SHARE PURCHASE AGREEMENT
THIS AGREEMENT dated for reference May 1, 1997
BETWEEN:
PENSBREIGH HOLDINGS LTD., Chancery House, High Street,
Bridgetown, Barbados, West Indies
(the "Seller")
AND:
PROMAX COMMUNICATIONS INC., 1200 - 0000 Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X-0X0
(the "Buyer")
WITNESSES THAT WHEREAS:
(A) As of the reference date of this Agreement, the Seller controls all of the
300 issued and outstanding common shares (the "Shares") in the capital of
Servicios de Telecomunicaciones S.A. ("SETESA");
(B) SETESA has obtained a concession from the Bolivian Government, permitting
SETESA to install and operate a remote pager service throughout Bolivia; and
(C) The Seller has represented to the Buyer that it is duly authorized to sell
the Shares and has agreed to sell to the Buyer and the Buyer has agreed to buy
from the Seller all of the Shares upon and subject to the terms and conditions
set out in this Agreement;
NOW THEREFORE in consideration of the payment of $20,000 by the Buyer to the
Seller (the receipt and sufficiency of which is acknowledged) and in
consideration of the covenants and agreements herein contained, the parties
hereto covenant and agree as follows:
PART 1
DEFINITIONS AND INTERPRETATIONS
Definitions
1.1 In this Agreement, the following terms shall have the meanings set out below
unless the context clearly requires otherwise: (a) "Agreement" means this
Agreement, including the Schedules attached to this Agreement;
(b)
"Business" means the remote pager service business carried in Bolivia by SETESA
under authority of the Concession (as that term is defined below); (c) "Closing
Date" means the day of execution of this Agreement, or such other date as is
agreed in writing among the Seller and the Buyer; (d) "Concession" means the
Concession Contract for the Operation of a Public Telecommunications Network and
for the Rendering of a Beeper Mobile Service, dated July 24, 1996, between
SETESA and the Superintendencia (as that term is defined below) and attached
hereto as Schedule 1, which permits SETESA to operate a remote pager service
throughout Bolivia using the UHF frequencies of 931.4375 Mhz and 931.9375 Mhz;
(e) "Encumbrances" means any mortgage, charge, pledge, hypothecation, security
interest, lien, encroachment, covenant, condition, right of re-entry, lease,
licence, assignment, option or claim or any other encumbrance or title defect of
whatsoever nature or kind regardless of form, whether or not registered or
registerable and whether or not consensual or arising at law (statutory or
otherwise), including rights of creditors under bankruptcy or insolvency
legislation; (f) "Financial Statements" means those audited financial statements
of SETESA dated December 31, 1996 and the interim unaudited financial statements
of SETESA dated March 31, 1997, and attached hereto as Schedule 2; (g)
"Liabilities" means those liabilities set out in the Financial Statements; (h)
"Parties" means the parties to this Agreement as set out above; (i) "Promax
Shares" means the 390,000 post-consolidation Class "A" common shares of the
Buyer; (j) "Promax Trustee" means the party described in Section 3.5 hereof
who will
hold in trust the Promax Shares under the terms and conditions set out herein;
(k) "Purchase Price" means $150,000 (USD) and the Promax Shares; (l) "SETESA"
means Servicios de Telecomunicaciones S.A.; (m) "Shares" means all of the shares
in the capital of SETESA more particularly described herein; and (n)
"Superintendencia" means the Superintendencia de Telecomunicaciones of Bolivia.
Interpretation 1.2 In this Agreement, except as otherwise expressly provided:
(a) a reference to a designated Part, paragraph, sub-paragraph or Schedule is a
reference to the designated Part, paragraph, sub-paragraph or Schedule of this
Agreement; (b) the words "herein", "hereof', "hereunder" and other similar words
refer to this Agreement as a whole and not to any particular Part, paragraph,
subparagraph or Schedule; (c) the headings are for convenience only and do not
form a part of this Agreement and are not intended to interpret, define, or
limit the scope, extent or intent of this Agreement or any provision hereof; (d)
words importing the masculine gender include the feminine or neuter, words in
the singular include the plural, words importing a corporate entity include
individuals, and vice versa; (e) any accounting term not otherwise defined in
this Agreement has the meaning assigned to it in accordance with generally
accepted accounting principles applicable in Bolivia; (f) any monetary amount
referred to in this Agreement is in United States funds; (g) any term defined
within the text of this Agreement has the meaning given to that term in the text
of the Agreement; (h) where applicable, the Spanish versions of the Schedules
attached hereto are the authoritative versions of those Schedules, and the
English translations of the Spanish versions of certain Schedules have been
prepared and attached for convenience only; and (i) a reference to a notice,
approval, authorization or consent means a written notice, approval,
authorization or consent. Schedules 1.3 The following Schedules are incorporated
into and form an integral part of this Agreement:
SCHEDULE DESCRIPTION
1 Concession Agreement
2 Audited Financial Statements as of December 31, 1996
and unaudited
Interim Financial Statements as of March 31, 1997
3 Intellectual Property
PART 2
PURCHASE AND SALE
Purchase and Sale
2.1 Subject to the terms and conditions hereof, the Seller hereby sells to the
Buyer and the Buyer hereby purchases from the Seller the Shares for a total
purchase price of $150,000 (USD) plus the allotment and issuance as fully paid
and non-assessable Promax Shares (the "Purchase Price"). Payment of Purchase
Price 2.2 The Buyer has paid and the Seller has acknowledged receipt of $20,000
(USD) of the Purchase Price which, notwithstanding anything to the contrary
herein the parties agree is non-refundable, and the Buyer will pay the Purchase
Price to the Seller on the following basis: (a) on execution hereof, (i) $30,000
(USD), (ii) the Promax Shares, 350,000 of the Promax Shares legended as non-
transferable for two years from the Closing Date and 40,000 of the Promax Shares
legended as non-transferable for one year from the Closing Date will be allotted
and issued to the Seller which will be placed in escrow with the Promax Trustee
pursuant to the terms and conditions set forth in Part 3, (b) 60 days after
execution hereof, $50,000 (USD); and (c) 90 days after execution hereof,
$50,000(USD). Closing Deliveries 2.3 On execution hereof the Seller shall
deliver to the Buyer or its Bolivian legal counsel the following: (a) a letter
of direction to Ossio Abogados providing irrevocable instructions to release the
certificates representing the Shares to Buyer's Bolivian counsel together with
share transfer deeds that, upon receipt of the Superintendencia's consent
described in Section 4.1 hereof, will cause the Shares to be transferred to
the Buyer
and provide the Buyer certificates representing the Shares duly registered in
the name of the Buyer, except for one share which will be registered in the name
of Xxxxx Xxxxxx, in trust; and (b) within 45 days after execution hereof, to the
Buyer, a legal opinion of licensed Bolivian legal counsel confirming that: (i)
the Shares have been duly issued, validly transferred to the Buyer and represent
the only outstanding shares in the capital of SETESA;
(ii) the Superintendencia's consent described in Section 4.1 hereof has
been obtained;
(iii) that the Buyer's representatives (described in Section13.1)have been
duly appointed as directors of SETESA and constitute a majority of the board
of its directors; and
(iv) legal counsel has examined the corporate records of SETESA and confirms
that SETESA is in compliance with the terms and warranties of this Agreement.
PART 3
ESCROW
Promax Trustee
3.1 The parties agree that the Buyer will cause to be placed in trust with the
law firm of Xxxxxxx, Xxxxxxxx (the "Promax Trustee") the Promax Shares to be
held by the Promax Trustee until the Buyer has received the Superintendencia's
consent described in Section 4.1 hereof, and the Shares and the opinion referred
to in Section 2.3(b). The Promax Trustee shall provide written confirmation on
execution hereof that it is in possession of the Promax Shares and that it will
deal with them in accordance with the terms of this Agreement. Delivery/Dispute
Notice 3.2 On delivery of all Shares registered in the Buyer's name, together
with the opinion referred to in Section 2.3(b) and the consent of the
Superintendencia's described in Section 4.1, the Promax Trustee shall thereupon
deliver the Promax Shares to the Seller and the Shares to the Buyer. If the
Shares are not delivered to the Buyer as contemplated herein together with the
opinion free of any conditions within one year of the Promax Shares being placed
in escrow with the Promax Trustee, then the Promax Trustee may either continue
to hold the Promax Shares or pay the Promax Shares into a Court of competent
jurisdiction pending a judicial outcome of any dispute between the Buyer and
Seller. Seller May Vote Shares 3.3 Notwithstanding that the Promax Shares have
been placed in escrow with the Promax Trustee pending delivery of the Shares by
the Seller, the Seller shall be entitled to all voting rights with respect to
such Promax Shares.
PART 4
CONSENT OF THE SUPERINTENDENCIA
Seller to Obtain Consent
4.1 The Seller will use its best efforts to obtain the consent of the
Superintendencia to the sale of the Shares to the Buyer immediately after
execution hereof. If the Seller has been unable to obtain the consent of the
Superintendencia within 45 days of the date of execution hereof, this Agreement
may be terminated at the Buyer's option, all obligations of the Buyer hereunder
will end, and any payments made by the Buyer, other than the initial $20,000
payment, will be returned to the Buyer and the Shares and transfer deeds will be
returned to the Seller.
PART 5
CLOSING
Closing
5.1 The closing of the transactions contemplated hereunder will occur at the
Buyer's office noted on page one and will be deemed to have been completed upon
the execution hereof by both parties, the payment by the Buyer of the initial
$30,000 to the Seller referred to in Section 2.1 and the provision by the Seller
to the Buyer of the written direction and the Promax Trustee's letter
referred to in Section 2.3 and Section 3.1 respectively. Receipt
Acknowledged 5.2 The Seller acknowledges delivery and receipt of the initial
$20,000 paid by the Buyer to the Seller as well as the $30,000 paid on
execution of this Agreement pursuant to Section 2.2(a) as of the date hereof.
Due Diligence 5.3 The Buyer hereby acknowledges that it has completed to its
satisfaction a due diligence review of SETESA.
PART 6
SELLER'S REPRESENTATIONS AND WARRANTIES
The Seller represents and warrants to the Buyer as follows and acknowledges that
the Buyer is relying on the representations and warranties of the Seller in
entering into this Agreement and completing the purchase of the Shares:
Share Capital
6.1 (a) Share Capital - The authorized share capital of SETESA consists of 1,000
common shares, of which 300 shares have been duly and validly authorized,
allotted and issued as outstanding and fully-paid and non-assessable shares; (b)
Title to Shares - The Seller has all requisite authority to sell the Shares and
is the beneficial owner of all of the Shares, with good and marketable title
thereto, free and clear of all liens, charges and Encumbrances; (c) Rights to
Acquire Securities - No person has any agreement, option, right or privilege
(whether by law, pre-emptive or contractual), present or future, contingent or
absolute, or capable of becoming an agreement, option, right or privilege: (i)
to require SETESA to issue or allot any further shares in its capital or any
other security convertible or exchangeable into shares in its capital or to
convert or exchange any securities into or for shares in the capital of SETESA;
(ii) to require SETESA to purchase, redeem or otherwise acquire any of the
issued and outstanding Shares in SETESA's capital; or (iii) to purchase or
otherwise acquire any Shares in the capital of SETESA; and (d) No Commissions
Payable - there are and will be no commissions payable by the Seller or SETESA
to any person as a result of the completion of the transactions contemplated
under this Agreement. Corporate Status and Authority 6.2 (a) Corporate Status -
SETESA is duly incorporated, validly existing and in good standing under the
laws in force in Bolivia; (b) Corporate Authority - SETESA has all requisite
power, authority and capacity to carry on the Business as presently conducted by
it and to own and use its assets; (c) Business Activities - SETESA carries on
business in Bolivia, does not carry on any business in any other jurisdiction
and does not carry on any business other than the Business; (d) Amendments to
Memorandum or Articles - SETESA has not made any amendments to its constating
documents other than those that have been filed with the appropriate Bolivian
authorities as of the reference date of this Agreement;
(e) No Subsidiaries -
SETESA has no subsidiaries and does not own any shares, and is not a party to
any agreements of any nature to acquire any shares, in any other corporations or
entities and is not a party to any agreements to acquire or lease any other
business operations; and (f) Corporate Records - The corporate records and
minute books of SETESA reflect, in all material respects, all proceedings of the
directors and shareholders of SETESA, and include minutes of all meetings of its
directors and shareholders, resolutions passed by the directors and
shareholders, and up-to-date and accurate shareholder, director and transfer
registers.
Assets
6.3 (a) Ownership - SETESA has good and marketable title to all of its assets
free and clear of all Encumbrances other than the Liabilities; (b) Equipment
Leases - As of the reference date of this Agreement SETESA has no leased assets;
(c) Condition of Assets - SETESA does not own any tangible assets; (d)
Intellectual Property - All of the intellectual property owned by SETESA
including, without limitation, all trade-marks, trade-names and copyrights, is
set forth in Schedule 3 to this Agreement (the "Intellectual Property"). Except
as set out in Schedule 3, SETESA is not the registered owner or registered user
of any other trade-marks or trade-names. To the best of the Seller' knowledge,
the Business does not infringe upon the trademarks, trade-names or other
intellectual property of any other person, firm or corporation and SETESA has
the full right and authority to utilize the Intellectual Property used by it in
the conduct of the Business; (e) Real Property - As of the reference date of
this Agreement SETESA owns no real property; and (f) Leased Premises - As of the
reference date of this Agreement SETESA leases no premises or other real
property.
Business Operations
6.4 (a) Business - The sole business of SETESA is the Business;
(b) Operating Authorities - SETESA has acquired and currently holds the
Concession and all other necessary and required permits, licenses consents,
authorizations, approvals, certificates or other similar documents granted by or
entered into with any governmental or regulatory authority in connection with
SETESA's assets or the carrying on of the Business (collectively, the
"Permits"). Each Permit is in full force and effect and there are no unwritten
agreements or arrangements relating to the Permits. SETESA's interests in the
Permits are free and clear of all Encumbrances other than the Liabilities.
SETESA has not previously assigned the Permits or its interests in the Permits.
SETESA is not in breach of any of the terms of the Permits and no event or
condition has occurred which could give rise to the cancellation or termination
of any of the Permits or the inability of SETESA to exercise any of its rights
under the Permits;
(c) Compliance with Laws - SETESA is conducting the Business
in compliance with the terms of the Concession and all other applicable laws and
regulations and is not in default of any such laws or regulations. To the best
of the Seller' knowledge, after due enquiry, there are no work or other similar
orders issued by any Bolivia governmental authority that are outstanding against
SETESA; and (d) Material Contracts - SETESA is not a party to or bound by any
material agreement or material commitment of any kind with any person, firm or
corporation other than the Concession. SETESA has not entered into any contract,
commitment or agreement, whether written or oral, which could materially impair
the value of the Business or assets or the transactions contemplated under this
Agreement.
Financial Matters
6.5 (a) Books and Records - The books and records of SETESA fairly and correctly
set out and disclose in all material respects the financial position of SETESA
and contain an accurate recording of all financial transactions of SETESA; (b)
Financial Statements - The Financial Statements have been prepared on a basis
consistent with previous financial statements of SETESA and present fairly, in
all material respects, the financial position of SETESA as at 31 December 1996;
(c) No Material Change - Since 31 December 1996 until the reference date of this
Agreement, there has been no change in the operations, affairs, assets or
liabilities of SETESA which has materially adversely affected or which will
materially adversely affect SETESA, except for general economic conditions
affecting the industry in which SETESA operates; (d) Liabilities - SETESA has no
liabilities (direct, indirect, contingent or otherwise) other than the
Liabilities; (e) Loans and Credit Facilities - As of the reference date of this
Agreement, SETESA does not have any loans (to or from any shareholders or
otherwise), operating lines of credit or other credit facilities or any bonds,
debentures, mortgages, notes or other similar indebtedness outstanding except
for those included as part of the Liabilities. SETESA is not obliged to create
or issue any bonds, debentures, mortgages, notes or other similar indebtedness;
(f) Receivables - As of the reference date of this Agreement SETESA has no
accounts receivable; (g) Guarantees/Indemnities - SETESA has not guaranteed or
indemnified (or agreed to guarantee or indemnify) or entered into any other like
commitment in respect of any debt, liability or other obligation of any person;
(h) Insurance Policies - As of the reference date of this Agreement SETESA has
no insurance policies relating to any of its assets;
(i) Taxes, Tax Returns and
Other Reports - All tax returns and other reports of SETESA required by law to
be filed prior to the reference date of this Agreement have been filed with the
appropriate authorities and are true, complete and correct in every material
respect. All applicable income and other taxes, levies, assessments and other
governmental charges (collectively, the "Taxes") relating to the Shares and the
Business required to be paid prior to the time of closing on the Closing Date
have been, or will be, paid in full and SETESA has no liability, contingent or
otherwise, for any Taxes except Taxes not yet due and payable for the current
fiscal year of SETESA; (j) Adverse Tax Proceedings - There are no actions,
suits, proceedings, investigations or claims by any governmental authority
pending or threatened against SETESA relating to Taxes; and (k)
Deductions/Remittances - SETESA has withheld and remitted all amounts required
to be withheld and remitted by it and it has paid such amounts including any
penalties or interest due to the appropriate authorities on a timely basis and
in the form required by such authorities.
Employee Matters
6.6 (a) No Employees - As of the date of this Agreement SETESA has no employees.
SETESA is not party to any oral or written consulting contract, management
contract, labour services contract, collective agreement, union contract or
other similar agreement for the services of a particular individual or group of
individuals; and (b) Employee Claims - From the start of operations of SETESA on
22 July 1992 until the reference date of this Agreement, no person has made any
private claim against SETESA for wrongful dismissal, nor are any persons owed
any compensation by SETESA under the employment laws of Bolivia.
Litigation and Claims
6.7 (a) Judgments - There are no outstanding judgments, decrees, orders, rulings
or injunctions by or against or otherwise involving the Shares, SETESA or the
assets of SETESA; (b) Litigation - There are no claims, actions, suits,
litigation, legal proceedings, arbitration proceedings, or administrative or
governmental proceedings pending, or to the best of the Seller' knowledge
threatened, against the Shares, SETESA, the assets of SETESA or the Business
before or by any governmental agency, domestic or foreign; and (c) No Bankruptcy
or Dissolution - No actions have been taken or authorized by SETESA, the Seller
or any other person to initiate any proceedings for or in respect of the
bankruptcy, insolvency, liquidation, dissolution or winding-up of SETESA.
Effect of this Transaction
6.8 (a) No Adverse Implications - Subject to receiving the consent of the
Superintendencia for the sale of the Shares to the Buyer as required under Part
5, the making of this Agreement and the completion of the transactions
contemplated hereunder and the performance of and compliance with the terms
hereof does not and will not: (i) conflict with or result in a breach of or
violate any of the terms, conditions or provisions of the constating documents
of SETESA; (ii) conflict with or result in a breach of or violate any of the
terms, conditions or provisions of any law, judgment, order, injunction, decree,
regulation or ruling of any court or governmental authority, domestic or
foreign, to which either of SETESA or any of the Seller is subject or constitute
or result in a default under any contract to which SETESA or the Seller is a
party; (iii) give to any person any remedy, cause of action, right of
termination, cancellation or acceleration, right to or to enforce security, or
suspension or reduction of benefits under any contract or give any person the
right to accelerate the maturity for the payment by SETESA of any amount payable
by it; (iv) give to the Bolivian Government or governmental authority including
any governmental department, commission, bureau, board or administrative agency
any right of termination, cancellation or suspension of, or constitute a breach
of or result in a default or reduction of benefits under any permit, license,
consent, authorization, approval, privilege or other concession held by SETESA;
or (v) result in the creation of Encumbrances on the Business.
Seller's Status
6.9 The Seller represents further that it:
(a) is duly incorporated and validly subsisting under the laws of Barbados; (b)
has all necessary corporate power and has taken all necessary proceedings to
authorize this Agreement and to convey the Shares to the Buyer; (c) has duly
executed and delivered this Agreement as a binding obligation of the Seller,
enforceable in accordance with its terms; and (d) the execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby, and
the due observance and performance by the Seller of its obligations contained in
this Agreement will not conflict with or result in a breach or a violation of
any of the terms, conditions or provisions of any law, judgement, order,
injunction, decree, regulation or ruling of any court or other governmental
authority, domestic or foreign, to which the Seller is subject, nor constitute
or result in a default under any agreement, contract, or commitment to which the
Seller is a party or by which the Seller is bound, or to which the Seller is
subject.
PART 7
BUYER'S REPRESENTATIONS AND WARRANTIES
The Buyer represents and warrants to the Seller as follows and acknowledges that
the Seller is relying on those representations and warranties in entering into
this Agreement and in concluding the purchase and sale of the Shares: (a)
Corporate Status - The Buyer is duly incorporated and validly existing and in
good standing under the laws in force in British Columbia. (b) Corporate
Authority - The Buyer has all requisite power, authority and capacity to acquire
the Shares pursuant to this Agreement. (c) Authorization of this Agreement -
This Agreement has been duly authorized, executed and delivered by the Buyer and
is a valid and binding obligation of the Buyer enforceable against it in
accordance with its terms; (d) Effect of the Agreement - The execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby, and the due observance and performance by the Buyer of its obligations
contained in this Agreement will not conflict with or result in a breach or a
violation of any of the terms, conditions or provisions of any law, judgement,
order, injunction, decree, regulation or ruling of any court or other
governmental authority, domestic or foreign, to which the Buyer is subject, nor
constitute or result in a default under any agreement, contract, or commitment
to which the Buyer is a party or by which the Buyer is bound, or to which the
Buyer is subject.
PART 8
COVENANTS
Access to the Company
8.1 Following the date of execution of this Agreement, the Seller will cause
SETESA to afford to the Buyer and its authorized representatives access during
normal business hours to all properties, books, contracts, commitments and
records of SETESA and to furnish such copies thereof and other information as
the Buyer may reasonably request, and to permit the Buyer and its authorized
representatives to make such audit of the books of account of SETESA and
physical verification of the assets of SETESA as the Buyer may reasonably see
fit. At the request of the Buyer, the Seller will cause SETESA to execute such
consents, authorizations and directions as may be necessary to permit any
inspection of any its property or to enable the Buyer or its authorized
representatives to obtain full access to all files and records relating to the
Business or SETESA's assets maintained by governmental or other public
authorities in Bolivia. The exercise of any rights of inspection by or on behalf
of the Buyer under this paragraph will not mitigate or otherwise affect the
representations and warranties of the Seller hereunder, which will continue in
full force and effect.
Conduct Business in the Ordinary Course
8.2 Between the date of execution of this Agreement and until the Buyer receives
the Shares and the opinion in Section 2.3(b), the Seller and Buyer will: (a)
cause SETESA to conduct the Business diligently and only in the ordinary course
and in a manner consistent with past practice; (b) preserve and maintain the
goodwill of SETESA and the Business; (c) permit and arrange for representatives
of the Buyer to meet with senior managers employed by SETESA from time to time
for the purposes of keeping informed as to the current status of the Business;
(d) not permit SETESA to change its accounting practices, procedures or methods;
(e) not permit SETESA to enter into any contract or commitment other than in the
ordinary course of business; (f) not permit SETESA to incur any capital
expenditures; (g) not permit SETESA to issue any shares in its capital or other
securities; (h) not permit SETESA to amend or vary or agree to amend or vary any
of the terms of the Concession or any other Permit, license, consent,
authorization, approval or privilege held by it except in the ordinary course of
business or with the consent of the Buyer; (i) not permit SETESA to declare or
pay any dividends or other distributions on any class or kind of its shares
except as may be necessary to achieve the financial result contemplated by the
Financial Statements; (j) not permit SETESA to repurchase or redeem any of its
shares or reduce its capital in any way; (k) not make any material change to the
compensation paid to any employee or pay or agree to pay any bonus to or enter
into any agreement with any salaried employee, officer or director of SETESA
which would affect either the payment or the period of notice to which they
would be entitled in the event of termination.
No Payments
8.3 Between the date of execution of this Agreement and the time of closing on
the Closing Date, the Seller will not permit SETESA to make or agree to make any
payment to any director, officer, employee or agent of the company except in the
ordinary course of the Business and at the regular rates of salary and
commission for such person.
Superintendencia's Consent
8.4 To obtain the consent contemplated under Part 4, the Seller will use its
best efforts to obtain the consent of the Superintendencia, immediately after
execution hereof and Buyer will use its best efforts to provide any
documentation that may be required from them to obtain the said consent within
15 days of execution of this Agreement.
Transfer of Technology
8.5 Following the closing of the transactions contemplated under this Agreement,
the Buyer will use commercially reasonable efforts to transfer appropriate
technology to SETESA in order to allow SETESA to expand and develop the
Business.
PART 9
NON-MERGER
Representations, Warranties, Covenants and Agreements to Survive
9.1 The representations, warranties, covenants and agreements of the Parties
contained herein and those contained in the documents and instruments delivered
pursuant to this Agreement will be true at and as of the time of closing on the
Closing Date as though made at the time of closing on the Closing Date and will
survive the closing and, notwithstanding the completion of the transactions
herein contemplated, will remain in full force and effect for a period of one
year after the execution hereof.
PART 10
SELLER'S INDEMNITY
Indemnity of the Seller
10.1 Subject to the terms and conditions of this Agreement, the Seller will
indemnify and save harmless the Buyer from any loss, damages, liabilities,
expenses, costs or claims whatsoever which may be incurred or suffered by the
Buyer as a result of or in connection with:
(a) any representations and warranties of the Seller contained in this Agreement
which are untrue and any covenants of the Seller which are unfulfilled; and
(b)
any liabilities of SETESA attributable to the conduct of SETESA up to the date
first above written and any acts or omissions of the SETESA, its directors,
officers, employees and agents, whether or not negligent and which have not
otherwise been disclosed to the Buyer pursuant to this Agreement.
The indemnity provided for under this paragraph shall survive for a period of
two years following the Closing Date.
PART 11
NON-COMPETITION
Non-Competition by the Seller
11.1 The Seller covenants on behalf of itself and any prior shareholders of
SETESA and prior or current principals of SETESA that it, any prior shareholder
of SETESA and prior and current principals of SETESA will not, for a period of
one year from the Closing Date, either alone or in partnership or in conjunction
with any other person, firm, association, corporation or other entity as
principal, agent, shareholder, partner, investor, consultant, advisor or in any
other capacity, directly or indirectly, carry on, be engaged in, concerned with
or interested in any business which is the same as, substantially similar to or
competitive with the Business.
PART 12
CONDITIONS PRECEDENT
Conditions of Closing in Favour of the Buyer
12.1 The obligation of the Buyer to complete the purchase of the Shares is
subject to the fulfilment of each of the following conditions at the times
stipulated, which conditions are for the exclusive benefit of the Buyer: (a)
Satisfactory Completion of Due Diligence - satisfactory completion of its due
diligence as provided for under Part 4; (b) Representations and Warranties - the
representations and warranties of the Seller contained in this Agreement will be
true and correct at and as of the time of closing on the Closing Date with the
same force and effect as if those representations and warranties were made at
and as of the time of closing on the Closing Date; (c) Covenants - all of the
covenants, agreements and obligations hereunder on the part of the Seller to be
performed or complied with at or prior to the Closing Date, including the
Seller' obligation to deliver the documents and instruments herein provided for,
will have been performed and complied with as at the time of closing on the
Closing Date;
(d) No Liabilities - SETESA will have no debts, liabilities or
contractual commitments other than the Liabilities; (e) Financial Condition -
The financial condition of SETESA at and as of the time of closing on the
Closing Date shall be substantially as set out in the Financial Statements, and
the Seller shall have provided to the Buyer a certificate of one of the current
directors of SETESA to that effect, dated as of the Closing Date; (f) Damage -
no substantial damage to any of the assets of SETESA will have occurred from the
date of execution of this Agreement to the time of closing on the Closing Date;
(g) No Material Adverse Change - there will have been no material change in the
condition of the assets of SETESA or the Business, including the prospects
thereof, from the date of execution of this Agreement to the time of closing on
the Closing Date; (h) Consent of the Superintendencia - the Seller will have
delivered to the Buyer within 30 days of the time that Buyer provides the
required documentation to Seller for the application for the consent of the
Superintendencia required to be obtained by the Seller under Part 4, and it will
not be subject to any conditions or terms that are unacceptable to the Buyer,
acting reasonably and in good faith; (i) Injunctions, etc. - at the time of
closing on the Closing Date no action or proceeding at law or in equity will be
pending or threatened by any person and no injunction or restraining order will
be in effect to enjoin or prohibit: (i) the purchase and sale of the Shares
contemplated hereby or the right of the Buyer to own the Shares; or (ii) the
right of SETESA to carry on the Business in the normal course; and (j)
Directorships - the directors and officers of SETESA will resign as of the
Closing Date and will be replaced by the following representatives of the Buyer:
Name Office Resigning Appointed
------------------------------ ------------------------- ------- ------------------ ---------------------
Xxxxx Xxxxxx May 1, 1997
Xxxxxx Xxxx President May 1, 1997
Xxxxx Xxxxx Secretary May 1, 1997
Failure to Fulfil Conditions
12.2 The conditions set forth in Section 13.1 are for the exclusive benefit of
the Buyer. If any of the conditions contained in Section 13.1 are not performed
or fulfilled at or prior to the times stipulated in Section 13.1, then the Buyer
may, by notice to the Seller, terminate this Agreement and, subject to the
exception set out below and the other applicable terms of this Agreement, in
that event the Buyer will be released from all obligations under this Agreement
and, unless the Buyer can show that the condition or conditions for the non-
performance of which the Buyer has terminated the Agreement are reasonably
capable of being performed or caused to be performed by the Seller, the Seller
will also be released from all obligations under this Agreement. Should the
Buyer terminate this Agreement in accordance with this Section 13.2 the Purchase
Price, and any interest accrued thereon, will be returned to the Purchaser in
accordance with Section 2.3. Termination by the Buyer pursuant to this
Section13.2
will be without prejudice to the right of the Buyer to recover damages for any
misrepresentation, breach of warranty or non-fulfilment of any covenant or
agreement on the part of the Seller or any of them that arose prior to the
termination. Alternatively, subject to the other applicable terms of this
Agreement, the Buyer may elect to waive compliance with any such condition in
whole or in part without prejudice to any of its rights of termination in the
event of non- performance of any other condition, obligation or covenant in this
Agreement.
Conditions of Closing in Favour of the Seller
12.3 The obligation of the Seller to complete the sale of the Shares is subject
to the fulfilment by the Buyer of each of the following conditions at the times
stipulated, which conditions are for the exclusive benefit of the Seller: (a)
Representations and Warranties - The representations and warranties of the Buyer
contained in this Agreement will be true and correct at and as of the time of
closing on the Closing Date with the same force and effect as if those
representations and warranties were made at and as of the time of closing on the
Closing Date; (b) Covenants - All covenants, agreements and obligations
hereunder on the part of the Buyer to be performed or complied with at or prior
to the Closing Date, including the Buyer's obligations to deliver the documents
and instruments herein provided for, will have been performed and complied with
as at the time of closing on the Closing Date in all material respects; and (c)
Injunctions, etc. - No injunction or restraining order of a court or
administrative tribunal of competent jurisdiction will be in effect at the time
of closing on the Closing Date restraining or prohibiting the transactions
contemplated hereby and no action or proceeding will be threatened or instituted
and remain pending at the time of closing on the Closing Date before any such
court or administrative tribunal to restrain or prohibit the transactions
contemplated hereby.
Failure to Fulfil Conditions
12.4 The conditions set forth in Section 13.3 are for the exclusive benefit of
the Seller. If any of the conditions contained in Section 13.3 are not performed
or fulfilled at or prior to the times stipulated in Section 13.3, then the
Seller may, by notice to the Buyer, terminate this Agreement and, subject to the
exception set out below and the other applicable terms of this Agreement, in
that event the Seller will be released from all obligations under this Agreement
and, subject to the payment of the Purchase Price other than the initial $20,000
over to the Seller in accordance with Section 2.3, the Buyer will also be
released from all obligations under this Agreement. Should the Seller terminate
this Agreement in accordance with this Section 13.4 by reason of the Buyer's
non-compliance with Section 13.3(a) or 13.3(b) then the Purchase Price, and any
interest accrued thereon, will be paid over to the Seller in accordance with
Section 2.3.Should the Seller terminate this Agreement in accordance with this
Section 13.4 by reason of Section 13.3(c) then the Purchase Price less the
$20,000 initial payment,
and any interest accrued thereon, will be repaid to the Buyer. Termination by
the Seller pursuant to this Section 13.4 and payment of the Purchase Price to
the Seller by reason of non-compliance with Section 13.3(a) or 13.3(b) will be
the sole right of the Seller to recover damages for any misrepresentation,
breach of warranty or non-fulfilment of any covenant or agreement on the part of
the Buyer that arose prior to the termination. Alternatively, subject to the
other applicable terms of this Agreement, the Seller may waive compliance with
any such term, covenant or condition in whole or in part without prejudice to
any of its rights of termination in the event of non-performance of any other
condition, obligation or covenant in this Agreement.
PART 13
MISCELLANEOUS PROVISIONS
Notice
13.1 All notices and other communications under this Agreement will be in
writing and may be delivered personally, by courier, by facsimile or by pre-paid
registered mail to the Parties at the addresses and facsimile numbers set forth
below or at such other addresses or facsimile numbers as may be advised by the
Parties from time to time:
(a) if to the Buyer:
Promax Communications Inc.
1200 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Fax No.: (000) 000-0000
with a copy to:
Lang Xxxxxxxx Xxxxxxxx & Xxxx
1500 Royal Centre, 0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax No.: (000) 000-0000
Attention: Xx. X. Xxxxxxxxx
(b) if to the Seller:
Pensbreigh Holdings Ltd.
Xxxxxxxx Xxxxx, Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx Xxxx Xxxxxx
Fax No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxxx, Q.C.
with a copy to:
International Portfolio Management Inc.
0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
(c) if to the Promax Trustee:
Xxxxxxx, Xxxxxxxx
1020 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
Any notice or communication delivered personally or by courier will be deemed to
be received on the day of delivery. Any notice or communication delivered by
facsimile transmission will be deemed to be received on the first business day
following the day on which it is sent. Any notice or communication delivered by
pre-paid registered mail will be deemed to have been received on the fifth
business day following the day on which it was sent provided that if at the time
of mailing or between the time of mailing and actual receipt of the notice or
communication there should be a mail strike, slowdown or other labour dispute
which might affect the delivery of such notice or communication by mail, then
such notice or communication shall only be effective if actually delivered.
Proper Law
13.2 This Agreement will be governed by and construed in accordance with the
laws of the Province of British Columbia, which for all purposes will be deemed
to be the proper law of this Agreement.
Binding Effect
13.3 This Agreement will enure to the benefit of and be binding upon the Buyer
and the Seller and their respective heirs, executors, personal representatives,
successors and permitted assigns.
Time
13.4 Time is of the essence in this Agreement.
Entire Agreement
13.5 Subject to any confidentiality agreement that may be entered into by the
Parties, the terms and provisions contained in this Agreement (including all of
the recitals and Schedules to this Agreement), as may be amended from time to
time, constitute the entire agreement between the Parties with respect to the
purchase and sale of the Shares and supersede any previous oral or written
communications.
Modification
13.6 This Agreement may not be modified or amended except by instrument in
writing signed by both the Buyer and the Seller.
Assignment
13.7 This Agreement and the rights and obligations contained in this Agreement
may not be assigned by either Party without the prior written consent of the
other Party.
Further Assurances
13.8 Each of the Parties to this Agreement will execute such further and other
documents and do such further and other acts as may be necessary to give effect
to this Agreement.
Severability
13.9 If any covenant, obligation or term of this Agreement is held to be invalid
or unenforceable, then the remainder of this Agreement will not be affected by
the invalid or unenforceable portion and this Agreement will be construed as
though it were executed without reference to the invalid or unenforceable
portion of this Agreement.
Expenses
13.10 The Buyer and the Seller will each pay their own expenses including,
without limitation, accountant's and lawyer's fees, incurred by them in
connection with the negotiations, execution and delivery of this Agreement under
the consummation of the transactions contemplated under this Agreement.
Counterparts
13.11 This Agreement may be executed in any number of counterparts, each of
which when delivered will be deemed to be an original and all of which together
will constitute one and the same document.
This ris page of a Share Purchase Agreement dated for reference May 1, 1997
between Pensbreigh Holdings Ltd. and Promax Communications Inc.
Attornment
a. Each party irrevocably attorns to the jurisdiction of the courts of British
Columbia and all courts having appellats jurisdiction thereover, and any
proceeding commenced or maintained by a party in respect of this Agreement will
be commenced or maintained only in such courts as is appropriate.
Arbitration
b. The Parties agree that they will strive to solve all disputes arising out of
or in connection with this Agreement, or in respect of any defined legal
relationship associated therewith or derived therefrom, in an amicable manner,
failing which such disputes shall be referred to and finally resolved by binding
arbitration in accordance with the International Commercial Arbitration Act
(British Columbia). Any such arbitration will be held before a panel of three
arbitrators. The Seller, acting collectively, shall be entitled to appoint one
arbitrator to the panel. The Buyer shall also be entitled to appoint one
arbitrator to the panel. The two arbitrators so appointed will then select the
third arbitrator by consensus, who will act as the chair of the panel. A
decision of the majority of the arbitrators shall be binding on the Parties. The
place of arbitration shall be Vancouver, British Columbia.
IN WITNESS WHEREOF the Parties have executed this Agreement this _____ day
of July, 1997, effective as of the date first noted above.
PENSBREIGH HOLDINGS LTD.
Per:
Authorized Signatory
PROMAX COMMUNICATIONS INC.
Per:
Authorized Signatory
- 1 -
SCHEDULE 1
CONCESSION AGREEMENT
- 1 -
SCHEDULE 2
FINANCIAL STATEMENTS
- 1 -
SCHEDULE 3
INTELLECTUAL PROPERTY
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