MDRM GROUP (CANADA) LTD. Toronto. Ontario. Canada. M5X
EXHIBIT
10.01
MDRM
GROUP (CANADA) LTD.
000-0
Xxxxx Xxxxxxxx Xxxxx 0X0
Xxxxxxx.
Xxxxxxx. Canada. M5X
TO
2539296
Ontario Inc and Marble Mining Company Inc
ATTN:
Xx.
Xxxx Xxxxxx
Dear Sirs:
This
letter (“Letter of Intent”), when agreed to and
accepted by you for the purposes provided herein, shall evidence
our respective intentions to proceed with negotiations, in good
faith, with the objective of moving forward toward the execution of
the following definitive agreements providing for the acquisition
by MDRM Group (Canada) Ltd. a Canadian subsidiary of Modern
Mobility Aids Inc, a publicly traded Nevada Corporation with
155,621,621 Common Shares and 500,000 Preferred Shares outstanding
or its assignee (the “Purchaser”) from the
following:
1)
100% of the shareholders of 2539296 Ontario
Limited (hereinafter collectively referred to as the “253
Sellers”) of all of the issued and outstanding (One
Thousand Shares) share capital of 2539296 Ontario Limited
(“253”) free and clear of all liens, claims
and encumbrances (“253 Share Purchase
Agreement”). 253 owns all of the issued and outstanding share
capital of Satchel Company Limited, which is engaged in the
business of cryptocurrency.
2)
100% of the shareholders of Marble Mining Company
Inc. (hereinafter collectively referred to as the “Marble
Sellers”) of all of the issued and outstanding (Two
Thousand Shares) share capital of Marble Mining Company Inc.
(“Marble”) free and clear
of all liens, claims and encumbrances (“Marble Share Purchase
Agreement”). Marble is engaged in the business of
cryptocurrency IP and electronic gaming.
In
this Letter of Intent, the 253 Sellers and the Marble Sellers shall
collectively be referred to as the Sellers.
It is understood that this Letter of Intent is not
intended to constitute a binding agreement by and between Purchaser
and Sellers to enter into either the 253 Share Purchase Agreement
or the Marble Share Purchase Agreement, as applicable, and no
liability or obligation of any nature whatsoever is intended to be
created hereunder, except as expressly set forth in this Letter of
Intent. None of the Purchaser or Sellers should make
business decisions in reliance upon completion of the transactions
proposed in this Letter of Intent. This Letter of Intent does not contain all matters
on which agreement must be reached in order to consummate the
transactions contemplated herein, as it is intended solely as an
outline of certain material terms.
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The
transactions contemplated in this Letter of Intent, the 253 Share
Purchase Agreement and the Marble Share Purchase Agreement are
subject in all respects to the following terms and
conditions:
1.
Purchase of 253 Shares by Purchaser; Purchase Price;
Consideration.
a. Purchaser shall acquire One Thousand
(100%) of the issued and outstanding
common shares of 253 from the 253 Sellers (it being represented and
warranted by 253 Sellers by signing this letter that the share
capital of 253 consists only of 1,000 common shares) free and clear
of all liens, claims and encumbrances. Adequate provisions for
federal and provincial taxes through the date of Closing shall be
estimated by 253, and sufficient cash shall be retained at the date
of Closing to pay such taxes. In addition to the amount estimated
for taxes as discussed above, there shall be sufficient cash and
working capital at Closing to allow 253 to continue to operate in
the ordinary course of business consistent with past practices
without the injection of cash from the Purchaser.
b. Unless otherwise agreed to by 253 Sellers to
Purchaser, the consideration for 100% of the issued and outstanding
common shares of 253 shall be FIVE HUNDRED THOUSAND Dollars
($500,000) in cash and 128,370,490 common shares of MDRM
Group (Canada) Inc a Canadian subsidiary of Modern Mobility Aids
Inc and 500,000 preferred Shares of Modern Mobility Aids
Inc, to be paid in the following
manner:
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(i)
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FIVE
HUNDRED THOUSAND dollars ($500,000), payable by cashier’s
check or by wire transfer, at Closing;
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(ii)
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Subject
to the terms and conditions set forth herein, each of the 253
common shares (“253 Common
Shares”) will be exchanged for 257,460 common shares
of MDRM Group (Canada) Inc, a Canadian subsidiary of Modern
Mobility Aids Inc (“Exchange
Shares”) for a total of 257,460,494 common shares that
will be exchangeable for new common shares of Modern Mobility Aids
Inc (“MDRM publicly traded
Shares”). 253 will also be issued a total of 500,000
Preferred Shares of Modern Mobility Aids Inc with voting rights of
200 to 1 that will entitle 253 to vote with the common stockholders
of Modern Mobility Aids Inc on any matter presented for stockholder
consideration (“Voting
Shares”).
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2.
Purchase of Marble Shares by Purchaser; Purchase Price;
Consideration.
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a)
Purchaser shall acquire Two Thousand (100%)
of the issued and outstanding common
shares of Marble from the Marble Sellers (it being represented and
warranted by Marble Sellers by signing this letter that the share
capital of Marble consists only of common shares) free and clear of
all liens, claims and encumbrances. Adequate provisions for federal
and provincial taxes through the date of Closing shall be estimated
by Marble, and sufficient cash shall be retained at the date of
Closing to pay such taxes.
b)
Unless
otherwise agreed to by Marble Sellers to Purchaser, the
consideration for100% of the issued and outstanding common shares
of:
(i)
Subject to the
terms and conditions set forth herein, each of the Marbles Inc
common shares (“Marbles
Common Shares”) will be exchanged for 273,552 common
shares of MDRM Group (Canada) Inc, a Canadian subsidiary of Modern
Mobility Aids Inc (“Exchange
Shares”) for a total of 547,103,549 common shares that
will be exchangeable for new common shares of Modern Mobility Aids
Inc (“MDRM
Shares”)
(ii)
In addition to the consideration set out above,
Purchaser may make the following purchases:
I.
1,050,000,000
marbles for $2,000,000 (US) on or before November 30, 2017;
and
II.
1,050,000,000
marbles for $4,000,000 (US) on or before January 31,
2018.
3.
Employment Contracts; Non-Compete Agreements.
a)
At
the date of Closing, certain key employees of 253 and Marble shall
enter into Employment Contracts with Purchaser for not more than a
three (3) year period commencing upon the date of Closing,
providing a salary and benefits (including employee stock options)
comparable to other members of Purchaser’s senior management
in comparable positions. The terms and provisions of those
Employment Contracts, and the salary, benefits and employee stock
options, between Purchaser and key employees of 253 and Marble
shall be negotiated by Purchaser and Sellers prior to
Closing.
b)
These
key employees shall also be required to execute a non-compete
agreement in which they agree not to compete in a similar business
of Purchaser. The term of the non-compete agreement shall be for a
period of not less than two (2) years commencing upon the
termination of their employment contract with Purchaser, and shall
contain such other provisions as shall be mutually agreed upon
prior to Closing.
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4.
Conditions.
Closing will be subject to the
satisfaction of various conditions to be satisfied as of the date
of Closing, which shall include, without limitation, the
following:
a)
Seller
shall provide the first drafts of the Share Purchase Agreement for
253 and Marbles on or before October 20, 2017.
b)
253
Share Purchase Agreement and Marble Share Purchase
Agreement. The Purchaser
and Sellers shall have negotiated, executed, and delivered a
mutually satisfactory 253 Share Purchase Agreement and/or Marble
Share Purchase Agreement and related documents which shall provide
for the transactions contemplated hereby and include (without
limitation): (i) representations and warranties of Purchaser
and Sellers as are mutually acceptable and customary for a
transaction of the nature set forth herein; (ii) Closing
conditions (including those specified herein) as are mutually
acceptable; (iii) covenants pending prior to Closing and in
effect thereafter (including those specified herein) as are
mutually acceptable; (iv) indemnities as are mutually
acceptable; and (v) forms of opinions of counsel as are
mutually acceptable and customary for a transaction of the nature
set forth herein.
c)
Other
Documents; Legal Opinions. Each other instrument contemplated by the
253 Share Purchase Agreement and/or Marble Share Purchase Agreement
shall have been executed and delivered by each signatory hereto,
and the opinions of counsel shall have been
delivered.
d)
Corporate
and Shareholder Approvals. The 253 Share Purchase Agreement and/or
Marble Share Purchase Agreement and the transactions contemplated
thereby shall have been approved by the respective boards of
directors of 253, Marble and Purchaser.
e)
Consents
and Approvals. All
necessary government filings and approvals relating to the
transactions contemplated by this Letter of Intent and the 253
Share Purchase Agreement and/or Marble Share Purchase Agreement,
and all consents and approvals of third parties necessary for the
consummation of the transactions contemplated by this Letter of
Intent and the 253 Share Purchase Agreement and/or Marble Share
Purchase Agreement, shall have been obtained.
f)
Financial
Statements. Prior to
closing, Purchaser shall have received audited financial statements
of 253 and Marble for all of their prior fiscal years (since
inception) and monthly financial statements of 253 and Marble for
the months subsequent to the end of the most recently completed
fiscal year, which shall be satisfactory to
Purchaser.
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g)
Due
Diligence. Purchaser shall
have conducted the legal, environmental, business, and financial
due diligence reviews of 253 and Marble (the “Due
Diligence”) it considers necessary, the results of which
shall be materially consistent with Sellers’ representations
and warranties regarding such matters.
h)
Closing;
Removal of Conditions on Purchaser’s Obligation to
Close. The parties will
negotiate in good faith with a view to executing the 253 Share
Purchase Agreement and/or Marble Share Purchase Agreement on or
before October 31,
2017. The Closing of the
proposed transactions will take place as soon thereafter as all
conditions to the transaction are satisfied or waived, but not
later than November 30, 2017, unless an extension is mutually
agreed upon. If the 253 Share Purchase Agreement and/or Marble
Share Purchase Agreement is/are not executed by October 31,
2017, or such later date as the parties may agree, either party may
terminate this Letter of Intent.
5.
Confidentiality. The
parties agree that neither will use any of the information gathered
pursuant to the proposed Due Diligence contemplated herein for any
purpose other than the transaction anticipated by this Letter of
Intent. Without the express written consent of all the parties
hereto, each of the parties hereto agree to maintain in confidence
and not disclose to any other person the existence of this Letter
of Intent, the terms of the proposed transaction or the information
delivered in connection with the proposed Due Diligence, other than
disclosures required to obtain the approvals for the transaction
contemplated hereby, disclosures to those professionals, advisors
and potential financing sources and their attorneys who have a need
to know, or any other disclosure required by applicable law.
The parties
expressly acknowledge that purchasing securities or otherwise
trading securities with knowledge of material facts which have not
been generally disclosed may be a breach of xxxxxxx xxxxxxx
regulations, and will confirm same with those officers, employees
and third parties with a need to know the transactions contemplated
in the Letter of Intent. In the
event that a party hereto is at any time requested or required (by
oral questions, interrogatories, request for information or
documents, subpoena or similar process) to disclose any information
supplied to it in connection with this transaction to anyone other
than professionals, advisors and potential financing sources and
their attorneys, such party agrees to provide the other parties
prompt notice of such request so that an appropriate protective
order may be sought and/or such other parties may waive the first
party’s compliance with the terms of this paragraph. The
parties acknowledge that their existing Confidentiality Agreement
dated September 5, 2017, shall remain in full force and effect
following the execution of this Letter of
Intent.
6.
Conduct
of Business. Sellers agree
that pending negotiation of the 253 Share Purchase Agreement and/or
Marble Share Purchase Agreement, 253 and Marble in all material
aspects will operate business only in the usual, regular and
ordinary manner and in accordance with past practice so as to
maintain the goodwill each now enjoys, and to the extent consistent
with such operation, each will use all reasonable efforts to
preserve its present officers and employees and to preserve
relationships with customers and others having business dealings
with it, including, but not limited to, paying suppliers and
vendors in accordance with its usual business practices in a timely
fashion.
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7.
Exclusivity. 253,
Marble and the Sellers shall immediately terminate negotiations
and/or marketing efforts, if any, with others in regard to the sale
of the shares of 253 and Marble, or the sale of either
company’s business and assets. Sellers shall not, prior to
November 30, 2017, in the event the 253 Share Purchase Agreement
and/or Marble Share Purchase Agreement are/is executed on or before
October 31, 2017, solicit or initiate the submission of
indications of interest, proposals, or offers from, or discuss or
negotiate with any person relating to any direct or indirect
acquisitions or purchase of any part of or all of the shares of 253
and/or Marble, or any part of (other than an immaterial part of ),
or all of, the assets owned or to be owned by 253 or Marble, nor
will the Sellers, 253 or Marble discuss any merger, consolidation,
or business combination. The Sellers, 253 and Marble shall not
furnish to any other person any information with respect to 253
and/or Marble that could be used for the purposes described in this
paragraph. Sellers shall promptly notify Purchaser of any
acquisition proposal received by Sellers and shall provide
Purchaser a copy (to the extent written) or description (to the
extent made) of such acquisition proposal.
8.
Access. From
the date of execution of this Letter of Intent, and until such time
as the parties either terminate negotiations on the 253 Share
Purchase Agreement and/or Marble Share Purchase Agreement or until
the Closing, Sellers, 253 and Marble shall cooperate with Purchaser
in the performance by Purchaser of its Due Diligence. Upon
execution of this Letter of Intent, and until such time as the
parties either terminate negotiations on the 253 Share Purchase
Agreement and/or Marble Share Purchase Agreement or until the
Closing, Sellers and 253 agree to grant to Purchaser and its
authorized agents the right to inspect and audit the books and
records of 253 and Marble and to consult with those directors,
officers, key employees, attorneys, auditors, and accountants of
253 and Marble as Sellers shall approve upon request by Purchaser,
such approval not to be unreasonably withheld, concerning customary
due diligence matters. Such inspections and audits may include, for
example, review and examination of 253 and Marble’s books and
records of account, tax records, records of corporate proceedings,
contracts, trademarks, governmental consents, and other business
activities and matters relating to the transactions contemplated by
this Letter of Intent and the 253 Share Purchase Agreement and/or
Marble Share Purchase Agreement. All confidential information
acquired by Purchaser pursuant to this paragraph shall be held in
the strictest of confidence by Purchaser and shall not be revealed
or disclosed to any third party or parties, other than to
Purchaser’s professionals, advisors and potential funding
sources and their attorneys, except as may be required by law. In
the event the transaction should not be consummated for any reason
after execution of the 253 Share Purchase Agreement and/or Marble
Share Purchase Agreement, Purchaser shall promptly, upon request of
253 and/or Marble, return all such documents as it may have
obtained in this process, and any and all copies of such documents,
save and except electronic documents in the Purchaser’s
electronic archive system, provided that any confidential
information so retained shall remain subject to the obligations of
confidentiality under this Letter of Intent. The parties
acknowledge that their existing Confidentiality Agreement dated
September 5, 2017, shall remain in place following the execution of
this Letter of Intent.
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9.
Costs
and Expenses. All costs
and expenses incurred in connection with the negotiation,
execution, and delivery of this Letter of Intent and the 253 Share
Purchase Agreement and/or Marble Share Purchase Agreement and
related agreements and the consummation of the transactions
contemplated thereby shall be paid by the party incurring such
costs and expenses, except that the 253 Share Purchase Agreement
and Marble Share Purchase Agreement shall contain a provision that,
in the event of a default under the 253 Share Purchase Agreement or
Marble Share Purchase Agreement, the defaulting party shall pay the
non-defaulting party’s attorneys’ fees incurred in
connection with the negotiation, execution, and efforts toward
consummation of the 253 Share Purchase Agreement and/or Marble
Share Purchase Agreement. The costs and expenses incurred by the
Purchaser shall include, but not be limited to, the costs and
expenses of due diligence reviews and financial audits conducted at
the Purchaser’s request. Notwithstanding anything herein, the
execution of this Letter of Intent does not obligate either party
to enter into the 253 Share Purchase Agreement and/or Marble Share
Purchase Agreement, but does obligate both to utilize their
reasonable best efforts to negotiate the terms and provisions of
such an Agreement in good faith.
10.
Termination. It
is understood and agreed that if, despite the reasonable good faith
efforts of the parties, a mutually satisfactory definitive 253
Share Purchase Agreement and/or Marble Share Purchase Agreement
have/has not been executed on or before October 31, 2017,
Purchaser and Seller may terminate this Letter of Intent by written
notice to the other without any liability; provided, however, that
the obligations set forth in paragraphs 5 and 7 through 14 shall
survive.
11.
Nature
of Letter of Intent. The
provisions of paragraphs 5 and 7 through 14 hereof are intended to
be binding upon the parties in accordance with their terms. With
respect to all other matters set forth herein, it is understood
that: (i) this Letter of Intent sets forth the intentions of
the parties to use their reasonable best efforts to negotiate, in
good faith, a the 253 Share Purchase Agreement and/or Marble Share
Purchase Agreement and that any legal obligations with respect to
such matters, including, but not limited to, the customary
representations and warranties described in paragraph 3(a), shall
be only as set forth in the 253 Share Purchase Agreement and/or
Marble Share Purchase Agreement when and if executed by Purchaser
and Sellers, and (ii) that neither Purchaser (or any affiliate
thereof) nor Sellers shall be responsible for any claims or
liability relating to the transactions contemplated hereby in the
event the 253 Share Purchase Agreement and/or Marble Share Purchase
Agreement is not so executed and delivered, except as expressly
provided in the Letter of Intent.
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12.
Indemnification.
The Sellers represent and warrant that the Purchaser will not incur
any liability of any kind or nature whatsoever in connection with
the consummation of the acquisition of 253 and Marble to any third
party with whom the Seller or its agents have had discussions
regarding the disposition of 253 and/or Marble, and the Sellers
agree to indemnify, defend and hold harmless the Purchaser, its
officers, directors, stockholders, lenders and affiliates from any
claims by or liabilities to such third parties, including any legal
or other expenses incurred in connection with the defense of such
claims.
13.
Governing
Law. This Letter of Intent
shall be governed by and construed in accordance with the laws of
the Province of Ontario, without giving effect to principles of
conflicts of laws.
14.
Miscellaneous. This
Letter of Intent constitutes the complete understanding of the
parties with respect to the matters referenced herein, and any
other agreements, contracts or understanding (whether written or
oral) are superseded by the terms hereof. The rights and
obligations of the parties created by this Letter of Intent shall
not be assignable by either party without the prior written consent
of the other party, which will not be unreasonably withheld.
Notwithstanding the foregoing, the rights and obligations of
Purchaser created by this Letter of Intent shall be assignable by
Purchaser without the prior written consent of Seller only to the
ultimate holding company contemplated by this agreement. This
Letter of Intent may be signed in one or more counterparts, each of
which taken together shall constitute one and the same
agreement.
If the foregoing general terms are acceptable to you, please so
indicate by signing the enclosed duplicate original of the Letter
of Intent and returning it to the undersigned.
Very truly yours,
/s/ Xxxx
XxXxxxx
Xxxx XxXxxxx
President
MDRM Group (Canada) Inc
8
2539296 Ontario Inc
/s/ Xxxx
Xxxxxx
By; Xxxx Xxxxxx
President
I have authority to bind the Corporation
Marbles Inc
/s/ Xxxx
Xxxxxx
By: Xxxx Xxxxxx
President
I have authority to bind the Corporation
Dated
this 11th
day of October 2017 in the city of Toronto
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