REORGANIZATION AGREEMENT by and between TRIMAX CORPORATION - and - THE INDIVIDUALS SET FORTH IN EXHIBIT A (hereinafter referred to as the "‘SUBSCRIBERS") dated June 1, 2006
by
and between
TRIMAX
CORPORATION
-
and -
THE
INDIVIDUALS
SET
FORTH IN EXHIBIT A
(hereinafter
referred to as the "‘SUBSCRIBERS")
dated
This
Reorganization Agreement (the
"Agreement") is made and entered into by and between Trimax
Corporation,
a
Nevada corporation (the "Corporation") and the
Individuals set forth in Exhibit A
(hereinafter collectively referred to as the "Subscribers"), (the Corporation
and the Subscribers being collectively referred to as the "Parties").
Whereas,
the
Subscribers own all of the authorized issued and outstanding common shares
in
the capital stock of Multi-Source
Inc.,
a
privately held corporation organized under the laws of the Province of Ontario
(the "Subsidiary"); and
Whereas,
the
Subscribers (and debt holders) desire to acquire 5,000,000 shares of the
Corporation’s common stock, $.001 par value (the "Stock") which upon issuance
would constitute approximately 16.19% of the Corporation's issued and
outstanding common shares; and
Whereas,
the
Subscribers desire to acquire the Stock, in consideration for their conveyance
of all of their common stock in the Subsidiary, which stock constitutes all
of
the Subsidiary’s authorized, issued and outstanding securities (the "Subsidiary
Stock").
Now,
therefore,
in
consideration of the premises as well as the mutual covenants hereinafter set
forth, the Parties, intending to be legally bound, hereby agree as follows:
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Article
1
EXCHANGE
PROVISIONS
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1.1
|
Exchange
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Subject
to the hereinafter described conditions, the Corporation shall and hereby agrees
to exchange 5,000,000 shares of its common stock, $.001 par value, with the
Subscribers (and debt holders) for all of the capital stock of the Subsidiary.
The Corporation represents to the Subscribers that the 5,000,000 shares of
its
common stock upon issuance will represent approximately 16.19% of the total
issued and outstanding shares of the common stock of the
Corporation.
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1.2
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Closing
|
The
exchange of the Stock for the Subsidiary Stock shall take place on or before
June 1st,
2006
(the "Closing date") at the offices of the Corporation as set out in section
4.2, or at such later time or different place as the Parties may mutually agree.
At the Closing:
(a) The
Subscribers shall tender to the Corporation certificates representing all of
the
Subsidiary's authorized, issued and outstanding common stock, duly executed
and
in proper form for transfer to the Corporation, together with such executed
consents, powers of attorney, stock powers and other
items as shall be required to convey such stock to the Corporation, in
compliance with all applicable laws; and
(b) The
Corporation shall tender to the Subscribers and debt holders of the Subsidiary
certificates representing 5,000,000 shares of the Stock, on the pro rata basis
set out in Exhibit A, and such other items as shall be required to convey the
Stock to the Subscribers, as follows:
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i)
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3,000,000
shares of the Stock which shall be restricted shall be issued to
the
Subscribers (as per Exhibit A) at
Closing;
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ii)
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500,000
shares of the Stock which shall be restricted shall be delivered
to the
Subscribers forthwith upon signing of any service agreement by the
Subsidiary with any utility organization or governmental entity in
Ecuador; and
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iii)
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1,500,000
shares of the Stock shall be delivered to the Subscribers forthwith
upon
the anniversary date of this Agreement, according to the revenues
derived
by the Subsidiary from any "broadband over power lines" services
agreement(s) with any utility organization or governmental entity
in
Ecuador or otherwise in the world, as follows: the targeted gross
revenues
from any such agreements during the 12 month period following the
date of
this Agreement is U.S.$1,000,000.00 and therefore a percentage equal
to
the percentage of the targeted gross revenues achieved by the Subsidiary
from any such service agreements during the 12 month period following
the
date of closing of this Agreement shall be applied to the issuance
of the
1,500,000 shares of the Stock, so that by way of example, if 80%
of the
targeted gross revenues are achieved (i.e. U.S.$800,000.00) then
80% of
the 1,500,000 shares of the Stock (i.e. 1,200,000 shares) would be
issued
to the Subscribers and released from
Escrow.
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-3-
Any
shares of the Stock placed in Escrow pursuant to subsections 1.2(b) (ii) and
(iii) above which have not been released to the Subscribers in the 18 month
period following the Closing date shall forthwith be returned to the Corporation
upon the expiration of the said 18 month period.
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1.3
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Price
Adjustment
|
The
Subscribers represent and warrant and undertake to the Corporation that as
of
the Closing date the Subsidiary shall have sufficient current assets to pay
out
any current liabilities and any outstanding debt in excess of U.S.$200,000,
which debt shall remain with the Subsidiary post-Closing. In the event there
are
any current liabilities or outstanding debt in excess of U.S.$200,000 which
has
not been paid as of the Closing date, the amount of any such unpaid current
liabilities or outstanding debt in excess of U.S.$200,000 shall be the
responsibility of and paid by the Subscribers to the Corporation, either by
a
cash payment or else a deduction from the Stock issuances set out in section
1.2
(b) above.
The
Corporation shall cause a Closing balance sheet for the Subsidiary to be
prepared by an independent accountant within sixty (60)
days of
the Closing date, and forthwith upon the preparation of the Closing balance
sheet the Corporation and the President of the Subsidiary, acting on behalf
of
the Subscribers, shall meet to approve and agree upon the Closing balance sheet
and make the corresponding purchase price adjustments, if any, as set out in
this section 1.3. In the event the parties cannot agree upon the Closing balance
sheet or purchase price adjustment set out in this section 1.3 within ninety
(90)
days of
the Closing date, then the matter may be referred by either party to arbitration
in the City of Toronto, Ontario under the provisions of the Arbitration
Act, 1991, S.O. 1991, c.17.
The
parties shall select a single arbitrator from a mutually agreeable public
accounting firm to act as the arbitrator, and the arbitration determination
shall be final and binding upon the parties.
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1.4
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Additional
Shares
|
The
Corporation shall within the 3 month period following the Closing set up an
employee stock option plan, based on stipulated performance and milestone
objectives, which shall make available shares to designated employees of the
Corporation and its Subsidiaries.
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1.5
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Exemption
From Registration -
Subscribers
|
The
Subscribers hereby represent, warrant, covenant and acknowledge that:
(1) The
Stock
is being issued without registration under the provisions of Section
5
of the
Securities
Act of 1933,
as
amended (the "Act") pursuant to exemptions provided pursuant to Sections
3(b), 4(2)
or
4(6)
or
Regulation
S
thereof;
(2) 5,000,000
shares of the Stock will bear legends restricting its transfer to United States
residents, or its transfer, sale, conveyance or hypothecation within the
jurisdictional boundaries of the United States, unless such Stock is either
registered under the provisions of Section
5 of
the
Act and under applicable state securities laws, or an opinion of legal counsel,
in form and substance satisfactory to legal counsel to the Corporation is
provided certifying that such registration is not required as a result of
applicable exemptions therefrom;
-4-
(3) The
Corporation's transfer agent shall be instructed not to transfer any of the
Stock unless the Corporation advises it that such transfer is in compliance
with
all applicable laws;
(4) The
Subscribers are acquiring the 5,000,000 shares of Stock for investment purposes
only and not with a view to further sale or distribution; and
(5) The
Subscribers and its advisors have examined all of the Corporation's books and
records and have fully and completely questioned the Corporation's officers
and
directors as to all matters involving the Corporation.
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1.6
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Exemption
From Registration - the
Corporation
|
The
Corporation hereby represents, warrants, covenants and acknowledges that:
(1) The
Subsidiary Stock is being transferred without registration under the provisions
of Section
5 of
the
Act pursuant to exemptions provided pursuant to Sections
3(b), 4(2)
or
4(6)
thereof;
(2) All
of
the Subsidiary Stock will bear legends restricting its transfer to United States
residents, or its transfer, sale, conveyance or hypothecation within the
jurisdictional boundaries of the United States, unless such Subsidiary Stock
is
either registered under the provisions of Section
5
of the
Act and under applicable State securities laws, or an opinion of legal counsel
is provided certifying that such registration is not required as a result of
applicable exemptions there from;
(3) The
Corporation shall not transfer any of the Subsidiary Stock except in compliance
with all applicable laws;
(4) The
Corporation is acquiring the Subsidiary Stock for investment purposes only
and
not with a view to further sale or distribution.
REPRESENTATIONS
AND WARRANTIES
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2.1
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The
Corporation
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The
Corporation hereby represents and warrants to the Subscribers, as a material
inducement to their entry into this Agreement, that:
(a) The
Corporation is, as of the date of this Agreement, a validly existing
Corporation, duly organized and in good standing pursuant to the laws of the
State of Nevada, with all legal and corporate authority and power to conduct
its
business and to own its properties and that it possesses all necessary permits
and licenses required in connection with the conduct of its business;
(b) The
conduct of the Corporation's business is in full compliance with all applicable
United States federal, state, and local governmental statutes, rules,
regulations, ordinances and decrees;
-5-
(c) Pursuant
to its Amended and Restated Articles of Incorporation, the Corporation is
authorized to issue 100,000,000 Shares of Common Stock, $.001 par value. The
Corporation is also authorized to issue 20,000,000 shares of Preferred Stock,
par value $.001 per share. There are currently no shares of Preferred issued
and
outstanding. There are no other authorized or outstanding securities of any
class or of any kind or character or, except as reflected in this Agreement
and
the Corporation's convertible debenture offering which the Subscribers are
aware
of, there are no outstanding subscriptions, options, warrants or other
agreements or commitments obligating the Corporation to issue or sell any
additional shares of the Corporation's capital stock or any options or rights
with respect thereto, or any securities convertible into any shares of Stock
of
any class;
(d) Upon
issuance of the Stock in accordance with and subject to the provisions of
Section 1.2 (b), the Subscribers will become the owner of 5,000,000 shares
of
the Corporation's, issued and outstanding Common Stock representing upon
issuance approximately 16.19% of the Corporation's issued and outstanding Common
Stock;
(e) The
execution and delivery of this Agreement, the consummation of the transactions
herein contemplated and compliance with the terms of this Agreement will not
result in a breach of any of the terms or provisions of, or constitute a default
under the Articles of Incorporation or By-laws of the Corporation; any
indenture, other agreement or instrument to which the Corporation is a party
or
by which it or its assets are bound; or any applicable regulation, judgment,
order or decree of any governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Corporation, its securities or its
properties;
(f) Except
with respect to the convertible debenture offering which the Subscribers are
aware of, the Corporation is not a party to any written or oral agreement which
grants an option or right of first refusal or other arrangement to acquire
any
of the Stock or to any agreement that affects the voting rights of any of the
Stock, nor has the Corporation made any commitment of any kind relating to
the
issuance of shares of any of its Stock, whether by subscription, right of
conversion, option or otherwise;
(g) The
Corporation is not a party to any agreement or understanding for the sale or
exchange of inventory or services for consideration other than cash or at a
discount in excess of normal discount for quantity or cash payment;
(h) The
Corporation has filed with the appropriate governmental agencies all tax returns
and tax reports required to be filed; all Federal, state and local income,
franchise, sales, use, occupation or other
taxes due have been fully paid or adequately reserved for; and the Corporation
is not a party to any action or proceeding by any governmental authority for
assessment or collection of taxes, nor has any claim for assessments been
asserted against the Corporation;
(i) The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby do not require the consent, authority or approval of any
other person or entity except such as have been obtained;
(j) No
transactions have been entered into either by or on behalf of the Corporation,
other than in the ordinary course of business nor have any acts been performed
(including within the definition of the term performed the failure to perform
any required acts) which would adversely affect the good will of the
Corporation;
-6-
(k) The
entering into of this Agreement and the performance thereof has been duly and
validly authorized by all required Corporate action and does not require any
corporate consents other than such as have been unconditionally obtained;
(l) The
Corporation's Financial Statements for the year ended September 30, 2005 are
audited by independent certified public accountants and have been prepared
in
accordance with generally accepted accounting principles applied on a consistent
basis. They, along with the March 31, 2005 unaudited financial statements filed
with the SEC, fairly present the Corporation’s financial condition, results of
operations, assets, liabilities or business;
(m) The
Corporation does not have any subsidiaries other than those disclosed in the
Corporation's Financial Statements;
(n) The
Minute Books of the Corporation contain true, correct and complete copies of
the
minutes of all meetings of its organizers, shareholders and Board of Directors
from the date of its organization to the present. On the Closing date Xx.
Xxxxxxx Xxxxxx, President of the Subsidiary, shall be appointed to the Board
of
Directors of the Corporation, it being agreed that this appointment shall have
a
duration which is at least coextensive with the period of any applicable
restrictions on the sale or transfer of the Stock; and
(o) The
Corporation has complied with Nevada corporate law, since this transaction
represents the sale of less than all of the Corporation' s assets and therefore
is not subject to Section
14
of the
Exchange
Act of 1934,
as that
pertains to shareholders' approval.
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2.2
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The
Subscribers
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The
Subscribers and the Subsidiary hereby represent and warrant to the Corporation,
as a material inducement to the Corporation's entry into this Agreement, that,
to the best of their knowledge after reasonable inquiry:
(a) The
Subsidiary has entered into letters of intent with various utility organizations
and/or governmental entities in Ecuador as set out in Exhibit B hereto, and
as
of the date of this Agreement no events have occurred and no facts have been
discovered which materially alters the business relationship between the
Subsidiary and any such entities;
(b) The
Subsidiary is, as of the date of this Agreement, a validly existing corporation,
duly organized and in good standing pursuant to the laws of the Province of
Ontario, Canada and has all corporate authority and power to conduct its
business and to own its properties and possesses all necessary permits and
licenses required in connection with the conduct of its business;
(c) The
conduct of the Subsidiary's business is in full compliance with all applicable
governmental statutes, rules, regulations, ordinances and decrees;
-7-
(d) The
Subsidiary has the authority to authorize an unlimited number of shares of
common stock and has currently authorized and issued 5,000,000 shares. There
are
no other outstanding securities of any class or of any kind or character of
the
Subsidiary and, except as reflected in this Agreement, there are no outstanding
subscriptions, options, warrants or other agreements or commitments obligating
the Subsidiary, to issue or sell any additional shares of the Subsidiary's
Stock
or any options or rights with respect thereto, or any securities convertible
into any shares of Stock of any class;
(e) The
execution and delivery of this Agreement, the consummation of the transactions
herein contemplated and compliance with the terms of this Agreement will not
result in a breach of any of the terms or provisions of, or constitute a default
under, the Articles of Incorporation or By-laws of the Subsidiary; any
indenture, other agreement or instrument to which the Subsidiary is a party
or
by which it or its assets are bound; or any applicable regulation, judgment,
order or decree of any governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Subsidiary, its securities or its
properties;
(f) The
Subsidiary is not a party to any written or oral agreement which grants an
option or right of first refusal or other arrangement to acquire any of its
securities or to any agreement that affects the voting rights of any of its
securities, nor has the Corporation made any commitment of any kind relating
to
the issuance of shares of any of its securities, whether by subscription, right
of conversion, option or otherwise;
(g) The
Subsidiary is not a party to any agreement or understanding for the sale or
exchange of inventory or services for consideration other than cash or at a
discount in excess of normal discount for quantity or cash payment;
(h) The
Subsidiary has filed with the appropriate governmental agencies, if applicable,
all tax returns and tax reports required to be filed; all income, franchise,
sales, occupation or other taxes due have been fully paid or adequately reserved
for; and the Subsidiary is not a party to any action or proceeding by any
governmental authority for assessment or collection of taxes, nor has any claim
for assessments been asserted against the Subsidiary;
(i) The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby do not require the consent, authority or approval of any
other person or entity except such as have been obtained;
(j) No
transactions have been entered into either by or on behalf of the Subsidiary,
other than in the ordinary course of business nor have any acts been performed
(including within the definition of the term performed the failure to perform
any required acts) which would adversely affect the goodwill of the
Subsidiary;
(k) The
entering into of this Agreement and the performance thereof has been duly and
validly authorized by all required corporate action and does not require any
consents other than such as have been unconditionally obtained; and
(l) All
of
the Subscribers are either non-residents of the U.S. or accredited
investors.
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Article
3
SPECIAL
CONDITION
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3.1
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Each
Party
|
The
obligations of each Party to this Agreement are subject to the condition
precedent that the other Party’s representations and warranties contained in
this Agreement shall be true, correct and complete on and as of the date of
Closing with the same effect as though such representations and warranties
were
made on and as of such date.
Article
4
GENERAL
PROVISIONS
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4.1
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Amendment
|
No
modification, waiver, amendment, discharge or change of this Agreement shall
be
valid unless the same is evinced by a written instrument, subscribed by the
Party against which such modification, waiver, amendment, discharge or change
is
sought.
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4.2
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Notice
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All
notices, demands or other communications given hereunder shall be in writing
and
shall be deemed to have been duly given on the first business day after mailing
by United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
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To
the Corporation:
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Trimax
Corporation
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|
0
Xxxxxxx Xxxxxx, Xxxxx 000
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Xxxxxxx,
Xxxxxxx, Xxxxxx X0X 0X0
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To
the Subscribers:
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Multi-Source
Inc.
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0000
Xxxxx Xxxx, Xxxx 0
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Xxxxxxx,
Xxxxxxx, Xxxxxx X0X 0X0
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or
such
other address or to such other person as any Party shall designate to the other
for such purpose.
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4.3
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Merger
|
This
instrument, together with the instruments referred to herein, contains all
of
the understandings and agreements of the Parties with respect to the subject
matter discussed herein. All prior agreements whether written or oral are merged
herein and shall be of no force or effect.
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4.4
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Survival
|
The
several representations, warranties and covenants of the Parties contained
herein shall survive the execution hereof and shall be effective regardless
of
any investigation that may have been made or may be made by or on behalf of
any
Party.
-9-
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4.5
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Severability
|
If
any
provision or any portion of any provision of this Agreement, other than one
of
the conditions precedent, or the application of such provision or any portion
thereof to any person or circumstance shall be held invalid or unenforceable,
the remaining portions of such provision and the remaining provisions of this
Agreement or the application of such provision or portion of such provision
as
is held invalid or unenforceable to persons or circumstances other than those
to
which it is held invalid or unenforceable, shall not be affected thereby.
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4.6
|
Governing
Law and Venue
|
This
Agreement shall be construed in accordance with the laws in force in the State
of Nevada, U.S.A., and any proceeding arising between the Parties in any matter
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in the City of Las Vegas, Nevada, U.S.A, except for the arbitration
provision regarding the Closing balance sheet set out in section 1.3 above
which
shall be governed by the provisions of section 1.3.
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4.7
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Indemnification
|
Each
Party hereby irrevocably agrees to indemnify and hold the other Parties harmless
from and against any and all liabilities, claims and damages (including legal
or
other expenses incidental thereto), contingent, current, or inchoate to which
they or any one of them may become subject as a direct, indirect or incidental
consequence of any action by the indemnifying Party or as a consequence of
the
failure of the indemnifying Party to act, whether pursuant to requirements
of
this Agreement or otherwise. In the event it becomes necessary to enforce this
indemnity through an attorney, with or without litigation, the successful Party
shall be entitled to recover from the indemnifying Party, all costs incurred
including reasonable attorneys' fees throughout any negotiations, trials or
appeals, whether or not any suit is instituted.
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4.8
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Litigation
|
In
any
action between the Parties to enforce any of the terms of this Agreement or
any
other matter arising from this Agreement, the prevailing Party shall be entitled
to recover its costs and expenses,
including reasonable attorneys' fees up to and including all negotiations,
trials and appeals, whether or not litigation is initiated.
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4.9
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Benefit
of Agreement
|
The
terms
and provisions of this Agreement shall be binding upon and inure to the benefit
of the Parties, their successors, assigns, personal representatives, estate,
heirs and legatees.
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4.10
|
Captions
|
The
captions in this Agreement are for convenience and reference only and in no
way
define, describe, extend or limit the scope of this Agreement or the intent
of
any provisions hereof.
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4.11
|
Number
and Gender
|
All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, as the identity of the Party or Parties,
or their personal representatives, successors and assigns may require.
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4.12
|
Further
Assurances
|
The
Parties agree to do, execute, acknowledge and deliver or cause to be done,
executed, acknowledged or delivered and to perform all such acts and deliver
all
such deeds, assignments, transfers, conveyances, powers of attorney, assurances,
stock certificates and other documents, as may, from time to time, be required
herein to effect the intent and purpose of this Agreement.
-10-
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4.13
|
Status
|
Nothing
in this Agreement shall be construed or shall constitute a partnership, joint
venture, employer-employee relationship, lessor-lessee relationship, or
principal-agent relationship.
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4.14
|
Counterparts
|
This
Agreement may be executed in any number of counterparts. All executed
counterparts shall constitute one Agreement notwithstanding that all signatories
are not signatories to the original or the same counterpart.
In
witness whereof
the
Parties have signed this Agreement by their duly authorized officers, in the
case of the two corporations, and individually in the case of the Subscribers,
effective as of the 1st
day of
June, 2006.
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TRIMAX
CORPORATION
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By:
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per:
Xxxxx Xxxxxx
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Xxxxx
Xxxxxx, President
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MULTI-SOURCE
INC.
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By:
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per:
Xxxx Xxxxxx
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Xxxxxxx
Xxxxxx, President
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The
SUBSCRIBERS:
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See
Exhibit A attached hereto.
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-11-
Exhibit
A - The Subscribers are as follows:
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By:
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per:
Xxxx Xxxxxx
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By:
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per:
O2 Limited
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Xxxx
Xxxxxx
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O2
Limited
|
The
Parties hereby agree that 750,000 shares of the 3,000,000 shares of Stock to
be
delivered at Closing pursuant to Section 1.2 (b) (i) shall be issued to the
order of O2 Limited, and thereafter the Stock shall be issued to the following
parties in the corresponding following percentages, in accordance with the
terms
of the Agreement:
