Exhibit 3.13
REDEMPTION AND CANCELLATION AGREEMENT
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THIS REDEMPTION AND CANCELLATION AGREEMENT ("Agreement") is made as of
April 30, 1997 by and between Sky Games International, Inc., a Nevada
Corporation ("SGII"), and Sky Games International Ltd., a Bermuda exempted
company (the "Company").
RECITALS
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A. SGII owns 2,000,000 issued and outstanding shares of common stock,
Cdn.$.01 par value per share, of the Company (the "Common Stock") which are held
in escrow (the "Escrow" and such stock, the "Escrowed Stock") with the Montreal
Trust Company of Canada (the "Escrow Agent") pursuant to the securities laws of
British Columbia, Canada and that certain Escrow Agreement dated as of May 27,
1992 by and among the Escrow Agent, the Company, SGII, Xxxxxxx X. Xxxxxxxx and
Xx. Xxx Xxxxxxxxx (the "Escrow Agreement").
B. SGII has issued to the Company its promissory note bearing interest at
six percent (6%) per annum in the outstanding principal amount of five hundred
forty-nine thousand six hundred fifty-one dollars ($549,651) as of the date of
this Agreement (the "Note").
B. The Company desires to redeem the Escrowed Stock from SGII and
thereafter cancel the Escrowed Stock and SGII is willing to have the Company
redeem and to agree to the cancellation of the Escrowed Stock in exchange for
cancellation of the Note and the issuance of additional shares of Common Stock
and the Company is willing to cancel the Note and issue the shares of Common
Stock, in each case in accordance with and on the terms and conditions set forth
herein.
AGREEMENTS
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NOW, THEREFORE, in consideration of the mutual promises herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Representations and Warranties. Assuming receipt of the Regulatory
Approval (as defined herein) or the release of Escrowed Stock (in whole or in
part) from the Escrow for any reason whatsoever:
(a) SGII hereby represents and warrants:
(1) neither the execution and delivery of this Agreement nor the
consummation of the transactions herein contemplated will result in a
violation of any statute, regulation, order, writ, injunction,
judgment or decree of any court or governmental authority or of any
arbitration award;
(2) it is not a party to any unexpired, undischarged or
unsatisfied written or oral contract, agreement, indenture, mortgage,
debenture, note or other instrument under the terms of which
performance by it according to the terms of this Agreement will be a
default, or whereby timely performance by it according to the terms of
this Agreement
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may be prohibited, prevented or delayed;
(3) the Escrowed Stock is owned beneficially and of record by it
free and clear of all voting trust and other voting arrangements,
liens, encumbrances, security interests, transfer restrictions and
claims of every nature, other than those obligations arising out of
the Escrow Agreement or by the shareholders of SGII with respect to
and in the amount of the Escrowed Stock set forth on Exhibit A
opposite their respective name;
(4) the Common Stock to be acquired by SGII pursuant to this
Agreement as part of the Redemption Consideration (as herein defined)
is and shall be acquired for such holder's own account, for investment
purposes only and not with a present view to, or intention of,
distribution or resale thereof in violation of the United States
Securities Act of 1933, as amended (the "1933 Act") or any state
securities laws and that, irrespective of any other provisions of this
Agreement, such Common Stock shall be transferred only in compliance
with all applicable federal and state securities laws, including,
without limitation, the 1933 Act;
(5) the shares of Common Stock to be received by SGII hereunder
are not registered under the 1933 Act and must be held until such
shares of Common Stock are registered under the 1933 Act or an
exemption from such registration is available; the Company shall have
no obligation to take any actions that may be necessary to make
available any exemption from registration under the 1933 Act; and the
Company shall place "stop transfer" restrictions on the party
responsible for recording transfers of shares of Common Stock in
violation of the foregoing provisions of this paragraph;
(6) SGII is familiar with Rule 144 adopted by the United States
Securities and Exchange Commission (the "SEC") which establishes
guidelines governing, among other things, the resale of "restricted
securities" (securities, such as shares of Common Stock acquired
hereunder);
(7) SGII is able to evaluate the risks and merits of the
transaction contemplated by this Agreement and of making an informed
decision with respect thereto and has had an opportunity to ask
questions and receive answers concerning the terms and conditions of
this Agreement and to consult with legal counsel regarding this
Agreement;
(8) SGII is a corporation duly organized, existing and in good
standing, under the laws of the State of Nevada;
(9) all corporate action necessary to authorize the execution
and delivery of this Agreement by SGII, and the consummation of the
transactions contemplated hereby, has been taken; and
(10) neither the execution and delivery of this Agreement, nor
the consummation of the transactions herein contemplated, will
conflict with or result in the breach of any of the terms, conditions
or provisions of the Articles of Incorporation or
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the By-laws of SGII; and
(b) the Company represents and warrants to SGII as follows:
(1) the Company is a corporation duly organized and existing
under and in compliance with the corporate laws of Bermuda;
(2) all corporate action necessary to authorize the execution
and delivery of this Agreement by the Company, and the consummation of
the transactions contemplated hereby, has been taken;
(3) neither the execution and delivery of this Agreement, nor
the consummation of the transactions herein contemplated, will
conflict with or result in the breach of any of the terms, conditions
or provisions of the Memorandum of Continuance or the Bye-laws of the
Company, or, to the Company's knowledge, result in a violation of any
statute, administrative regulation, order, writ, injunction, judgment
or decree of any court or governmental authority or of any arbitration
award;
(4) the Company is not a party to any material unexpired,
undischarged or unsatisfied written or oral contract, agreement,
indenture, mortgage, debenture, note or other instrument under the
terms of which performance by the Company according to the terms of
this Agreement will be a default or an event of acceleration, or
grounds for termination, or whereby timely performance by the Company
according to the terms of this Agreement may be prohibited, prevented
or delayed; and
(5) all shares of Common Stock issued as the Redemption
Consideration pursuant to the terms of this Agreement shall be duly
and validly issued and fully paid.
2. Redemption, Issuance and Cancellation. On the terms and subject to the
conditions contained in this Agreement, including, without limitation, receipt
of the Regulatory Approval, (i) SGII agrees to sell, transfer and convey the
Escrowed Stock to the Company, and (ii) the Company agrees to purchase the
Escrowed Stock by (a) issuing to SGII, as directed by SGII, eighty thousand five
hundred ninety (80,590) shares of Common Stock and (b) canceling the Note (such
issuance of shares and cancellation of the Note being referred to herein as the
"Redemption Consideration"). Upon redemption of the Escrowed Stock, the Company
shall cancel the Escrowed Stock and SGII hereby agrees to the cancellation of
the Escrowed Stock. The parties hereby agree that in the event the Regulatory
Approval is not obtained, all the consideration received by SGII from the
Company under this Agreement (i.e., cancellation of the Note and the eighty
thousand five hundred ninety (80,590) shares of Common Stock) shall not be
refunded or returned to the Company due to the failure of Regulatory Approval to
have been obtained.
3. Time and Place of Closings. The consummation of the transactions
described in paragraph 2 hereof (the "Closing") shall be deemed to have occurred
at the offices of Altheimer & Xxxx, 00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000 at 10:00 a.m., local time, on the date hereof (the "Initial
Closing") and thereafter on the date which is five (5) business days following
the date of the Regulatory Approval or the date of each release of Escrowed
Stock, in whole or in part, from the Escrow for any reason whatsoever (each, a
"Closing Date").
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4. Conditions Precedent to Closing Deliveries. The obligation of SGII to
make the deliveries set forth in Section 5(b) is subject to the fulfillment of
the following conditions on the Closing Date:
(a) the parties shall have received the approval of the
Superintendent of Brokers appointed under the British Columbia Securities
Act, S.B.C. 1985, c. 83, to the transactions contemplated hereby in form
and substance reasonably satisfactory to the parties (the "Regulatory
Approval"); or
(b) Escrowed Stock shall have been released, in whole or in part,
from the Escrow, for any reason whatsoever (including, without limitation,
by termination of the Escrow).
5. Closing Deliveries. To effectuate the transactions contemplated
hereby:
(a) SGII shall deliver to the Company at the Initial Closing all of
the following:
(1) a certified copy of the resolutions of SGII's board of
directors, authorizing the execution and performance of this Agreement
and all documents to be delivered in connection with this Agreement;
(2) an irrevocable proxy to the Company in such form as the
Company shall specify naming such party as the Company shall determine
the proxy for SGII with respect to any and all votes SGII may now or
in the future be entitled to with respect to the Escrowed Stock; and
(3) an assignment separate from certificate, duly executed in
blank, for the Escrowed Stock; and
(b) SGII shall deliver to the Company at each Closing (including, as
applicable, the Initial Closing) an assignment separate from certificate,
duly executed in blank, for the particular Escrowed Stock as to which
Regulatory Approval has been received or which has been released from the
Escrow for any other reason whatsoever and, certificates representing such
Escrowed Stock; and
(c) the Company shall deliver at Initial Closing to SGII all of the
following:
(1) a certified copy of resolutions of the Company's board of
directors, authorizing the execution and performance of this Agreement
and all documents to be delivered in connection with this Agreement;
(2) the original Note marked "cancelled"; and
(3) the shares of Common Stock constituting part of the
Redemption Consideration; provided, however, the Company acknowledges
that it is hereby instructed by SGII to issue the number of shares of
Common Stock which constitutes part of the Redemption Consideration to
the parties and in the amounts set forth on
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Exhibit A attached hereto and SGII hereby agrees that it shall be
responsible for the compliance by such parties with SGII's and their
obligations hereunder;
(d) in the event the Escrowed Stock is cancelled (in whole or in
part) prior to release from the Escrow, SGII shall deliver to the Company a
general release of the Company from all claims in connection with the
Escrowed Stock, except for obligations of the Company under this Agreement;
and
(e) the parties shall execute and deliver at any Closing, or any time
thereafter, such further documents, and shall perform such further acts, as
may be necessary or desirable to effectuate the transactions contemplated
by this Agreement.
6. Expenses. The Company shall reimburse SGII for the reasonable
professional fees and expenses of one (1) law firm and one (1) financial advisor
incurred by it in connection with the negotiation, preparation, execution and
delivery of this Agreement upon the presentation of proper invoices therefor
(including supporting back-up such as itemization of expenses and time entries)
in an aggregate amount not to exceed ten thousand dollars ($10,000). The Company
shall not be liable for any other costs or expenses incurred by SGII in
connection with this Agreement or the performance of its obligations hereunder.
7. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and shall be
binding on them and on their respective legal representatives, successors and
assigns. Each exhibit to this Agreement is incorporated herein by reference. Any
amendments to this Agreement, and any alternative or supplementary provision,
must be made in writing and duly executed by an authorized representative or
agent of each of the parties hereto.
8. Non-Waiver. Neither the failure in any one or more instances of a
party to insist upon performance of any of the terms, covenants or conditions of
this Agreement or to exercise any right or privilege conferred in this
Agreement, nor the waiver by said party of any breach of any of the terms,
covenants or conditions of this Agreement, shall be construed as a subsequent
waiver of any such terms, covenants, conditions, rights or privileges, and all
of such terms, covenants, conditions, rights or privileges shall continue and
remain in full force and effect as if no such forbearance or waiver had
occurred. Any provision of this Agreement may be waived by the party for whose
benefit it is made, but no waiver shall be effective unless it is in writing and
signed by an authorized representative or agent of the waiving party.
9. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed to be an original, and all of which when taken
together shall constitute but one instrument.
10. Severability. The invalidity of any provision of this Agreement or a
portion of a provision shall not affect the validity of any other provision of
this Agreement or the remaining portion of the applicable provision.
11. Applicable Law. This Agreement shall be governed and controlled as to
validity, enforcement, interpretation, construction, effect and in all other
respects by the internal laws of the State of Tennessee.
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* * * * *
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SKY GAMES INTERNATIONAL LTD.
By:/s/ Xxxxxxx X. Xxxxx
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Its: President
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SKY GAMES INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxx
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Its: President
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Exhibit A
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Recipients of Redemption Consideration
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No. of shares of
Party Redemption Consideration
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Xxxxxxx Xxxxxxxxx 21,744
Xxxxx Xxxxxx 16,538
Xxxx Xxxxxxx 6,431
Xxxxxxx Xxxxx 6,125
X.X. Xxxx Xxxxx, Xx. 6,125
Xxxx and Xxxx XxXxxxx 3,063
Xxxxx Xxxxxxx 3,063
Xxxxxx Xxxxxxxx 2,450
Xxx Xxxxx 2,450
Xxxxxxx and Xxxxx Xxxxxxxxx 1,837
Xxx and Xxxxx Xxxxx 1,225
Xxxxxxx and Xxxxx Xxxx 1,225
Xxxxxxx Xxxxxxx 1,225
Xxxxxxxx Xxxxxx 1,225
Xxxx Xxxxxxxxxx 1,225
Baby X. Xxxxxxx 1,225
Xxxx X. Xxxxxxxx 857
Xxxxx Xxxx 612
Katie and Xxxxx Xxxxx 520
Xxxxxxxx X. Xxxxxxxxxx 483
Xxxxxx Xxx 367
Xxx Xxxxxxxx 306
Xxxxx Xxxxx 269
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Total 80,590
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