EXHIBIT 10.4
SHARE PURCHASE AGREEMENT
THIS AGREEMENT dated for reference the 20th day of March,
2000.
BETWEEN:
AK DRILLING, INC., a body corporate duly incorporated
under the laws of the State of Montana and having an
office at 0000 Xxxxx Xxxxxxxx, Xxxxx, Xxxxxxx, XXX 00000;
(hereinafter referred to as the "Vendor")
OF THE FIRST PART
AND
CHARGER VENTURES INC., a body corporate duly incorporated
under the laws of the State of Nevada and having an
office at Suite 411, 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, XxxxxxX0X 0X0;
(herein referred to as the "Purchaser")
OF THE SECOND PART
WHEREAS:
A. The Vendor is the owner of the shares set out in Schedule
"A" attached hereto in those
companies set out in Schedule "A" attached hereto (herein
collectively called the "Shares"
and individually called "Share").
B. The Vendor wishes to sell and the Purchaser wishes to
purchase all of the Shares for their
mutual benefit on the terms herein set forth.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration
of the sum of $1.00 paid by the Purchaser to the Vendor (the
receipt and sufficiency of which is acknowledged by the
parties hereto) and the mutual covenants and agreements herein
contained, the parties hereto covenant and agree, each with
the other, as follows:
1. DEFINITIONS
1.1 For the purposes of this Agreement:
(a) "Closing" means the completion of the transactions
contemplated by this Agreement;
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(b) "Closing Date" means April 29, 2000 or such other date as the
parties may agree in writing;
(c) "Execution Date" means the date of execution of this
Agreement;
(d) "Performance Date" means the date on which the Purchaser has
received the legal and equitable title to and interest in the
Shares.
1.2 In this Agreement, except as otherwise expressly provided:
(a) "Agreement" means this agreement, including the preamble and
the schedules hereto, as it may from time to time be supplemented
or amended in effect;
(b) the words "herein", "hereof' and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Paragraph or other subdivision or Schedule;
(c) the headings are for convenience only and do not form a part
of this Agreement and are not intended to interpret, define, or
limit the scope, extent or intent of this Agreement or any
provisions hereof,
(d) except as otherwise provided, any dollar amount referred to in
this Agreement is in U.S. funds.
2. PURCHASE AND SALE
2.1 The Vendor hereby sells and the Purchaser hereby purchases the
Shares.
2.2. This Agreement is intended to and shall operate as an actual
transfer of the Shares and the Purchaser shall be the owner of the
Shares from the Closing Date. The Vendor shall execute all
documents and shall do all such other acts and things which are
convenient or necessary or which counsel may advise, for more
completely and effectually carrying out the intention of this
Agreement and for vesting the Shares in the Purchaser. The Vendor
shall hold the Shares to the extent that the same shall not have
been effectually transferred by or pursuant to this Agreement, in
trust for arid as the property of the Purchaser pending the
effective transfer thereof
2.3. The Vendor hereby irrevocably constitutes and appoints the
Purchaser, its successors and assigns, the true and lawful
attorney of the Vendor for and in the name of or otherwise on
behalf of the Vendor with ftull power of substitution to do and
execute all acts, deeds, matters and things whatsoever necessary
for the assignment, transfer and/or conveyance of any interest in
the Shares to the Purchaser and its successors and assigns as
contemplated
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herein.
3. CONSIDERATION
The Vendor will agree to sell all of the Shares to the Purchaser
pursuant to the terms of this Agreement for a total purchase price
of US $1,150,000 and 1,000,000 shares of' the Purchaser restricted
common stock, $0.001 par value per share (the "Purchase Price").
The Purchaser shall make payments to the Vendor pursuant to the
payment schedule set out below, which payments shall be credited
against the Purchase Price on the Closing Date:
(a) Cash
(i) US $100,000 Non refundable payment upon the
execution of this Agreement;
(ii) US $150,000 To be paid into an interest
bearing escrow with the Purchaser's
attorney, such attorney to be
reasonably approved by the
Vendor, within 30 days of the date of
execution of this Agreement;
(iii) US $250,000 To be paid into an interest
bearing escrow with the Purchaser's
attorney, such attorney to be
reasonably approved by the Vendor,
within 60 days of the date of
execution of this Agreement;
(iv) US $250,000 To be paid into an interest bearing
escrow with the Purchaser's
attorney, such attorney to be
reasonably approved by the
Vendor, within 90 days of the date of
execution of this Agreement; and
(v) US $400,000 To be paid into an interest bearing
escrow with the Purchaser's
attorney, such attorney to be
reasonably approved by the
Vendor, within 120 days of the date of
execution of this Agreement,
US $1,150,000 Total
The Purchaser shall have the right to accelerate the payment
schedule listed above. Payments made by the Purchaser pursuant
to items 3.1 (a) (ii), (iii), (iv) and (v) above shall remain
in escrow until Closing at which time all funds held in escrow
shall be released to the Vendor:
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In order to assure the Vendor of timely cash payments, the
Purchaser shall place into escrow with the Purchaser's attorney,
such attorney to be reasonably approved by the Vendor, an aggregate
of 1,000,000 non-restricted free-trading shares of the Purchaser
(the "Escrow Shares"). The Purchaser shall provide irrevocable
instructions to its attorney that should the Purchaser fall to
remedy a default of payment within seven days, then the Purchaser's
attorney shall have the authority to immediately sell such number
of the Escrow Shares to satisfy the balance due for the particular
payment until it has been paid in full.
(b) Shares
(i) 1,000,000 shares of the Purchaser restricted common
stock, $0.001 par value per share within seven days
from the date of execution of this Agreement.
The parties hereto acknowledge that the shares of the
Purchaser's stock to be issued hereunder to the Vendor
will not be registered with the Securities and Exchange
Commission under the Securities Act of 1933, as
amended, (the "Securities Act") nor the securities laws
of any state or province. Accordingly, as a condition
precedent to the deliver), of the Purchaser's common stock,
thereby acknowledge and represent to Purchaser the
following:
(I) They intend to acquire, receive and hold those
shares of the Purchaser for investment purposes
only and are not acquiring or receiving, that stock
with a view or intent or for the purpose of the
sale or alienation thereof within the United States
except as provided and permitted by applicable state
and U.S. federal securities laws, rules and regulations
and particularly the Securities Act and the rules and
regulations promulgated thereunder.
(II) They understand that those shares are not being
registered under the United States Securities Act of
1933, as amended, or the securities law of any U.S.
state, and therefore those shares cannot
be sold or otherwise transferred to a U.S. person or
within the U.S. except in compliance 'with applicable
U.S. securities laws, rules and regulations or an
exemption therefrom.
(III) They understand that the sale and alienation of
those shares of the Purchaser's stock will be
restricted, and that any future disposition of the
Purchaser's shares may be made only after full and
complete compliance with those applicable laws,
acts, codes, rules and
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regulations or under an applicable exemption
therefrom has been duly established.
(IV) Each certificate for those newly issued shares of
the Purchaser's stock issued to the Vendors will
contain the following legend stamped prominently
upon that certificate:
The shares of stock represented by this certificate
have not be registered under the Securities Act of
1933, as amended and may not be sold or otherwise
transferred unless a compliance with the
registration provisions of such Act has been made or
unless availability of an exemption from such
registration provisions has been established, or
unless sold pursuant to Rule 144 under the
Securities Act of 1933.
(c) As further consideration for the Vendor agreeing to sell
all of the Shares to the Purchaser pursuant to the terms of
this Agreement, to the extent that Xxxxxxx X. Xxxx, his heirs
and assigns, remains liable for the payment of any indebtedness
identified in. the financial statements attached as
Schedule B to this Agreement, within 120 days of the final
payment (v) noted above, the Purchaser shall either
cause the creditor to release any claim for payment of
such indebtedness or shall pay and satisfy such creditors
claim so that Xxxxxxx X. Xxxx is no longer liable for said
indebtedness.
4. VENDOR'S WARRANTIES AND REPRESENTATIONS
4.1 To induce the Purchaser to execute this Agreement and as a
condition of the Vendor's obligation to close this Agreement, the
Vendor hereby represents and warrants to the Purchaser as follows:
(i) Effect of Agreement: The execution and delivery by the Vendor
of this Agreement and its consummation and the performance of its
terms by the Vendor will not conflict with or result in a breach
of the terms of or constitute a default under or violation of any
law or regulation of any governmental authority, domestic or
foreign or the Articles of Incorporation or By-Laws of the Vendor
or any material agreement or instrument to which the Vendor or
any of its shareholders is a party or member or by which any one
of them is bound or to which any of them is subject; nor will it
give to others any interests or rights, including rights of
termination, acceleration or cancellation, in or with respect to
any of the properties, assets, agreements, contracts or
business of any one of the corporations. No consent of any
person not a party to this agreement, and no consent of any
governmental authority, is required to be obtained on the part of
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the Vendor to permit the transactions contemplated by this
Agreement, of the business activities of the Vendor in the
manner such business is currently carried on by their current
or past management.
(ii) Nature of Representations: No representation, warranty or
agreement made by the Vendor in this Agreement, the financial
statements, any document referred to herein. or other
instruments or disclosure furnished by the Vendor or its
shareholders as required by this Agreement contains, or will
contain, an untrue statement of a material fact or omits to
state any material fact necessary to make any statement,
presentation, warranty or agreement not misleading to a
prospective purchaser of all the stock of the Vendor or all of
its assets and business and the assumption of its liabilities.
The Vendor knows of no material fact or conditions adversely
affecting the value of the Vendor common stock or assets,
whether owned or leased, or the business operations of the
Vendor which has not been disclosed to the Purchaser. The
Vendor agrees to disclose to the Purchaser prior to the
closing any fact, information, document or notice which would
have an adverse effect on any statement, covenant,
representation, warranty or agreement of the Vendor contained
in this Agreement, or any agreement, list, certificate,
schedule, statement, or other instrument required by this
Agreement.
(iii) Organization: The Vendor is an entity duly incorporated,
validly existing and in good standing under the laws of the
governmental entity stated above, has the corporate power and
authority to own or lease its properties and hold its licenses
and to carry on its business as now being conducted, and
possesses all licenses, franchises, rights and privileges material
to the conduct of its business. The Vendor is qualified or licensed
under any and all applicable laws, regulations, ordinances, or
orders Of public authorities to do business where the character of
the properties owned or leased by that entity or the nature of
the transaction require it to be qualified in each such jurisdiction.
(iv) Capitalization of the Vendor: All of the outstanding stock of
the Vendor has been duly authorized, is validly issued and
outstanding, is fully paid and nonassessable and all of which
issued and outstanding shares are owned by the person stated
in the Schedule A hereto. There are no existing options,
warrants, or other outstanding rights whatsoever to stock or
securities of the Vendor.
(v) The Shares: The Shares are legally and equitably owned and are
free and clear of any and all restrictions, liens, claims,
covenants or encumbrances or rights of third parties of any nature
whatsoever. No voting agreements or restrictions of any
kind affect the rights of the holders of the Shares. When
completed as herein specified, the transfer of the Shares will
vest full, absolute, complete and unconditional ownership of the
transferred shares to the Purchaser.
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(vi) Financial Statements: The Vendor has furnished to the
Purchaser the unaudited financial statements for the period
ended December 31, 1999, consisting of the balance sheet,
statement of income and shareholder's equity for the period
then ending. A copy of those items has been appended to this
Agreement as Schedule "B". All such financial statements,
together with the notes thereto, (i) are in accordance with
the Vendor's true books and records; (ii) present fairly the
financial position of the Vendor as of such dates, and its
results of operations and changes in financial position for
the respective periods indicated; and (iii) have been prepared
in conformity with generally accepted accounting principals
applied on ,I consistent basis, except as might be
specifically indicated therein.
(vii) Properties: The Vendor has good and marketable title to
all tangible personal property, tangible assets, vehicles,
supplies, machinery and equipment owned by it as reflected on
its balance sheet, in each case subject to no contract or
security interest, lien, pledge, restriction, charge or
encumbrance not specified in its balance sheet and the related
notes thereto, including all contracts Xxxxxx which it presently
holds rights to tangible personal property, copyrights and other
proprietary technical rights. Each of the contracts set forth
in its balance sheet is valid and subsisting and, subject to laws
of general application affecting the rights and remedies of
creditors, is, to the best knowledge, information and belief of the
Vendor, enforceable in accordance with its terms, and no
material default of the Vendor or, to the best knowledge, information
and belief of the Vendor, of any other party, exists under any of
said contracts.
(viii) Receivables: The receivables of the Vendor shown on its
balance sheet, if any, and all receivables thereafter acquired
arose from valid transactions in the ordinary course of
business.
(ix) Agreements, Contracts and Commitments: Except as shown on the
its balance sheet, the Vendor is not a party to or otherwise subject
to any or written (i) collective bargaining agreement; (ii)
commitments for the employment of any officer or employee which is
not terminable (without liability) on a 30 days (or less) notice;
(iii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension, retirement or similar plans or agreements
providing employee benefits; (iv) mortgages, indentures, notes or
other agreements, contracts commitments or instruments for or
relating to any borrowing of money on the deferred purchase price
of property; (v) guarantees of any obligations for the borrowing of
money or otherwise, or any other agreement of guarantee or
indemnification, excluding endorsements made for collection in
the ordinary course of business; (vi) agreements, contracts or
commitments for the purchase or sale of any assets other than in
the ordinary course of business or for the grant of any preferential
rights to purchase any of its assets, properties or rights; (vii)
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agreements, contracts or commitment or other instruments
containing any covenant limiting its freedom to engage in any
line of business in any area of the world or to compete with
any person or entity or which constitute an undue material
burden on its business, financial condition or properties,
(viii) continuing agreements, contracts or commitments for
future purchase of materials, supplies or equipment, (ix)
agreements, contracts or commitments relating to the issuance
of any securities or capital expenditures involving future
payments; (x) agreements, contracts or commitments relating to
the acquisition of the assets or a substantial part of the
assets or capital stock of any business enterprise; (xi)
agreements, contracts or commitments with any officer,
director, 5% shareholder of the Vendor or any "associate" or
affiliate thereof as the term is defined in Rule 405 of the
Securities Act; (xii) continuing agreements, contracts, or
commitments for the future sale of products or rendering of
services by the Vendor; or (xiii) agreements, contracts,
commitments or other instruments not entered into in the
ordinary Course of business. Except for debt payments to the
creditors and in the amounts set forth in the attached
Schedule B, the Vendor is not in default Xxxxxx any franchise,
contract, agreement, lease or other document to which it is a
party or by which its properties are bound; and there have
been no claims of defaults and there are no existing facts or
conditions known to the Vendor or to its shareholders which,
if continued or on notice, will result in a default under the
contracts, agreements, leases or other documents to which the
Vendor is a party or by which its property may be bound and
which would adversely affect its business properties. Except
as otherwise contemplated or permitted by this Agreement,
between the date hereof and the closing date, the Vendor will
not, without the prior consent of the Purchaser, which consent
shall not be unreasonably withheld, amend, in any material
respect, or enter into, any contract, agreement, or other
instrument of the type described in this section.
(x) Absence of Undisclosed Liabilities: To the best knowledge,
information and belief of the executive officers of the Vendor,
it has no material liabilities or obligations, either accrued,
absolute, contingent or otherwise, including, without
limitation, liabilities for federal, state, local or foreign
taxes or custom duties, except (i) as reflected on its balance
sheet, including the notes thereto; or (ii) liabilities and
obligations incurred after the date of its balance sheet in the
ordinary course of business in amounts usual and normal; or
(iii) contracts and agreements of kinds not reflected on corporate
balance sheets (prepared in accordance with generally accepted
accounting principals) incurred in or as a result of the ordinary
course of business.
(xi) Litigation-Claims: There are no claims, litigation, actions,
suits, investigations or proceedings pending or, to the knowledge
of the executive officers of the Vendor, threatened against or
affecting the Vendor or its properties or business, at
law or in equity, or before or by any governmental department,
commission,
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board, bureau, agency or instrumentality, domestic or
foreign, which if determined adversely would have a material
adverse effect on its business or financial condition, or its
ability to carry on its business as presently conducted.
(xii) Taxes and Renegotiation: Except as specifically provided
in this Agreement, the Vendor (i) has timely filed and duly
filed all tax returns and custom declarations required by any
jurisdiction, domestic or foreign, to which it or any of them
is or has been subject; (ii) has either paid in full all taxes
due and custom duties claimed to be due to each jurisdiction,
and any interest and penalties with respect thereto, or
provided adequate reserves for the payment thereof as set
forth on its balance sheet; and (111) has adequately reflected
as liabilities on its books all taxes and Custom duties that
have accrued For any period which are not yet due and payable.
Said tax returns and custom declarations for the years for
which deficiencies could arise are true and complete,
(xiii) Insurance: The Vendor Currently maintains (i) insurance
on all of its assets and business of a type customarily
insured, covering property damage and loss of income by fire
or other casualty; and (ii) adequate insurance protection
against all liabilities, claims, and risks against which it is
customary to insure. Such insurance or comparable insurance
will be maintained in full force and effect to and including
the closing date.
(xiv) Absence of Certain Charges: Since its incorporation, the
Vendor has not (i) issued, delivered, or agreed to issue or
deliver to any person any shares of stock (except as set forth
in the corporate minutes), bonds or other corporate securities
(whether authorized but unissued or held in treasury) or
granted to any person or entity any options, warrants or other
rights calling for the issuance thereof, (ii) incurred any
obligation or liability (absolute or contingent) except
obligations and liabilities Incurred in the ordinary course of
business: (iii) discharged or satisfied any lien or
encumbrance, or paid any obligation or liability (absolute or
contingent) other than current liabilities incurred since the
date of its balance sheet and current liabilities Incurred
since the date of its balance sheet in the ordinary course of
business; (iv) declared or made any payment or distribution to
shareholders, or purchased or redeemed any shares of stock;
(v) except as specifically stated in this agreement, has not
mortgaged, pledged or subjected to lien or any encumbrance,
an), asset (tangible or intangible); sold or transferred, or
contracted to sell or transfer, any tangible assets or
cancelled any debts or claims, except in the ordinary course
of business and in any event not in an aggregate amount which
is material; (vii) sold, assigned or transferred, or
contracted to sell, assign or transfer, any patents,
trademarks, trade names, copyrights, licenses, trade secrets
or other intangible assets; (viii) waived any right of'
substantial value; (ix) entered into any transaction other
than in the ordinary course of business; or (x) agreed to any
of the forgoing. Except as otherwise
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expressly provided for or set forth in, or required by, this
Agreement, since the date of its balance sheet, there have been
no changes in the assets, properties, operations or financial
condition of the Vendor which have had or may have a materially
adverse effect on its business, and neither the Vendor nor its
shareholders nor any of its agents knows of any development or
threatened development of a nature that is or may be materially
adverse to its business, including, without limitation, the loss
of a significant customer or the services of a key employee.
(xv) Minute Books: The minute book of the Vendor contains complete and
accurate records of all meetings and other corporate actions of
the share holdings and the Board of Directors (including any
committees of the Board) or any committee created pursuant to any
employee benefit plan of the Vendor.
(xvi) Finders: Except as specifically stated in writing in
separate documents. the Vendor is not obligated, absolutely or
contingently, to any person for financial advice. a finder's fee,
legal fees, ;accounting fees, brokerage commission, or other
similar payment in connection with the transaction contemplated
by this Agreement.
(xvii) Interest in the Vendor's Assets: No person has any interest
in any inventions, patents, copyrights, trademarks, trade names,
trade secrets, proprietary rights or processes or business lists
used in or pertaining to the business of the Vendor, other than
those disclosed.
(xviii) Compliance with Laws: To the best of the knowledge,
information and belief of the Vendor, it has complied with, and
is not in violation of any United States or Canadian federal,
commonwealth, state, provincial, local or foreign statute, law,
code, rule or regulation with respect to the conduct of its
business, the ownership or operation of its properties, or the
sale or purchase of its securities or disclosure to shareholders
which violation. might have a material adverse effect on the
business, financial condition or earnings of the Vendor.
(xix) Absence of Certain Payments: Neither the Vendor nor any of
its current or past officers, agents, directors, employees or
other persons associated with or acting on behalf of any of it,
has used any funds of the Vendor for unlawful contributions,
(lifts, entertainment or other unlawful expenses relating to
political activities, or made any direct or indirect unlawful
payment to government officials or employees (foreign or
domestic) from corporate funds, or established or maintained any
unlawful or unreported funds.
(xx) Accuracy at Closing: All representations and warranties of the
Vendor herein made will be true and correct as of the closing date.
As of the closing date, the
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Vendor will have performed and complied with all covenants and
conditions required to be performed or complied with by it at or
before such time by this Agreement.
5. PURCHASER'S WARRANTIES AND REPRESENTATIONS
5.1 (i) Effect of Agreement: The execution and delivery by the Purchaser
of this Agreement and its consummation and the performance of its
terms by Purchaser will not conflict with or result in a breach of
the terms of or constitute a default under or violation of any law
or regulation of any governmental authority, domestic or foreign
or the Articles of Incorporation or By-Laws of the Purchaser
or any material agreement or instrument to which the Purchaser
or any of its shareholders is a party or member or by which any
one of them is bound or to which any of them is subject; nor
will it give to others any interests or rights, including rights
of termination, acceleration or cancellation, in or with respect
to any of the properties, assets, agreements, contracts or
business of any one of the corporations. No consent of any
person not a party to this agreement, and no consent of any
governmental authority, is required to be obtained on the part of
the Purchaser to permit the transactions contemplated by this
Agreement, of the business activities of the Purchaser in the
manner such business is currently carried on by their current or
past management.
(ii) Nature of Representations: No representation, warranty or
agreement made by the Purchaser in this Agreement, any document
referred to herein, or other instruments or disclosure furnished
by the Purchaser as required by this Agreement contains, or will
contain, an untrue statement of a material fact or omits to state
any material fact necessary to make any statement, presentation,
warranty or agreement not misleading to the Vendor. The Purchaser
knows of no material fact or conditions adversely affecting the
value of the Purchaser's common stock or assets, whether owned or
leased, or the business operations of the Purchaser which has not
been disclosed to the Vendor. The Purchaser agrees to disclose
to the Vendor prior to the closing any fact, information, document
or notice which would have an adverse effect on any statement,
covenant, representation, warranty or agreement of the Purchaser
contained in this Agreement, or any agreement, list, certificate,
schedule, statement, or other instrument required by this Agreement.
(iii) Organization: The Purchaser is an entity duly incorporated,
validly existing and in good standing under the laws of the
governmental entity stated above, has the corporate power and
authority to own or lease its properties and hold its licenses
and to carry on its business as now being conducted, and
possesses all licenses, franchises, rights and privileges
material to the conduct of its business.
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(iv) Finders: Except as specifically stated in writing in separate
documents, the Purchaser is not obligated, absolutely or
contingently, to any person for financial advice, a finder's fee,
legal fees, accounting fees, brokerage commission, or other
similar payment in connection with the transaction contemplated
by this Agreement.
(iv) Accuracy at Closing: All representations and warranties of the
Purchaser herein made will be true and correct as of the closing
date. As of the closing date, the Purchaser will have performed
and complied with all covenants and conditions required to be
performed or complied with by it at or before such time by this
Agreement.
6. CLOSING
6.1 The time of Closing shall be 10:00 a.m. on April 29, 2000 [can't be
29th - 120 days from March 20 at least], at the offices of the
Purchaser, x/x Xx. Xxxxxx Xxxxxxx Xxxxxxxxxxx, Xxxxx 000, 1200 Xxxx
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0.
6.2 At least 7 days prior to the Closing Date, the Vendor shall provide to
the solicitors for the Purchaser, upon their undertakings as set out
in Paragraph 4.3, the following documents:
(a) transfer forms and share certificates duly endorsed in blank for
transfer by the Vendor and dated on the Closing Date which will
effectively transfer the Shares to the Purchaser as of the Closing
Date;
(b) a certified copy of a resolution of the directors of the Vendor
consenting to the transfer of the Shares to the Purchaser on the
Closing Date as anticipated herein;
(c) a certified copy of a resolution of the directors of the Vendor
whereby they resolve to redeem the Shares from the Purchaser for
the Purchase Price on the Closing Date;
(d) an irrevocable proxy expiring on the Closing date whereby the
Vendor appoints the Purchaser with full and discretionary power
to vote the Shares at any ordinary or extraordinary shareholders
meeting relating to the Shares; and
(e) a consent to act as a director of the Purchaser duly endorsed by
Xxxxxxx Xxxx (hereinafter collectively referred to as the "Closing
Documents").
6.3 Prior to receipt of the Closing Documents, the Purchaser shall obtain
from its solicitors their undertaking to do the following:
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(a) hold the Closing Documents until the Closing Date at which
time, so long as there is no uncured default as set out in
Paragraph 4.3(ii) herein of which they have received
notice, they shall release the Closing Documents to the
Purchaser;
(b) in the event that the Purchaser terminates this Agreement
pursuant to paragraph 7 of this Agreement, they shall, upon
receiving written notice of such termination from
the Purchaser, return the Closing Documents to the Vendor.
7. TERMINATION BY PURCHASER
7.1 The Parties hereto understand and agree that the Purchaser, at its
sole discretion, may terminate this Agreement upon any of the following
events:
(a) the Vendor does not provide to the Purchaser any and all of
the Closing Documents within the time allotted; or
(b) the Vendor has materially breached any of the Vendor's
conditions, warranties and representations set out herein.
7.2 In the event of termination of this Agreement as set out in
paragraph 7.1 herein, the Purchaser shall provide the Vendor and the
Purchaser's solicitors with notice of termination. Upon receipt of
such notice, the solicitors for the Purchaser will forthwith return
to the Vendor all of the Closing Documents. The parties agree that
in the event of the termination set out in paragraph 7.1 herein,
neither party will have any claim for any damages whatsoever against
the other.
GENERAL
8. This Agreement contains the entire agreement of the parties hereto
and supersedes any prior written or oral agreements between them
concerning the subject matter contained herein. There are no
representations, agreements or understandings, oral or written,
between the parties hereto or with any third parties, relating to
the subject matter contained in this Agreement, which are not fully
expressed herein, and this Agreement, or any part thereof, can only
be modified by a written instrument executed by all of the parties
hereto.
9. Any provision of this Agreement which is declared unlawful or
unenforceable by a Court of competent jurisdiction shall not affect
any other provision herein.
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10. A waiver or breach of any provision of this Agreement shall not
constitute a waiver or breach of any other provision and the balance
of the Agreement shall remain in full force and effect.
11. This Agreement shall be binding and enure to the benefit of the heirs,
personal representatives, successors and permitted assigns of the
parties hereto.
12. This Agreement shall be governed by and be interpreted in accordance
with the laws of the State of Nevada.
13. This Agreement shall not be assigned, amended, changed or modified or
any provision thereof waived or discharged except by the written consent
of all of the parties hereto, not to be unreasonably withheld.
14. This Agreement may be signed in counterparts.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first written above.
CHARGER VENTURES
Per: /s/ Xxxxx Xxxxx
Authorized Signatory
AK DRILLING, INC.
Per: /s/ Xxxxxxx X. Xxxx
Authorized Signatory
4-6-00
121
SCHEDULE A
LIST OF SHARES
CORPORATION NUMBER AND CLASS OF SHARES
----------- --------------------------
AK DRILLING, INC. Common Shares or 100% of
all of the issued and
outstandingshares of AK
DRILLING, INC.
122
SCHEDULE B
FINANCIAL STATEMENTS OF AK DRILLING
123
AK Drilling, Inc.
05/08/00 P&L Year-to-Date Comparison
April 2000
Apr'00 Jan-Apr'00 %YTD % of Inc.
---------- ----------- ----- ---------
Ordinary Income/Expense
Income
DRILLING INCOME-WATER WELL 74,079.86 77,957.36 95.0% 21.7%
DRILLING INCOME 267,448.42 1,110,898.57 24.1% 78.3%
---------- ------------ ----- ------
Total Income 341,528.28 1,188,855.93 28.7% 100.0%
Cost of Goods Sold
DRILL BITS/HAMMER 9,613.25 31,666.95 30.4% 2.8%
EMPLOYEE EXPENSES 309.54 5,073.45 6.1% 0.1%
FREIGHT & SHIPPING 2,036.10 8,485.63 24.0% 0.6%
FUEL & OIL 21,336.06 99,690.40 21.4% 6.2%
MATERIALS & SUPPLIES 17,078.24 68,222.06 25.0% 5.0%
PAYROLL EXPENSE 70,965.12 278,326.33 25.5% 20.8%
PAYROLL TAX EXPENSE 5,479.21 22,913.79 23.9% 1.6%
SUBCONTRACT LABOR 850.00 1,900.00 44.7% 0.2%
WORKER'S COMP. 4,141.11 17,986.21 23.0% 1.2%
---------- ----------- ----- -----
Total COGS 131,808.63 534,264.82 24.7% 38.6%
---------- ----------- ----- -----
Gross Profit 209,719.65 654,591.11 32.0% 61.4%
Expense
AUTOMOBILE EXPENSE 285.18 855.54 33.3% 0.1%
ADVERTISING 429.90 4,147.80 10.4% 0.1%
AMORTIZATION EXPENSE 83.00 332.00 25.0% 0.0%
BANK CHARGE- WIRE FEES 71.20 249.20 28.6% 0.0%
DEPRECIATION 13,750.00 55,000.00 25.0% 4.0%
DUES & SUBSCRIPTIONS 0.00 2,024.72 0.0% 0.0%
EMPLOYEE PER DIEM 8,905.00 37,395.00 23.8% 2.6%
FUEL 208.47 632.93 32.9% 0.1%
NSURANCE-GENERAL 5,769.10 11,026.96 52.3% 1.7%
INSURANCE- HEALTH 2,354.01 4,595.98 51.2% 0.7%
INSURANCE- LIFE 365.72 1,462.88 25.0% 0.1%
INTEREST EXPENSE 9,078.43 36,793.90 24.7% 2.7%
LODGING 3,741.32 7,106.31 52.6% 1.1%
MEALS & ENTERTAINMENT 21.90 404.52 5.4% 0.0%
OFFICE SUPPLIES 258.96 1,755.42 14.8% 0.1%
PAYROLL EXPENSES 10,107.70 40,430.80 25.0% 3.0%
PAYROLL TAX EXPENSES 1,010.78 4,043.12 25.0% 0.3%
PENALTIES & FINES 0.00 527.55 0.0% 0.0%
PROFESSIONAL SERVICES 417.50 2,462.50 17.0% 0.1%
PROFIT SHARING EXPENSE 2,000.00 8,000.00 25.0% 0.6%
RENT 2,014.98 37,393.52 5.4% 0.6%
REPAIRS & PARTS 7,67117 59,219.17 13.0% 2.2%
SAFETY TRAINING 160.00 4,954.58 3.2% 0.0%
TAXES & LICENSES 1,109.86 10,688.20 10.4% 0.3%
TELEPHONE 2,182.45 7,086.84 30.8% 0.6%
TOOLS & SMALL EQUIP. 2,501.12 8,860.92 28.2% 0.7%
124
TRAILER LEASE 768.00 3,072.00 25.0% 0.2%
TRAVEL 3,457.17 6,925.52 49.9% 1.0%
TRUCK EXPENSE 6,870.46 33,514.65 20.5% 2.0%
TRUCK LEASE 0.00 2,610.35 0.0% 0.0%
UNCATEGORIZED EXPENSES 0.00 0.00 0.0% 0.0%
UTILITIES 614.73 3,731.48 16.5% 0.2%
WATER TRUCK LEASE 1,152.00 4,608.00 25.0% 0.3%
---------- ---------- ----- -----
Total Expense 87.362.11 401,912.36 21.7% 25.6%
---------- ---------- ----- -----
Net Ordinary Income 122,357.54 252,678.75 48.4% 35.8%
Other Income/Expense
Other Income
INTEREST INCOME 568.24 2,272.96 25.0% 0.2%
---------- ---------- ----- -----
Total Other Income 568.24 2,272.96 25.0% 0.2%
---------- ---------- ----- -----
Net Other Income 568.24 2,272.96 25.0% 0.2%
---------- ---------- ----- -----
Net Income 122,925.78 254,951.71 48.2% 36.0%
========== ========== ===== =====
125
AK Drilling, Inc.
05/08/00
Balance Sheet
As of April 30, 2000
Apr 30,'00
ASSETS ----------
Current Assets
Checking/Savings
CASH IN CHECKING- F.C.B. -22,012.51
----------
Total Checking/Savings -22,012.51
Accounts Receivable
ACCOUNTS RECEIVABLE 446,159.65
----------
Total Accounts Receivable 446,159.65
Other Current Assets
INVENTORY-WELL PIPE-U.S. 8,182.42
DEPOSITS 19,706.16
EMPLOYEE ADVANCES 4,755.80
INVENTORY- PIPE- USA 93,250.00
----------
Total Other Current Assets 125,894.38
----------
Total Current Assets 550,041.52
Fixed Assets
AUTOS & TRUCKS
Original Cost 466,331.47
----------
Total AUTOS & TRUCKS 466,331.47
DRILL RIGS
Original Cost 2,462,604.15
------------
Total DRILL RIGS 2,462,604.15
EQUIPMENT
Original Cost 440,567.71
------------
Total EQUIPMENT 440,567.71
OFFICE BUILDING
Original Cost 1,735.33
------------
Total OFFICE BUILDING 1,735.33
OFFICE EQUIPMENT
Original Cost 8,254.06
------------
Total OFFICE EQUIPMENT 8,254.06
ACCUMULATED DEPRECIATION
Original Cost -660,533.98
------------
Total ACCUMULATED DEPRECIATION -660,533.98
-----------
Total Fixed Assets 2,718,958.74
Other Assets
TAX RESERVE 15,000.00
LOAN ORIGINATION FEES 13,207.00
START UP COSTS 1,000.00
ACCUMULATED AMORTIZATION -6,189.00
------------
Total Other Assets 23,018.00
------------
TOTAL ASSETS 3,292,018.26
============
126
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
ACCOUNTS PAYABLE 87,295.25
------------
Total Accounts Payable 87,295.25
Credit Cards
A/P- CREDIT CARD
Mastercard-Xxxx 1,203.10
----------
Total A/P- CREDIT CARD 1,203.10
------------
127
AK Drilling, Inc.
05/08/00
Balance Sheet
As of April 30, 2000
Apr 30,'00
----------
Total Credit Cards 1,203.10
Other Current Liabilities
Dental Ins. Withheld 181.45
FINE W/H 1,425.00
CURRENT MATURITIES- LTD 223,730.57
N/P- FOREMOST 3,586.94
PAYROLL TAXES PAYABLE 816.58
PROFIT SHARING PAYABLE 32,000.00
STATE WITHHOLDING 1,975.65
-----------
Total Other Current Liabilities 263,716.19
-----------
Total Current Liabilities 352,214.54
Long Term Liabilities
N/P- F.C.B.- CONSOLIDATION 843,340.09
N/P-FCB-TRUCKS-3 DODGES 51,107.58
CURRENT MATURITIES- LTD-2 -223,730.57
NIP- CENTER CAP. CORP 3 296,644.11
N/P- SECURITY BANK- TRUCK 8,654.74
N/P- SECURITY BANK- TRUCKS-2 12,649.42
-----------
Total Long Term Liabilities 988,665.37
-----------
Total Liabilities 1,340,879.91
Equity
CAPITAL STOCK 10,000.00
RETAINED EARNINGS 1,926,388.76
Net Income 254,951.71
SHAREHOLDER'S DISTRIBUTION -240,202.12
------------
Total Equity 1,951,138.35
------------
TOTAL LIABILITIES & EQUITY 3,292,018.26
============
128
SCHEDULE C
(i) PENSION FUNDS: ALL EXISTING PENSION MONIES UP TO CLOSING DATE TO
ACCRUE TO VENDOR'S EXISTING EMPLOYEE PENSION PLAN.
NEW PENSION PLAN TO START ONE DAY POST CLOSING.
(ii) RECEIVABLES AND PAYABLES
ALL RECEIVABLES AND PAYABLES UP TO CLOSING DATE WILL
ACCRUE TO THE VENDOR'S ACCOUNT AND WILL REMAIN THE
RESPONSIBILTY OF THE VENDOR POST CLOSING.
129
GLOBAL INDUSTRIAL SERVICES INC.
00xx Xxxxx, 000 Xxxxxxxxx Xx.
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Telephone: (000) 000-0000
Facsimile: (604) 683-8804
October 11, 2000 VIA FAX
AK DRILLING INC.
0000 Xxxxx Xxxxxxxx
Xxxxx, Xxxxxxx
XXX 00000
Attention: Xx.Xxxxxxx X. Xxxx
Re: Global Industrial Services, Inc. (the "Company")
This letter shall serve as an Addendum to the Share Purchase Agreement dated for
reference March 20, 2000 (the "Agreement") between AK Drilling Inc. and Charger
Ventures Inc. The parties hereto acknowledge that:
1. The 1,000,000 common shares of the Company (the "Shares") issued to Xxxxxxx
Xxxx were not and will not be registered with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act").
Accordingly, the resale of the Shares is subject to Rule 144 of the Act.
2. All payments outstanding pursuant to the Agreement shall be due and payable
by the Company to Xxxxxxx Xxxx no later than 14 days from the date the
Company's shares are cleared for quotation on the OTC-BB.
Trusting the foregoing is satisfactory, would you please acknowledge your
acceptance of the foregoing by counter-signing below and returning a signed
copy to us by fax.
Yours truly, Agreed to the foregoing
this 16th day of October,
GLOBAL INDUSTRIAL SERVICES INC. 2000.
/s/ Xxxxx Xxxxx /s/ Xxxxxxx X. Xxxx
Per: Xxxxx Xxxxx Xxxxxxx X. Xxxx
President
130
