of its size (collectively the "Insurance
Coverage"), and all of the policies (the "Insurance Policies")
in respect of such Insurance Coverage are described on
Schedule "E" to this Agreement and all such Insurance Policies
are in good standing in all respects and not in default in any
respects;
(p) the unaudited financial statements of Targetco for its fiscal
years ended 30 November 1994, 1995, 1996, 1997 and 1998 and
the unaudited interim financial statements of Targetco for the
interim period of December 1998 (collectively, the "Targetco
Financial Statements"), copies of which appear as Schedule "F"
to this Agreement, are true and correct in every material
respect and present fairly and accurately the financial
position and results of the operations of Targetco for the
periods then ended and the Targetco Financial Statements have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis;
(q) the books and records of Targetco disclose all material
financial transactions of Targetco arising subsequent to the
preparation of the Targetco Financial Statements and such
transactions have been fairly and accurately recorded;
(r) since 31 December 1998:
(i) no dividends or other distributions of any kind whatsoever on
any shares in the capital of Targetco have been made, declared
or authorized;
(ii) Targetco has not become indebted to the Vendors or any one of
them, except for current employment compensation as described
in Schedule "G";
6
(iii) none of the Vendors or any other officer, director or employee
of Targetco has become indebted or under obligation to
Targetco on any account whatsoever; and
(iv) Targetco has not guaranteed or agreed to guarantee any debt,
liability or other obligation of any kind whatsoever of any
person, firm or corporation of any kind whatsoever;
(s) there are no material liabilities of Targetco, whether direct,
indirect, absolute, contingent or otherwise which are not
disclosed or reflected in the Targetco Financial Statements
except those incurred in the ordinary course of business since
the date the Targetco Financial Statements were prepared, all
of which are recorded in the books and records of Targetco,
and except for revenue sharing obligations pursuant to the
Material Contracts listed on Schedule "H";
(t) to the best of their knowledge, the accounts receivable of
Targetco shown on the Targetco Financial Statements or
recorded in the books and records of Targetco are bona fide,
good and collectible without set-off or counterclaim;
(u) since 31 December 1998:
(i) there has not been any material adverse change of any kind
whatsoever in the financial position or condition of Targetco
or any damage, loss or other change of any kind whatsoever in
circumstances materially affecting the business or Assets or
the right or capacity of Targetco to carry on its business;
(ii) Targetco has not waived or surrendered any right of any kind
whatsoever of material value;
(iii) Targetco has not discharged, satisfied or paid any lien,
charge or encumbrance of any kind whatsoever or obligation or
liability of any kind whatsoever other than current
liabilities in the ordinary course of its business or as
expressly permitted under this Agreement;
(iv) the business of Targetco has been carried on in the ordinary
course;
(v) no new machinery or equipment of any kind whatsoever has been
ordered by, or installed or assembled on the premises of,
Targetco, except that Targetco has agreed to lease from IBM a
new server valued at approximately $2,500 on IBM's usual
equipment lease terms; and
(vi) no capital expenditures exceeding in the aggregate $10,000
have been authorized or made by Targetco;
(v) the directors, officers, employees, contractors and
consultants of Targetco and all of their compensation
arrangements with Targetco, whether as directors, officers or
employees of, or as independent contractors or consultants to,
Targetco, are as listed on Schedule "G" to this Agreement;
(w) no payments of any kind whatsoever have been made or
authorized by Targetco to or on behalf of the Vendors or any
one of them or to or on behalf of any of the directors,
officers, employees contractors or consultants of Targetco
except in accordance with those compensation arrangements
specified on Schedule "G" to this Agreement or except as
contemplated by this Agreement;
(x) there are no pensions, profit sharing, group insurance or
similar plans or other deferred compensation plans of any kind
whatsoever affecting Targetco other than those specified on
Schedule "G" to this Agreement;
(y) Targetco is not now, and has never been, a party to any
collective agreement with any labour union or other
association of employees of any kind whatsoever;
7
(z) the contracts and agreements included on Schedules "A", "E"
and "G" to this Agreement and those additional contracts and
agreements specified on Schedule "H" to this Agreement
(collectively the "Material Contracts") constitute all of the
material contracts and agreements of Targetco, and current,
complete and true copies of all the Material Contracts have
been delivered to the Purchaser;
(aa) Targetco has not licensed, leased, transferred, disposed of or
encumbered any of the Assets in any way, or permitted any
third party access to any of the Assets, including in
particular the source code to the computer software and the
contestant and subscriber information included in the Assets,
except in accordance with the terms of the Material Contracts;
(bb) to the best of their knowledge, except as is noted on the
appropriate Schedule to this Agreement, the Material Contracts
are in good standing in all respects and not in default in any
respect;
(cc) except as is noted on the appropriate Schedule to this
Agreement, Targetco can terminate all of their obligations
under each of the Material Contracts without liability on not
more than one month's notice;
(dd) all tax returns and reports of Targetco required by law to be
filed have been filed and are substantially true, complete and
correct and all taxes and other government charges of any kind
whatsoever of Targetco have been paid or accrued in the
Targetco Financial Statements;
(ee) Targetco has been assessed for all applicable income and
capital tax for all of its full or partial fiscal years to and
including its fiscal year ended 31 December, 1997;
(ff) Targetco has been and will be until the completion of this
Agreement a Canadian-controlled private corporation within the
meaning of the Tax Act;
(gg) Targetco has not:
(i) made any election under Section 85 of the Income
Tax Act, R.S.C. 1952 C-148 as amended (the "Tax
Act") with respect to the acquisition or
disposition of any property, other than the three
elections made as of 15 February 1994 in respect
of transfers of property by Xx. X. Xxxx, Xx.
Xxxxxx and Xx. Xxxxx, for which the amounts
elected were the fair market values of the
property transferred;
(ii) acquired any property from a person, otherwise than
at arm's length, for proceeds greater than the fair
market value thereof; or
(iii) disposed of anything to a person, otherwise than at
arm's length, for proceeds less than the fair market
value thereof;
(hh) Targetco has made all elections required to have been made
under all applicable tax legislation in connection with any
distributions made by it and all such elections were true and
correct and made in the prescribed form and within the
prescribed time period;
(ii) adequate provision has been made for taxes payable by Targetco
for the current period for which tax returns are not yet
required to be filed and there are no agreements, waivers or
other arrangements of any kind whatsoever providing for an
extension of time with respect to the filing of any tax return
by, or payment of, any tax or governmental charge of any kind
whatsoever by Targetco;
(jj) they are not aware of any contingent tax liabilities of
Targetco of any kind whatsoever or any grounds which would
prompt a reassessment of Targetco including aggressive
treatment of income and expenses in earlier tax returns filed;
8
(kk) there are no amounts outstanding and unpaid for which Targetco
has previously claimed a deduction under any applicable tax
legislation;
(ll) none of the Vendors is a "non-resident of Canada" within the
meaning of that phrase as it is used in the Canada INCOME TAX
ACT;
(mm) Targetco has made all collections, deductions, remittances and
payments of any kind whatsoever and filed all reports and
returns required by it to be made or filed under the
provisions of all applicable statutes requiring the making of
collections, deductions, remittances or payments of any kind
whatsoever in those jurisdictions in which it carries on
business;
(nn) Targetco is "Canadian" within the meaning of the INVESTMENT
CANADA ACT, R.S.C. 1985 C-28, as amended (the "Investment
Canada Act");
(oo) to the best of their knowledge, there are no actions, suits,
judgments, investigations or proceedings of any kind
whatsoever outstanding, pending or threatened against or
affecting the Vendors or any one of them or Targetco at law or
in equity or before or by any federal, provincial, state,
municipal or other governmental department, commission, board,
bureau or agency of any kind whatsoever and there is no basis
therefor;
(pp) to the best of their knowledge, Targetco is not in breach of
any law, ordinance, statute, regulation, bylaw, order or
decree of any kind whatsoever;
(qq) the Vendors and Targetco have good and sufficient right and
authority to enter into this Agreement and complete their
respective transactions contemplated under this Agreement on
the terms and conditions set forth herein;
(rr) to the best of their knowledge, the execution and delivery of
this Agreement, the performance of their respective
obligations under this Agreement and the completion of their
respective transactions contemplated under this Agreement will
not:
(i) conflict with, or result in the breach of or the
acceleration of any indebtedness under, or constitute
default under, the constating documents of Targetco
or any indenture, mortgage, agreement, lease, licence
or other instrument of any kind whatsoever to which
Targetco, the Vendors or any one or more of them is a
party or by which any one of them is bound, or any
judgment or order of any kind whatsoever of any court
or administrative body of any kind whatsoever by
which any one of them is bound; and
(ii) result in the violation of any law or regulation of
any kind whatsoever by any of the Vendors or by
Targetco;
(ss) neither Targetco nor the Vendors nor any of them has incurred
any liability for brokers' or finder's fees of any kind
whatsoever with respect to this Agreement or any transaction
contemplated under this Agreement; and
(tt) to the best of their knowledge, the representations and
warranties of the Vendors contained in this Agreement disclose
all material facts specifically relating to the transactions
involving the Vendors and Targetco contemplated under this
Agreement which materially and adversely affect, or in the
future may materially and adversely affect, their respective
abilities to perform their respective obligations under this
Agreement.
4.2 The representations and warranties of the Vendors contained in this
Agreement shall be true at the Time of Closing as though they were made at
the Time of Closing and they shall survive the completion of the transactions
contemplated under this Agreement and remain in full force and effect
thereafter for the benefit of the Purchaser for a
9
period of five (5) years after the Time of Closing in respect of
representations and warranties relating to tax matters, and for a period of
two (2) years after the Time of Closing in respect of all other
representations and warranties.
4.3 In order to induce the Vendors to enter into this Agreement and complete
their respective transactions contemplated hereunder, the Purchaser
represents and warrants to the Vendors that:
(a) the Purchaser was and remains duly incorporated under the laws
of Nevada and the Purchaser is in good standing with respect
to the filing of annual reports in that jurisdiction; and
(b) to the best of its knowledge, the Purchaser holds all licences
and permits that are required for carrying on its business in
the manner in which such business has been carried on.
4.4 The representations and warranties of the Purchaser contained in this
Agreement shall be true at the Time of Closing as though they were made at
the Time of Closing and shall terminate on and not survive the completion of
the transactions contemplated under this Agreement.
5. INDEMNITY
5.1 Notwithstanding the completion of the transactions contemplated under
this Agreement or the Purchaser's Investigation, the representations,
warranties and acknowledgments of the Vendors or any one of them contained in
this Agreement or any certificates or documents delivered by them or any one
of them pursuant to this Agreement shall survive the completion of the
transactions contemplated by this Agreement and shall continue in full force
and effect thereafter for the benefit of the Purchaser for a period of five
(5) years after the Time of Closing in respect of representations, warranties
and acknowledgments relating to tax matters, and for a period of two (2)
years after the Time of Closing in respect of all other representations,
warranties and acknowledgments. If any of the representations, warranties or
acknowledgments given by the Vendors or any one of them in this Agreement are
found to be untrue or there is a breach of any covenant or agreement in this
Agreement on the part of the Vendors or any one of them, the Vendors shall
jointly and severally indemnify and save harmless the Purchaser from and
against any and all liability, claims, debts, demands, suits, actions,
penalties, fines, losses, costs (including legal fees and disbursements as
charged by a lawyer to his own client), damages and expenses of any kind
whatsoever which may be brought or made against the Purchaser by any person,
firm or corporation of any kind whatsoever or which may be suffered or
incurred by the Purchaser, directly or indirectly, arising out of or as a
consequence of any such misrepresentation or breach of warranty,
acknowledgment, covenant or agreement. Without in any way limiting the
generality of the foregoing, this shall include any loss of any kind
whatsoever which may be suffered or incurred by the Purchaser, directly or
indirectly, arising out of a misrepresentation or breach of warranty related
to any material assessment or reassessment levied upon Targetco for tax,
interest and/or penalties for any period up to and including the Closing Date
and all claims, demands, costs (including legal fees and disbursements s
charged by a lawyer to his own client) and expenses of any kind whatsoever in
respect of the foregoing.
6. CLOSING DOCUMENTS
6.1 At the Time of Closing, the Vendors shall deliver to the solicitors for
the Purchaser:
(a) a certified true copy of the resolutions of the directors of
Targetco evidencing that the directors of the Targetco have
approved this Agreement and all of the transactions of
Targetco contemplated hereunder and the resolutions shall
include specific reference to:
(i) the sale and transfer of the Targetco Shares from
the Vendors to the Purchaser as provided for in
this Agreement;
(ii) the cancellation of the share certificates (the "Old
Share Certificates") representing the Targetco Shares
held as set forth in paragraph B of the recitals to
this Agreement; and
10
(iii) the issuance of a new share certificate (the "New
Share Certificate") representing the Targetco Shares
registered in the name of the Purchaser;
(b) the Old Share Certificates;
(c) the New Share Certificate;
(d) the Participant Lists;
(e) the Employment Agreements referred to in subparagraph 2.1(c)
of this Agreement;
(f) the solicitor's opinion referred to in subparagraph 2.1(d)
of this Agreement;
(g) all the minute books and corporate seals of Targetco;
(h) a certificate of confirmation signed by the Vendors in the
form attached as Schedule "I" to this Agreement;
(i) a release in the form of Schedule "J" to this Agreement (the
"RELEASE") from each of the Vendors and Xxxxx Xxxx of all
claims against Targetco or any of Promotions or Classroom 2000
for any outstanding amounts owing by Targetco or any of
Promotions or Classroom 2000 to any of the Vendors or Xxxxx
Xxxx on account of any loans, bonuses, reimbursements,
compensation, fees, royalties, dividends or other
consideration whatsoever, except only as provided in the
Employment Agreements; and
(j) any other materials that are, in the opinion of the solicitors
for the Purchaser, reasonably required to complete the
transactions contemplated under this Agreement.
6.2 At the Time of Closing, the Purchaser shall deliver to the solicitors
for the Vendors:
(a) certified true copies of the resolutions of the directors of
the Purchaser, evidencing that the directors of the Purchaser
have approved this Agreement and all of the transactions of
the Purchaser contemplated hereunder;
(b) the Purchase Price as provided for in subparagraph 1.2 of this
Agreement;
(c) the solicitor's opinion referred to in subparagraph 2.2 (a)
of this Agreement; and
(d) a certificate of confirmation signed by a director or officer
of the Purchaser in the form attached as Schedule "K" to this
Agreement.
7. GENERAL
7.1 Time and each of the terms and conditions of this Agreement shall be of
the essence of this Agreement and any waiver by the parties of this paragraph
7.1 or any failure by them to exercise any of their rights under this
Agreement shall be limited to the particular instance and shall not extend to
any other instance or matter in this Agreement or otherwise affect any of
their rights or remedies under this Agreement.
7.2 The Schedules to this Agreement incorporated by reference and the
recitals to this Agreement constitute a part of this Agreement.
7.3 This Agreement constitutes the entire Agreement between the parties
hereto in respect of the matters referred to herein and there are no
representations, warranties, covenants or agreements, expressed or implied,
collateral hereto other than as expressly set forth or referred to herein.
11
7.4 The headings in this Agreement are for reference only and do not
constitute terms of the Agreement.
7.5 The provisions contained in this Agreement which, by their terms,
require performance by a party to this Agreement subsequent to the Closing
Date of this Agreement, shall survive the Closing Date of this Agreement.
7.6 No alteration, amendment, modification or interpretation of this
Agreement or any provision of this Agreement shall be valid and binding upon
the parties hereto unless such alteration, amendment, modification or
interpretation is in written form executed by the parties directly affected
by such alteration, amendment, modification or interpretation.
7.7 Whenever the singular or masculine is used in this Agreement the same
shall be deemed to include the plural or the feminine or the body corporate
as the context may require.
7.8 The parties hereto shall execute and deliver all such further documents
and instruments and do all such acts and things as any party may, either
before or after the Closing Date, reasonably require in order to carry out
the full intent and meaning of this Agreement.
7.9 Any notice, request, demand and other communication to be given under
this Agreement shall be in writing and shall be delivered by hand or by
telecopier to the parties at their following respective addresses:
To the Vendors or Targetco:
c/o SportsMark Holdings Inc.
Attention: Xx. Xxxxx Xxxx
633 - 00000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx, X0X 0X0
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxx Xxxxxx, Barristers & Solicitors
Attention: Xx. Xxxxxxx X. Xxxxxxxx
800 - 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X., X0X 0X0
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
To the Purchaser:
Internet Sports Network, Inc.
#000 - 000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X., X0X 0X0
Attention: Xx. Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, Barristers & Solicitors
Attention: Xx. Xxxxxx X. Xxxxxx
2100 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X., X0X 0X0
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
12
or to such other addresses as may be given in writing by the parties hereto
in the manner provided for in this paragraph, and shall be deemed to have
been received, if delivered by hand, on the date of delivery, or if delivered
by telecopier, on the date that it is sent.
7.10 This Agreement or any rights hereunder may be assigned by the Purchaser
with the consent of the Vendors, not to be unreasonably delayed or withheld,
but any such assignment shall not release the Purchaser from its obligations
hereunder.
7.11 This Agreement shall be subject to, governed by, and construed in
accordance with the laws of the Province of British Columbia.
7.12 This Agreement may be signed by the parties in as many counterparts as
may be deemed necessary, each of which so signed shall be deemed to be an
original, and all such counterparts together shall constitute one and the
same instrument.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals as of
the Effective Date first above written.
SIGNED, SEALED & DELIVERED )
by XXXXX XXXX )
in the presence of: )
)
------------------------------------------------------- ) /s/ XXXXX XXXX
Signature of Witness ) ------------------
) XXXXX XXXX
Name: )
------------------------------------------------- )
Address: )
----------------------------------------------- )
)
------------------------------------------------------- )
Occupation: )
------------------------------------------ )
13
SIGNED, SEALED & DELIVERED )
by XXXXXXX XXXXXX )
in the presence of: )
)
------------------------------------------------------ ) /s/ XXXXXXX XXXXXX
Signature of Witness ) ------------------
) XXXXXXX XXXXXX
Name: )
------------------------------------------------- )
Address: )
----------------------------------------------- )
)
------------------------------------------------------- )
Occupation: )
------------------------------------------ )
SIGNED, SEALED & DELIVERED )
by XXXXXX XXXXX )
in the presence of: )
)
) /s/ XXXXXX XXXXX
Signature of Witness ) ------------------
Name: ) XXXXXX XXXXX
------------------------------------------------- )
Address: )
----------------------------------------------- )
)
------------------------------------------------------- )
Occupation: )
------------------------------------------ )
14
THE CORPORATE SEAL of SPORTSMARK INC. was )
hereunto affixed in the presence of: )
)
) c/s
)
------------------------------------------------------- )
Name: )
Title: )
)
)
)
------------------------------------------------------- )
Name: )
Title: )
THE CORPORATE SEAL of INTERNET SPORTS )
NETWORK, INC. was hereunto affixed in the presence )
of: )
) c/s
)
)
)
------------------------------------------------------- )
Name: )
Title: )
)
)
)
------------------------------------------------------- )
Name: )
Title: )
15
ADDENDUM
THIS ADDENDUM dated for reference the 5th day of February, 1999,
BETWEEN: INTERNET SPORTS NETWORK, INC., a company incorporated under the laws
of Nevada having a place of business at #000 - 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0;
("ISN")
AND: XXXXX XXXX, of 0000 00xx Xxxxxx, X.X. Xxxxxxx, Xxxxxxx, X0X 0X0
("Xx. X. Xxxx"); XXXXXXX XXXXXX, of 000 Xxxxxx Xxx,
X.X. Xxxxxxx, Xxxxxxx, X0X 0X0 ("Xx. Xxxxxx"); and
XXXXXX XXXXX, of 000 Xxxxxxxxx Xxxxx, X.X. Xxxxxxx,
Xxxxxxx, X0X 2CZ ("Xx. Xxxxx");
(individually a "Vendor" and collectively the "Vendors")
AND: XXXXX XXXX, of 1050 - 00000 Xxxxxxxxx Xxxx X.X. Xxxxxxx, Xxxxxxx,
X0X 0X0 ("Xxxxx Xxxx")
AND: SPORTSMARK INC. (Corporate Access No. 203552690),
a corporation incorporated under the laws of Alberta having a
registered office at 1050 - 00000 Xxxxxxxxx Xxxx X.X., Xxxxxxx,
Xxxxxxx, X0X 0X0;
("SMI")
AND: SPORTSMARK HOLDINGS INC. (Corporate Access No. 205311954),
a corporation incorporated under the laws of Alberta having a
registered office at 1900, 000 - 0 Xxxxxx X.X., Xxxxxxx, Xxxxxxx,
X0X 0X0
("SMH");
AND: SPORTSMARK PROMOTIONS INC. (Corporate No. 732176013),
a corporation incorporated under the laws of Delaware having a
registered office at 0000, 000 - 0 Xxxxxx X.X., Xxxxxxx, Xxxxxxx,
X0X 0X0
("SMP");
AND: CLASSROOM 2000 INC. (Corporate Access No. 207442955),
a corporation incorporated under the laws of Alberta having a
registered office at 000, 000 - 00 Xxxxxx X.X., Xxxxxxx, Xxxxxxx,
X0X 0X0
("C2K");
AND: SMP SPORTSMARK PROMOTIONS INTERNATIONAL INC. (Company No. 7860),
a corporation incorporated under the laws of Barbados having a
registered office at Xxxxxxxx Xxxxxxxx, Xxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx;
("SMPI")
WHEREAS:
The Vendors, SMI and ISN entered into a Share Purchase Agreement (the "SMI
Agreement") dated 1 February 1999 pursuant to which ISN agreed to purchase
the shares of SMI from the Vendors;
SMH, SMP, C2K and ISN entered into a Share Purchase Agreement (the "SMH
Agreement") dated 1 February 1999 pursuant to which ISN agreed to purchase
certain loans and the shares of SMP and C2K from SMH;
SMPI and ISN entered into an Asset Purchase Agreement (the "SMPI Agreement")
dated 1 February 1999 pursuant to which ISN agreed to purchase certain assets
from SMPI in exchange for shares of ISN;
The SMI Agreement, the SMH Agreement and the SMPI Agreement (collectively,
the "Agreements") each contain conditions precedent (collectively, the
"Conditions") for the benefit of each of the parties to the Agreements, one
of which in each of the Agreements is the concurrent completion of all the
transactions contemplated under all of the Agreements;
The SMI Agreement provides for the Vendors and Xxxxx Xxxx to enter into
employment agreements with SMI (the "Employment Agreements"), effective upon
closing of the transactions under the SMI Agreement on 5 February 1999; and
The parties hereto have agreed on the terms set out below to complete the
transactions under the SMI Agreement and the SMH Agreement on 5 February
1999, and the transactions under the SMPI Agreement on 12 February 1999;
NOW THIS ADDENDUM WITNESSES that in consideration of the premises and the
covenants and agreements herein contained and for other good and valuable
consideration (the receipt and sufficiency of which being hereby acknowledged
by each party), the parties covenant and agree as follows:
The CDN$356,700 portion of the Purchase Price due under the SMH Agreement
shall be payable by ISN issuing in favor of SMH a Promissory Note in that
amount, dated and delivered to SMH on 5 February 1999, due without interest
on 12 February 1999;
The Closing Date under the SMPI Agreement shall be amended to 12 February
1999;
The Employment Agreements shall not take effect until the transactions
contemplated in the SMPI Agreement have been completed, but the Employment
Agreements shall thereupon take effect as of 5 February 1999;
Each of the parties to this Addendum hereby waives and removes all conditions
precedent for the benefit of that party contained in any of the Agreements,
without prejudice to any rights or remedies that party may have whatsoever in
respect of any misrepresentation, breach of warranty, default or neglect by
any other party;
All other terms of the Agreements shall continue in full force and effect;
This Addendum may be executed in counterparts, and each counterpart shall
constitute an original portion of this Addendum; and
This Addendum shall not be effective until it has been executed by each of
the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the
date set out above.
SIGNED, SEALED & DELIVERED )
by XXXXX XXXX )
in the presence of: )
)
/s/ XXXXXXX X. XXXXXX ) /s/ XXXXX XXXX
-------------------------------------------------------- ) -----------------
Signature of Witness ) XXXXX XXXX
)
Name: XXXXXXX X. XXXXXX )
--------------------------------------------------- )
Address: 000 Xxxxxx Xxx X.X. )
----------------------------------------------- )
Xxxxxxx, XX X0X 0X0 )
-------------------------------------------------------- )
Occupation: Businessman )
-------------------------------------------- )
SIGNED, SEALED & DELIVERED )
by XXXXXXX XXXXXX )
in the presence of: )
)
/s/ XXX XXXXX ) /s/ XXXXXXX XXXXXX
------------------------------------------------------- ) ------------------
Signature of Witness ) XXXXXXX XXXXXX
)
Name: Xxx Xxxxx )
------------------------------------------------- )
Address: 000 Xxxxxxxxx Xxxxx XX )
---------------------------------------------- )
Xxxxxxx, XX X0X 0X0 )
------------------------------------------------------- )
Occupation: Businessman )
------------------------------------------- )
SIGNED, SEALED & DELIVERED )
by XXXXXX XXXXX )
in the presence of: )
)
/s/ XXXXXXX X. XXXXXX ) /s/ XXXXXX XXXXX
------------------------------------------------------- ) -----------------
Signature of Witness ) XXXXXX XXXXX
)
Name: Xxxxxxx X. Xxxxxx )
------------------------------------------------- )
Address: 000 Xxxxxx Xxx X.X. )
---------------------------------------------- )
Xxxxxxx, XX X0X 0X0 )
------------------------------------------------------- )
Occupation: )
------------------------------------------- )
SIGNED, SEALED & DELIVERED )
by XXXXX XXXX )
in the presence of: )
)
/s/ X.X. XXXX ) /s/ XXXXX XXXX
------------------------------------------------------ ) ---------------
Signature of Witness ) XXXXX XXXX
)
Name: X.X. Xxxx )
------------------------------------------------- )
Address: )
---------------------------------------------- )
Calgary, AB )
------------------------------------------------------ )
Occupation: Businessman )
------------------------------------------ )
THE CORPORATE SEAL of INTERNET SPORTS )
NETWORK, INC. was hereunto affixed in the presence )
of: )
) c/s
)
)
------------------------------------------------------
Name:
Title:
------------------------------------------------------
Name:
Title:
THE CORPORATE SEAL of SMP SPORTSMARK )
PROMOTIONS INTERNATIONAL INC. )
was hereunto affixed in the presence of: )
) c/s
)
)
/s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director
/s/ Xxxxxx X. Xxxx
------------------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Director
THE CORPORATE SEAL of SPORTSMARK INC. was )
hereunto affixed in the presence of: )
)
) c/s
)
/s/ Xxxxxxx X. Xxxxxx )
---------------------------------------------------------- )
Name: Xxxxxxx X. Xxxxxx )
Title: President )
)
)
/s/ X.X. Xxxx )
---------------------------------------------------------- )
Name: X.X. Xxxx )
Title: Vice President )
Duly Executed and Delivered on behalf of )
SPORTSMARK HOLDINGS INC. by its authorized )
signatory(ies): )
)
)
) c/s
---------------------------------------------------------- )
Name: )
Title: )
)
)
---------------------------------------------------------- )
Name: )
Title: )
THE CORPORATE SEAL of SPORTSMARK )
PROMOTIONS INC. was hereunto affixed in the )
presence of: )
) c/s
)
)
)
---------------------------------------------------------- )
Name: )
Title: )
)
)
---------------------------------------------------------- )
Name: )
Title: )
THE CORPORATE SEAL of CLASSROOM 2000 INC. )
was hereunto affixed in the presence of: )
)
) c/s
)
)
---------------------------------------------------------- )
Name: )
Title: )
)
)
---------------------------------------------------------- )
Name: )
Title: )
