MEMORANDUM OF SHARE PURCHASE AGREEMENT MADE AND ENTERED INTO ON THE 30TH DAY OF
JULY 1999
BETWEEN: IVISION GROUP LTD., a corporation duly incorporated under the laws
of Nevada, U.S.A., and having its head office at 0000 Xxxx Xxxxxxxx Xxxx, Xxxxx
000, Xxx Xxxxx, Xxxxxx, X.X.X. 00000, acting and represented hereby by Xxxxxxxx
Xxxxxx, its President, duly authorized as he so declares,
(hereinafter referred to as the Purchaser );
PARTY OF THE FIRST PART;
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AND: XXXXX XXXXXXXX, a businessman, domiciled and residing at 0000 Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxx, X0X 0X0;
(hereinafter referred to as Xxxxxxxx );
PARTY OF THE SECOND PART;
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AND: H L NE JULIEN, a businesswoman, domiciled and residing at 0000 Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxx, X0X 0X0;
(hereinafter referred to as Julien );
PARTY OF THE THIRD PART;
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AND: LA SOCI T DE GESTION XXXXX XXXXXX INC., a corporation duly
incorporated under the Laws of Canada and having its head office at 000 Xxxxxxxx
Xxxxxx, # 000, Xx-Xxxxxxx, Xxxxxx, X0X 0X0, acting and represented hereby by
Xxxxx Xxxxxx, its President, duly authorized as he so declares;
(hereinafter referred to as Xxxxxx Co. );
PARTY OF THE FOURTH PART;
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(Xxxxxxxx, Xxxxxx and Xxxxxx Co. are hereinafter individually referred to
as the Vendor and collectively as the Vendors );
WHEREAS the Purchaser is a publicly traded company listed on the OTC
Bulletin Board, involved in web commerce interactive marketing and related
matters;
WHEREAS Javanaise Information Services Corporation Inc., a corporation duly
incorporated under the Canada Business Corporations Act, having its head office
and principal place of business at 0000 XxXxxx Xxxxxxx, Xxxxx 0000, Xxxxxxxx,
Xxxxxx, Xxxxxx, X0X 0X0 (hereinafter referred to as Javanaise Co. ), is a web
project management consulting corporation;
WHEREAS all the issued and outstanding shares in the share capital of Javanaise
Co. are owned equally (50-50), under the Laws of Quebec, by Xxxxxx Co. and
Xxxxxxxx Conseils et R alisations Inc., a corporation duly incorporated and
having its head office at 0000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0
(hereinafter referred to as Xxxxxxxx Co. );
WHEREAS Xxxxxxxx and Julien own, in the proportion of 60% and 40%
respectively, all the issued and outstanding shares of Xxxxxxxx Co.;
WHEREAS the Purchaser wishes to purchase and Xxxxxxxx and Julien wish to
sell to the Purchaser all of the issued and outstanding shares in the share
capital of Xxxxxxxx Co.; and
WHEREAS the Purchaser wished to purchase and Xxxxxx Co. wishes to sell to
Purchaser all of the issued and outstanding shares owned by Xxxxxx Co. in the
share capital of Javanaise Co.;
NOW THEREFORE, THIS AGREEMENT WITNESSETH that in consideration fo the
mutual covenants hereinafter provided, the parties agree as follows:
ARTICLE 1
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
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1.1 DEFINITIONS - Whenever used in this Agreement, unless there is something
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inconsistent in the subject matter or context, the following words and terms
shall have the meanings set out below:
1.1.1 AB EMPLOYMENT AGREEMENT means the employment agreement entered into
as of the date hereof by Xxxxxxxx and iVision Integral Inc., as amended in
writing from time to time, and any renewal or replacement thereof;
1.1.2 ACCOUNTS RECEIVABLE means any and all accounts receivable, bills
receivable, trade accounts, book debts and insurance claims of any of the
Acquired Corporations as the case may be and any other amount due to any
Acquired Corporations including any refunds and rebates, and the benefit of all
security (including cash deposits), guarantees and other collateral held by any
Acquired Corporations;
1.1.3 ACCRUED LIABILITIES means any and all accrued liabilities of any
Acquired Corporations incurred in the ordinary course of business, including
accruals for vacation pay, customer rebates and allowances for product returns;
1.1.4 ACQUIRED CORPORATIONS means collectively Javanaise Co. and Xxxxxxxx
Co.;
1.1.5 AGREEMENT means this Share Purchase Agreement, including all
schedules, and all instruments supplementing or amending or confirming this
Agreement and references to Article or Section mean and refer to the
specified Article or Section of this Agreement;
1.1.6 ARM'S LENGTH means arm's length as defined in the Income Tax Act
(Canada);
1.1.7 BALANCE SHEETS means in case of Javanaise Co. the balance sheets as
at March 31st, 1999 and in case of Xxxxxxxx Co. , the balance sheets as at
January 31st, 1999;
1.1.8 BOOKS AND RECORDS means all books and records of any Acquired
Corporations, including financial, corporate, operation and sales books,
records, books of account, sales and purchase records, lists of suppliers and
customers, business reports, plans and projections and all other documents,
files, records, correspondence, and other data and information, financial or
otherwise, including without limitation, all data and information stored on
computer-related media;
1.1.9 CLAIMS means any claim, demand, action, cause of action, damage,
loss, costs, liability or expense, including, without limitation, reasonable
professional fees and all costs incurred in pursuing any of the foregoing;
1.1.10 CLOSING means the completion of the sale to and purchase by the
Purchaser of the Purchased Shares under this Agreement and all ancillary
transactions contemplated hereof;
1.1.11 CLOSING DATE means the 30th day of July 1999, or such other date as
the parties may agree in writing as the date upon which the Closing shall take
place;
1.1.12 CLOSING TIME means 12:00 noon, Montreal time, on the Closing Date
or such other time on such date as the parties may agree in writing as the time
at which the Closing shall take place;
1.1.13 CONTRACTS means all contracts, licences, leases, agreements,
commitments, entitlements and engagements of the Acquired Corporations whether
written or oral and includes all quotations, orders or tenders for contracts
which remain open for acceptance and any supplier's warranty, guarantee or
commitment (express or implied);
1.1.14 CONSULTING AGREEMENT means the consulting agreement entered into as
of the date hereof by Xxxxx Xxxxxx Conseils Inc. and iVision Integral Inc., as
amended in writing from time to time, and any renewal or replacement thereof;
1.1.15 ENCUMBRANCE means any pledge, lien, charge, hypothec, security
agreement, lease, title retention agreement, mortgage, encumbrance or option;
1.1.16 EQUIPMENT CONTRACTS means all leases, equipment leases, conditional
sales contracts, leasings, installment sales, title retention agreements and
other similar agreements relating to equipment;
1.1.17 ESCROW AGENT means Andr X. Xxxxxx, lawyer, having his place of
business at 0 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxxx, X0X 0X0, Xxxxxx;
1.1.18 ESCROW AGREEMENT means an agreement among the Purchaser, the
Vendors and the Escrow Agent dated as of the Closing Date substantially in the
form attached hereto as Schedule 1.1.18;
1.1.19 EXCHANGED SHARES means collectively all shares of Common Stock in
the share capital of the Purchaser issued to the Vendors pursuant to section 3
of this Agreement and the Escrow Agreement;
1.1.20 FINANCIAL STATEMENTS means in case of Javanaise Co. the unaudited
financial statements for the fiscal year ended March 31st, 1999 and in case of
Xxxxxxxx Co. the unaudited financial statements for the fiscal year ended
January 31st, 1999 copies of which are attached as Schedule 1.1.21;
1.1.21 GOVERNMENTAL AUTHORITY means any government, regulatory authority,
governmental department, agency, commission, board, tribunal, crown corporation,
or court or other law, rule or regulation-making entity having or purporting to
have jurisdiction on each of the Acquired corporations, as the case may be;
1.1.22 GOVERNMENTAL AUTHORIZATION means all authorizations, approvals,
licences or permits issued, granted, given, or otherwise made available by or
under the authority of any Governmental Authority as required pursuant to Laws;
1.1.23 INDEBTEDNESS means the indebtedness of the Acquired Corporations
for borrowed money including principal and accrued interest and the cost of
repayment of any indebtedness of the Acquired Corporations for borrowed money;
1.1.24 INTELLECTUAL PROPERTY means all copyrights, trademarks, trade
names, proprietary information, trade secrets and all other intellectual
property owned by, licensed to or used by the Acquired Corporations (including
applications and registrations for any of the foregoing and renewals, divisions,
extensions and reissues, where applicable, pertaining thereto);
1.1.25 INVENTORIES means all inventories of every kind and nature and
wheresoever situate owned by the Acquired Corporations including, without
limitation, all work-in-progress;
1.1.26 LAWS means all applicable laws, by-laws, rules, regulations,
orders, ordinances and judgements or other requirements of any Governmental
Authority;
1.1.27 LOSSES means any damage, liability, loss, cost, expense (including
all reasonable attorney's), deficiency, interest, penalty, impositions,
assessments or fines;
1.1.28 MATERIAL CONTRACTS means (a) the Equipment Contracts, Real Property
Leases; (b) any other Contract involving aggregate annual payments to or by any
Acquired Corporations in excess of $5,000.00; (c) any commitment to or by the
Acquired Corporations that may reasonably extend beyond three (3) months from
the Closing Date; and (d) any Contract which is outside the ordinary course of
business;
1.1.29 PERSON means any individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate, Governmental Authority, and a natural
person in such person's capacity as trustee, executor, administrator or other
legal representative;
1.1.30 PURCHASED XXXXXXXX CO. SHARES means all of the issued and
outstanding shares in the share capital of Xxxxxxxx Co., as described in
Schedule 2.1;
1.1.31 PURCHASED LM SHARES means all of the issued and outstanding shares
owned by Xxxxxx Co. in the share capital of Javanaise Co., as described in
Schedule 2.1;
1.1.32 PURCHASED SHARES means both the Purchased Xxxxxxxx Co. Shares and
the Purchased LM Shares;
1.1.33 REAL PROPERTY LEASES means those leases, subleases, agreements to
lease, tenancy agreement, rights of occupation, licences and other agreements
relating to real property used or occupied by the Acquired Corporations;
1.1.34 SHAREHOLDERS AGREEMENT means the shareholders agreement dated April
10, 1997 between Xxxxxx Co., Xxxxxxxx Co. and Javanaise Co.;
1.1.35 TAX RETURNS includes, without limitation, all returns, reports,
declarations, elections, notices, filings, information returns and statements
filed in respect with Taxes; and
1.1.36 TAXES includes, without limitation, all taxes, duties, fees,
premiums, assessments, imposts, levies and other charges of any kind whatsoever
imposed by any Governmental Authority, together with all interest, penalties,
fines, additions to tax or other additional amounts imposed in respect thereof,
including, without limitation, those levied on, or measured by, or referred to
as income, gross receipts, profits, capital, transfer, land transfer, sales,
goods and services, use, value-added, excise, stamp, withholding, business,
franchising, property, payroll, employment, health, social services, education
and social security taxes, all surtaxes, all customs duties and import and
export taxes, all license, franchise and registration fees and all employment
insurance, health insurance and Canada, Quebec and other government pension plan
premiums.
1.2 CERTAIN RULES OF INTERPRETATION - In this Agreement and the Schedules:
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(a) TIME - time is of the essence in the performance of the parties'
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respective obligations;
(b) CURRENCY - unless otherwise specified, all references to money amounts
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are to Canadian currency;
(c) HEADINGS - the descriptive headings of Articles and Sections are
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inserted solely for convenience of reference and are not intended as complete or
accurate descriptions of the content of such Articles or Sections;
(d) SINGULAR, ETC. - the use of words in the singular or plural, or with a
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particular gender, shall not limit the scope or exclude the application of any
provision of this Agreement to such person or persons or circumstances as the
context otherwise permits;
(e) CALCULATION OF TIME - unless otherwise specified, time periods within or
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following which any payment is to be made or act is to be done shall be
calculated by excluding the day on which the period commences and including the
day on which the period ends and by extending the period to the next business
day following if the last day of the period is not a business day;
1.3 ENTIRE AGREEMENT - This Agreement together with the agreements and other
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documents to be delivered pursuant to this Agreement, constitute the entire
agreement between the parties pertaining to the subject matter of this Agreement
and supercede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter of this Agreement except as specifically set
forth in this Agreement and any document delivered pursuant to this Agreement.
No supplement, modification or waiver or termination of this Agreement shall be
binding unless executed in writing by the parties to be bound thereby.
1.4 APPLICABLE LAW - This Agreement shall be construed in accordance with
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the laws of the Province of Quebec and the laws of Canada applicable therein and
shall be treated, in all respects, as a Quebec contract.
1.5 ACCOUNTING PRINCIPLES - All reference to generally accepted accounting
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principles means to principles recommended, from time to time, in the Handbook
of the Canadian Institute of Chartered Accountants and all accounting terms not
otherwise defined in this Agreement have the meanings assigned to them in
accordance with Canadian generally accepted accounting principles.
1.6 SCHEDULES - The schedules to this Agreement, as listed below, are an
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integral part of this Agreement:
Schedule Description
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1.1.18 Escrow Agreement
1.1.20 Financial Statements
2.1 Vendors, Shareholdings and Authorized Share Capital
4.2.4 List of electronic Equipment
4.2.20 a) List of Employees
4.2.20 b) Employment Agreements
4.2.22 Insurance Policy
4.2.23 a) Material Contracts
ARTICLE 2
ACQUISITION TRANSACTIONS
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2.1 PURCHASE AND SALE OF THE PURCHASED SHARES - Subject to the terms and
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conditions herein, at the Closing Time, the parties shall effect the following
transactions:
(a) the Vendors shall sell, transfer and assign to the Purchaser and the
Purchaser shall purchase and accept the assignment of all the Purchased Shares,
as listed opposite the Vendor's respective name in Schedule 2.1;
(b) the Purchaser shall pay and satisfy the purchase price for the Purchased
Shares as provided in Section 3;
(c) the Vendors shall transfer and deliver to the Purchaser share
certificates representing the Purchased Shares duly endorsed in blank for
transfer;
(d) the parties shall effect all transactions contemplated in Section 11.
2.2 ACTIONS/DELIVERIES BY THE PARTIES - At or before the Closing Time, the
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Vendors and the Purchaser shall take and cause to be taken all necessary and
desirable actions, steps and corporate and legal proceedings to approve and
authorize the transactions contemplated by this Agreement.
2.3 PLACE OF CLOSING - The Closing shall take place at the Closing Time at
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the offices of Xxxxx X. Xxxxxx, located at 0 Xxxxxxxxx Xxxxxx, 00xx xxxxx,
Xxxxxxxxx (Xxxxxx), X0X 0X0, or at such other place as may be agreed upon by the
Vendors and the Purchaser.
ARTICLE 3
PURCHASE PRICE AND PAYMENT
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3.1 PURCHASE PRICE - The total purchase price ("Purchase Price") for the
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Purchased Shares is equal to the following cash and shares considerations:
(a) ONE HUNDRED FIFTY THOUSAND CANADIAN DOLLARS (CDN $150,000.00) in cash,
payable in the manner described in Sections 3.2.1 hereinafter; and
(b) SIXTY-EIGHT THOUSAND (68,000) shares of Common Stock of Purchaser
(collectively referred to as "Exchanged Shares"), payable in the manner
described in Section 3.2.2 hereinafter;
it being understood between the parties that said amount of CDN $150,000.00 plus
the Exchanged Shares shall constitute the entire and sole consideration payable
by the Purchaser to Vendors.
3.2 SATISFACTION OF PURCHASE PRICE - The Purchaser shall pay and satisfy the
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Purchase Price payable to the Vendors as follows:
3.2.1 CASH CONSIDERATION (CDN $150,000.00)
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The amount of ONE HUNDRED FIFTY THOUSAND CANADIAN DOLLARS (CDN $150,000.00)
shall be paid to the Vendors in TWO (2) installments as follows:
(a) CDN $75,000.00 - at Closing Date, by the remittance of a certified
cheque in the amount of TWENTY-TWO THOUSAND FIVE HUNDRED CANADIAN DOLLARS (CDN
$22,500.00) to the order of Xxxxxxxx, a certified cheque in the amount of
FIFTEEN THOUSAND CANADIAN DOLLARS (CDN $15,000.00) to the order of Julien, and a
certified cheque in the amount of THIRTY-SEVEN THOUSAND FIVE HUNDRED CANADIAN
DOLLARS (CDN $37,500.00) to the order of Xxxxxx Co., receipt of which is hereby
acknowledged by each of the Vendors; and
(b) CDN $75,000.00 - at the earliest of i) September 30, 1999 or ii) the
closing of a financing of greater than ONE MILLION U.S. DOLLARS (US
$1,000,000.00) for the Purchaser, by remittance of a certified cheque in the
amount of TWENTY-TWO THOUSAND FIVE HUNDRED CANADIAN DOLLARS (CDN $22,500.00) to
the order of Xxxxxxxx, a certified cheque in the amount of FIFTEEN THOUSAND
CANADIAN DOLLARS (CDN $15,000.00) to the order of Julien, and a certified cheque
in the amount of THIRTY-SEVEN THOUSAND FIVE HUNDRED CANADIAN DOLLARS (CDN
$37,500.00) to the order of Xxxxxx Co.
3.2.2 EXCHANGED SHARES
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The share consideration payable to the Vendors shall be paid by the
issuance, on or before Closing Date, of the Exchanged Shares in favor of the
Vendors as follows:
(a) the issuance in favor of Xxxxxxxx of 20,400 of the Exchanged Shares,
10,200 of which shall immediately be released to Xxxxxxxx on Closing Date and
the other 10,200 shall be remitted to the Escrow Agent to be held and released
(and/or cancelled) in accordance with the terms and conditions of the Escrow
Agreement;
(b) the issuance in favor of Julien of 13,600 of the Exchanged Shares, 6,800
of which shall immediately be released to Julien on Closing Date and the other
6,800 shall be remitted to the Escrow Agent to be held and released (and/or
cancelled) in accordance with the terms and conditions of the Escrow Agreement;
and
(c) the issuance in favor of Xxxxxx Co. of 34,000 of the Exchanged Shares,
17,000 of which shall immediately be released to Xxxxxx Co. on Closing Date and
the other 17,000 shall be remitted to the Escrow Agent to be held and released
(and/or cancelled) in accordance with the terms and conditions of the Escrow
Agreement.
3.3 ALLOCATION OF PURCHASE PRICE - The Purchase Price shall be allocated
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equally (50-50) between the Purchased LM Shares and the Purchased Xxxxxxxx Co.
Shares and, the portion payable for Purchased Xxxxxxxx Co. Shares shall itself
be prorated between Xxxxxxxx and Julien in the proportion of 60% and 40%
respectively.
ARTICLE 4
4.1.1 REPRESENTATIONS AND WARRANTIES CONCERNING XXXXXXXX AND JULIEN - Each
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of Xxxxxxxx and Julien represents and warrants to the Purchaser on a joint and
several basis as follows, and acknowledges that the Purchaser is relying on said
representations and warranties in entering into this Agreement:
(A) RIGHT TO SELL - Xxxxxxxx and Julien are the sole registered and
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beneficial owners of the Purchased Xxxxxxxx Co. Shares in the proportion of 60%
and 40% respectively, the whole as set out in Schedule 2.1 hereto, free and
clear of all Encumbrances and prior claims. All of the issued and outstanding
shares of Javanaise Co. are owned by Xxxxxx Co. and Xxxxxxxx Co., as set out in
Schedule 2.1 hereto, as the registered and beneficial owners, with good and
marketable title thereto, and the shares of Javanaise Co. owned by Xxxxxxxx Co.
are free and clear of all hypothecs, pledges and prior claims. Xxxxxxxx and
Julien have the exclusive right to sell, transfer and assign the Purchased
Xxxxxxxx Co. Shares as provided in this Agreement and such disposition will not
violate, contravene, breach or offend against or result in any default under any
indenture, mortgage, lease, agreement, obligation, instrument, charter or by-law
provision, statute, regulation, order, judgment decree, licence, permit or law
to which either of Xxxxxxxx, Xxxxxx and the Acquired Corporations is a party or
subject or by which either of them are bound or affected. The Purchased
Xxxxxxxx Co. shares are not subject to the terms of any Shareholder's Agreement
(unanimous or otherwise) other than the Shareholder Agreement which has been
terminated on the date hereof.
(B) ENFORCEABILITY OF OBLIGATIONS - This Agreement has been duly authorized,
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executed and delivered by each of Xxxxxxxx and Julien and constitutes a valid
and binding obligation of each of them enforceable against him (her) in
accordance with its terms.
(C) ABSENCE OF CONFLICTING AGREEMENTS - Neither of Xxxxxxxx and Julien is a
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party to, bound or affected by or subject to any indenture, mortgage, lease,
agreement, obligation, instrument, charter or by-law provision, statute,
regulation, order, judgment, decree, licence, permit or law which would be
violated, contravened, breached by, or under which default would occur or an
Encumbrance would be created as a result of the execution and delivery of this
Agreement or any other agreement to be entered into under the terms of this
Agreement, or the performance by Xxxxxxxx and Julien or the Acquired
Corporations of any of their respective obligations provided for under this
Agreement or any other agreement contemplated herein.
(D) NON-ARM'S LENGTH TRANSACTIONS - Neither Xxxxxxxx and Julien nor any
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Person not dealing at arm's length with any of them:
(a) owns, directly or indirectly, any interest in or is an employee,
consultant to or agent of, an entity which is a competitor, lessor, lessee,
customer or supplier of the Javanaise Co.;
(b) owns, directly or indirectly, any interest in any property or asset of
any Acquired Corporations;
(c) is a party to any Contract with any Acquired Corporations; or
(d) has any Indebtedness, liability or obligation to the Acquired
Corporations.
Subject to Section 9.3, the Acquired Corporations are not indebted or
otherwise obligated to Xxxxxxxx and Julien or any Person not dealing at arm's
length with any of them.
(E) RESIDENCE OF XXXXXXXX AND JULIEN - Neither of Xxxxxxxx and Julien is a
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non-resident of Canada for the purposes of the Income Tax Act (Canada).
(F) NO LITIGATION - There are no outstanding claims, actions, suits,
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litigation or arbitrations, investigations or proceedings at law or before any
Governmental Authority pending or, to the knowledge of the Vendors, proposed or
threatened, which would prevent the Vendors from completing the transactions
required to be completed pursuant to this Agreement.
(G) BROKERS - Neither of Xxxxxxxx and Julien have entered into any agreement
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that would entitle any Person to any claim against the Purchaser or the Acquired
Corporations for any broker's commission, finder's fee, agent's fee, fee for
financial intermediary services or any like payment in respect of the
transactions contemplated by this Agreement. To the knowledge of Xxxxxxxx and
Julien, the Acquired Corporations have not made or agreed to make any payment to
any broker, agent or professional advisor for or in connection with the
transactions contemplated in this Agreement.
4.1.2 REPRESENTATIONS AND WARRANTIES CONCERNING XXXXXX CO. - Xxxxxx Co.
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represents and warrants to the Purchaser as follows, and acknowledges that the
Purchaser is relying on said representations and warranties in entering into
this Agreement:
(A) RIGHT TO SELL - Xxxxxx Co. is the sole registered and beneficial owner
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of the Purchased LM Shares, as described in Schedule 2.1 hereto, free and clear
of all Encumbrances and prior claims. All of the issued and outstanding shares
of Javanaise Co. are owned by Xxxxxx Co. and Xxxxxxxx Co., as described in
Schedule 2.1 hereto, as the registered and beneficial owners, with good and
marketable title thereto, and the Purchased LM Shares are free and clear of all
hypothecs, pledges and prior claims. Xxxxxx Co. has the exclusive right to
sell, transfer and assign the Purchased LM Shares as provided in this Agreement
and such disposition will not violate, contravene, breach or offend against or
result in any default under any indenture, mortgage, lease, agreement,
obligation, instrument, charter or by-law provision, statute, regulation, order,
judgment decree, licence, permit or law to which Xxxxxx co. is a party or
subject or by which he is bound or affected. The Purchased LM Shares are not
subject to the terms of any Shareholder's Agreement (unanimous or otherwise)
other than the Shareholder Agreement which has been terminated on the date
hereof.
(B) ENFORCEABILITY OF OBLIGATIONS - This Agreement has been duly authorized,
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executed and delivered by Xxxxxx Co. and constitutes a valid and binding
obligation of it enforceable against it in accordance with its terms.
(C) ABSENCE OF CONFLICTING AGREEMENTS - Xxxxxx Co. is not a party to, bound
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or affected by or subject to any indenture, mortgage, lease, agreement,
obligation, instrument, charter or by-law provision, statute, regulation, order,
judgment, decree, licence, permit or law which would be violated, contravened,
breached by, or under which default would occur or an Encumbrance would be
created as a result of the execution and delivery of this Agreement or any other
agreement to be entered into under the terms of this Agreement, or the
performance by Xxxxxx Co. or Javanaise Co. of any of their respective
obligations provided for under this Agreement or any other agreement
contemplated herein.
(D) NON-ARM'S LENGTH TRANSACTIONS - Xxxxxx Co. nor any Person not dealing at
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arm's length with it:
(a) owns, directly or indirectly, any interest in or is an employee,
consultant to or agent of, an entity which is a competitor, lessor, lessee or
customer of the Javanaise Co.;
(b) owns, directly or indirectly, any interest in any property or asset of
any Acquired Corporations;
(c) is a party to any Contract, save and except for its verbal consulting
agreement entered into with Javanaise Co. which shall be terminated at Closing
Time; or
(d) has any Indebtedness, liability or obligation to the Acquired
Corporations.
Javanaise Co. is not indebted or otherwise obligated to Xxxxxx Co. or any
Person not dealing at arm's length with it.
(E) RESIDENCE OF XXXXXX CO. - Xxxxxx Co. is not a non-resident of Canada for
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the purposes of the Income Tax Act (Canada).
(F) NO LITIGATION - There are no outstanding claims, actions, suits,
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litigation or arbitrations, investigations or proceedings at law or before any
Governmental Authority pending or, to the knowledge of Xxxxxx Co., proposed or
threatened, which would prevent Xxxxxx Co. from completing the transactions
required to be completed pursuant to this Agreement.
(G) BROKERS - Xxxxxx Co. has not entered into any agreement that would
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entitle any Person to any claim against the Purchaser or the Acquired
Corporations for any broker's commission, finder's fee, agent's fee, fee for
financial intermediary services or any like payment in respect of the
transactions contemplated by this Agreement. To the knowledge of Xxxxxx Co.,
Javanaise Co. has not made or agreed to make any payment to any broker, agent or
professional advisor for or in connection with the transactions contemplated in
this Agreement.
4.2 REPRESENTATIONS AND WARRANTIES CONCERNING THE ACQUIRED CORPORATIONS -
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Each of the Vendors, it being understood however that Xxxxxx Co. does not make
any representations and warranties with respect to Xxxxxxxx Co. and accordingly
its representations and warranties described hereof are strictly limited to
Javanaise Co.
4.2.1 INCORPORATION AND REGISTRATION - Both Acquired Corporations are duly
--------------------------------
incorporated and validly existing under the laws of Canada and have all
necessary corporate power, authority and capacity to own their property and
assets and to carry on their business as presently conducted.
4.2.2 SUBSIDIARIES - Javanaise Co. does not own, or have any interest in any
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securities of any other corporation. Xxxxxxxx Co. does not own, or have any
interest in any securities of any other corporation other than shares in the
capital share of Javanaise Co.
4.2.3 CAPITALIZATION - The authorized and issued share capital of the
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Acquired Corporations is as set forth in Schedule 2.1. All of the shares in the
capital of the Acquired Corporations have been duly authorized and validly
issued and are outstanding as fully paid and non-assessable shares of the
Acquired Corporations. No options, warrants or other rights to purchase shares
or other securities of the Acquired Corporations and no securities or
obligations convertible into or exchangeable for shares or other securities of
the Acquired Corporations have been authorized or agreed to be issued or are
outstanding, except for the Shareholders Agreement which has been terminated on
or before the Closing Date.
4.2.4 TITLE TO ASSETS - The Acquired Corporations are the sole beneficial
-----------------
and sole owner of all of their respective assets and interests in assets, real
and personal, with good and valid title, free and clear of any Encumbrances.
Without limiting the foregoing, Javanaise Co. is and remain at the Closing Date,
the sole owner, without any Encumbrances, of all electronic equipment listed in
Schedule 4.2.4.
4.2.5 ASSETS AND LIABILITIES OF XXXXXXXX CO. - At Closing Time, the shares
---------------------------------------
of Javanaise Co. owned by Xxxxxxxx Co. shall constitute the sole assets of
Xxxxxxxx Co. Xxxxxxxx Co. carries on no active business and its sole activities
consist of holding shares of Javanaise Co. Xxxxxxxx Co. has no Accounts
Receivable, Accrued Liabilities, Indebtedness, Inventories and is not party or
otherwise bound by any Material Contract or any other liabilities or obligations
whatsoever and has no employees.
4.2.6 ABSENCE OF CONFLICTING AGREEMENTS - The Acquired Corporations are not
----------------------------------
party to, bound or affected by or subject to any indenture, mortgage, lease,
agreement, obligation, instrument, charter or by-law provision, statute,
regulation, order, judgement, decree, licence, permit or law which would be
violated, contravened, breached by, or under which default would occur or an
Encumbrance would be created as a result of the execution and delivery of this
Agreement or any other agreement to be entered into under the terms of this
Agreement, or the performance by the Vendors or the Acquired Corporations of any
of their respective obligations provided for under this Agreement or any other
agreement contemplated herein.
4.2.7 REGULATORY APPROVALS - No governmental or regulatory authorization,
---------------------
approval, order, consent, or filing (save and except filing of declarations
under the Act Respecting the Legal Publicity of Sole Proprietorship,
Partnerships and Legal Persons (Quebec) and filing of appropriate forms to
Industry Canada) is required on the part of the Vendors or the Acquired
Corporations, in connection with the execution, delivery and performance of this
Agreement or any other documents and agreements to be delivered under this
Agreement or the performance of the Vendors' obligations under this Agreement or
any other documents and agreements to be delivered under this Agreement.
4.2.8 FINANCIAL STATEMENTS - The Financial Statements have been prepared in
---------------------
accordance with generally accepted accounting principles applied on a basis
consistent with that of the preceding period and present fairly:
(a) all of the assets, liabilities and financial position of the Acquired
Corporations as at the dates indicated; and
(b) the sales, earnings, results of operation and changes in financial
position of the Acquired Corporations for all of the dates and periods
indicated.
4.2.9 ABSENCE OF UNDISCLOSED LIABILITIES OF JAVANAISE CO. - Subject to
--------------------------------------------------------
Section 4.2.10 hereinafter, since the date of the Balance Sheets, Javanaise Co.
has not incurred any liabilities or obligations (whether accrued, absolute,
contingent or otherwise), which continue to be outstanding, other than
liabilities and obligations incurred in the ordinary and normal course of
business, none of which has been materially adverse.
4.2.10.1 ABSENCE OF CHANGES OR UNUSUAL TRANSACTIONS - Subject to paragraph
--------------------------------------------
4.2.10.2 hereinafter, since the date of the Balance Sheet, Javanaise Co. has
carried on its business and conducted its operations and affairs in the ordinary
and normal course consistent with past practice and there has not been:
(a) any material change in the financial condition or operations of
Javanaise Co. other than changes in the ordinary and normal course of business,
none of which has been materially adverse;
(b) any damage, destruction, loss, labour trouble or other event,
development or condition of any character (whether or not covered by insurance)
materially and adversely affecting the business, assets or properties of
Javanaise Co.;
(c) any assumption of any obligation or liability (fixed or contingent),
except unsecured current obligations and liabilities incurred in the ordinary
and normal course of business;
(d) any discharge or satisfaction of any lien or encumbrance, or payment of
any obligation or liability (fixed or contingent) other than liabilities
included in the Balance Sheet and liabilities incurred since the date of the
Balance Sheet in the ordinary and normal course of business;
(e) any operating loss or any extraordinary loss, waiver or omission to take
any action in respect of any rights of substantial value, or entering into any
commitment or transaction not in the ordinary and normal course of business
where such loss, rights, commitment or transaction is or would be material in
relation to Javanaise Co.;
(f) any grant of any bonuses, whether monetary or otherwise, or the making
or announcement of any general wage or salary increases in respect of its
employees, or change in the terms of employment for any Employee except in the
ordinary and normal course of business and consistent with past practice;
(g) any mortgage, pledge, lien, grant of a security interest in or other
Encumbrance of any of its assets or property, whether tangible or intangible;
(h) directly or indirectly, any declaration or payment of any dividends or
declaration or making of any other payments or distributions on or in respect of
any of its shares or, directly or indirectly, the purchase or other acquisition
of any of its shares or any other capital outlays or expenditures by Javanaise
Co. or withdrawals of capital from Javanaise Co.; or
(i) the authorization, agreement or other commitment to do any of the
foregoing.
4.2.10.2 MATERIAL CHANGE - Notwithstanding terms of Sections 4.2.9,
----------------
4.2.10.1(a), (c) and (e), 4.2.11 and 4.2.14, it is understood that, during the
month of June, Javanaise Co. has terminated its Real Property Lease, moved its
assets and personnel to iVision Integral's premises situated at 0 Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxx, and since that time, has concentrated its operations
and resources for the benefit of iVision Integral Inc. and accordingly has
changed its normal cause of business and as a result most of its Accounts
Receivable are with iVision Integral Inc.
4.2.11 RESERVES AND ACCRUALS - Subject to Section 4.2.10.2 above, the
-----------------------
reserves and Accrued Liabilities disclosed on or reflected in the Financial
Statements and the Books and Records are sufficient in all respects to provide
for the liabilities in respect of which they have been established and have been
established in accordance with generally accepted accounting principles. In
particular, Javanaise Co. has made adequate provisions in its Books and Records
for any write-downs required for uncollectible Accounts Receivable, obsolete or
unusable Inventories.
4.2.12 NO JOINT VENTURE INTERESTS, ETC. - The Acquired Corporations are not
---------------------------------
a partner, beneficiary, trustee, co-tenancy, joint venture or otherwise a
participant in any partnership, trust, joint venture, co-tenancy or other
similar jointly owned business undertaking and the Acquired Corporations have no
other significant investment interests in any business owned or controlled by
any third party.
4.2.13 ABSENCE OF GUARANTEES - The Acquired Corporations have not given or
-----------------------
agreed to give, or are a party or bound by, any guarantee or indemnity in
respect of indebtedness, or other obligations, of any Person, or any other
commitment by which the Acquired Corporations are, or are contingently,
responsible for such indebtedness or other obligations.
4.2.14 COLLECTIBILITY OF ACCOUNTS RECEIVABLE - Subject to 4.2.10.2, the
----------------------------------------
Accounts Receivable are bona fide, good and collectible at the aggregate
recorded amounts. To the best of the knowledge of the Vendors, the Accounts
Receivable are not subject to any defense, counterclaim or set off.
4.2.15 BUSINESS IN COMPLIANCE WITH LAW - In all material respects, the
-----------------------------------
operations of Javanaise Co. have been and are now conducted in compliance with
all applicable Laws of each jurisdiction in which Javanaise Co. carries on or
has carried on business and Javanaise Co. has not received any notice of any
alleged breach of any such Laws. The Governmental Authorizations are all such
authorizations required by Javanaise Co. to enable it to carry on its business
in compliance with applicable Laws. Such Governmental Authorizations are in full
force and effect in accordance with their terms, and there have been no
violations thereof and no proceedings are pending or, to the knowledge of the
Vendors, threatened, which could result in their revocation or limitation.
4.2.16 RESTRICTIVE COVENANTS - Save and except for confidential agreement
----------------------
disclosed and attached as Schedule 4.2.23 a), Javanaise Co. is not a party to or
bound or affected by any commitment, agreement or document containing any
covenant expressly limiting the freedom of Javanaise Co. to compete in any line
of business, transfer or move any of its assets or operations or which
materially or adversely affects the business practices, operations or conditions
of Javanaise Co. or the continued operation of its business after the Closing on
substantially the same basis as its business is presently carried on.
4.2.17 INTELLECTUAL PROPERTY -
----------------------
(a) The only Intellectual property of the Acquired Corporations is limited
to "Javanaise" name and relating logo which used by Javanaise Co. in connection
with its business.
(b) The Vendors have no knowledge of any claim of adverse ownership,
invalidity or other opposition with any of the Intellectual Property nor of any
pending or threatened suit, proceeding, claim, demand, action or investigation
of any nature or kind against any of the Acquired Corporations.
4.2.18 EQUIPMENT CONTRACTS - The Acquired Corporations are not party or
--------------------
otherwise bound by any Equipment Contracts.
4.2.19 REAL PROPERTY LEASES -
----------------------
(a) Javanaise Co. is not party to any Real Property Leases other than the
Real Property lease entered into on May 6th, 1998 with Execu-Centre Inc., as
attached herewith in Schedule 4.2.23a) (hereinafter "Execu-Lease");
(b) All payments required to be made by Javanaise Co. pursuant to
Execu-Lease have been duly paid and Javanaise Co. is not otherwise in default in
meeting its obligations under Execu-Lease.
(c) Javanaise Co. may, at its entire discretion, unilaterally terminate the
Execu-Lease simply upon giving a thirty (30) days written notice to that effect.
Javanaise Co. declares having sent such a notice to Lessor on or before June
1st, 1999 and therefore the Execu-Lease was terminated, without penalty, charges
or other rental payments by the end of June 1999.
4.2.20 EMPLOYMENT MATTERS -
-------------------
(a) Schedule 4.2.20(a) sets forth a complete list of all employees of
Javanaise Co., together with the titles and, save and except for employees
having entered into an employment agreement as disclosed in Schedule 4.2.20(b),
material terms of employment, including, current salaries and bonus (whether
monetary or otherwise) paid or payable to each such employee. No Employee is on
long-term disability leave, maternity, parental or other extended leave or
absence or receiving workers' compensation or may be considered as permanently
or temporarily disabled according to the Act Respecting Industrial Accidents and
Occupational Diseases (R.S.Q., c. A-3.001).
(b) There are written contracts, as attached herewith in Schedule
4.20.20(b), of employment entered into with all employees save and except with
Xxxxxxxx.
(c) There are no employment policies, practices or plans, including
policies, practices or plans regarding incentive compensation, stock options,
severance pay or other terms or conditions of employment which employees may be
terminated, which are binding upon Javanaise Co.
(d) Javanaise Co. has been and is being operated in full compliance with all
Laws relating to employees, including labour standards, occupational health and
safety, industrial accidents and occupational diseases, human rights, pay equity
and employment equity. To the best of Vendors' knowledge, there have been no
complaints under such Laws against Javanaise Co.
(e) All amounts owing in respect of salary, wages, bonus or benefits
including any vacation pay, severance pay, termination pay or indemnity in lieu
of notice, have been paid or accrued for on the Books and Records.
(f) No employee has a claim for overtime or time off in lieu of overtime or
for a leave of absence with or without pay, which has not been accrued, on the
Books and Records.
(g) Javanaise Co. has no agreement, written or verbal, with any independent
persons, consultants or other independent contractors save and except with
Xxxxxx Co. which agreement shall be terminated on or before Closing Date.
(h) No dependent or independent contractors or sub-contractors are in
default of complying with any legal obligations that could bind Javanaise Co.
4.2.21 COLLECTIVE AGREEMENTS - Javanaise Co. is not a party, either
----------------------
directly or by operation of law, to any Collective Agreement which would cover
any of its employees or any dependent contractors of Javanaise Co.
4.2.22 INSURANCE - The only insurance policy which Javanaise Co. maintains
---------
is attached herewith in Schedule 4.2.22.
4.2.23 CONTRACTS -
---------
(a) Except for the Material Contracts attached in Schedule 4.2.23(a) and the
existing verbal agreement with iVision Integral Inc., Javanaise Co. is not a
party to or bound by any Material Contract. The Material Contracts listed in
Schedule 4.2.23a) are all in full force and effect, unamended, and no default
exists under such Material Contracts on the part of any of the parties to such
Contracts. None of the Material Contracts include provisions requiring consent
to a change of control of the Company.
(b) There are no current or pending negotiations with respect to the
renewal, repudiation or amendment of any such Material Contract.
4.2.24 LITIGATION - There is no suit, action, litigation, investigation,
----------
claim, complaint, grievance or proceeding, including appeals and applications
for review, in progress, or, to the knowledge of the Vendors, pending or
threatened against or relating to Acquired Corporations before any court,
Governmental Authority, commission, board, bureau, agency or arbitration panel.
The Vendors have no knowledge of any existing ground on which any such action,
suit, litigation or proceeding might be commenced with any reasonable likelihood
of success. There is not presently outstanding against Acquired Corporations any
judgment, decree, injunction, rule or order of any court, Governmental
Authority, commission, board, bureau, agency or arbitrator.
4.2.25 TAX MATTERS -
------------
(a) The Acquired Corporations have duly and timely filed their respective
Tax Returns with the appropriate Governmental Authority and have duly,
completely and correctly reported all income and all other amounts and
information required to be reported thereon.
(b) The Acquired Corporations have duly and timely paid all Taxes, including
all installments on account of Taxes for the current year that are due and
payable by any of them and the Acquired Corporations have established reserves
that are reflected on the Balance Sheet that are adequate for the payment by
them of all Taxes that are not yet due and payable (and that will not be due and
payable by the Closing Date) and that relate to periods ending on or prior to
Closing Date.
(c) The Acquired Corporations have not requested, or entered into any
agreement or other arrangement or executed any waiver providing for, any
extension of time within which (i) to file any Tax Return covering any Taxes for
which any of the Acquired Corporations are or may be liable; (ii) to file any
elections, designations or similar things relating to Taxes for which any of the
Acquired Corporations are or may be liable; (iii) any of the Acquired
Corporations are required to pay or remit any Taxes or amounts on account of
Taxes; or (iv) any Governmental Authority may assess or collect Taxes for which
any of the Acquired Corporations are or may be liable.
(d) The Canadian federal and provincial income and capital tax liabilities
of the Acquired Corporations have been assessed by the relevant taxing
authorities and notices of assessment have been issued to the Acquired
Corporations by the relevant taxing authorities for all taxation years prior to
and including the taxation year ended March 31st, 1999.
(e) There are no actions, suits, proceedings, investigations, audits or
claims now pending or, to the knowledge of the Vendors, threatened, against the
Acquired Corporations in respect of any Taxes and there are no matters under
discussion, audit or appeal with any Governmental Authority relating to Taxes.
The Vendors hereby jointly and severally agree to forthwith pay the full amount
of any reassessment against Javanaise Co. arising out of events which occurred
before the Closing Date. Xxxxxxxx and Julien hereby jointly and severally agree
to forthwith pay the full amount of any reassessment against Xxxxxxxx Co.
arising out of events which occurred before Closing Date.
(f) The Acquired Corporations have duly and timely withheld from any amount
paid or credited by it to or for the account or benefit of any Person,
including, without limitation, any of their respective employees, officers and
directors and any non-resident Person, the amount of all Taxes and other
deductions required by any applicable Law, to be withheld from any such amount
and has duly and timely remitted the same to the appropriate Governmental
Authority.
(g) The Acquired Corporations have not acquired property from or disposed of
property to a Person with whom it does not deal at arm's length for purposes of
the Income Tax Act (Canada) for proceeds of disposition which are greater or
less than the fair market value of the property acquired or disposed.
4.2.26 BOOKS AND RECORDS - All Books and Records of the Acquired
-------------------
Corporations have been delivered or made available to the Purchaser. Such Books
and Records fairly and correctly set out and disclose in all material respects
the financial position of the Acquired Corporations and all financial
transactions of the Acquired Corporations have been accurately recorded in such
Books and Records.
4.2.27 CORPORATE RECORDS AND MINUTE BOOKS - The corporate records and minute
----------------------------------
books of the Acquired Corporations have been delivered or made available to the
Purchaser. The articles and by-laws are in full force and effect and no
amendments have been made to the same. The minute books, including the articles
and by-laws of the Acquired Corporations, include complete and accurate minutes
of all meetings of the directors or shareholders of the Acquired Corporations,
as applicable, held to date or resolutions passed by the directors or
shareholders on consent, since the date of incorporation of the Acquired
Corporations. The share certificate book, register of shareholders, register of
transfers and register of directors of the Acquired Corporations, are complete
and accurate.
4.2.28 BANK ACCOUNTS, ETC. - Javanaise Co. has only one bank account opened
--------------------
and maintained with MBANX (branch located at 00 Xxxxx Xxxxxx West, 19th Floor,
BMTT, Toronto, Ontario, M4W 3N5), which account bears number "MBXCPPME1612-381".
4.2.29 NO ASSOCIATED/RELATED COMPANIES - No companies are or have been
---------------------------------
associated with or related to the Acquired Corporations for purposes of the
Income Tax Act (Canada) or corresponding provincial tax legislation.
4.2.30 NON-ARM'S LENGTH TRANSACTIONS -
-------------------------------
(a) The Acquired Corporations have not since the date of the Balance Sheets,
made any payment or loan to, or borrowed any moneys from or is otherwise
indebted to, any officer, director, employee, shareholder or any other person
not dealing at arm's length with any of the Acquired Corporations, except for
usual employee reimbursements and compensation paid in the ordinary and normal
course of business;
(b) Save and except for consulting agreement with Xxxxxx Co. which shall
terminate upon Closing Date, the Acquired Corporations are not a party to any
Contract with any officer, director, employee, shareholder or any other person
not dealing at arm's length with any of the Acquired Corporations;
(c) Save and except for consulting agreement with Xxxxxx Co. which shall
terminate upon Closing Date, no officer, director or shareholder of the Acquired
Corporations and no entity which is an affiliate or associate of one or more of
such individuals: (i) owns, directly or indirectly, any interest in (except for
shares representing less than one percent of the outstanding shares of any class
or series of any publicly traded company), or is an officer, director, employee
or consultant of, any person which is, or is engaged in business as, a
competitor of Javanaise Co. or a lessor, lessee, supplier, distributor, sales
agent or customer of Javanaise Co.; (ii) owns, directly or indirectly, in whole
or in part, any property that Javanaise Co. uses in the operation of its
business; or (iii) has any cause of action or other claim whatsoever against, or
owes any amount to, the Acquired Corporations, except for any liabilities
reflected in the Interim Financial Statements and claims in the ordinary and
normal course of business such as for accrued vacation pay and accrued benefits
for employees.
4.2.31 FULL DISCLOSURE - All information, which has been provided to the
----------------
Purchaser is true and correct in all material respects and no material fact or
facts have been omitted therefrom which would make such information misleading.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
The Purchaser hereby represents and warrants to the Vendors the
matters set out below.
5.1 INCORPORATION - The Purchaser is a corporation duly incorporated and
-------------
validly existing under the laws of Nevada, U.S.A.
5.2 ENFORCEABILITY OF OBLIGATIONS - This Agreement has been duly authorized,
-----------------------------
executed and delivered by the Purchaser and constitutes a valid and binding
obligation of the Purchaser enforceable against it in accordance with its terms.
5.3 ABSENCE OF CONFLICTING AGREEMENTS - The Purchaser is not a party to,
------------------------------------
bound or affected by or subject to any indenture, mortgage, lease, agreement,
obligation, instrument, charter or bylaw provision, statute, regulation, order,
judgement, decree, license, permit or law which would be violated, contravened
or breached by, or under which any default would occur or a lien, claim,
restriction or encumbrance would be created as a result of the execution and
delivery by it of this Agreement or the performance by it of any of the terms of
this Agreement.
5.4 LITIGATION - There is no suit, action, litigation, investigation, claim,
----------
complaint or proceeding before any Governmental Authority in progress or, to the
knowledge of the Purchaser, pending or threatened against or relating to the
Purchaser, which, if determined adversely to the Purchaser, would, prevent the
Purchaser from fulfilling any of its obligations set out in, arising from or in
connection with this Agreement, and the Purchaser has no knowledge of any
existing ground on which any such action, suit, litigation or proceeding might
be commenced with any reasonable likelihood of success.
5.5 AUTHORIZED CAPITAL OF THE PURCHASER - The authorized capital of the
---------------------------------------
Purchaser is accurately set out in Schedule 5.5 and all of the Exchanged Shares
have been duly issued and are outstanding as fully paid and non-assessable.
5.6 TITLE TO EXCHANGED SHARES - Subject to the terms of the Escrow
----------------------------
Agreement and the restrictions set out below in Section 5.9, at their date of
issuance, all of the Exchanged Shares shall be owned by the Vendors, as the
registered and beneficial owners, with good and marketable title thereto, free
and clear of all liens, hypothecs, pledges and prior claims.
5.7 NO AGREEMENTS, OPTIONS, ETC - No person, partnership, association, firm,
---------------------------
corporation or other entity has any written or oral agreement, option,
understanding or commitment for the purchase of any of the Exchanged Shares.
5.8 NO SUBSCRIPTION RIGHTS - No person, partnership, association, firm,
------------------------
corporation or other entity has any written or oral agreement, option,
understanding or commitment, including without limitations convertible
securities, warrants or convertible obligations of any nature, for the purchase,
subscription, allotment or issuance of any of the Exchanged Shares.
5.9 REGISTRATION AND DISPOSITION OF EXCHANGED SHARES - The Exchanged Shares
------------------------------------------------
to be issued pursuant to Section 3.1(b) of this Agreement have not been
registered under the U.S. Securities Act of 1933, as amended (the "Act"), and
may not be offered, sold or otherwise transferred unless such securities are
included in an effective registration statement under the Act or an opinion of
U.S. counsel concurred in by counsel to the Purchaser has been delivered to the
effect that registration of such securities is not required based upon
applicable exemption from registration. Such an exemption, by way of example
only, may be available under rule 144 of the Act, which requires, among other
things, that the securities be owned and fully paid for a minimum of one (1)
year prior to sale, that such sales be effected through a registered
broker/dealer and that there be current public information, regarding the
issued, available to the public. This is a summary of the requirements of that
rule and is not intended to be a complete statement of its requirements.
5.10 TAXES - The Purchaser has duly filed all tax returns required to be
-----
filed by it and has paid all taxes which are due and payable, including but not
limited to income taxes, goods and services taxes, provincial or state sales
taxes, payroll taxes, xxxxxxx'x compensation and all deductions required at
source, and has paid all assessments and reassessments, and all other Taxes,
dues, governmental charges, penalties, interest and fines due and payable by it.
5.11 RESIDENCY - The Purchaser is not a resident of Canada within the
---------
meaning of the Income Tax Act (Canada) and the Taxation Act (Quebec).
5.12 NON-VIOLATION - The entering into of this Agreement and the
-------------
performance by the Purchaser of the transactions contemplated under and pursuant
to this Agreement does not and will not i) conflict with, result in a breach of
the terms, conditions, or provisions of, or constitute a default under the
articles or by-laws of the Purchaser or any agreement, written or oral, to which
the Purchaser of any of its affiliates are subject, or ii) violate any laws or
regulations applicable to the Purchaser including the Securities Act (Quebec),
or iii) require any consent or other action by any administrative or
governmental body, including, without limiting the foregoing, the Commission des
valeurs mobilieres du Quebec or any securities exchange commission.
ARTICLE 6
NON-WAIVER; SURVIVAL
--------------------
6.1 NON-WAIVER - No investigations made by or on behalf of the Purchaser at
----------
any time shall have the effect of waiving, diminishing the scope of or otherwise
affecting any representation or warranty made by the Vendors in or pursuant to
this Agreement. No waiver of any condition or other provision, in whole or in
part, shall constitute a waiver of any other condition or provision (whether or
not similar) nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
6.2 NATURE AND SURVIVAL - All representations, warranties and covenants
---------------------
contained in this Agreement on the part of each of the parties shall survive the
Closing, the execution and delivery under this Agreement of any share or
security transfer instruments or other documents of title to any of the
Purchased Shares, except that:
(a) any claim for intentional misrepresentation or fraud may be brought at
any time;
(b) the representations and warranties set out in Sections 4.1.1(a),
4.1.2(a) and 5.6 shall survive and continue in full force and effect without
limitation of time;
(c) representations and warranties concerning Tax matters shall survive for
a period of ninety days after the relevant authorities shall no longer be
entitled to assess liability for Tax against the Acquired Corporations or the
Purchaser as the case may be for any particular taxation year ended on or prior
to the Closing Date; and
(d) all other representations and warranties shall survive for a period of
three (3) years from the Closing Date.
ARTICLE 7
PURCHASER'S CONDITIONS PRECEDENT
--------------------------------
The obligation of the Purchaser to complete the purchase of the
Purchased Shares under this Agreement shall be subject to the satisfaction of,
or compliance with, at or before the Closing Time, each of the following
conditions precedent (each of which is acknowledged to be inserted for the
exclusive benefit of the Purchaser and may be waived, in writing or verbally, by
the Purchaser in whole or in part):
7.1 TRUTH AND ACCURACY OF REPRESENTATIONS CONCERNING THE VENDORS AND THE
------------------------------------------------------------------------
ACQUIRED CORPORATIONS AT THE CLOSING TIME - All of the representations and
-------------------------------------------
warranties concerning the Vendors and the Acquired Corporations made in or
--
pursuant to this Agreement shall be true and correct as at the Closing Time and
--
with the same effect as if made at and as of the Closing Time.
7.2 PERFORMANCE OF OBLIGATIONS - The Vendors shall have performed or
----------------------------
complied with, in all respects, their respective obligations, covenants and
agreements under this Agreement.
7.3 RECEIPT OF CLOSING DOCUMENTATION - All documentation relating to the due
--------------------------------
authorization and completion of the sale and purchase of the Purchased Shares
under this Agreement and all actions and proceedings taken on or prior to the
Closing in connection with the performance by the Vendors of their respective
obligations under this Agreement, shall be satisfactory to the Purchaser, acting
reasonably, and the Purchaser shall have received copies of all such
documentation or other evidence as it may reasonably request in order to
establish the consummation of the transactions contemplated hereby and the
taking of all corporate proceedings in connection therewith in compliance with
these conditions, in form (as to certification and otherwise) and substance
satisfactory to the Purchaser acting reasonably.
7.4 CONSENTS, AUTHORIZATIONS AND REGISTRATIONS - All consents, approvals,
---------------------------------------------
orders and authorizations of any Person or Governmental Authority (or
registrations, declarations, filings or recordings with any such authorities),
on the part of the Vendors required in connection with the completion of any of
the transactions contemplated by this Agreement, the execution of this
Agreement, the Closing or the performance of any of the terms and conditions of
this Agreement, shall have been obtained at or before the Closing Time.
7.5 AB EMPLOYMENT AGREEMENT - Xxxxxxxx shall have entered into AB
-------------------------
Employment Agreement.
7.6 CONSULTING AGREEMENT - Xxxxx Xxxxxx Conseils Inc. shall have entered
---------------------
into the Consulting Agreement.
7.7 RESIGNATIONS AND RELEASES - There shall have been delivered to the
---------------------------
Purchaser on or before the Closing Time the resignations of all individuals who
are presently directors or officers of the Acquired Corporations from all
offices and positions with the Acquired Corporations and from Xxxxxxxx as an
employee of Javanaise Co. and duly executed comprehensive releases in form and
substance satisfactory to the Purchaser from the Vendors of all their claims,
respectively, against the Acquired Corporations.
7.8 TERMINATION OF SHAREHOLDERS AGREEMENT - The Shareholders Agreement shall
-------------------------------------
have been terminated and the Acquired Corporations shall have been released from
all liability thereunder.
7.9 ESCROW AGREEMENT - The Vendors shall have executed and delivered the
-----------------
Escrow Agreement.
ARTICLE 8
VENDORS' CONDITIONS PRECEDENT
-----------------------------
The obligations of the Vendors to complete the sale of the Purchased
Shares under this Agreement shall be subject to the satisfaction of or
compliance with, at or before the Closing Time, each of the following conditions
precedent (each of which is acknowledged to be inserted for the exclusive
benefit of the Vendors and may be waived, in writing or verbally, by them in
whole or in part).
8.1 TRUTH AND ACCURACY OF REPRESENTATIONS OF THE PURCHASER AT CLOSING TIME -
----------------------------------------------------------------------
All of the representations and warranties of the Purchaser made in or pursuant
to this Agreement shall be true and correct as at the Closing Time and with the
same effect as if made at and as of the Closing Time and the Vendors shall have
received a certificate from a senior officer of the Purchaser confirming the
truth and correctness of such representations and warranties.
8.2 PERFORMANCE OF OBLIGATIONS - The Purchaser shall have performed or
----------------------------
complied with, in all respects, all its obligations, covenants and agreements
under this Agreement.
8.3 AB EMPLOYMENT AGREEMENT AND CONSULTING AGREEMENT - iVision Integral Inc.
------------------------------------------------
shall have entered into the AB Employment Agreement and Consulting Agreement.
8.4 PERSONAL GUARANTY - Xxxxxxxx and Xxxxx Xxxxxx shall have been released
-----------------
from their personal guaranties granted to MBANX with respect to Javanaise Co.
8.5 RECEIPT OF CLOSING DOCUMENTATION - All documentation relating to the
-----------------------------------
due authorization and completion of the sale and purchase of the Purchased
shares under this Agreement and all actions and proceedings taken on or prior to
the closing in connection with the performance by the Purchaser of its
obligations under this Agreement, shall be satisfactory to the Vendors, acting
reasonably, and the Vendors shall have received copies of all such documentation
or other evidence as they may reasonably request in order to establish the
consummation of the transactions contemplated hereby and the taking of all
corporate proceedings in connection therewith in compliance with these
conditions, in form (as to certification and otherwise) and substance
satisfactory to the Vendors acting reasonably.
8.6 CONSENTS, AUTHORIZATIONS AND REGISTRATIONS - All consents, approvals,
--------------------------------------------
orders and authorizations of any Person or Governmental Authority (or
registrations, declarations, filings of recordings with any such authorities) on
the part of Purchaser, required in connection with the completion of any of the
transactions contemplated by this Agreement, the execution of this Agreement,
the closing or the performance of any of the terms and conditions of this
Agreement, shall have been obtained at or before the Closing Time.
8.7 ESCROW AGREEMENT - Purchaser shall have executed and delivered the
-----------------
Escrow Agreement.
ARTICLE 9
OTHER COVENANTS OF THE PARTIES
------------------------------
9.1 ACTIONS TO SATISFY CLOSING CONDITIONS - Each of the parties agrees to
----------------------------------------
take all such actions as are within its power to control, and to use all
reasonable efforts to cause other actions to be taken which are not within its
power to control, so as to ensure compliance with each of the conditions and
covenants set forth in Articles 7, 8 or 9 which are for the benefit of any other
Party.
9.2 CONSENT TO JURISDICTION - Each of the parties irrevocably attorns and
-------------------------
submits to the exclusive jurisdiction of any Quebec court sitting in Montreal in
any action or proceeding arising out of or related to this Agreement and
irrevocably agrees that all claims in respect of any such action or proceeding
shall be heard and determined in such Quebec court. Each of the parties
irrevocably waives, to the fullest extent possible, the defense of an
inconvenient forum to the maintenance of such action or proceeding.
9.3 XXXXXXXX CO. TAX - The Purchaser undertake to reimburse to Xxxxxxxx,
------------------
upon receipt, on behalf of Xxxxxxxx Co. from any Federal or provincial Tax
Authorities, of any amount or refund in respect of any period ending on or
before the Closing Date.
ARTICLE 10
INDEMNIFICATION
---------------
10.1 INDEMNIFICATION BY THE VENDORS -
---------------------------------
10.1.1 INDEMNIFICATION BY XXXXXX CO. - Xxxxxx Co. agrees to indemnify and
-------------------------------
save harmless the Purchaser and Javanaise Co. on an after-tax basis as well as
the directors and officers of Javanaise Co. against all Losses suffered or
incurred as a result of or arising directly or indirectly out of or in
connection with any breach by Xxxxxx Co of or any inaccuracy of any of the
representations and warranties of Xxxxxx Co., other than those referred to in
10.1.3, set out in this Agreement or any breach or non-performance by Xxxxxx Co.
of any covenant, other than those referred to in 10.1.3, to be performed by it
under this Agreement or any agreement, instrument, certificate or other document
delivered pursuant hereto.
10.1.2 INDEMNIFICATION BY XXXXXXXX AND XXXXXX - Xxxxxxxx and Julien agree
----------------------------------------
to jointly and severally indemnify and save harmless the Purchaser and the
Acquired Corporations on an after-tax basis as well as the directors and
officers of the Acquired Corporations against all Losses suffered or incurred as
a result of or arising directly or indirectly out of or in connection with any
breach by either Xxxxxxxx or Julien of or any inaccuracy of any of the
representations and warranties of Xxxxxxxx and Julien, other than those referred
to in 10.1.3, set out in this Agreement or any breach or non-performance by
either of them of any covenant, other than those referred to in 10.1.3, to be
performed by them under this Agreement or any agreement, instrument, certificate
or other document delivered pursuant hereto.
10.1.3 INDEMNIFICATION BY THE VENDORS - Each of the Vendors agree to
---------------------------------
jointly and severally indemnify and save harmless the Purchaser and Javanaise
Co. on an after-tax basis as well as the directors and officers of Javanaise Co.
against all Losses suffered or incurred as a result of or arising directly or
indirectly out of or in connection with any breach by the Vendors of or any
inaccuracy of any of the representations and warranties of the Vendors made by
the Vendors on a joint and several basis under this Agreement or any breach or
non-performance by the Vendors of any covenant to be performed by the Vendors on
a joint and several basis under this Agreement or any agreement, instrument,
certificate or other document delivered pursuant hereto.
10.2 INDEMNIFICATION BY THE PURCHASER - The Purchaser agrees to indemnify
-----------------------------------
and save harmless the Vendors on an after-tax basis from all Losses suffered or
incurred by the Vendors as a result of or arising directly or indirectly out of
or in connection with:
(a) any breach by the Purchaser of or any inaccuracy of any representation
or warranty of the Purchaser in this Agreement or in any agreement, instrument,
certificate or other document delivered pursuant hereto; and
(b) any breach or non-performance by the Purchaser of any covenant to be
performed by it under this Agreement or under any agreement, instrument,
certificate or other document delivered pursuant hereto.
10.3 NOTIFICATION OF AND PARTICIPATION IN CLAIMS - No Claim will arise until
-------------------------------------------
notice thereof is given to the party (the INDEMNITOR ) from whom indemnity is
sought. Such notice shall be sent within a reasonable time following the
determination by a party (the CLAIMANT ) that a Claim for indemnity exists. In
the event that any legal proceedings shall be instituted or any Claim or demand
is asserted by any third party in respect of which the Indemnitor may have an
obligation to indemnify the Claimant, the Claimant shall give or cause to be
given to the Indemnitor written notice thereof and the Indemnitor shall have the
right, at its option and expense, to be present at the defense of such
proceedings, claim or demand, but not to control the defense, negotiation or
settlement thereof, which control shall at all times rest with the Claimant,
unless the Indemnitor irrevocably acknowledges full and complete responsibility
for indemnification of Claimant, in which case the Indemnitor may assume such
control through counsel of its choice, provided however, that no settlement
shall be entered into without the Claimant's written consent (which shall not be
unreasonably withheld). The parties hereto agree to cooperate fully with each
other in connection with the defense, negotiation or settlement of any such
third party legal proceeding, claim or demand.
10.4 MISCELLANEOUS - Notwithstanding anything in this Agreement to the
-------------
contrary, the indemnity provided for in this Article 10 shall apply to any loss,
liability, damage, deficiency or expense, whether or not the actual amount
thereof shall have been ascertained prior to the final day upon which a Claim
for indemnity with respect thereto may be made hereunder, so long as written
notice thereof shall have been given to the Indemnitor prior to said date,
setting forth specifically and in reasonable detail, so far as is known, the
matter as to which indemnification is being sought, but nothing herein shall be
construed to require payment of any claim for indemnity until the actual amount
payable shall have been finally ascertained. In addition, any Claims for
damages payable hereunder shall be adjusted, in accordance with Canadian
generally accepted accounting principles, to reflect the after-tax effect
thereof.
10.5 RESTRICTIONS AND LIMITATIONS -
------------------------------
10.5.1 DEDUCTIBLE -
----------
(a) Notwithstanding any other provisions of this Agreement, the Vendors
shall have not liability to the Purchaser in respect of Losses except if and to
the extent that the aggregate of such Losses for the Purchaser and the Acquired
corporations shall exceed $5,000.00 However, the foregoing shall not relieve
Purchaser of its obligations to notify under Section 10.3.
(b) Notwithstanding any other provisions of this Agreement, the Purchaser
shall have no liability to the Vendors in respect of Losses except if and to the
extent that the aggregate of such Losses for the Vendors collectively shall
exceed $5,000.00 However, the foregoing shall not relieve Vendors of their
obligations to notify under Section 10.3.
10.5.2 LIABILITY CAP - Notwithstanding any other provisions of this
--------------
Agreement, each of the Vendors shall have no liability to the Purchaser in
respect of Losses in excess of the portion of the Purchase Price paid to such
Vendor.
10.5.3 INDIRECT DAMAGES - Notwithstanding any other provisions of this
-----------------
Agreement, none of the Vendors shall be liable to the Purchaser for any indirect
or consequential damages. Notwithstanding any other provisions of this
Agreement, Purchaser shall not be liable to the Vendors for any indirect or
consequential damages.
10.5.4 REDUCTION OF LOSSES - The amount of Losses payable by the Vendors
---------------------
shall be reduced by the aggregate amount of:
(a) any insurance proceeds received by the Purchaser or by the Acquired
Corporations or a successor corporations, for and in relation to those Losses,
subject to such reduction not resulting in a loss of coverage or reduction of
the insurance proceeds received or to be received by the Purchaser or the
Acquired Corporations (or a successor corporation) or increase of future
insurance premiums which are attributable to such Losses. If insurance proceeds
for Losses are received by the Purchase or by the Acquired corporations or a
successor corporation after the Vendors have performed their obligations to
indemnify under this Agreement in connection with such Losses, then the
Purchaser or the Acquired Corporations or a successor corporation, as the case
may be, shall remit to the Vendors the amount of such insurance proceeds;
(b) any reduction in Taxes otherwise payable by the Acquired Corporations or
a successor corporation arising from or relating to the Loss.
Where all or part of the Loss generates a reduction in Taxes the amount of
the reduction in Taxes shall reduce the Loss by an equal amount.
ARTICLE 11
PROCEDURES AT CLOSING
11. DELIVERY OF CLOSING DOCUMENTS - At Closing, the following shall occur:
-----------------------------
a) The Vendors shall:
(i) deliver to the Purchaser certificates respecting all of the Purchased
shares duly endorsed in blank for transfer;
(ii) cause the transfer of the Purchased shares to be duly registered and
regularly recorded in the name of the Purchaser in the books and
corporate records of the Acquired Corporations;
(iii) deliver to the Purchaser certificates respecting all of the issued
shares of the Acquired Corporations;
(iv) deliver to the Purchaser the minute books and corporate records of the
Acquired Corporations;
(v) deliver to the Purchaser the Consulting Agreement duly executed by Xxxxx
Xxxxxx Conseils Inc.;
(vi) deliver to the Purchaser the AB Employment Agreement duly executed by
Xxxxxxxx;
(vii) deliver to the Purchaser a non-competition agreement and a
non-disclosure agreement duly executed by Xxxxxx Co.;
(viii) deliver to the Purchaser a non-competition agreement and a
non-disclosure agreement duly executed by Xxxxxxxx;
(ix) deliver to the Purchaser duly certified copies of resolutions of the
directors of the Acquired Corporations authorizing the transfer of the
Purchased Shares to the Purchaser and of resolutions of the
director and shareholder of Xxxxxx Co. authorizing the sale of
shares of Javanaise Co. to the Purchaser;
(x) execute receipts with respect to the payments received;
(xi) deliver to the Purchaser the Escrow Agreement duly executed by the
Vendors;
(xii) Deliver releases in favor of the Acquired Corporations.
(b) The Purchaser shall:
(i) deliver cheques to the Vendors as provided for in Section 3.2 hereof;
(ii) deliver to the Vendors share certificates respecting all of the
Exchanged Shares issued at Closing;
(iii) deliver a certified copy of resolutions of the Board of Directors of
the Purchaser and iVision Integral Inc. authorizing the transactions
herein;
(iv) deliver to the Vendors the Consulting Agreement duly executed by
iVision Integral Inc.;
(v) deliver to the Vendors the AB Employment Agreement duly executed by
iVision Integral Inc.; and
(vi) deliver to the Vendors the Escrow Agreement duly executed by the
Purchaser.
ARTICLE 12
GENERAL
-------
12.1 PUBLIC NOTICES - All public notices to third parties and all other
---------------
publicity concerning the transactions contemplated by this Agreement shall be
jointly planned and coordinated by the Vendors and the Purchaser and no Party
shall act unilaterally in this regard without the prior approval of the other
Party, such approval not to be unreasonably withheld, except where required to
do so by law or by the applicable regulations or policies of any provincial or
Canadian or other regulatory agency of competent jurisdiction or any stock
exchange in circumstances where prior consultation with the other Party is not
practicable.
12.2 EXPENSES - The Vendors and the Purchaser shall pay their respective
--------
legal, accounting, and other professional advisory fees, costs and expenses
incurred in connection with the purchase and sale of the Purchased Shares and
the preparation, execution and delivery of this Agreement and all documents and
instruments executed pursuant to this Agreement and any other costs and expenses
incurred by the Party.
12.3 NOTICES - Any notice or other writing required or permitted to be given
-------
under this Agreement or for the purposes of this Agreement (in this Section
referred to as a Notice ) shall be in writing and shall be sufficiently given
if delivered, or if transmitted by facsimile or other form of recorded
communication tested prior to transmission to such Party:
(a) in the case of a Notice to the Vendors:
Xxxxxxxx and Julien
c/o Xxxxx Xxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxx (Xxxxxx) X0X 0X0
Xxxxxx Co.
c/o Xxxxx Xxxxxx
000 Xxxxxxxx Xxxxxx # 000
Xx-Xxxxxxx (Xxxxxx) X0X 0X0
(b) in the case of a Notice to the Purchaser at:
iVision Integral Inc.
c/o Xxxxxxxx Xxxxxx
0 Xxxxxxxxx Xxxxxx # 000
Xxxxxxxxx (Xxxxxx) X0X 0X0
or at such other address as the Party to whom such Notice is to be given shall
have last notified the Party giving the same in the manner provided in this
Section. Any Notice delivered to the Party to whom it is addressed as provided
above shall be deemed to have been given and received on the day it is so
delivered at such address, provided that if such day is not a Business Day then
the Notice shall be deemed to have been given and received on the next Business
Day. Any Notice transmitted by facsimile or other form of recorded communication
shall be deemed given and received on the first Business Day after its
transmission.
12.4 ASSIGNMENT - Neither this Agreement nor any benefits or burdens under
----------
this Agreement shall be assignable by any Party without the prior written
consent of each of the other parties. Subject to the foregoing, this Agreement
shall enure to the benefit of and be binding upon the parties and their
respective heirs, executors, legal representatives, successors (including any
successor by reason of amalgamation of any Party) and permitted assigns.
12.5 FURTHER ASSURANCES - The parties shall, with reasonable diligence, do
-------------------
all such things and provide all such reasonable assurances as may be required to
consummate the transactions contemplated by this Agreement, and each Party shall
provide such further documents or instruments required by any other Party as may
be reasonably necessary or desirable to effect the purpose of this Agreement and
carry out its provisions, whether before or after the Closing.
12.6 REMEDIES CUMULATIVE - Except as otherwise herein expressly provided,
--------------------
the rights and remedies of the parties under this Agreement are cumulative and
in addition to and not in substitution for any rights or remedies provided by
law. Any single or partial exercise by any party hereto of any right or remedy
for default or breach of any term, covenant or condition of this Agreement does
not waive, alter, affect or prejudice any other right or remedy to which such
party may be lawfully entitled for the same default or breach.
12.7 LANGUAGE - The parties declare that they have requested and do hereby
--------
confirm their request that this Agreement be drawn up in English; les parties
declarent qu'elles ont exige et par les presentes confirment leur demande que ce
contrat soit redige en anglais.
12.8 COUNTERPARTS AND FACSIMILE - This Agreement may be executed by the
----------------------------
parties in separate counterparts and by facsimile each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
IN WITNESS WHEREOF the parties have duly executed this Agreement at the
place and date herein-above mentioned.
IVISION GROUP LTD. LA SOCIETE DE GESTION XXXXX
XXXXXX INC.
Per: /s/ Xxxxxxxx Xxxxxx Per: /s/ Xxxxx Xxxxxx
____________________ _____________________
Xxxxxxxx Xxxxxx Xxxxx Xxxxxx
XXXXX XXXXXXXX XXXXXX XXXXXX
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxx Xxxxxx
__________________________ ___________________________
