THIS SHARE PURCHASE AGREEMENT made the ______ day of March, 2001.
BETWEEN:
SYNCRO-DATA SYSTEMS, LTD., a British Columbia incorporated company,
Incorporation No. 0353219, with a registered and records office
located at 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Buyer")
AND:
XXXXXXXX.XXX, a Nevada incorporated company with a business office
located at 00 Xxxx 0xx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
(the "Seller")
WHEREAS:
A. The Seller is indebted to the Buyer for advances made by the Buyer to
Eduverse Dot Com Inc. ("Eduverse"), in the approximate amount of $50,000.00
USD.
B. Eduverse is indebted to the Seller for ongoing operating expenses of
approximately $2.4 million CDN Funds (the "Indebtedness").
C. The Seller has agreed to assign to the Buyer the Indebtedness as partial
consideration for the within transaction.
D. The Seller is the legal and beneficial owner of 1 one common share without
par value in the capital of Eduverse, such shares being all of the issued
and outstanding shares in the capital of the company. Eduverse is a British
Columbia company, incorporated under number 0567998, which has a business
office located at 00 Xxxx 0xx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx X0X 0X0. The total issued shares of Eduverse consist of the 1 one
common share owned by the Seller.
E. The Seller has agreed to sell to the Buyer and the Buyer has agreed to buy
from the Seller of all of the Seller's respective legal and beneficial
interest in the shares in the capital of Eduverse on the terms and
conditions as hereinafter set forth.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the promises and
mutual agreements and covenants herein contained (the receipt and adequacy of
such considerations hereby mutually admitted by each party), the parties hereby
covenant and agree as follows:
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
--------------------------------------------------
The Seller represents and warrants to the Buyer as representations and
warranties which are true and correct as of the date hereof that:
1.1 The Seller is a company incorporated under the laws of the State of Nevada,
is a reporting company, is valid and subsisting, is in good standing, and
has the necessary powers to carry on the business carried on by it.
1.2 The Seller wholly owns Eduverse, a private subsidiary of the Seller.
Eduverse is not a reporting company, is valid and subsisting, is in good
standing and has the necessary powers to carry on the business carried on
by it.
1.3 Eduverse has only issued one 1 share and that share is validly issued and
outstanding as fully paid and non-assessable. This share represents all of
the issued and outstanding shares in Eduverse. It is contemplated that upon
completion of this transaction, the Buyer will be the sole shareholder of
all Eduverse stock issued.
1.4 The Seller and Eduverse carry on business in Canada, the United States, and
internationally and hold all permits, licenses and consent issued by any
Federal, Provincial, State, Regional or Municipal Government or Agency
thereof which are necessary or desirable in connection with the operations
of the Seller and Eduverse and the ownership of their respective assets.
1.5 The Seller has due and sufficient right and authority to enter into this
Agreement on the terms and conditions set out herein and to transfer legal
and beneficial title and ownership of the shares to the Buyer.
1.6 No person, firm or corporation has any agreement or right capable of
becoming an agreement for the purchase, subscription or issuance of any of
the unissued shares in the capital of Eduverse.
1.7 The Seller covenants that Eduverse will not create any options, warrants or
rights for any person to subscribe for any unissued shares in the capital
stock of Eduverse.
1.8 The Directors and Officers of the Seller as at the date of this agreement
are as follows:
Name Position
---- --------
Xxxxx Xxxxxx President, CEO, Board Chairman, Director
Xxxx Xxxxxx Director
1.9 The Directors and Officers of Eduverse are as follows:
Name Position
---- --------
Xxxx Xxxxxxx President, Secretary, Director
1.10 The unaudited consolidated financial statements of the Seller and Eduverse
as at December 31, 2000, which are attached hereto as Schedule "A" are true
and correct in every material respect and present fairly the consolidated
financial position of the Seller as of December 31, 2000 and the results of
its operations for the period then ended. The statements have been prepared
by management in accordance with generally accepted accounting principles
and there have been no material adverse changes in the financial position
or condition of the Seller or its wholly owned subsidiary, Eduverse, or
loss materially affecting the business or assets of the Seller or Eduverse.
1.11 There are no liabilities, contingent or otherwise, of the Seller or
Eduverse other than those set out in Schedule "A" and except for normal
accounts payable not exceeding a total of $1,000.00. The Seller or Eduverse
has not guaranteed or agreed to guarantee, any debt, liability or other
obligations of any person, firm or organization.
1.12 The Seller and Eduverse are not indebted to the Buyer or any affiliate, or
to any director or officer of the Seller or Eduverse other than as set out
in Schedule "A" hereto.
1.13 No dividends or other distribution on any shares in the capital of the
Seller or Eduverse have been made, declared or authorized.
1.14 No payments of any kind have been made or authorized since December 31,
2000 to or on behalf of the Buyer or to or on behalf of officers,
directors, and shareholders of the Seller or Eduverse except in the normal
course of operations to regular employees or to employees under management
agreements with the Seller.
1.15 The Memorandum and Articles of the Seller have not been altered since
incorporation of the Seller.
1.16 The Memorandum and Articles of Eduverse have not been altered since
incorporation of Eduverse.
1.17 All contracts, accounts receivable, accounts payable, Internet domain
names, and other material operational documentation relating to Eduverse
that are in the name of the Seller shall be assigned or transferred to
Eduverse pursuant to Schedules "D" and "E" attached.
1.18 Eduverse does not have any contracts, agreements, pension plans, profit
sharing plans, bonus plans, undertakings, or arrangements whether oral,
written, or implied with employees, lessees, licensees, managers,
accountants, suppliers, agents, distributors, officers, directors, or
lawyers.
1.19 As at the date of this agreement the Seller is aware of no actions, suits,
judgments, investigations or proceedings outstanding or pending or to the
knowledge of the Seller or Eduverse threatened against or affected by any
federal, provincial, state, municipal or other governmental department,
commission, board, bureau or agency or any other entity.
1.20 The Seller is a resident of Nevada for matters relating to jurisdiction of
taxation.
1.21 As at the date of this agreement the Seller and Eduverse are not in breach
of any laws, ordinances, statutes, regulations, by-laws, orders or decrees
to which they are subject or which apply to them.
1.22 As at the date of closing, neither the Seller nor any of its officers,
directors or shareholders is now indebted or under obligation to the Seller
on any account whatsoever except as set out in Schedule "A" hereto.
1.23 All material transactions of the Seller and Eduverse have been promptly and
properly recorded or filed in or with its respective books and records. The
minute books of the Seller and Eduverse contain all records of the meetings
and proceedings of shareholders and directors thereof.
1.24 The performance of this agreement will not be in violation of the
Memorandum or Articles of the Seller or of the Memorandum or Articles of
Eduverse or any agreement to which the Seller or Eduverse are a party and
will not give any person or company any right to terminate or cancel any
agreement or any right enjoyed by the Seller or Eduverse and will not
result in the creation or imposition of any lien, encumbrance or
restriction of any nature whatsoever in favor of a third party upon or
against the assets of the Seller or Eduverse.
1.25 The Seller does not own, directly of indirectly, any shares or interests in
any other company or firm other than the following:
(a) M & M Marketing Systems Inc., a Nevada private Corporation wholly
owned by the Seller.
1.26 The business of the Seller now and until the Closing Date will be conducted
and maintained in the manner which is normal to that business.
1.27 The representations, warranties, covenants and agreements of the Seller in
this agreement or any certificates or documents delivered pursuant to the
provisions hereof or in connection with the transaction contemplated hereby
shall be true at and as of the time of closing as though such
representations and warranties were made at and as of such time.
Notwithstanding any investigations or enquiries made by the Buyer prior to
the closing or the waiver of any condition by the Buyer, the
representations, warranties, covenants and agreements of the Seller shall
survive the Closing Date and notwithstanding the closing of the purchase
and sale herein provided for, shall continue in full force and effect.
1.28 For the purposes of this part, Intellectual Property Rights means any and
all proprietary rights used or owned by Eduverse, whether registered or not
provided under (i) patent law, (ii) copyright law, (iii) trade xxxx and
trade name law, (iv) design patent, distinguishing guises or industrial
design law, (v) semi-conductor chip or mask work law, or (vii) any other
statutory provision or common law principle which may provide a right in
either (a) ideas, formulae, algorithms, concepts, inventions or know how
generally, including trade secret law, or (b) the expression or use of such
ideas, formulae, algorithms, concepts, inventions or know-how; or goodwill
and (c) any and all applications, registrations, licenses, sub-licenses,
franchises, agreements or any other evidence of a right in any of the
foregoing.
1.29 To the best of the Seller's knowledge, the Intellectual Property Rights are
valid and enforceable.
1.30 There are no legal actions pending by any third party, including any
governmental agency, relating to the Intellectual Property Rights or other
property of Eduverse. The Seller is not aware of any adverse claim that has
ever been, or is currently being, threatened against the Intellectual
Property Rights or other property of Eduverse. The Seller is not aware of
any claim by any Person that any of the Intellectual Property Rights are or
may be invalid or unenforceable or non-distinctive of the Seller.
1.31 Eduverse is the owner of each of the Intellectual Property Rights and other
property of Eduverse, and has full and exclusive right, title, and interest
in each of the Intellectual Property Rights and other property of Eduverse.
There are no registered or pending Intellectual Property Rights.
1.32 Eduverse has kept in strict confidence all confidential information
pertaining to the Intellectual Property Rights, it has obtained written
agreements from persons that it has disclosed the Intellectual Property
Rights to obligating them to keep the information secret, and it has taken
reasonable steps to keep all confidential information from losing its
confidentiality in such a way as to bar the right to obtain registered
rights in the Intellectual Property. The confidential information is not
generally known.
1.33 The software used in Eduverse's business was written by employees of
Eduverse in the course of their employment and is an original work. All
authors have waived their moral rights in any copyrightable Intellectual
Property Rights. No portion of the software uses copies or comprises the
work of any third party including, without limitation, the structure,
sequence or organization of any third party work and no royalty or other
consideration is due to any third party arising out of the creation,
copying or distribution of such software or the Intellectual Property
Rights in the software.
1.34 The Seller has not granted, transferred, licensed or assigned any right or
interest in either the Intellectual Property Rights or other property of
Eduverse to any Person which is or could be in any way inconsistent with
the rights acquired or to be acquired by the Buyer under this agreement.
1.35 The Seller has good and marketable title to, and is owner of all right,
title and interest in, each of other property of Eduverse and the
Intellectual Property Rights, free and clear of all encumbrances (including
any restrictions on the modification or disposition thereof) of any kind
whatsoever.
1.36 The Code and all printed material connected to the Software which have been
or will be provided by the Seller to the Buyer shall be complete and
accurate in all material respects and shall be adequate to enable the Buyer
to make full use of the Software upon being provided with the Source Code.
1.37 No authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required or
desirable for the assignment by the Seller of the Intellectual Property
Rights or other property of Eduverse.
1.38 The Seller is not aware of any third party uses of the trademarks and has
not used any other trademarks, common law or otherwise, with respect to the
Intellectual Property Rights other than as described in Schedule "F".
1.39 If the Intellectual Property rights are based in any way on prior works or
inventions, the Seller has the legal right to use such prior works and
inventions and has disclosed such rights to the Buyer.
BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
-------------------------------------------------
The Buyer represents and warrants to the Seller as representations and
warranties which are true and correct as of the date hereof that:
2.1 The Buyer is a non-reporting company duly incorporated under the laws of
British Columbia, validly existing, and is in good standing to carry on
business in the Province of British Columbia.
2.2 There is no basis for and there are no actions, suits, judgments,
investigations or proceedings outstanding or pending or to the knowledge of
the Buyer threatened against or affecting the Buyer at law or in equity or
before or by any federal, provincial, state, municipal or other
governmental department, commission, board, bureau or agency.
2.3 The Buyer agrees to recognize outstanding accounts payable of Eduverse as
listed at February 12, 2001 and attached hereto as Schedule "C".
2.4 The Buyer agrees to recognize certain accounts payable of the Seller as
listed at February 12, 2001, and attached hereto as Schedule "B" to be
transferred to Eduverse, such payables to be recognized by the Buyer are
listed below:
o ASCD
x Xxxxxx Fiber Communications
o Dunn & Bradstreet
o International Market Access Inc.
o PAC Services
o XXXX.xxx
o WorldCoM
2.5 The representations, warranties, covenants and agreements by the Buyer in
this Agreement or any certificates or documents delivered pursuant to the
provisions hereof or in connection with the transaction contemplated hereby
shall be true at and as of the time of closing as though such
representations and warranties were made at and as of such time.
Notwithstanding any investigations or enquiries made by the Seller prior to
closing or the waiver of any condition by the Seller, the representations,
warranties, covenants and agreements of the Buyer shall survive the Closing
Date and notwithstanding the closing of the purchase and sale herein
provided for, shall continue in full force and effect.
PURCHASE AND SALE
-----------------
Pursuant to the terms of this Agreement, the Buyer agrees to buy from the Seller
on the terms set out herein, one share of Eduverse.
3.1 The Seller will assume the Ernst & Young account payable of Eduverse in the
amount of $74,652.60 Canadian.
3.2 The Buyer has paid the ongoing expenses of Eduverse to date in the
approximate amount of FIFTY THOUSAND DOLLARS ($50,000.00) the receipt of
which is hereby acknowledged by the Seller.
3.3 The Buyer shall recognize certain liabilities of Eduverse as part of the
share purchase including the liability of Lingo Media in the amount of
$62,000 (CDN), Revenue Canada in the amount of $95,000 (CDN), and the
accounts payable as per Schedule "C" herein totally $44,464.33 (CDN). The
Seller understands and recognizes that Eduverse shall receive accounts
receivable, contract revenue, outstanding cash in any bank account of at
the date of this Agreement estimated at $900 US funds, loss carryforwards,
and GST receivables.
CONDITIONS PRECEDENT TO THE PERFORMANCE BY
THE BUYER OF ITS OBLIGATIONS UNDER THIS AGREEMENT
-------------------------------------------------
4.1 The Buyer's obligations to carry out the terms of this Agreement and to
complete the purchase referred to in paragraph 3 hereof are subject to the
following conditions:
(a) That on the Closing Date the warranties and representations of the
Seller set forth in paragraph 1 shall be true in every particular as
if such warranties and representations had been made by the Seller on
the Closing Date;
(b) That all agreements to be performed by the Seller hereunder shall have
been fully performed and satisfied;
(c) Closing Documentation - the Buyer shall have received from the Seller
and, where applicable, Eduverse the following closing documentation:
(i) A share certificate representing the share issued in the name of
the respective seller duly endorsed for transfer to the Buyer;
(ii) A certified copy of resolutions of the directors of Eduverse,
authorizing the transfer of the share, the registration of the
share in the name of the Buyer and the issuance of share
certificate representing the share registered in the name of the
Buyer;
(iii) A share certificate registered in the name of the Buyer, signed
by the authorized signatory of the Seller representing the share;
(iv) A certified copy of the Register of Members of Eduverse showing
the Buyer as the registered owner of the shares;
(v) The corporate minute book and all other books of record of
Eduverse and the corporate seal for Eduverse.
4.2 The conditions set forth in paragraph 4.1 are for the exclusive benefit of
the Buyer and may be waived by the Buyer in whole or in part on or before
the Closing Date, but save as so waived, the completion of the purchase and
sale by the Buyer shall not prejudice or affect in any way the rights of
the Buyer in respect of the warranties and representations of the Seller
set forth in paragraph 1 which shall survive the closing and the payment of
the purchase price.
CONDITIONS PRECEDENT TO THE PERFORMANCE OF
THE SELLER OF ITS OBLIGATION UNDER THIS AGREEMENT
-------------------------------------------------
5.1 The Seller's obligation to carry out the terms of this Agreement and to
complete the purchase referred to in paragraph 3 hereof are subject to the
following conditions:
(a) That on the Closing Date the warranties and representations of the
Buyer set forth in paragraph 2 shall be true in every particular as if
such warranties and representations had been made by the Buyer on the
Closing Date;
(b) That all agreements to be performed by the Buyer hereunder shall have
been fully performed and satisfied.
5.2 The conditions set forth in paragraph 5.1, are for the exclusive benefit of
the Seller and may be waived by the Seller in whole or in part on or before
the Closing Date, but save as so waived, the completion of the purchase and
sale by the Seller shall not prejudice or affect in any way the rights of
the Seller in respect of the warranties and representations of the Buyer
set forth in paragraph 2 which shall survive the closing and the payment of
the purchase price.
GENERAL PROVISIONS
------------------
6.1 Time shall be of the essence in this Agreement.
6.2 This Agreement contains the whole agreement between the Seller and the
Buyer in respect of the purchase and sale contemplated hereby and there are
no warranties, representations, terms and conditions or collateral
agreements expressed, implied or statutory, other than as expressly set
forth in this Agreement.
6.3 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators,
successors and assigns.
6.4 Any notice to be given under this Agreement shall be duly and properly
given if made in writing and mailed by prepaid registered post in the
United States or Canada and addressed to the addresses as set out on page 1
of this Agreement and any such notice shall be deemed to be received seven
days after the day of mailing except in the case of postal disruption in
which case it will be deemed to be received when delivered or sent via
facsimile, or at such other address as the Buyer or the Seller may, from
time to time, designate by notice to the other.
6.5 This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia and the parties hereto submit and
are attorn to the jurisdiction of the Court of the Province of British
Columbia.
6.6 All references to sums of money shall be deemed to refer to the legal
tender of the United States of America unless otherwise specified herein.
6.7 This Agreement may be executed in as many counterparts as may be necessary
or by facsimile and each such Agreement or facsimile so executed shall be
deemed to be an original and such counterpart together shall constitute one
and the same instrument.
6.8 If any one or more of the provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect in any jurisdiction, the
validity, legality and enforceability of such provision or provisions shall
not in any way be affected or impaired thereby in any other jurisdiction
and the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby,
unless in either case as a result of such determination this Agreement
would fail in its essential purpose.
CLOSING DATE
------------
7.1 The Closing Date is the closing of the purchase and sale contemplated by
this Agreement and will take place at the offices of Eduverse located at 00
Xxxx 0xx Xxxxxx, 0xx Xxxxx, in the City of Vancouver, British Columbia on
or before June 30, 2001 at the next Annual Shareholder's meeting of the
Seller where such approval of the majority of shareholders of the Seller is
required to authorize and complete the contemplated purchase and sale as
set out herein.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals and have
caused their corporate seals to be affixed in the presence of their duly
authorized officers the day and year first above written.
The Corporate Seal of XXXXXXXX.XXX )
was hereunto affixed in the presence of: )
)
) (C/S)
------------------------------- )
Authorized Signatory )
The Corporate Seal of SYNCRO-DATA )
SYSTEMS, LTD. was hereunto affixed )
in the presence of: )
)
) (C/S)
-------------------------------- )
Authorized Signatory )
