EXHIBIT 2.6(c)
CANADIAN IMPERIAL BANK OF COMMERCE
as Vendor
and
INTERNET SPORTS NETWORK, INC.
and
ISN INTERNET SPORTS NETWORK CANADA LIMITED
as Purchasers
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PURCHASE AGREEMENT
MAY 26, 2000
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PURCHASE AGREEMENT
Purchase Agreement dated as of May 26, 2000 among Canadian Imperial
Bank of Commerce, a Canadian chartered bank (the "VENDOR"), and Internet Sports
Network, Inc. ("ISN"), a corporation incorporated under the laws of Florida,
United States of America and ISN Internet Sports Network Canada Limited ("ISN
CANADA"), a corporation incorporated under the laws of British Columbia (ISN and
ISN Canada referred to collectively, as the "PURCHASERS").
RECITALS:
(a) The Vendor desires to sell to ISN and ISN desires to purchase
from the Vendor 489,948 Class B Common Shares and 209,851
Class A Common Shares (the "PURCHASED SHARES") in the capital
of St. Clair Group Investments Inc. (the "CORPORATION") held
by its nominee, Gee & Co.;
(b) The Vendor desires to sell, assign and transfer to ISN Canada
and ISN Canada desires to purchase from the Vendor all of the
rights and obligations of the Vendor in and to the amended and
restated credit agreement between the Vendor and the
Corporation dated as of July 29, 1994 and the related security
documents set out in Schedule "A" (collectively, the
"PURCHASED DEBT") and any and all related security held by the
Vendor in respect of the Purchased Debt.
SECTION 1 PURCHASE AND SALE.
Subject to the terms and conditions herein contained, i) the Vendor
hereby sells, assigns and transfers to ISN and ISN hereby purchases from the
Vendor the Purchased Shares; and ii) the Vendor hereby sells, assigns and
transfers to ISN Canada and ISN Canada hereby purchases from the Vendor, the
Purchased Debt. The Purchasers hereby acknowledge receipt from the Vendor of (i)
share certificates numbered B-2, C-2 and C-5 representing the Purchased Shares
duly endorsed for transfer; and (ii) the documents evidencing the Purchased Debt
set out in Schedule "A" hereto.
SECTION 2 PURCHASE PRICE.
The aggregate purchase price payable for the Purchased Shares and the
Purchased Debt (collectively, the "PURCHASED ASSETS") is equal to $2,700,000
(the "PURCHASE PRICE").
SECTION 3 PAYMENT OF PURCHASE PRICE
The Purchase Price for the Purchased Assets payable to the Vendor by
the Purchasers is as follows, the receipt of all of which is hereby acknowledged
by the Vendor:
(a) as to $100,000, by application of the deposit received by the
Vendor on May 4, 2000 towards payment of the Purchase Price;
(b) as to $1,800,000 payable to the Vendor by way of a certified
cheque; and
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(c) as to the balance, by the issuance to the Vendor of 262,000
common shares in the capital of ISN (the "ISSUED SHARES").
SECTION 4 ALLOCATION OF PURCHASE PRICE
The Purchase Price shall be allocated as follows as between the
Purchased Shares and the Purchased Debt:
(a) as to the Purchased Shares, $800,000; and
(b) as to the Purchased Debt, $1,900,000.
SECTION 5 RECEIVERSHIP APPLICATION
Notwithstanding the sale of the Purchased Assets by the Vendor, the
Purchasers authorize and direct the Vendor to withdraw its application to
appoint a receiver of the assets of the Corporation.
SECTION 6 REPRESENTATIONS AND WARRANTIES OF THE VENDOR.
The Vendor represents and warrants as follows and acknowledges that the
Purchasers are relying upon such representations and warranties in connection
with the purchase by the Purchasers of the Purchased Assets:
(a) The Vendor is a Canadian chartered bank conducting business in
Canada and confirms that this Agreement and the transactions
contemplated thereby are being consummated in Canada;
(b) The Vendor is the beneficial owner of the Purchased Shares
with good title thereto, free and clear of all mortgages,
liens, charges, security interests, adverse claims, pledges,
encumbrances and demands whatsoever (collectively,
"ENCUMBRANCES") and the Vendor's nominee, Gee & Co., is the
registered owner of the Purchased Shares;
(c) The Vendor has good right and full power and authority to
enter into this agreement to sell and assign the Purchased
Assets as contemplated herein and the delivery of the
Purchased Shares to the Purchasers and the assignment of the
Purchased Debt to the Purchasers pursuant to the provisions
hereof will transfer to the Purchasers valid title thereto,
free and clear of all Encumbrances;
(d) Except for the Purchasers' rights hereunder, no person, firm
or corporation has any received from the Vendor or from Gee &
Co. any option, warrant, right, call, commitment, conversion
right, right of exchange or other agreement or any right or
privilege capable of becoming an option, warrant, right, call,
commitment, conversion right, right of exchange or other
agreement for the purchase from the Vendor of the Purchased
Assets;
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(e) The principal amount of accrued interest and other amounts
owing in respect of the Purchased Debt is as of May 26, 2000,
$5,168,870.99. The principal amounts and all other amounts of
the Purchased Debt remain outstanding together with all
interest thereon and the Vendor is the owner of all right,
title and interest in and to the Purchased Debt and is
transferring the Purchased Debt to ISN Canada free and clear
of all Encumbrances. Other than the Purchased Debt, the
Corporation has no outstanding debts, liabilities or
obligations of any kind owing to the Vendor;
(f) The Vendor has all necessary corporate power to enter into and
perform its obligations under this Agreement;
(g) The execution, and delivery and performance by the Vendor of
this Agreement and the consummation of the transactions
contemplated hereby:
(i) Have been duly authorized by all necessary corporate
action on the part of the Vendor; and
(ii) Do not (or would not with the giving of notice, the
lapse of time or the happening of any other event or
condition) result in a violation or a breach of, or a
default under or give rise to a right of termination,
amendment or cancellation or the acceleration of any
obligation under (i) any charter or by-law
instruments of the Vendor; (ii) any contracts or
instruments to which the Vendor is party or by which
the Vendor is bound, including any agreements between
the shareholders of the Corporation; or (iii) of any
laws applicable to it or any judgment, order or
decree of any government, authority or entity binding
on it; and
(h) This agreement constitutes legal, valid and binding
obligations of the Vendor enforceable against the Vendor in
accordance with its terms.
SECTION 7 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
The Purchasers represent and warrant as follows and acknowledge that
the Vendor is relying upon such representations and warranties in connection
with the sale by the Vendor of the Purchased Assets:
(a) The Purchasers have all necessary corporate power to enter
into and perform their obligations under this Agreement;
(b) The execution, and delivery and performance by the Purchasers
of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Purchasers;
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(c) This Agreement constitutes legal, valid and binding
obligations of the Purchasers enforceable against the
Purchasers in accordance with its terms;
(d) The 262,000 common shares in the capital of ISN issued to the
Vendor pursuant to this Agreement have been duly issued and
are outstanding as fully paid and non-assessable;
(e) Under current U.S. federal securities laws the Issued Shares
could be resold in compliance with Rule 144 of the Securities
Act of 1933, as amended (the "SECURITIES ACT") after the
Vendor had held the Issued Shares for more than one year,
provided that the following requirements were met: (1) ISN has
been subject to the reporting requirements of Section 13 of
the Securities Exchange Act of 1934, as amended (the
"SECURITIES EXCHANGE ACT") for at least 90 days prior to such
sale and filed all the reports required to be filed thereunder
during the 12 months preceding such sale (or for such shorter
period that ISN was required to file such reports); (2) the
amount sold by the Vendor in any three month period does not
exceed the greater of (A) one percent of the shares
outstanding (as reported on the most recently filed report) or
(B) the average weekly volume for the four calendar weeks
prior to such sale; (3) the Issued Shares are sold in
"broker's transactions' ( as that term is defined in the Rule)
and (4) the Vendor has filed with the U.S. Securities and
Exchange Commission a "Notice of Proposed Sale." In addition ,
under current U.S. federal securities laws the Issued Shares
could be resold in compliance with Rule 144 of the Securities
Act after the Vendor had held the Issued Shares for more than
two years, provided that the Vendor has filed with the U.S.
Securities and Exchange Commission a "Notice of Proposed
Sale." Notwithstanding anything in the foregoing, ISN makes no
representation that Rule 144 will be available to the Vendor
at the time the Vendor intends on selling the Issued Shares;
(f) ISN is a corporation duly incorporated and in good standing in
Florida and is quoted on the Nasdaq Over The Counter Bulletin
Board;
(g) The Issued Shares constitute less than ten percent (10%) of
the voting power of the capital stock of ISN; and
(h) The Issued Shares have been issued in compliance with
applicable U.S. federal and state securities laws.
SECTION 8 SECURITIES LAWS MATTERS
In addition to the other representations, warranties and covenants set
forth herein, as a material inducement to ISN to enter into this Agreement and
to consummate the transactions contemplated hereby, the Vendor makes the
following representations, warranties and covenants, as applicable:
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(a) Vendor is acquiring the Issued Shares offered and sold to it
hereunder as principal for its own account for investment
purposes only and not with a view to or for distributing or
reselling such Issued Shares or any part thereof or interest
therein, without prejudice, however, to such Vendor's right,
subject to the provisions of this Agreement, at all times to
sell or otherwise dispose of all or any part of such Issued
Shares pursuant to an effective registration statement under
the Securities Act and in compliance with applicable state
securities laws or under an exemption from such registration.
Vendor is aware of the resale restrictions imposed by Rule 144
of the Securities Act and understands that its ability to
resell the Issued Shares pursuant to Rule 144 may be subject
certain limitations, including minimum holding period, volume
limitations, manner of sale limitations and the availability
of current information by ISN. By making this representation,
such Vendor does not represent that it will hold such Issued
Shares for any period of time;
(b) At the time Vendor was offered the Issued Shares, it was, and
at the date hereof it is, an "accredited investor" as defined
in Rule 501(a) under the Securities Act. Such Vendor has not
been formed solely for the purpose of acquiring the Issued
Shares;
(c) Vendor, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits
and risks of the prospective investment in the Issued Shares,
and has so evaluated the merits and risks of such investment;
(d) Vendor is able to bear the economic risk of an investment in
the Issued Shares and, at the present time, is able to afford
a complete loss of such investment;
(e) Vendor has been given access to all of ISN's documents,
records, and other information, , including but not limited to
filings made by ISN with the U.S. Securities and Exchange
Commission under the Securities Exchange Act, and has had
adequate opportunity to ask questions of, and receive answers
from, ISN's officers, employees, agents, accountants, and
representatives concerning ISN's business, operations,
financial condition, assets, liabilities, and other matters
considered by Vendor as relevant to its investment in the
Issued Shares;
(f) Vendor is not purchasing the Issued Shares as a result of or
subsequent to any advertisement, article, notice or other
communication regarding the Issued Shares published in any
newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other
general solicitation or general advertisement;
(g) The certificates representing the Issued Shares shall bear the
following legend:
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THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE HOLDER
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
FILED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF ANY
STATE WITH RESPECT THERETO, OR IN ACCORDANCE WITH AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
(h) Vendor understands and acknowledges that (i) the Issued Shares
are being offered and sold to it without registration under
the Securities Act in a private placement that is exempt from
the registration provisions of the Securities Act and (ii) the
availability of such exemption, depends in part on, and ISN
will rely upon the accuracy and truthfulness of, the foregoing
representations and such Vendor hereby consents to such
reliance.
SECTION 9 GOVERNING LAW.
This Agreement shall be governed by in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein.
SECTION 10 CURRENCY
All references in this Agreement to dollars, unless otherwise
specifically indicated, are expressed in Canadian currency.
SECTION 11 ENUREMENT AND ASSIGNMENT.
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns. Neither of the parties hereto may assign its rights or obligations
under this Agreement without the prior written consent of the other party
hereto.
SECTION 12 HEADINGS
The section and subsection headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
SECTION 13 COUNTERPARTS
This Agreement may be executed in one or more counterparts which
together shall be deemed to constitute one valid and binding agreement and
delivery of the counterparts may be effected by means of a telecopier
transmission.
SECTION 14 SEVERABILITY.
Any section, subsection or other subdivision or other subdivision of
this Agreement or any other provision of this Agreement which is, or becomes,
illegal,
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invalid or unenforceable shall be severed from this Agreement and be ineffective
to the extent of such illegality, invalidity or unenforceability and shall not
affect or impair the remaining provisions hereof.
SECTION 15 GENDER AND NUMBER.
Any reference in this Agreement to gender shall include all genders,
and words importing the singular number only shall include the plural and vice
versa.
SECTION 16 AMENDMENTS.
This Agreement may only be amended, modified or supplemented by a
written agreement signed by all of the parties to such agreement.
SECTION 17 TIME.
Time shall be of the essence in respect of this Agreement.
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IN WITNESS WHEREOF the parties have executed this Agreement as of the
date hereof.
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ X.X. XxXxxxxx
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Authorized Signing Officer
INTERNET SPORTS NETWORK, INC.
By: /s/ Xxxx XxXxxxxxxxx
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Xxxxxx De Francesco
Chairman and Chief Executive Officer
ISN INTERNET SPORTS NETWORK
CANADA LIMITED
By: /s/ Xxxx XxXxxxxxxxx
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Authorized Signing Officer
