SHARE EXCHANGE AGREEMENT
BETWEEN
QUANTITATIVE METHODS CORPORATION
AND
ROADVISION TECHNOLOGIES INC.
AND
THE SHAREHOLDERS OF ROADVISION TECHNOLOGIES INC.
SHARE EXCHANGE AGREEMENT
TABLE OF CONTENTS
RECITALS 1
ARTICLE I INTERPRETATION
1.1 Definitions 2
1.2 Article Headings, Construction, etc. 7
1.3 Number, Gender, etc. 7
1.4 Currency 7
1.5 Date for Any Action 7
1.6 Entire Agreement and Modification 7
1.7 Schedules 8
1.8 Accounting Matters 8
1.9 Knowledge 8
ARTICLE II EXCHANGE OF SECURITIES AND SHARE CONSIDERATION
2.1 Share Exchange 8
2.2 Withholding 9
2.3 Reorganization - Section 368 9
2.4 Directors of QTTM at Closing 9
2.5 Capitalization of QTTM at Closing 9
ARTICLE III CLOSING
3.1 Closing Location 9
3.2 Closing Date 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF RTI SELLING SHAREHOLDERS
4.1 Generally 10
4.2 Investment Representations 11
4.3 Registration Rights 13
4.4 Purchase Entirely for Own Account 13
4.5 Investment Experience 14
4.6 Independent Nature of RTI Selling Shareholders' Obligations and Rights 14
4.7 No General Solicitation 14
ARTICLE V REPRESENTATIONS AND WARRANTIES OF RTI
5.1 Organization and Qualification 14
5.2 Subsidiaries 15
5.3 Organizational Documents 15
5.4 Authorization and Validity 15
5.5 No Violation 15
5.6 Binding Obligations 16
5.7 Capitalization and Related Matters 16
5.8 RTI Selling Shareholders 17
5.9 Compliance with Laws and Other Instruments 17
5.10 Certain Proceedings 17
5.11 Brokers or Finders 17
5.12 No Direct Selling Efforts or General Solicitation 17
5.13 No Integrated Offering 18
5.14 Absence of Undisclosed Liabilities 18
5.15 Absence of Certain Changes or Events 18
5.16 Material Assets 19
5.17 Material Contracts 19
5.18 Labor Matters 20
5.19 Tax Matters 20
5.20 Insurance Coverage 21
5.21 Litigation; Orders 22
5.22 Licenses, etc. 22
5.23 Interested Party Transactions 22
5.24 Governmental Inquiries 23
5.25 Financial Institutions 23
5.26 Intellectual Property 23
5.27 Title and Condition of Properties 23
5.28 Books and Records 23
5.29 Financial Statements 24
5.30 Stock Option Plans, Employee Benefits 24
5.31 Environmental and Safety Matters 25
5.32 Money Laundering Laws 25
5.33 Board Recommendation 25
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF QTTM
6.1 Organization and Qualification 25
6.2 Subsidiaries 26
6.3 Organizational Documents 26
6.4 Authorization and Validity 26
6.5 No Violation 26
6.6 Binding Obligations 27
6.7 Securities Laws 27
6.8 Capitalization and Related Matters 27
6.9 Compliance with Laws 28
6.10 Certain Proceedings 28
6.11 Brokers and Finders 29
6.12 No Direct Selling Efforts or General Solicitation 29
6.13 No Integrated Offering 29
6.14 Absence of Undisclosed Liabilities 29
6.15 Absence of Certain Changes or Events 29
6.16 Material Assets 31
6.17 Material Contracts 31
6.18 Labor Matters 31
6.19 Tax Matters 32
6.20 Insurance Coverage 33
6.21 Litigation; Orders 33
6.22 Licenses 33
6.23 Interested Party Transactions 34
6.24 Governmental Inquiries 34
6.25 Financial Institutions 34
6.26 Intellectual Property 34
6.27 Title and Conditions of Properties 34
6.28 Books and Records 34
6.29 Financial Statements 35
6.30 SEC Documents 35
6.31 Stock Option Plans, Employee Benefits 36
6.32 Environmental and Safety Matters 36
6.33 Money Laundering Laws 36
6.34 Board Recommendation 36
ARTICLE VII COVENANTS OF QTTM
7.1 Rule 144 Reporting 37
7.2 Private Placement 37
7.3 SEC Documents 37
7.4 No Assurances and Warranties 37
ARTICLE VIII CONDITIONS PRECEDENT OF RTI
8.1 Accuracy of Representations 38
8.2 Performance by QTTM 38
8.3 No Force Majeure Event 38
8.4 Consents 38
8.5 Documents 39
8.6 No Proceedings 39
8.7 Financial Matters 40
ARTICLE IX CONDITIONS PRECEDENT OF QTTM
9.1 Accuracy of Representations 40
9.2 Performance by RTI and RTI Selling Shareholders 40
9.3 No Force Majeure Event 40
9.4 Consents 41
9.5 Documents 41
9.6 No Proceedings 42
ARTICLE X SURVIVAL, INDEMNIFICATION AND REMEDIES
10.1 Survival 42
10.2 Indemnification by RTI and RTI Selling Shareholders 42
10.3 Indemnification by QTTM 42
10.4 Notice of Indemnification Proceeding 43
ARTICLE XI GENERAL PROVISIONS
11.1 Arbitration, Attornment 43
11.2 Assignments, Inurement, and Third Party Rights 43
11.3 Confidentiality 44
11.4 Counterparts 44
11.5 Expenses 44
11.6 Further Action 45
11.7 Further Assurances 45
11.8 Governing Laws; Jurisdiction 45
11.9 Language 45
11.10 No Personal Liability 45
11.11 Notices to Parties 46
11.12 Public Announcements 46
11.13 Severability 47
11.14 Waiver 47
COUNTERPART SIGNATURE PAGE - QTTM 48
COUNTERPART SIGNATURE PAGE - RTI 49
EXHIBITS 50
SCHEDULE "A" - RTI SHARES AND QTTM SHARES TO BE EXCHANGED 58
SCHEDULE "B" - SUBSCRIPTION AGREEMENT FOR "ACCREDITED INVESTOR"
OR "NON - U.S. PERSON" 62
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SHARE EXCHANGE AGREEMENT
MEMORANDUM OF AGREEMENT is made as of the 31st day of August, 2005,
BETWEEN:
QUANTITATIVE METHODS CORPORATION, a corporation existing under the laws of
the State of Nevada (hereinafter referred to as "QTTM")
AND:
ROADVISION TECHNOLOGIES INC., a corporation existing under the laws of
Canada (hereinafter referred to as "RTI")
AND:
The Shareholders of Roadvision Technologies Inc., hereinafter referred to
as (collectively, the "RTI Selling Shareholders", and individually a ("RTI
Selling Shareholder").
RECITALS
WHEREAS, Quantitative Methods Corporation, "(QTTM"), is a public company,
having an address at 00 xx Xxxxxxx Xxxxxxxx, Xx-Xxxxxxx, Xxxxxx, Xxxxxx X0X 0X0.
QTTM is a reporting company under Section 15(d) of the Securities Exchange Act
of 1934, as amended, and whose common stock is traded on the OTC Bulletin Board
("OTCBB"), under the symbol "QTTM"; and
WHEREAS, Roadvision Technologies Inc., ("RTI"), is a private Canadian
company, having an office address at 0000 Xxxxx-Xxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0. RTI is a company that develops and provides
micromanagement hardware and software solutions in vehicle fleet operation
management; and
WHEREAS, The Shareholders of Roadvision Technologies Inc. ("RTI Selling
Shareholders"), as set forth on Schedule "A" affixed hereto, are cumulatively
the beneficial owners of all of the issued and outstanding shares (100%) of
Roadvision Technologies Inc; and
WHEREAS, QTTM desires to acquire, from RTI Selling Shareholders, 100% of
the issued and outstanding shares of common stock of RTI; in exchange for
7,250,000 authorized but unissued shares of the $ 0.001 par value common stock
of QTTM, pursuant to a plan of reorganization within the meaning of IR CODE
(1986), Section 368 (a)(1)(B), as amended; and
WHEREAS, RTI Selling Shareholders desire to exchange 100% of the issued and
outstanding shares of the common stock of RTI, currently owned by RTI Selling
Shareholders in exchange for said 7,250,000 shares of QTTM's Common Stock to be
issued on the Closing Date. Said QTTM Shares shall constitute 42% of the issued
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and outstanding shares of QTTM's Common Stock immediately after the closing of
the transactions contemplated herein.
NOW, THEREFORE, THIS AGREEMENT WITNESSES that in consideration of the
respective covenants and agreements provided in this Agreement and for good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), and to consummate the foregoing plan of reorganization, the
parties hereby adopt said plan of organization and agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions.
In this Agreement, unless the subject matter or context otherwise requires, the
following terms shall have the respective meanings set forth below and
grammatical variations of such terms shall have corresponding meanings:
"Accredited Investor" has the meaning set forth in as defined in Rule 501
of Regulation D, as amended, under the Securities Act and set forth on
Schedule B.
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by, or is under common
control with the indicated Person.
"Agreement" means this Share Exchange Agreement, including all Exhibits
and Schedules hereto, among QTTM, RTI, and RTI Selling Shareholders, as
this Agreement may be from time to time amended, modified and/or
supplemented.
"Business Day" means any day on which commercial banks are generally open
for business in Nevada and Quebec, Canada, other than Saturday, a Sunday
or a day observed as a holiday in Nevada, or in Quebec, Canada.
"CAD Dollars or CAD $" means the currency of Canada.
"CAD GAAP" means, with respect to any Person, Canadian generally accepted
accounting principles applied on a consistent basis with such Person's
past practices.
"Closing" means the consummation of the Agreement and each of the
Transaction Documents on or before August 31st, 2005.
"Closing Date" means on or before August 31st, 2005 or any other date
that the parties hereto agree to in writing.
"Commission" means the United States Securities and Exchange Commission
or any other federal agency then administering the Securities Act.
"Environmental Law" means all applicable Laws or other requirement
relating to the protection of the environment, natural resources, and
public or employee health and safety.
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"Environmental Permit" means all licenses, permits, authorizations,
certificates, registrations, approvals, and consents necessary under
Environmental Laws or Orders.
"Exchange" has the meaning set forth in Article 2.1.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same will be in effect at the
time.
"Exhibit" means the several exhibits referred to and identified in
herein, setting forth certain disclosures, exceptions and other
information, data and documents referred to at various places throughout
this Agreement.
"Governmental Entity" means any
(a) any domestic or foreign, federal, national, state, provincial,
regional, municipal, international, multinational, local or other
government, government or public department, central bank, court,
tribunal, arbitral body, commission, board, bureau or agency,
domestic or foreign,
(b) any subdivision, agent, commission, board, or authority of any of
the foregoing, or
(c) any quasi-governmental or private body exercising any regulatory,
expropriation or taxing authority under of for the account of any
of the foregoing.
"Indebtedness" means any obligation, contingent or otherwise. Any
obligation secured by a Lien on, or payable out of the proceeds of, or
production from, property of the relevant party will be deemed to be
Indebtedness.
"Intellectual Property" means all industrial and intellectual property,
including, without limitation, all U.S. and non-U.S. patents, patent
applications, patent rights, trademarks, trademark applications, common
law trademarks, Internet domain names, trade names, service marks,
service xxxx applications, common law service marks, and the goodwill
associated therewith, copyrights, in both published and unpublished
works, whether registered or unregistered, copyright applications,
franchises, licenses, know-how, trade secrets, technical data, designs,
customer lists, confidential and proprietary information, processes and
formulae, all computer software programs or applications, layouts,
inventions, development tools and all documentation and media
constituting, describing or relating to the above, including manuals,
memoranda, and records, whether such intellectual property has been
created, applied for or obtained anywhere throughout the world.
"IR CODE" means the Internal Revenue Code of 1986, as amended.
"IT ACT" means the Income Tax Act (Canada).
"Law" means, with respect to any Person, any domestic or foreign,
federal, national, state, provincial, regional, municipal, international,
multinational, local or other law (including common law), constitution,
statute, code, ordinance, rule, regulation or treaty applicable to such
Person.
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"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind, including, without limitation, any conditional
sale or other title retention agreement, any lease in the nature thereof
and the filing of or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction and including any lien or
charge arising by Laws.
"Licensed Intellectual Property means any license and other contracts
granting a license or other right to use Intellectual Property.
"Material Contract" means, when used in connection with QTTM or RTI, any
and all agreements, contracts, arrangements, licenses, franchise, lease
transaction, commitments or other right or obligation, of QTTM or RTI.
"Material Adverse Change" means, when used in connection with QTTM or RTI,
any change, event or occurrence that is, or would reasonably be expected to
be, material and adverse to the financial condition, business, assets
(including intangible assets) or results of operations of such party and
its subsidiaries taken as a whole other than any change, event or
occurrence relating to the Canadian or United States' economy or securities
markets in general or related to the announcement of this Agreement and the
transactions contemplated herein.
"Material Adverse Effect" means, when used with respect to QTTM or RTI,
as the case may be, any change, effect or circumstance which,
individually or in the aggregate, would reasonably be expected to
(a) have a material adverse effect on the business, assets, financial
condition or results of operations of QTTM or the RTI, as the case
may be, in each case taken as a whole or
(b) materially impair the ability of QTTM or the RTI, as the case may
be, to perform their obligations under this Agreement, excluding
any change, effect or circumstance resulting from
(i) the announcement, pendency or consummation of the
transactions contemplated by this Agreement,
(ii) changes in the United States securities markets generally, or
(iii)changes in general economic, currency exchange rate,
political or regulatory conditions in industries in
which QTTM or RTI, as the case may be, operate;
"Order" means any award, decision, decree, injunction, judgment, order,
ruling, subpoena, writ, judgment, determination, award or verdict
entered, issued, made, or rendered by any Governmental Entity.
"Organizational Documents" means
(a) the articles or certificate of incorporation and the by-laws or
code of regulations of a corporation;
(b) the partnership agreement and any statement of partnership of a
general partnership;
(c) the limited partnership agreement and the certificate of limited
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partnership of a limited partnership;
(d) the articles or certificate of formation and operating agreement
of a limited liability company;
(e) other document performing a similar function to the documents
specified in clauses; a), b), c) and d) adopted or filed in
connection with the creation, formation or organization of a
Person; and
(f) any and all amendments to any of the foregoing.
"Permitted Lien" means
(a) Liens for Taxes not yet payable or in respect of which the
validity thereof is being contested in good faith by appropriate
proceedings and for the payment of which the relevant party has
made adequate reserves;
(b) Liens in respect of pledges or deposits under workmen's
compensation laws or similar legislation, carriers, warehousemen,
mechanics, laborers and materialmen and similar Liens, if the
obligations secured by such Liens are not then delinquent or are
being contested in good faith by appropriate proceedings conducted
and for the payment of which the relevant party has made adequate
reserves;
(c) statutory Liens incidental to the conduct of the business of the
relevant party which were not incurred in connection with the
borrowing of money or the obtaining of advances or credits and
that do not in the aggregate materially detract from the value of
its property or materially impair the use thereof in the operation
of its business; and
(d) Liens that would not have a Material Adverse Effect.
"Person" means any individual, firm, company, partnership, joint venture,
venture capital fund, limited liability company, unlimited liability
company, association, trust, trustee, executor, administrator, legal
personal representative, estate, group, body corporate, corporation,
unincorporated association or organization, Governmental Entity,
syndicate or other entity, whether or not having legal status.
"Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal,
administrative or investigative) commenced, brought, conducted, or heard
by or before, or otherwise involving, any Governmental Entity.
"QTTM Balance Sheet" means QTTM's audited balance sheet as at December
31, 2004.
"QTTM Board" means the Board of Directors of QTTM.
"QTTM Common Stock" means the shares of common stock in the capital of
QTTM, par value US $0.001 per share.
"QTTM Shares" means the aggregate number of QTTM Common Stock being
issued to RTI Selling Shareholders at the Closing Date.
"Regulation S" means Regulation S under the Securities Act, as the same
5
may be amended from time to time, or any successor statute.
"RTI Balance Sheet" means RTI's unaudited balance sheet as at March 31st,
2005.
"RTI Board" means the Board of Directors of RTI.
"RTI Shares" means 7,250,000 issued and outstanding Class A common shares
in the capital of RTI.
"Schedule" means the several schedules referred to and identified in
herein, setting forth certain disclosures, exceptions and other
information, data and documents referred to at various places throughout
this Agreement.
"Section 4(2)" means Section 4(2) under the Securities Act, as the same
may be amended from time to time, or any successor statute.
"Securities Act" means the United States Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same will be in effect at the time.
"Share Exchange" means the transfer, by the RTI Selling Shareholders of
the RTI Shares to QTTM in exchange for issuance, by QTTM, of the QTTM
Shares directly to RTI Selling Shareholders.
"Share Exchange Agreement" means the Agreement made as of the 31st of
August 2005 among QTTM, RTI, RTI Selling Shareholders, as amended,
supplemented and/or restated in accordance therewith prior to the Closing
Date.
"Subscription Agreement" means the Subscription Agreement, set forth in
Schedule B, among RTI Selling Shareholders and QTTM.
"Tax" and "Taxes" means, with respect to any entity, all foreign,
federal, state or local taxes, charges, fees, levies, imposts, duties and
other assessments, as applicable, including, but not limited to all
income taxes (including any tax on or based upon net income, gross
income, income as specially defined, earnings, profits or selected items
of income, earnings or profits) and all capital taxes, gross receipts
taxes, environmental taxes, sales taxes, use taxes, ad valorem taxes,
value-added taxes, transfer taxes, commercial rent taxes, registration
taxes, title taxes, paid-up capital taxes, intangibles taxes, franchise
taxes, license taxes, withholding taxes, recording taxes, personal
property taxes, payroll taxes, employment taxes, Canada or Quebec Pension
Plan premiums, excise, severance, social security premiums, workers'
compensation premiums, unemployment insurance or compensation premiums,
stamp taxes, occupation taxes, premium taxes, real property taxes,
windfall profits taxes, alternative or add-on minimum taxes, goods and
services tax, Quebec sales tax, customs duties or other taxes, fees,
imports, assessments or charges of any kind whatsoever, together with any
interest and any penalties or additional amounts imposed by any taxing
authority (domestic or foreign) on such entity, and any interest,
penalties, additional taxes and additions to tax imposed with respect to
the foregoing.
"Tax Group" means any federal, state, local or foreign consolidated,
affiliated, combined, unitary or other similar group of which QTTM is now
or was formerly a member.
"Tax Return" means any return, declaration, report, claim for refund or
credit, information return, statement or other similar document filed
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with any Governmental Entity with respect to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Transaction Documents" means, collectively, all agreements, instruments
and other documents to be executed and delivered in connection with the
transactions contemplated by this Agreement.
"U.S." means the United States of America.
"U.S. Dollars or U.S. $" means the currency of the United States of
America.
"US GAAP" means, with respect to any Person, United States generally
accepted accounting principles applied on a consistent basis with such
Person's past practices.
"U.S. Person" has the meaning set forth in Regulation S under the
Securities Act and set forth on Schedule C hereto.
1.2 Article Headings, Construction, etc.
The division of this Agreement into Articles, sections and other portions and
the insertion of paragraph headings are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement. Unless
otherwise indicated, all references to an "Article" or "section" followed by a
number and/or letter refer to the corresponding Article or Section of this
Agreement. Unless otherwise indicated, the terms "this Agreement", "hereof",
"herein", and "hereunder" and similar expressions refer to this Agreement and
not to any particular Article, section, or other portion hereof and include any
agreement or instrument supplementary or ancillary hereto.
1.3 Number, Gender, etc.
All words used in this Agreement shall be construed to be of such gender or
number as the circumstances require. Unless the context otherwise requires,
words importing the singular number include the plural and vice versa and words
importing any gender shall include all genders.
1.4 Currency.
Unless otherwise specifically indicated, all sums of money referred to in this
Agreement are expressed in lawful money of Canada.
1.5 Date for Any Action.
In the event that any date on which any action is required to be taken hereunder
by any of the parties hereto is not a Business Day, such action shall be
required to be taken on the next succeeding day which is a Business Day.
1.6 Entire Agreement and Modification.
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This Agreement and each and every Transaction Document referred to herein
constitutes the complete and exclusive statement of the terms of the Share
Exchange Agreement and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, between the parties. This
Agreement may not be amended except by a written agreement executed by the party
against whom the enforcement of such amendment is sought.
1.7 Schedules.
The following Schedules are annexed to this Agreement and are hereby
incorporated by reference into this Agreement and form an integral part hereof:
SCHEDULE "A" - RTI SHARES AND QTTM SHARES TO BE EXCHANGED
SCHEDULE "B" - SUBSCRIPTION AGREEMENT FOR "ACCREDITED INVESTOR" OR "NON-U.S.
PERSON"
1.8 Accounting Matters.
Unless otherwise stated, all accounting terms used in this Agreement in respect
of RTI shall have the meanings attributable thereto under CAD GAAP and all
determinations of an accounting nature required to be made in respect of RTI
shall be made in a manner consistent with CAD GAAP and past practice.
Unless otherwise stated, all accounting terms used in this Agreement in respect
of QTTM shall have the meanings attributable thereto under US GAAP and all
determinations of an accounting nature required to be made in respect of QTTM
shall be made in a manner consistent with US GAAP and past practice.
1.9 Knowledge.
In this Agreement, each reference herein to the knowledge of a party means,
unless otherwise indicated, the actual knowledge of such party after due inquiry
from an officer responsible for the matter being represented.
ARTICLE II
EXCHANGE OF SECURITIES AND SHARE CONSIDERATION
2.1 Share Exchange.
2.1.1 Issuance of QTTM Shares. On the Closing Date, QTTM agrees to issue
to RTI Selling Shareholders the respective amounts set forth in
Schedule "A" and in consideration therefor, subject to Article 2.2,
of fully paid and nonassessable unregistered shares of the QTTM
Common Stock, the whole in accordance with the terms and conditions
of this Agreement.
2.1.2 Transfer of RTI Shares. On the Closing Date, each RTI Selling
Shareholder shall deliver to QTTM all of the issued and
outstanding Class A common shares (100%) of RTI, in exchange and
concurrent with the issuance of QTTM's Common Stock, as described
above, the whole in accordance with the terms and conditions of
this Agreement.
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2.2 Withholding.
QTTM shall be entitled to deduct and withhold from QTTM Shares otherwise payable
pursuant to this Agreement to any RTI Selling Shareholder such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the IR CODE or any provision of state, local, provincial or foreign tax Laws. To
the extent that amounts are so withheld, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to RTI Selling
Shareholder in respect of which such deduction and withholding was made.
2.3 Reorganization - Section 368.
For U.S. federal income tax purposes, the Exchange is intended to constitute a
"reorganization" within the meaning of Section 368(a)(1)(B), as amended, of the
IR CODE. The parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations. Notwithstanding the foregoing or anything
else to the contrary contained in this Agreement, the parties acknowledge and
agree that no party is making any representation or warranty as to the
qualification of the Exchange as a reorganization under Section 368 of the IR
CODE or as to the effect, if any, that any transaction consummated prior to the
Closing Date has or may have on any such reorganization status. The parties
acknowledge and agree that each
(a) has had the opportunity to obtain independent legal and tax advice
with respect to the transaction contemplated by this Agreement,
and
(b) is responsible for paying its own Tax, including without
limitation, any adverse Tax consequences that may result if the
transaction contemplated by this Agreement is not determined to
qualify as a reorganization under Section 368 of the IR CODE.
2.4 Directors of QTTM at Closing.
On or prior to the Closing Date, and effective on the Closing Date, the current
directors of QTTM shall appoint, Xxxxxxxxx Xxxxxxxxx and Xxxxxx Xxx, as
additional members to the QTTM Board. All current and newly appointed members
shall remain on the QTTM Board until successors are duly elected or appointed
and qualified in accordance with applicable Law.
2.5 Capitalization of QTTM at Closing.
On the Closing Date, there will be 17,550,000 issued and outstanding shares of
QTTM Common Stock.
ARTICLE III
CLOSING
3.1 Closing Location.
The Closing of the Share Exchange Agreement and each of the Transaction
Documents shall take place at the offices of RTI or at such other location as
the parties mutually agreed upon.
3.2 Closing Date.
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The Closing of this Agreement and all deliverables hereunder shall occur upon
execution of this Agreement on or before the 31st day of August 2005 or at such
time as all of the closing conditions set forth in Articles 8 and 9 have been
satisfied or waived (the "Closing Date").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF RTI SELLING SHAREHOLDERS
4.1 Generally.
Each RTI Selling Shareholder severally, and not jointly, hereby represents and
warrants in favor of QTTM as follows and acknowledges that QTTM is relying upon
such representations and warranties in connection with the matters contemplated
by this Agreement:
4.1.1 Authority. Such RTI Selling Shareholder has the right, power,
authority and capacity to execute and deliver this Agreement and
each of the Transaction Documents to which such RTI Selling
Shareholder is a party, to consummate the transactions
contemplated by this Agreement and each of the Transaction
Documents to which such RTI Selling Shareholder is a party, and to
perform such RTI Selling Shareholder's obligations under this
Agreement and each of the Transaction Documents to which such RTI
Selling Shareholder is a party. This Agreement has been, and each
of the Transaction Documents to which such RTI Selling Shareholder
is a party shall be, duly and validly authorized and approved,
executed and delivered by such RTI Selling Shareholder. Assuming
this Agreement and each of the Transaction Documents have been
duly and validly authorized, executed and delivered by the parties
thereto other than such RTI Selling Shareholder, this Agreement
is, and each of the Transaction Documents to which such RTI
Selling Shareholder is a party have been, duly authorized,
executed and delivered by such RTI Selling Shareholder and
constitutes the legal, valid and binding obligation of such RTI
Selling Shareholder, enforceable against such RTI Selling
Shareholder in accordance with their respective terms, except as
such enforcement is limited by general equitable principles, or by
bankruptcy, insolvency and other similar Laws affecting the
enforcement of creditors' rights generally.
4.1.2 No Conflict. Neither the execution or delivery by such RTI Selling
Shareholder of this Agreement or any Transaction Document to which
such RTI Selling Shareholder is a party, nor the consummation or
performance by such RTI Selling Shareholder of the transactions
contemplated hereby or thereby will, directly or indirectly,
(a) contravene, conflict with, or result in a violation of any
provision of the Organization Documents of such RTI Selling
Shareholder (if such RTI Selling Shareholder is not a
natural Person);
(b) contravene, conflict with, constitute a default (or an event
or condition which, with notice or lapse of time or both,
would constitute a default) under, or result in the
termination or acceleration of, any agreement or instrument
to which such RTI Selling Shareholder is a party or by which
the properties or assets of such RTI Selling Shareholder are
bound; or
(c) contravene, conflict with, or result in a violation of, any
Law or Order to which such RTI Selling Shareholder, or any
of the properties or assets of such RTI Selling Shareholder,
may be subject.
4.1.3 Ownership of RTI Shares. Such RTI Selling Shareholder owns, of
record and beneficially, and has good, valid and indefeasible
10
title to and the right to transfer to QTTM pursuant to this
Agreement, such RTI Selling Shareholder's Shares free and clear of
any and all Liens. There are no options, rights, voting trusts,
stockholder agreements or any other contracts or understandings to
which such RTI Selling Shareholder is a party or by which such RTI
Selling Shareholder or such RTI Selling Shareholder's Shares are
bound with respect to the issuance, sale, transfer, voting or
registration of such RTI Selling Shareholder's Shares. At the
Closing Date, QTTM will acquire good, valid and marketable title
to such RTI Selling Shareholder's Shares free and clear of any and
all Liens.
4.1.4 Litigation. There is no pending Proceeding against such RTI
Selling Shareholder that challenges, or may have the effect of
preventing, delaying or making illegal, or otherwise interfering
with, any of the transactions contemplated by this Agreement and,
to the knowledge of such RTI Selling Shareholder, no such
Proceeding has been threatened, and no event or circumstance
exists that is reasonably likely to give rise to or serve as a
basis for the commencement of any such Proceeding.
4.1.5 No Brokers or Finders. No Person has, or as a result of the
transactions contemplated herein will have, any right or valid
claim against such RTI Selling Shareholder for any commission, fee
or other compensation as a finder or broker, or in any similar
capacity, and such RTI Selling Shareholder will indemnify and hold
QTTM and RTI and their respective directors and officers harmless
against any liability or expense arising out of, or in connection
with, any such claim.
4.2 Investment Representations.
Each RTI Selling Shareholder severally and not jointly, hereby represents and
warrants to QTTM:
4.2.1 Acknowledgement of Restricted Securities. Each RTI Selling
Shareholder understands and agrees that QTTM Shares to be issued
pursuant to this Agreement are characterized as "restricted
securities" and have not been registered under the Securities Act
or the securities laws of any state of the U.S. inasmuch as they
are being acquired from QTTM in a transaction not involving a
public offering and that under such laws and applicable
regulations such securities may be resold in reliance upon an
exemption from registration afforded either under Section 4(2) of
the Securities Act or Regulation S for offers and sales of
securities outside the U.S.
4.2.2 Status. By the execution of this Agreement, each RTI Selling
Shareholder, severally and not jointly, represents and warrants to
QTTM as indicated on the signature page to this Agreement, either
that:
(a) such RTI Selling Shareholder is an Accredited Investor; or
(b) such RTI Selling Shareholder is not a U.S. Person.
Each RTI Selling Shareholder severally understands that QTTM
Shares are being offered and sold to such RTI Selling Shareholder
in reliance upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of such
RTI Selling Shareholder set forth in this Agreement, in order that
QTTM may determine the applicability and availability of the
exemptions from registration of QTTM Shares on which QTTM is
relying.
11
4.2.3 Additional Representations and Warranties of Accredited Investors.
Each RTI Selling Shareholder, severally and not jointly, makes the
representations and warranties to QTTM that such RTI Selling
Shareholder is an Accredited Investor as indicated on the
Acknowledgement page of Appendix A, of the Subscription Agreement.
4.2.4 Additional Representations and Warranties of Non - U.S. Persons.
Each RTI Selling Shareholder, severally and not jointly, makes the
representations and warranties to QTTM that such RTI Selling
Shareholder is not a U.S. Person as indicated on the
Acknowledgement page of Appendix B, of the Subscription Agreement.
4.2.5 Stock Legends. Each RTI Selling Shareholder hereby agrees with
QTTM as follows:
(a) Securities Act Legend - Accredited Investors. The
certificates evidencing QTTM Shares issued to those RTI
Selling Shareholders who are Accredited Investors, and each
certificate issued in transfer thereof, will bear the
following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
(THE "ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT
(i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS; OR
(ii) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY,
THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER
CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS.
(b) Securities Act Legend - Non - U.S. Persons. The certificates
evidencing QTTM Shares issued to those RTI Selling
Shareholders who are not U.S. Persons, and each certificate
issued in transfer thereof, will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
(THE "ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT
(i) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
PROMULGATED UNDER THE SECURITIES ACT, AND BASED
ON AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION
ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT THE
PROVISIONS OF REGULATION S HAVE BEEN SATISFIED; OR
(ii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS; OR
(iii) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE
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HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY,
THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER
CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT.
(c) Other Legends. The certificates representing such QTTM
Shares, and each certificate issued in transfer thereof,
will also bear any other legend required under any
applicable Laws, including, without limitation, any U.S.
state corporate and state securities law, or contract.
(d) Opinion. No RTI Selling Shareholder will transfer any or all
of QTTM Shares pursuant to Regulation S or absent an
effective registration statement under the Securities Act
and applicable state securities law covering the disposition
of such RTI Selling Shareholder's QTTM Shares, without first
providing QTTM with an opinion of counsel (which counsel and
opinion are reasonably satisfactory to QTTM) to the effect
that such transfer will be made in compliance with
Regulation S or will be exempt from the registration and the
prospectus delivery requirements of the Securities Act and
the registration or qualification requirements of any
applicable U.S. state securities laws.
(e) Consent. Each RTI Selling Shareholder understands and
acknowledges that QTTM may refuse to transfer QTTM Shares,
unless such RTI Selling Shareholder complies with this
Article 4.2.5 and any other restrictions on transferability
set forth in the Subscription Agreement. Each RTI Selling
Shareholder consents to QTTM making a notation on its
records or giving instructions to any transfer agent of
QTTM's Common Stock in order to implement the restrictions
on transfer of QTTM Shares.
4.3 Registration Rights.
No RTI Selling Shareholder has any right to compel QTTM to register or otherwise
qualify such securities for public sale in Canada or the U.S.
4.4 Purchase Entirely for Own Account.
The QTTM Shares to be received by such RTI Selling Shareholder hereunder will be
acquired for such RTI Selling Shareholder's own account, not as nominee or
agent, and not with a view to the resale or distribution of any part thereof in
violation of the 1933 Act, and such RTI Selling Shareholder has no present
intention of selling, granting any participation in, or otherwise distributing
the same in violation of the 1933 Act without prejudice, however, to such RTI
Selling Shareholder's right at all times to sell or otherwise dispose of all or
any part of such QTTM Shares in compliance with applicable federal and state
securities laws and in compliance with this Agreement and each of the
Transaction Documents. Nothing contained herein shall be deemed a representation
or warranty by such RTI Selling Shareholder to hold the QTTM Shares for any
period of time. Such RTI Selling Shareholder is not a broker-dealer registered
with the SEC under the 1934 Act or an entity engaged in a business that would
require it to be so registered
13
4.5 Investment Experience.
Such RTI Selling Shareholder acknowledges that it can bear the economic risk and
complete loss of its investment in the QTTM Shares and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment contemplated hereby.
4.6 Independent Nature of RTI Selling Shareholders' Obligations and Rights.
The obligations of each RTI Selling Shareholder under this Agreement and any
Transaction Documents are several and not joint with the obligations of any
other RTI Selling Shareholder, and no RTI Selling Shareholder shall be
responsible in any way for the performance of the obligations of any other RTI
Selling Shareholder under this Agreement and any Transaction Documents. The
decision of each RTI Selling Shareholder to purchase QTTM Shares pursuant to
this Agreement has been made by such RTI Selling Shareholder independently of
any other RTI Selling Shareholder. Nothing contained in this Agreement or in any
Transaction Document, and no action taken by any RTI Selling Shareholder
pursuant thereto, shall be deemed to constitute the RTI Selling Shareholders as
a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the RTI Selling Shareholders are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement or in any Transaction Documents. Each RTI Selling
Shareholder acknowledges that no other RTI Selling Shareholder has acted as
agent for such RTI Selling Shareholder in connection with making its investment
hereunder and that no RTI Selling Shareholder will be acting as agent of such
RTI Selling Shareholder in connection with monitoring its investment in the QTTM
or enforcing its rights under this Agreement. Each RTI Selling Shareholder shall
be entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other RTI Selling
Shareholder to be joined as an additional party in any proceeding for such
purpose.
4.7 No General Solicitation.
Such RTI Selling Shareholder did not learn of the investment in the QTTM Shares
as a result of any public advertising or general solicitation.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF RTI
RTI represents and warrants to and in favour of QTTM as follows and acknowledges
that QTTM is relying upon such representations and warranties in connection with
the matters contemplated by this Agreement:
5.1 Organization and Qualification.
RTI is duly incorporated under the laws of Canada, is validly subsisting and has
all requisite authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to carry on its business as presently
conducted and as contemplated to be conducted, to own, hold and operate its
properties and assets as now owned, held and operated by it. To enter into this
Agreement and to carry out the provisions hereof except where the failure to be
so organized, existing and in good standing or to have such authority and power,
governmental licenses, authorizations, consents or approvals would not, in the
aggregate, either
14
(a) have a material adverse effect on the business, assets, financial
condition, or prospects of RTI, or
(b) materially impair the ability of RTI and RTI Selling Shareholders
each to perform their material obligations under this Agreement
(any of such effects or impairments, a "Material Adverse Effect").
RTI is duly qualified, licensed or domesticated as a foreign
corporation in good standing in each jurisdiction wherein the
nature of its activities or its properties owned or leased makes
such qualification, licensing or domestication necessary, except
where the failure to be so qualified, licensed or domesticated
will not have a Material Adverse Effect. Set forth in Exhibit 5.1
is a list of those jurisdictions in which RTI presently conducts
its business, owns, holds and operates its properties and assets.
5.2 Subsidiaries.
RTI does not own, directly or indirectly, any equity or other ownership interest
in any corporation, partnership, joint venture or other entity or enterprise.
5.3 Organizational Documents.
True, correct and complete copies of the Organizational Documents of RTI have
been delivered to QTTM prior to the execution of this Agreement, and no action
has been taken to amend or repeal such Organizational Documents. RTI is not in
violation or breach of any of the provisions of its Organizational Documents,
except for such violations or breaches as would not have a Material Adverse
Effect.
5.4 Authorization and Validity.
The recording of the transfer of the RTI Shares and the delivery of new
certificates representing the RTI Shares in the name of QTTM are within RTI's
corporate powers, have been duly authorized by all necessary corporate action,
do not require from the RTI Board or RTI Selling Shareholders any consent or
approval that has not been validly and lawfully obtained, require no
authorization, consent, approval, license, exemption of or filing or
registration with any court or Governmental Entity. RTI has all requisite
authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to enter into this Agreement and each of
the Transaction Documents to which RTI is a party, to consummate the
transactions contemplated by this Agreement and each of the Transaction
Documents to which RTI is a party and to perform its obligations under this
Agreement and each of the Transaction Documents to which RTI is a party. The
execution, delivery and performance by RTI of this Agreement and each of the
Transaction Documents to which RTI is a party have been duly authorized by all
necessary corporate action and do not require from RTI Board or the stockholders
of RTI any consent or approval that has not been validly and lawfully obtained.
The execution, delivery and performance by RTI of this Agreement and each of the
Transaction Documents to which RTI is a party requires no authorization,
consent, approval, license, exemption of or filing or registration with any
Governmental Entity or other Person other than such customary filing with
Industry Canada regarding Notification to Acquire Control of an Existing
Canadian Business under the Investment Canada Act for transactions of the type
contemplated by this Agreement, except for those that, if not obtained or made
would not have a Material Adverse Effect.
5.5 No Violation.
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Neither the execution nor the delivery by RTI of this Agreement or any
Transaction Document to which RTI is a party, nor the consummation or
performance by RTI of the transactions contemplated hereby or thereby will,
directly or indirectly,
(a) contravene, conflict with, or result in a violation of any
provision of the Organizational Documents of RTI;
(b) contravene, conflict with, constitute a default (or an event or
condition which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or
acceleration of, or result in the imposition or creation of any
Lien under, any agreement or instrument to which RTI is a party
or by which the properties or assets of RTI are bound;
(c) contravene, conflict with, or result in a violation of, any Law
or Order to which RTI, or any of the properties or assets owned
or used by RTI, may be subject; or
(d) contravene, conflict with, or result in a violation of, the terms
or requirements of, or give any Governmental Entity the right to
revoke, withdraw, suspend, cancel, terminate or modify, any
licenses, permits, authorizations, approvals, franchises or other
rights held by RTI or that otherwise relate to the business of,
or any of the properties or assets owned or used by, RTI, except,
in the case of clause (b), (c), or (d), for any such
contraventions, conflicts, violations, or other occurrences as
would not have a Material Adverse Effect.
5.6 Binding Obligations.
Assuming this Agreement and each of the Transaction Documents have been duly and
validly authorized, executed and delivered by QTTM, and RTI Selling
Shareholders, this Agreement and each of the Transaction Documents to which RTI
is a party, have been duly authorized, executed and delivered by RTI and
constitutes the legal, valid and binding obligations of RTI, enforceable against
RTI in accordance with their respective terms, except as such enforcement is
limited by general equitable principles, or by bankruptcy, insolvency and other
applicable Laws affecting the enforcement of creditors rights generally, and to
the fact that the Currency Act (Canada) precludes a court in Canada from giving
judgment in any currency other than Canadian currency.
5.7 Capitalization and Related Matters.
5.7.1 Capitalization. RTI is authorized by its charter and applicable
Law to issue an unlimited number of RTI Shares. As of July 31,
2005, there were 7,250,000 RTI Shares issued and outstanding. All
issued and outstanding shares of RTI's Shares are duly authorized,
validly issued, fully paid and nonassessable, and have not been
issued in violation of any preemptive or similar rights. There are
no outstanding options, warrants, calls, subscription rights,
conversion privileges or rights (including any preemptive, or
contingent or otherwise), purchase agreements, participation
agreements, exchange rights or other securities or contracts that
could require RTI to issue, sell or otherwise cause to become
outstanding any of its authorized but unissued shares of capital
stock or any securities convertible into, exchangeable for or
carrying a right or option to purchase shares of capital stock or
to create, authorize, issue, sell or otherwise cause to become
outstanding any new class of capital stock. There are no
outstanding stockholders' agreements, voting trusts or
arrangements, registration rights agreements, rights of first
refusal or other contracts pertaining to the capital stock of RTI.
16
5.7.2 No Redemption Requirement. There are no outstanding contractual
obligations (contingent or otherwise) of RTI to retire,
repurchase, redeem or otherwise acquire any outstanding
securities, or other ownership interests in, RTI or to provide
funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any other Person.
5.7.3 Duly Authorized. The RTI Shares have been validly issued and are
fully paid and nonassessable and the exchange and transfer of the
RTI Shares has been duly authorized in accordance with the terms
of this Agreement.
5.8 RTI Selling Shareholders.
Schedule A contains a true and complete list of the names and addresses of the
record and beneficial holders of all of the outstanding RTI Shares. Except as
expressly provided in this Agreement, no holder of RTI Shares or any other
security of RTI or any other Person is entitled to any preemptive right, right
of first refusal or similar right as a result of the issuance of the shares or
otherwise. There is no voting trust, agreement or arrangement among any of RTI
Selling Shareholders of any RTI Shares affecting the exercise of the voting
rights of any such common stock.
5.9 Compliance with Laws and Other Instruments.
Except as would not have a Material Adverse Effect, the business and operations
of RTI have been and are being conducted in accordance with all applicable Laws
and Orders. Except as would not have a Material Adverse Effect, RTI has not
received notice of any violation (or any Proceeding involving an allegation of
any violation) of any applicable Law or Order by or affecting RTI. To the
knowledge of RTI, no Proceeding involving an allegation of violation of any
applicable Law or Order is threatened or contemplated. Except as would not have
a Material Adverse Effect, RTI is not subject to any obligation or restriction
of any kind or character, nor is there, to the knowledge of RTI, any event or
circumstance relating to RTI that materially and adversely affects in any way
its business, properties, assets or prospects or that prohibits RTI from
entering into this Agreement or would prevent or make burdensome its performance
of or compliance with all or any part of this Agreement or the consummation of
the transactions contemplated hereby.
5.10 Certain Proceedings.
There is no pending Proceeding that has been commenced against RTI and that
challenges, or may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the transactions contemplated in this
Agreement. To the knowledge of RTI, no such Proceeding has been threatened.
5.11 Brokers or Finders.
No Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against RTI for any commission, fee or other
compensation as a finder or broker, or in any similar capacity, and RTI will
indemnify and hold QTTM, and QTTM's directors and officers, harmless against any
liability or expense arising out of, or in connection with, any such claim.
5.12 No Directed Selling Efforts or General Solicitation.
RTI, nor any Person acting on its or their behalf has conducted any general
17
solicitation or general advertising (as those terms are used in Regulation D) in
connection with the offer or sale of any of the Securities.
5.13 No Integrated Offering.
RTI, nor any Person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any RTI security or solicited any offers to buy any
security, under circumstances that would adversely affect reliance by QTTM on
Section 4(2) or Regulation S for the exemption from registration for the
transactions contemplated hereby or would require registration of the Securities
under the 1933 Act.
5.14 Absence of Undisclosed Liabilities.
Except as disclosed in the RTI Balance Sheet, set forth in Exhibit 5.27, RTI has
no debt, obligation or liability (whether accrued, absolute, contingent,
liquidated or otherwise, whether due or to become due, whether or not known to
RTI) arising out of any transaction entered into at or prior to the Closing Date
or any act or omission at or prior to the Closing Date, except to the extent set
forth on or reserved against on RTI Balance Sheet. RTI has not incurred any
liabilities or obligations under agreements entered into, except in the usual
and ordinary course of business since April 1st, 2005. RTI Balance Sheet
provides a true and fair view of the assets and liabilities (whether accrued,
absolute, contingent, liquidated or otherwise, whether due or to become due,
whether or not known to RTI as at March 31st, 2005.
5.15 Absence of Certain Changes or Events.
Since April 1st, 2005, through to the date hereof, RTI has conducted its
business in the usual and ordinary course of business, consistent with past
practice and has not entered into any transaction, except for this Agreement,
or:
5.15.1 Accounting. changed its method of accounting or the accounting
principles or practices utilized in the preparation of its
financial statements, other than as required by CAD GAAP;
5.15.2 Acquisitions. acquired the capital stock or other securities or
any ownership interest in, or substantially all of the assets
of, any other Person;
5.15.3 Adverse Changes. suffered or experienced any change in, or
affecting, its condition (financial or otherwise), properties,
assets, liabilities, business, operations, results of operations
or prospects other than changes, events or conditions in the
usual and ordinary course of its business, none of which would
have a Material Adverse Effect;
5.15.4 Agreements. entered into any agreement or arrangement, or
otherwise obligated itself, to take action which, if taken prior
to the date of hereof, would have any representation or warranty
set forth in this Agreement materially untrue or incorrect as of
the date when made;
5.15.5 Assets or Property. acquired or sold its assets or property
aggregating five percent or more of RTI's total consolidated
property and assets as at April 1st, 2005, other than in the
usual and ordinary course of business consistent with past
practice;
5.15.6 Benefit Arrangements. increased or modified any bonus, pension,
insurance or benefit arrangement (including the granting of
stock options, restricted stock awards or stock appreciation
rights) made to, for or with any of its directors or officers;
18
5.15.7 Capital Stock. issued, sold, disposed of or encumbered, or
authorized the issuance, sale, disposition or encumbrance of, or
granted or issued any option to redeem, repurchase, or acquire
any RTI Shares or any other of its securities or any Equity
Security, or altered the term of any of its outstanding
securities or approved, or made any change in its outstanding
shares of capital stock or its capitalization, whether by reason
of reclassification, recapitalization, stock split, combination,
exchange or readjustment of shares, stock dividend or otherwise,
except as disclosed to QTTM;
5.15.8 Claims. released, waived or cancelled any claims or rights
relating to or affecting RTI in excess of CAD $10,000 in the
aggregate or instituted or settled any Proceeding involving in
excess of CAD $10,000 in the aggregate;
5.15.9 Compensation. increased, or modified any compensation payable or
to become payable to any of its directors or officers, or any
grant to any such director or officer of any increase in
severance of termination pay;
5.15.10 Discharges Liabilities. paid, discharged or satisfied any claim,
obligation or liability in excess of CAD $10,000 in the
aggregate, except for liabilities incurred prior to the date of
this Agreement in the ordinary course of business;
5.15.11 Dividends. declared, set aside, made or paid any dividend or
other distribution to any of its stockholders;
5.15.12 Guarantees. guaranteed or endorsed in a material amount any
obligation or net worth of any Person;
5.15.13 Indebtedness. created, incurred, assumed or otherwise become
liable for any Indebtedness in excess of CAD $10,000 in the
aggregate;
5.15.14 Liens. created or permitted to exist any Lien on any material
property or asset of RTI, other than Permitted Liens;
5.15.15 Loans. made any loans or advances to any Person;
5.15.16 Material Adverse Change. made a Material Adverse Change with
respect to RTI;
5.15.16 Material Contracts. entered into, amended, modified, terminated
or non-renewal of any RTI Material Contract, except for
termination upon expiration in accordance with the terms thereof.
5.16 Material Assets.
The financial statements of RTI, set forth in Exhibit 5.27, reflect the material
properties and assets (real and personal) owned or leased by RTI.
5.17 Material Contracts.
RTI has made available to QTTM, prior to the date of this Agreement, true,
correct and complete copies of each written RTI Material Contract, including
each amendment, supplement and modification thereto.
19
5.17.1 No Defaults. Each RTI Material Contract is a valid and binding
agreement of RTI that is party thereto, and is in full force and
effect. Except as would not have a Material Adverse Effect, RTI
is not in breach or default of any RTI Material Contract to which
it is a party and, to the knowledge of RTI, no other party to any
RTI Material Contract is in breach or default thereof. Except as
would not have a Material Adverse Effect, no event has occurred
or circumstance exists that (with or without notice or lapse of
time) would;
(a) contravene, conflict with or result in a violation or breach
of, or become a default or event of default under, any
provision of any RTI Material Contract; or
(b) permit RTI or any other Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or
modify any RTI Material Contract. RTI has not received
notice of the pending or threatened cancellation, revocation
or termination of any RTI Material Contract to which it is a
party. There are no renegotiations of, or attempts to
renegotiate, or outstanding rights to renegotiate any
material terms of any RTI Material Contract.
5.18 Labor Matters.
5.18.1 Exhibit 5.16 contains the names and titles of all the current
directors and officers and key employees of RTI, as of the date
of this Agreement.
5.18.2 RTI has employees or other Persons providing research or other
services to them. Except as would not have a Material Adverse
Effect, RTI has operated in accordance and is in full compliance
with all applicable Laws with respect to employment and labor,
including, but not limited to, employment and labor standards,
occupational health and safety, employment and pay equity,
workers' compensation, collective bargaining, human rights and
labor relations, payment of deductions at source and other
Taxes. RTI is not liable for the payment of any compensation,
damages, taxes, fines, penalties or other amounts, however
designated, for failure to comply with respect to any of the
foregoing Laws.
5.18.3 No director, officer or employee of RTI is a party to, or is
otherwise bound by any contract (including any confidentiality,
non-competition or proprietary rights agreement) with any other
Person that in any way adversely affects or will materially
affect
(a) the performance of his or her duties as a director, officer
or employee of RTI; or
(b) the ability of RTI to conduct its business. Following the
consummation of the transactions contemplated by this
Agreement, RTI shall sign an employment agreement with each
of its key employees.
5.19 Tax Matters.
5.19.1 Tax Returns. Except in respect for the current taxation year
(which return is not yet due) and any income tax return which is
required to be filed as a result of or in connection with the
transactions contemplated herein, RTI has duly filed in the
prescribed manner with the appropriate Governmental Entity, or
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caused to be filed, on a timely basis, all material Tax Returns
required to be filed by or on behalf of RTI and have paid or
remitted, or caused to be paid, on a timely basis, all amounts of
Taxes, including installments or prepayments of Taxes, which are
required to have been paid (whether or not reflected on any Tax
Return); to the appropriate Governmental Entity.
5.19.2 RTI has provided to QTTM true, correct and complete copies of all
Tax Returns and all correspondence (including examination reports
and statement of deficiencies), to or from a Governmental Entity
relating to the Taxes of RTI, with respect to periods or events
of which the Government Entity may by Law assess or otherwise
impose any such Tax.
5.19.3 RTI has duly and timely withheld all Taxes and other amounts
required by Law to be by it (including Taxes and other amounts
required to be withheld by it in respect of any amount paid or
credited or deemed to be paid or credited by it to or for the
account or benefit of any Person, including any employees,
directors or officers and any non-resident Person), and has duly
and timely remitted to the appropriate Governmental Entity such
Taxes and other amounts required by Law to be remitted by it.
5.19.4 There are no Liens with respect to Taxes on RTI's property or
assets other than Permitted Liens; and no Governmental Entity in
any jurisdiction has made a claim, assertion or threat to RTI
that RTI is or may be subject to taxation by such jurisdiction.
5.19.5 No Disputes. RTI has not received any written notification of
assessment of any pending audit, examination, investigation,
dispute, proceeding or claim with respect to any Taxes of RTI,
nor is any such claim or dispute pending or contemplated by the
Canada Revenue Agency, the U.S. Internal Revenue Service or any
other taxing authority, including, without limitation, any sales
and customs tax authority and no waiver of a limitation period or
statute of limitations or extension of time within which
(a) to file a Tax Return has been given or requested with
respect to RTI;
(b) to file any elections, designations or similar filings
relating to Taxes for which RTI is or may be liable;
(c) RTI is required to pay or remit any Taxes or amounts on
account of Taxes; or
(d) any Governmental Entity may assess or collect Taxes for
which RTI is or may be liable;
(e) all liability of RTI for income taxes has been assessed for
the fiscal year ended March 31st, 2005. To the best of the
knowledge of RTI, there are not threats of assessments or
other proceedings, negotiations or investigations against
RTI or any contingent liability for Taxes.
5.19.6 There are no Tax rulings, requests for rulings, or closing
agreements relating to RTI for any period (or portion of a
period) that would affect any period after the date hereof.
5.20 Insurance Coverage.
Following the consummation of the transactions contemplated by this Agreement,
RTI shall obtain adequate insurance covering its properties, assets and
operations against all risks, claims and liabilities for comparably situated
companies in the industry in which RTI operates, which is sufficient for
compliance with all applicable Laws and RTI Material Contracts. RTI shall in
21
addition acquire adequate directors and officer's liability insurance for each
and every director and officer of RTI and insurance on the life of its key
employee, the Senior Technology Officer.
5.21 Litigation; Orders.
There is no Proceeding in Canada in any federal, provincial or local forum, or
in the United States in any federal, state or local forum, or in any foreign
country or other jurisdiction, pending or, to the knowledge of RTI, threatened
against or affecting RTI or RTI's properties, assets, business or employees. To
the knowledge of RTI, there is no fact that might result in or form the basis
for any such Proceeding. RTI is not subject to any Orders.
5.22 Licenses, etc.
Except as would not have a Material Adverse Effect, RTI possesses or has
obtained and is in compliance with, all licenses, permits, certificates,
approvals and other authorizations or rights of and from any Governmental
Entity, necessary to engage in its business as currently conducted and to permit
RTI to own and use its properties and assets in the manner in which it currently
owns and uses such properties and assets (collectively, "RTI Permits"). RTI has
not received notice from any Governmental Entity or other Person that there is
lacking any license, permit, certificate, approval and other authorization or
right necessary for RTI to engage in its business as currently conducted and to
permit RTI to own and use its properties and assets in the manner in which it
currently owns and uses such properties and assets. Except as would not have a
Material Adverse Effect, the RTI Permits are valid and in full force and effect.
Except as would not have a Material Adverse Effect, no event has occurred or
circumstance exists that may (with or without notice or lapse of time):
(a) constitute or result, directly or indirectly, in a violation of
or a failure to comply with any RTI Permit; or
(b) result, directly or indirectly, in the revocation, withdrawal,
suspension, cancellation or termination of, or any modification
to, any RTI Permit. RTI has not received notice from any
Governmental Entity or any other Person regarding:
(i) any actual, alleged, possible or potential contravention of
any RTI Permit; or
(ii) any actual, proposed, possible or potential revocation,
withdrawal, suspension, cancellation, termination of, or
modification to, any RTI Permit. All applications required
to have been filed for the renewal of such RTI Permits have
been duly filed on a timely basis with the appropriate
Persons, and all other filings required to have been made
with respect to such RTI Permits have been duly made on a
timely basis with the appropriate Persons. All RTI Permits
are renewable by their terms or in the ordinary course of
business without the need to comply with any special
qualification procedures or to pay any amounts other than
routine fees or similar charges, all of which have, to the
extent due, been duly paid.
5.23 Interested Party Transactions.
No officer, director or shareholder of RTI or any Affiliate or "associate" (as
such term is defined in Rule 405 of the Commission under the Securities Act) of
any such Person, has or has had, either directly or indirectly,
22
(a) An interest in any Person which
(i) furnishes or sells services or products which are furnished
or sold or are proposed to be furnished or sold by RTI, or
(ii) purchases from or sells or furnishes to, or proposes to
purchase from, sell to or furnish RTI any goods or
services; or
(b) a beneficial interest in any contract or agreement to which RTI
is a party or by which it may be bound or
affected.
5.24 Governmental Inquiries.
RTI has provided to QTTM a copy of each material written inspection report,
questionnaire, inquiry, demand or request for information received by RTI from
any Governmental Entity, and RTI's response thereto, and each material written
statement, report or other document filed by RTI with any Governmental Entity.
5.25 Financial Institutions.
Exhibit 5.25 sets forth the name and location of each bank, trust company and
other financial institution in which RTI maintains and uses an account, as well
as the name of each Person authorized to draw thereon or access information
thereto on behalf of RTI. RTI does not own or use a money on deposit account or
a safety deposit box, in its business as presently conducted.
5.26 Intellectual Property.
5.26.1 Following the consummation of the transactions contemplated by
this Agreement, RTI shall commence the registration and
application process to obtain all necessary Intellectual Property
rights which are material to RTI's business as presently
conducted, or proposed to be developed and conducted.
5.26.2 RTI has the right to use the Licensed Intellectual Property used
in RTI's business as currently conducted. RTI does not violate,
infringe upon, or otherwise act adversely to any right or claimed
right with respect to Licensed Intellectual Property of any other
Person. RTI has not received any written notice and or claim
challenging RTI's use of ownership and validity of the Licensed
Intellectual Property.
5.27 Title and Condition of Properties.
Except as would not have a Material Adverse Effect, RTI owns (with good and
marketable title in the case of real property) or holds under valid leases or
other rights to use all real property, plants, machinery, equipment and other
personal property necessary for the conduct of its business as presently
conducted, free and clear of all Liens, except Permitted Liens.
5.28 Books and Records.
23
The books, records and accounts of RTI, in all material respects,
(a) have been maintained in accordance with good business practices
on a basis consistent with prior years,
(b) are stated in reasonable detail and accurately and fairly reflect
the transactions and dispositions of the assets of RTI and have
been maintained in accordance with good business practices on a
basis consistent with prior years,
(c) accurately and fairly reflect the basis for the RTI financial
statements. RTI has devised and maintains a system of internal
accounting controls sufficient to provide reasonable assurances
that,
(i) transactions are executed in accordance with management's
general or specific authorization; and
(ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with CAD GAAP or any
other criteria applicable to such statements and to maintain
accountability for assets.
5.29 Financial Statements.
Set forth in Exhibit 5.29 are the unaudited financial statements of RTI as at
March 31st, 2005, which have been prepared and reviewed by management, and have
not been certified or audited by a Certified Public Accountant. The unaudited
financial statements for RTI as at the 12-month period ended March 31st, 2005
and the unaudited financial statements for any subsequent interim period have
been prepared in accordance with CAD GAAP (subject, in the case of unaudited
interim financial statements, to the absence of footnotes required by such
principles and normal year-end adjustments), the requirements of applicable
Governmental Entities; such financial statements present fairly, in all material
respects, the financial condition and results of operations of RTI as of the
respective dates thereof and for the respective periods covered thereby. RTI
will provide, immediately following the Closing, the audited financial
statements in accordance with the applicable securities Laws, required to
consummate the transactions in accordance with this Agreement.
5.30 Stock Option Plans, Employee Benefits.
5.30.1 RTI has no stock option plans providing for the grant by RTI of
stock options to directors, officers or employees.
5.30.2 RTI has no employee benefit plans or arrangements covering their
present and former employees or providing benefits to such
persons in respect of services provided RTI.
5.30.3 Neither the consummation of the transactions contemplated hereby
alone, nor in combination with another event, with respect to
each director, officer, employee and consultant of RTI, will
result in
(a) any payment (including, without limitation, severance,
unemployment compensation or bonus payments) becoming due
from RTI,
(b) any increase in the amount of compensation or benefits
24
payable to any such individual or,
(c) any acceleration of the vesting or timing of payment of
compensation payable to any such individual. No agreement,
arrangement or other contract of RTI provides benefits or
payments contingent upon, triggered by, or increased as a
result of a change in the ownership or effective control of
RTI.
5.31 Environmental and Safety Matters.
RTI has at all time been and is in compliance with all applicable requirements
of the Canadian Environmental Xxxxxxxxxx Xxx, 0000, (Xxxxxx), and all other
Environmental Laws applicable to RTI.
5.31.1 There are no Proceedings pending or threatened against RTI
alleging the violation of any Environmental Laws or
Environmental Permit applicable to RTI or alleging that RTI is a
potentially responsible party for any environmental site
contamination.
5.31.2 Neither this Agreement nor the consummation of the transactions
contemplated by this Agreement shall impose any obligations to
notify or obtain the consent of any Governmental Entity or third
Persons under any Environmental Laws applicable to RTI.
5.32 Money Laundering Laws.
The operations of RTI is and has been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Proceeds of
Crime (Money Laundering) and Terrorist Financing Xxx, 0000, (Xxxxxx), the money
laundering statutes of all Canadian and non-Canadian jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any Governmental Entity
(collectively, the "Money Laundering Laws") and no Proceeding involving RTI with
respect to the Money Laundering Laws is pending or, to the knowledge of RTI,
threatened.
5.33 Board Recommendation.
RTI Board, by unanimous written consent, has determined that this Agreement and
the transactions contemplated by this Agreement are advisable and in the best
interests of RTI Selling Shareholders and has duly authorized this Agreement and
the transactions contemplated by this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF QTTM
QTTM represents and warrants to and in favor of RTI as follows and acknowledges
that RTI and RTI Selling Shareholders are relying upon such representations and
warranties in connection with the matters contemplated by this Agreement:
6.1 Organization and Qualification.
QTTM is duly organized, validly existing and in good standing under the laws of
the State of Nevada, has all requisite authority and power (corporate and
other), governmental licenses, authorizations, consents and approvals to carry
25
on its business as presently conducted and as contemplated to be conducted, to
own, hold and operate its properties and assets as now owned, held and operated
by it. To enter into this Agreement and to carry out the provisions hereof
except where the failure to be so organized, existing and in good standing or to
have such authority and power, governmental licenses, authorizations, consents
or approvals would not, in the aggregate, either
(a) have a material adverse effect on the business, assets, financial
condition, or prospects of QTTM, or
(b) materially impair the ability of QTTM to perform its material
obligations under this Agreement (any of such effects or
impairments, a "Material Adverse Effect"). QTTM is duly qualified,
licensed or domesticated as a foreign corporation in good standing
in each jurisdiction wherein the nature of its activities or its
properties owned, held, or operated makes such qualification,
licensing or domestication necessary, except where the failure to
be so qualified, licensed or domesticated and in good standing
would not have a Material Adverse Effect. Set forth in Exhibit 6.1
list of those jurisdictions in which QTTM presently conducts its
business, owns, holds and operates its properties and assets.
6.2 Subsidiaries.
QTTM does not own, directly or indirectly, any equity or other ownership
interest in any corporation, partnership, joint venture or other entity or
enterprise.
6.3 Organizational Documents.
True, correct and complete copies of the Organizational Documents of QTTM have
been delivered to RTI prior to the execution of this Agreement, and no action
has been taken to amend or repeal such Organizational Documents. QTTM is not in
violation or breach of any of the provisions of its Organizational Documents,
except for such violations or breaches as would not have a Material Adverse
Effect.
6.4 Authorization and Validity.
QTTM has all requisite authority and power (corporate and other), governmental
licenses, authorizations, consents and approvals to enter into this Agreement
and each of the Transaction Documents to which QTTM is a party, to consummate
the transactions contemplated by this Agreement and each of the Transaction
Documents to which QTTM is a party and to perform its obligations under this
Agreement and each of the Transaction Documents to which QTTM is a party. The
execution, delivery and performance by QTTM of this Agreement and each of the
Transaction Documents to which QTTM is a party have been duly authorized by all
necessary corporate action and do not require from QTTM Board or the
stockholders of QTTM any consent or approval that has not been validly and
lawfully obtained. The execution, delivery and performance by QTTM of this
Agreement and each of the Transaction Documents to which QTTM is a party
requires no authorization, consent, approval, license, exemption of or filing or
registration with any Governmental Entity or other Person other than such
customary filings with the Commission for transactions of the type contemplated
by this Agreement, except for those that, if not obtained or made would not have
a Material Adverse Effect.
6.5 No Violation.
26
Neither the execution nor the delivery by QTTM of this Agreement or any
Transaction Document to which QTTM is a party, nor the consummation or
performance by QTTM of the transactions contemplated hereby or thereby will,
directly or indirectly,
(a) contravene, conflict with, or result in a violation of any
provision of the Organizational Documents of QTTM;
(b) contravene, conflict with, constitute a default (or an event or
condition which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or
acceleration of, or result in the imposition or creation of any
Lien under, any agreement or instrument to which QTTM is a party
or by which the properties or assets of QTTM are bound;
(c) contravene, conflict with, or result in a violation of, any Law
or Order to which QTTM, or any of the properties or assets owned
or used by QTTM may be subject; or
(d) contravene, conflict with, or result in a violation of, the terms
or requirements of, or give any Governmental Entity the right to
revoke, withdraw, suspend, cancel, terminate or modify, any
licenses, permits, authorizations, approvals, franchises or other
rights held by QTTM or that otherwise relate to the business of,
or any of the properties or assets owned or used by, QTTM,
except, in the case of clause (b), (c), or (d), for any such
contraventions, conflicts, violations, or other occurrences as
would not have a Material Adverse Effect.
6.6 Binding Obligations.
Assuming this Agreement and each of the Transaction Documents have been duly and
validly authorized, executed and delivered by RTI, and RTI Selling Shareholders,
this Agreement and each of the Transaction Documents to which QTTM is a party,
have been duly authorized, executed and delivered by QTTM and constitutes the
legal, valid and binding obligations of QTTM, enforceable against QTTM in
accordance with their respective terms, except as such enforcement is limited by
general equitable principles, or by bankruptcy, insolvency and other applicable
Laws affecting the enforcement of creditors rights generally, and to the fact
that the Currency Act (Canada) precludes a court in Canada from giving judgment
in any currency other than Canadian currency.
6.7 Securities Laws.
Assuming the accuracy of the representations and warranties of RTI Selling
Shareholders contained in Article 4 and Appendix A or B in Schedule B, the
issuance of QTTM Shares pursuant to this Agreement are:
(a) exempt from the registration and prospectus delivery requirements
of the Securities Act,
(b) have been registered or qualified (or are exempt from registration
and qualification) under the registration permit or qualification
requirements of all applicable state securities laws, and from the
registration and prospectus delivery requirements of the
Securities Act,
(c) accomplished in conformity with all other applicable federal and
state securities laws.
6.8 Capitalization and Related Matters.
27
6.8.1 Capitalization.
The authorized capital stock of QTTM consists of 25,000,000
shares of $ 0.001 par value common stock, of which 10,300,000
shares are currently issued and outstanding. All issued and
outstanding shares of QTTM's Common Stock are duly authorized,
validly issued, fully paid and nonassessable, and have not been
issued in violation of any preemptive or similar rights. At the
Closing Date, QTTM will have sufficient authorized and unissued
QTTM's Common Stock to consummate the transactions contemplated
hereby. There are no outstanding options, warrants, calls,
subscription rights, conversion privileges or rights (including
any preemptive, or contingent or otherwise), purchase agreements,
participation agreements, exchange rights or other securities or
contracts that could require QTTM to issue, sell or otherwise
cause to become outstanding any of its authorized but unissued
shares of capital stock or any securities convertible into,
exchangeable for or carrying a right or option to purchase shares
of capital stock or to create, authorize, issue, sell or
otherwise cause to become outstanding any new class of capital
stock. There are no outstanding stockholders' agreements, voting
trusts or arrangements, registration rights agreements, rights of
first refusal or other contracts pertaining to the capital stock
of QTTM. The issuance of all of the shares of QTTM's Common Stock
described in this Article 6.8.1 have been in compliance with U.S.
federal and state securities laws.
6.8.2 No Redemption Requirements.
There are no outstanding contractual obligations (contingent or
otherwise) of QTTM to retire, repurchase, redeem or otherwise
acquire any outstanding securities, or other ownership interests
in, QTTM or to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any other
Person.
6.8.2 Duly Authorized.
The issuance of QTTM Shares has been duly authorized and, upon
delivery to RTI Selling Shareholders of certificates therefor in
accordance with the terms of this Agreement, QTTM Shares will
have been validly issued and fully paid, and will be
nonassessable, have the rights, preferences and privileges
specified, will be free of preemptive rights and will be free and
clear of all Liens and restrictions, other than Liens created by
RTI Selling Shareholders and restrictions on transfer imposed by
this Agreement and the Securities Act.
6.9 Compliance with Laws.
Except as would not have a Material Adverse Effect, the business and operations
of QTTM have been and are being conducted in accordance with all applicable Laws
and Orders. Except as would not have a Material Adverse Effect, QTTM has not
received notice of any violation (or any Proceeding involving an allegation of
any violation) of any applicable Law or Order by or affecting QTTM. To the
knowledge of QTTM, no Proceeding involving an allegation of violation of any
applicable Law or Order is threatened or contemplated. Except as would not have
a Material Adverse Effect, QTTM is not subject to any obligation or restriction
of any kind or character, nor is there, to the knowledge of QTTM, any event or
circumstance relating to QTTM that materially and adversely affects in any way
its business, properties, assets or prospects or that prohibits QTTM from
entering into this Agreement or would prevent or make burdensome its performance
of or compliance with all or any part of this Agreement or the consummation of
the transactions contemplated hereby.
6.10 Certain Proceedings.
There is no pending Proceeding that has been commenced against QTTM and that
challenges, or may have the effect of preventing, delaying, making illegal, or
28
otherwise interfering with, any of the transactions contemplated by this
Agreement. To the knowledge of QTTM, no such Proceeding has been threatened.
6.11 Brokers or Finders.
No Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against QTTM for any commission, fee or other
compensation as a finder or broker, or in any similar capacity, and QTTM will
indemnify and hold RTI, RTI's directors and officers, and RTI Selling
Shareholders, harmless against any liability or expense arising out of, or in
connection with, any such claim.
6.12 No Directed Selling Efforts or General Solicitation.
QTTM, nor any Person acting on its or their behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation D) in
connection with the offer or sale of any of the Securities.
6.13 No Integrated Offering.
QTTM, nor any Person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any QTTM security or solicited any offers to buy any
security, under circumstances that would adversely affect reliance by QTTM on
Section 4(2) or Regulation S for the exemption from registration for the
transactions contemplated hereby or would require registration of the Securities
under the 1933 Act.
6.14 Absence of Undisclosed Liabilities.
Except as disclosed in the QTTM Balance Sheet, set forth in Exhibit 6.27, QTTM
has no debt, obligation or liability (whether accrued, absolute, contingent,
liquidated or otherwise, whether due or to become due, whether or not known to
QTTM) arising out of any transaction entered into at or prior to the Closing
Date or any act or omission at or prior to the Closing Date, except to the
extent set forth on or reserved against on QTTM Balance Sheet. QTTM has not
incurred any liabilities or obligations under agreements entered into, in the
usual and ordinary course of business since January 1st, 2005. QTTM Balance
Sheet provides a true and fair view of the assets and liabilities (whether
accrued, absolute, contingent, liquidated or otherwise, whether due or to become
due, whether or not known to QTTM) as at December 31st, 2004.
6.15 Absence of Certain Changes or Events.
Since January 1st, 2005 through to the date hereof, QTTM has conducted its
business in the usual and ordinary course of business, consistent with past
practice, and has not entered into any transaction, except for this Agreement,
or:
6.15.1 Accounting. changed its method of accounting or the accounting
principles or practices utilized in the preparation of its
financial statements, other than as required by US GAAP;
6.15.2 Acquisitions. acquired the capital stock or other securities or
any ownership interest in, or substantially all of the assets
of, any other Person;
29
6.15.3 Adverse Changes. suffered or experienced any change in, or
affecting, its condition (financial or otherwise), properties,
assets, liabilities, business, operations, results of operations
or prospects other than changes, events or conditions in the
usual and ordinary course of its business, none of which would
have a Material Adverse Effect;
6.15.4 Assets or Property. acquired or sold its assets or property
aggregating five percent or more of QTTM's total consolidated
property and assets as at January 1, 2005, other than in the
usual and ordinary course of business consistent with past
practice;
6.15.5 Agreements. entered into any agreement or arrangement, or
otherwise obligated itself, to take action which, if taken prior
to the date of hereof, would have any representation or warranty
set forth in this Agreement materially untrue or incorrect as of
the date when made;
6.15.6 Benefit Arrangements. increased or modified any bonus, pension,
insurance or benefit arrangement (including the granting of
stock options, restricted stock awards or stock appreciation
rights) made to, for or with any of its directors or officers;
6.15.7 Capital Stock. issued, sold, disposed of or encumbered, or
authorized the issuance, sale, disposition or encumbrance of, or
granted or issued any option to redeem, repurchase, or acquire
any QTTM Shares or any other of its securities, or altered the
term of any of its outstanding securities or approved, or made
any change in its outstanding shares of capital stock or its
capitalization, whether by reason of reclassification,
recapitalization, stock split, combination, exchange or
readjustment of shares, stock dividend or otherwise;
6.15.8 Claims. released, waived or cancelled any claims or rights
relating to or affecting RTI in excess of US $10,000 in the
aggregate or instituted or settled any Proceeding involving in
excess of US $10,000 in the aggregate;
6.15.9 Compensation. increased, or modified any compensation payable or
to become payable to any of its directors or officers, or any
grant to any such director or officer of any increase in
severance of termination pay;
6.15.10 Discharges Liabilities. paid, discharged or satisfied any claim,
obligation or liability in excess of US $10,000 in the aggregate,
except for liabilities incurred prior to the date of this
Agreement in the ordinary course of business;
6.15.11 Dividends. declared, set aside, made or paid any dividend or
other distribution to any of its stockholders;
6.15.12 Guarantees. guaranteed or endorsed in a material amount any
obligation or net worth of any Person;
6.15.13 Indebtedness. created, incurred, assumed or otherwise become
liable for any Indebtedness in excess of US $10,000 in the
aggregate, other than professional fees;
6.15.14 Liens. created or permitted to exist any Lien on any material
property or asset of QTTM, other than Permitted Liens;
6.15.15 Loans. made any loans or advances to any Person;
30
6.15.16 Material Adverse Change. Made a Material Adverse Change with
respect to QTTM;
6.15.17 Material Contracts. entered into, amended, modified, terminated
or non-renewal of any QTTM Material Contract, except for
termination upon expiration in accordance with the terms
thereof;
6.16 Material Assets.
The financial statements of QTTM set forth in Exhibit 6.27 reflect the material
properties and assets (real and personal) owned or leased by QTTM.
6.17 Material Contracts.
QTTM has made available to RTI, prior to the date of this Agreement, true,
correct and complete copies of each written QTTM Material Contract, including
each amendment, supplement and modification thereto.
6.17.1 No Defaults. Each QTTM Material Contract is a valid and binding
agreement of QTTM that is party thereto, and is in full force
and effect. Except as would not have a Material Adverse Effect,
QTTM is not in breach or default of any QTTM Material Contract
to which it is a party and, to the knowledge of QTTM, no other
party to any QTTM Material Contract is in breach or default
thereof. Except as would not have a Material Adverse Effect, no
event has occurred or circumstance exists that (with or without
notice or lapse of time) would
(a) contravene, conflict with or result in a violation or breach
of, or become a default or event of default under, any
provision of any QTTM Material Contract; or
(b) permit QTTM or any other Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or
modify any QTTM Material Contract. QTTM has not received
notice of the pending or threatened cancellation, revocation
or termination of any QTTM Material Contract to which it is
a party. There are no renegotiations of, or attempts to
renegotiate, or outstanding rights to renegotiate any
material terms of any QTTM Material Contract.
6.18 Labor Matters.
6.18.1 Exhibit 6.18 contains the names and titles of all the current
directors and officers of QTTM, as of the date of this
Agreement.
6.18.2 QTTM has no employees or other Persons providing research or
other services to them. Except as would not have a Material
Adverse Effect, QTTM has operated in accordance and is in full
compliance with all applicable Laws with respect to employment
andlabor, including, but not limited to, employment andlabor
standards, occupational health and safety, employment and pay
equity, workers' compensation, collective bargaining, human
rights andlabor relations, payment of Social Security and other
Taxes. RTI is not liable for the payment of any compensation,
damages, taxes, fines, penalties or other amounts, however
designated, for failure to comply with respect to any of the
foregoing Laws.
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6.18.3 No director, officer or employee of QTTM is a party to, or is
otherwise bound by any contract (including any confidentiality,
non-competition or proprietary rights agreement) with any other
Person that in any way adversely affects or will materially
affect
(a) the performance of his or her duties as a director, officer
or employee of QTTM; or
(b) the ability of QTTM to conduct its business. Each director,
officer or employee of QTTM is employed on an at-will basis
and QTTM has no contract with any of its employees which
would interfere with QTTM's ability to discharge its
employees.
6.19 Tax Matters.
6.19.1 Tax Returns. QTTM duly filed with the appropriate Governmental
Entity, or caused to be filed, on a timely basis, all material
Tax Returns required to be filed by or on behalf of QTTM and have
paid or remitted, or caused to be paid, on a timely basis, all
amounts of Taxes, including installments or prepayments of Taxes,
which are required to have been paid (whether or not reflected on
any Tax Return); to the appropriate Governmental Entity.
6.19.2 QTTM has delivered to RTI true, correct and complete copies of
all Tax Returns and all correspondence (including examination
reports and statement of deficiencies), to or from a Governmental
Entity relating to the Taxes of QTTM, with respect to periods or
events of which the Government Entity may by Law assess or
otherwise impose any such Tax.
6.19.3 QTTM has duly and timely withheld all Taxes and other amounts
required by Law to be by it (including Taxes and other amounts
required to be withheld by it in respect of any amount paid or
credited or deemed to be paid or credited by it to or for the
account or benefit of any Person, including any employees,
directors or officers and any non-resident Person), and has duly
and timely remitted to the appropriate Governmental Entity such
Taxes and other amounts required by Law to be remitted by it.
6.19.4 There are no Liens with respect to Taxes on QTTM's property or
assets other than Permitted Liens; and no Governmental Entity in
any jurisdiction has made a claim, assertion or threat to QTTM
that QTTM is or may be subject to taxation by such jurisdiction.
6.19.5 No Disputes. QTTM has not received any written notification of
assessment of any pending audit, examination, investigation,
dispute, proceeding or claim with respect to any Taxes of QTTM,
nor is any such claim or dispute pending or contemplated by the
U.S. Internal Revenue Service, the Canada Revenue Agency, or any
other taxing authority, including, without limitation, any sales
and customs tax authority and no waiver of a limitation period or
statute of limitations or extension of time within which
(a) to file a Tax Return has been given or requested with
respect to QTTM;
(b) to file any elections, designations or similar filings
relating to Taxes for which QTTM is or may be liable;
(c) QTTM is required to pay or remit any Taxes or amounts on
account of Taxes; or
(d) any Governmental Entity may assess or collect Taxes for
which QTTM is or may be liable.
32
(e) all liability of QTTM for income taxes has been assessed for
the fiscal year ended December 31st, 2004. To the best of
the knowledge of QTTM, there are not threats of assessments
or other proceedings, negotiations or investigations against
QTTM or any contingent liability for Taxes.
6.19.6 There are no Tax rulings, requests for rulings, or closing
agreements relating to QTTM for any period (or portion of a
period) that would affect any period after the date hereof.
6.20 Insurance Coverage.
Following the consummation of the transactions contemplated by this Agreement,
QTTM shall obtain adequate directors and officer's liability insurance for each
and every director and officer of QTTM.
6.21 Litigation; Orders.
There is no Proceeding in the United States in any federal, state or local
forum, or in Canada in any federal, provincial or local forum, or in any foreign
country or other jurisdiction, pending or, to the knowledge of QTTM, threatened
against or affecting QTTM or QTTM's properties, assets, business or employees.
To the knowledge of QTTM, there is no fact that might result in or form the
basis for any such Proceeding. QTTM is not subject to any Orders.
6.22 Licenses.
Except as would not have a Material Adverse Effect, QTTM possesses or has
obtained and is in full compliance with, all licenses, permits, certificates,
approvals, and other authorizations or rights from any Governmental Entity,
necessary to engage in its business as currently conducted and to permit QTTM to
own and use its properties and assets in the manner in which it currently owns
and uses such properties and assets (collectively, "QTTM Permits"). QTTM has not
received notice from any Governmental Entity or other Person that there is
lacking any license, permit, certificate, approval, and other authorization or
right necessary for QTTM to engage in its business as currently conducted and to
permit QTTM to own and use its properties and assets in the manner in which it
currently owns and uses such properties and assets. Except as would not have a
Material Adverse Effect, QTTM Permits are valid and in full force and effect.
Except as would not have a Material Adverse Effect, no event has occurred or
circumstance exists that may (with or without notice or lapse of time):
(a) constitute or result, directly or indirectly, in a violation of
or a failure to comply with any QTTM Permit; or
(b) result, directly or indirectly, in the revocation, withdrawal,
suspension, cancellation or termination of, or any modification
to, any QTTM Permit. QTTM has not received notice from any
Governmental Entity or any other Person regarding:
(i) any actual, alleged, possible or potential contravention of
any QTTM Permit; or
(ii) any actual, proposed, possible or potential revocation,
withdrawal, suspension, cancellation, termination of, or
modification to, any QTTM Permit. All applications required
to have been filed for the renewal of such QTTM Permits have
been duly filed on a timely basis with the appropriate
Persons, and all other filings required to have been made
33
with respect to such QTTM Permits have been duly made on a
timely basis with the appropriate Persons. All QTTM Permits
are renewable by their terms or in the ordinary course of
business without the need to comply with any special
qualification procedures or to pay any amounts other than
routine fees or similar charges, all of which have, to the
extent due, been duly paid.
6.23 Interested Party Transactions.
No officer, director or stockholder of QTTM or any Affiliate or "associate" (as
such term is defined in Rule 405 of the Commission under the Securities Act) of
any such Person, has or has had, either directly or indirectly,
(a) an interest in any Person which
(i) furnishes or sells services or products which are furnished
or sold or are proposed to be furnished or sold by QTTM, or
(ii) purchases from or sells or furnishes to, or proposes to
purchase from, sell to or furnish QTTM any goods or
services; or
(b) a beneficial interest in any contract or agreement to which
QTTM is a party or by which it may be bound or affected.
6.24 Governmental Inquiries.
QTTM has provided to RTI a copy of each material written inspection report,
questionnaire, inquiry, demand or request for information received by QTTM from
any Governmental Entity, and QTTM's response thereto, and each material written
statement, report or other document filed by QTTM with any Governmental Entity.
6.25 Financial Institutions.
QTTM does not maintain or use an account, money on deposit account or a safety
deposit box in any, bank, trust company and other financial institution, in its
business as presently conducted.
6.26 Intellectual Property.
QTTM does not own, use or license any Intellectual Property in its business as
presently conducted.
6.27 Title and Conditions of Properties.
Except as would not have a Material Adverse Effect, QTTM owns (with good and
marketable title in the case of real property) or holds under valid leases or
other rights to use all real property, plants, machinery, equipment and other
personal property necessary for the conduct of its business as presently
conducted, free and clear of all Liens, except Permitted Liens.
6.28 Books and Records.
34
The books, records and accounts of QTTM, in all material respects,
(a) have been maintained in accordance with good business practices
on a basis consistent with prior years,
(b) are stated in reasonable detail and accurately and fairly reflect
the transactions and dispositions of the assets of QTTM and have
been maintained in accordance with good business practices on a
basis consistent with prior years,
(c) accurately and fairly reflect the basis for the QTTM financial
statements. QTTM has devised and maintains a system of internal
accounting controls sufficient to provide reasonable assurances
that,
(i) transactions are executed in accordance with management's
general or specific authorization; and
(ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with US GAAP or any
other criteria applicable to such statements and to maintain
accountability for assets.
6.29 Financial Statements.
Set forth in Exhibit 6.29 are the audited consolidated financial statements of
QTTM as at and for each of the 12-month periods ended December 31st, 2004 and
2003 have been prepared, and the audited consolidated financial statements for
any subsequent interim period will at the time of their filing, were prepared in
accordance with US GAAP (subject in the case of unaudited interim financial
statements, to the absence of footnotes required by such principles and normal
year-end adjustments), the requirements of applicable Governmental Entities and
rules and regulations of the Commission; such financial statements present
fairly, in all material respects, the consolidated financial condition and
results of operations of QTTM as of the respective dates thereof and for the
respective periods covered thereby.
6.30 SEC Documents.
QTTM has filed all reports required to be filed by it under the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the three (3) years
preceding the date hereof (or such shorter period as QTTM was required by law to
file such material) (the foregoing materials being collectively referred to
herein as the "SEC Documents") and, while not having filed all such SEC
Documents prior to the expiration of any extension(s), is nevertheless current
with respect to its Exchange Act filing requirements. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statement
therein, in light of the circumstances under which they were made, not
misleading. All material agreements to which QTTM is a party or to which the
property or assets of QTTM are subject have been appropriately filed as
Schedules to the SEC Documents as and to the extent required under the Exchange
Act. QTTM's Common Stock is listed on the OTC Bulletin Board, ("OTCBB"), and
QTTM is not aware of any facts which would make QTTM's Common Stock ineligible
for quotation on the OTCBB.
35
6.31 Stock Option Plans, Employee Benefits.
6.31.1 QTTM has no stock option plans providing for the grant by QTTM
of stock options to directors, officers or employees.
6.31.2 QTTM has no employee benefit plans or arrangements covering
their present and former employees or providing benefits to such
persons in respect of services provided QTTM.
6.31.3 Neither the consummation of the transactions contemplated hereby
alone, nor in combination with another event, with respect to
each director, officer, employee and consultant of QTTM, will
result in
(a) any payment (including, without limitation, severance,
unemployment compensation or bonus payments) becoming due
from QTTM,
(b) any increase in the amount of compensation or benefits
payable to any such individual or
(c) any acceleration of the vesting or timing of payment of
compensation payable to any such individual. No agreement,
arrangement or other contract of QTTM provides benefits or
payments contingent upon, triggered by, or increased as a
result of a change in the ownership or effective control of
QTTM.
6.32 Environmental and Safety Matters.
QTTM has at all time been and is in compliance with all Environmental Laws
applicable to QTTM.
6.32.1 There are no Proceedings pending or threatened against QTTM
alleging the violation of any Environmental Laws or
Environmental Permit applicable to QTTM or alleging that QTTM is
a potentially responsible party for any environmental site
contamination.
6.32.2 Neither this Agreement nor the consummation of the transactions
contemplated by this Agreement shall impose any obligations to
notify or obtain the consent of any Governmental Entity or third
Persons under any Environmental Laws applicable to QTTM.
6.33 Money Laundering Laws.
The operations of QTTM is and has been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all U.S. and non-U.S. jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any Governmental Entity (collectively, the "Money
Laundering Laws") and no Proceeding involving QTTM with respect to the Money
Laundering Laws is pending or, to the knowledge of QTTM, threatened.
6.34 Board Recommendation.
QTTM Board by unanimous written consent, has determined that this Agreement and
the transactions contemplated by this Agreement are advisable and in the best
interests of QTTM and has duly authorized this Agreement and the transactions
contemplated by this Agreement.
36
ARTICLE VII
COVENANTS OF QTTM
7.1 Rule 144 Reporting.
Subject to RTI Selling Shareholders not being in material breach of the
warranties and representations in Article IV and Schedule B, with a view to
making available to QTTM the benefit of certain rules and regulations of the
Commission which may permit the sale of QTTM Common Stock to the public without
registration, from and after the Closing Date, QTTM agrees to
7.1.1 Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act; and
7.1.2 File with the Commission, in a timely manner, all reports and
other documents required of QTTM under the Exchange Act.
7.2 Private Placement.
Assuming the accuracy of the RTI Selling Shareholders' representations and
warranties in Article IV and Schedule B, the exchange of the Securities to the
RTI Selling Shareholders as contemplated hereby is exempt from the registration
and/or prospectus requirements, as the case may be, of the 1933 Act and of the
securities laws and regulations in all applicable jurisdictions, including but
not limited to the province of Quebec.
7.3 SEC Documents.
From and after the Closing Date, in the event the Commission notifies QTTM of
its intent to review any SEC Document filed prior to or following the Closing
Date or QTTM receives any oral or written comments from the Commission with
respect to any SEC Document filed prior to or following the Closing Date, QTTM
shall promptly notify RTI and RTI Selling Shareholders and RTI and RTI Selling
Shareholders shall fully cooperate with QTTM.
7.4 No Assurances and Warranties.
RTI and RTI Selling Shareholders acknowledge that there can be no assurance
regarding the tax consequences of this transaction, nor can there be any
assurance the IR Code or IT Act (Canada) or the regulations promulgated
thereunder will not be amended in such manner as to deprive them of any tax
benefit that might otherwise be received. RTI and RTI Selling Shareholders are
relying upon the advice of their own tax advisors with respect to the tax
aspects of this transaction. No representations or warranties have been made by
QTTM, or its directors or officers, affiliates or agents, as to the benefits to
be derived by RTI and RTI Selling Shareholders in completing this transaction,
nor have any of them made any warranty or agreement, expressed or implied, as to
the tax or securities consequences of the transactions contemplated by this
Agreement or the tax or securities consequences of any action pursuant to or
growing out of this Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT OF RTI AND RTI SELLING SHAREHOLDERS
37
RTI Selling Shareholders' obligation to transfer the RTI Shares and the
obligations of RTI to take the other actions required to be taken by RTI in
advance of or at the Closing Date are subject to the satisfaction, at or prior
to the Closing Date, of each of the following conditions (any of which may be
waived by RTI and RTI Selling Shareholders jointly, in whole or in part):
8.1 Accuracy of Representations.
The representations and warranties of QTTM and set forth in this Agreement or in
any Transaction Document or certificate delivered pursuant hereto that are not
qualified as to materiality shall be true and correct in all material respects
as of the date of this Agreement except to the extent a representation or
warranty is expressly limited by its terms to another date and without giving
effect to any supplemental Exhibit or Schedule. The representations and
warranties of QTTM and set forth in this Agreement or in any Transaction
Document or certificate delivered pursuant hereto that are qualified as to
materiality shall be true and correct in all respects as of the date of this
Agreement, except to the extent a representation or warranty is expressly
limited by its terms to another date and without giving effect to any
supplemental Exhibit or Schedule.
8.2 Performance by QTTM.
8.2.1 All of the covenants and obligations that QTTM are required to
perform or to comply with pursuant to this Agreement (considered
collectively), and each of these covenants and obligations
(considered individually), must have been performed and complied
with in all respects.
8.2.2 Each document required to be delivered by QTTM pursuant to this
Agreement must have been delivered.
8.3 No Force Majeure Event.
There shall not have been any delay, error, failure or interruption in the
conduct of the business of QTTM, or any loss, injury, delay, damage, distress,
or other casualty, due to force majeure including but not limited
(a) acts of God;
(b) fire or explosion;
(c) war, acts of terrorism or other civil unrest; or
(d) national emergency.
8.4 Consents.
All material consents, waivers, approvals, authorizations or orders required to
be obtained, and all filings required to be made, by QTTM for the authorization,
execution and delivery of this Agreement and the consummation by it of the
transactions contemplated by this Agreement, shall have been obtained and made
by QTTM, except where the failure to receive such consents, waivers, approvals,
38
authorizations or orders or to make such filings would not have a Material
Adverse Effect on RTI or QTTM.
8.5 Documents.
QTTM must have caused the following documents to be delivered to RTI and/or RTI
Selling Shareholders at or prior to the Closing Date:
8.5.1 Share certificates evidencing each RTI Selling Shareholder's pro
rata share of the QTTM Shares (as set forth in Schedule A);
8.5.2 A Secretary's Certificate, dated the Closing Date certifying
attached copies of
(a) the Organizational Documents of QTTM,
(b) the resolutions of QTTM Board approving this Agreement and
the transactions contemplated hereby; and
(c) a list identifying the incumbency of each authorized officer
of QTTM signing this Agreement and any other agreement or
instrument contemplated hereby to which QTTM is a party;
8.5.3 A Certificate of Good Standing of QTTM;
8.5.4 Each of the Transaction Documents to which QTTM is a party,
duly executed; and
8.5.5 Such other documents as RTI may reasonably request for the
purpose of
(a) evidencing the accuracy of any representation or warranty
of QTTM pursuant to Article 8.1,
(b) evidencing the performance of, or the compliance by QTTM
with, any covenant or obligation required to be
performed or complied with by QTTM,
(c) evidencing the satisfaction of any condition referred to in
this Article, or
(d) otherwise facilitating the consummation or performance of
any of the transactions contemplated by this Agreement.
8.6 No Proceedings.
Prior the date of this Agreement, there must not have been commenced or
threatened against QTTM, RTI or any RTI Selling Shareholder, or against any
Affiliate thereof, any Proceeding (which Proceeding remains unresolved as of the
date of this Agreement)
(a) involving any challenge to, or seeking damages or other relief
in connection with, any of the transactions contemplated by this
Agreement.
(b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the
transactions contemplated by this Agreement.
39
8.7 Financial Matters.
Exhibit 5.25 sets forth the name and location of each financial institution
where RTI maintains accounts. RTI is required to establish dual signing
authorization of such accounts and shall add one member from the QTTM Board to
the list of authorized signatories for internal controls and procedures which
are designed with the objective of providing reasonable assurance that financial
transactions are properly authorized and assets are safeguarded against
unauthorized or improper use.
ARTICLE IX
CONDITIONS PRECEDENT OF QTTM
QTTM's obligation to acquire the RTI Shares and to take the other actions
required to be taken by QTTM in advance of or at the Closing Date is subject to
the satisfaction, at or prior to the Closing Date, of each of the following
conditions (any of which may be waived by QTTM, in whole or in part):
9.1 Accuracy of Representations.
The representations and warranties of RTI and RTI Selling Shareholders set forth
in this Agreement or in any Transaction Document or certificate delivered
pursuant hereto that are not qualified as to materiality shall be true and
correct in all material respects as of the date of this Agreement except to the
extent a representation or warranty is expressly limited by its terms to another
date and without giving effect to any supplemental Exhibit or Schedule. The
representations and warranties of RTI and RTI Selling Shareholders set forth in
this Agreement or in any Transaction Document or certificate delivered pursuant
hereto that are qualified as to materiality shall be true and correct in all
respects as of the date of this Agreement, except to the extent a representation
or warranty is expressly limited by its terms to another date and without giving
effect to any supplemental Exhibit or Schedule.
9.2 Performance By RTI and RTI Selling Shareholders.
9.2.1 All of the covenants and obligations that RTI and RTI Selling
Shareholders are required to perform or to comply with pursuant
to this Agreement (considered collectively), and each of these
covenants and obligations (considered individually), must have
been duly performed and complied with in all material respects.
9.2.2 Each document required to be delivered by RTI and RTI Selling
Shareholders pursuant to this Agreement must have been
delivered.
9.3 No Force Majeure Event.
There shall not have been any delay, error, failure or interruption in the
conduct of the business of RTI, or any loss, injury, delay, damage, distress, or
other casualty, due to force majeure including but not limited to
(a) acts of God;
(b) fire or explosion;
(c) war, acts of terrorism or other civil unrest; or
40
(d) national emergency.
9.4 Consents.
All material consents, waivers, approvals, authorizations or orders required to
be obtained, and all filings required to be made, by RTI and/or RTI Selling
Shareholders for the authorization, execution and delivery of this Agreement and
the consummation by them of the transactions contemplated by this Agreement,
shall have been obtained and made by RTI or RTI Selling Shareholders, as the
case may be, except where the failure to receive such consents, waivers,
approvals, authorizations or orders or to make such filings would not have a
Material Adverse Effect on RTI or QTTM.
9.5 Documents.
RTI and RTI Selling Shareholders must have previously furnished to QTTM complete
and correct copies of the following documents to be delivered to QTTM at or
prior to the Closing Date.
9.5.1 Share certificates evidencing the number of RTI Shares held by
each RTI Selling Shareholder (as set forth in Schedule A), along
with executed share transfer forms transferring such RTI Shares
to QTTM together with a certified copy of a board resolution of
RTI approving the registration of the transfer of such shares to
QTTM.
9.5.2 A Secretary's Certificate, dated the Closing Date certifying
attached copies of
(a) the Organizational Documents of RTI,
(b) the resolutions of RTI Board approving this Agreement and
the transactions contemplated hereby; and
(c) a list identifying the incumbency of each authorized officer
of RTI signing this Agreement and any other agreement or
instrument contemplated hereby to which RTI is a party;
9.5.3 A copy of the annual return (Form 22) from Industry Canada,
Corporations Canada;
9.5.4 A copy of the annual declaration from Registraire des
Entreprises Quebec;
9.5.5 Each of the Transaction Documents to which RTI and/or RTI
Selling Shareholders is a party, duly executed, and
9.5.6 Such other documents as QTTM may reasonably request for the
purpose of
(a) evidencing the accuracy of any of the representations and
warranties of RTI and RTI Selling Shareholders
pursuant to Article 9.1,
(b) evidencing the performance of, or compliance by RTI and RTI
Selling Shareholders with, any covenant or obligation
required to be performed or complied with by RTI or RTI
Selling Shareholders, as the case may be,
(c) evidencing the satisfaction of any condition referred to in
this Article, or
41
(d) otherwise facilitating the consummation or performance of
any of the transactions contemplated by this Agreement.
9.6 No Proceedings.
Prior to the date of this Agreement, there must not have been commenced or
threatened against QTTM, RTI or any RTI Selling Shareholder, or against any
Affiliate thereof, any Proceeding (which Proceeding remains unresolved as of the
date of this Agreement)
(a) involving any challenge to, or seeking damages or other relief
in connection with, any of the transactions contemplated by this
Agreement, or
(b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the transactions
contemplated by this Agreement.
ARTICLE X
SURVIVAL, INDEMNIFICATION AND REMEDIES
10.1 Survival.
All representations, warranties, covenants and agreements contained in this
Agreement, including without limitation the indemnification contained in Article
10.3 and 10.4 below, shall survive the Closing of the transactions contemplated
by this Agreement.
10.2 Indemnification by RTI and RTI Selling Shareholders.
RTI and RTI Selling Shareholders, (the "Indemnifier"), agree to indemnify and
hold harmless QTTM and their respective directors, officers, employees and
agents from and against any and all losses, claims, damages, liabilities and
expenses (including without limitation reasonable attorney fees and
disbursements and other expenses incurred in connection with investigating,
preparing or defending any action, claim or proceeding, pending or threatened
and the costs of enforcement thereof) (collectively, "Losses") to which such
Person may become subject as a result of any breach of representation, warranty,
covenant or agreement made by or to be performed on the part of RTI and RTI
Selling Shareholders under this Agreement and each of the Transaction Documents,
and will reimburse any such Person for all such amounts as they are incurred by
such Person.
10.3 Indemnification by QTTM.
QTTM, (the "Indemnifier"), agrees to indemnify and hold harmless RTI and RTI
Selling Shareholder and their respective directors, officers, employees and
agents from and against any and all losses, claims, damages, liabilities and
expenses (including without limitation reasonable attorney fees and
disbursements and other expenses incurred in connection with investigating,
preparing or defending any action, claim or proceeding, pending or threatened
and the costs of enforcement thereof) (collectively, "Losses") to which such
Person may become subject as a result of any breach of representation, warranty,
covenant or agreement made by or to be performed on the part of QTTM under this
Agreement and each of the Transaction Documents, and will reimburse any such
Person for all such amounts as they are incurred by such Person.
42
10.4 Notice of Indemnification Proceedings.
Promptly after receipt by any Person (the "Indemnified Person") of notice of any
demand, claim or circumstances which would or might give rise to a claim or the
commencement of any action, proceeding or investigation in respect of which
indemnity may be sought pursuant to Article 10.2 or 10.3, such Indemnified
Person shall promptly notify the Indemnifier in writing and Indemnifier shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Person, and shall assume the payment of all
fees and expenses; provided, however, that the failure of any Indemnified Person
so to notify Indemnifier shall not relieve Indemnifier of its obligations
hereunder except to the extent that Indemnifier is materially prejudiced by such
failure to notify. In any such proceeding, any Indemnified Person shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Person unless:
(a) Indemnifier and the Indemnified Person shall have mutually agreed to
the retention of such counsel; or
(b) in the reasonable judgment of counsel to such Indemnified Person
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. Indemnifier shall not be liable for any settlement of any
proceeding effected without its written consent, which consent shall
not be unreasonably withheld, but if settled with such consent, or if
there be a final judgment for the plaintiff, Indemnifier shall
indemnify and hold harmless such Indemnified Person from and against
any loss or liability (to the extent stated above) by reason of such
settlement or judgment. Without the prior written consent of the
Indemnified Person, which consent shall not be unreasonably withheld,
Indemnifier shall not effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or
could have been a party and indemnity could have been sought hereunder
by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability
arising out of such proceeding.
ARTICLE XI
GENERAL PROVISIONS
11.1 Arbitration, Attornment.
Each of the parties hereto agrees that any dispute, controversy, action or
proceeding arising out of or relating to this Agreement shall be settled
exclusively by arbitration in the City of New York, County of New York in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court having
jurisdiction.
11.2 Assignments, Inurement, and No Third Party Rights.
No party may assign any of its rights under this Agreement without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the parties hereto and be enforceable by their respective successors
and permitted assigns of the parties. Except as set forth in Article 7.1,
nothing expressed or referred to in this Agreement will be construed to give any
Person other than the parties to this Agreement any legal or equitable right,
remedy, or claim under or with respect to this Agreement or any provision of
this Agreement. This Agreement and all of its provisions and conditions are for
43
the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
11.3 Confidentiality.
11.3.1 Subsequent to the date of this Agreement, QTTM, RTI and RTI
Selling Shareholders will maintain in confidence, and will cause
their respective directors, officers, employees, agents, and
advisors to maintain in confidence, any written, oral, or other
information obtained in confidence from another party in
connection with this Agreement or the transactions contemplated
by this Agreement, unless
(a) such information is already known to such party or to others
not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party,
(b) the use of such information is necessary or appropriate in
making any required filing with the Commission, or obtaining
any consent or approval required for the consummation of the
transactions contemplated by this Agreement, or
(c) the furnishing or use of such information is required by or
necessary or appropriate in connection with legal
proceedings.
11.3.2 In the event that any party is required to disclose any information
of another party pursuant to clause (ii) or (iii) of Article 11.3.1,
the party requested or required to make the disclosure (the
"disclosing party") shall provide the party that provided such
information (the "providing party") with prompt notice of any such
requirement so that the providing party may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions
of this Article 11.3. If, in the absence of a protective order or
other remedy or the receipt of a waiver by the providing party, the
disclosing party is nonetheless, in the opinion of counsel, legally
compelled to disclose the information of the providing party, the
disclosing party may, without liability hereunder, disclose only that
portion of the providing party's information which such counsel
advises is legally required to be disclosed, provided that the
disclosing party exercises its reasonable efforts to preserve the
confidentiality of the providing party's information, including,
without limitation, by cooperating with the providing party to obtain
an appropriate protective order or other relief assurance that
confidential treatment will be accorded the providing party's
information.
11.3.3 If the transactions contemplated by this Agreement are not
consummated, each party covenants and agrees to return or
destroy as much of such written information as the other party
may reasonably request. Each party further covenants and agrees
to maintain the confidentiality of such information and
documentation by not using such information or furnishing any
retained copies thereof, for the benefit of any Person directly
or indirectly.
11.4 Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same instrument.
11.5 Expenses.
44
Except as otherwise expressly provided in this Agreement, each party to this
Agreement will be responsible and bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated by this Agreement, including all fees and
expenses of agents, representatives, counsel, and accountants. In the event of
termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a breach of
this Agreement by another party.
11.6 Further Action.
The parties agree to execute any and all other documents, including corporate
proceedings, and to take such other action required or permitted to be taken
under this Agreement as may be necessary or desirable to carry out the terms
hereof.
11.7 Further Assurances.
Notwithstanding that the transactions and events set out herein shall occur and
be deemed to occur without any further act or formality, each of the parties to
this Agreement hereto agree:
(a) to furnish upon request to each other such further information,
(b) to make, do and execute, or cause to be made, done and executed,
all such further acts, deeds, agreements, transfers, assurances,
instruments or such other documents as may reasonably be
required by each other in order to further document or evidence
any of the transactions or events,
(c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of
this Agreement and the documents referred to in this Agreement.
11.8 Governing Laws; Jurisdiction.
This Agreement and each of the Transaction Documents shall be construed and
governed in accordance with the laws of the State of Nevada, the laws of the
Province of Quebec, and the laws of Canada applicable therein and shall be
treated in all respects as a Nevada contract.
11.9 Language.
The undersigned hereby acknowledges that it has consented to and requested that
the documents relating in any way to the purchase and sale of the Securities be
drawn up in the English language only.
11.10 No Personal Liability.
11.10.1 No director or officer of any QTTM shall have any personal
liability whatsoever to RTI under this Agreement, or any other
document delivered in connection with this Agreement on behalf of
QTTM.
11.10.1 No director or officer of RTI shall have any personal liability
45
whatsoever to QTTM under this Agreement or any other document
delivered in connection with this Agreement on behalf of RTI.
11.11 Notices to Parties.
All notices, consents, requests, waivers, and other communications between the
parties under this Agreement shall be in writing and shall be deemed to have
been duly given to the party to whom notice is to be given, when received by the
addressee. If the date of confirmed receipt thereof is not a Business Day in
which case it shall be deemed to have been given and received upon the
immediately following Business Day.
(a) if delivered personally by hand (with written confirmation of
receipt),
(b) if sent by telecopy (with written confirmation of receipt), or
(c) if sent by a nationally recognized overnight delivery service
(with confirmed delivery receipt); or
(d) if sent by first class mail, registered mail or certified mail
(deemed to have been received on the third Business Day after
mailing).
In each case to the appropriate addresses and telecopy numbers of the parties
set forth below (or to such other addresses and telecopy numbers as a party may
designate by written notice to the other parties):
If to QTTM, at: with a copy to:
--------------
Quantitative Methods Corporation Xxxxxx & Xxxxx
70 de Navarre Crescent 000 Xxxxxxx Xxxxxx
Xx-Xxxxxxx, Xxxxxx, Xxxxxx Suite 3200
J4S 1Y6 Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Attention: Xx. Xxxxxx X. Xxxxxx,
President Attorney
Telephone No.: (000) 000-0000 Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
If to RTI, at:
RTI Technologies Inc.
0000, Xxxxx-Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxx-Xxxxxxx (Xxxxxx)
Xxxxxx
X0X 0X0
Attention: Xxxx Xxxxxxxx, President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
11.12 Public Announcements.
46
QTTM shall promptly, but no later than four (4) days following the effective
date of this Agreement, issue a press release disclosing the transactions
contemplated hereby. Prior to the Closing Date, RTI and QTTM shall consult with
each other in issuing any other press releases or otherwise making public
statements or filings and other communications with the Commission or any
regulatory agency or stock market or trading facility with respect to the
transactions contemplated hereby and neither party shall issue any such press
release or otherwise make any such public statement, filings or other
communications without the prior written consent of the other, which consent
shall not be unreasonably withheld or delayed, except that no prior consent
shall be required if such disclosure is required by law, in which case the
disclosing party shall provide the other party with prior notice of such public
statement, filing or other communication and shall incorporate into such public
statement, filing or other communication the reasonable comments of the other
party.
11.13 Severability.
In the event that any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by applicable law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.
11.14 Waiver.
The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power, or privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power, or privilege, and
no single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law,
(a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in
whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party;
(b) no waiver that may be given by a party will be applicable except
in the specific instance for which it is given; and
(c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the
party giving such notice or demand to take further action
without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
47
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have caused this Share Exchange
Agreement to be duly executed as of the date first written above.
QUANTITATIVE METHODS CORPORATION
Signed:
---------------------------------------------------------
Printed Name:
---------------------------------------------------------
Title: President and Director
Signed:
---------------------------------------------------------
Printed Name:
---------------------------------------------------------
Title: Secretary/Treasurer and Director
48
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have caused this Share Exchange
Agreement to be duly executed as of the date first written above.
ROADVISION TECHNOLOGIES INC.
Signed:
---------------------------------------------------------
Printed Name:
---------------------------------------------------------
Title: President and Director
Signed:
---------------------------------------------------------
Printed Name:
---------------------------------------------------------
Title: Secretary/Treasurer and Director
49
EXHIBITS
Exhibit 5.1 RTI Jurisdiction
Exhibit 5.18 Directors and Officers of RTI
Exhibit 5.25 Financial Institutions
Exhibit 5.29 Financial Statements
Exhibit 6.1 QTTM Jurisdiction
Exhibit 6.18 Directors and Officers of QTTM
Exhibit 6.29 Financial Statements
50
EXHIBIT 5.1
ROADVISION TECHNOLOGIES INC.
JURISDICTION
1) Province of Quebec, Canada
51
EXHIBIT 5.18
ROADVISION TECHNOLOGIES INC.
DIRECTORS AND OFFICERS
1) Xxxx Xxxxxxxx President and Director
2) Xxxxxx Xxxxxx Vice-President and Director
3) Xxxxxx Xxx Secretary and Director
4) Xxxxxx Xxx Treasurer and Director
5) Xxxxxxx Xxxxx Director
KEY EMPLOYEES
1) Xxxxxx Xxxxxxx Senior Technology Officer
52
EXHIBIT 5.25
ROADVISION TECHNOLOGIES INC.
FINANCIAL INSTITUTIONS
1) TD CANADA TRUST 000 xx Xxxxxxxxxxx Xxxxxxxxx Xxxx Xxxxxxxx (Xxxxxx)
Xxxxxx
X0X 0X0
Branch Number: 0527
Account Number: 8379-0000000
53
EXHIBIT 5.29
ROADVISION TECHNOLOGIES INC.
FINANCIAL STATEMENTS
1) Financial Statements (Unaudited) March 31, 2005
2) Financial Statements (Unaudited) June 30, 2005
3) Financial Statements (Unaudited) July 31, 2005
4) Financial Statements (Unaudited) August 31, 2005
54
EXHIBIT 6.1
QUANTITATIVE METHODS CORPORATION
JURISDICTION
1) State of Nevada, United Xxxxxx xx Xxxxxxx
0) Xxxxxxxx xx Xxxxxx, Xxxxxx under the name of CORPORATION METHODE
QUANTITATIVE.
55
EXHIBIT 6.18
QUANTITATIVE METHODS CORPORATION
DIRECTORS AND OFFICERS
1) Xxxxxx X. Xxxxx President and Director
2) Xxxxx Xxxxxx Secretary and Director
3) Xxxxx Xxxxxx Treasurer and Director
56
EXHIBIT 6.29
QUANTITATIVE METHODS CORPORATION
FINANCIAL STATEMENTS
1) Financial Statements (Audited) December 31, 2005
2) Financial Statements (Unaudited) March 31, 2005
3) Financial Statements (Unaudited) June 30, 2005
57
SCHEDULE "A"
RTI SHARES AND QTTM SHARES TO BE EXCHANGED
------------------------------------------------------------------------------------------------------------------------------
Name and Address of RTI Selling Number of RTI Shares to be delivered by Number of QTTM Shares to be issued to RTI
Shareholder RTI Selling Shareholder Selling Shareholder
------------------------------------------------------------------------------------------------------------------------------
0000-0000 Xxxxxx Inc. 696,000 696,000
10-5275 Xxxxxx xx xx Xxxx Xx-Xxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
0000000 Xxxxxx Inc. 2,000,000 2,000,000
0000 Xxxx Xxxxxxxx Xxxxxxxxx Xxxx,
Xxxxx 0000
Montreal (Quebec) Canada
H3B 5C9
Adam, Justin 10,000 10,000
3272 Amicale
Mascouche (Quebec) Canada
J7K 2Y1
Xxxxxxx, Xxxxxxx 30,000 30,000
000 Xxxxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Avinar S.E.N.C. 10,000 10,000
c/o Xxxxx Xxxxxxx
297 Xxxxxxxxx-Xxxxx, Apt. #22
C.P. 1029, Succursale Hull
Gatineau (Quebec) Canada
J8X 3X5
Xxxxxxx, Xxxxxx 15,000 15,000
000 Xxxxxxx Xxxxx Xxxxxx
Xx-Xxxx-xxx-Xxxxxxxxx (Xxxxxx), Xxxxxx
X0X 0X0
Xxxxxxxxxx, Xxxxxxxx 15,000 15,000
15 Place Xxxxxxxx
Xxxxxxxx (Quebec) Canada
J6Z 3A7
Xxxxxxxx, Xxxxxxx 500,000 500,000
54 Seize Arpents
Xxxxx Heights (Quebec) Canada
J0R 1H0
Xxxxxx, Xxxxxx 10,000 10,000
0 Xxxxx Xxxxxxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxx, Xxxxxx 10,000 10,000
00 Xxxxxxx, Xxx #0000
Xxx'x Xxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxxx-Xxxxxxxx, Xxxxxxxxx 30,000 30,000
00000 Xxx Xxxxxxx
Xxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
58
Xxxx, Xxxxxx 17,500 17,500
0000 Xxxxxx Xxxxxxxxxxx
Xxxxxx (Xxxxxx)
X0X 0X0
Xxxxxx, Xxxxxxx 20,000 20,000
3611 Xxxxxx xx Xxx
Xx-Xxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxxx, Xxxxxx 25,000 25,000
0000 Xxxxxxx Xxxxxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxx, Xxxxxx 90,000 90,000
2 Montee Major, #201
Laval (Quebec) Canada
H7N 4R8
Xxxxxxx, Xxxxx 90,000 90,000
000 Xxxxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxx, Xxxxxxxx 25,000 25,000
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxxxx, Xxxx 10,000 10,000
0 Xxxxx Xxxxxx
Xxxxx (Xxxxxx) Xxxxxx
X0X 0X0
La Vigilance 50,000 50,000
00 xxx Xxxxxx Xxxxxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxx, Xxxxxxx 100,000 100,000
0000 Xx-Xxxxxx Xxxxxxxxx Xxxx
Tour "A", Bureau 400
Laval (Quebec) Canada
H7G 4R8
Xxxxxx, Xxxxxxx "In Trust" 1,713,750 1,713,750
0000 Xx-Xxxxxx Xxxxxxxxx Xxxx
Tour "A", Bureau 400
Laval (Quebec) Canada
H7G 4R8
Xxxxxxxx, Real 80,000 80,000
1699 Xxxxxx Xxxxxx
Nominingque (Quebec)
J0W 1R0
Xxxxxxx, Xxxxx 64,000 64,000
0000 Xxxx-Xxxxxx
Xxxxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Les Placements Davcom Inc. 50,000 50,000
000 Xxxxxx
Xxxxxxx-xxx-Xxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
59
Xxxxxxxxx, Xxxxxxxxx 200,000 200,000
0000 Xxxxxxxxxx Xxxxxx Xxxx, Xxx # X-00
Montreal (Quebec) Canada
X0X 0X0
Xxxxxxxxxx, Xxxxx 25,000 25,000
00 Xxxxxxxx xx xx Xxxxxxx
Lavaltrie (Quebec) Canada
J5T 1B1
Xxxxxx, Xxxx Xxx Dr. 25,000 25,000
0000 Xxxxxx Xxxxx Xxxxxxx
Xx-Xxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxx, Xxxxxx 35,000 35,000
884 Massawipi
Terrebonne (Quebec) Canada
J6W 5H2
Xxxxxxxxx, Xxxxxx 9,000 9,000
00 Xxxxx Xxxxxxxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxx, Xxxxx-Xxxxx 20,000 20,000
00 Xxxxx Xxxxxxxxx Xxxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxxx, Xxxx 50,000 50,000
0000 Xxxxx-xx-Xxxxx Xxxxxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxx, Xxxxxx Dr. 230,000 230,000
000 Xxxxxx Xxxxxx
Xxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxx, France 112,500 112,500
000 Xxxxxx Xxxxxx
Xxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxxx, Xxxxx 17,000 17,000
2372 L'Acajou
St-Laurent (Quebec) Canada
H4R 2R8
Xxxxxxxxx, Xxxxxx 40,000 40,000
27 des Neiges Street
Beauport (Quebec) Canada
X0X 0X0
Xxxxx, Xxxxx 10,000 10,000
000 Xxxxx Xxxxxxx, #000
Xx-Xxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxxxx, Xxxx 200,000 200,000
0000 xx Xxxxxxxxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxx, Xxxxxx 341,250 341,250
000 Xxxxxxxxxx, #0
Xxxxxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
60
Xxxxxx, Xxxxxxx 60,000 60,000
0000 Xxxx Xxxxxx, Xxx #000
Xx-Xxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxx, Xxxxx 54,000 54,000
109 Sevigny, #4
Repentigny (Quebec) Canada
J5Y 2C9
Stravrakis, Xxxxx 10,000 10,000
117 Lisbonne
Xxxxxxx-des-Ormeaux (Quebec) Canada
H9B 3B6
Subai, Ziad 10,000 10,000
0000 Xx-Xxxxx
Xx-Xxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Xxxxxxxx, Xxxxx 70,000 70,000
00000 Xxx Xxxxxxx
Xxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Votre Conseiller Professional Inc. 70,000 70,000
00 xx x'Xxxxxxx Xxxxxx
Xxxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
61
SCHEDULE "B"
QUANTITATIVE METHODS CORPORATION
SUBSCRIPTION AGREEMENT
FOR
"ACCREDITED INVESTOR" OR "NON-U.S. PERSON"
---------------------------------------------------------------
(Name of Subscriber)
To: Xxxxxx Xxxxx, President
Quantitative Methods Corporation
00 xx Xxxxxxx Xxxxxxxx
Xx-Xxxxxxx (Xxxxxx) Xxxxxx
X0X 0X0
Re: Offer to acquire shares of
Quantitative Methods Corporation
This Subscription Agreement (the "Subscription"), dated as of the 26th of
August, 2005, has been executed by the undersigned (a "Subscriber") in
connection with the Share Exchange Agreement (the" Agreement"), between
Roadvision Technologies Inc. ("RTI"), the Shareholders of Roadvision
Technologies Inc., and Quantitative Methods Corporation ("QTTM)", whereby QTTM
offers to acquire all of the issued and outstanding Class A common shares (100%)
of RTI (the "Offering") in consideration for the issuance of QTTM common stock,
("QTTM Shares"), $.001 par value per share, (being 7,250,000 shares in total).
The aggregate price for the QTTM Shares is 7,250,000 issued and outstanding
Class A common shares of RTI. The offer to issue and exchange the QTTM Shares is
being made in reliance upon the exemption provided in Section 4(2) of the
Securities Act of 1933, as amended, (the "Securities Act") for private offerings
and the provisions of Regulation S ("Regulation S") for offers made outside the
U.S. without registration under the Securities Act and promulgated by the
Securities and Exchange Commission (the "SEC"). Upon the terms and subject to
the conditions set forth herein, each Subscriber hereby agrees to exchange and
cancel their shares of RTI, and QTTM hereby agrees to acquire and issue the QTTM
Shares.
Gentlemen,
1. Agreement to Subscribe.
Subject to the terms and conditions set forth in this Subscription Agreement
("Subscription") and in the Share Exchange Agreement (the "Agreement"), the
undersigned Subscriber hereby agrees to exchange and cancel his/her or its RTI
shares for _______________ QTTM Shares and irrevocably tenders this
Subscription, together with his/her or its share certificate of RTI, duly
endorsed to QTTM.
2. Acceptance of Subscription.
The Subscriber understands and agrees:
(a) that this offer to subscribe is subject to acceptance, in writing,
by the President, who shall have the right to accept or reject
this Subscription, in whole or in part, on behalf of QTTM.
(b) that QTTM will not accept subscriptions from a person who does not
qualify as an "Accredited Investor", as the term is defined in
62
Rule 501 of Regulation D under the Securities Act or who is a
"U.S. Person", as the term is defined in Rule 902 of Regulation S
under the Securities Act.
3. Effective Date.
The Subscriber recognizes that the effective date of this Subscription shall not
be the date the Subscriber signs this Subscription, but rather the execution
date of the Agreement ("Closing").
The subscriber understands that the plan of reorganization described in the
Agreement shall be consummated immediately after the closing of this
Subscription.
4. Non-Transferable, Assignable.
The Subscriber acknowledges and agrees, either before or after the acceptance
hereof by the President of QTTM that this subscription:
(a) is irrevocable (except as otherwise provided below); and
(b) is not transferable or assignable; and
(c) that the QTTM Shares to be issued and delivered as a result of
this Subscription, will only be issued in the
name of and delivered to the undersigned; and
(d) that the QTTM Shares certificates will bear the respective legends
and appropriate "stop transfer" instructions as specified in the
attached acknowledgement.
5. Documentation.
The Subscriber will complete, sign and return one (1) executed copy of this
Subscription, including an acknowledgement form certifying that the Subscriber
is:
(a) an accredited investor (APPENDIX A); or
(b) not a U.S. Person (APPENDIX B).
The Subscriber will also tender his/her or its share certificate for the issued
and outstanding Class A common shares of RTI, duly endorsed to QTTM. Any such
share certificate sent to QTTM shall be held in escrow by QTTM, pending the
satisfaction of the conditions to Closing specified herein.
6. Investment Knowledge, Experience.
The Subscriber has sufficient knowledge and experience in finance, securities,
investments and other business matters to be able to protect such Subscriber's
interests in connection with the transaction contemplated in this Subscription
and the Agreement.
7. Independent Investigation.
The Subscriber, in making the decision to acquire the QTTM Shares, has relied
upon an independent investigation of QTTM and has not relied upon any
information or representations made by any third parties or upon any oral or
written representations or assurances from QTTM, its officers, directors or
employees or any other representatives or agents of QTTM, other than as set
forth in this Subscription and the Agreement.
The Subscriber is familiar with the business, operations and financial condition
63
of QTTM and has been afforded the opportunity to ask questions of, and receive
answers from, QTTM's officers and directors concerning QTTM and the terms and
conditions of this Subscription and has had full access to such other
information concerning QTTM as the Subscriber has requested. The Subscriber has
also had access to QTTM's publicly filed reports with the SEC. The Subscriber
acknowledges that all such public information has been sufficient to evaluate
the risks of investing in QTTM Shares.
8. No Legal Advice from QTTM.
The Subscriber acknowledges that he, she or it has had the opportunity to review
the transactions contemplated by this Subscription and the Agreement and has
consulted, as deemed necessary, with the Subscriber's own legal counsel and
investment and tax advisors concerning the investment in QTTM Shares.
The Subscriber is relying solely on his/her or its professional tax, legal and
financial advisors and not on any statements or representations of QTTM or any
of its representatives or agents for legal, tax or investment advice with
respect to this investment, the transactions contemplated by this Subscription
or the securities laws of any jurisdiction, except for any statements or
representations of QTTM made in this Subscription and the Agreement.
The Subscriber admits, (along with such advisors) that they are familiar with
the nature of and risks attending investments in restricted securities and have
determined, based upon an independent analysis of his/her or its assets and
income, that the acquisition of the QTTM Shares is consistent with his/her or
its investment objectives and income prospects.
9. No Advertisements.
The subscriber acknowledges that he/she or it is not subscribing for QTTM Shares
as a result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, or presented at any seminar or meeting.
10. No Government Recommendation or Approval.
The Subscriber is aware and understands that no United States federal of state
agency or any similar regulatory agency has made any finding or determination as
to the fairness of this investment, nor passed upon or made any recommendation
or endorsement of QTTM, its business or the offering of QTTM Shares.
The Subscriber understands that this offering of QTTM Shares has not been
reviewed by the Attorneys General of any State, the Attorney General of the
United States, the SEC or the securities commission of any State, because of
QTTM's representations that the offering is intended to be non-public offering
exempt from registration pursuant to Rule 501 of Regulation D under the
Securities Act. The Subscriber understands that any offering literature used in
connection with this offering has not been filed or will be filed with the
Attorneys General or securities commissions of any State. Therefore, the
foregoing authorities have not confirmed the accuracy or determined the adequacy
of any information concerning QTTM that has been supplied to the Subscriber.
The Subscriber recognizes that there is not guarantee that the Internal Revenue
Code, or the regulations promulgated thereunder, will not be amended in such a
manner as to deprive QTTM and its shareholders of any tax benefit they might now
receive. The Subscriber acknowledges being aware that the tax effects which may
be expected by QTTM are not susceptible to absolute prediction and that new
developments and rulings of the Internal Revenue Service, audit adjustments,
court decisions, or legislative changes may have an adverse effect on one or
more of the tax consequences sought by QTTM.
11. Intent.
The Subscriber is acquiring the QTTM Shares solely for investment purposes, for
the Subscriber's own account and not for the account or benefit of any U.S.
person, and not with a view towards the distribution or dissemination thereof
64
and the Subscriber has no present arrangement or intention to sell the QTTM
Shares in the United States, to or through any U.S. person or entity. The
Subscriber has carefully considered the various risks of investment in QTTM
Shares and can afford to bear such risks indefinitely, including without
limitation, the economic risk of losing his/her or its entire investment in QTTM
Shares, unless such QTTM Shares are resold in accordance with the provisions of
Regulation S and subsequently registered under the Securities Act or if an
exemption from registration is available.
12. Restrictions on Transfer.
The Subscriber understands and agrees that the QTTM Shares to be issued pursuant
to the Agreement are characterized as "restricted securities" and have not been
registered under the Securities Act or the securities laws of any state of the
U.S. inasmuch as they are being acquired from QTTM in a transaction not
involving a public offering in reliance upon an exemption from registration
afforded under Section 4(2) of the Securities Act or Regulation S for offers and
sales of securities outside the U.S.
The Subscriber recognizes that QTTM is under no obligation to register the QTTM
Shares for sale under the Securities Act and that QTTM shall refuse to register
any transfer of the QTTM Shares not made in accordance with the provisions of
Regulation S, pursuant to an effective registration statement filed under the
Securities Act, or pursuant to an available exemption from the registration
requirements of the Securities Act.
The Subscriber is aware the QTTM Shares have not been registered under the
Securities Act, or the securities laws of any state, and therefore, if in the
future the Subscriber decides to offer, resell, pledge or otherwise transfer the
QTTM Shares, such QTTM Shares may be offered, resold, pledged or otherwise
transferred only:
(a) pursuant to an effective registration statement filed under the
Securities Act;
(b) to a non-U.S. person in an offshore transaction in accordance
with Rule 903 or Rule 904 of Regulation S of the Securities Act;
(c) pursuant to the resale limitations set forth in Rule 905 of
Regulation S;
(d) pursuant to an exemption from registration under the Securities
Act provided by Rule 144 thereunder (if available); or
(e) pursuant to any other exemption from the registration
requirements of the Securities Act, and in each case in
accordance with any applicable securities laws of any state of
the United States or any other jurisdiction.
The Subscriber agrees that if any transfer of its QTTM Shares or any interest
therein is proposed to be made, as a condition precedent to any such transfer,
the transferor may be required to deliver to QTTM an opinion of counsel
satisfactory to QTTM. Absent from registration or another exemption from
registration, the Subscriber agrees that it will not resell the QTTM Shares to
U.S. Persons or within the United States.
The Subscriber will not sell QTTM Shares to any U.S. person or within the United
States prior to the expiration of a period of one year, commencing on the
execution date of the Agreement and ending 365 days thereafter, (Distribution
Compliance Period), except pursuant to registration under the Securities Act or
exemption from registration under the Securities Act.
The Subscriber agrees and covenants that it will not engage in hedging
transactions with regard to the QTTM Shares prior to the expiration of the
Distribution Compliance Period specified in Rule 903 of Regulation S promulgated
under the Securities Act, unless in compliance with the Securities Act.
The Subscriber further agrees and covenants that he/she or it has not entered
into, has the intention of entering into, or will enter into any put option,
short position or similar instrument or position in the United States with
respect to QTTM Shares at any time after the Closing through the Distribution
Compliance Period except in compliance with the Securities Act.
65
13. Authority; Competence.
If the Subscriber is an individual, he/she is not a minor and has all the legal
capacity right and authority to enter into and execute the Subscription, and to
take all actions required pursuant hereto and, if the Subscriber is a
corporation, none of the members are minors and it is duly incorporated and
validly subsisting under the laws of its jurisdiction of incorporation and all
necessary approvals by its directors and shareholders and others have been
obtained to authorize the execution of this Subscription.
This Subscriber further acknowledges that this Subscription is a valid and
binding agreement enforceable in accordance with its terms, subject to the
general principles of equity and to bankruptcy or other laws affecting the
enforcement of creditors' rights generally. The Subscriber's execution, delivery
and performance of this Subscription does not and will not conflict with,
violate or cause a breach of any agreement, contract or instrument to which the
Subscriber is a party.
14. Language; Titles and Subtitles.
The Subscriber hereby acknowledges that it has consented to and requested that
the documents relating in any way to this Subscription be drawn up in the
English language only. The Subscriber acknowledges that the titles and subtitles
used in this Subscription are used for convenience only and are not to be
considered in construing or interpreting this Subscription.
15. Representations/Warranties; Survival/Severability.
The Subscriber understands that the QTTM Shares are being offered and issued in
reliance on specific provisions of United States federal and state securities
laws and that QTTM is relying upon the truth and accuracy of his/her or its
representations, warranties, agreements, acknowledgments and understandings set
forth in this Subscription in order to determine the applicability of such
provisions. The Subscriber acknowledges that the representations, warranties and
agreements made herein shall survive the execution and delivery of this
Subscription, the Agreement and the acquisition of QTTM Shares.
The Subscriber further acknowledges in the event that any provision of this
Subscription becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Subscription shall continue in full force
and effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Subscription.
15. No Waiver.
Notwithstanding any of the representations and warranties, acknowledgements or
agreement made herein by the Subscriber, he/she or it does not thereby or in any
other manner waive any rights granted under the Federal or State securities laws
or the securities laws in any other jurisdiction.
16. Acknowledgement.
By the execution of this Subscription, the Subscriber, hereby represents and
warrants to the President and to QTTM, that he/she or it meets the requirements
of either an "Accredited Investor" or a "Non-U.S. Person" as indicated in the
attached acknowledgement.
66
The Subscriber understands that QTTM Shares are being acquired and issued to the
Subscriber in reliance upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of such Subscriber
set forth in this Subscription, in order that QTTM may determine the
applicability and availability of the exemptions from registration of the QTTM
Shares on which QTTM is relying and, further, he/she or it specifically
represents that there is no additional information necessary to explain any
inaccuracy or omission from, or to modify or alter, the following:.
NAME OF SUBSCRIBER:
(Please Print Name)
Date of Subscription:
-------------------------------------------
Check one of the following as applicable:
ACCREDITED INVESTOR (APPENDIX "A" ATTACHED)
NON-U.S. PERSON (XXXXXXXX "X" XXXXXXXX)
Xxxxx of Residency and/or Principal Place of Business:
-------------------------------------------
-------------------------------------------
City, Province, Country, Postal Code
-------------------------------------------
Telephone Number
Check one of the following as applicable:
Annexe A attached or No Annexe A attached
(Other Beneficial Owners) (No Other Beneficial Owners)
------- -------
SIGNATURE OF SUBSCRIBER:
-------------------------------------------
67
APPENDIX A
Acknowledgement of "Accredited Investor"
1. The Subscriber hereby agrees to exchange and cancel his/her or its Class
A shares of RTI for _______________ QTTM Shares.
2. The Subscriber is aware that the QTTM Shares are only available to an
"Accredited Investors" (see definition below) and are being issued
pursuant to the exemption provided in Section 4(2) of the Securities Act
for private offerings and the offering has not been submitted - to, or
reviewed by the SEC. The Subscriber is aware that the QTTM Shares will
not be registered with the SEC and that they may not be registered with
any state securities regulatory agency.
3. The Subscriber, as an individual, represents that the address provided on
the signature page to this Subscription is his/her true and correct
principal residence, and has no present intention of becoming a resident
of any other country or jurisdiction and the Subscriber, if a
corporation, trust or partnership, or other entity, represents that the
address provided on the signature page to this Subscription is the true
and correct principal place of business and has no present intention of
establishing residency in any other country or jurisdiction. If such
entity was formed specifically to acquire the QTTM Shares, all names and
addresses of its beneficial owners are set forth on the signature page of
this Subscription and all representations in this Subscription are
applicable to each of them.
4. Definition of Accredited Investor.
The term "accredited investor" means:
(a) a bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act, whether acting in its
individual or fiduciary capacity; a broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934; an
insurance company as defined in Section 2(a)(13) of the
Securities Act; an investment company registered under the
Investment Company Act of 1940 (the "Investment Company Act") or
a business development company as defined in Section 2(a)(48) of
the Investment Company Act; a Small Business Investment Company
licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958; any
plan established and maintained by a state, its political
subdivisions or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees, if such
plan has total assets in excess of US $5,000,000; any employee
benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 ("ERISA"), if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of ERISA,
which is either a bank, savings and loan association, insurance
company, or registered investment advisor, or if the employee
benefit plan has total assets in excess of US $5,000,000 or, if a
self-directed plan, with investment decisions made solely by
persons that are accredited investors;
(b) a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(c) an organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess of
US $5,000,000;
(d) any director, executive officer, or general partner of the issuer
of the securities being offered or sold, or any director,
executive officer, or general partner of that issuer;
68
(e) a natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase, exceeds US
$1,000,000, (inclusive of homes and automobiles);
(f) a natural person who had an individual income in excess of US
$200,000 in each of the two recent calendar years or joint income
with that person's spouse in excess of US $300,000 in each of the
two recent calendar years and has a reasonable expectation of
reaching the same income level in the current year;
(g) a trust, with total assets in excess of US $5,000,000, not formed
for the specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person as described
in Rule 506(b)(2)(ii) (i.e., a person who has such knowledge and
experience in financial and business matters that he is capable of
evaluating the merits and risks of the prospective investment);
(h) any entity in which all of the equity owners are accredited
investors. (If this alternative is checked, the Subscriber must
identify each equity owner and provide statements signed by each
demonstrating how each is qualified as an accredited investor).
5. The Subscriber hereby certifies that he/she or it is deemed an
"Accredited Investor" in conformity with subparagraph _____ above, as
defined in Rule 501 of Regulation D and qualifies for the exemption
provided in Section 4(2) of the Securities Act for private offerings.
--------------------------- --------------------------------------
Date Signature of Subscriber
00
XXXXXXXX X
Acknowledgement of Non - U.S. Person
1. The Subscriber hereby agrees to exchange and cancel his/her or its Class
A shares of RTI for _______________ QTTM Shares.
2. The Subscriber is aware that the QTTM Shares are only available to a
"Non-U.S. Person" and are being offered under the exemption provided
under the provisions of Regulation S for offers and sales of securities
outside the United States and the offering has not been submitted - to,
or reviewed by, the Securities and Exchange Commission ("SEC"). The
Subscriber is aware that the QTTM Shares will not be registered with the
SEC and that they may not be registered with any state securities
regulatory agency.
3. The Subscriber, as an individual, represents that the address provided on
the signature page to this Subscription is his/her true and correct
principal residence, and has no present intention of becoming a resident
of any other country or jurisdiction and the Subscriber, if a
corporation, trust or partnership, or other entity, represents that the
address provided on the signature page to this Subscription is the true
and correct principal place of business and has no present intention of
establishing residency in any other country or jurisdiction. If such
entity was formed specifically to acquire the QTTM Shares, all names and
addresses of its beneficial owners are set forth on the signature page of
this Subscription and all representations in this Subscription are
applicable to each of them.
4. Definition of U.S. Person".
For the purposes of this acknowledgement the term "United States" means the
United States of America, its territories and possessions, any State of the
United States, and the District of Columbia.
(1) The term "U.S. person" means:
(a) any natural person resident in the United States;
(b) any partnership or corporation organized or incorporated
under the laws of the United States;
(c) any estate of which any executor or administrator is a U.S.
person;
(d) any trust of which any trustee is a U.S. person;
(e) any agency or branch of a foreign entity located in the
United States;
(f) any non-discretionary account or similar account (other than
an estate or trust) held by a dealer or
other fiduciary for the benefit or account of a U.S. person;
(g) any discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary
organized, incorporated, or (if an individual) resident in
the United States; and
(h) any partnership or corporation if:
(i) organized or incorporated under the laws of any
foreign jurisdiction; and
(ii) formed by a U.S. person principally for the purpose of
investing in securities not registered under the
Securities Act, unless it is organized or
incorporated, and owned, by accredited investors
70
(as defined in Rule 501(a)) who are not natural
persons, estates or trusts.
(2) The following are not "U.S. person":
(a) notwithstanding paragraph (1) above, any discretionary
account or similar account (other than an estate or trust)
held for the benefit or account of a non-U.S. person by a
dealer or other professional fiduciary organized,
incorporated, or (if an individual) resident in the United
States shall not be deemed a "U.S. person";
(b) notwithstanding paragraph (1), any estate of which any
professional fiduciary acting as executor or administrator
is a U.S. person shall not be deemed a U.S. person if:
(i) an executor or administrator of the estate who is not a
U.S. person has sole or shared investment discretion
with respect to the assets of the estate; and
(ii) the estate is governed by foreign law;
(c) notwithstanding paragraph (1), any trust of which any
professional fiduciary acting as trustee is a U.S. person,
shall not be deemed a U.S. person if a trustee who is not a
U.S. person, has sole or shared investment discretion with
respect to the trust assets, and no beneficiary of the trust
(and no settlor if the trust is revocable) is a U.S. person;
(d) notwithstanding paragraph (1), an employee benefit plan
established and administered in accordance with the law of a
country other than the United States and customary practices
and documentation of such country shall not be deemed a U.S.
person;
(e) notwithstanding paragraph (1), any agency or branch of a
U.S. person located outside the United States shall not be
deemed a "U.S. person" if:
(i) the agency or branch operates for valid business
reasons; and
(ii) the agency or branch is engaged in the business of
insurance or banking and is subject to substantive
insurance or banking regulation, respectively, in the
jurisdiction where located;
(f) the International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American
Development Bank, the Asian Development Bank, the African
Development Bank, the United Nations, and their agencies,
affiliates and pension plans, and any other similar
international organizations, their agencies, affiliates and
pension plans.
5. The Subscriber hereby certifies that he/she or it is not considered a "U.S.
Person" as defined in Rule 902 of Regulation S and confirms that he/she or
it :
(a) was a resident outside the United States, or
(b) was not acquiring the QTTM Shares for the account or benefit of any
U.S. person, or with a view towards distribution to any U.S. person,
or
(c) was not offered to acquire the QTTM Shares or otherwise to participate
in the transactions contemplated in the Agreement by any person inside
the United States, or
(d) was not organized under the laws of any United States jurisdiction, or
(e) was not formed for the purpose of investing in securities not
registered under the Securities Act, or
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(f) was outside the United States at the time of the offer by QTTM, and
the acceptance of the offer by the Subscriber of the QTTM Shares.
Date Signature of Subscriber
72
ACCEPTANCE
This Subscription is hereby accepted by QUANTITATIVE METHODS CORPORATION.
DATED at Xxxxxxxx, Xxxxxx, Xxxxxx, the _____ day of August, 2005.
QUANTITATIVE METHODS CORPORATION
By:
---------------------------------------------------------------
Xxxxxx X. Xxxxx, President and Director
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