XXXX XXXXXXX
XXXX XXXXXXX
0000-000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx X.X.
V6B lN2
Tel: (000) 000-0000
Fax: (000) 000-0000
xxxx@xxxxxxxxxxxx.xxx
May 28, 1999
Carta Resources Ltd.
0000 Xxxxxxx Xxxxxx
Xxxx Xxxxxxxxx, X.X.
V7T 1G8
Attention: X. X. Xxxxxxxxxxxx, President
Dear Sirs:
Re: Quotes Canada Financial Network Ltd. ("QC"')
The purpose of this letter is to offer for sale to Carta Resources Ltd.
("Carta"), on the terms and conditions set out herein, all of the issued shares
of QC.
1. Xxxx Xxxxxxx and Xxxx Xxxxxxx (collectively the "Vendors") have
represented to Carta that:
(a) the Vendors, Xxxx Xxxxxxx and Xxxx Xxxxxxx each as to 250,000 shares,
are the registered and beneficial shareholders of 500,000 shares of QC (the
"Shares"), representing all of the issued shares of QC;
(b) the authorized capital of QC consists of 1,000,000 common shares without
par value, of which 500,000 are issued and outstanding;
(c) there are no options, share purchase warrants, agreements or other
instruments pursuant to which any person has a right to acquire shares of QC,
either from the Vendors or from the treasury of QC;
(d) the Shares are fully paid and non-assessable shares in capital of QC,
and are free and clear of all charges, liens and encumbrances;
(e) QC is a corporation duly incorporated in the province of British
Columbia, and is in good standing with the Registrar of Companies;
(f) QC is an emerging company engaged in the business of providing stock
market quotation and related services through the internet;
(g) to the best of their knowledge, there is no litigation involving QC, nor
is any litigation pending or threatened against QC;
(h) QC has all permits and licences necessary for it to conduct and continue
to conduct its business in the manner in which it has been conducted hitherto;
and
(i) on the closing of the transaction contemplated in this agreement, QC
will have liabilities of $ 1,000 or less.
2. Xxxxx has represented to each of the Vendors that:
(a) it has full corporate power and authority to enter into this agreement
and the entering into of this agreement does not conflict with any applicable
laws or with its charter documents nor does it conflict with, or result in a
breach of, or accelerate the performance required by any contract or other
commitment to which it is party or by which it is bound;
(b) it is a company in good standing under the laws of the province of
British Columbia;
(c) it is a reporting issuer in good standing under the Securities Act
(British Columbia);
(d) its common shares are listed and posted for trading on the Vancouver
Stock Exchange (the "VSE") and Carta is not in breach of its listing agreement
with the VSE;
(e) it is a reporting issuer only in the province of British Columbia;
(f) its authorized capital consists of 20,000,000 common shares without par
value of which 3,726,142 are issued and outstanding;
(g) there are no shares of Carta which are subject to issuance except a
total of 360,000 of its shares which are subject to issuance pursuant to
incentive stock options, and an additional 25,000 shares which are subject to
issuance pursuant to a property acquisition agreement;
(h) the directors of Carta are as follows:
X. X. Xxxxxxxxxxxx
Xxxxxx Xxxxxxx
H. Xxx Xxxx
(i) Carta in not an "inactive" company on the VSE, and Xxxxx does not intend
to seek such status, nor has it received any notice from the VSE that it will be
deemed to be inactive by the VSE.
3. The Vendors hereby offer to sell all of the Shares to Carta on the
following terms and conditions:
(a) the purchase price for the Shares shall be $240,000 payable as follows:
(i) $50,000 cash to be paid by certified cheque on the acceptance of this
offer by Xxxxx;
(ii) an additional $190,000 to be paid by the issuance of 1,000,000 shares
of Carta at the deemed price of $0.19 per share, such shares to be issued and
delivered within five business days following the date of issuance (the
"Effective Date") by the VSE of a notice accepting this agreement for filing;
(b) each of Xxxx Xxxxxxx and Xxxx Xxxxxxx shall, if they consent, be
appointed to the board of directors of Carta such that the board of directors of
Carta shall comprise five persons;
(c) each of Xxxx Xxxxxxx and Xxxx Xxxxxxx shall enter into an employment
contract with Carta for a minimum period of two years at the salary of not less
than $2,500 per month;
(d) incentive stock options shall be granted such that each of Xxxx Xxxxxxx
and Xxxx Xxxxxxx shall be granted from time to time an incentive stock option
entitling him to purchase not less than 4% (or such lower percentage as may be
accepted by the optionee) of the issued shares in the capital of Carta at the
minimum price permitted by the VSE for a period of five years;
(e) X.X. Xxxxxxxxxxxx and Xxxxxx Xxxxxxx (collectively the "Shareholders")
shall enter into a voting trust agreement with the Vendors such that the
Shareholders, for a period of three years following the closing of the purchase
and sale contemplated hereunder, shall vote their respective shares in the
capital of Carta in a manner which is consistent with the intent of this
agreement, and notwithstanding the generality of the foregoing, in a way as to
implement the provisions of sub-paragraphs 3(b), 3(c) and 3(d) hereof, and
(f) the Vendors shall purchase, by way of private placement from the
treasury of Carta, 160,000 units (each unit comprising one share and one share
purchase warrant with a two year term) at a price of $0.15 per unit, such
purchase to close concurrently with the sale and purchase of the Shares
contemplated hereunder.
4. The Vendors shall promptly provide Carta with all information and
documentation as is requested and required by the applicable securities
regulatory bodies. Carta, at its sole cost and expense, shall prepare any
valuation of QC that may be required by the securities regulatory bodies.
5. Except for the payment of $50,000 referred to in sub-paragraph 3(a)(i),
which payment is unconditional, this agreement is subject to it being accepted
for filing by the VSE and subject to Carta's review and acceptance, acting
reasonably, of QC's audited financial statements. Carta shall advise the
Vendors as to the acceptability of the said financial statements within two
business days of Carta's receipt of them Carta shall use its good faith best
efforts to obtain VSE acceptance of this agreement as quickly as possible;
provided that if the Effective Date has not occurred on or before July 31, 1999,
this agreement shall terminate at the election of the Vendors at any time
thereafter, and the Vendors shall be entitled to retain, as liquidated damages,
the sum of $50,000 paid pursuant to sub-paragraph 3 (a)(i) hereof
6. The shares to be issued to the Vendors under sub-paragraph 3(a)(ii)
hereof shall be free-trading and non-assessable shares in the capital of Carta,
subject to no pooling or escrow restrictions or hold periods other than those
required by law or the policies of any securities regulatory body having
jurisdiction.
7. All cash and share payments due to the Vendors hereunder shall be made to
Xxxx Xxxxxxx and Xxxx Xxxxxxx, each as to 50%, unless Xxxxx receives written
instructions to the contrary from the Vendors.
8. The Vendors agree that, until the Closing Date, QC will not, without the
prior written consent of Carta, which consent shall not be unreasonably withheld
or delayed
(a) purchase or sell any assets which are of material value;
(b) waive or surrender any material right in connection with its business;
(c) issue any shares;
(d) make any public announcement concerning the transactions contemplated by
this Agreement, other than as required by law or by an regulatory authority
having jurisdiction over QC; or
(e) declare or pay dividends or make any other distribution to shareholders.
9. Until the closing of the transaction contemplated hereunder, QC will
conduct its business only in the ordinary course, and neither QC nor the Vendors
will solicit, initiate, or encourage the submission of proposals or offers from
any other person, entity or group relating to, and will not participate in any
negotiations regarding, or (except an order to comply with any requirement of
law to furnish information to regulatory authorities) furnish to any other
person, entity or group any information with respect to, or otherwise cooperate
in any way with, or assist or participate in, facilitate or encourage, any
effort or attempt with respect to, the disposition of the business of QC or any
of its assets out to the ordinary course or acquisition of any outstanding
shares of QC or any shares in the capital of QC from treasury. The Vendors
agree that if they receive any such proposal or offer in respect to any of the
foregoing, they will immediately notify Carta in writing of all relevant details
relating to the proposal or offer. While this agreement is in effect, neither
the Vendors nor Carta may use or refer to this agreement or any aspect of its
negotiations with the other party, without the other parties prior written
consent, except as may otherwise be required by law.
If this offer is acceptable to Carta, kindly execute a copy of this letter
and return in to the Vendors on or before June 1, 1999, whereupon this shall
constitute a binding agreement between us, enforceable in accordance with its
terms. Forthwith upon the execution and delivery of this letter agreement, the
parties shall use their respective best efforts to enter into a comprehensive
agreement embodying the terms and conditions of this agreement Failure to return
such an executed copy within such time period shall result in the termination of
this offer.
Yours Truly
Xxxx Xxxxxxx
Xxxx Xxxxxxx
Xxxxxx to and accepted as of the 1st day of June, 1999,
CARTA RESOURCES LTD.
Per:
Authorized Signatory
