THIS AGREEMENT made and dated for reference the 8th day of June, 1999.
AMONG:
ASIA PACIFIC ENTERPRISES, INC., a body corporate, incorporated
under the laws of the State of Delaware, having its registered
office at 0000 Xxxxx Xxxxxx Xxxxxx, Xxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000-0000
(hereinafter called "Asia Pacific")
OF THE FIRST PART
AND:
EVIDEO USA, INC., a body corporate, incorporated under the
laws of Nevada, having its registered office at 000 Xxxx Xxxx
Xxxxxx, Xxxxxx Xxxx, Xxxxxx 00000
(hereinafter called "USA")
OF THE SECOND PART
AND:
EVIDEO INTERNATIONAL, INC., a body corporate, incorporated
under the laws of The Commonwealth of the Bahamas, having its
registered office at ABL Building, Bank Lane, Nassau, Bahamas
(hereinafter called "International")
OF THE THIRD PART
AND:
XXX X. XXXXXXX & ASSOCIATES LTD., a body corporate,
incorporated under the laws of the Province of British
Columbia, having its head office at 0000 Xxxxxxx Xxxxx, Xxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
(hereinafter called "Xxxxxxx")
OF THE FOURTH PART
AND:
XXX X. XXXXXXX, an individual, of 0000 Xxxxxxx
Xxxxx, Xxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
(hereinafter called "Xxx Xxxxxxx")
OF THE FIFTH PART
WHEREAS:
A. Pursuant to a letter agreement between Xxxxxxx and Macrovision Corporation
(hereinafter called "Macrovision") dated September 14, 1998 (hereinafter called
the "Macrovision Agreement"), a copy of which has been delivered to each of the
parties hereto, Xxxxxxx was granted an option entitling it to procure an
exclusive, non-transferable license (hereinafter called the "License"), without
the right to sub-license, to apply Macrovision's analog copy protection
technology (hereinafter called the "Technology") in the United States of
America, as well as a right of first refusal to extend the territory of the
License to other countries, subject to the terms and conditions contained in the
Macrovision Agreement (which right of first refusal Xxxxxxx has agreed to waive
in favour of CEBU Holdings Inc. with respect to Germany and China, and in favour
of International with respect to all other countries);
X. Xxxxxxx has agreed to designate USA under the Macrovision Agreement as
the corporation to be entitled to procure the License;
X. Xxxxxxx has agreed to transfer all of its rights in and to the business and
technology described in the document prepared by Xxxxxxx entitled "eVideo
Business Plan - May 1999 - Confidential" (hereinafter called the "Business
Plan"), a copy of which has been delivered to each of the parties hereto;
D. International owns all of the issued and outstanding shares of USA;
E. Asia Pacific wishes to acquire all of the issued and outstanding shares
of USA from International on the terms and conditions hereinafter set forth;
F. Xxx Xxxxxxx owns all of the issued and outstanding shares of Xxxxxxx;
G. Asia Pacific has agreed to acquire all of the issued and outstanding shares
of Xxxxxxx from Xxx Xxxxxxx in the event Macrovision has not accepted the
designation of USA under the Macrovision Agreement as the corporation to be
entitled to procure the License within 60 days of the closing provided for
hereunder (hereinafter called the "Closing") on the terms and conditions
hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of these
presents and the sum of Ten Dollars ($10.00) now paid by each of the parties to
each of the other parties hereto, the receipt and sufficiency of which is hereby
acknowledged by each of the parties, and for other good and valuable
consideration, the receipt and sufficiency of which is also hereby acknowledged
by each of the parties, the parties hereby agree as follows:
PURCHASE AND SALE OF SHARES OF USA AND, POTENTIALLY, OF XXXXXXX
1.01 Subject to the terms and conditions hereof, International hereby agrees to
sell to Asia Pacific, and Asia Pacific hereby agrees to purchase from
International, one common share in the capital stock of USA, representing all of
the issued and outstanding shares of USA, with the consideration, in addition to
the consideration provided for in paragraph 1.02 hereof, to consist of the
issuance of 6,623,016 common shares in the capital stock of Asia Pacific, with
all of these shares to be held in escrow by an independent escrow agent, with
these shares of Asia Pacific to be dealt with on the following basis:
(a) 25% of these shares will be released to International from escrow
when all of the following business milestones have been met:
(i) the demonstration of an operational prototype digital set
top box (hereinafter called a "STB") for the Technology;
(ii) USA has entered into with written agreements with
manufacturers to produce a total of 15,000 STB's per month;
(iii) the formal Long Form Agreement contemplated in paragraph 16 of
the Macrovision Agreement has been entered into; and
(iv) an initial distribution agreement with a motion picture studio
in respect of a substantial portfolio of video movies has been
entered into;
(b) an additional 25% of these shares will be released to International
from escrow when each of the following conditions have been met:
(i) Asia Pacific has successfully recruited a recognized Chief
Executive Officer and such recruitment has been approved by
Asia Pacific's board of directors;
(ii) a successful file server beta testing with video files has
been developed;
(iii) the first cable company distribution letter of agreement has
been entered into and a head end communication test has been
successfully completed;
(c) an additional 25% of these shares will be released to International
from escrow when Asia Pacific first generates gross annual revenues
of Five Million Dollars ($5,000,000) on a consolidated basis;
(d) the remaining 25% of these shares will be released to International
from escrow when Asia Pacific first generates gross annual revenues
of Five Hundred Million Dollars ($500,000,000) on a consolidated
basis; and
(e) any shares not released to International from escrow at the
expiration of 5 years from the Closing will be surrendered to Asia
Pacific for cancellation;
PROVIDED THAT, notwithstanding any of the provisions of this paragraph 1.01, all
shares not yet released to International from escrow pursuant to the provisions
of sub-paragraphs (a), (b), (c) or (d) or not cancelled pursuant to the
provision of sub-paragraph (e) hereof shall be released from escrow upon the
occurrence of any of the following events:
(f) in the event of the declaration by Asia Pacific of a dividend within
24 months of the Closing Date equivalent to at least Two Dollars
($2.00) per common share; or
(g) the completion of a successful secondary public offering raising in
excess of Twenty Million Dollars ($20,000,000) with less than a
thirty percent (30%) dilution factor to its existing shareholders at
the time of the completion of such secondary offering; or
(h) the completion of a successful takeover for a majority of the issued
and outstanding common shares of Asia Pacific; or
(i) Asia Pacific having a publicly quoted market price in excess of
Fifteen Dollars ($15.00) per common share for a period in excess of
twenty consecutive trading days.
1.02 It is Asia Pacific's intention to raise an additional Three Million
Nine Hundred Thousand Dollars ($3,900,000) by the sale of equity
capital subsequent to the date of this Agreement as follows:
(a) Two Million Four Hundred Thousand Dollars ($2,400,000) by July 31,
1999; and
(b) an additional One Million Five Hundred Thousand Dollars ($1,500,000) by
September 30, 1999.
For every common share of Asia Pacific issued to raise the funds
provided for in sub-paragraphs (a) and (b) of this paragraph 1.02, Asia Pacific
agrees to issue one and one-half (1 1/2) common shares in its capital stock to
International, which shares are to be issued on September 30, 1999 or, to the
extent that the funds are raised subsequent to September 30, 1999, such later
date(s) as International may agree to, with all of these shares to be held in
escrow by an independent escrow agent and released to International from escrow
on the same basis as the 6,623,016 common shares to be held in escrow pursuant
to paragraph 1.01 hereof.
1.03 In order to secure Asia Pacific's performance in the raising of the
additional equity capital provided for in paragraph 1.02 hereof, Xxxxxx Rollke,
a director and the President of Asia Pacific, has agreed to lodge 345,000 common
shares of Asia Pacific currently owned by him with an independent escrow agent,
which shares will be released to Mr. Rollke from escrow on a pro rata basis to
the amount of additional equity capital raised by Asia Pacific pursuant to
paragraph 1.02 hereof, with any shares not entitled to be released from escrow
as provided for herein by September 30, 1999 to be surrendered to Asia Pacific
for cancellation.
1.04 Subject to the terms and conditions hereof, in the event Macrovision has
not accepted the designation of USA under the Macrovision Agreement as the
corporation to be entitled to procure the License within 60 days of the Closing
provided for hereunder, Xxx Xxxxxxx hereby agrees to sell to Asia Pacific, and
Asia Pacific hereby agrees to purchase from Xxx Xxxxxxx, 10 common shares in the
capital stock of Xxxxxxx, representing all of the issued and outstanding shares
of Xxxxxxx, with the consideration to consist of the payment by Asia Pacific to
Xxx Xxxxxxx of One Dollar ($1).
COVENANTS, REPRESENTATIONS AND WARRANTIES OF ASIA PACIFIC
2.01 Asia Pacific covenants, represents and warrants to each of USA and
International that:
(a) it is a company validly subsisting under the laws of the State of
Delaware and has all necessary corporate power and authority to
execute and deliver this Agreement to purchase all of the issued and
outstanding shares of USA from International, to issue shares in its
capital stock to International as provided for herein and to perform
its obligations hereunder;
(b) all necessary corporate action of the directors and members of
Asia Pacific to authorize the issuance of shares of Asia Pacific
hereunder and the execution, delivery and performance of this
Agreement has been taken, the shares of Asia Pacific to be issued
hereunder have been duly and validly created and this Agreement
has been duly executed and delivered on behalf of Asia Pacific
and constitutes a legal, valid and binding obligation of Asia
Pacific enforceable by USA and International in accordance with
its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights and subject to the
qualification that specific performance and injunction, being
equitable remedies, may only be granted in the discretion of a
court of competent jurisdiction;
(c) the authorized and issued share capital of Asia Pacific,
including convertible securities, warrants and options or other
rights to acquire shares of Asia Pacific, consists of 30,000,000
common shares having a par value of US$0.0001 each and 5,000,000
preferred shares having a par value of $0.0001 each, of which
8,965,343 common shares are issued and outstanding as fully paid
and non-assessable, no issued and outstanding preferred shares,
307,693 issued and outstanding common share purchase warrants
exercisable at a price of $3.25 per share until May 25, 2000, no
issued and outstanding common share purchase options, no issued
and outstanding preferred share purchase warrants, and no issued
and outstanding preferred share purchase options;
(d) none of the authorization, execution, delivery or performance by
Asia Pacific of this Agreement, including, without limitation,
the issuance of the shares of Asia Pacific as provided hereunder,
requires any approval or consent of any governmental or
regulatory authority or agency having jurisdiction (except as has
already been, or at or prior to the Closing will be, obtained)
nor is in conflict with or in contravention of Asia Pacific's
constating documents (including the provisions attaching to its
common shares), resolutions of the directors or members of Asia
Pacific or the provisions of any written instrument or agreement
to which Asia Pacific is a party or by which Asia Pacific or its
properties or assets are bound or constitutes a default
thereunder;
(e) to the best of Asia Pacific's knowledge, there is not now pending or
threatened against Asia Pacific or any of its subsidiaries, nor has
Asia Pacific received notice in respect of any claim which could
lead to any litigation, action, suit or other proceeding by or
before any court, tribunal or other competent governmental agency or
authority or regulatory body that is material to the business or
affairs of Asia Pacific;
(f) neither Asia Pacific nor any affiliate or associate thereof is a
party to, or is aware of, any agreement, commitment or understanding
between or among the shareholders of Asia Pacific with respect to
the exercise of any voting rights attaching to any securities of
Asia Pacific beneficially owned by such shareholders or any voting
trust agreement or other shareholders' agreement relating to
securities of Asia Pacific;
(g) it will use its best efforts to satisfy and fulfill all requirements
and conditions contained in this Agreement required to be satisfied
or fulfilled by it in order to complete the transactions
contemplated hereby and to comply with, satisfy and fulfill promptly
all legal and regulatory requirements applicable to Asia Pacific
with respect to the consummation of the transactions contemplated
hereby;
(h) it is in good standing with the National Association of Securities
Dealers in the United States of America and that its common shares
are quoted for trading on the National Association of Securities
Dealers Automatic Quotation Over-the-Counter Bulletin Board System
under the trading symbol "APEP";
(i) its financial statements prepared as at March 31, 1999
(hereinafter called the "Asia Pacific Financial Statements"), a
copy of which are attached as Schedule "A", are true and correct
in every material respect and present fairly the financial
position of Asia Pacific as at the date of the Asia Pacific
Financial Statements and the results of its operations for the
period then ended in accordance with generally accepted
accounting principles on a basis consistently applied;
(j) since the date of the Asia Pacific Financial Statements:
(i) there has not been any material adverse change in the
financial position or condition of Asia Pacific or any damage,
loss or other change in circumstances materially affecting the
business or property of Asia Pacific or its right or capacity
to carry on business;
(ii) Asia Pacific has not waived or surrendered any right of
material value;
(iii) Asia Pacific has not discharged or satisfied or paid any lien
or encumbrance or obligation or liability other than current
liabilities in the ordinary course of business;
(iv) the business of Asia Pacific has been carried on in the
ordinary course; and
(v) the constating documents of Asia Pacific have not been
amended;
(k) there are no liabilities, contingent or otherwise, commitments or
material contracts of Asia Pacific not disclosed or reflected in the
Asia Pacific Financial Statements except those incurred in the
ordinary course of Asia Pacific's business since the date of the
Asia Pacific Financial Statements, and Asia Pacific has not
guaranteed or agreed to guarantee any debt, liability or other
obligation of any person, firm or corporation;
(l) it will raise the funds provided for in paragraph 1.02 hereof on the
timetable provided for therein by the sale of equity capital.
2.02 Asia Pacific acknowledges that the covenants, representations and
warranties set forth in paragraph 2.01 hereof form a part of this Agreement and
are conditions upon which each of USA and International has relied in entering
into this Agreement, and that these covenants, representations and warranties
shall survive the acquisition of any interest in the issued and outstanding
shares of USA by Asia Pacific hereunder.
2.03 The parties also acknowledge and agree that the covenants, representations
and warranties set forth in paragraph 2.01 hereof are provided for the exclusive
benefit of USA and International, and a breach of any one or more thereof may be
waived by USA or International in whole or in part at any time without prejudice
to either of their rights in respect of any other breach of the same or any
other covenant, representation or warranty.
COVENANTS, REPRESENTATIONS AND WARRANTIES OF USA
3.01 USA covenants, represents and warrants to each of Asia Pacific and
International that:
(a) it is a company validly subsisting under the laws of Nevada and has
all necessary corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder;
(b) all necessary corporate action of the directors and members of
USA to authorize the sale of shares of USA hereunder and the
execution, delivery and performance of this Agreement has been
taken, the shares of USA to be sold hereunder have been duly and
validly created and this Agreement has been duly executed and
delivered on behalf of USA and constitutes a legal, valid and
binding obligation of USA enforceable by Asia Pacific and
International in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency or
other laws of general application affecting the enforcement of
creditors' rights and subject to the qualification that specific
performance and injunction, being equitable remedies, may only be
granted in the discretion of a court of competent jurisdiction;
(c) the authorized and issued share capital of USA, including
convertible securities, warrants and options or other rights to
acquire shares of USA, consists of 100,000,000 common shares without
par value, of which one (1) common share is issued and outstanding
as fully paid and non-assessable, and no issued and outstanding
common share purchase options and no issued and outstanding common
share purchase warrants;
(d) none of the authorization, execution, delivery or performance by
USA of this Agreement, including, without limitation, the sale of
the shares of USA as provided hereunder, requires any approval or
consent of any governmental or regulatory authority or agency
having jurisdiction (except as has already been, or at or prior
to the Closing will be, obtained) nor is in conflict with or in
contravention of USA's constating documents (including the
provisions attaching to its common shares), resolutions of the
directors or members of USA or the provisions of any written
instrument or agreement to which USA is a party or by which USA
or its properties or assets are bound or constitutes a default
thereunder;
(e) to the best of USA's knowledge, there is not now pending or
threatened against USA or any of its subsidiaries, nor has USA
received notice in respect of any claim which could lead to any
litigation, action, suit or other proceeding by or before any court,
tribunal or other competent governmental agency or authority or
regulatory body that is material to the business or affairs of USA;
(f) neither USA nor any affiliate or associate thereof is a party to, or
is aware of, any agreement, commitment or understanding between or
among the shareholders of USA with respect to the exercise of any
voting rights attaching to any securities of USA beneficially owned
by such shareholders or any voting trust agreement or other
shareholders' agreement relating to securities of USA;
(g) it will use its best efforts to satisfy and fulfill all requirements
and conditions contained in this Agreement required to be satisfied
or fulfilled by it in order to complete the transactions
contemplated hereby and to comply with, satisfy and fulfill promptly
all legal and regulatory requirements applicable to USA with respect
to the consummation of the transactions contemplated hereby;
(h) it has the appropriate authority to procure the License and that it
will not sell, transfer, dispose of or encumber in any way its right
to procure the License or in respect of the Technology after having
been designated by Xxxxxxx under the Macrovision Agreement as the
corporation to be entitled to procure the License;
(i) its only assets, liabilities, commitments and material contracts are
disclosed on the attached Schedule "B".
3.02 USA acknowledges that the covenants, representations and warranties set
forth in paragraph 3.01 hereof form a part of this Agreement and are conditions
upon which each of Asia Pacific and International has relied in entering into
this Agreement, and that these covenants, representations and warranties shall
survive the acquisition of any interest in the issued and outstanding shares of
USA by Asia Pacific hereunder.
3.03 The parties also acknowledge and agree that the covenants, representations
and warranties set forth in paragraph 3.01 hereof are provided for the exclusive
benefit of Asia Pacific and International, and a breach of any one or more
thereof may be waived by Asia Pacific or International in whole or in part at
any time without prejudice to any of their rights in respect of any other breach
of the same or any other covenant, representation or warranty.
COVENANTS, REPRESENTATIONS AND WARRANTIES OF INTERNATIONAL
4.01 International covenants, represents and warrants to each of Asia Pacific
and USA that:
(a) it is a company validly subsisting under the laws of The
Commonwealth of the Bahamas and has all necessary corporate power
and authority to execute and deliver this Agreement and to sell all
of the issued and outstanding shares of USA to Asia Pacific as
provided to herein and to perform its obligations hereunder;
(b) all necessary corporate action of the directors and members of
International to authorize the sale of shares of USA hereunder
and the execution, delivery and performance of this Agreement has
been taken, the shares of USA to be sold to Asia Pacific
hereunder have been duly and validly created and this Agreement
has been duly executed and delivered on behalf of International
and constitutes a legal, valid and binding obligation of
International enforceable by USA and Asia Pacific in accordance
with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights and subject to the
qualification that specific performance and injunction, being
equitable remedies, may only be granted in the discretion of a
court of competent jurisdiction;
(c) none of the authorization, execution, delivery or performance by
International of this Agreement, including, without limitation,
the sale of shares of USA as provided hereunder, requires any
approval or consent of any governmental or regulatory authority
or agency having jurisdiction (except as has already been, or at
or prior to the Closing will be, obtained) nor is it in conflict
with or in contravention of International's constating documents
(including the provisions attaching to its common shares),
resolutions of the directors or members of International or the
provisions of any written instrument or agreement to which
International is a party or by which International or its
properties or assets are bound or constitutes a default
thereunder;
(d) to the best of International's knowledge, there is not now pending
or threatened against International or any of its subsidiaries, nor
has International received notice in respect of any claim which
could lead to any litigation, action, suit or other proceeding by or
before any court, tribunal or other competent governmental agency or
authority or regulatory body that is material to the business or
affairs of International;
(e) neither International nor any affiliate or associate thereof is a
party to, or is aware of, any agreement, commitment or understanding
between or among the shareholders of International with respect to
the exercise of any voting rights attaching to any securities of
International beneficially owned by such shareholders or any voting
trust agreement or other shareholders' agreement relating to
securities of International;
(f) it will use its best efforts to satisfy and fulfill all requirements
and conditions contained in this Agreement required to be satisfied
or fulfilled by it in order to complete the transactions
contemplated hereby and to comply with, satisfy and fulfill promptly
all legal and regulatory requirements applicable to International
with respect to the consummation of the transactions contemplated
hereby;
(g) the assets, liabilities, commitments and material contracts of USA
as reflected on the list attached hereto as Schedule "B" are true
and correct in every material respect and present fairly the
financial position of USA as of the date of this Agreement;
(h) it will acquire from Xxxxxxx all of the rights in and to the
business and technology described in the Business Plan and transfer
the rights for the operation of that business and the use of that
technology in the United States of America to USA for the sole
consideration of a note payable to International in the amount of
$200,000, without interest, payable in conjunction with the Closing.
4.02 International acknowledges that the covenants, representations and
warranties set forth in paragraph 4.01 hereof form a part of this Agreement and
are conditions upon which each of Asia Pacific and USA has relied in entering
into this Agreement, and that these covenants, representations and warranties
shall survive the acquisition of any interest in the issued and outstanding
shares of USA by Asia Pacific hereunder.
4.03 The parties also acknowledge and agree that the covenants, representations
and warranties set forth in paragraph 4.01 hereof are provided for the exclusive
benefit of Asia Pacific and USA, and a breach of any one or more thereof may be
waived by Asia Pacific or USA in whole or in part at any time without prejudice
to any of their rights in respect of any other breach of the same or any other
covenant, representation or warranty.
COVENANTS, REPRESENTATIONS AND WARRANTIES OF XXXXXXX
5.01 Xxxxxxx covenants, represents and warrants to each of the parties hereto
that:
(a) it is a company validly subsisting under the laws of the Province of
British Columbia and has all necessary corporate power and authority
to execute and deliver this Agreement and to perform its obligations
hereunder;
(b) all necessary corporate action of the directors and members of
Xxxxxxx to authorize the sale of shares of Xxxxxxx hereunder and
the execution, delivery and performance of this Agreement has
been taken, the shares of Xxxxxxx to be sold hereunder have been
duly and validly created and this Agreement has been duly
executed and delivered on behalf of Xxxxxxx and constitutes a
legal, valid and binding obligation of Xxxxxxx enforceable by
Asia Pacific in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency or
other laws of general application affecting the enforcement of
creditors' rights and subject to the qualification that specific
performance and injunction, being equitable remedies, may only be
granted in the discretion of a court of competent jurisdiction;
(c) the authorized and issued share capital of Xxxxxxx, including
convertible securities, warrants and options or other rights to
acquire shares of Xxxxxxx, consists of 10,000 common shares without
par value, of which ten (10) common shares are issued and
outstanding as fully paid and non-assessable, and no issued and
outstanding common share purchase options and no issued and
outstanding common share purchase warrants;
(d) none of the authorization, execution, delivery or performance by
Xxxxxxx of this Agreement, including, without limitation, the
sale of the shares of Xxxxxxx as provided hereunder, requires any
approval or consent of any governmental or regulatory authority
or agency having jurisdiction (except as has already been, or at
or prior to the Closing will be, obtained) nor is in conflict
with or in contravention of Xxxxxxx'x constating documents
(including the provisions attaching to its common shares),
resolutions of the directors or members of Xxxxxxx or the
provisions of any written instrument or agreement to which
Xxxxxxx is a party or by which Xxxxxxx or its properties or
assets are bound or constitutes a default thereunder;
(e) to the best of Xxxxxxx'x knowledge, there is not now pending or
threatened against Xxxxxxx or any of its subsidiaries, nor has
Xxxxxxx received notice in respect of any claim which could lead to
any litigation, action, suit or other proceeding by or before any
court, tribunal or other competent governmental agency or authority
or regulatory body that is material to the business or affairs of
Xxxxxxx;
(f) neither Xxxxxxx nor any affiliate or associate thereof is a party
to, or is aware of, any agreement, commitment or understanding
between or among the shareholders of Xxxxxxx with respect to the
exercise of any voting rights attaching to any securities of Xxxxxxx
beneficially owned by such shareholders or any voting trust
agreement or other shareholders' agreement relating to securities of
Xxxxxxx;
(g) it will use its best efforts to satisfy and fulfill all requirements
and conditions contained in this Agreement required to be satisfied
or fulfilled by it in order to complete the transactions
contemplated hereby and to comply with, satisfy and fulfill promptly
all legal and regulatory requirements applicable to Xxxxxxx with
respect to the consummation of the transactions contemplated hereby;
(h) its only commitments and material contracts are disclosed on the
attached Schedule "C";
(i) its financial statements prepared as at January 31, 1999
(hereinafter called the "Xxxxxxx Financial Statements"), a copy
of which are attached as Schedule "D", are true and correct in
every material respect and present fairly the financial position
of Xxxxxxx as at the date of the Xxxxxxx Financial Statements and
the results of its operations for the period then ended in
accordance with generally accepted accounting principles on a
basis consistently applied;
(j) other than as provided for in sub-paragraphs 5.01(l) through (n)
herein, inclusive, since the date of the Xxxxxxx Financial
Statements:
(i) there has not been any material adverse change in the
financial position or condition of Xxxxxxx or any damage, loss
or other change in circumstances materially affecting the
business or property of Xxxxxxx or its right or capacity to
carry on business;
(ii) Xxxxxxx has not waived or surrendered any right of material
value;
(iii) Xxxxxxx has not discharged or satisfied or paid any lien or
encumbrance or obligation or liability other than current
liabilities in the ordinary course of business;
(iv) the business of Xxxxxxx has been carried on in the ordinary
course; and
(v) the constating documents of Xxxxxxx have not been amended;
(k) there are no liabilities, contingent or otherwise, commitments or
material contracts of Xxxxxxx not disclosed in the Xxxxxxx Financial
Statements except those incurred in the ordinary course of Xxxxxxx'x
business since the date of the Xxxxxxx Financial Statements, and
Xxxxxxx has not guaranteed or agreed to guarantee any debt,
liability or other obligation of any person, firm or corporation;
(l) it has agreed to transfer all of its rights and interests in and to
the business and technology described in the Business Plan to
International in consideration for preference shares of
International (the "Preference Shares");
(m) the creditors and debt-holders of Xxxxxxx have agreed to accept the
Preference Shares in full satisfaction of all of the liabilities and
debts of Xxxxxxx; and
(n) it has agreed to designate USA under the Macrovision Agreement as
the corporation to be entitled to procure the License in
consideration of One Dollar ($1).
5.02 Xxxxxxx acknowledges that the covenants, representations and warranties set
forth in paragraph 5.01 hereof form a part of this Agreement and are conditions
upon which Asia Pacific has relied in entering into this Agreement, and that
these covenants, representations and warranties shall survive the acquisition of
any interest in the issued and outstanding shares of Xxxxxxx by Asia Pacific
hereunder.
5.03 The parties also acknowledge and agree that the covenants, representations
and warranties set forth in paragraph 5.01 hereof are provided for the exclusive
benefit of Asia Pacific, and a breach of any one or more thereof may be waived
by Asia Pacific in whole or in part at any time without prejudice to its rights
in respect of any other breach of the same or any other covenant, representation
or warranty.
COVENANTS, REPRESENTATIONS AND WARRANTIES OF XXX XXXXXXX
6.01 Xxx Xxxxxxx covenants, represents and warrants to Asia Pacific that:
(a) the shares of Xxxxxxx which may be sold to Asia Pacific here under have
been duly and validly created and this Agreement has been duly
executed and delivered by Xxx Xxxxxxx and constitutes a legal,
valid and binding obligation of Xxx Xxxxxxx enforceable by
Xxxxxxx and Asia Pacific in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency
or other laws of general application affecting the enforcement of
creditors' rights and subject to the qualification that specific
performance and injunction, being equitable remedies, may only be
granted in the discretion of a court of competent jurisdiction;
(b none of the authorization, execution, delivery or performance by Xxx Xxxxxxx
of this Agreement, including, without limitation, the sale of shares of Xxxxxxx
as provided hereunder, requires any approval or consent of any governmental or
regulatory authority or agency having jurisdiction (except as has already been,
or at or prior to the Closing will be, obtained) nor is in conflict with or in
contravention of the provisions of any written instrument or agreement to which
Xxx Xxxxxxx is a party or by which Xxx Xxxxxxx or his properties or assets are
bound or constitutes a default thereunder;
(c) to the best of his knowledge,
there is not now pending or threatened against him, nor has he received notice
in respect of any claim which could lead to any litigation, action, suit or
other proceeding by or before any court, tribunal or other competent
governmental agency or authority or regulatory body that is material to his
business or affairs;
(d) he will use his best efforts to satisfy and fulfill all
requirements and conditions contained in this Agreement required to be satisfied
or fulfilled by him in order to complete the transactions contemplated hereby
and to comply with, satisfy and fulfill promptly all legal and regulatory
requirements applicable to him with respect to the consummation of the
transactions contemplated hereby;
(e) the commitments and material contracts of
Xxxxxxx as reflected on the list attached hereto as Schedule "C" are true and
correct in every material respect and present fairly the financial position of
Xxxxxxx as of the date of this Agreement;
(f) the Xxxxxxx Financial Statements are true and correct in every material
respect and present fairly the financial position of Xxxxxxx as at
the date of the Xxxxxxx Financial Statements and the results of its
operations for the period then ended in accordance with generally
accepted accounting principles on a basis consistently applied;
6.02 Xxx Xxxxxxx acknowledges that the covenants, representations and warranties
set forth in paragraph 6.01 hereof form a part of this Agreement and are
conditions upon which Asia Pacific has relied in entering into this Agreement,
and that these covenants, representations and warranties shall survive the
acquisition of any interest in the issued and outstanding shares of Xxxxxxx by
Asia Pacific hereunder.
6.03 The parties also acknowledge and agree that the covenants, representations
and warranties set forth in paragraph 6.01 hereof are provided for the exclusive
benefit of Asia Pacific, and a breach of any one or more thereof may be waived
by Asia Pacific in whole or in part at any time without prejudice to its rights
in respect of any other breach of the same or any other covenant, representation
or warranty.
ADDITIONAL COVENANTS
7.01 In conjunction with the Closing on the Closing Date, the following will
become or remain the directors and officers of each of Asia Pacific and USA:
(a) Xxx Xxxxxxx will become or remain a director, the President and the
Chief Executive Officer until a new Chief Executive Officer is
appointed under subsection 1.01(b)(i) herein, at which time Xxx
Xxxxxxx will remain a director;
(b) Xxxxxx Rollke will have the right to nominate three directors, who,
if not already directors of Asia Pacific, will be appointed
directors forthwith upon being nominated by Xxxxxx Rollke;
(c) Xxx Xxxxxxx will have the right to nominate two additional
directors, who shall be appointed directors forthwith upon being
nominated by Xxx Xxxxxxx; and
(d) Xxxx Xxxxxxx will become or remain the Secretary/Treasurer.
7.02 Asia Pacific covenants and agrees to nominate annually for election as
directors for a period of 2 years from the date of this Agreement a slate of 6
directors, to consist of the 6 individuals referred to or contemplated in
paragraph 7.01 hereof, provided that, in the event the Chief Executive Officer
contemplated in sub-paragraph 1.01 (b)(i) herein is also appointed a director of
Asia Pacific, the slate will consist of 7 directors, with the additional member
of the slate to be said Chief Executive Officer.
7.03 International covenants and agrees to vote all of its shares of Asia
Pacific at general meetings of members of Asia Pacific for the election of the
persons referred to or contemplated in paragraph 7.01 hereof to the Board of
Directors of Asia Pacific from the date of this Agreement for a period ending on
the first to occur of 2 years from the date of this Agreement and the completion
of a successful takeover for a majority of the issued and outstanding common
shares of Asia Pacific, as contemplated in sub-paragraph 1.01(h) hereof.
7.04 International acknowledges that all common shares of Asia Pacific to be
issued to International hereunder will be restricted securities as that term is
defined in Rule 144 of the Securities and Exchange Commission of the United
States of America. International also acknowledges that all such shares must be
held for at least one year before any of such shares can be sold in the public
market and that any sale of such shares must be in accordance with said Rule
144.
7.05 Asia Pacific and USA acknowledge and agree that, in conjunction with the
Closing, they will change their bank signing officers such that 2 signatures are
required on all cheques to be issued by them, with one authorized signatory to
be either Xxx Xxxxxxx or one of the directors nominated by Xxx Xxxxxxx and the
other to be either Xxxxxx Rollke or one of the directors nominated by Xxxxxx
Rollke.
7.06 Asia Pacific also acknowledges and agrees that, subsequent to the Closing,
it will cause USA, to the extent that is practicable, to implement the matters
contained in the Business Plan.
CONDITIONS OF CLOSING
8.01 Asia Pacific's obligation to carry out the terms of this Agreement and to
purchase all of the issued and outstanding shares of USA from International
hereunder will be subject to the following conditions for the exclusive benefit
of Asia Pacific, to be fulfilled or satisfied at or prior to the Closing on the
Closing Date:
(a) Xxxxxxx shall have completed the designation of USA under the
Macrovision Agreement as the corporation to be entitled to procure
the License and the transfer of all of its rights in and to the
technology described in the Business Plan;
(b) the covenants, representations and warranties of each of USA,
International, Xxxxxxx and Xxx Xxxxxxx contained in this Agreement
or in any certificate or other document delivered pursuant hereto
shall be true and correct on and as of the date of this Agreement
and the Closing Date, as the case may be, with the same force and
effect as though made on and as of such date or dates;
(c) each of USA, International, Xxxxxxx and Xxx Xxxxxxx shall have
complied with all covenants and agreements herein agreed to be
performed or caused to be performed by it;
(d) no action or proceeding, at law or in equity, shall be pending or
threatened by any person, company, firm, domestic or foreign
court, governmental authority, securities commissions or other
regulatory body or agency, and no order, decision or ruling shall
have been made by any such court, governmental authority,
securities commission or other regulatory authority, and no law
or regulation shall have been passed which, in any of the
foregoing cases, would have the effect of:
(i) enjoining or prohibiting Asia Pacific's purchase of all of the
issued and outstanding shares of USA from International
hereunder; or
(ii) imposing on Asia Pacific material burdensome obligations,
restrictions, limitations or conditions on its ownership of or
exercise of rights of ownership of the shares of USA to be
purchased hereunder which would have a materially adverse
effect on the value of such shares;
(iii) enjoining or prohibiting Asia Pacific's purchase of all of the
issued and outstanding shares of Xxxxxxx from Xxx Xxxxxxx
hereunder; or
(iv) imposing on Asia Pacific material burdensome obligations,
restrictions, limitations or conditions on its ownership of or
exercise of rights of ownership of the shares of Xxxxxxx to be
purchased hereunder which would have a materially adverse
effect on the value of such shares;
(e) each of USA, International, Xxxxxxx and Xxx Xxxxxxx shall have
delivered at the Closing a certificate dated the Closing Date in
form and substance satisfactory to Asia Pacific, executed by USA,
International, Xxxxxxx or Xxx Xxxxxxx as the case may be,
certifying that the covenants, representations and warranties of
USA, International, Xxxxxxx or Xxx Xxxxxxx contained in this
Agreement, as the case may be, are true and correct on and as of
the Closing Date with the same force and effect as though made on
and as of such date, and certifying as to the fulfilment or
satisfaction of the conditions contained in sub-paragraphs
8.01(a) through (d) and as to such other matters as Asia Pacific
may require, acting reasonably;
(f) Asia Pacific shall be satisfied, acting reasonably, that it is or
will be in compliance with all applicable legal and regulatory
requirements relating to it with respect to its
(i) purchase of all of the issued and outstanding shares of USA
from International hereunder and shall have received, in its
discretion, all necessary or appropriate orders, rulings and
consents from all regulatory bodies, securities commissions,
governmental authorities and others with respect thereto; and
(ii) potential purchase of all of the issued and outstanding shares
of Xxxxxxx from Xxx Xxxxxxx hereunder and shall have received,
in its discretion, all necessary or appropriate orders,
rulings and consents from all regulatory bodies, securities
commissions, governmental authorities and others with respect
thereto;
(g) Asia Pacific shall have received a favourable written opinion from
each of USA's, International's and Xxxxxxx'x counsel dated the
Closing Date satisfactory in scope and substance to Asia Pacific and
its counsel, acting reasonably, with respect to the following
matters:
(i) each of USA, International and Xxxxxxx is a company validly
subsisting under the laws of its jurisdiction of incorporation
and has all necessary corporate power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder;
(ii) all necessary corporate action has been taken by each of
USA, International and Xxxxxxx to authorize the execution,
delivery and performance of this Agreement and this
Agreement has been duly executed and delivered by each of
USA, International and Xxxxxxx and constitutes a legal,
valid and binding obligation of each of USA, International
and Xxxxxxx enforceable against each of USA, International
and Xxxxxxx in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy,
insolvency laws or other laws of general application
affecting enforcement of creditors' rights and subject to
the qualification that specific performance and injunction,
being equitable remedies, may only be granted in the
discretion of a court of competent jurisdiction;
(iii) the USA shares to be acquired by Asia Pacific hereunder have
been duly and validly created and issued and are outstanding
as fully paid and non-assessable shares in the capital stock
of USA;
(iv) the Xxxxxxx shares that may be acquired by Asia Pacific
hereunder have been duly and validly created and issued and
are outstanding as fully paid and non-assessable shares in the
capital stock of Xxxxxxx;
(v) none of the authorization, execution, delivery or
performance by either USA, International or Xxxxxxx of this
Agreement requires any approval or consent of any
governmental or regulatory authority or agency having
jurisdiction (except as such has already been obtained) or
breaches any of the terms and conditions of either of
USA's, International's or Xxxxxxx'x constating documents or
constitutes a default thereunder;
(h) Macrovision has accepted the designation by Xxxxxxx of USA under
the Macrovision Agreement as the corporation to be entitled to
procure the License, PROVIDED THAT in the event such designation
has not been accepted by Macrovision prior to the Closing or
within a period of 60 days subsequent to the Closing Date, Xxx
Xxxxxxx will sell to Asia Pacific 10 common shares in the capital
of Xxxxxxx, representing all of the issued and outstanding shares
of Xxxxxxx, for consideration of One Dollar ($1), with the
closing in respect of the sale of these shares of Xxxxxxx from
Xxx Xxxxxxx to Asia Pacific to occur on the 61st day subsequent
to the Closing Date;
(i) an employment or management contract between USA and Xxxxxxx with
respect to the services of Xxx Xxxxxxx acceptable to Asia Pacific
has been entered into.
If any of the foregoing conditions have not been fulfilled or
satisfied to the satisfaction of Asia Pacific at or before the Closing on the
Closing Date, Asia Pacific may rescind this Agreement by notice to each of USA,
International, Xxxxxxx and Xxx Xxxxxxx and in such event Asia Pacific will be
released from all obligations hereunder, provided that any of such conditions
may be waived in whole or in part by Asia Pacific without prejudice to its
rights of rescission in the event of the non-fulfilment of any other condition
or conditions.
8.02 USA's obligation to carry out the terms of this Agreement will be subject
to the following conditions for the exclusive benefit of USA, to be fulfilled or
satisfied at or prior to the Closing on the Closing Date:
(a) the covenants, representations and warranties of each of Asia
Pacific and International contained in this Agreement or in any
certificate or other document delivered pursuant hereto shall be
true and correct on and as of the date of this Agreement and the
Closing Date, as the case may be, with the same force and effect as
though made on and as of such date or dates;
(b) each of Asia Pacific and International shall have complied with all
covenants and agreements herein agreed to be performed or caused to
be performed by it;
(c) no action or proceeding, at law or in equity, shall be pending or
threatened by any person, company, firm, domestic or foreign
court, governmental authority, securities commissions or other
regulatory body or agency, and no order, decision or ruling shall
have been made by any such court, governmental authority,
securities commission or other regulatory authority, and no law
or regulation shall have been passed which, in any of the
foregoing cases, would have the effect of enjoining or
prohibiting Asia Pacific's purchase of all of the issued and
outstanding shares of USA from International hereunder;
(d) each of Asia Pacific and International shall have delivered at
the Closing a certificate dated the Closing Date in form and
substance satisfactory to USA, executed by Asia Pacific or
International, as the case may be, certifying that the covenants,
representations and warranties of Asia Pacific or International
contained in this Agreement, as the case may be, are true and
correct on and as of the Closing Date with the same force and
effect as though made on and as of such date, and certifying as
to the fulfilment or satisfaction of the conditions contained in
sub-paragraphs 8.02(a) through (c) and as to such other matters
as USA may require, acting reasonably;
(e) USA shall be satisfied, acting reasonably, that it is or will be
in compliance with all applicable legal and regulatory
requirements relating to it with respect to the purchase by Asia
Pacific of all of the issued and outstanding shares of USA from
International hereunder and shall have received, in its
discretion, all necessary or appropriate orders, rulings and
consents from all regulatory bodies, securities commissions,
governmental authorities and others with respect thereto;
(f) USA shall have received a favourable written opinion from each of
Asia Pacific's and International's counsel dated the Closing Date
satisfactory in scope and substance to USA and its counsel, acting
reasonably, with respect to the following matters:
(i) each of Asia Pacific and International is a company validly
subsisting under the laws of its jurisdiction of incorporation
and has all necessary corporate power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder;
(ii) all necessary corporate action has been taken by each of
Asia Pacific and International to authorize the execution,
delivery and performance of this Agreement and this
Agreement has been duly executed and delivered by each of
Asia Pacific and International and constitutes a legal,
valid and binding obligation of each of Asia Pacific and
International enforceable against each of Asia Pacific and
International in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy,
insolvency laws or other laws of general application
affecting enforcement of creditors' rights and subject to
the qualification that specific performance and injunction,
being equitable remedies, may only be granted in the
discretion of a court of competent jurisdiction;
(iii) none of the authorization, execution, delivery or performance
by either Asia Pacific or International of this Agreement
requires any approval or consent of any governmental or
regulatory authority or agency having jurisdiction (except as
such has already been obtained) or breaches any of the terms
and conditions of either of Asia Pacific's or International's
constating documents or constitutes a default thereunder;
(g) an employment or management contract between USA and Xxxxxxx with
respect to the services of Xxx X. Xxxxxxx has been entered into.
If any of the foregoing conditions have not been fulfilled or
satisfied to the satisfaction of USA at or before the Closing on the Closing
Date, USA may rescind this Agreement by notice to each of Asia Pacific and
International and in such event USA will be released from all obligations
hereunder, provided that any of such conditions may be waived in whole or in
part by USA without prejudice to its rights of rescission in the event of the
non-fulfilment of any other condition or conditions.
8.03 International's obligation to carry out the terms of this Agreement and to
sell all of the issued and outstanding shares of USA to Asia Pacific hereunder
will be subject to the following conditions for the exclusive benefit of
International, to be fulfilled or satisfied at or prior to the Closing on the
Closing Date:
(a) Asia Pacific has at least Nine Hundred Thousand Dollars ($900,000)
on hand at Closing;
(b) the covenants, representations and warranties of each of Asia
Pacific and USA contained in this Agreement or in any certificate or
other document delivered pursuant hereto shall be true and correct
on and as of the date of this Agreement and the Closing Date, as the
case may be, with the same force and effect as though made on and as
of such date or dates;
(c) each of Asia Pacific and USA shall have complied with all covenants
and agreements herein agreed to be performed or caused to be
performed by it;
(d) no action or proceeding, at law or in equity, shall be pending or
threatened by any person, company, firm, domestic or foreign
court, governmental authority, securities commissions or other
regulatory body or agency, and no order, decision or ruling shall
have been made by any such court, governmental authority,
securities commission or other regulatory authority, and no law
or regulation shall have been passed which, in any of the
foregoing cases, would have the effect of:
(i) enjoining or prohibiting Asia Pacific's purchase of all of the
issued and outstanding shares of USA from International
hereunder; or
(ii) imposing on International material burdensome obligations,
restrictions, limitations or conditions on its ownership of or
exercise of rights of ownership of the shares of Asia Pacific
to be purchased hereunder which would have a materially
adverse effect on the value of such shares, save as
specifically provided for herein;
(e) each of Asia Pacific and USA shall have delivered at the Closing
a certificate dated the Closing Date in form and substance
satisfactory to International, executed by Asia Pacific or USA,
as the case may be, certifying that the covenants,
representations and warranties of Asia Pacific or USA contained
in this Agreement, as the case may be, are true and correct on
and as of the Closing Date with the same force and effect as
though made on and as of such date, and certifying as to the
fulfilment or satisfaction of the conditions contained in
sub-paragraphs 8.03(a) through (d) and as to such other matters
as International may require, acting reasonably;
(f) International shall be satisfied, acting reasonably, that it is
or will be in compliance with all applicable legal and regulatory
requirements relating to it with respect to its sale of all of
the issued and outstanding shares of USA to Asia Pacific
hereunder and shall have received, in its discretion, all
necessary or appropriate orders, rulings and consents from all
regulatory bodies, securities commissions, governmental
authorities and others with respect thereto;
(g) International shall have received a favourable written opinion from
each of Asia Pacific's and USA's counsel dated the Closing Date
satisfactory in scope and substance to International and its
counsel, acting reasonably, with respect to the following matters:
(i) each of Asia Pacific and USA is a company validly subsisting
under the laws of its jurisdiction of incorporation and has
all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations
hereunder;
(ii) all necessary corporate action has been taken by each of
Asia Pacific and USA to authorize the execution, delivery
and performance of this Agreement and this Agreement has
been duly executed and delivered by each of Asia Pacific
and USA and constitutes a legal, valid and binding
obligation of each of Asia Pacific and USA enforceable
against each of Asia Pacific and USA in accordance with its
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency laws or other laws of general
application affecting enforcement of creditors' rights and
subject to the qualification that specific performance and
injunction, being equitable remedies, may only be granted
in the discretion of a court of competent jurisdiction;
(iii) none of the authorization, execution, delivery or performance
by either Asia Pacific or USA of this Agreement requires any
approval or consent of any governmental or regulatory
authority or agency having jurisdiction (except as such has
already been obtained) or breaches any of the terms and
conditions of either of Asia Pacific's or USA's constating
documents or constitutes a default thereunder;
(h) a nominee or nominees of International have entered into agreements
acceptable to them for the purchase of at least 2,730,000 currently
issued and outstanding common shares of Asia Pacific from the
holders of these shares;
(i) an employment or management contract between USA and Xxxxxxx with
respect to the services of Xxx Xxxxxxx acceptable to International
has been entered into;
(j) there shall have been delivered to Asia Pacific's transfer agent
certificates representing the 2,730,000 common shares in its capital
stock provided for in sub-paragraph 8.03(h) hereof, duly endorsed in
blank for transfer to a nominee or nominees of International.
If any of the foregoing conditions have not been fulfilled or
satisfied to the satisfaction of International at or before the Closing on the
Closing Date, International may rescind this Agreement by notice to each of Asia
Pacific and USA and in such event International will be released from all
obligations hereunder, provided that any of such conditions may be waived in
whole or in part by International without prejudice to its rights of rescission
in the event of the non-fulfilment of any other condition or conditions.
8.04 Xxxxxxx'x obligation to carry out the terms of this Agreement will be
subject to the following conditions for the exclusive benefit of Xxxxxxx, to be
fulfilled or satisfied at or prior to the Closing on the Closing Date:
(a) the covenants, representations and warranties of Asia Pacific
contained in this Agreement or in any certificate or other document
delivered pursuant hereto shall be true and correct on and as of the
date of this Agreement and the Closing Date, as the case may be,
with the same force and effect as though made on and as of such date
or dates;
(b) Asia Pacific shall have complied with all covenants and agreements herein
agreed to be performed or caused to be performed by it;
(c) no action or proceeding, at law or in equity, shall be pending or
threatened by any person, company, firm, domestic or foreign
court, governmental authority, securities commissions or other
regulatory body or agency, and no order, decision or ruling shall
have been made by any such court, governmental authority,
securities commission or other regulatory authority, and no law
or regulation shall have been passed which, in any of the
foregoing cases, would have the effect of enjoining or
prohibiting Asia Pacific's purchase of all of the issued and
outstanding shares of Xxxxxxx from Xxx Xxxxxxx hereunder;
(d) Asia Pacific shall have delivered at the Closing a certificate
dated the Closing Date in form and substance satisfactory to
Xxxxxxx, executed by Asia Paific, certifying that the covenants,
representations and warranties of Asia Pacific contained in this
Agreement are true and correct on and as of the Closing Date with
the same force and effect as though made on and as of such date,
and certifying as to the fulfilment or satisfaction of the
conditions contained in sub-paragraphs 8.04(a) through (c) and as
to such other matters as Xxxxxxx may require, acting reasonably;
(e) Xxxxxxx shall be satisfied, acting reasonably, that it is or will
be in compliance with all applicable legal and regulatory
requirements relating to it with respect to the purchase by Asia
Pacific of all of the issued and outstanding shares of Xxxxxxx
from Xxx Xxxxxxx hereunder and shall have received, in its
discretion, all necessary or appropriate orders, rulings and
consents from all regulatory bodies, securities commissions,
governmental authorities and others with respect thereto;
(f) Xxxxxxx shall have received a favourable written opinion from Asia
Pacific's counsel dated the Closing Date satisfactory in scope and
substance to Xxxxxxx and its counsel, acting reasonably, with
respect to the following matters:
(i) Asia Pacific is a company validly subsisting under the laws of
its jurisdiction of incorporation and has all necessary
corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder;
(ii) all necessary corporate action has been taken by Asia
Pacific to authorize the execution, delivery and
performance of this Agreement and this Agreement has been
duly executed and delivered by Asia Pacific and constitutes
a legal, valid and binding obligation of Asia Pacific
enforceable against Asia Pacific in accordance with its
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency laws or other laws of general
application affecting enforcement of creditors' rights and
subject to the qualification that specific performance and
injunction, being equitable remedies, may only be granted
in the discretion of a court of competent jurisdiction;
(iii) none of the authorization, execution, delivery or performance
by Asia Pacific of this Agreement requires any approval or
consent of any governmental or regulatory authority or agency
having jurisdiction (except as such has already been obtained)
or breaches any of the terms and conditions of Asia Pacific's
constating documents or constitutes a default thereunder.
If any of the foregoing conditions have not been fulfilled or
satisfied to the satisfaction of Xxxxxxx at or before the Closing on the Closing
Date, Xxxxxxx may rescind this Agreement by notice to Asia Pacific and in such
event Xxxxxxx will be released from all obligations hereunder, provided that any
of such conditions may be waived in whole or in part by Xxxxxxx without
prejudice to its rights of rescission in the event of the non-fulfilment of any
other condition or conditions.
8.05 Xxx Xxxxxxx'x obligation to carry out the terms of this Agreement and to
sell all of the issued and outstanding shares of Xxxxxxx to Asia Pacific
hereunder will be subject to the following conditions for the exclusive benefit
of Xxx Xxxxxxx, to be fulfilled or satisfied at or prior to the Closing on the
Closing Date:
(a) Asia Pacific has at least Nine Hundred Thousand Dollars ($900,000)
on hand at Closing;
(b) the covenants, representations and warranties of Asia Pacific
contained in this Agreement or in any certificate or other document
delivered pursuant hereto shall be true and correct on and as of the
date of this Agreement and the Closing Date, as the case may be,
with the same force and effect as though made on and as of such date
or dates;
(c) Asia Pacific shall have complied with all covenants and agreements
herein agreed to be performed or caused to be performed by it;
(d) no action or proceeding, at law or in equity, shall be pending or
threatened by any person, company, firm, domestic or foreign
court, governmental authority, securities commissions or other
regulatory body or agency, and no order, decision or ruling shall
have been made by any such court, governmental authority,
securities commission or other regulatory authority, and no law
or regulation shall have been passed which, in any of the
foregoing cases, would have the effect of enjoining or
prohibiting Asia Pacific's purchase of all of the issued and
outstanding shares of Xxxxxxx from Xxx Xxxxxxx hereunder;
(e) Asia Pacific shall have delivered at the Closing a certificate
dated the Closing Date in form and substance satisfactory to Xxx
Xxxxxxx, executed by Asia Pacific, certifying that the covenants,
representations and warranties of Asia Pacific contained in this
Agreement are true and correct on and as of the Closing Date with
the same force and effect as though made on and as of such date,
and certifying as to the fulfilment or satisfaction of the
conditions contained in sub-paragraphs 8.05(a) through (d) and as
to such other matters as Xxx Xxxxxxx may require, acting
reasonably;
(f) Xxx Xxxxxxx shall be satisfied, acting reasonably, that he is or
will be in compliance with all applicable legal and regulatory
requirements relating to him with respect to his sale of all of
the issued and outstanding shares of Xxxxxxx to Asia Pacific
hereunder and shall have received, in his discretion, all
necessary or appropriate orders, rulings and consents from all
regulatory bodies, securities commissions, governmental
authorities and others with respect thereto;
(g) Xxx Xxxxxxx shall have received a favourable written opinion from
Asia Pacific's counsel dated the Closing Date satisfactory in scope
and substance to Xxx Xxxxxxx and his counsel, acting reasonably,
with respect to the following matters:
(i) Asia Pacific is a company validly subsisting under the laws of
its jurisdiction of incorporation and has all necessary
corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder;
(ii) all necessary corporate action has been taken by Asia
Pacific to authorize the execution, delivery and
performance of this Agreement and this Agreement has been
duly executed and delivered by Asia Pacific and constitutes
a legal, valid and binding obligation of Asia Pacific
enforceable against Asia Pacific in accordance with its
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency laws or other laws of general
application affecting enforcement of creditors' rights and
subject to the qualification that specific performance and
injunction, being equitable remedies, may only be granted
in the discretion of a court of competent jurisdiction;
(iii) none of the authorization, execution, delivery or performance
by Asia Pacific of this Agreement requires any approval or
consent of any governmental or regulatory authority or agency
having jurisdiction (except as such has already been obtained)
or breaches any of the terms and conditions of Asia Pacific's
constating documents or constitutes a default thereunder;
(h) an employment or management contract between USA and Xxx Xxxxxxx has
been entered into.
If any of the foregoing conditions have not been fulfilled or
satisfied to the satisfaction of Xxx Xxxxxxx at or before the Closing on the
Closing Date, Xxx Xxxxxxx may rescind this Agreement by notice to Asia Pacific
and in such event Xxx Xxxxxxx will be released from all obligations hereunder,
provided that any of such conditions may be waived in whole or in part by Xxx
Xxxxxxx without prejudice to his rights of rescission in the event of the
non-fulfilment of any other condition or conditions.
CLOSING
9.01 The closing date for the transactions provided for in this Agreement will
occur on June 21, 1999 or on such other date as the parties unanimously agree to
in writing (hereinafter called the "Closing Date").
9.02 The Closing will be at 2:00 p.m. on the Closing Date at Suite 1750 - 1177
West Hastings Street, Vancouver, British Columbia, Canada, or at such other
time, date or place as the parties may agree to.
9.03 In conjunction with the Closing, Asia Pacific shall deliver the following
at the Closing:
(a) a certified copy of a Resolution of the Directors of Asia Pacific,
approving this Agreement, or any amendments hereto;
(b) the certificates provided for in sub-paragraphs 8.02(d), 8.03(e) and
8.05(e) hereof;
(c) the legal opinions provided for in sub-paragraphs 8.02(f), 8.03(g)
and 8.05(g) hereof;
(d) Asia Pacific share certificates representing 6,623,016 common shares
in its capital stock, registered in the name of International, which
are to be held by an independent escrow agent in escrow pursuant to
the provisions of paragraph 1.01 hereof;
(e) Asia Pacific share certificates representing 345,000 common shares
owned by Xxxxxx Rollke, which are to be held by an independent
escrow agent in escrow pursuant to the provisions of paragraph 1.03
hereof;
(f) confirmation from its transfer agent that said transfer agent is in
a position to complete the transfer to the nominee or nominees of
International of the 2,730,000 common shares of Asia Pacific
provided for in sub-paragraph 8.03(h) hereof;
(g) irrevocable instructions to its bankers to wire transfer $200,000 to
International's bank account, in satisfaction of USA's liability to
International disclosed in Schedule "B" hereto;
(h) such other documents as may be required to give effect to this
Agreement.
9.04 In conjunction with the Closing, USA shall deliver the following at the
Closing:
(a) a certified copy of a Resolution of the Directors of USA, approving
this Agreement, or any amendments hereto;
(b) the certificates provided for in sub-paragraphs 8.01(e) and 8.03(e)
hereof;
(c) the legal opinions provided for in sub-paragraphs 8.01(g) and 8.03
(g) hereof;
(d) such other documents as may be required to give effect to this
Agreement.
9.05 In conjunction with the Closing, International shall deliver the following
at the Closing:
(a) a certified copy of a Resolution of the Directors of International,
approving this Agreement, or any amendments hereto;
(b) the certificates provided for in sub-paragraphs 8.01(e) and 8.02(d)
hereof;
(c) the legal opinions provided for in sub-paragraphs 8.01(g) and
8.02(f) hereof;
(d) a USA share certificate representing one (1) common share in its
capital stock, duly endorsed for transfer to Asia Pacific;
(e) such other documents as may be required to give effect to this
Agreement.
9.06 In conjunction with the Closing, Xxxxxxx shall deliver the following at the
Closing:
(a) a certified copy of a Resolution of the Directors of Xxxxxxx,
approving this Agreement, or any amendments hereto;
(b) the certificate provided for in sub-paragraph 8.01(e) hereof;
(c) the legal opinion provided for in sub-paragraph 8.01(g) hereof;
(d) financial statements prepared as at April 30, 1999 and the review
engagement report of its certified general accountants thereon;
(e) a certificate dated the Closing Date in form and substance satisfactory to
Asia Pacific, executed by Xxxxxxx, certifying that Xxxxxxx has no
unsatisfied liabilities as of the Closing Date;
(f) such otherdocuments as may be required to give effect to this Agreement.
9.07 In conjunction with the Closing, Xxx Xxxxxxx shall deliver the following
at the Closing:
(a) the certificate provided for in sub-paragraph 8.01(e) hereof;
(b) a Xxxxxxx share certificate representing 10 common shares in its capital
stock, duly endorsed for transfer to Asia Pacific, PROVIDED THAT Asia Pacific
agrees to return this share certificate to Xxx Xxxxxxx and to release Xxx
Xxxxxxx of his obligations under this Agreement in the event that Macrovision
consents within 60 days of the Closing to the designation of USA under the
Macrovision Agreement as the corporation to be entitled to procure the License;
(c) a certificate dated the Closing Date in form and substance satisfactory to
Asia Pacific, executed by Xxx Xxxxxxx, certifying that Xxxxxxx has no
unsatisfied liabilities as of the Closing Date;
(d) such other documents as may be required to give effect to this Agreement.
NOTICES AND PAYMENT
10.01 Any notice, demand, payment or other communication under this Agreement
will be given in writing and must be delivered or sent by telecopier and
addressed to the party to which it is being given at the following addresses:
Asia Pacific Enterprises, Inc. with a copy to: Xxxxxx Rollke
0000 Xxxxx Xxxxxx Xxxxxx Facsimile No. (000) 000-0000
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Rollke
Facsimile No. (000) 000-0000
eVideo USA, Inc. with a copy to: Xxx X. Xxxxxxx
000 Xxxx Xxxx Xxxxxx Facsimile No. (000) 000-0000
Xxxxxx Xxxx, Xxxxxx 00000
and with a copy to: Xxxxxx Rollke
Attention: Xxx X. Xxxxxxx Facsimile No. (000) 000-0000
Facsimile No. (000) 000-0000
eVideo International, Inc.
ABL Building
Bank Lane
Nassau, Bahamas
Attention: Xxx X. Xxxxxxx
Facsimile No. (000) 000-0000
Xxx X. Xxxxxxx & Associates Ltd.
0000 Xxxxxxx Xxxxx
Xxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxx X. Xxxxxxx
Facsimile No. (000) 000-0000
Xxx X. Xxxxxxx
0000 Xxxxxxx Xxxxx
Xxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Facsimile No. (000) 000-0000
10.02 If notice, demand, payment or other communication is sent by telecopier or
is delivered, it will be deemed to have been received on the next business day
following the day of transmission or delivery.
10.03 Any party may at any time give to the others notice in writing of any
change of address of the party giving such notice and from and after the giving
of such notice the address or addresses therein specified will be deemed the
address of such party for the purposes of giving notice hereunder.
CURRENCY
11.01 All references to monies hereunder will be in lawful currency of the
United States of America.
ARBITRATION
12.01 The parties agree that all questions or matters in dispute with respect to
the matters provided for herein shall be submitted to arbitration pursuant to
the terms hereof.
12.02 It shall be a condition precedent to the right of any party to submit any
matter to arbitration pursuant to the provisions hereof that any party intending
to refer any matter to arbitration shall have given not less than thirty (30)
days' prior written notice of its intention so to do to the other party together
with particulars of the matter in dispute. On the expiration of such thirty (30)
days, the party who gave such notice may proceed to refer the dispute to
arbitration as provided for in paragraph 12.03 hereof.
12.03 The party desiring arbitration shall appoint one arbitrator, and shall
notify the other party of such appointment, and the other party shall, within
fifteen (15) days after receiving such notice, appoint an arbitrator, and the
two arbitrators so named, before proceeding to act, shall, within fifteen (15)
days of the appointment of the last appointed arbitrator, unanimously agree on
the appointment of a third arbitrator to act with them and be chairman of the
arbitration herein provided for. If the other party shall fail to appoint an
arbitrator within fifteen (15) days after receiving notice of the appointment of
the first arbitrator, and if the two arbitrators appointed by the parties shall
be unable to agree on the appointment of the chairman, the chairman shall be
appointed under the provision of the Commercial Arbitration Act (British
Columbia). Except as specifically otherwise provided in this paragraph, the
arbitration herein provided for shall be conducted in accordance with such Act.
The chairman, or in the case where only one arbitrator is appointed, the single
arbitrator, shall fix a time and place in Vancouver, British Columbia, for the
purpose of hearing the evidence and representations of the parties, and he shall
preside over the arbitration and determine all questions of procedure not
provided for under such Act or this paragraph. After hearing any evidence and
representations that the parties may submit, the single arbitrator, or the
arbitrators, as the case may be, shall make an award and reduce the same to
writing, and deliver one copy thereof to each of the parties. The expense of the
arbitration shall be paid as specified in the award.
12.04 The parties may agree that the award of a majority of the arbitrators, or
in the case of a single arbitrator, of such arbitrator, shall be final and
binding upon each of them.
FURTHER ASSURANCES
13.01 Each of the parties hereto agrees to do and/or execute all such further
and other acts, deeds, things, devices, documents and assurances as may be
required in order to carry out the true intent and meaning of this Agreement.
TIME OF THE ESSENCE
14.01 Time shall be of the essence of this Agreement.
COSTS
15.01 Each of the parties hereto will be responsible for paying its own costs
relating to the preparation and execution of this Agreement.
SEVERABILITY
16.01 In the event that any provision of this Agreement is determined to be void
or unenforceable in whole or in part it shall be deemed to be severed from this
Agreement and shall not affect or impair the validity or enforceability of any
other provision of this Agreement.
ENTIRE AGREEMENT
17.01 The parties hereto agree that the terms and conditions of this Agreement
shall supersede and replace any other agreements or arrangements, whether oral
or written, heretofore existing among the parties in respect of the subject
matter of this Agreement.
COUNTERPARTS
18.01 This Agreement and any certificate or other writing delivered in
connection herewith may be executed in any number of counterparts and any party
hereto may execute any counterpart, each of which when executed and delivered
will be deemed to be an original and all of which counterparts of this Agreement
or such other writing, as the case may be, taken together, will be deemed to be
one and the same instrument. The execution of this Agreement or any other
writing by any party hereto will not become effective until all counterparts
hereof have been executed by all the parties hereto.
EXECUTION BY FACSIMILE
19.01 Each of the parties hereto will be entitled to rely upon delivery by
facsimile of executed copies of this Agreement and any certificates or other
writings delivered in connection herewith, and such facsimile copies will be
legally effective to create a valid and binding agreement among the parties in
accordance with the terms and conditions of this Agreement.
TITLES
20.01 The titles to the respective paragraphs hereof shall not be deemed as part
of this Agreement but shall be regarded as having been used for convenience
only.
GOVERNING LAW
21.01 This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia and the federal laws of Canada
applicable therein.
ENUREMENT
22.01 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and each of their successors and permitted assigns, as the case
may be.
IN WITNESS WHEREOF this Agreement has been executed as of the day and year first
above written.
SIGNED and DELIVERED by
ASIA PACIFIC ENTERPRISES, INC.
in the presence of:
/s/ Xxxxxx Rollke
Authorized Signatory
SIGNED and DELIVERED by
EVIDEO USA, INC.
in the presence of:
/s/ X. Xxxxxxx
Authorized Signatory
SIGNED and DELIVERED by
EVIDEO INTERNATIONAL, INC.
in the presence of:
/s/ X. Xxxxxxx
Authorized Signatory
SIGNED and DELIVERED by
XXX X. XXXXXXX & ASSOCIATES LTD.
in the presence of:
/s/ X. Xxxxxxx
Authorized Signatory
SIGNED and DELIVERED by )
XXX X. XXXXXXX )
in the presence of: )
)
)
/s/ Xxxx X. Xxxxx ) /s/ X. Xxxxxxx
------------------------------------------ --------------
Signature of Witness ) XXX X. XXXXXXX
)
Xxxx X. Xxxxx )
------------------------------------------------
Name of Witness - please type or print )
)
000-0000 X 0xx Xxx )
Address of Witness - please type or print )
)
Vancouver, B.C. Canada )
)
Barrister & Solicitor )
Occupation of Witness - please type or print )
SCHEDULE "A"
FINANCIAL STATEMENTS OF ASIA PACIFIC ENTERPRISES, INC.
PREPARED AS AT MARCH 31, 1999
Balance Sheets
(Unaudited)
March 31, December 31,
1999 1998
US$ US$
A S S E T S
Current Assets
Cash 546 229
Long-Term Investments (note 0) 100,175 175
Organization Costs 3,250 3,500
---------------------
Total Assets 103,971 3,904
===================
L I A B I L I T I E S
Current Liabilities
Accounts payable 3,802 3,366
Loans from related party (note 3) 4,386 16,000
-----------------
Total Liabilities 8,188 19,366
-----------------
S H A R E H O L D E R S ' E Q U I T Y
Share Capital (notes 0 and 4)
Authorized
- 30,000,000 shares of common stock, $0.0001 par value
- 5,000,000 shares of preferred stock, $0.0001 par value
Issued and outstanding
- 8,575,425 common shares (1998 - 7,375,425) 858 738
Contributed surplus 124,317 4,437
-------------------
Total Share Capital 125,175 5,175
Deficit Accumulated during the Development Stage (29,392) (20,637)
---------------------
Total Shareholders' Equity 95,783 (15,462)
---------------------
Total Liabilities and Shareholders' Equity 103,971 3,904
===================
Continuance of Operations (note 1)
The accompanying notes are an integral part of these financial statements.
Statements of Operations
(Unaudited)
Cumulative,
inception to Three months ended
March 31, March 31,
1999 1999 1998
US$ US$ US$
General and Administrative Expenses
Professional fees 5,775 - 2,500
Transfer agent fees 9,282 - 1,685
Management and consulting fees 6,293 6,293 -
Rent 2,117 2,117 -
Amortization of incorporation costs 1,750 250 250
General corporate expenses 4,239 117 166
---------------------------------------
Total General and Administrative
Expenses 29,456 8,777 4,601
Interest Income 64 22 -
-----------------------------------------
Net Loss for the Period 29,392 8,755 4,601
=======================================
Weighted average number of shares
outstanding 7,393,667 7,499,900 7,375,456
-------------------------------------
Net Loss Per Share - - -
============================================
Statements of Cash Flows
(Unaudited) Cumulative,
inception to Three months ended
March 31, March 31,
1999 1999 1998
US$ US$ US$
Operating Activities
Net loss for the period (29,392) (8,755) (4,601)
Adjustments to reconcile net loss
to net cash used in operating activities:
- amortization 1,750 250 250
- decrease in prepaid expenses - - 2,500
- increase in accounts payable 3,802 436 1,851
----------------------------------
Net Cash Used in Operating Activities
Investing Activities (23,840) (8,069) -
--------------------------------
Incorporation costs (5,000) - -
Acquisition of long-term investments (100,000) (100,000) -
---------------------------------
Total Cash Flow from Investing Activities (105,000) (100,000) -
---------------------------------
Financing Activities
Proceeds from sale of common shares 125,000 120,000 -
Loans from related party 4,386 (11,614) -
----------------------------------
Total Cash Flow from Financing Activities 129,386 108,386 -
--------------------------------
Increase in Cash During the Period 546 317 -
Cash at the Beginning of the Period - 229 -
-------------------------------
Cash at the End of the Period 546 546 -
============================
Non-Cash Activity not included in
Cash Flows Acquisition of long-term
investment for common shares 175 - -
============================
-
Statement of Shareholders' Equity
Incorporation, July 25, 1997, to March 31, 1999
(Unaudited)
Total
Number of Par Contributed Shareholders'
Shares value Surplus Deficit Equity
US$ US$ US$ US$
Issuance of shares on
July 25, 1997 7,200,000 720 4,280 - 5,000
Issuance of shares on
August 25, 1997 on
acquisition of Century
International Ventures
Inc. Series C common
shares 175,425 18 157 - 175
Net loss, incorporation,
July 27, 1997, to
December 31, 1997 - - - (9,754) (9,754)
--------------------------------------------------
Balance, December 31,
1997 7,375,425 738 4,437 (9,754) (4,579)
Net loss, year ended
December 31, 1998 - - - (10,883) (10,883)
----------------------------------------------------
Balance, December 31,
1998 7,375,425 738 4,437 (20,637) (15,462)
Issuance of shares
on March 17, 1999 800,000 80 19,920 - 20,000
Issuance of shares
on March 31, 1999 400,000 40 99,960 - 100,000
Net loss, three months ended
March 31, 1999 (8,755) (8,755)
---------------------------------------------------
Balance, March 31, 1999 8,575,425 858 124,317 (29,392) 95,783
==================================================
Notes to the Financial Statements
March 31, 1999
(Unaudited)
1. Basis of Presentation and Nature of Operations
The ability of the Company to continue as a going concern is dependent upon
its ability to raise substantial amounts of equity funds for use in
administrative and investment activities. There is no assurance that the
Company's investments will generate future cash flow for the Company.
The Company is developing an electronic video distribution system.
2. Significant Accounting Policies
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenue and expenses
during the reporting period. The principal area requiring the use of
management estimates is the determination of the appropriate carrying values
for the Company's investments. Actual results could differ from those
estimates.
Investments - Investments in which the Company has significant influence,
generally the ability to appoint more than 20% of the board of directors, are
accounted for under the equity method, whereby the value of the investment is
adjusted for the Company's share of income or loss realized by the investee.
Investments in which the Company does not have significant influence are
recorded at the lower of cost and estimated market value. If the Company has
the ability to appoint a majority of the directors to the board of an
investee, that investee's financial statements will be consolidated into
those of the Company.
Translation of Foreign Currencies - Monetary assets and liabilities are
translated at the exchange rate in effect at the balance sheet date and
non-monetary assets and liabilities at the exchange rates in effect at the
time of acquisition or issue. Revenues and expenses are translated at the
rates in effect at the time of the transaction. Exchange gains or losses
arising on translation are included in net income or loss for the period.
Financial Instruments - The company has various financial instruments,
including cash, receivables and payables. The carrying values of these
financial instruments approximate their fair values.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(Unaudited)
3. Long Term Investments
During the year ended December 31, 1997, the Company acquired all of the
series C common shares of Century International Ventures Inc. in exchange for
175,456 common shares of the Company valued at $175.
Subsequent to March 31, 1999, the Company agreed to acquire all of the
outstanding shares of eVideo U.S.A. Inc. in exchange for the issuance of
6,623,016 common shares of the Company. As additional consideration, the
Company must issue one and one-half shares to the vendor of eVideo U.S.A.
Inc. for each share issued, subsequent to the issuance of the shares
described in note 5, to raise additional equity capital of $3,900,000.
At March 31, 1999, the Company had loaned $100,000 to eVideo U.S.A. Inc.
4. Loans from Related Party
The loans from a related party are from a management company that employs the
Company's executive officers and are without interest and specific repayment
terms.
5. Share Capital
Subsequent to March 31, 1999, the Company issued the following shares for
cash, net of issue costs:
Number Price Contributed
of shares per share Par value surplus Total
US$ US$ US$ US$ US$
66,841 1.00 7 66,834 66,841
323,078 3.25 32 999,970 1,000,002
The Company also issued warrants that entitle the holder to purchase 307,693
common shares at $3.25 per share until May 25, 2000.
SCHEDULE "B"
LIST OF ASSETS AND LIABILITIES OF EVIDEO USA, INC.
Assets
Rights under a Professional Services Agreement dated May 13, 1999 with Burnt
Sand Solutions Inc.
Liabilities
$100,000 owed to Asia Pacific Enterprises, Inc.
Commitments
Material Contracts
Agreement with Xxxxxxx and International under which Xxxxxxx has agreed to
designate USA under the Macrovision Agreement as the corporation to be entitled
to procure the License and to transfer all of its rights in and to the business
and technology described in the Business Plan to International and under which
International has agreed to transfer the rights in and to the business and
technology described in the Business Plan for the operation of that business and
the use of that technology in the United States of America to USA for the sole
consideration of a note payable to International in the amount of $200,000,
without interest, payable in conjunction with the Closing provided for in this
Agreement.
Professional Services Agreement dated May 13, 1999 with Burnt Sand Solutions
Inc.
SCHEDULE "C"
LIST OF COMMITMENTS AND MATERIAL CONTRACTS
OF XXX X. XXXXXXX & ASSOCIATES LTD.
Commitments
Material Contracts
Agreement with USA under which it has agreed to designate USA under the
Macrovision Agreement as the corporation to be entitled to procure the License.
Agreement with International under which it has agreed to transfer all of its
rights in and to the business and technology described in the Business Plan to
International in exchange for the Preference Shares.
Agreements with all of its creditors and debt-holders to accept the Preference
Shares in full satisfaction of all of Xxxxxxx'x liabilities.
