ARRANGEMENT AGREEMENT
TABLE OF CONTENTS
ARTICLE INTERPRETATION 1
Definitions. 1
Exhibit. 7
ARTICLE THE ARRANGEMENT 7
Court Approval. 7
Closing. 8
Consummation of the Arrangement. 8
Effects of the Arrangement. 8
Conversion of Securities. 8
Taking of Necessary Action; Further Action. 9
ARTICLE REPRESENTATIONS AND WARRANTIES 9
Representations and Warranties of Silverzipper and AcquisitionCo. 9
Representations and Warranties of Serac. 15
ARTICLE COVENANTS OF SERAC 27
Conduct of Business by Serac Pending the Arrangement. 27
ARTICLE ADDITIONAL AGREEMENTS 30
Cooperation; Consents and Approvals 30
Filings; Consents; Reasonable Efforts 31
Notification of Certain Matters 31
Expenses 31
Mutual Agreements 32
Deposit of Silverzipper Stock and Cash 32
AcquisitionCo. Obligations 33
ARTICLE CONDITIONS 33
Conditions to Obligation of Each Party to Effect the Arrangement 33
Additional Conditions to Obligation of Silverzipper and AcquisitionCo. 34
Additional Conditions to Obligations of Serac 35
ARTICLE MISCELLANEOUS 37
Termination 37
Effect of Termination 38
Waiver and Amendment 38
Nonsurvival of Representations and Warranties 39
Public Statements 39
Assignment 39
Notices 39
Governing Law 41
Severability 42
Counterparts 42
Entire Agreement: Third Party Beneficiaries 42
Serac Disclosure Letter 42
Currency 43
Number and Gender 44
Divisions, Headings, etc. 44
Action 44
SCHEDULE 66
List of Exhibits
Exhibit 1 - Plan of Arrangement
Exhibit 2 - Form of Lock-Up Agreement, List of Signatories and Number of Shares
Owned
List of Schedules
Schedule "A" - Silverzipper Liens
ARRANGEMENT AGREEMENT
THIS ARRANGEMENT AGREEMENT dated as of December 30, 1999 (this
"Agreement"), is made and entered into by and among Xxxxxxxxxxxx.xxx Inc., a
Nevada corporation ("Silverzipper"), Serac Acquisition Ltd., an Alberta
corporation ("AcquisitionCo") and Serac Sports Ltd., an Alberta corporation
("Serac").
WHEREAS, in furtherance of the Arrangement, the Board of Directors of
Serac has unanimously approved this Agreement and has agreed to submit the Plan
of Arrangement in the form of Exhibit I hereto and the other transactions
contemplated by this Agreement to its shareholders for approval;
WHEREAS, in furtherance of the Arrangement, following approval by the
shareholders of Serac of the transactions contemplated by this Agreement, Serac
will submit the Plan of Arrangement to the Court for approval; and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the consummation of the Arrangement;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:
1 ARTICLE INTERPRETATION
1.1 Definitions.
In this Agreement, unless the context otherwise requires, the following
terms shall have the respective meanings set forth below:
"ABCA" means the Business Corporations Act (Alberta), S.A. 1981, C. B-15, as
amended from time to time, including the regulations promulgated thereunder;
"Affiliate" with respect to any Person, means any Person that directly or
indirectly controls, is controlled by or is under common control with such
Person;
"Acquisition Proposal" has the meaning set forth in Section 5.5;
"Arrangement" means the arrangement under section 186 of the ABCA on the terms
and subject to the conditions set forth in the Plan of Arrangement;
"Articles of Arrangement" means the articles of arrangement in respect of the
Arrangement required by the ABCA to be sent to the Registrar after the Final
Order is made;
"ASE" means the Alberta Stock Exchange or any successor exchange;
"Benefit Program or Agreement" means any stock option plan, collective
bargaining agreement, bonus plan or arrangement, incentive award plan or
arrangement, pension plan, vacation policy, severance pay plan, policy or
agreement, deferred compensation agreement or arrangement, executive
compensation or supplemental income arrangement, consulting agreement,
employment agreement and each other employee benefit plan, agreement,
arrangement, program, practice or understanding to which Serac or any Serac
Subsidiary is a party or has any obligation with respect to any employee,
consultant or independent contractor rendering services to Serac;
"Business Day" means, with respect to any action to be taken, any day other than
Saturday, Sunday or a statutory holiday in the place where such action is to be
taken;
"Closing" means the closing of the transactions contemplated by this Agreement
on the Effective Date;
"Commission" means the Securities Commission in Alberta;
"Court" means the Court of Queen's Bench of Alberta;
"Demands" means any claims, actions, suits, investigations, inquiries or
proceedings;
"Depositary" means Montreal Trust Company of Canada at its offices located at
000, 000-0xx Xxxxxx X.X., Xxxxxxx, Xxxxxxx X0X 0X0;
"Effective Date" means the date the Articles of Arrangement are accepted for
filing by the Registrar;
"Environmental Laws" means any and all laws, statutes, ordinances, rules,
regulations, orders or determinations of any Governmental Entity pertaining to
health or the environment currently in effect in any and all jurisdictions in
which the party in question and its subsidiaries own or lease property or
conduct business;
"Final Order" means the final order of the Court approving the Arrangement to be
applied for following the Serac Shareholders Meeting pursuant to section 186(9)
of the ABCA;
"Governmental Entity" means any court, administrative agency or commission or
other governmental authority or agency, domestic or foreign, including local
authorities, and any arbitration board or panel;
"GST" means any and all taxes payable under Part IX of the Excise Tax Act
(Canada) as amended from time to time and any regulations promulgated
thereunder;
"Interim Order" means the interim order of the Court made in connection with the
approval of the Arrangement;
"Lien" means any lien, mortgage, pledge, security interest, restriction on
transfer, option, charge, right of any third Person or any other encumbrance of
any nature;
"NASD" means the National Association of Securities Dealers (in the United
States);
"NASDAQ" means the National Association of Securities Dealers Automated
Quotation System;
"Other Agreements" means, other than this Agreement, the agreements and
instruments contemplated to be executed and delivered in connection with the
Arrangement;
"Permitted Liens" means (A) Liens for taxes not due and payable and (B) inchoate
mechanics', warehousemen's and other statutory Liens incurred in the ordinary
course of business;
"Person" means an individual, corporation, limited liability company,
partnership, Governmental Entity or any other entity;
"Plan of Arrangement" means the plan of arrangement, which is attached as
Exhibit 1 and any amendment or supplement thereto made in accordance with
Section 7.3;
"Proprietary Rights" rneans all patents, inventions, shop rights, licenses, know
how, trade secrets (whether or not patentable or copyrightable), designs, plans,
manuals, computer software, specifications, confidentiality agreements,
confidential information and other proprietary technology and similar
information which is intellectual property; all registered and unregistered
trademarks, service marks, logos, names, trade names and all other trademark
rights; all registered and unregistered copyrights; and all registrations for,
and applications for registration of, any of the foregoing, in each case that
are used in the conduct of the business of Serac or any Serac Subsidiary and all
claims with respect to the foregoing;
"Proxy Circular" means the proxy circular, as amended or supplemented from time
to time, relating to the approval by the Serac Common Shareholders at the Serac
Shareholders Meeting of the Arrangement;
"Recommendation" has the meaning set forth in Section 5.1(c);
"Registrar" means the Registrar of Corporations appointed pursuant to section
253 of the ABCA;
"SEC" means the United States Securities and Exchange Commission;
"SEC Documents" means all reports heretofore filed by Silverzipper with the SEC;
"Securities Act" means the United States Securities Act of 1933, as amended,
"Serac Articles" means Serac's Articles of Amalgamation, as amended;
"Serac Assets" means all of the assets and properties of Serac and its
subsidiaries;
"Serac Certificate" means a certificate that immediately prior to the Effective
Date represented outstanding Serac Common Shares;
"Serac Commission Filings" means all reports and other filings (including all
notes, exhibits and schedules thereto and documents incorporated by reference
therein) filed by Serac with the ASE or the Commissions together with any
amendments thereto;
"Serac Affiliates" has the meaning set forth in Section 6.2(h);
"Serac Common Shareholders" means the holders of the Serac Common Shares;
"Serac Common Shares" means the Class "A" common shares in the capital of Serac;
"Serac Disclosure Letter" means the disclosure letter delivered by Serac to
Silverzipper on the date hereof;
"Serac MAE" means (i) a single event, occurrence or fact that (together with all
other events, occurrences and facts) would have, or might reasonably be expected
to have, a material adverse effect on the assets, business, operations,
prospects or financial condition of Serac or (ii) an item that prevents or
adversely affects the ability of Serac to perform and comply with its
obligations under this Agreement or any other agreement to be executed and
delivered in connection with the transactions contemplated hereby or thereby;
"Serac Options" means the outstanding options to purchase an aggregate of
985,000 Serac Common Shares under the Serac Option Plan;
"Serac Option Plan" means the Serac Sports Ltd. Stock Option Plan;
"Serac Permits" has the meaning set forth in Section 3.2(o);
"Serac Shareholders Meeting" means the meeting of the shareholders of Serac
(including any), adjournment thereof) that is to be convened as provided by the
Interim Order to consider, and if deemed advisable, approve the Arrangement;
"Serac Subsidiaries" means all corporations, partnerships, limited liability
companies and other entities of which Serac owns directly or indirectly, an
equity interest;
"Silverzipper Assets" means all of the assets and properties of Silverzipper and
its subsidiaries;
"Silverzipper Common Stock" means the common stock of Silverzipper;
"Silverzipper MAE" means (i) a single event, occurrence or fact that (together
with all other events, occurrences and facts) would have, or might reasonably be
expected to have, a material adverse effect on the assets, business, operations,
prospects or financial condition of Silverzipper and its subsidiaries on a
consolidated basis or (ii) an item that prevents or adversely affects the
ability of Silverzipper or AcquisitionCo. to perform and comply with its
obligations under this Agreement or any other agreement to be executed and
delivered in connection with the transactions contemplated hereby or thereby;
"Silverzipper Subsidiaries" means all corporations, partnerships, limited
liability companies and other entities of which Silverzipper owns directly or
indirectly, an equity interest.
1.1 Exhibit.
The following Exhibit is annexed to and incorporated into this
Agreement by reference and is deemed to be a part hereof:
Exhibit 1 - Plan of Arrangement
Exhibit 2 - Form of Lock-Up Agreement, List of Signatories and Number of Shares
Owned
1 ARTICLE THE ARRANGEMENT
1.1 Court Approval.
As soon as reasonably practicable after the date hereof, Serac shall
apply to the Court pursuant to section 186 of the ABCA for an order approving
the Arrangement and in connection with such application shall:
(a) forthwith file, proceed with and diligently prosecute an
application for an Interim Order under section 186(4) of the ABCA
providing for, among other things, the calling and holding of the
Serac Shareholders Meeting as provided for in Section 5.1(a) for
the purpose of considering and, if deemed advisable, approving
the Arrangement; and
(a) subject to obtaining such approval of the Serac Common
Shareholders as may be directed by the Court in the Interim
Order, take the steps necessary to submit the Arrangement to the
Court and apply for the Final Order, and, subject to the
fulfillment of the conditions set forth in Article 6, shall
deliver to the Registrar Articles of Arrangement and such other
documents as may be required to give effect to the Arrangement.
Copies of all documents in this proceeding shall be provided promptly to
Silverzipper's counsel, and beforehand in the case of documents being filed by
Serac.
Closing.
The Closing shall take place at the offices of counsel for Serac as
soon as practicable after the satisfaction or waiver of the conditions set forth
in Article 6 but not later than three Business Days after the Final Order is
granted or at such other time and place and on such other date as Silverzipper
and Serac shall agree; provided that the closing conditions set forth in Article
6 shall have been satisfied or waived at or prior to such time.
1.1 Consummation of the Arrangement.
At the time of Closing, the parties hereto will cause the Arrangement
to be consummated by filing with the Registrar the Articles of Arrangement in
such form as required by, and executed in accordance with, the relevant
provisions of the ABCA and the Final Order.
1.1 Effects of the Arrangement.
The Arrangement shall have the effects set forth in the Plan of
Arrangement as affected by the applicable provisions of the ABCA and the Final
Order.
1.1 Conversion of Securities.
Subject to the terms and conditions of this Agreement, at the Effective
Date, by virtue of the Arrangement and without any further action on the part of
any of the parties hereto or their shareholders, each Serac Common Share issued
and outstanding immediately prior to the Effective Date and held other than by
Silverzipper shall be exchanged for Silverzipper Common Stock on the basis set
forth in the Plan of Arrangement.
1.1 Taking of Necessary Action; Further Action.
The parties hereto shall take all such reasonable and lawful action as
may be necessary or appropriate in order to effectuate the Arrangement as
promptly as possible.
1 ARTICLE
REPRESENTATIONS AND WARRANTIES
1.1 Representations and Warranties of Silverzipper and AcquisitionCo.
Silverzipper and AcquisitionCo. hereby represent and warrant to Serac
that:
(b) Organization and Compliance with Law. Each of Silverzipper and
AcquisitionCo. is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction
of incorporation. Each of Silverzipper and AcquisitionCo. has all
requisite corporate power and corporate authority and all
necessary governmental authorizations to own, lease and operate
all of its properties and assets and to carry on its business as
now being conducted. Silverzipper is duly qualified as a foreign
corporation to do business, and is in good standing, in each
jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such
qualification necessary, except in such jurisdictions where the
failure to be duly qualified does not and would not have a
Silverzipper MAE. Each of Silverzipper and AcquisitionCo. is in
compliance with all applicable material laws, judgments, orders,
rules and regulations, domestic and foreign.
(a) Capitalization.
(i) The authorized capital stock of Silverzipper consists of
100,000,000 shares of Silverzipper Common Stock, of which
3,740,316 shares were issued and outstanding as at the date
hereof.
(i) The authorized share capital of AcquisitionCo. consists of an
unlimited number of common shares, of which there is 100 common
share issued and outstanding owned by Silverzipper.
(a) Authorization and Validity of Agreement. The execution and delivery by
Silverzipper and AcquisitionCo. of this Agreement and the Other Agreements
and the consummation by them of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by Silverzipper and
AcquisitionCo. and is a valid and binding obligation of Silverzipper and
AcquisitionCo., enforceable against Silverzipper and AcquisitionCo. in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws from time to time in effect that affect creditors' rights generally
and by legal and equitable limitations on the availability of specific
remedies. The Other Agreements, when executed and delivered by Silverzipper
and AcquisitionCo., as applicable, will constitute valid and binding
obligations of Silverzipper and AcquisitionCo. enforceable against them in
accordance with their respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect that affect creditors' rights
generally and by legal and equitable limitations on the availability of
specific remedies.
(a) No Approvals or Notices Required: No Conflict. Neither the execution and
delivery of this Agreement nor the performance by Silverzipper and
AcquisitionCo. of its respective obligations hereunder, nor the
consummation of the transactions contemplated hereby by Silverzipper and
AcquisitionCo., will (i) conflict with the articles or bylaws of
Silverzipper or AcquisitionCo.; (ii) assuming satisfaction of the
requirements set forth in clause (iii) below, violate any, provision of law
applicable to Silverzipper or AcquisitionCo.; (iii) except for (A) issuance
of the Interim Order and the Final Order by the Court, (B) requirements of
notice filings in such foreign jurisdictions as may be applicable and (C)
the filing of Articles of Arrangement in accordance with the ABCA, require
any consent or approval of, or filing with or notice to, any public body or
authority, domestic or foreign, under any provision of law applicable to
Silverzipper or AcquisitionCo.; or (iv) require any consent, approval or
notice under, or violate, breach, be in conflict with or constitute a
default (or an event that, with notice or lapse of time or both, would
constitute a default) under, or permit the termination of any provision of,
or result in the creation or imposition of any Lien upon any properties,
assets or business of Silverzipper or AcquisitionCo. under, any note, bond,
indenture, mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument or other agreement or
commitment or any order, judgment or decree to which Silverzipper or
AcquisitionCo. is a party or by, which it or any, of its assets or
properties is bound or encumbered, except those that have already been
given, obtained or filed.
(a) Voting Requirements. No vote of the holders of shares of the capital stock
of Silverzipper is required under applicable law to approve this Agreement
and the Arrangement.
(a) Information Supplied. The information supplied or to be supplied by
Silverzipper and AcquisitionCo. in writing for inclusion or incorporation
by reference in the Proxy Circular shall, at the date the Proxy Circular is
first mailed to Serac Common Shareholders and at the time of the Serac
Shareholders Meeting, shall not contain any material misrepresentation or
omissions (as defined in the Securities Act (Alberta)).
(a) Authorization for Silverzipper Common Stock. Silverzipper has taken all
necessary action to permit it to issue the number of shares of Silverzipper
Common Stock required to be issued pursuant to the terms of the Plan of
Arrangement and this Agreement. The shares of Silverzipper Common Stock
issued pursuant to the terms of the Plan of Arrangement and this Agreement
will, when issued, be validly issued, fully paid and nonassessable and not
subject to preemptive rights.
(a) SEC Documents. As of their respective dates, the SEC Documents complied in
all material respects with the requirements of the United States Securities
Exchange Act of 1934, as amended, and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Documents, and none of the
SEC Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The consolidated financial statements
of Silverzipper included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared
in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and accurately and fully present the
consolidated financial position of Silverzipper and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended. Except as set forth
in the SEC Documents, no event has occurred since the date of filing of
such documents that would constitute a Silverzipper MAE.
(a) Conduct of Business in the Ordinary Course; Absence of Certain Changes and
Events. Since September 30, 1999, except as contemplated by this Agreement
or as disclosed in the SEC Documents, there has not been: (i) a
Silverzipper MAE or (ii) any other condition, event or development that
reasonably may be expected to result in a Silverzipper MAE.
(a) Litigation. Except as disclosed in writing to Serac, there are no Demands
pending or, to the knowledge of Silverzipper, threatened against or
affecting (i) Silverzipper or any of its properties at law or in equity, or
any of their employee benefit plans or fiduciaries of such plans or (ii)
any Silverzipper Subsidiary or any of their respective properties at law or
in equity, or any of their respective employee benefit plans or fiduciaries
of such plans, before or by any Governmental Entity, wherever located.
(a) Environmental Matters. Except as disclosed in writing to Serac (i) the
properties, operations and activities of Silverzipper complies in all
material respects with all applicable Environmental Laws; (ii) none of
Silverzipper or any Silverzipper Subsidiary is subject to any existing,
pending, or, to the knowledge of Silverzipper, threatened action, suit,
investigation, inquiry or proceeding by or before any Governmental Entity
under any Environmental Law; (iii) all notices, permits, licenses, or
similar authorizations, if any, required to be obtained or filed by
Silverzipper under any Environmental Law in connection with any aspect of
the business of Silverzipper or any Silverzipper Subsidiary, including,
without limitation, those relating to the treatment, storage, disposal or
release of a hazardous substance or solid waste, have been duly obtained or
filed and will remain valid and in effect after the Arrangement and
Silverzipper and each Silverzipper Subsidiary is in compliance with the
terms and conditions of all such notices, permits, licenses and similar
authorizations; (iv) Silverzipper and each Silverzipper Subsidiary has
satisfied and is currently in compliance in all material respects with all
financial responsibility requirements applicable to its operations and
imposed by any Governmental Entity under any Environmental Law, and none of
such parties has received any notice of noncompliance with any such
requirements; (v) to Silverzipper's knowledge, there are no physical or
environmental conditions existing on any property currently owned or leased
or presently owned or leased by Silverzipper or any entity in which it has
or had ownership interest that could reasonably be expected to give rise to
any on-site or off-site remedial obligations under any Environmental Laws;
and (vi) to Silverzipper's knowledge, since the effective date of the
relevant requirements of applicable Environmental Laws, all hazardous
substances or solid wastes generated by Silverzipper or any Silverzipper
Subsidiary or used in connection with their properties or operations have
been transported only by carriers authorized under Environmental Laws to
transport such substances and wastes, and disposed of only at treatment,
storage, and disposal facilities authorized under Environmental Laws to
treat, store or dispose of such substances and wastes, and, to the
knowledge of Silverzipper, such carriers and facilities have been and are
operating in compliance in all material respects with such authorizations
and are not the subject of any existing, pending, or overtly threatened
action, investigation, or inquiry by any Governmental Entity in connection
with any Environmental Laws;
(a) Compliance with Laws. Silverzipper holds all required, necessary or
applicable permits, licenses, variances, exemptions, orders, franchises and
approvals of all Governmental Entities (the "Silverzipper Permits"). To
Silverzipper's knowledge, all applications with respect to the Silverzipper
Permits (excluding applications for such Silverzipper Permits where the
failure to so hold could not reasonably be expected to have a Silverzipper
MAE) were complete and correct in all material respects when made and
Silverzipper does not know of any reason why any of the Silverzipper
Permits would be subject to cancellation of the Silverzipper Permits in all
material respects. Silverzipper has not violated or failed to comply with
any statute, law, ordinance, regulation, rule, permit or order of any
federal, state or local government, domestic or foreign, or any
Governmental Entity, any arbitration award or any judgment, decree or order
of any court or other Governmental Entity, applicable to Silverzipper or
its business, assets or operations in any material respect.
(a) Title to Property. To Silverzipper's knowledge, it has complied in all
material respects with the terms of all leases to which it is a party and
under which it is in occupancy, and all such leases are in full force and
effect.
(a) Silverzipper Assets.
(i) the Silverzipper Assets are subject to no liens except as set
forth on Schedule A.
(i) Silverzipper has not received any notices of material violation
or alleged material violation of the provisions of any agreement
in respect of the Silverzipper Assets.
(i) Silverzipper has performed, observed and satisfied all of its
material duties, liabilities, obligations and covenants required
to be satisfied, performed and observed by it under and is not in
material default under or in material breach of, the terms of any
material leases or agreements pertaining to the Silverzipper
Assets.
(i) All ad valorem, property, production, severance and similar taxes
and assessments based on or measured by the ownership of the
Silverzipper Assets payable in respect of or in relation to
substantially all of the Silverzipper Assets have been properly
and fully paid and discharged.
(i) There is no material circumstance, matter or thing known to
Silverzipper which indicates in any manner that it may not hold
good and marketable title to any of the Silverzipper Assets
except for liens disclosed herein.
(i) All material documents and agreements of whatsoever nature and
kind affecting the title to the Silverzipper Assets which are in
the possession of Silverzipper or of which Silverzipper is
otherwise aware have been disclosed to Serac.
(a) Insurance Policies. All insurance policies held by Silverzipper are in full
force and effect, with responsible insurance carriers and are substantially
equivalent in coverage and amount to policies covering companies of the
size of Silverzipper and in the business in which Silverzipper is engaged,
in light of the risk to which such companies and their employees,
businesses, properties and other assets may be exposed. All retroactive
premium adjustments under any worker's compensation policy of Silverzipper
has been recorded in Silverzipper's financial statements in accordance with
United States generally accepted accounting principles and are reflected in
the financial statements contained in the SEC Documents;
(a) SEC Documents: Financial Statements. Silverzipper is not in default of any
requirement of such securities laws and it is in compliance with the
bylaws, rules and regulations of the NASD, being the only exchange upon
which its stock of Silverzipper is listed. Silverzipper has filed all
reports and other filings, together with any amendments required to be made
with respect thereto, that they have been required to file with the NASD
and the SEC. As of the respective dates of their filing with the NASD or
the SEC, the Silverzipper SEC Filings complied in all material respects
with the applicable securities laws, the rules and regulations of the SEC
thereunder and the bylaws, rules and regulations of the NASD, and were true
and complete in all material respects and did not contain any material
misrepresentation.
Each of the financial statements (including any related notes or schedules)
included in the Silverzipper SEC Documents was prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis (except as may be noted therein or in the notes or
schedules thereto) and complied with the rules and regulations of
the NASD and the SEC. Such consolidated financial statements
accurately and fully present the consolidated financial position of
Silverzipper as of the dates thereof and the results of operations,
cash flows and changes in shareholders' equity for the periods then
ended (subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments on a basis comparable
with past periods). As of the date hereof, Silverzipper has no
material liabilities, absolute or contingent that are not reflected in
the Silverzipper SEC Documents except those incurred in the ordinary course
of its business; and
(a) Disclosure. Silverzipper has made disclosure of all material
facts relating to its business and financial affairs to Serac and
acknowledges that Serac is relying upon such disclosure in
determining whether to proceed with the Plan of Arrangement.
1.1 Representations and Warranties of Serac.
Serac hereby represents and warrants to Silverzipper and AcquisitionCo. that:
(a) Organization. Serac is a corporation duly incorporated, validly
existing and in good standing under the laws of the Province of
Alberta. Serac has all requisite corporate power and corporate
authority and all necessary governmental authorizations to own,
lease and operate all of its properties and assets and to carry
on its business as now being conducted. Serac is duly qualified
as a foreign corporation to do business, and is in good standing,
in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it
makes such qualification necessary, except in such jurisdictions
where the failure to be duly qualified does not and would not
have a Serac MAE. Serac is in compliance with all applicable
laws, judgments, orders, rules and regulations, domestic and
foreign.
(a) Capitalization.
(i) The authorized share capital of Serac consists of an unlimited
number of Class "A" Common Shares, an unlimited number of Class
"B" Common Shares and an unlimited number of Class "C" preferred
shares issuable in series of which there are 12,299,912 Serac
Common Shares. No other shares in the capital of Serac are
outstanding. A total of 1,005,000 Serac Common Shares have been
reserved for issuance upon the exercise of the Serac Options. All
issued and outstanding Serac Common Shares are validly issued,
fully paid and nonassessable and no holder thereof is entitled to
preemptive rights. Serac is not a party to, and is not aware of,
any voting agreement, voting trust or similar agreement or
arrangement relating to any class or series of its shares, or any
agreement or arrangement providing for registration rights with
respect to any shares or other securities of Serac. All rights,
options and warrants, of every description, to purchase Serac
Common Shares are referred to as the "Serac Rights".
(i) Other than Serac Common Shares issued pursuant to the Serac
rights at the Effective Date, there will not be, any (A) shares
of capital or other equity securities of Serac outstanding, other
than the 12,299,912 Serac Common Shares currently issued and
outstanding and any additional Serac Common Shares issued after
the date hereof and prior to the Effective Date pursuant to the
exercise of Serac Options, or (B) outstanding options, warrants,
scrip, rights to subscribe for, calls or commitments of any
character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any class of
share capital of Serac, or contracts, understandings or
arrangements to which Serac is a party, or by which it is or may
be bound, to issue additional shares of its capital or options,
warrants, scrip or rights to subscribe for, or securities or
rights convertible into or exchangeable for, any additional
shares of its capital.
(i) Section 1 of the Serac Disclosure Letter sets forth a list of the
Serac Subsidiaries including name, jurisdiction, authorized and
outstanding capital stock and the registered and beneficial
holder(s) thereof. Each Serac Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization and is
duly authorized, qualified and licensed and has all requisite
power and authority under all applicable laws, ordinances and
orders of public authorities to own, operate and lease its
properties and assets and to carry on its business in the places
and in the manner currently conducted. All of the outstanding
shares in the capital of the Serac Subsidiaries have been duly
authorized and validly issued and are fully paid, nonassessable,
were not issued in violation of any preemptive rights or other
preferential rights of subscription or purchase of any Person and
are owned of record and beneficially by Serac or the Serac
Subsidiary identified on such schedule as owning such interest
free and clear of all Liens (other than restrictions on sales of
shares under applicable securities laws). There are no
outstanding options, warrants, convertible securities, calls,
rights, commitments, preemptive rights, agreements, arrangements
or understandings of any character obligating any Serac
Subsidiary (i) to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares in the capital of any Serac
Subsidiary or any securities or obligations convertible into or
exchangeable for such shares or (ii) to grant, extend or enter
into any such option, warrant, convertible security, call, right,
commitment, preemptive right, agreement, arrangement or
understanding. Neither Serac nor any Serac Subsidiary owns
(directly or indirectly) any equity interest or other interest or
investment in any corporation, partnership, joint venture,
association or other entity or organization, other than the Serac
Subsidiaries.
(a) Authorization and Validity of Agreement. Serac has all requisite corporate
power and authority to enter into this Agreement and the Other Agreements
and to perform its obligations hereunder and thereunder. The execution and
delivery by Serac of this Agreement and the Other Agreements to which it is
a party and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action
(subject only, with respect to the Arrangement, to approval of this
Agreement by the Serac Common Shareholders as provided for in Section 5.1).
On or prior to the date hereof the Board of Directors of Serac has
unanimously determined to recommend approval of the Arrangement to the
Serac Common Shareholders, and such determination is in effect as of the
date hereof. This Agreement has been duly executed and delivered by Serac
and is the valid and binding obligation of Serac enforceable against it in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws from time to time in effect that affect creditors' rights generally
and by legal and equitable limitations on the availability of specific
remedies. The Other Agreements, when executed and delivered by Serac, as
applicable, will constitute valid and binding obligations of Serac,
enforceable against it in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect that
affect creditors' rights generally and by legal and equitable limitations
on the availability of specific remedies.
(a) No Approvals or Notices Required; No Conflict with Instruments to which
Serac is a Party. The execution and delivery of this Agreement and the
Other Agreements do not, and the consummation of the transactions
contemplated hereby and thereby and compliance with the provisions hereof
and thereof will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of or "put"
right with respect to any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the properties or
assets of Serac or any of the Serac Subsidiaries under, any provision of
(i) the Serac Articles or bylaws of Serac or any provision of the
comparable organizational documents of the Serac Subsidiaries, (ii) any
loan or credit agreement, note, bond, mortgage, indenture, lease, guaranty
or other financial assurance agreement or other agreement, instrument,
permit, concession, franchise or license applicable to Serac or its
properties or assets, (iii) any loan or credit agreement, note, bond,
mortgage, indenture, lease, guaranty or other financial assurance agreement
or other agreement, instrument, permit, concession, franchise or license
applicable to any Serac Subsidiary, or their respective properties or
assets and (iv) subject to governmental filing and other matters referred
to in the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation or arbitration award applicable to Serac or
any of the Serac Subsidiaries or their respective properties or assets. No
consent, approval, order or authorization of, or registration, declaration
or filing with, any Governmental Entity is required by or with respect to
Serac or any of the Serac Subsidiaries in connection with the execution and
delivery of this Agreement by Serac or the consummation by Serac of the
transactions contemplated hereby, except for (i) issuance of the Interim
Order and the Final Order, (ii) the filing with the ASE and Commissions of
the Proxy Circular, (iii) the filing of the Articles of Arrangement with
the Registrar with respect to the Arrangement as provided in the ABCA and
the Final Order and appropriate documents with the relevant authorities of
other jurisdictions in which Serac is qualified to do business and (iv)
such other consents, approvals, orders, authorizations, registrations,
declarations, filings and notices as are set forth in Section 2 of the
Serac Disclosure Letter.
(a) Commission Filings: Financial Statements. Serac is a reporting issuer under
the securities laws of Alberta and is not in default of any requirement of
such securities laws and it is in compliance with the bylaws, rules and
regulations of the ASE, being the only exchange upon which the Serac Common
Shares are listed. Serac has filed all reports and other filings, together
with any amendments required to be made with respect thereto, that they
have been required to file with the ASE and the Commission. Serac has
heretofore delivered to Silverzipper copies of the Serac, ASE and
Commission Filings. As of the respective dates of their filing with the ASE
or the Commission, the Serac Commission Filings complied in all material
respects with the applicable securities laws, the rules and regulations of
the Commission thereunder and the bylaws, rules and regulations of the ASE,
and were true and complete in all material respects and did not contain any
misrepresentation (as defined in the Securities Act (Alberta)).
Each of the financial statements (including any related notes or
schedules)included in the Serac Commission Filings was prepared in
accordance with Canadian generally accepted accounting principles
applied on a consistent basis (except as may be noted therein or in the
notes or schedules thereto)and complied with the rules and regulations of
the ASE and the Commission. Such consolidated financial statements
accurately and fully present the consolidated financial position of Serac
as of the dates thereof and the results of operations, cash flows and
changes in shareholders' equity for the periods then ended (subject,
in the case of the unaudited interim financial statements, to normal
year-end audit adjustments on a basis comparable with past periods). As
of the date hereof, Serac has no material liabilities, absolute or
contingent that are not reflected in the Serac Commission Filings.
(a) Other Financial Information. The financial information theretofore provided
by Serac to Silverzipper is true and correct in all material respects.
(a) Conduct of Business in the Ordinary Course; Absence of Certain Changes and
Events. Since January 31, 1999, except as contemplated by this Agreement or
as disclosed in the Serac Commission Filings, Serac and the Serac
Subsidiaries have conducted their respective businesses only in the
ordinary and usual course in accordance with past practice, and there has
not been: (i) a Serac MAE or any other material adverse change in the
financial condition, results of operations, prospects, assets or business
of Serac or any Serac Subsidiary, taken as a whole, or (ii) any other
condition, event or development that reasonably may be expected to result
in any such material adverse change or a Serac MAE; (iii) any change by
Serac in its accounting methods, principles or practices; (iv) any
amendment to the Serac Articles, bylaws or other governing documents or any
resolutions or proceedings pending for any amendment thereto, except as may
be contemplated therein; (v) except as disclosed in Section 3 of the Serac
Disclosure Letter, any revaluation by Serac or any Serac Subsidiary of any
of its assets, including, without limitation, writing down the value of or
writing off notes or accounts receivable other than in the ordinary course
of business and consistent with past practice; (vi) any entry by Serac or
any Serac Subsidiary into any commitment or transaction that may be
material to Serac and is not in the ordinary course of business; (vii) any
declaration, setting aside or payment of any dividends or distributions in
respect of the Serac Common Shares or any redemption, purchase or other
acquisition of any of its securities; (viii) any damage, destruction or
loss (whether or not covered by insurance) materially adversely affecting
or which may materially and adversely affect the properties or business of
Serac; (ix) any increase in indebtedness of borrowed money other than
borrowing under existing credit facilities as disclosed in Section 3 of the
Serac Disclosure Letter; (x) any granting of a security interest or Lien on
any property or assets of Serac, other than Permitted Liens; or (xi) any
loss of a customer or customers accounting for more, in the aggregate than
5% of fiscal 1999 sales, or (xii) any increase in or establishment of any
bonus, insurance, severance, deferred compensation, pension, retirement,
profit sharing, stock option (including, without limitation, the granting
of stock options, stock appreciation rights, performance awards or
restricted stock awards), stock purchase or other employee benefit plan or
any other increase in the compensation payable or to become payable to any
directors, officers or key employees of Serac or for which Serac would be
responsible or change in any benefit plan or agreement.
(b) Litigation. Except as disclosed in the Serac Commission Filings, there are
no Demands pending or, to the knowledge of Serac, threatened against or
affecting (i) Serac or any of its properties at law or in equity, or any of
their employee benefit plans or fiduciaries of such plans or (ii) any Serac
Subsidiary or any of their respective properties at law or in equity, or
any of their respective employee benefit plans or fiduciaries of such
plans, before or by any, Governmental Entity, wherever located. Except as
disclosed in the Serac Commission Filings, Serac is not subject to any
judicial, governmental or administrative order, writ, judgment, injunction
or decree.
(a) Disclosure. Serac has made disclosure of all material facts (as defined in
the Securities Act (Alberta)) relating to its business and financial
affairs to Silverzipper and acknowledges that Silverzipper is relying upon
such disclosure in determining whether to proceed with the Plan of
Arrangement.
(a) Employee Benefit Plans.
(i) Section 4 of the Serac Disclosure Letter provides a description
of each Benefit Program or Agreement that is sponsored,
maintained or contributed to by Serac or any Serac Subsidiary for
the benefit of its employees or others, or has been so sponsored,
maintained or contributed to within three years prior to the
Effective Date. True and complete copies of each of the Benefit
Programs or Agreements, related trusts, if applicable, and all
amendments thereto have been furnished to Silverzipper.
(i) Except as otherwise set forth in Section 4(ii) of the Serac
Disclosure Letter,
(A) Each Benefit Program or Agreement has been administered,
maintained and operated in all material respects in
accordance with the terms thereof and in compliance with its
governing documents and applicable law;
(A) There are no actions, suits or claims pending (other than
routine claims for benefits) or, to the knowledge of Serac,
threatened against, or with respect to, any of the Benefit
Programs or Agreements or its assets; and
(A) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will
not require Serac or any Serac Subsidiary to make a larger
contribution to, or pay greater benefits under, any Benefit
Program or Agreement than it otherwise would or create or
give rise to any additional vested rights or service credits
under any Benefit Program or Agreement or cause the
companies to make accelerated payments.
(i) Except as set forth in Section 4(iii) of the Serac Disclosure
Letter, termination of employment of any employee of Serac or any
Serac Subsidiary immediately after consummation of the
transactions contemplated by this Agreement would not result in
payments under the Benefit Programs or Agreements.
(i) Except as set forth in Section 4(iv) of the Serac Disclosure
Letter, each of the Benefit Programs or Agreements may be
unilaterally amended or terminated in its entirety, without
liability except as to benefits accrued thereunder prior to such
amendment or termination.
(i) None of the employees of Serac or any Serac Subsidiary are
subject to union or collective bargaining agreements.
(i) To the best knowledge of Serac, none of Serac or any of the Serac
Subsidiaries, any officer or director of Serac or any of the
Serac Subsidiaries or any of the Benefit Plans, or any trusts
created thereunder, or any trustee or administrator thereof, has
engaged in any prohibited transaction or act or any other breach
of fiduciary responsibility that could subject Serac or any Serac
Subsidiary or to any tax or penalty or to any liability under any
applicable law or regulation.
(a) Taxes.
(i) Serac and its current and past subsidiaries have duly and timely
filed, in proper form, accurate and complete returns in respect
of taxes under the Income Tax Act (Canada), the Alberta Corporate
Tax Act, the income tax legislation of any other province of
Canada or any foreign country having jurisdiction over its
affairs or any of the Serac Subsidiaries, and similar legislation
of other provinces having jurisdiction over its affairs, for all
prior periods in respect of which such filings have heretofore
been required. All taxes shown on such returns and all taxes now
owing, including interest and penalties, have been paid or
accrued on Serac's books. There are no outstanding agreements or
waivers extending the statutory period of limitations applicable
to any federal, provincial or other income tax return for any
period. There is no claim against Serac or any Serac Subsidiary
with respect to any taxes, and no assessment, deficiency or
adjustment has been asserted or proposed with respect to any tax
return of or with respect to Serac or any Serac Subsidiary except
as set forth in section 5A of Serac's Disclosure Letter. All
income tax returns of or with respect to Serac or any Serac
Subsidiary up to and including January 31, 1999, have been
assessed by the applicable Governmental Entity. The total amounts
set up as liabilities for current and deferred taxes in the
consolidated financial statements included in the Serac
Commission Filings have been prepared in accordance with Canadian
generally accepted accounting principles and are sufficient to
cover the payment of all taxes, including any penalties or
interest thereon and whether or not assessed or disputed, that
are, or are hereafter found to be, or to have been, due with
respect to the operations of Serac or any Serac Subsidiary
through the periods covered thereby. Except for statutory Liens
for current taxes not yet due, no Liens for taxes exist upon the
assets of Serac.
(i) Serac and each Serac Subsidiary has remitted to the proper tax
authority when required by law to do so, all amounts payable by
it on account of GST and is a "taxable Canadian corporation" for
the Income Tax Act (Canada).
(i) As of the Effective Date, Serac shall have fully accrued for all
taxes that may be required to be paid as a result of the
transactions contemplated hereby.
(a) Environmental Matters. Except as set forth in Section 5 of the
Serac Disclosure Letter, (i) the properties, operations and
activities of Serac and each of the Serac Subsidiaries complies
in all material respects with all applicable Environmental Laws;
(ii) none of Serac or any Serac Subsidiary is subject to any
existing, pending, or, to the knowledge of Serac, threatened
action, suit, investigation, inquiry or proceeding by or before
any Governmental Entity under any Environmental Law; (iii) all
notices, permits, licenses, or similar authorizations, if any,
required to be obtained or filed by Serac under any Environmental
Law in connection with any aspect of the business of Serac or any
Serac Subsidiary, including, without limitation, those relating
to the treatment, storage, disposal or release of a hazardous
substance or solid waste, have been duly obtained or filed and
will remain valid and in effect after the Arrangement and Serac
and each Serac Subsidiary is in compliance with the terms and
conditions of all such notices, permits, licenses and similar
authorizations; (iv) Serac and each Serac Subsidiary has
satisfied and is currently in compliance in all material respects
with all financial responsibility requirements applicable to its
operations and imposed by any Governmental Entity under any
Environmental Law, and none of such parties has received any
notice of noncompliance with any such requirements; (v) to
Serac's knowledge, there are no physical or environmental
conditions existing on any property currently owned or leased or
presently owned or leased by Serac or any entity in which it has
or had ownership interest that could reasonably be expected to
give rise to any on-site or off-site remedial obligations under
any Environmental Laws; and (vi) to Serac's knowledge, since the
effective date of the relevant requirements of applicable
Environmental Laws, all hazardous substances or solid wastes
generated by Serac or any Serac Subsidiary or used in connection
with their properties or operations have been transported only by
carriers authorized under Environmental Laws to transport such
substances and wastes, and disposed of only at treatment,
storage, and disposal facilities authorized under Environmental
Laws to treat, store or dispose of such substances and wastes,
and, to the knowledge of Serac, such carriers and facilities have
been and are operating in compliance in all material respects
with such authorizations and are not the subject of any existing,
pending, or overtly threatened action, investigation, or inquiry
by any Governmental Entity in connection with any Environmental
Laws.
(a) Severance Payments. Except as set forth in Section 6 of the Serac
Disclosure Letter, Serac will not have any liability or
obligation to make any payment under a benefit plan or agreement
as a result of the Arrangement or the transactions contemplated
by this Agreement, nor will any of its employees, officers or
directors be entitled to an increase in severance payments or
other benefits as a result of the Arrangement or the transactions
contemplated by this Agreement or the Other Agreements in the
event of the subsequent termination of their employment.
(a) Shareholder and Similar Agreements. To the knowledge and belief
of Serac, there are no shareholder, pooling, voting trust or
other agreements relating to the issued and outstanding shares of
Serac, except for the Lock-Up Agreements annexed hereto as
Exhibit B.
(a) Brokers. No broker, investment banker, or other Person acting on
behalf of Serac or any Serac Subsidiary is or will be entitled to
any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by this Agreement.
(a) Compliance with Laws. Serac and each of the Serac Subsidiaries
hold all required, necessary or applicable permits, licenses,
variances, exemptions, orders, franchises and approvals of all
Governmental Entities (the "Serac Permits"). All applications
with respect to the Serac Permits were complete and correct in
all material respects when made and Serac does not know of any
reason why any of the Serac Permits would be subject to
cancellation. Serac and each of the Serac Subsidiaries are in
compliance with the terms of the Serac Permits. Neither Serac nor
any of the Serac Subsidiaries has violated or failed to comply
with any statute, law, ordinance, regulation, rule, permit or
order of any federal, provincial or local government, domestic or
foreign, or any Governmental Entity, any arbitration award or any
judgment, decree or order of any court or other Governmental
Entity, applicable to Serac or any of the Serac Subsidiaries or
their respective business, assets or operations.
(a) Contracts. Section 7 to the Serac Disclosure Letter contains a
complete list of the following contracts, agreements,
arrangements, ownership interests and commitments: (i) all
benefit plans and agreements, employment or consulting contracts
or agreements to which Serac or any Serac Subsidiary is
contractually obligated; (ii) leases, sales contracts and other
agreements with respect to any property, real or personal, of
Serac or any Serac Subsidiary or to which Serac or any Serac
Subsidiary is contractually obligated; (iii) contracts or
commitments for capital expenditures or acquisitions in excess of
$25,000.00 in the aggregate to which Serac or any Serac
Subsidiary is obligated; (iv) agreements, contracts, indentures
or other instruments relating to the borrowing of money, or the
guarantee of any obligation for the borrowing of money, to which
Serac or any Serac Subsidiary is a party or any of their
respective properties is bound; (v) contracts or agreements or
amendments thereto that would be required to be filed as an
exhibit to a Serac Commission Filing that has not yet been filed
as an exhibit; (vi) all corporations, partnerships, limited
liability companies and other entities in which Serac or any
Serac Subsidiary owns or has owned, directly or indirectly, a
material equity interest; (vii) all material indemnification and
guarantee or other similar obligations to which Serac or any
Serac Subsidiary is bound and which the officers of Serac or any
Serac Subsidiary, after reasonable investigation, are aware;
(viii) any outstanding bonds, letters of credit posted or
guaranteed by Serac or any Serac Subsidiary with respect to any
Person; (ix) any covenants not to compete or other obligations
affecting Serac or any Serac Subsidiary that would restrict
Silverzipper or its Affiliates from engaging in any business or
activity; (x) any agreement, lease, contract or commitment or
series of related agreements, leases, contracts or commitments
not entered into in the ordinary course of business or, except
for agreements to purchase or sell goods and services entered
into in the ordinary course of business, not cancellable by Serac
or any Serac Subsidiary within 30 calendar days; (xi) licenses,
restrictive covenants, liens; (xii) contracts, agreements,
arrangements or commitments, other than the foregoing, that could
reasonably be considered to be material to Serac or any Serac
Subsidiary, taken as a whole.
(a) Title to Property.
(i) Other than as disclosed in the Serac Disclosure Letter, the
Serac Assets are free and clear of any liens, royalties,
production payments, charges, adverse claims, demands or
encumbrances created by, through or under Serac or of which
Serac has knowledge.
(i) Serac and each of the Serac Subsidiaries has complied in all
material respects with the terms of all leases to which they
are a party and under which they are in occupancy, and all
such leases are in full force and effect. Serac and each of
the Serac Subsidiaries enjoy peaceful and undisturbed
possession under all such leases.
(a) Serac Assets.
(i) the Serac Assets are subject to no liens except as set forth
in the Serac Disclosure Letter.
(i) Serac has not received any notices of material violation or
alleged material violation of the provisions of any
agreement in respect of the Serac Assets.
(i) Serac has performed, observed and satisfied all of its
material duties, liabilities, obligations and covenants
required to be satisfied, performed and observed by it under
and is not in material default under or in material breach
of, the terms of any material leases or agreements
pertaining to the Serac Assets.
(i) All ad valorem, property, production, severance and similar
taxes and assessments based on or measured by the ownership
of the Serac Assets payable in respect of or in relation to
substantially all of the Serac Assets have been properly and
fully paid and discharged.
(i) There is no material circumstance, matter or thing known to
Serac which indicates in any manner that it may not hold
good and marketable title to any of the Serac Assets.
(i) All material documents and agreements of whatsoever nature
and kind affecting the title to the Serac Assets which are
in the possession of Serac or of which Serac is otherwise
aware have been disclosed to Silverzipper.
(a) Insurance Policies. Section 8 of the Serac Disclosure Letter
contains a correct and complete description of all insurance
policies held by Serac covering Serac and the Serac Subsidiaries,
any employees or other agents of Serac and the Serac Subsidiaries
or Serac Assets. Each such policy is in full force and effect, is
with responsible insurance carriers and is substantially
equivalent in coverage and amount to policies covering companies
of the size of Serac and in the business in which Serac and the
Serac Subsidiaries is engaged, in light of the risk to which such
companies and their employees, businesses, properties and other
assets may be exposed. All retroactive premium adjustments under
any worker's compensation policy of Serac or any of the Serac
Subsidiaries have been recorded in Serac's financial statements
in accordance with Canadian generally accepted accounting
principles and are reflected in the financial statements
contained in the Serac Commission Filings.
(a) Information Supplied. The information included or incorporated by reference
in the Proxy Circular (except for any information supplied or to be
supplied by Silverzipper) shall, at the date the Proxy Circular is first
mailed to Serac Common Shareholders and at the time of the Serac
Shareholders Meeting, be true and complete in all material respects and
shall not contain any misrepresentation (as defined in the Securities Act
(Alberta)). The Proxy Circular will comply as to form in all material
respects with the requirements of the Securities Act (Alberta) and the
rules and regulations thereunder.
(a) Serac 0ptions. Serac has terminated the granting of Serac Options and has
negotiated the exercise of all unexercised Serac Rights effective on or
before the Effective Date and prior to the filing of the Articles of
Arrangement at no cost to Serac.
(a) Disclosure. The disclosure by Serac hereunder to Silverzipper has not
omitted any facts or projected facts that may be the basis for a Serac MAE.
1 ARTICLE COVENANTS OF SERAC
1.1 Conduct of Business by Serac Pending the Arrangement.
Serac covenants and agrees that, from the date of this Agreement until
the earlier of the Effective Date or the date of termination of this Agreement,
unless Silverzipper shall otherwise agree in writing or as otherwise expressly
contemplated by this Agreement:
(a) The business of Serac and the Serac Subsidiaries shall be conducted only
in, and Serac and the Serac Subsidiaries shall not take any action except
in, the ordinary course of business and consistent with past practice.
(a) Serac shall not directly or indirectly do any of the following: (i) issue,
sell, pledge, dispose of or encumber any share capital of Serac except for
the issuance of Serac Common Shares upon the exercise of outstanding Serac
Rights; (ii) split, combine, or reclassify any outstanding share capital,
or declare, set aside, or pay any dividend payable in cash, shares,
property, or otherwise with respect to its share capital whether now or
hereafter outstanding; (iii) redeem, purchase or acquire or offer to
acquire any of its share capital; (iv) grant any options to purchase any
shares of Serac or any Serac Subsidiary; (v) acquire, agree to acquire or
make any offer to acquire for cash or other consideration, any equity
interest in or all or substantially all of the assets of any corporation,
partnership, joint venture, or other entity; (vi) enter into any contract,
agreement, commitment, or arrangement with respect to any of the matters
set forth in this Section 1.10(b); (vii) amend its articles or bylaws; or
(viii) reorganize, amalgamate or merge with any other Person.
(a) Serac shall allow Silverzipper and its representatives and agents full
access during normal business hours, to all of the assets, properties,
books, records, agreements and commitments of each of Serac and its
subsidiaries and provide all such information concerning Serac and its
subsidiaries as Silverzipper may reasonably request.
(a) Until the Effective Date, Serac shall:
(i) conduct its operations in the ordinary and normal course of business
and in accordance with applicable laws, generally accepted industry
practice, any operating and other agreements applicable to the Serac
Assets and within its usual areas of exploration except as otherwise
contemplated by this Agreement or as otherwise agreed to in writing by
Silverzipper;
(i) in all material respects, conduct itself so as to keep Silverzipper
fully informed as to the decisions required with respect to the most
advantageous methods in Serac's opinion of operating and the Serac
Assets and promptly disclose in writing to Silverzipper all material
adverse changes, if any, in the Serac Assets or in its interest
therein;
(i) except in respect of existing commitments, not make or authorize,
without prior written consent of Silverzipper, any single capital
expenditure in respect of any of its properties or assets which
exceeds U.S. $25,000.00 in the aggregate, otherwise than in the event
of a catastrophe or other event endangering life, property or the
environment;
(i) take no action which would be outside the ordinary course of business
or which may result in a Serac MAE;
(i) not modify a benefit plan or agreement; and
(i) maintain insurance on and in respect of all of its properties and
assets in like kind to, and in an amount not less than the amount of,
insurance in respect of its properties and assets in effect on the
date hereof.
(a) Neither Serac nor any of the Serac Subsidiaries shall sell, lease,
mortgage, pledge, xxxxx x Xxxx on or otherwise encumber or otherwise
dispose of any of Serac's or the Serac Subsidiaries' properties or assets.
(a) Neither Serac nor any of the Serac Subsidiaries shall, directly or
indirectly, incur any indebtedness for borrowed money or guarantee any such
indebtedness of another Person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of Serac or the
Serac Subsidiaries, guarantee any debt securities of another Person or
enter into any arrangement having the economic effect of any of the
foregoing, except for short-term borrowings incurred in the ordinary course
of business consistent with past practice, or make or permit to remain
outstanding any loans, advances or capital contributions to, or investments
in, any other Person, other than to Serac or any direct or indirect
wholly-owned subsidiary of Serac.
(a) Neither Serac nor any of the Serac Subsidiaries shall make any election
relating to taxes.
(a) Neither Serac nor any of the Serac Subsidiaries shall change any accounting
principle used by it.
(a) Serac shall use its reasonable efforts: (i) to preserve intact the business
organization of Serac; (ii) to maintain in effect any material
authorizations or similar rights of Serac; (iii) to preserve the goodwill
of those having business relationships with it, (iv) to maintain and keep
each of Serac's properties in the same repair and condition as presently
exists, except for deterioration due to ordinary wear and tear and damage
due to casualty; and (v) to maintain in full force and effect insurance
comparable in amount and scope of coverage to that currently maintained by
it.
(a) Serac shall not authorize any of, or commit or agree to take any of, or
permit any Serac Subsidiary to take any of, the foregoing actions to the
extent prohibited by the foregoing and shall not, and shall not permit any
of the Serac Subsidiaries to, take any action that would, or that
reasonably could be expected to, result in any of the representations and
warranties set forth in this Agreement becoming untrue or any of the
conditions to the Arrangement set forth in Article 6 not being satisfied.
Serac promptly shall advise Silverzipper orally and in writing of any
change or event having, or which, insofar as reasonably can be foreseen,
would have, a material adverse effect on Serac and the Serac Subsidiaries,
taken as a whole, or cause a Serac MAE.
1 ARTICLE
ADDITIONAL AGREEMENTS
1.1 Cooperation; Consents and Approvals
(a) Serac shall use all reasonable efforts to, as soon as practicable, complete
the preparation of the Proxy Circular as agreed with Silverzipper and,
subject to the grant of the Interim Order, to mail to the Serac Common
Shareholders and file in all jurisdictions where required the Proxy
Circular and other documentation required in connection with the Serac
Shareholders Meeting, all in accordance with National Policy No. 41 of the
Canadian Securities Administrators, the Interim Order and applicable law,
and Serac shall use all reasonable efforts, subject to the grant of the
Interim Order, to as soon as practicable and in any event on the date
specified in the Interim Order, to convene the Serac Shareholders Meeting
for the purpose of approving the Arrangement and this Agreement in
accordance with the Interim Order.
(a) Serac shall ensure that the Proxy Circular complies with all applicable
disclosure laws as they relate to the disclosure of information regarding
Serac and, without limiting the generality of the foregoing, provides the
Serac Common Shareholders to which such circular is sent with information
in sufficient detail to permit them to form a reasoned judgment concerning
the matters before them.
(a) Subject to the terms and conditions set forth in Section 5.5 and the
fiduciary obligations of the Board of Directors of Serac with respect to
such matters, the Board of Directors of Serac: (i) shall recommend at such
meeting that the Serac Common Shareholders vote to adopt and approve the
Arrangement and this Agreement (the "Recommendation"); (ii) shall use all
reasonable efforts to solicit from the Serac Common Shareholders proxies in
favour of such adoption and approval; and (iii) shall take all other action
reasonably necessary to secure a vote of its shareholders in favour of the
adoption and approval of the Arrangement and this Agreement.
(a) Serac shall use all reasonable efforts to effect a release of all escrowed
shares by the ASE ("Escrowed Shares Release").
1.1 Filings; Consents; Reasonable Efforts
Subject to the terms and conditions set forth in Section 5.5 and the
fiduciary obligations of the Board of Directors of Serac with respect to such
matters, Serac, Silverzipper and AcquisitionCo. shall: (i) make all necessary
filings with respect to the Arrangement and this Agreement under applicable
securities laws and shall use all reasonable efforts to obtain required
approvals and clearances with respect thereto; (ii) use reasonable efforts to
obtain all consents, waivers, approvals, authorizations, and orders required in
connection with the authorization, execution, and delivery of this Agreement and
the consummation of the Arrangement; (iii) use reasonable efforts to take, or
cause to be taken, all appropriate action, and do, or cause to be done, all
things necessary, proper, or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement; and
(iv) will permit the review by each other of all documents to be filed with the
Court or to be sent to the Serac Common Shareholders with respect to the Serac
Shareholders Meeting.
1.1 Notification of Certain Matters
Serac shall give prompt notice to Silverzipper, and Silverzipper shall
give prompt notice to Serac, orally and in writing, of: (i) the occurrence, or
failure to occur, of any event which occurrence or failure would be likely to
cause any representation or warranty contained in this Agreement to be untrue or
inaccurate at any time from the date hereof to the Effective Date; and (ii) any
material failure of Serac, AcquisitionCo. or Silverzipper, as the case may be,
or any officer, director, employee or agent thereof, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder.
1.1 Expenses
All costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
expenses, whether or not the Arrangement is consummated. Serac shall obtain
Silverzipper's consent for its costs and expenses, not to be unreasonably
withheld or delayed.
1.1 Mutual Agreements
Each of Silverzipper, Serac and AcquisitionCo. covenants and agrees
that, until the Effective Date or the day upon which this Agreement is
terminated, whichever is earlier, it:
(a) in the case of Serac, will in a timely and expeditious manner proceed
with and diligently prosecute an application to the Court under the
ABCA for an Interim Order with respect to the Arrangement;
(a) will, in a timely and expeditious manner, carry out the terms of the
Interim Order, provided that nothing shall require a party to consent
to any modification of this Agreement, the Arrangement or such party's
obligations hereunder;
(a) will, subject to the approval of the Arrangement at the Serac
Shareholders Meeting in accordance with the provisions of the Interim
Order, forthwith, but in any event not later than February 15, 2000,
file, proceed with and diligently prosecute together with the other
parties hereto an application for the Final Order; and
(a) will forthwith carry out the terms of the Final Order and will,
together with the other parties, file Articles of Arrangement and the
Final Order with the Registrar in order for the Arrangement to become
effective on or before February 15, 2000, provided that nothing shall
require a party to consent to any modification of this Agreement, the
Arrangement or such party's obligations hereunder.
1.1 Deposit of Silverzipper Stock and Cash
Silverzipper shall deposit with the Depositary the shares of
Silverzipper Common Stock and cash required for the exchange of Serac Common
Shares held by Serac Common Shareholders other than Silverzipper pursuant to
this Agreement and the Plan of Arrangement and Silverzipper shall irrevocably
direct the Depositary to exchange the Serac Common Shares held by such holders
with the shares of Silverzipper Common Stock and/or cash deposited. Such deposit
shall be made 5 days prior to the Closing of the transaction contemplated
herein.
1.1 AcquisitionCo. Obligations
Silverzipper covenants and agrees to cause AcquisitionCo. to fulfill
its obligations under this Agreement in accordance with the provisions of this
Agreement.
1 ARTICLE
CONDITIONS
1.1 Conditions to Obligation of Each Party to Effect the Arrangement
The respective obligations of each party to effect the Arrangement
shall be subject to the fulfillment at or prior to the Effective Date of the
following conditions:
(a) This Agreement and the Arrangement shall have been approved and
adopted by the requisite vote of the Serac Common Shareholders as may
be required by law, by the Court, by the rules of the ASE and by any
applicable provisions of the Serac Articles or its bylaws;
(a) No order shall have been entered and remain in effect in any action or
proceeding before any foreign, federal, provincial or state court or
governmental agency or other foreign, federal or provincial regulatory
or administrative agency or commission that would prevent or make
illegal the consummation of the Arrangement;
(a) There shall have been obtained any and all material permits, approvals
and consents of securities commissions of any jurisdiction, and of any
other governmental body or agency, that reasonably may be deemed
necessary so that the consummation of the Arrangement and the
transactions contemplated thereby will be in compliance with
applicable laws; and
(a) There shall have been obtained all approvals and consents of third
Persons the granting of which is necessary for the consummation of the
Arrangement or the transactions contemplated in connection therewith
including the receipt of the Interim Order and the Final Order.
1.1 Additional Conditions to Obligation of Silverzipper and AcquisitionCo.
The obligation of Silverzipper and AcquisitionCo. to effect the
Arrangement is, at the option of Silverzipper and AcquisitionCo., also subject
to the fulfillment at or prior to the Effective Date of the following
conditions:
(a) The representations and warranties of Serac contained in Section 3.2
shall be accurate as of the date of this Agreement and (except to the
extent such representations and warranties speak specifically as of an
earlier date) as of the Effective Date as though such representations
and warranties had been made at and as of that time; all of the terms,
covenants and conditions of this Agreement to be complied with and
performed by Serac on or before the Effective Date shall have been
duly complied with and performed in all material respects; and a
certificate to the foregoing effect dated the Effective Date and
signed by the president of Serac shall have been delivered to
Silverzipper;
(a) There shall not have occurred or exist any fact or condition that
would reasonably result in a Serac MAE or would constitute a material
fixed or contingent liability to Serac, and Silverzipper shall have
received a certificate signed by the president of Serac dated the
Effective Date to such effect;
(a) Serac shall have received the consent of CIT Group to the Arrangement;
(a) The Recommendation shall have been made and not withdrawn or altered
in any manner detrimental to the Arrangement;
(a) There shall be no more than 5% of the total issued and outstanding
Serac Common Shares having exercised rights of dissent in relation to
the Arrangement approved at the Serac Shareholders Meeting;
(a) Silverzipper shall have received from XxXxxxxx Xxxxxxxx, counsel to
Serac, an opinion dated the Effective Date covering customary matters
relating to this Agreement and the Arrangement;
(a) Silverzipper shall be reasonably satisfied that immediately prior to
the Effective Date no Person has any agreement or option or any right
or privilege (whether by law, preemptive right, contract or otherwise)
capable of becoming an agreement, option, right or privilege for the
purchase, subscription, allotment or issuance of any unissued
securities of Serac;
(a) All Serac options shall have been either exercised or terminated and
cancelled in accordance with the terms of the Lock-up Agreement;
(a) Silverzipper shall have received from Serac a list of such Persons, if
any, that Silverzipper, after discussions with counsel for Serac,
believes may be "affiliates" of Serac (the "Serac Affiliates"), within
the meaning of Rule 145 promulgated under the Securities Act. Serac
shall deliver or cause to be delivered to Silverzipper an undertaking
by each Serac Affiliate in form satisfactory to Silverzipper that no
Silverzipper Common Stock received or to be received by such Serac
Affiliate pursuant to the Arrangement will be sold or disposed of
except pursuant to an effective registration statement under the
Securities Act or in accordance with the provisions of Rule 144 or
Rule 145(d) promulgated under the Securities Act or another exemption
from registration under the Securities Act;
(a) Serac shall be solvent and able to pay its bills as they arise, and
shall otherwise have sufficient cash for its operations; and
(a) No material demands shall be pending or threatened.
1.1 Additional Conditions to Obligations of Serac
The obligation of Serac to effect the Arrangement is, at the option of
Serac, also subject to the fulfillment at or prior to the Effective Date of the
following conditions:
(a) The representations and warranties of Silverzipper and AcquisitionCo.
contained in Section 3.1 shall be accurate as of the date of this
Agreement and (except to the extent such representations and
warranties speak specifically as of an earlier date) as of the
Effective Date as though such representations and warranties had been
made at and as of that time; all the terms, covenants and conditions
of this Agreement to be complied with and performed by Silverzipper
and AcquisitionCo. on or before the Effective Date shall have been
duly complied with and performed in all material respects; and a
certificate to the foregoing effect dated the Effective Date and
signed by the chief executive officer of Silverzipper shall have been
delivered to Serac and Serac shall have no knowledge to the contrary;
(a) There shall not have occurred or exist any fact or condition that
would reasonably result in a Silverzipper MAE and Serac shall have
received a certificate signed by the chief executive officer of
Silverzipper dated the Effective Date to such effect;
(a) Serac shall have received from counsel to Silverzipper and
AcquisitionCo., an opinion dated the Effective Date covering customary
matters relating to this Agreement and the Arrangement;
(a) Silverzipper shall have deposited with the Depositary the shares of
Silverzipper Common Stock and cash required for the exchange of the
Serac Common Shares held by Serac Common Shareholders other than
Silverzipper pursuant to this Agreement and the Plan of Arrangement
and Silverzipper shall have irrevocably directed the Depositary to
exchange the Serac Common Shares held by such holders with the shares
of Silverzipper Common Stock deposited;
(a) The Escrowed Shares Releases shall be effected;
(a) Silverzipper shall have U.S. $2,000,000.00 of shareholders' equity
after giving effect to this Transaction and be able, with Serac to
finance their working capital requirements;
(a) a release of the personal guarantee of Xxxxxx X. Xxxxxxxx in
connection with the operating line of Credit of Serac with Serac's
bankers shall have been obtained prior to the Closing Date; and
(a) four outstanding loans from three shareholders to Serac shall have
been repaid with interest prior to the Closing Date. Details of the
loans are:
(i) Xxxxxx X. Xxxxxxxx is owed U.S. $160,842 and CAN $50,000;
(i) Xxxxxxx X. Xxxxxxxxxx is owed CAN $50,000;
(i) Cherokee Realty (a partnership) is owed U.S. $70,255.40.
The U.S. funds carry interest at 10% per annum and the Canadian funds
carry interest at 15% per annum all as and from January 31, 1999.
1 ARTICLE
MISCELLANEOUS
1.1 Termination
This Agreement may be terminated and the Arrangement and the other
transactions contemplated herein may be abandoned at any time prior to the
Effective Date, whether prior to or after approval by the Serac Common
Shareholders:
(a) by mutual written consent of Silverzipper, AcquisitionCo. and Serac;
(a) by Silverzipper or Serac if: (i) the Arrangement has not been
consummated on or before February 15, 2000 (provided that the right to
terminate this Agreement under this clause (i) shall not be available
to any party whose breach of any representation or warranty or failure
to fulfill any covenant or agreement under this Agreement has been the
cause of or resulted in the failure of the Arrangement to occur on or
before such date); (ii) any court of competent jurisdiction, or some
other governmental body or regulatory authority shall have issued a
permanent order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Arrangement; or
(iii) the Serac Common Shareholders shall not approve the Arrangement
at the Serac Shareholders Meeting or at any adjournment thereof;
(a) by Serac if: (i) Silverzipper or AcquisitionCo. shall have failed to
comply in any material respect with any of the covenants or agreements
contained in this Agreement to be complied with or performed by it at
or prior to such date of termination (provided such breach has not
been cured within 30 days following receipt by Silverzipper or
AcquisitionCo. of written notice from Serac of such breach and is
existing at the time of termination of this Agreement); or (ii) any
representation or warranty of Silverzipper or AcquisitionCo. contained
in this Agreement shall not be true in all respects when made
(provided such breach has not been cured within 30 days following
receipt by Silverzipper and AcquisitionCo. of written notice from
Serac of such breach and is existing at the time of termination of
this Agreement) or on and as of the Effective Date as if made on and
as of the Effective Date (except to the extent it relates to a
particular date), except for such failures to be so true and correct
which would not individually or in the aggregate, reasonably be
expected to have a Silverzipper MAE, assuming the effectiveness of the
Arrangement;
(a) by Silverzipper if: (i) Serac shall have failed to comply in any
material respect with any of the covenants or agreements contained in
this Agreement to be complied with or performed by Serac at or prior
to such date of termination (provided such breach has not been cured
within 30 days following receipt by Serac of written notice from
Silverzipper of such breach and is existing at the time of termination
of this Agreement); (ii) any representation or warranty of Serac
contained in this Agreement shall not be true in all respects when
made (provided such breach has not been cured within 30 days following
receipt by Serac of written notice from Silverzipper of such breach
and is existing at the time of termination of this Agreement) or on
and as of the Effective Date as if made on and as of the Effective
Date (except to the extent it relates to a particular date); or (iii)
the Board of Directors of Serac withdraws, modifies or changes the
Recommendation in a manner adverse to Silverzipper or shall have
resolved to do any of the foregoing.
1.1 Effect of Termination
In the event of termination of this Agreement as provided in Section
1.23, this Agreement shall forthwith become void and there shall be no liability
or obligation on the part of Silverzipper, AcquisitionCo. or Serac, except such
termination shall not relieve any, party hereto for any intentional breach prior
to such termination by a party hereto of any of its representations or
warranties or of any, of its covenants or agreements set forth in this
Agreement.
1.1 Waiver and Amendment
Any provision of this Agreement may be waived at any time by the party
that is, or whose shareholders are, entitled to the benefits thereof. This
Agreement may not be amended or supplemented at ail), time, except by an
instrument in writing signed on behalf of each party hereto, provided that after
this Agreement has been approved and adopted by the Serac Common Shareholders,
this Agreement may only be amended without further authorization if such
amendment is not prejudicial to the Serac Common Shareholders and is not
otherwise prohibited by law. The waiver by any party hereto of any condition or
of a breach of another provision of this Agreement shall not operate or be
construed as a waiver of any other condition or subsequent breach. The waiver by
any party hereto of any of the conditions precedent to its obligations under
this Agreement shall not preclude it from seeking redress for breach of this
Agreement other than with respect to the condition so waived.
1.1 Nonsurvival of Representations and Warranties
The representations and warranties in this Agreement shall remain in
effect only until the Effective Date, at which time they will expire.
1.1 Public Statements
Serac and Silverzipper agree to consult with each other prior to
issuing any press release or otherwise making any public statement with respect
to the transactions contemplated hereby and not to issue any release to which
the other party reasonably objects except where such release is required in the
opinion of counsel to the party.
1.1 Assignment
This Agreement shall enure to the benefit of and will be binding upon
the parties hereto and their respective legal representatives, successors and
permitted assigns.
1.1 Notices
All notices, requests, demands, claims and other communications which
are required to be or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if: (i) delivered in person or by
courier; (ii) sent by facsimile transmission, answer back requested, or (iii)
mailed, certified first class mail, postage prepaid, return receipt requested,
to the parties hereto at the following addresses:
if to Serac:
Serac Sports Ltd.
00 Xxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. XxXxxx
President, Chief Executive Officer
Facsimile: (000) 000-0000
and to Serac:
Serac Sports Ltd.
000, 000 - 00 Xxxxxx X.X.
Xxxxxxx, XX X0X 0X0
Attn: Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
XxXxxxxx Xxxxxxxx
0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Attn: Xxxxxxx X. Xxxxxx, Q.C.
Facsimile: (000) 000-0000
if to Silverzipper or AcquisitionCo.:
Xxxxxxxxxxxxxxx.Xxx.
Suite 1223
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx
Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Ruskin, Moscou, Xxxxx & Flatischek, P.C.
000 Xxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 1.29. Such notices shall be
effective: (i) if delivered in person or by courier, upon actual receipt by the
intended recipient; or (ii) if sent by facsimile transmission, when the answer
back is received.
1.1 Governing Law
All questions arising out of this Agreement and the rights and
obligations created herein, or its validity, existence, interpretation,
performance or breach shall be governed by the laws of the Province of Alberta
and the laws of Canada applicable therein.
1.1 Severability
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall continue in full force and effect and shall in no way be
affected, impaired or invalidated.
1.1 Counterparts
This Agreement may be executed in counterparts, each of which shall be
an original, but all of which together shall constitute one and the same
agreement.
1.1 Entire Agreement: Third Party Beneficiaries
This Agreement, the Plan of Arrangement and the Other Agreements
constitute the entire agreement and supersede all other prior agreements and
understandings, both oral and written, among the parties or any of them, with
respect to the subject matter hereof and neither this nor any document delivered
in connection with this Agreement confers upon any Person not a party hereto any
rights or remedies hereunder.
1.1 Serac Disclosure Letter
The Serac Disclosure Letter, executed by Serac as of the date hereof,
and delivered to Silverzipper on the date hereof, contains all disclosure
required to be made by Serac under the various terms and provisions of this
Agreement. Each item of disclosure set forth in the Serac Disclosure Letter
specifically refers to the Article and Section of the Agreement to which such
disclosure responds, and shall not be deemed to be disclosed with respect to any
other Article or Section of the Agreement.
1.1 Currency
References to "$" or "dollars" in this Agreement are to the lawful
currency of Canada unless otherwise specified.
1.1 Number and Gender
In this Agreement, words importing the singular number only shall
include the plural and vice versa, and words importing any gender shall include
all genders.
1.1 Divisions, Headings, etc.
Division of this Agreement into articles, sections, subsections and
paragraphs and the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation hereof. The terms
"herein", "hereof", "hereunder" and similar expressions refer to this Agreement
and not to any particular article, section, subsection, paragraph or other
portion hereof and include any exhibits or appendices hereto and any agreement
or instruments supplementary or ancillary hereto.
1.1 Action
Venue in Alberta or New York State or New York County Courts;
prevailing party to receive reasonable counsel.
In the event that any date on which an action is required or permitted
to be taken hereunder is not a Business Day, such action shall be required or
permitted to be taken on or by the next succeeding day that is a Business Day.
IN WITNESS WHEREOF, each of the parties caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
XXXXXXXXXXXX.XXX INC.
By: /s/Xxxx Xxxxxxx
---------------
SERAC SPORTS LTD.
By: /s/Xxxxxx Xxxxxxxx
------------------
SERAC ACQUISITION LTD.
By: /s/Xxxx Xxxxxxx
---------------
EXHIBIT 1
PLAN OF ARRANGEMENT
MADE PURSUANT TO SECTION 186
OF THE BUSINESS CORPORATIONS ACT (ALBERTA)
1 ARTICLE
2 INTERPRETATION
1.1 Definitions
In this Plan of Arrangement, the following terms shall have the
following meanings respectively:
"ABCA" means the Business Corporations Act (Alberta), S.A. 1981, C. B-15, as
amended from time to time, including the regulations promulgated thereunder;
"AcquisitionCo." means Serac Acquisition Ltd., an Alberta corporation;
"AcquisitionCo. Common Shares" means common shares in the capital of
AcquisitionCo.;
"Arrangement" means the arrangement under section 186 of the ABCA on the terms
and subject to the conditions set out in this Plan of Arrangement, subject to
any amendments thereto made in accordance with this Plan of Arrangement or at
the direction of the Court in the Final Order;
"Arrangement Agreement" means the agreement by and between Silverzipper,
AcquisitionCo. and Serac dated as of December 30, 1999 relating, to the
Arrangement;
"Articles of Arrangement" means the articles of arrangement in respect of the
Arrangement required by the ABCA to be sent to the Registrar after the Final
Order is made;
"Business Day" means, with respect to any action to be taken, any day other than
Saturday, Sunday or a statutory holiday in the place where such action is to be
taken;
"Court" means the Court of Queen's Bench of Alberta;
"Depositary" means Montreal Trust Company of Canada at its offices located at
000, 000 - 0xx Xxxxxx X.X., Xxxxxxx, Xxxxxxx X0X 0X0;
"Effective Date" means the date the Articles of Arrangement are accepted for
filing by the Registrar;
"Final Order" means the final order of the Court made in connection with the
approval of the Arrangement, providing, among other things, for the coming into
effect of the Arrangement;
"Interim Order" means the interim order of the Court made in connection with the
approval of the Arrangement;
"Plan of Arrangement" means this plan of arrangement, as amended or supplemented
from time to time;
"Registrar" means the Registrar of Corporations appointed pursuant to section
253 of the ABCA;
"Serac" means Serac Sports Ltd., a corporation incorporated pursuant to the
ABCA;
"Serac Common Shares" means the Class "A" Common Shares in the capital of Serac;
"Serac Common Shareholders" means the holders of the Serac Common Shares;
"Serac Shareholders Meeting" means the special meeting of the shareholders of
Serac (including any adjournment thereof) that is to be convened as provided by
the Interim Order to consider, and if deemed advisable, approve the Arrangement;
"Silverzipper" means Xxxxxxxxxxxx.xxx Inc., a corporation incorporated under the
laws of the State of Nevada; and
"Silverzipper Common Stock" means the common stock of Silverzipper.
1.1 Currency
References to `$' or "dollars" in this Plan of Arrangement are to
the lawful currency of United States unless otherwise
specified.
1.1 Number and Gender
In this Plan of Arrangement, words importing the singular number only
shall include the plural and vice versa, and words importing any, gender shall
include all genders.
1.1 Divisions, Headings, etc.
Division of this Plan of Arrangement into articles, sections,
subsections and paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation hereof.
The terms "herein", "hereof", "hereunder" and similar expressions refer to this
Plan of Arrangement and not to any particular article, section, subsection,
paragraph or other portion hereof and include any exhibits or appendices hereto
and any agreement or instruments supplementary or ancillary hereto.
1.1 Date of Any Action
In the event that any date on which an action is required or permitted
to be taken hereunder is not a Business Day, such action shall be required or
permitted to be taken on or by the next succeeding day that is a Business Day.
1 ARTICLE
2 EFFECT OF PLAN OF ARRANGEMENT
1.1 Arrangement Agreement
This Plan of Arrangement is made pursuant to, is subject to the
provisions of, and forms part of the Arrangement Agreement.
1.1 Effectiveness of the Arrangement
The steps of the Arrangement set forth in Article 3 hereof shall occur
on the Effective Date effective upon the acceptance for filing of the Articles
of Arrangement by the Registrar in the order in which such steps appear in this
Plan of Arrangement and without any further act or formality.
1.1 Binding Effect
This Plan of Arrangement shall be binding on all Serac Common
Shareholders, Silverzipper, AcquisitionCo. and Serac upon the acceptance for
filing of the Articles of Arrangement by the Registrar.
1.1 Effectiveness of Provisions
The Articles of Arrangement shall be filed with the Registrar with the
purpose and intent that none of the provisions of this Plan of Arrangement shall
become effective unless all of the provisions of this Plan of Arrangement shall
have become effective.
1 ARTICLE
2 THE ARRANGEMENT
1.1 Steps of the Arrangement
On the Effective Date, each of the events set out below shall occur and
be deemed to occur in the sequence set out therein without further act or
formality:
(a) The total consideration to be paid by Silverzipper for Serac Common
Shares (the "Serac Shares") shall be U.S. $3,000,000 including not
more than U.S. $400,000 in cash, and the balance in Silverzipper
Common Stock. The Silverzipper Common Stock shall be valued at the
average closing price of the same on the NASDAQ Bulletin Board for the
60 trading days preceding the Effective Date but not in excess of U.S.
$5.00 as presently constituted;
(a) The amount to be paid per share (the "Amount Per Share") shall be U.S.
$3,000,000 divided by the number of Serac Shares
outstanding on the Effective Date;
(a) All holders of Serac Shares (the "Holders") will be offered the Amount
Per Share in cash or Silverzipper Common Stock, provided that if more
than U.S. $400,000 is elected, the amount of U.S. $400,000 will be
prorated among the Holders based on amounts of cash elected by them,
and the balance of the Amount Per Share shall be paid to them in
Silverzipper Common Stock.
(a) The certificates representing the Silverzipper Common Stock issuable
to the Serac Common Shareholders shall bear a legend restricting the
transfer of the same for a period of one (1) year from the Closing.
(a) If the application of the foregoing exchange ratio to the aggregate
number of Serac Common Shares beneficially owned by a Serac Common
Shareholder would result in such holder being entitled to receive a
fraction of a share of Silverzipper Common Stock, then such fraction
shall be rounded up to the nearest whole share; and
(a) AcquisitionCo. will issue one AcquisitionCo. Common Share to
Silverzipper for each share of Silverzipper Common Stock issued by
Silverzipper pursuant to Section 3.1(a).
(a) AcquisitionCo. and Serac shall amalgamate resulting in the amalgamated
entity being wholly-owned by Silverzipper.
1.1 Effect of the Arrangement
(a) No notice to the holders of the Serac Common Shares shall be required
to effect the exchange of Serac Common Shares for shares of
Silverzipper Common Stock pursuant to Section 3.1(a) and upon the
deposit of a sufficient number of shares of Silverzipper Common Stock
to effect the exchange being deposited with the Depositary, the Serac
Common Shares are, and shall for all purposes be deemed to be,
exchanged as of the Effective Date for shares of Silverzipper Common
Stock and thereafter a holder of Serac Common Shares whose shares are
to be exchanged shall not, as such, have any rights against Serac.
(a) Upon surrendering the certificate for Serac Common Shares, each former
holder of Serac Common Shares (other than Silverzipper) shall be
entitled to receive shares of Silverzipper Common Stock in exchange
for the Serac Common Shares held by that holder, plus any declared and
unpaid dividends on such shares.
(a) With respect to each Serac Common Share to which Section 3.1(a) or
Section 3.1(c) applies, the holder thereof shall cease to be a holder
of such shares and such holder's name shall be removed from the
register of Serac Common Shares with respect to such shares and
AcquisitionCo. shall be registered as the holder of such shares.
1 ARTICLE
2 OUTSTANDING CERTIFICATES AND PAYMENTS
1.1 Serac Outstanding Certificates
Subject to Section 5.1, after the Effective Date, certificates formerly
representing Serac Common Shares held by Serac Common Shareholders other than
Silverzipper shall represent only the right to receive certificates representing
shares of Silverzipper Common Stock that the former holder of such Serac Common
Shares is entitled to receive pursuant to Article 3, subject to compliance with
the requirements set forth in this Article 4. After the Effective Date,
certificates formerly representing Serac Common Shares held by Silverzipper
shall represent only the right to receive certificates representing the
AcquisitionCo. Common Shares that Silverzipper is entitled to receive pursuant
to Article 3.
1.1 Letter of Transmittal
As soon as practicable after the Effective Date, Serac shall forward or
cause to be forwarded to each Serac Common Shareholder (other than those Serac
Common Shareholders who have exercised their dissent rights) at the address of
such holder as it appears in the share register of Serac and to Silverzipper, a
letter of transmittal containing, among other things, instructions for obtaining
delivery of the shares of Silverzipper Common Stock or AcquisitionCo. Common
Shares pursuant to this Plan of Arrangement. Such shareholders shall be entitled
to receive certificates representing the shares of Silverzipper Common Stock or
AcquisitionCo. Common Shares, as the case may be, upon delivering the
certificate formerly representing such holder's Serac Common Shares to the
Depositary or as the Depositary may otherwise direct and in accordance with the
instructions contained in the letter of transmittal. Such certificate shall be
accompanied by the letter of transmittal, duly completed, and such other
documents as the Depositary may reasonably require.
1.1 Registration
In respect of Serac Common Shareholders other than Silverzipper, the
Depositary shall register shares of Silverzipper Common Stock in the name of
each such shareholder or as otherwise instructed in the letter of transmittal,
and shall deliver such shares of Silverzipper Common Stock as each such holder
may direct in such letter of transmittal, as soon as practicable after receipt
by the Depositary of such documents.
1.1 Rights Extinguished
After the Effective Date, the Serac Common Shareholders (other than
Silverzipper) shall not be entitled to any interest, dividend, premium or other
payment on or with respect to Serac Common Shares other than the shares of
Silverzipper Common Stock that they are entitled to receive pursuant to this
Plan of Arrangement. After the Effective Date, Silverzipper shall not be
entitled to any interest, dividend, premium or other payment on or with respect
to the Serac Common Shares other than the AcquisitionCo. Common Shares that
Silverzipper is entitled to receive pursuant to this Plan of Arrangement.
1 ARTICLE
2 SHAREHOLDER DISSENT RIGHTS
1.1 Dissent Rights
Serac Common Shareholders who have given a timely written demand for
payment that remains outstanding on the Effective Date in accordance with the
rights of dissent in respect of the Plan of Arrangement granted by the Interim
Order and who:
(a) are ultimately entitled to be paid for the Serac Common Shares in
respect of which they dissent in accordance with the provisions of
such Interim Order whether by order of a Court (as defined in the
ABCA) or by acceptance of an offer made pursuant to such Interim
Order, shall be deemed to have transferred such Serac Common Shares to
Serac for cancellation immediately prior to the implementation of the
Arrangement on the Effective Date and such shares shall be deemed to
no longer be issued and outstanding as of the Effective Date; or
(a) are ultimately not so entitled to be paid for the Serac Common Shares
in respect of which they dissent for any reason, shall not be, or be
reinstated as, shareholders of Serac but for purposes of receipt of
consideration shall be treated as if they had participated in this
Plan of Arrangement on the same basis as a non-dissenting, holder of
Serac Common Shares and such holders shall accordingly be entitled to
receive shares of Silverzipper Common Stock as such non-dissenting
holders are entitled to receive on the basis determined in accordance
with Article 3 and shall be deemed to have transferred Serac Common
Shares to AcquisitionCo. as of the Effective Date.
1 ARTICLE
2 AMENDMENTS
1.1 Amendments
(a) This Plan of Arrangement may be amended, modified and/or supplemented
at any time and from time to time provided that any, such amendment,
modification, or supplement must be contained in a written document
that is: (i) agreed to by each of the parties to the Arrangement
Agreement, (ii) filed With the Court; and, if made following the Serac
Shareholders Meeting, approved by the Court, and (iii) communicated to
holders of Serac Common Shares in the manner required by the Court (if
so required).
(a) Any amendment, modification or supplement to this Plan of Arrangement
may be proposed by Serac at any time prior to or at the Serac
Shareholders Meeting (provided that each of the parties to the
Arrangement Agreement shall have consented thereto) with or without
any other prior notice or communication, and if so proposed and
accepted by the persons voting at the Serac Shareholders Meeting
(other than as may be required under the Court's interim order), shall
become part of this Plan of Arrangement for all purposes.
(a) Any amendment, modification or supplement to this Plan of Arrangement
that is approved by the Court following the Serac Shareholders Meeting
shall be effective only: (i) if it is consented to by each of the
parties to the Arrangement Agreement; and (ii) if required by the
Court or applicable law, it is consented to by the holders of the
Serac Common Shares.
EXHIBIT 2
FORM OF LOCK-UP AGREEMENT
LIST OF SIGNATORIES AND NUMBER OF SHARES OWNED
XXXXXXXXXXXX.XXX INC.
000 Xxxxx Xxxxxx
Xxxxx 00000
Xxx Xxxx, XX 00000
December 6, 1999
Confidential
To Each of the Shareholders of Serac Sports Ltd.
noted on Schedule "A" hereto (together the
"Shareholders and individually the "Shareholder")
Dear Shareholders:
Re: Xxxxxxxxxxxx.xxx Inc. ("Silverzipper")
and Serac Sports Ltd. Plan of Arrangement
We understand that you are each the beneficial holder of, have
control over, or have the authority to vote, the number of Common Shares (the
"Serac Shares") of Serac Sports Ltd. ("Serac") and options to purchase Serac
Shares (the "Serac Options") set forth opposite your name in Schedule "A"
hereto.
1. Definitions
In this Letter Agreement, the following definitions have been
used:
(a) "ABCA" means the Business Corporations Act (Alberta);
(a) "Acquisition Proposal" has the meaning ascribed thereto in the
Arrangement Agreement;
(a) "Arrangement" means the plan of arrangement involving Serac and
Silverzipper described in the Arrangement Agreement;
(a) "Arrangement Agreement" means the Arrangement Agreement to be agreed
upon among Silverzipper, a wholly-owned subsidiary of Silverzipper to
be incorporated and called Silverzipper (Alberta) Ltd. and Serac;
(a) "Closing Date" means the date upon which articles of arrangement are
filed with the Registrar of Corporations in Alberta making effective
the terms of the Arrangement;
(a) "Final Approval Date" means the date upon which all applicable appeal
periods have expired with respect to the final order of a court of
competent jurisdiction approving the Arrangement; and
(a) "Mailing Date" means the date of mailing of proxy solicitation
materials by Serac.
All other defined terms shall have the meaning as ascribed in the
body of this letter.
1. Covenants
By the acceptance of this letter each of you hereby agrees
with Silverzipper, subject to the terms of this Agreement and the terms and
conditions of the Arrangement Agreement, from the date hereof until the Final
Approval Date:
(a) to vote or cause to be voted all the Serac Shares presently
owned, controlled or hereafter acquired by you or which you have,
or may be given, authorization to vote, in favour of the
Arrangement and any other resolutions relating thereto at any
meeting of the shareholders of Serac called to consider the
Arrangement (the "Meeting") or by written consent; for greater
certainty, nothing herein shall obligate the Shareholder if
appointed as proxy by another shareholder of Serac to vote such
other shareholder's shares at the Meeting other than in
accordance with the voting instructions of such shareholder;
(a) not to exercise statutory rights of dissent and appraisal in
respect of any resolution authorizing the Arrangement proposed to
be passed at the Meeting or any adjournment thereof and, subject
to the terms hereof, not to exercise any other shareholder rights
or remedies available at common law or pursuant to the ABCA to
delay, hinder, upset or challenge the Arrangement;
(a) not to directly or indirectly initiate, propose, assist or
participate in any solicitation of shareholders of Serac in
opposition to the Arrangement or otherwise take any action which
might be regarded as being directed towards or likely to prevent
or delay the successful completion of the Arrangement, provided
that the continued solicitation and consideration by the Board of
Directors of Serac of any alternative Acquisition Proposals
consistent with the Arrangement Agreement shall not constitute a
violation of this covenant;
(a) not to, by action or omission, do anything from the date hereof
until and including the completion or termination of this
Agreement that would result in the representations and warranties
of the Shareholders set forth in this Agreement ceasing to be
true and correct in all material respects;
(a) in connection with the solicitation of proxies for the Meeting,
to use your reasonable best efforts to furnish to counsel to
Serac and counsel to Silverzipper the information relating to you
required by any applicable law, regulation or regulatory
authority to be set forth in any information circular (the
"Information Circular") and in any other applicable regulatory
filing. Information furnished by you for inclusion in the
Information Circular will not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading. With respect to information furnished by you in
connection with any other application, statement or filing
relating to the Arrangement, such information at the time such
information is furnished shall be correct in all material
respects and shall not omit any material fact required to be
stated therein or necessary to make the statements therein not
misleading;
(a) if you are a director of Serac and so requested by Silverzipper,
to resign as a director of Serac on the Closing Date; and
(a) in respect of Serac Options, if any, held by you to enter into an
agreement with Serac prior to the Mailing Date pursuant to which
you agree to exercise such Serac Options and to acquire
additional Serac Shares pursuant to such exercise on or prior to
the Closing Date (it being understood and agreed that all Serac
Options not exercised prior to the filing of the Articles of
Arrangement shall be terminated).
Furthermore, you agree to elect to take payment for your Serac
Shares solely in shares of common stock of Silverzipper.
In addition, by the acceptance of this letter, you hereby agree with
Silverzipper, subject to the terms of this Agreement, from the date hereof until
the Closing Date, not to sell, assign, convey or otherwise dispose of or cause
to be sold, assigned, conveyed or disposed, any of the Serac Shares beneficially
owned by or controlled by you. It is acknowledged that the covenants of each
Shareholder set forth in this Section 2 relate to the Shareholder acting solely
in the capacity of a shareholder of Serac and not as a director and/or officer
of Serac and shall not affect or restrict any legal obligation imposed on such
Shareholder acting in the capacity of a director or officer of Serac.
1. Representations and Warranties of the Shareholders
By executing this Agreement you hereby represent and warrant to
Silverzipper that:
(a) this letter is a valid and binding agreement, enforceable against
you in accordance with its terms; and neither the execution of
this Agreement nor the consummation by you of the transactions
contemplated hereby will constitute a violation of or default
under, or conflict with, any contract, commitment, agreement,
understanding, arrangement or restriction of any kind to which
you are or will be a party and by which you are or will be bound
at the time of such consummation; and
(a) you are the beneficial holder of, or control, or have the
authority to vote and shall at all times material to this
Agreement be the beneficial owner of, or control, or have
authority to vote at least that number of Serac Shares set forth
opposite your name in Schedule "A" hereto.
1. Termination
It is understood and agreed that the respective rights and obligations
hereunder of each Shareholder and Silverzipper shall cease and this Agreement
shall terminate in the event that:
(a) the Mailing Date has not occurred by January 20, 2000;
(a) at your election if, prior to the date of the Meeting, an
Acquisition Proposal is received by Serac and the Board of
Directors of Serac withdraws its recommendation of the
Arrangement in accordance with Section 7.1 of the Arrangement
Agreement; or
(a) the Arrangement Agreement has been terminated by Silverzipper or
Serac in accordance with its terms.
1. Amendment
Except as expressly set forth herein, this Agreement constitutes the whole
of the agreement between the parties and may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
1. Assignment
No Shareholder party to this Agreement may assign his rights or obligations
under this Agreement without the prior written consent of Silverzipper.
Silverzipper may not assign any of its rights or obligations under this
Agreement.
1. Notice
Any notice, document or other communication required or permitted to be
given to the parties under this Agreement shall be in writing and be either hand
delivered or telecopied as follows:
(a) to the Shareholders at the addresses specified on Schedule "A"
hereto;
(a) to Silverzipper:
Xxxxxxxxxxxx.xxx Inc.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX
00000
Attention: Xxxx X. Xxxxxxx, Chief Executive Officer
Facsimile: (000) 000-0000
and shall be deemed to be received by the party to whom such notice is given on
the date of delivery or transmission.
1. Disclosure
You agree not to make any public disclosure or announcement of
or pertaining to this Agreement, unless you are advised by your counsel that
certain disclosures or announcements are required to be made by applicable laws,
stock exchange rules or policies or regulatory authorities having jurisdiction,
in which event you shall consult with Silverzipper prior to making such
disclosure.
1. Successors
This Agreement will be binding upon, enure to the benefit of
and be enforceable by Silverzipper and the Shareholders and their respective
successors and permitted assigns.
1. Time of the Essence
Time shall be of the essence of this Agreement.
1. Further Assurances
Each of the parties hereto will, from time to time and at all
times hereafter, but without further consideration, do such further acts and
execute and deliver all such further assurances, deeds and documents as shall be
reasonably required in order to fully perform and carry out the terms of this
Agreement.
1. Applicable Law
This Agreement shall be governed by and construed in
accordance with the laws of the Province of Alberta and the laws of Canada
applicable therein.
This Agreement may be signed in counterparts and delivery of
such counterparts may be effected by means of telecopier. This Agreement shall
become binding on each Shareholder forthwith upon his execution and delivery of
this Agreement.
Yours truly,
XXXXXXXXXXXX.XXX INC.
Per:
The foregoing is in accordance with my understanding and is
agreed to as of the date first above written.
/s/ Xxxxxxx XxXxxx
-------------------------- ------------------
Witness: XXXXXXX XxXXXX
/s/ Xxxxxx Xxxxxxxx
-------------------------- -------------------
Witness: XXXXXX XXXXXXXX
/s/ Xxxxxxx Xxxxxxxxxx
-------------------------- ----------------------
Witness: XXXXXXX XXXXXXXXXX
/s/ Xxxx X. Xxxxxxxx
-------------------------- --------------------
Witness: XXXX X. XXXXXXXX
/s/ Xxxxxx Xxxx
------------------------- ---------------
Witness: XXXXXX XXXX
/s/ Xxxxxxx Sweep
------------------------- -----------------
Witness: XXXXXXX SWEEP
/s/ Xxxxx Xxxxxxxx
------------------------ ------------------
Witness: XXXXX XXXXXXXX
/s/ Cherokee Realty
------------------------ -------------------
Witness: CHEROKEE REALTY
/s/ Xxxx Xxxxxx
------------------------ ---------------
Witness: XXXX XXXXXX
/s/ Xxxx X. Xxxx
------------------------ ----------------
Witness: XXXX X. XXXX
SCHEDULE "A"
Name and Address of Shareholder Number of Serac Shares Number and Exercise Price of
Serac Options
Xxxxxxx X. XxXxxx 1,799,980 185,000
Xxxxxx Xxxxxxxx 1,931,561 280,000
Xxxxxxx Xxxxxxxxxx 1,799,980 165,000
Xxxx X. Xxxxxxxx 532,165 145,000
Lion Rock Resources (H.K.) Limited 466,660 0
(by Xxxxxx Xxxx)
Xxxxx Xxxxxxxx 0 105,000
Cherokee Realty (a partnership) 126,000 0
Xxxx Xxxxxx 66,607 30,000
Xxxx X. Xxxx 10,000 50,000
Xxxxxxx Sweep 39,000 35,000
Total 6,771,953 995,000
SCHEDULE "A"
SILVERZIPPER LIENS
A blanket lien on all inventory and receivables granted to
Merchant Factors.
