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EXHIBIT 2.1
SHARE PURCHASE AGREEMENT
THIS AGREEMENT dated for reference the ____ day of __________, 1999.
BETWEEN:7
JCC CONSULTING SERVICES LTD., CAMBRIDGE ASSET HOLDINGS S.A.,
TIGERLILY FINANCIAL INC., XXXXX XXXXXXXX, XXXXXX XXXXX, XXXXX
DRAGON, XXXXXX XXXXXX, XXXXXX XXXXXXX, XXXX XXXXXXXX, XXXXX
XXXXX
(hereinafter collectively called the "Vendors")
AND:
RELIANCE RESOURCES INC., a Colorado corporation with a
registered office in the State of Colorado, USA, located at
0000 Xxxxxxxx, Xxxxx 000, Xxxxxx, XX, XXX, 00000, and a head
office within BC located at Suite 1200, 0000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxx
(hereinafter called the "Purchaser")
AND:
SUM MEDIA CORP., a company duly incorporated under the laws of
BC and having an office and place of business at Suite 1200,
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx
(hereinafter called the "Company")
WITNESSES THAT WHEREAS:
A. The Vendors are the legal and/or beneficial owners of an aggregate of
9,000,001 common shares in the capital of the Company (the "Shares"),
allocated as follows:
JCC Consulting Services Ltd. 562,500
Xxxxxx Xxxxxxx 112,500
Xxxx Xxxxxxxx 281,250
Xxxxx Xxxxx 281,250
Cambridge Asset Holdings S.A. 1,125,000
Tigerlily Financial Inc. 1,125,000
Xxxxx Xxxxxxxx 2,404,688
Xxxxxx Xxxxx 562,500
Andre Dragon 140,625
Xxxxxx Xxxxxx 2,404,688
---------
TOTAL 9,000,001
B. The Vendors have each agreed to sell and the Purchaser has agreed to
purchase the Shares upon the terms and conditions herein set forth;
NOW THEREFORE in consideration of the premises, the covenants and agreements and
warranties hereinafter set forth, it is hereby agreed as follows:
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SALE AND PURCHASE
1. Based on and relying upon the representations and warranties herein, the
Vendors hereby each agree to sell the Shares to the Purchaser and the
Purchaser hereby agrees to purchase the Shares from the Vendors on the
terms and conditions herein contained.
2. The purchase price payable by the Purchaser to the Vendors for the Shares
shall be US $600,000 (the "Purchase Price") payable on the Closing Date by
the issuance of 3,200,000 common shares in the capital stock of the
Purchaser (the "Exchangeable Shares") as per the allocation table set out
in Schedule "A", to be issued in exchange for the Shares held by the
Vendors in the Company.
3. The Exchangeable Shares will be issued pursuant to exemptions under
Regulation S promulgated under the US SECURITIES XXX 0000 and under the
British Columbia SECURITIES ACT.
COMPANY AND VENDORS' REPRESENTATIONS AND WARRANTIES
4. The Company and the Vendors, jointly and severally, represent and warrant
to the Purchaser, to the best of their knowledge, information and belief
after making due inquiry that:
(a) the Company is a company duly incorporated under the laws of the
Province of British Columbia, is not a reporting company and is a valid
and subsisting company in good standing with all regulatory
authorities;
(b) the authorized capital of the Company consists of 30,000,000 Common
Shares without par value, of which there are 9,000,001 Common Shares
issued and outstanding;
(c) the Shares are free and clear of all liens, claims, charges and
encumbrances of every nature and kind whatsoever;
(d) the Shares are duly authorized, validly issued and outstanding as fully
paid and non-assessable shares;
(e) the Vendors are the sole registered and/or beneficial owners of the
Shares and have due and sufficient right and authority to transfer the
legal and beneficial title and ownership of the Shares to the
Purchaser, and each of the Vendors and the Company has due and
sufficient right, power and authority (including any and all necessary
corporate and/or shareholder authorizations) to enter into this
Agreement on the terms and conditions herein set forth, and this
Agreement, when executed and delivered by the Vendors and Company, will
constitute a legal and binding obligation of each such party
enforceable against it in accordance with its terms;
(f) no person, firm or corporation has any agreement or option or a right
capable of becoming an agreement for the purchase of the Shares or any
other shares in the capital of the Company owned by the Vendors or any
right capable of becoming an agreement for the purchase, subscription
or issuance of any of the unissued shares in the capital of the
Company;
(g) the Company has the full corporate power and authority to carry on the
business presently being carried on by it and as proposed to be carried
on by it;
(h) the Company holds all licenses and permits as may be requisite for
carrying on its business in the manner in which it has heretofore been
carried on.
(i) there are no material liabilities, contingent or otherwise, of the
other than as set forth in Schedule "B" attached hereto;
(j) at the Time of Closing, the Company shall not have any material
liabilities, contingent or otherwise other than those liabilities set
forth in Schedule "B" attached hereto;
(k) the books and records of the Company fairly and correctly set out and
disclose in all material respects, in accordance with Canadian
generally accepted accounting principles, the financial position of the
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Company as at the date hereof and all material financial transactions
of the Company relating to its business have been accurately recorded
in such books and records;
(l) no payments of any kind have been made or authorized to or on behalf of
the Vendors or any of them or to or on behalf of officers, directors or
shareholders of the Company or under any management agreements with the
Company which are not recorded in the books or records of the Company
or which have not been disclosed in writing to the Purchaser other than
payments made in the normal course of business;
(m) there is no basis for and there are no actions, suits, judgments,
investigations or proceedings outstanding or pending or to the
knowledge of the Company or the Vendors, jointly or severally,
threatened against or affecting the Company at law or in equity or
before or by any federal, state, municipal or other governmental
department, commission, board, bureau or agency;
(n) to the best of the Vendors' knowledge, the Company is not in breach of
any laws, ordinances, statutes, regulations, by-laws, orders or decrees
to which it is subject or which apply to it;
(o) the Company is not a party to any collective agreement with any labour
union or other association or employees and no attempt has been made to
organize or certify the employees of the Company as a bargaining unit;
(p) there are no pensions, profit sharing, group insurance or similar plans
or other deferred compensation plans affecting the Company;
(q) the Company is not indebted to any employee of the Company or other
workers engaged in the business of the Company and the Company has not
received or been notified of any general wage claims;
(r) the Company is the sole beneficial owner and has good and marketable
title to all its properties and assets free and clear of all liens,
mortgages, pledges, deeds of trust, conditional sale agreements,
encumbrances, charges or claims of every kind and nature whatsoever;
(s) the Company has not experienced nor is it aware of any occurrence or
event which has had, or might reasonably be expected to have, a
materially adverse affect on its business or the results of its
operations;
(t) neither the Vendors nor any officer, director, employee or shareholder
of the Company is now indebted or under obligation to the Company on
any account whatsoever; and the Company is not indebted or under
obligation to the Vendors or any officer, director, employee or
shareholder of the Company.
(u) this Agreement once duly executed and delivered by the Vendors and the
Company will constitute a legal, valid and binding obligation of the
Vendors and the Company; enforceable against the Vendors and the
Company in accordance with its terms;
5. The Vendors hereby jointly and severally represent and warrant to the
Purchaser as follows that:
(a) the Vendors have the capacity to protect their own interests in
connection with the acquisition of the common Shares of the Purchaser
and are capable of evaluating the merits and risks of an investment in
the Purchaser by reason of their business and financial knowledge and
experience;
(b) the Vendors are acquiring the shares of common stock of the Purchaser
for investment for their own account, not as a nominee or agent, and
not with the view to, or for resale in connection with, any
distribution thereof. The Vendors understand that the shares of common
stock of the Purchaser have not been, and will not be, registered under
the US SECURITIES XXX 0000, as amended (the "Securities Act"), by
reason of a specific exemption from the registration provisions of the
Securities Act, the availability of which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy
of the Vendors' representations as expressed herein;
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(c) each Vendor acknowledges that the shares of common stock of the
Purchaser must be held indefinitely unless subsequently registered
under the Securities Act or unless an exemption from such registration
is available. Each Vendor is aware of the restrictions and limitations
on resale of the shares of common stock of the Purchaser into the
United States or to a US Person pursuant to the provisions of
Regulation S promulgated under the Securities Act. In addition, each
Vendor is aware of the provisions of Rule 144 promulgated under the
Securities Act ("Rule 144") which permit limited resales in the US of
shares purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things, the existence of a
public market for the shares of common stock of the Purchaser, the
availability of certain current public information about the Purchaser,
the resale occurring not less than one year after a party has purchased
and paid for the security to be sold, the sale being effected through a
"broker's transaction" or in transactions directly with a "market
maker" and the number of shares being sold during any three-month
period not exceeding specified limitations;
(d) each of the Vendors has had an opportunity to discuss the Purchaser's
business, management and financial affairs with the Company's
management and has also had an opportunity to ask questions of the
Purchaser's officers, which questions were answered to the Vendors'
satisfaction. Each Vendor has been furnished with or has had access to
such information as a sophisticated investor would customarily require
to evaluate the merits and risks of the proposed investment together
with such additional information as is necessary to verify the accuracy
of the information supplied. The Vendors represent and acknowledge that
they have been solely responsible for their own due-diligence
investigation of the Purchaser and its management and business, for its
own analysis of the merits and risks of this investment, and for its
own analysis of the terms of the investment, and that in taking any
action or performing any role relative to the proposed investment, it
has acted solely in its own interest, and that neither it nor any of
its agents or employees has acted as an agent, employee, partner or
fiduciary of any other person, or as an agent of the Purchaser, or as
an issuer, underwriter, broker, dealer or investment advisor relative
to this investment;
(e) each of the Vendors understands that the Purchaser has no operating
history, and that investment in the Purchaser involves substantial
risks. The Vendors further understand that the acquisition of the
shares of common stock of the Purchaser will be a highly speculative
investment. Each of the Vendors is able, without impairing his
financial condition, to hold the shares of common stock of the
Purchaser for an indefinite period of time and to suffer a complete
loss of his investment;
(f) each of the Vendors agrees to indemnify and hold harmless the Purchaser
and its officers, directors and agents for any costs, liabilities or
losses caused by any misstatement of material fact by such Vendor with
respect to the representations and warranties contained in this Section
or any other written information provided to the Purchaser by such
Vendor in connection with the investment contemplated by this
Agreement; and
(g) each Vendor represents and warrants to the Purchaser that he is not a
US Person as defined in Regulation S as promulgated under the
Securities Act and that the buy order for the common shares of the
Purchaser originated by each Vendor outside of the US.
VENDORS' COVENANTS
6. The Vendors jointly and severally covenant and agree that:
(a) the representations and warranties contained in this Agreement shall be
true at and as of the Time of Closing as if such representations and
warranties were made as of such time;
(b) the Vendors will permit the Purchaser or whoever it directs on its
behalf to examine the records, statements and accounts of the Company
on regular business days and during regular business hours up to and
including the Closing Date and make such audit of the books of account
of the Company and physical verification of the inventory of the
Company as the Purchaser may see fit;
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(c) the representations, warranties, covenants and agreements contained
herein shall survive the Closing Date and notwithstanding the Closing
of the purchase and sale herein contemplated, shall continue in full
force and effect;
(d) the Vendors will, jointly and severally, prior to Closing, take all
steps and proceedings and execute such further assurances and documents
as may be required to obtain the transfer and registration of the
Shares into the name of the Purchaser provided that all terms and
conditions to be observed and performed by the Purchaser at the Time of
Closing have been observed and performed;
PURCHASERS' REPRESENTATIONS AND WARRANTIES
7. As an inducement to the Company and each of the Vendors to enter into this
Agreement and to consummate the transactions provided for herein, the
Purchaser represents and warrants to the Company and each of the Vendors,
to the best of its knowledge, information and belief after making due
inquiry that:
(a) the Purchaser was incorporated on December 7, 1990 under the laws of
the State of Delaware as Pursuit Ventures Corporation. Under a Plan and
Agreement of Merger, effective August 21, 1998, the Purchaser merged
with a Colorado corporation. The Colorado corporation was incorporated
on March 20, 1997, under the name Remington Assets Limited, and,
effective August 11, 1998, changed its name to Pursuit Ventures
Corporation. Effective with the terms of the Agreement of Merger,
Pursuit Ventures Corporation, Colorado, became the surviving company.
The Purchaser filed for a name change with the Colorado Secretary of
State to Reliance Resources Inc., which became effective September 8,
1998;
(b) the Purchaser is duly incorporated, validly existing and in good
standing under the laws of the State of Colorado;
(c) the Purchaser is now and as of the Closing Date will be traded on the
OTC Bulletin Board and no further action must be taken before the
Closing Date for continued trading on the Bulletin Board except for the
filing of a registration statement with the U.S. Securities and
Exchange Commission, on Form 10-SB or similar prescribed form, such
filing to be the responsibility of the Purchasers new management
following the Closing Date;
(d) it has full and absolute right, power and authority to enter into this
Agreement on the terms and conditions herein set forth, to carry out
the transactions contemplated hereby and, to transfer on the Closing
Date to the vendors all legal and beneficial ownership in and to the
Exchangeable Shares;
(e) this Agreement once duly executed and delivered by the Purchaser will
constitute a legal, valid and binding obligation of the Purchaser;
enforceable against the Purchaser in accordance with its terms;
(f) no proceedings have been taken or authorized by the purchaser, or to
the knowledge of the purchaser, by any person, with respect to the
bankruptcy, insolvency, liquidation, dissolution or winding-up of the
Purchaser or with respect to any amalgamation, merger, consolidation,
arrangement or reorganization relating to the Purchaser;
(g) the authorized capital stock of the Purchaser consisted of 50,000,000
shares of common stock with a par value of US $0.001 per share, of
which 500,000 were issued and outstanding. On June 16, 1999, the Board
of Directors passed a unanimous resolution to adopt a forward stock
split at the ratio of 32 to 1. On June 24, 1999 the Secretary of the
State of Colorado received the amendment of the Purchaser's Articles of
Incorporation, under which its authorized capital stock is now
65,500,000 shares of common stock with a par value of US $0.01 per
share. Pursuant to a Stock Purchase Agreement dated June 11, 1999,
between Caribbean Avionics Ltd. et al, the Purchaser and Xxxxxxx X.
Xxxxxx (a copy of which is attached hereto as Schedule "C"), on June
16, 1999, Xxxxxxx X. Xxxxxx cancelled and returned to the Purchaser
6,210,000 post-split shares of common stock. The Purchaser's issued and
outstanding post-split shares of common stock, on the Closing Date,
shall be 10,790,000 which, includes 1,000,000 shares of common stock to
be issued pursuant to the private placement referred to in subsection
7(p). The authorized capital stock of the
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Purchaser also consists of 1,000,000 shares of preferred stock, with a
par value of US $0.01 per share, none of which are issued and
outstanding;
(h) following the forward stock split, and the cancellation of 6,210,000
post-split shares of common stock referred to in subsection 7(g), there
are no persons or group of persons acting in concert, that directly or
indirectly hold shares of the Purchaser that would constitute a control
block;
(i) other than the 1,000,000 share purchase warrants referred to in
subsection 7(p), on the Closing Date there will not be outstanding (i)
any options, warrants, rights of first refusal or other rights to
purchase any shares of the Purchaser, (ii) any securities convertible
into or exchangeable for such shares, or (iii) any other commitments of
any kind for the issuance of additional shares of the Purchaser or
options warrants or other securities of the Purchaser;
(j) all of the issued and outstanding shares of the Purchaser have been
duly and validly authorized and issued in accordance with applicable
laws and are validly outstanding, fully paid and non-assessable;
(k) all of the Exchangeable Shares which will be issued to the Vendors
hereunder in compliance with applicable laws and the articles of the
Purchaser, and will be issued fully paid and non-assessable, and free
and clear of all liens, charges, encumbrances and trading restrictions
other than as may be imposed by applicable U.S. Federal and State laws,
and the laws of British Columbia;
(l) the Purchaser has no subsidiaries;
(m) the officers and directors of the Purchaser are as follows:
Name Position
---- --------
Xxxxx Xxxxxxxx Director, President, Secretary
(n) attached hereto as Schedule "D" are true and complete copies of the
Purchasers audited financial statements for the fiscal year ended on
December 31, 1998 and unaudited financial statements as contained in
the Purchasers' Form 10-QSB for the fiscal quarter ending on March 31,
1999 (the "Purchasers Financial Statements"). The Purchasers Financial
Statements have been prepared in accordance with American GAAP and
present fairly the financial position, results of operations and
statements of changes in the Parent's financial position for the period
indicated;
(o) no adverse material changes in the affairs of the purchaser have
occurred since April 1, 1999;
(p) the Purchaser is in the process of obtaining irrevocable subscriptions
from purchasers not residents or citizens of Canada or the United
States, for the purchase of 1,000,000 units of the Purchaser at US
$1.00 per unit pursuant to Rule 504 (the "Rule 504 Offering"). Each
unit consists of 1 share of common stock and 1 two-year warrant. Each
warrant entitles the holder to purchase, within 2 years from the date
of the subscription agreement, 1 additional share of common stock at
the price of US $3.00 per share, for total proceeds of US $1,000,000,
such subscriptions being made in accordance with an exemption from the
registration requirements of the US SECURITIES XXX 0000 and applicable
U.S. state legislation, and will bear a restrictive legend pursuant to
restrictions on resale under Rule 144;
(q) there are no liabilities, contingent or otherwise of the Purchaser
which are not disclosed or reflected in its Financial Statements or as
set forth in Schedule "D" attached hereto;
(r) at the time of Closing the Purchaser shall not have any liabilities,
contingent or otherwise, other than those liabilities set forth in
Schedule "E" attached hereto;
(s) there are no employment, consulting, severance pay, continuation pay,
termination pay, indemnification agreements, collective agreements,
employee benefit plans or other similar agreement of any nature
whatsoever affecting the Purchaser;
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(t) there is no litigation, proceeding, or investigation pending or
threatened against the Purchaser, nor does the Purchaser know, or have
grounds to know, of any basis for any litigation, proceeding or
investigation against the Purchaser, except as disclosed in writing to
the Vendors;
(u) since April 1, 1999, the Purchaser's business has been operated
substantially in accordance with all laws, rules, regulations, orders
of competent regulatory authorities, and there has not been:
(i) any event or change in circumstances that has had, or which
the Purchaser may expect to have, a material adverse effect on
the Purchaser or its business;
(ii) any change in liabilities of the Purchaser that has had, or
which the Purchaser may expect to have, a material adverse
effect on the Purchaser or its business;
(iii) any incidence, assumption or guarantee of any indebtedness for
borrowed money by the Purchaser;
(iv) any payments by the Purchaser in respect of any indebtedness
of the Purchaser for borrowed money or in satisfaction of any
liabilities of the Purchaser, other than in the ordinary
course of business;
(v) the creation, assumption or sufferance of the existence of any
lien on any assets reflected on the Purchaser Financial
Statements;
(vi) any transaction or commitment made, or any contract entered
into, by the Purchaser other than the Stock Purchase Agreement
attached hereto as Schedule "C";
(vii) any grant of any severance, continuation or termination pay to
any director, officer, stockholder or employee of the
Purchaser; or any entering into of an employment, deferred
compensation or other similar agreement, or amendment or
variation to any such existing agreement;
(viii) any change by the Purchaser in its accounting principles,
methods or practices or in the manner it keeps its books and
records;
(ix) any distribution, dividend, bonus, management fee or other
payment by the Purchaser to any of its respective officers,
directors stockholders or affiliates, or any of their
respective affiliates or associates; and
(x) any material capital expenditure or commitment by the
Purchaser or material sale, assignment, transfer, lease or
other disposition of or agreement to sell, assign, transfer
lease or otherwise dispose of any asset or property by the
Purchaser other than in the ordinary course of business.
(v) the Purchaser does not own or lease any real property or material
assets;
(w) the Purchaser currently has no operating business and has not had an
operating business since December 7, 1990, being the date the Purchaser
was organized under the laws of Delaware as Pursuit Ventures
Corporation;
(x) there are no contracts or indebtedness between the Purchaser and any of
its shareholders, or affiliates or associates of any of its
shareholders;
(y) there are no material contracts to which the Purchaser is a party other
than as specified in this Agreement;
(z) the operation of the Purchaser's business has not violated or infringed
any U.S. Federal or State securities laws or regulations;
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(aa) all tax returns and reports of the Purchaser required by law to be
filed prior to the date hereof have been filed and are substantially
true, complete and correct, and all taxes and other government charges
have been paid or accrued in the Purchaser Financial Statements;
(bb) the information contained in the documents, certificates and written
statements (including this Agreement and the attachments thereto)
furnished by the Purchasers to the Vendors are true and complete in all
material respects and do not omit to state any material fact necessary
in order to make the statements therein; and
(cc) there is no fact known to the Purchaser that has not been disclosed to
the Vendors in writing that could reasonably have a material adverse
effect on the Purchaser.
PURCHASERS COVENANTS
8. The Purchaser covenants and agrees as follows:
(a) on the Closing Date, Xxxxx Xxxxxxxx shall resign as Director, President
and Secretary and the following persons will be appointed the directors
and officers of the Purchaser:
Name Position
---- --------
Xxxx Xxxxxxxx Director, President
Xxxxx Xxxxx Director, Secretary
Xxxxx Xxxxxxxx Director
(b) on the Closing Date, and provided that all terms and conditions to be
observed and performed by the Vendors at the Time of Closing have been
observed and performed, the Purchaser will issue the Exchangeable
Shares to the Vendors, such Exchangeable Shares to be issued free and
clear of any liens, encumbrances and charges, but subject to applicable
trading restrictions imposed by U.S. securities legislation, and
imposed under such other securities legislation applicable in the each
jurisdiction where any of the Vendors are resident;
(c) the Purchaser shall not disseminate to any third party any information,
by press-release or otherwise, without the prior written consent of the
Vendors and the Company;
(d) to forthwith deliver to Vendors or legal counsel designated by the
Vendor, a copy of the corporate records and minute books of the
Purchaser, a copy of all documents filed with US State and Federal
securities regulatory authorities since the date of incorporation of
the Purchaser, a current copy of the shareholder list kept by the
transfer agent of the Purchaser and all such documents as the Vendors
or its legal counsel may request as part of their due diligence
investigation of the Purchaser. The Purchaser agrees to provide access
to all corporate records and otherwise assist the Vendors in the
completion of their due diligence;
(e) the Purchaser agrees to sign all documents required, and otherwise
assist the Vendors, to transfer of signing authority over all bank
accounts of the Purchaser.
CONDITIONS PRECEDENT FOR THE VENDORS
9. The joint and several obligations of the Vendors to carry out the terms of
this Agreement and to complete the sale contemplated herein is subject to
the following conditions:
(a) the Purchaser shall have performed and satisfied each of its
obligations hereunder required to be performed and satisfied by it on
or prior to the Closing Date and each of the representations and
warranties of the Purchaser contained herein shall have been true and
correct and contained no misstatement or omission that would make any
such representation or warrant misleading when made, and shall be true
and correct and contain no misstatement or omission that would make any
such representation or warranty misleading at and as of the Closing
Date with the same force and effect as if made as of the Closing Date;
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(b) the Vendors shall have had the opportunity to complete their due
diligence, and all matters arising therefrom shall have been resolved
by the Purchaser. The Vendors, acting reasonably, may in their sole
discretion terminate this Agreement without further obligation or
liability to the Purchaser, if matters arising from the due diligence
investigation of the Purchaser are considered to be materially adverse
to the interests of the Vendors or the Company, and such matters cannot
be cured or otherwise rectified promptly by the Purchaser;
(c) the transactions contemplated by this Agreement shall not violate any
applicable law and there shall be no pending actions or proceedings by
any State, U.S. Federal or Provincial regulatory authority or by any
other person challenging or seeking to materially restrict or prohibit
the transfer and exchange contemplated hereby or the consummation of
the transactions contemplated by this Agreement;
(d) subsequent to the date hereof and prior to the Closing Date, there
shall not have been any event, occurrence, development or state of
circumstances or facts that has had or that may be reasonably expected
to have a material adverse effect on the Purchaser;
(e) the Purchaser's Board of Directors, by proper and sufficient vote
respectively, shall have approved this Agreement and the transactions
contemplated hereby;
(f) prior to the Closing Date, the Purchaser shall have taken all steps
legally necessary to:
(i) effect the forward stock split of the Purchaser's shares of
common stock at the ratio of 32 to 1;
(ii) amend its Articles of Incorporation; and
(iii) cancel the 6,210,000 post-split shares of common stock in the
capital of the Purchaser held by Xxxxxxx X. Xxxxxx; and
(g) the Purchaser shall have completed the Rule 504 Offering and issued the
shares to the investors thereunder and the Purchaser shall have filed
the appropriate Form D with the U.S. Securities and Exchange Commission
and any state securities regulatory authority, as required by
applicable Federal and State securities laws.
CONDITIONS PRECEDENT FOR THE PURCHASER
10. All obligations of the Purchaser under this Agreement are subject to the
fulfillment on or prior to Closing, of each of the following conditions to
the satisfaction of the Purchaser's solicitor:
(a) all covenants, warranties and agreements of the Vendors to be performed
on or before the Closing Date pursuant to the terms and conditions of
this Agreement have been duly performed;
(b) the Vendors shall transfer the Shares to the Purchaser and such Shares
shall be registered on the books of the Company in the name of the
Purchaser at the Time of Closing; and
(c) the representations and warranties of the Vendors set forth in this
Agreement shall be true and correct as of the date of the Agreement and
shall be true and correct as at the Date of Closing as if made by the
Vendors on the Closing Date.
11. The Vendors jointly and severally agree that the foregoing conditions in
section 10 are inserted for the exclusive benefit of the Purchaser and may
be waived by the Purchaser in whole or in part at any time.
12. In the event any of the conditions set forth in section 10, are not met by
the Closing Date for whatever reason, the Purchaser at his option, may
elect not to proceed with the purchase of the Shares contemplated herein
without prejudice to any other rights and remedies.
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SHARE CERTIFICATE LEGENDS
13. It is understood that the certificates evidencing the Purchaser's shares of
common stock may bear one or more legends in substantially the following
forms, as well as any other legend required by the laws of any applicable
jurisdiction:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE U.S. OR TO US PERSONS IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER
SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED. HEDGING TRANSACTIONS FOR SUCH SECURITIES
MAY NOT BE MADE UNLESS IN COMPLIANCE WITH SUCH ACT.
THE SHARES ARE SUBJECT TO RESTRICTION ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD IN THE U.S. OR TO US PERSONS EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
The Purchaser need not record a transfer of the shares, unless the
conditions specified in any applicable legends are satisfied. The Purchaser
may also instruct its transfer agent not to record the transfer of any of
the shares unless the conditions specified in the applicable legends are
satisfied.
14. The legend relating to the Securities Act endorsed on a stock certificate
pursuant to this Agreement and the stop transfer instructions with respect
to the shares represented by such certificate shall be removed and the
Purchaser shall issue a certificate without such legend to the holder of
such shares if such shares are registered under the Securities Act and a
prospectus meeting the requirements of Section 10 of the Securities Act is
available or if such holder provides to the Purchaser an opinion of counsel
reasonably satisfactory to the Purchaser, or a no-action letter or
interpretive opinion of the staff of the Securities and Exchange Commission
(the "SEC") to the effect that a public sale, transfer or assignment of
shares may be made without registration and without compliance with any
restriction such as Rule 144.
CLOSING
15. The sale and purchase of the Shares shall be closed on July 30, 1999, or on
such other date agreed by all of the parties hereunder, at the office of
Xxxxxx & Company, or at any other place agreed to by all of the Parties,
which date and time are referred to herein as the "Date of Closing", the
"Closing Date", the "Closing" and the "Time of Closing".
16. At Closing, the Vendors shall deliver to the Purchaser:
(a) share certificates duly endorsed for transfer of 9,000,001 Common
Shares without par value in the capital of the Company into the
Purchaser's name representing the Shares;
(b) certified copies of resolutions of the directors of the Company
authorizing and approving the transfer of the Shares, registration of
the Shares in the name of the Purchaser, authorizing the issue of new
share certificates representing the Shares in the name of the
Purchaser, and entry of the name and address of the Purchaser into the
Register of Members and Register of Directors of the Company;
(c) all corporate records and books of account of the Company, including,
without limitation, the minute book, corporate seal, share register
books, share certificate books and annual reports of the Company;
(d) certified copies of such resolutions of the shareholders and directors
of the Company as are to be passed to authorize the execution, delivery
and implementation of this Agreement and of all documents to be
delivered by the Vendor pursuant thereto;
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(e) a certificate signed by the Vendors that all covenants, warranties and
agreements of the Vendors pursuant to the terms of this Agreement have
been duly performed and that the representations and warranties of the
Vendors set forth in this Agreement are true and correct as at the Date
of Closing;
17. On Closing the Purchaser shall deliver to the Vendor the following:
(a) share certificates representing the Exchangeable Shares in the names
and denominations set out in Schedule "A" hereto;
(b) certified copies of resolutions of the directors of the Purchaser
authorizing and approving the issuance of the Exchangeable Shares,
registration of the Exchangeable Shares in the name of the Vendors in
accordance with Schedule "A" hereto and authorizing the issue of the
new share certificates representing such Exchangeable Shares;
(c) all corporate records and books of account of the Company, including
without limitation, the minute book;
(d) certified copies of such resolutions of the directors of the Purchaser
as are to be passed to authorize the execution, delivery and
implementation of this Agreement and of all documents to be delivered
to the Vendors pursuant thereto;
(e) a certificate signed by a duly authorized officer of the Purchaser that
all covenants, warranties and agreements of the Purchaser pursuant to
the terms of this Agreement have been duly performed and that the
representations and warranties of the Purchaser set forth in this
Agreement are true and correct as at the Closing;
(f) the signed resignations of Xxxxx Xxxxxxxx as director, President and
corporate secretary of the Purchaser and good evidence of proper
termination of all employment or consulting contracts to which the
Purchaser is a party; and
(g) a certified cheque from Global Securities Corporation in the amount of
US $1,000,000, less any amounts previously forwarded (as at August 4,
1999 approximately US $550,000 has been forwarded to the Company)
payable to SUM Media Corp., or as the Company may otherwise direct,
representing the proceeds of the Rule 504 Offering.
INDEMNITY
18. The Purchaser shall be indemnified and held harmless by the Vendors in
respect of any and all damages incurred by the Purchaser as a result of any
inaccuracy or misrepresentation in or breach of any representation or
warranty, covenant or agreement made in this Agreement by the Vendors.
19. The Vendors shall each be indemnified and held harmless by the Purchaser in
respect of any and all damages incurred by any of such Vendors as a result
of any inaccuracy or misrepresentation in or breach of any representation,
warranty, covenant or agreement made by the Purchaser in this Agreement.
SURVIVAL OF REPRESENTATION, WARRANTIES AND COVENANTS
20. Except as hereinafter provided, all representations, warranties, covenants,
agreements and obligations of the parties hereto shall survive the Closing
and shall expire one year following the Closing Date.
GENERAL
21. This Agreement and the terms hereunder shall be treated as confidential
information and no disclosure thereof can be made without the written
consent of the Vendors and the Company.
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22. This Agreement shall be governed by and be construed in accordance with the
laws of the Province of British Columbia.
23. Any notice to be given to a party hereto shall be in writing and signed by
or on behalf of such party and shall be given to the other party by
delivery thereto, or by sending by prepaid registered mail, telex,
facsimile, telegram or cable to the address of the other as hereinbefore
set forth or to such other address of which notice is given, and any notice
shall be deemed not to have been sufficiently given until it is received.
Any notice or other communication contemplated herein shall be deemed to
have been received on the day delivered, if delivered; on the seventh
business day following the mailing thereof, if sent by registered mail; and
on the business day following the transmittal thereof, if sent by telex,
facsimile, telegram or cable. If normal mail, telex, facsimile, telegram or
cable service shall be interrupted by strike, slow down, force majeure or
other cause, the party sending the notice shall utilize any of the other
such services which have not been so interrupted or shall deliver such
notice in order to ensure prompt receipt of same by the other party.
24. The parties shall execute such further assurances and other documents and
instruments and do such further and other things as may be necessary to
implement and carry out the intent of this Agreement.
25. The provisions herein contained constitute the entire agreement between the
parties hereto and supersede all previous expectations, understandings,
communications, representations and agreements whether verbal or written
between parties.
26. This Agreement may be amended by a written instrument signed by the party
against whom enforcement of the amendment is sought and any waivers made on
the part of the Purchaser with respect to any terms or conditions herein
must be in writing and signed by them.
27. If any provision of this Agreement is unenforceable or invalid for any
reason whatever, such unenforceability or invalidity shall not effect the
enforceability or validity of the remaining provisions of this Agreement
and such provision shall be severable from the remainder of this Agreement.
28. Time shall be of the essence hereof.
29. The headings appearing in this Agreement are inserted for convenience of
reference only and shall not affect the interpretation of this Agreement.
30. This Agreement shall enure to the benefit of and be binding upon the
parties and their successors and permitted assigns.
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31. This Agreement may be executed in as many counterparts as may be necessary
or by facsimile and each such agreement or facsimile so executed shall be
deemed to be an original and such counterparts together shall constitute
one and the same Agreement.
IN WITNESS WHEREOF the parties hereto have caused this indenture to be executed
as of the day and year first above written.
CAMBRIDGE ASSET HOLDINGS S.A.
Per:
-----------------------------------------
Authorized Signatory
-----------------------------------------
Authorized Signatory
TIGERLILY FINANCIAL INC.
Per:
-----------------------------------------
Authorized Signatory
-----------------------------------------
Authorized Signatory
JCC CONSULTING SERVICES LTD.
Per:
-----------------------------------------
Authorized Signatory
-----------------------------------------
Authorized Signatory
SIGNED, SEALED and DELIVERED by Grant )
Xxxxxxxx in the presence of: )
)
)
)
----------------------------------------- ) --------------------------------
witness name ) XXXXX XXXXXXXX
)
)
)
)
----------------------------------------- )
witness address )
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SIGNED, SEALED and DELIVERED by
Xxxxxx Xxxxxxx in the presence of: )
)
)
)
----------------------------------------- ) --------------------------------
witness name ) XXXXXX XXXXXXX
)
)
)
)
----------------------------------------- )
witness address )
SIGNED, SEALED and DELIVERED by
Xxxx Xxxxxxxx in the presence of: )
)
)
)
----------------------------------------- ) --------------------------------
witness name ) XXXX XXXXXXXX
)
)
)
)
-----------------------------------------
witness address
-----------------------------------------
witness occupation
SIGNED, SEALED and DELIVERED by Xxxxx Xxxxx
in the presence of: )
)
)
)
----------------------------------------- ) --------------------------------
witness name ) XXXXX XXXXX
)
)
)
)
----------------------------------------- )
witness address )
)
)
----------------------------------------- )
witness occupation )
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SIGNED, SEALED and DELIVERED by
Xxxxxx Xxxxx in the presence of: )
)
)
)
----------------------------------------- ) --------------------------------
witness name ) XXXXXX XXXXX
)
)
)
)
----------------------------------------- )
witness address )
)
)
----------------------------------------- )
witness occupation
SIGNED, SEALED and DELIVERED by
Andre Dragon in the presence of: )
)
)
----------------------------------------- ) --------------------------------
witness name ) ANDRE DRAGON
)
)
)
)
----------------------------------------- )
witness address )
)
)
----------------------------------------- )
witness occupation
SIGNED, SEALED and DELIVERED by
Xxxxxx Xxxxxx in the presence of: )
)
)
----------------------------------------- ) --------------------------------
witness name ) XXXXXX XXXXXX
)
)
)
)
----------------------------------------- )
witness address )
)
)
----------------------------------------- )
witness occupation
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RELIANCE RESOURCES INC.
Per:
-----------------------------------------
Authorized Signatory
-----------------------------------------
Authorized Signatory
SUM MEDIA CORP.
Per:
-----------------------------------------
Authorized Signatory
-----------------------------------------
Authorized Signatory
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SCHEDULE "A"
Share Allocation Table for shares of the Purchaser to be issued to the Vendors
NAME NO. OF SHARES
---- -------------
JCC Consulting Services Ltd. 200,000
Xxxxxx Xxxxxxx 40,000
Xxxx Xxxxxxxx 100,000
Xxxxx Xxxxx 100,000
Cambridge Asset Holdings S.A. 400,000
Tigerlily Financial Inc. 400,000
Xxxxx Xxxxxxxx 855,000
Xxxxxx Xxxxx 200,000
Andre Dragon 50,000
Xxxxxx Xxxxxx 855,000
-------
TOTAL 3,200,000
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SCHEDULE "B"
Current Material Liabilities of
Sum Media Corp.
As of _____________, Sum Media Corp. has no current material
liabilities, contingent or otherwise except for the following:
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SCHEDULE "C"
Stock Purchase Agreement re Xxxxxxx X. Xxxxxx
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SCHEDULE "D"
Financial Statements of Reliance Resources Inc. for the
year ended December 31, 1998
and the quarter ended March 31, 1999
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SCHEDULE "E"
Current Liabilities of Reliance Resources Inc.
As at _____________, Reliance Resources Inc. had no current
liabilities, contingent or otherwise, except for the following:
Nil
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