EXHIBIT 10.19
Xxxx Xxxx
TidalBeach Inc.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Re: Letter of Intent "TidalBeach"
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Dear Xx. Xxxx:
This letter will set forth our understanding with respect to the terms
and conditions of a proposed transaction between Xxxxxxxxx.xxx Inc., an Ontario
Corporation ("THP") and TidalBeach Inc. ("TBI") an Ontario Corporation.
1. Pursuant to an agreement among THP or one of its subsidiaries and TBI,
THP or one of its subsidiaries will purchase 100% of the common stock
of TBI on and subject to the terms and conditions hereinafter set
forth. Such transaction is referred to as the "Purchase."
2. At the effective time of the purchase, THP will issue 250,000 THP
shares in exchange for 100% of the outstanding shares of TBI .
Note:
1. The share price will be the average trading price two weeks
prior to closing.
2. The same shares will be registered within 3 months of
issuance.
3. As a result of the Purchase, as described in (2) of this letter, TBI
will become a wholly-owned subsidiary of THP and the holders of TBI
stock will become stockholders of THP shares.
4. The purchase is deemed effective July 1, 2000. TBI shall not (from the
effective date):
a. Make any payments out of the ordinary course
b. Declare or pay any dividends
c. Make any payments to shareholders except salaries payable in
the ordinary course
All earnings of the company from the effective date shall be for the
account of THP.
5. Attached herewith are management-prepared financial statements as at
August 31, 2000.
6. At closing, the employment agreement between TBI and Messrs. Xxxx Xxxx,
Xxxxx Xxx, and Xxxxxx Xxxxxxx shall be amended as follows:
a. The term of the agreement shall be for a period of two years
from the point of closing.
b. The base salary shall be based on historical levels.
c. The allowances (car, dues) shall be based on historical
levels; medical benefits will be in effect until termination
or retirement.
d. Xxxx Xxxx will be appointed President of TBI and a
Vice-President of THP. Xxxxx Xxx and Xxxxxx Xxxxxxx will be
appointed Vice-Presidents of TBI.
e. There will be a non-compete agreement in effect for one (1)
year from date of termination or retirement unless otherwise
agreed.
7. The Purchase Agreement shall include customary representations,
warranties and covenants; provided, however, that the respective
representations and warranties of TBI and THP shall terminate one (1)
years from the closing date.
8. The closing shall be held at the offices of THP counsel or such other
place as may be agreed upon by the parties on such date as may be
mutually agreed upon by the parties, but not later than two (2)
business days after the Purchase has been approved by the stockholders
of both TBI and THP.
9. During the period from the date of this letter of Intent until the
first to occur of the closing or the termination of negotiations with
respect to the Purchase Agreement, both TBI and THP shall conduct their
respective businesses in the ordinary course in a manner consistent
with past practices, and shall not make any changes in its business
without prior approval of the other party.
10. Each party will assist the other party in its due diligence
investigation. In this connection, each party will make available to
the other party its financial statements, tax return and other books
and records concerning such party and its business and prospects. The
due diligence investigation shall be conducted in a manner, which is
not disruptive of the parties= respective businesses. Neither party
shall contact any of the other party=s clients except pursuant to an
agreed-upon procedure.
11. TBI agrees that until November 5, 2000 or such later date as may be
agreed on by TBI and THP, TBI shall not, without prior written approval
of THP, conduct any discussions, negotiations or consultations with
respect to, or engage or permit anyone acting on behalf of any of them,
from entering into or conducting, or enter into any agreement, letter
of intent or memorandum of understanding, whether written or oral, that
relate, directly or indirectly to any merger or business combinations
involving TBI, other than potential acquisitions by THP.
12. A joint press release shall be issued following execution of the Letter
by both parties. Nothing in this Paragraph shall be construed from
precluding any party from including required disclosure in any report
filed with the Commission or any state or provincial securities
commission, provided, that prior notice shall be given to the other
party.
13. Each party shall bear its own expenses in connection with this
transaction contemplated by this Letter of Intent.
This Letter of Intent sets forth the terms of a transaction proposed to be
entered into among the parties, and, except as provided in Paragraphs 10, 11 and
13 of this Letter, which paragraphs are binding upon the parties immediately
upon execution, does not constitute an agreement or an agreement to enter into
an agreement. The rights of the parties shall be subject, among other things, to
the completion of due diligence investigations by the parties and the execution
of a definitive Purchase Agreement, and no party shall have any rights or
obligations under this Letter except as expressly provided in this Letter of
Intent. Except as set forth in Paragraph 12 of this Letter, the failure of any
party to enter into definitive agreement shall not give rise to any liability to
any other party.
This expression of interest expires September 22, 2000 at 5:00 P.M. Please
confirm your agreement with the foregoing by signing this Letter where indicated
and returning it to THP.
Very truly yours,
XXXXXXXXX.XXX INC.
By: /s/ Declan French
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Declan French, President and CEO
AGREED TO AND ACCEPTED
This 21st day of September 2000
TIDALBEACH INC.
By: /s/ Xxxx Xxxx
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Xxxx Xxxx, President
