SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT is made this 30th day of August
0000,
XXXXXXX
XXXXXXXXXX XXXXXX INC.
a corporation incorporated under the laws
of the Province of Ontario
(hereinafter referred to as the "Purchaser")
OF THE FIRST PART
and
LYNX GAMING CORP.,
a corporation incorporated under the laws
of the Province of Ontario
(hereinafter referred to as "Lynx")
OF THE SECOND PART
and The Principal Shareholders of Lynx
who are listed in Schedule 2 annexed hereto
(hereinafter collectively referred to as the "Lynx
Shareholders")
OF THE THIRD PART
and
PLAYANDWIN, INC.,
a corporation incorporated under the laws
of the State of Nevada
(hereinafter referred to as "PWIN")
OF THE FOURTH PART
WHEREAS the Purchaser desires to purchase from the Lynx
Shareholders and the Lynx Shareholders desire to sell to the
Purchaser the Lynx Shares and the Lynx Warrants;
AND WHEREAS the Purchaser is a subsidiary of PWIN;
AND WHEREAS the Purchaser, PWIN and the Lynx Shareholders
desire to effect the purchase and sale of the Lynx Shares and
Lynx Warrants pursuant to the Share Exchange in accordance with
the terms and conditions of this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT, in consideration of
the mutual covenants hereinafter contained and provided for and
other good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged by the Parties), the
Parties agree as follows:
ARTICLE I
INTERPRETATION
1.1 Definitions. In this Agreement, unless the context otherwise
requires, the terms set forth in Schedule 1 shall have the
meanings set forth therein.
1.2 Entire Agreement. This Agreement together with the
agreements and other documents to be delivered pursuant to this
Agreement, constitute the entire agreement between the Parties
pertaining to the Share Exchange and supersedes all prior
agreements, understandings, negotiations and discussions, whether
oral or written, and there are no warranties, representations and
other agreements between the Parties in connection with the
subject matter hereof except as specifically set forth in this
Agreement or any other agreement or document to be delivered
pursuant to this Agreement.
1.3 Extended Meanings. In this Agreement, words importing the
singular number include the plural and vice versa; words
importing the masculine gender include the feminine and neuter
genders.
1.4 Headings. The 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 of this Agreement.
1.5 References. References to an article, section, subsection,
paragraph, schedule or exhibit shall be construed as references
to an article, section, subsection, paragraph, schedule or
exhibit to this Agreement, unless the context otherwise requires.
1.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the Province of Ontario
and the laws of Canada applicable in that Province.
1.7 Currency. Unless otherwise specified, the word "dollar", or
the symbol "$" refers to Canadian currency.
1.8 Schedules. The following is a list of schedules attached to
and incorporated into this Agreement by reference and deemed as
part of this Agreement.
SCHEDULE DESCRIPTION
1 Definitions
2 Principal Shareholders of Lynx
3 Lynx Financial Statements
4 Support Agreement between Purchaser and
PWIN
5 Minority Share and Warrant Exchange
Agreement
ARTICLE II
SHARE EXCHANGE
2.1 Agreement to Purchase. Upon the terms and subject to the
conditions contained in this Agreement, the Lynx Shareholders
shall sell and the Purchaser shall purchase, as of and with
effect from the opening of business on the Closing Date, the Lynx
Shares and the Lynx Warrants.
2.2 Share Exchange. The purchase and sale of the Lynx Shares and
the Lynx Warrants shall be effected by the issue of the
Exchangeable Shares and Exchangeable Warrants from the treasury
of the Purchaser to the Lynx Shareholders, pursuant to the
prospectus and registration exemptions contained in paragraphs
72(1)(j) and 35(1)(16) of the Securities Act (Ontario), in
exchange for the Lynx Shares and Lynx Warrants as set forth in
Schedule 2 (the "Share Exchange").
2.3 Exchange Ratio. The Purchaser and the Lynx Shareholders
have established for the purposes of this Agreement an exchange
ratio of one Exchangeable Share for every two Lynx Shares and
one Exchangeable Warrant for every two Lynx Warrants.
2.4 Rollover. At the option of each Shareholder, the Purchaser
covenants and agrees to elect, jointly with such Shareholder if
applicable (referred to in this section as the "Electing
Shareholder"), in accordance with the provisions of subsection
85(1) or 85.1(1) of the Income Tax Act (Canada) (the "Tax Act")
(and the corresponding provisions of any applicable provincial
tax legislation) in the prescribed form and within the prescribed
time for the purposes of the Tax Act, and shall therein agree to
elect in respect of the Lynx Shares of the Electing Shareholder
an amount as the Electing Shareholder shall direct which shall be
deemed to be the Electing Shareholder's proceeds of disposition
thereof and Purchaser's cost thereof. Notwithstanding the
foregoing, the Electing Shareholder may not direct the parties to
elect an amount which is greater than the fair market value of
the Lynx Shares or an amount which is less than the adjusted cost
base of the Lynx Shares to the Electing Shareholder. The
Electing Shareholder and the Purchaser agree to execute all such
documents and forms to make the election contemplated in this
section.
2.5 Price Adjustment. The parties hereto covenant and agree
that, in the event that any governmental taxing authority having
jurisdiction issues or proposes to issue, assessments or
reassessments of additional liability for taxes or any other
subject by reason of asserting that the Elected Amount is greater
or less than the adjusted cost base of the Lynx Shares to the
Electing Shareholder, or that the adjusted cost base of the Lynx
Shares to the Electing Shareholder is greater than or less than
the Elected Amount, then the Elected Amount shall be increased or
decreased by the difference so determined; but only to the extent
that the Elected Amount so revised is accepted by the taxing
authority, the Electing Shareholder and the Purchaser, or,
failing such acceptance is established by the courts having
jurisdiction in the matter after all rights of appeal have been
exhausted and all times for appeal have expired without appeals
having been taken by such taxing authority, the Electing
Shareholder or the Purchaser. Each of the Electing Shareholder
and the Purchaser hereby agrees to make such further elections,
enter into such acknowledgements or agreements, and do or cause
to be done such further acts and things as may be, in the opinion
of counsel, reasonably necessary to give effect to this section
and the change in the Elected Amount.
2.6 Exchangeable Shares. The Exchangeable shares to be issued
by the Purchaser pursuant to this Agreement shall be subject to
the following terms:
(a) each Exchangeable Share may be exchanged at the request
of its holder for one common share of PWIN, provided that in
the event of a consolidation, split or other reorganization
of the capital stock of the Purchaser or of PWIN, the number
of PWIN common shares issuable for each one Exchangeable
Share shall be adjusted accordingly;
(b) Of the Exchangeable Shares received by a Lynx
Shareholder on the Closing Date:
(i) none may be exchanged during the period ending on
and including the day of the first anniversary of
the Closing Date;
(ii) up to one-third (1/3) may be exchanged after said
first anniversary;
(iii) an additional one-third (1/3) may be
exchanged after the second anniversary of the
Closing Date; and
(iv) all Exchangeable Shares may be exchanged after the
third anniversary of the Closing Date.
(c) Each Exchangeable Share may be exchanged at the request
of the Purchaser at any time during the period ending on and
including the day of the fifth anniversary of the Closing
Date, and shall be exchanged upon: (i) the occurrence of a
take over bid for all of the issued and outstanding shares
of PWIN; or (ii) the day of the fifth anniversary of the
Closing Date. All Exchangeable Shares shall be automatically
exchanged on the fifth anniversary of the Closing Date.
2.7 Exchangeable Warrants. Each Exchangeable Warrant to be
issued by the Purchaser pursuant to this Agreement shall entitle
its holder to acquire one Exchangeable Share at a price of $1.70.
No Exchangeable Warrant may be exercised on or before the day of
the first anniversary of the Closing Date. The Exchangeable
Warrants shall expire eighteen (18) months after the Closing
Date.
2.8 Acknowledgement of Resale Restrictions. The Lynx
Shareholders hereby acknowledge that any Exchangeable Shares or
PWIN common shares that they receive pursuant to this Agreement
are restricted in accordance with the United States Securities
Act of 1933, as amended, and the rules promulgated thereunder.
ARTICLE III
SUPPORT AGREEMENT
3.1 Support Agreement. Concurrent with the execution of this
Agreement, PWIN and the Purchaser will enter into the Support
Agreement attached hereto as Schedule 3.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE LYNX SHAREHOLDERS
4.1 Representations and Warranties of the Lynx Shareholders.
Each of the Lynx Shareholders jointly and severally represents
and warrants to the Purchaser and PWIN as follows (to the extent
that the following representations and warranties relate to that
Lynx Shareholder) and acknowledges that the Purchaser and PWIN
are relying on these representations and warranties in connection
with the completion of the Share Exchange:
(a) Capacity to own Lynx Shares and Warrants - The Lynx
Shareholders have all necessary power, authority and
capacity to own the Lynx Shares and the Lynx Warrants.
(b) Capacity to Enter Agreement - The Lynx Shareholders have
full power, right and authority to enter into this Agreement
and to perform their obligations under it.
(c) Binding Obligation - This Agreement has been duly executed
and delivered by the Lynx Shareholders and constitutes a
valid and binding obligation of each of them.
(d) Absence of Conflict - The Lynx Shareholders are not a party
to, bound or affected by any agreement which would be
violated, breached or terminated by, or which would result
in creation or imposition of any Encumbrance upon any of the
Lynx Shares or Lynx Warrants as a consequence of the
execution and delivery of this Agreement or the consummation
of the transactions contemplated in this Agreement.
(e) Title to Lynx Shares and Lynx Warrants - The Lynx
Shareholders are the legal and beneficial owners of the Lynx
Shares and the Lynx Warrants as set forth in Schedule 2,
with good and marketable title, free and clear of any
Encumbrances.
(f) No Bankruptcy - No proceedings have been taken or authorized
by any Lynx Shareholder or by any other person in respect of
the bankruptcy, insolvency, liquidation, dissolution or
winding up as applicable, of any Lynx Shareholder.
(g) No Option - No Person, other than the Purchaser under this
Agreement, has any agreement or any right capable of
becoming an agreement or option for the purchase from the
Lynx Shareholders of any of the Lynx Shares.
(h) Disclosure - The representations and warranties of the Lynx
Shareholders in this Agreement are true, correct and do not
contain any untrue or misleading statement of a material
fact or omit to state a material fact necessary to make such
representations and warranties not misleading to the
Purchaser or PWIN.
(i) Non-Violation - The entering into of this Agreement and the
consummation of transactions contemplated herein do not and
will not conflict with, or result in a breach of, or
constitute a default under the terms or conditions of any
constating document of Lynx or a Lynx Shareholder, any
by-laws, any court or administrative order or process, any
agreement or instrument to which Lynx or a Lynx Shareholder
is party or by which it is bound.
ARTICLE V
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF LYNX
5.1 Representations and Warranties of Lynx. Lynx represents and
warrants to the Purchaser and PWIN as follows and acknowledges
that the Purchaser and PWIN are relying on these representations
and warranties in connection with the Share Exchange:
(a) Due Incorporation - Lynx is a corporation duly incorporated
and validly existing under the laws of Ontario.
(b) Capacity to Enter Agreement - Lynx has full corporate power
and authority to enter into this Agreement and to perform
its obligations under it.
(c) Due Authorization - The executing and delivery of this
Agreement and the consummation of the transactions
contemplated under it have been duly authorized by all
necessary corporate action on the part of Lynx.
(d) Binding Obligation - This Agreement has been duly executed
and delivered by Lynx and constitutes a valid and binding
obligation of it.
(e) Absence of Conflict - Lynx is not a party to, bound or
affected by any agreement which would be violated, breached
or terminated by, or which would result in the creation or
imposition of any Encumbrance upon any of the Lynx Shares as
a consequence of the execution and delivery of this
Agreement or the consummation of the transactions
contemplated in this Agreement.
(f) Regulatory Approvals - No governmental or regulatory
authorization, approval, order or consent is required on the
part of Lynx, in connection with the execution, delivery and
performance of this Agreement and the performance of Lynx's
obligations under this Agreement.
(g) No Bankruptcy - No proceedings have been taken, are pending
or authorized by Lynx or by any other person in respect of
the bankruptcy, insolvency, liquidation, dissolution or
winding up of Lynx.
(h) Authorised and Issued Capital - The authorized capital of
Lynx consists of an unlimited number of common shares, of
which 5,978,512 common shares are currently outstanding as
fully paid and non-assessable shares of Lynx. Other than
the 289,250 Lynx Warrants and 799,746 Lynx Special Warrants,
there are no other options or warrants or other rights of
any kind in existence, authorized or agreed to which could
result in any further shares or other securities of Lynx
being allotted or issued or becoming outstanding.
(i) Minute Books - The minute books of Lynx contain accurate and
complete minutes of all meetings and resolutions of the
directors
and the shareholders of Lynx held or passed by signature in
writing, respectively, since the date of its incorporation.
All
such meetings have been duly called and held. Lynx share
certificate books and share registers are complete and
accurate.
(j) No Subsidiaries - Except for 2,260,006 common shares of
P.E.S.T. Creative Gaming Corporation, Lynx does not own any
shares in or securities of any corporate body and is not a
partner of any partnership or a member of any joint venture.
(k) Lynx's Capacity and Power - Lynx has full corporate right,
power and authority to own or lease its assets as now owned
or leased and to carry on the Lynx Business.
(l) Business - The only business carried on by Lynx is the Lynx
Business.
(m) Lynx Financial Statements - The Lynx Financial Statements
have been prepared in accordance with Canadian generally
accepted accounting principles applied on a consistent basis
throughout the periods indicated, and fairly and accurately
present, subject to immaterial variation, the financial
position, assets and liabilities (whether absolute,
contingent, accrued or otherwise) of Lynx on the dates
thereof and the financial results of Lynx for the periods
referred to in the Lynx Financial Statements.
(n) No Guarantees etc. - Lynx is not a party to or bound by any
agreement of guarantee, indemnification, assumption or
endorsement or any like commitment of the obligations,
liabilities (contingent or otherwise) or indebtedness of any
Person.
(o) Records -
(i) The Lynx Records are true and
correct and present fairly and disclose
in all material respects the actual
results of the Lynx Business.
(ii) To the best of knowledge, all
material financial transactions of Lynx
have been accurately recorded in the
Lynx Records. The Lynx Records (of a
financial nature) have been prepared in
accordance with Canadian generally
accepted accounting principles
consistently applied.
(iii) The files, documentation and information in
writing provided by Lynx to the Purchaser and PWIN in
connection with the negotiation and completion of the
transactions contemplated in this Agreement are true
and correct in all material respects.
(p) Business Agreements - There are no material agreements
relating to the Lynx Business.
(q) Litigation - There are no judgements, decrees, injunctions,
ruling or orders of any court, Governmental Authority or
arbitration, or any actions, suits, grievances or
proceedings, (whether or not on behalf of Lynx and, to the
best of knowledge, pending or threatened or involving Lynx,
or the Lynx Business) which may materially adversely affect
the Lynx Business or Lynx's assets.
(r) Disclosure - The representation and warranties of the Lynx
Shareholders in this Agreement are true, complete and
correct and do not contain any untrue or misleading
statement of a material fact.
(s) Non-Violation - The entering into of this Agreement and the
consummation of transactions contemplated herein do not and
will not conflict with, or result in a breach of, or
constitute a default under the terms or conditions of any
constating document of Lynx, any by-laws, any court or
administrative order or process, any agreement or instrument
to which Lynx is party or by which it is bound.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
6.1 Representations and Warranties of The Purchaser. The
Purchaser hereby represents and warrants to Lynx and the Lynx
Shareholders as follows and acknowledges that Lynx and the Lynx
Shareholders are relying on those representations and warranties
in connection with the Share Exchange:
(a) Due Incorporation - The Purchaser is a corporation duly
incorporated and validly existing under the laws of the
Province of Ontario.
(b) Capacity to Enter Agreement - The Purchaser has full power,
right and authority to enter into this Agreement and to
perform the obligations under it.
(c) Due Corporate Authorization - The execution and delivery of
this Agreement and the consummation of the transactions
contemplated under it have been duly authorized by all
necessary corporate action on the part of the Purchaser.
(d) Binding Obligation - This Agreement has been duly executed
and delivered by the Purchaser and constitutes a valid and
binding obligation of the Purchaser.
(e) Absence of Conflict - The Purchaser is not a party to, bound
or affected by or subject to any agreement which would be
violated, breached or terminated by, or which would result
in the creation or imposition of any Encumbrance upon any of
the Exchangeable Shares or Exchangeable Warrants as a
consequence of, the execution and delivery of this Agreement
or the consummation of the transactions contemplated in this
Agreement.
(f) Regulatory Approvals - No governmental or regulatory
authorization, approval, order or consent is required on the
part the Purchaser, in connection with the execution,
delivery and performance of this Agreement and the
performance of the Purchaser's obligations under this
Agreement.
(g) No Bankruptcy - No proceedings have been taken, are pending
or authorized by the Purchaser or by any other person in
respect to the bankruptcy, insolvency, liquidation,
dissolution or winding up of the Purchaser.
(h) Minute Books - The minute books of the Purchaser contain
accurate and complete minutes of all meetings and resolutions
of
the directors and the shareholders of the Purchaser held or
passed by signature in writing, respectively, since the date
of
its incorporation. All such meetings have been duly called
and
held.
(i) Absence of Material Changes - Since the execution of this
Agreement:
(i) no changes have been made in the accounting
methods, practices, or policies followed by the
Purchaser;
(ii) the Purchaser has not increased, incurred or
guaranteed any debt, obligation, or liability (whether
absolute or contingent and whether or not currently due
and payable);
(iii) there has been no damage, destruction or
loss, labour trouble, or other event, development or
condition of any character (whether or not covered by
insurance) which adversely affects, or, may adversely
affect, the properties or prospects of the Purchaser;
and
(iv) the Purchaser has not paid any amount or dividend,
or otherwise made any distribution or the payment of
any kind or nature whatsoever to any non-arm's length
Person.
(j) Records - The files, documentation and information in
writing provided by the Purchaser to Lynx and the Lynx
Shareholders in connection with the negotiation and
completion of the transactions contemplated in this
Agreement are true and correct in all material respects.
(k) Litigation - There are no judgements, decrees, injunctions,
ruling or orders of any court, Governmental Authority or
arbitration, or any actions, suits, grievances or
proceedings (whether or not on behalf of the Purchaser)
pending or threatened or the Purchaser which may materially
adversely affect the Purchaser's assets.
(l) Disclosure - The representations and warranties of the
Purchaser in this Agreement are true, complete and correct
and do not contain any untrue or misleading statement of a
material fact or omit to state a material fact necessary to
make such representations and warranties not misleading to
Lynx Shareholders.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PWIN
7.1 Representations and Warranties of PWIN. PWIN hereby
represents and warrants to Lynx and the Lynx Shareholders as
follows and acknowledges that Lynx and the Lynx Shareholders are
relying on those representations and warranties in connection
with the Share Exchange:
(a) Due Incorporation - PWIN is a corporation duly incorporated
and validly existing under the laws of the State of Nevada.
(b) Capacity to Enter Agreement - PWIN has full power, right and
authority to enter into this Agreement and to perform the
obligations under it.
(c) Due Corporate Authorization - The execution and delivery of
this Agreement and the consummation of the transactions
contemplated under it have been duly authorized by all
necessary corporate action on the part of PWIN.
(d) Binding Obligation - This Agreement has been duly executed
and delivered by PWIN and constitutes a valid and binding
obligation of PWIN.
(e) Absence of Conflict - PWIN is not a party to, bound or
affected by or subject to any agreement which would be
violated, breached or terminated by, or which would result
in the creation or imposition of any Encumbrance upon any of
the PWIN Shares as a consequence of, the execution and
delivery of this Agreement or the consummation of the
transactions contemplated in this Agreement.
(f) Regulatory Approvals - No governmental or regulatory
authorization, approval, order or consent is required on the
part of PWIN, in connection with the execution, delivery and
performance of this Agreement and the performance of PWIN's
obligations under this Agreement.
(g) No Bankruptcy - No proceedings have been taken, are pending
or authorized by PWIN or by any other person in respect to
the bankruptcy, insolvency, liquidation, dissolution or
winding up of PWIN.
(i) Minute Books - The minute books of PWIN contain accurate and
complete minutes of all meetings and resolutions of the
directors
and the shareholders of PWIN held or passed by signature in
writing, respectively, since the date of its incorporation.
All
such meetings have been duly called and held.
(j) Absence of Material Changes - Since the execution of this
Agreement:
(i) no changes have been made in the accounting
methods, practices, or policies followed by PWIN;
(ii) PWIN has not increased, incurred or guaranteed any
debt, obligation, or liability (whether absolute or
contingent and whether or not currently due and
payable);
(iii) there has been no damage, destruction or
loss, labour trouble, or other event, development or
condition of any character (whether or not covered by
insurance) which adversely affects, or, may adversely
affect, the properties or prospects of PWIN; and
(iv) PWIN has not paid any amount or dividend, or
otherwise made any distribution or the payment of any
kind or nature whatsoever to any non-arm's length
Person.
(k) Records -
(i) All material financial
transactions of PWIN have been
accurately recorded in the PWIN Records.
The PWIN Records (of a financial nature)
have been prepared in accordance with US
generally accepted accounting principles
consistently applied.
(ii) The files, documentation and information in
writing provided by PWIN to Lynx Shareholders in
connection with the negotiation and completion of the
transactions contemplated in this Agreement are true
and correct in all material respects.
(l) Litigation - There are no judgements, decrees, injunctions,
ruling or orders of any court, Governmental Authority or
arbitration, or any actions, suits, grievances or
proceedings (whether or not on behalf of PWIN) pending or
threatened or involving PWIN which may materially adversely
affect PWIN's assets.
(m) Disclosure - The representations and warranties of PWIN in
this Agreement are true, complete and correct and do not
contain any untrue or misleading statement of a material
fact or omit to state a material fact necessary to make such
representations and warranties not misleading to Lynx
Shareholders.
ARTICLE VIII
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
8.1 Subject to section 8.2, all representations and warranties
contained in this Agreement on the part of each of the parties
shall survive the Closing for a period of one (1) year from the
Closing Date, after which time, if no claim shall have been made
against a Party with respect to any incorrectness or breach of
any representation or warranty, that Party shall have no further
liability under this Agreement with respect to the representation
or warranty.
8.2 The representations, warranties, covenants and indemnities
of the Parties relating to the tax liability of the Purchaser and
Lynx shall:
(a) unless resulting from any misrepresentation made or fraud
committed in filing a return or supplying information for
the purposes of the Income Tax Act (Canada), applicable
provincial corporation tax legislation or any other
legislation imposing tax on the Purchaser and Lynx,
terminate at the expiration of the last of the limitation
periods contained in the Income Tax Act (Canada), applicable
provincial corporation tax legislation or any other
legislation imposing tax on the Purchaser and Lynx; and
(b) if based upon misrepresentation made or fraud committed in
filing a return or in supplying information for the purposes
of the Income Tax Act (Canada), applicable provincial
corporation tax legislation or any other legislation
imposing tax on the Purchaser and Lynx, survive without
limit as to time.
8.3 All statements contained in any certificate or any
instrument delivered by or on behalf of a Party pursuant to or in
connection with the transactions contemplated by this Agreement
shall be deemed to be made by such Party under this Agreement.
ARTICLE IX
COVENANTS
9.1 Conduct of Lynx Business Prior to Closing. During the
Interim Period, Lynx shall:
(a) Conduct Business in Ordinary Course - except as otherwise
contemplated or permitted by this Agreement, conduct the
Lynx Business diligently and prudently and shall not,
without the prior written consent of the Purchaser, enter
into any contracts, agreements, commitments or leases, or
undertake any activity (including allotment or issuance of
any further shares or securities of Lynx), except in the
ordinary course of the Lynx Business;
(b) Continue Insurance - continue in full force all existing
insurance policies;
(c) Comply with Laws - comply with all laws applicable to the
Lynx Business;
(d) Maintain Permits - apply for, maintain in good standing and
renew all permits, licenses, registrations and permits
necessary to enable it to carry on the Lynx Business as now
conducted; and
(e) Distributions - not pay any amount or dividend or otherwise
make any distribution to its shareholders or any non-arm's
length Person out of the normal course.
9.2 Conduct of the Purchaser and PWIN Prior to Closing. During
the Interim Period, the Purchaser and PWIN shall comply with
all laws applicable to PWIN and the Purchaser.
9.3 Access for Investigation.
(a) The Purchaser, PWIN, the Lynx Shareholders and Lynx shall
permit the other Parties and their Authorized
Representatives, until the closing Date, to have reasonable
access during normal business hours to their respective
premises and their respective Records to enable confirmation
of the accuracy of the Records and the matters represented
and warranted in Articles IV, V, VI and VII.
(b) Until the Closing Date and, in the event the termination of
this Agreement without the completion of the transactions
contemplated hereby, each of the Parties shall thereafter,
subject to subsection 9.3(c), use its best efforts to keep
confidential and not use for its own purpose (other than as
contemplated by this Agreement) any information obtained
from any other Party with respect to the other Party's
affairs. If this Agreement is terminated, all documents,
working papers and other written material obtained by the
Party from the other party in connection with this Agreement
and not previously made public (and all copies thereof)
shall be returned to the other Party promptly after such
termination.
(c) The obligation of each of the Parties under subsection
9.3(a) to keep confidential and not use any information
shall not apply to information which:
(i) becomes generally available to
the public other than as a result of a
disclosure by the Party or its
representatives in violation of this
Agreement;
(ii) was available to the Party on a non-confidential
basis prior to its disclosure by the other party or
their representatives;
(iii) becomes available to the party on a
non-confidential basis from a source other than the
other Party or its representatives, provided that such
source is not bound by a confidentiality agreement with
the other Party; or
(iv) the Party is required by law to disclose.
9.4 Closing Documents. The Ancillary Agreements and the
Conveyance Documents shall be executed and delivered by the
Parties thereto at the Closing time.
9.5 Corporate Proceedings. On or before the Closing Date, each
Party (which is a corporation) shall provide to the other Parties
certified copies of all necessary proceedings and resolutions,
corporate or otherwise, and all other necessary actions,
corporate or otherwise, authorizing the execution and delivery of
this Agreement and the matters contemplated in it.
9.6 Actions to Satisfy Closing Conditions. Each Party shall
take all such actions as are within its power to control, and
shall use its best efforts to cause other actions to be taken
which are not within its power to control, so as to ensure
compliance with any conditions set forth in this Agreement which
are for the benefit of itself or any other Party.
9.7 PWIN Proceedings. PWIN shall use its best efforts to
complete an S-4 or other suitable filing with the US Securities
and Exchange Commission so as to permit the PWIN common shares
obtained by the Lynx Shareholders under this Agreement shall be
tradeable without restriction.
ARTICLE X
CONDITIONS OF CLOSING
10.1 Conditions for the Purchaser's Benefit. The Purchaser shall
not be obliged to complete the Share Exchange unless, on the
Closing Date, each of the following conditions shall have been
satisfied:
(a) Accuracy of Representations - The representations and
warranties of the Lynx Shareholders and Lynx set forth in
sections 4.1 and 5.1, respectively, shall be true and
correct at the Closing, except as those representations and
warranties may be affected by the occurrence of events or
transactions expressly contemplated and permitted by this
Agreement, including, without limitation, those in the
ordinary course of business, and the Purchaser shall have
received a certificate from the Lynx Shareholders and Lynx
confirming the foregoing.
(b) Performance of Obligations - Lynx and the Lynx Shareholders
shall have performed all of the obligations hereunder to be
performed by them at or prior to the Closing. Lynx and the
Lynx Shareholders shall not be in breach of any agreement on
its part contained herein;
(c) Deliveries - Lynx and the Lynx Shareholders shall have
delivered or caused to be delivered to the Purchaser the
Ancillary Agreements and Conveyance Documents, and shall
deliver up to the Purchaser possession of the Lynx Shares
and Lynx Warrants, free and clear of any Encumbrances;
(d) Approvals - All necessary approvals of the directors and/or
shareholders of Lynx shall have been obtained or given, as
the case may be, on or before the Closing Time;
(e) Completion of Investigations - The investigations and
assessments contemplated in section 9.3 shall have been
completed and the Purchaser shall be satisfied with the
result of such investigations and assessments including,
without limitation, the accuracy of the Records and matters
represented and warranted in Articles IV and V;
(f) Consents, Authorizations and Registrations - All consents,
approvals, orders and authorizations of, from or
notifications to any persons or Governmental Authorities
required in connection with the completion of any of the
transactions contemplated by this Agreement, the execution
of this Agreement, the Closing or the performance of any of
the terms and conditions of this Agreement shall have been
obtained on or before the Closing Date.
There shall be no injunction or order issued preventing, and
no pending or threatened claim, action, litigation or
proceeding, judicial or administrative, or investigation
against any Party by any Governmental Authority or Person
for the purpose of enjoining or preventing the consummation
of this Agreement, or otherwise claiming that this Agreement
or the consummation thereof is improper or would give rise
to proceedings under any statute or rule of law;
(g) No Loss - During the Interim Period, there has been no
material damage to the assets of Lynx or the Lynx Business
by fire or other peril, whether or not such damage is
covered by insurance;
(h) No Material Changes - There shall have been no material
adverse changes in the Lynx Business, assets or financial
condition of Lynx during the Interim Period. For the purposes
of
this subsection, the term "material adverse change" shall
mean
any change in the assets, liabilities or financial condition
of
Lynx or the Lynx Business that may involve material
reduction,
damage, risk to or destruction of the assets, whether or not
the
change is covered by insurance; and
(i) Legal Opinion - Counsel to Lynx shall deliver to counsel for
the Purchaser an opinion confirming that Lynx qualifies for
the
exemption from the provisions of Part XX of the Securities
Act
(Ontario) set out in s.93(1)(d) of said act.
(j) Closing of Minority Share and Warrant Exchange Agreement -
The Minority Share and Warrant Exchange Agreement shall have
been
duly executed by all parties thereto, all conditions to the
closing thereof, except the closing of this Agreement, shall
have
been satisfied, and the Purchased Securities held by the
Vendors
(as that term is defined in the Minority Share and Warrant
Exchange Agreement) shall have been tendered to the Purchaser
pursuant to the terms of said Minority Share and Warrant
Exchange
Agreement.
If any one or more of the foregoing conditions shall not have
been fulfilled on or before the Closing Date, the Purchaser may
terminate this Agreement by notice in writing to the other
Parties in which event the Purchaser shall be released from all
obligations under this Agreement and (unless the Purchaser can
show that the condition relied upon could reasonably have been
performed by the other parties) the other Parties shall also be
released from all obligations hereunder; provided, however, that
the Purchaser shall be entitled to waive compliance with any one
or more of such conditions in whole or in part if it shall see
fit to do so, without prejudice to its rights of termination in
the event of the non-fulfilment of any other condition in whole
or in part.
10.2 Conditions for the Benefit of the Lynx Shareholders. The
Lynx Shareholders shall not be obliged to complete the Share
Exchange unless, on the Closing Date, each of the following
conditions shall have been satisfied:
(a) Accuracy of Representations - The representations and
warranties of the Purchaser and PWIN set forth in sections
6.1 and 7.1 shall be true and correct at the Closing, except
as those representations and warranties may be affected by
the occurrence of events or transactions expressly
contemplated and permitted by this Agreement, and the Lynx
Shareholders shall have received certificates from the
Purchaser and PWIN confirming the foregoing.
(b) Performance of Obligations - the Purchaser shall have
performed all of the obligations hereunder to be performed
by it at or prior to the Closing and neither the Purchaser
nor PWIN shall be in breach of any agreement on its part
contained herein.
(c) Deliveries - the Purchaser shall have delivered or caused to
be delivered to Lynx Shareholders possession of the
Exchangeable Shares and Exchangeable Warrants, free and
clear of any Encumbrances.
(d) Approvals - All necessary approvals by the directors and/or
shareholders of the Purchaser and PWIN shall have been
obtained, completed or given, as the case may be, on or
before the Closing Time.
(e) Completion of Investigations - The investigations and
assessments contemplated in section 9.3 shall have been
completed and the Lynx Shareholders shall be satisfied with
the results of such investigations and assessments
including, without limitation, the accuracy of the Records
and matters represented and warranted in Articles VI and
VII.
(f) Consents, Authorizations and Registrations - All consents,
approvals, orders and authorizations of, from or
notifications to any Persons or Governmental Authorities
required in connection with the completion of any of the
transactions contemplated by this Agreement, the execution
of this Agreement, the Closing or the performance of any of
the terms and conditions of this Agreement shall have been
obtained on or before the Closing Date.
There shall be no injunction or order issued preventing, and
no pending or threatened claim, action, litigation or
proceeding, judicial or administrative, or investigation
against any Party by any Governmental Authority or Person
for the purpose of enjoining or preventing the consummation
of this agreement, or otherwise claiming that this Agreement
or the consummation thereof is improper or would give rise
to proceedings under any statute or rule of law.
(g) No Loss - During the Interim Period, there has been no
material damage to the assets of the Purchaser or PWIN by
fire or other peril, whether or not such damage is covered
by insurance.
(h) No Material Changes - There shall have been, in the
reasonable opinion of Lynx and the Lynx Shareholders, no
material adverse changes in the assets or financial
condition of the Purchaser or PWIN during the Interim
Period. For the purposes of this subsection, the term
"material adverse change" shall mean any change in the
assets, liabilities or financial condition of the Purchaser
or PWIN that may, in the reasonable opinion of Lynx and the
Lynx Shareholders involve material reduction, damage, risk
to or destruction of the assets whether or not the change is
covered by insurance.
(i) Support Agreement - PWIN and the Purchaser shall have
executed the Support Agreement on or before the Closing
Date.
If any one or more of the foregoing conditions shall not have
been fulfilled on or before the Closing Date, the Lynx
Shareholders may terminate this Agreement by notice in writing to
the Purchaser in which event the Lynx Shareholders shall be
released from all obligations under this Agreement and (unless
the Lynx Shareholders can show that the condition relied upon
could reasonably have been performed by the Purchaser or PWIN)
the Purchaser and PWIN shall also be released from all
obligations hereunder; provided, however, that the Lynx
Shareholders shall be entitled to waive compliance with any one
or more of such conditions in whole or in part if they shall see
fit to do so, without prejudice to their rights to termination in
the event of the non-fulfilment of any other condition in whole
or in part.
ARTICLE XI
INDEMNIFICATION
11.1 Mutual Indemnifications for Breaches of Warranty, etc.
Subject to section 11.3, the Purchaser and PWIN hereby covenants
and agrees with the Lynx Shareholders and Lynx and the Lynx
Shareholders and Lynx hereby covenant and agree severally with
the Purchaser and PWIN (the parties covenanting and agreeing to
indemnify another party under this Article XI are hereinafter
individually referred to as "Indemnifying Party" and the parties
that are being indemnified by another Party under this Article XI
are hereinafter individually referred to as the "Indemnified
Party") to indemnify and save harmless the Indemnified Party,
effective as and from the Closing Time, from and against any
Claims which may be made or brought against the Indemnified Party
and/or which it may suffer or incur as a result of, or arising
out of any non-fulfilment of any covenant or agreement on the
part of the Indemnifying Party under this Agreement or any
Ancillary Agreement or any incorrectness in or breach of any
representation or warranty of the Indemnifying Party contained in
this Agreement or any Ancillary Agreement.
11.2 Undisclosed Liabilities Indemnity. Notwithstanding section
11.1 and without limiting the generality of section 11.1:
(a) the Lynx Shareholders and Lynx shall indemnify the Purchaser
and PWIN from all Claims arising from liabilities or
obligations to Persons that arise from any act or failure to
act of Lynx or the Lynx Shareholders prior to the Closing
Date that is not disclosed to the Purchaser and PWIN
pursuant to Articles IV and V; and
(b) the Purchaser and PWIN shall indemnify Lynx and the Lynx
Shareholders from all Claims arising from liabilities or
obligations to Persons that arise from any act or failure to
act of the Purchaser or PWIN prior to the Closing Date that
is not disclosed to Lynx and the Lynx Shareholders pursuant
to Articles V and VI.
11.3 Limitation on Mutual Indemnification. The indemnification
obligations of each of the Parties pursuant to section 11.1 and
11.2 shall be subject to the following:
(a) the applicable limitation mentioned in Article VIII
respecting the survival of the representations and
warranties of the Parties;
(b) the indemnity obligations under section 11.2 shall survive
for a period of five (5) years from the Closing Date;
(c) there shall be no limit as to amount in respect of breaches
of the representations and warranties of the Parties other
than as specifically limited by the provisions of the
section; and
(d) an Indemnifying Party shall not be required to indemnify an
Indemnified Party until the aggregate Claims sustained by
the Indemnified Party exceeds a value of $5,000, in which
case the Indemnifying Party shall be obligated to the
Indemnified party for all Claims without limit as to amount.
11.4 Procedure for Indemnification. The following provisions
shall apply to any Claims for which an Indemnifying Party may be
obligated to indemnify an Indemnified Party pursuant to this
Agreement:
(a) upon receipt from a third party by the Indemnified Party of
notice of a Claim or the Indemnified party becoming aware of
a Claim in respect of which the Indemnified Party proposes
to demand indemnification from the Indemnifying Party, the
Indemnified Party shall give notice to that effect to the
Indemnifying Party with reasonable promptness, provided that
failure to give such notice shall not relieve an
Indemnifying Party from any liability it may have to the
Indemnified Party except to the extent that the Indemnifying
Party is prejudiced thereby;
(b) in the case of Claims arising from third parties, the
Indemnifying Party shall have the right by notice to the
Indemnified party not later than thirty (30) days after
receipt of the notice described in paragraph (i) above to
assume the control of the defense, compromise or settlement
of the Claims, provided that such assumption shall, by its
terms, be without costs to the Indemnified Party and the
Indemnifying Party shall at the Indemnified Party's request
furnish it with reasonable security against any costs or
other liabilities to which it may be or become exposed by
reason of such defense, compromise or settlement;
(c) upon the assumption of control by the Indemnifying Party as
aforesaid, the Indemnifying Party shall diligently proceed
with the defense, compromise or settlement of the Claims at
its sole expense, including employment of counsel reasonably
satisfactory to the Indemnified Party and, in connection
therewith, the Indemnified Party shall co-operate fully, but
at the expense of the Indemnifying Party, to make available
to the Indemnifying Party all pertinent information and
witnesses under the Indemnified Party's control, make such
assignments and take such other steps as in the opinion of
counsel for the Indemnifying Party are necessary to enable
the Indemnifying Party to conduct such defense; provided
always that the Indemnified Party shall be entitled to
reasonable security from the Indemnifying Party for the
expense, costs of other liabilities to which it may be or
may become exposed by reason of such co-operation;
(d) the final determination of any such Claims arising from
third parties, including all related costs and expenses,
will be binding and conclusive upon the Parties as to the
validity or invalidity, as the case may be of such Claims
against the Indemnifying Party hereunder; and
(e) should the Indemnifying Party fail to give notice to the
Indemnified Party as provided in paragraph (ii) above, the
Indemnified Party shall be entitled to make such settlement
of the Claims as in its sole discretion may appear
advisable, and such settlement or any other final
determination of the Claims shall be binding upon the
Indemnifying Party.
ARTICLE XII
CLOSING ARRANGEMENTS
12.1 Closing. The Closing shall take place at the offices of
Xxxxxxx & Associates, Barristers and Solicitors, 0 Xxxxx Xxxxxxxx
Xxxxx, Xxxxx 000, 000 Xxxx Xxxxxx Xxxx, Xxxxxxx X0X 0X0,
Xxxxxxx, Xxxxxx at the Closing Time on the Closing Date.
12.2 Closing Procedures. At the Closing Time:
(a) the Purchaser shall issue and deliver to the Lynx
Shareholders possession of the Exchangeable Shares and the
Exchangeable Warrants;
(b) the Lynx Shareholders shall deliver up to the Purchaser the
Lynx Shares and the Lynx Warrants;
(c) the Parties shall take or shall have taken, as the case may
be, the other actions contemplated to be taken by them at or
before the Closing contemplated in this Agreement.
12.3 Non-Waiver. No investigations made by or on behalf of the
Purchaser, PWIN, Lynx` and the Lynx Shareholders at any time
shall have the effect of waiving or diminishing the scope of or
otherwise affecting any representation, warranty or indemnity
made by or imposed upon the Parties pursuant to this Agreement.
ARTICLE XIII
GENERAL
13.1 Termination.
(1) This agreement may be terminated at any time prior to the
Closing Date:
(a) by the mutual agreement of the Parties;
(b) by the Parties if:
(i) the Share Exchange shall not have been
completed by October 1, 1999 (or such other date,
if any, as the Parties shall have agreed in
writing), if the failure to complete such purchase
and sale on or before such date is not caused by
any breach of this Agreement by the Party electing
to terminate; or
(ii) the Share Exchange would violate any
non-appealable final order, decree or judgement of
any court or governmental body having competent
jurisdiction.
(2) If this Agreement is terminated by a Party under subsection
13.1(1), such termination shall be without liability of
either Party to the other parties, or to any of their
shareholders, directors, officers, employees, agents,
consultants or representatives provided that if such
termination shall result from the wilful failure of the
Party to fulfil a condition to the performance of the other
Parties or to perform a covenant of this agreement or from a
wilful breach by the party to this Agreement, the Party
shall be fully liable for any and all damages, costs and
expenses (including, but not limited to, reasonable counsel
fees and disbursements) sustained or incurred by the other
Parties.
13.2 Expenses Except as otherwise specified herein, all costs
and expenses (including the fees and disbursements of accountants
and legal counsel) incurred in connection with this Agreement and
completion of the transactions contemplated by this Agreement
shall be paid by the Party incurring those expenses.
13.3 Time of Essence. Time shall be of the essence in all
respects of this Agreement.
13.4 Notices. Any notice or other communication which is
required or permitted to be given or made by one Party to the
others hereunder shall be in writing and shall be either
personally delivered to such Parties sent by facsimile.
Any notice shall be sent to the intended recipient at its
address as follows:
(a) to the Purchaser and/or to PWIN:
c/o Xxxxx Xxxxxxxxxxxx
000 Xxxxxxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
and to Xxxxxxx & Xxxxxxxx, Ltd. at:
c/o Xxxxxx Xxxxxxx, Esq.
0000, X. Xxxxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxx
00000
and to Xxxxxxx & Associates at:
x/x Xxxx X. Xxxxxxx
Xxxxx 000, X.X. Xxx 000
0 First Canadian Place
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
(b) to Lynx and/or the Lynx Shareholders at:
c/o Xxxxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
and to Xxxxxxx Bloovol at:
00 Xxx Xxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile No.: (000) 000-0000
or at such other address as any Party may from time to time
advise the others by notice in writing. Any notice given by
personal delivery shall be deemed to be received on the date of
delivery. Any notice sent by facsimile or similar method of
recorded communication shall be deemed to have been received on
the next Business Day following the date of its transmission.
13.5 Further Assurances. The Parties shall with reasonable
diligence do all things and provide all reasonable assurances as
may be required to complete the transactions contemplated by this
Agreement, and each Party shall provide such further documents or
instruments required by any other Party as may be reasonably
necessary or desirable to give effect to this Agreement and carry
out its provisions, whether before or after the Closing.
13.6 Public Notice. All public notices to third parties and all
other publicity concerning the transactions contemplated by this
Agreement shall be jointly planned and co-ordinated by the
Parties and no Party shall act unilaterally in this regard
without the prior written approval of the other Parties, such
approval not to be unreasonably withheld.
13.7 Amendment and Waiver. No supplement, modification, waiver
or termination of this Agreement shall be binding unless executed
in writing by the party to be bound. No waiver of any of the
Provisions of this Agreement shall constitute a waiver of any
other provision (whether or not similar) nor shall such waiver
constitute a continuing waiver unless otherwise expressly
provided.
13.8 Assignment. This Agreement and the rights or obligations
hereunder or thereunder are not assignable by any Party without
the prior written consent of the other Parties, which consent
shall not be unreasonably withheld. This Agreement shall enure to
the benefit of and be binding upon the Parties and their
respective successors and permitted assigns.
13.9 Severability. Any provision of this Agreement, which is
prohibited or unenforceable in any jurisdiction, shall not
invalidate the remaining provisions hereof. Any such prohibition
or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
13.10 Governing Law. The Parties agree that this Agreement
shall be governed by the laws of the Province of Ontario, and the
federal laws of Canada applicable therein, that Ontario will be
the proper forum for any controversy arising in connection with
this Agreement and that the courts of which will be the exclusive
forums for all such suits, actions or proceedings.
13.11 Counterparts. This Agreement may be executed by the
Parties in one or more counterparts, each of which when so
executed and delivered shall be an original and such counterparts
shall together constitute one and the same instrument.
IN WITNESS WHEREOF this agreement has been executed by the
Parties each as of the day and year first before written.
THIS AGREEMENT IS HEREBY EXECUTED on the date set forth
above.
PLAYANDWIN CANADA INC.
Per:
_________________________________
A.S.O.
PLAYANDWIN, INC.
Per:
_________________________________
A.S.O.
LYNX GAMING CORP.
Per:
________________________________
A.S.O.
THE LYNX SHAREHOLDERS:
_________________________
_____________________________
Witness Xxxxxxx Xxxxxx
_________________________
_____________________________
Witness Xxx Xxxxxxx
CONSULAR INVESTMENT
CORPORATION
Per:__________________________c/s
A.S.O.
SCHEDULE 1
DEFINITIONS
"Affiliate and Associate" means an "affiliate" and "associate",
respectively, as those terms are defined in the Business
Corporation Act, 1990 (Ontario), as amended on the date
hereof.
"Agreement" means the Agreement and any instrument supplemental
or ancillary to it.
"Ancillary Agreements" means all documents, agreements,
certificates and instruments to be executed or delivered by
any Person under this Agreement including the Conveyance
Documents, the Support Agreement, and the Minority Share and
Warrant Exchange Agreement.
"Authorized Representatives" means employees, agents, counsel,
accountants and other representatives.
"Business Day" means any day other than a Saturday, Sunday or
statutory holiday in the Province of Ontario.
"Capital Expenditures" means expenditures which, in accordance
with Canadian generally accepted accounting principles
consistently applied, are chargeable to capital or fixed
assets accounts and includes expenditures in connection with
the acquisition by, purchase, erection or construction of
lands, fixed assets, plant, machinery and/or equipment,
whether fixed or moveable.
"Claims" means claims, demands, actions, causes of action,
damages, losses, costs, fines, penalties, interest,
liabilities and expenses, including, without limitation,
reasonable legal fees.
"Closing" means the completion of the Share Exchange pursuant to
this Agreement.
"Closing Date" means September 1, 1999, or such other later
date as may be agreed to by the Parties, provided that such
date shall not be later than October 1, 1999.
"Closing Time" means 2:00 p.m. (Toronto time) on the Closing Date
or such other time on the Closing Date as may be agreed to
by the Parties.
"Conveyance Documents" means all bills of sale, assignments, and
instruments of transfer, assurances, consents, and other
documents as shall be necessary to effectively transfer to
the Purchaser the Lynx Shares.
"Encumbrances" means any mortgage, charge, pledge, hypothecate,
lien, encumbrance, restriction, option, right of others or
security interest of any kind.
"Exchangeable Shares" means Class B Special Shares of the
Purchaser, being subordinate, non-voting preferred shares
authorized in an unlimited number, redeemable and
retractable subject to the terms of this Agreement.
"Exchangeable Warrants" means warrants to purchase one
Exchangeable Share each at a price of $1.70, expiring
eighteen (18) months after the Closing Date.
"Governmental Authorities" means any applicable Canadian or
non-Canadian federal, provincial and municipal agency,
ministry, crown corporation, department, inspector and
official.
"Interim Period" means the period commencing on the date of this
Agreement and ending immediately before the opening of
business on the Closing Date.
"Lynx's Business" means Lynx's Business of developing and
marketing proprietary games of chance, including but not
limited to the game known as RACINGO, either by itself or
through or in combination with its subsidiary, P.E.S.T.
Creative Gaming Corporation.
"Lynx Business Agreements" means the business agreements
undertaken in the normal course of business.
"Lynx Financial Statements" means the financial statements of
Lynx attached as Schedule 3.
"Lynx Records" means Lynx's books, records, files, including
business and financial records, documentation and
information, whether in writing or stored in any retrieval
system or database.
"Lynx Shareholders" means the registered principal shareholders
of Lynx listed in Schedule 2.
"Lynx Shares" means the common shares of Lynx owned by the Lynx
Shareholders as listed in Schedule 2.
"Lynx Special Warrants" means the special warrants held certain
persons who are not shareholders of Lynx, each special
warrant entitling its holder to 1.1 Lynx Shares and 0.55
Lynx Warrants for no further consideration, exercisable
automatically upon the completion of the transactions
contemplated in this Agreement.
"Lynx Warrants" means the warrants held by the Lynx Shareholders
as listed in Schedule 2, each warrant entitling its holder
to purchase one Lynx Share each at a price of $0.85
exercisable for 18 months after Lynx becomes a reporting
issuer.
"NASD" means the National Association of Securities Dealers.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"OSC" means the Ontario Securities Commission.
"Parties" means the parties to the Agreement and "Party" means
any one of them.
"Permits" means authorizations, registrations, permits, approvals
or licenses that can be issued or granted by Governmental
Authorities.
"Person" means an individual, body corporate, partnership,
trustee, trust, unincorporated association, executor,
administrator or legal representative.
"Purchasers Records" means the Purchaser's books, records, files,
including business and financial records, documentation and
information, whether in writing or stored in any retrieval
system or database.
"PWIN Records" means PWIN books, records, files including
business and financial records, documentation and
information, whether in writing or stored in any retrieval
system or database
"Records" means the Lynx Records, the Purchasers' Records and
PWIN Records.
"Regulatory Approval" means the approvals and consents of
applicable regulatory authorities, which are required to
complete the Share Exchange.
"Share Exchange" has the meaning attributed to it in section 2.2.
"Shareholder Approval" means approval by the holders of the
common shares of PWIN in respect to the Share Exchange.
SCHEDULE 2
LIST OF LYNX SHAREHOLDERS
Number of Number of
Shareholder Common Shares Warrants
Xxxxxxx Xxxxxx 1,105,000 nil
Xxx Xxxxxxx 530,000 25,000
Consular Investment Corporation 2,640,012 nil
SCHEDULE 3
LYNX FINANCIAL STATEMENTS
SCHEDULE 4
SUPPORT AGREEMENT
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT is made as of the 30th day of August,
0000,
XXXXXXX
XXXXXXXXXX XXXXXX INC.
a corporation incorporated under the laws
of the Province of Ontario
(hereinafter referred to as the "Purchaser")
OF THE FIRST PART
and
PLAYANDWIN, INC.,
a corporation incorporated under the laws
of the State of Nevada
(hereinafter referred to as "PWIN")
OF THE SECOND PART
WHEREAS PWIN and Purchaser have entered into an agreement
(the "Share Exchange Agreement") with the principal shareholders
of Lynx Gaming Corporation ("Lynx") and an agreement (the
"Minority Share and Warrant Exchange Agreement") with the other
shareholders and holders of special warrants of Lynx whereby the
Purchaser is to acquire all of the issued and outstanding shares,
share purchase warrants and special warrants of Lynx in exchange
for shares of the Purchaser convertible into shares of PWIN (the
"Exchangeable Shares") and warrants to purchase Exchangeable
Shares;
AND WHEREAS Purchaser is a wholly-owned subsidiary of PWIN;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in
consideration of the mutual covenants hereinafter contained and
provided for and other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged by the
Parties), the Parties agree as follows:
1. The Purchaser will be funded with sufficient resources,
including PWIN common shares, to permit it to satisfy its
obligations under the Share Exchange Agreement and the Minority
Share and Warrant Exchange Agreement with respect to the
Exchangeable Shares.
2. PWIN will not:
(i) take actions that prejudice holders of Exchangeable
Shares, by unduly diminishing the value of that which they
are entitled to receive on the conversion/exchange of their
shares, provided that PWIN shall not be liable hereunder for
reasonable decisions made in the ordinary course of
business, or for fluctuations in market price caused by
factors beyond its control;
(ii) split or consolidate PWIN stock without causing the
Purchaser to make a corresponding split or consolidation of
the issued and outstanding Exchangeable Shares and
Exchangeable Warrants, provided that such action is also
authorized by the shareholders of the Purchaser including
the holders of the Exchangeable Shares;
(iii) liquidate, wind up or dissolve the Purchaser while
there are Exchangeable Share outstanding.
IN WITNESS WHEREOF this agreement has been executed by the
Parties each as of the day and year first before written.
THIS AGREEMENT IS HEREBY EXECUTED on the date set forth
above.
PLAYANDWIN CANADA INC.
Per:
_________________________________
A.S.O.
PLAYANDWIN, INC.
Per:
_________________________________
A.S.O.
SCHEDULE 5
MINORITY SHARE AND WARRANT EXCHANGE AGREEMENT
MINORITY SHARE AND WARRANT EXCHANGE AGREEMENT
THIS AGREEMENT is made the 8th day of September 0000,
XXXXXXX
XXXXXXXXXX XXXXXX INC., a corporation
incorporated under the laws of the Province of
Ontario
(the "Purchaser")
OF THE FIRST PART
and LYNX GAMING CORP., a corporation
incorporated under the laws of the Province of
Ontario
("Lynx")
OF THE SECOND PART
and All the registered holders of Lynx
Shares, Lynx Warrants and/or Lynx Special Warrants
listed in Schedule 2 hereto
(the "Vendors")
OF THE THIRD PART
and PLAYANDWIN, INC., a corporation
incorporated under the laws of the State of Nevada
("PWIN")
OF THE FOURTH PART
WHEREAS the Purchaser desires to purchase from the Vendors
and the Vendors desire to sell to the Purchaser the Lynx Shares
and Lynx Warrants;
AND WHEREAS the Purchaser is a wholly-owned subsidiary of
PWIN;
AND WHEREAS the Purchaser, PWIN and Lynx have entered into
an agreement (the "Share Exchange Agreement") whereby the
Purchaser will acquire all of the common shares and share
purchase warrants of Lynx owned by the principal registered
shareholders of Lynx;
AND WHEREAS the Board of Directors of Lynx has approved the
sale of the Lynx Shares Lynx Warrants and Lynx Special Warrants
to the Purchaser;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of
the mutual covenants hereinafter contained and provided for and
other good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged by the Parties), the
Parties agree as follows:
1. Purchase and Sale.
(a) Previous Agreement Superseded. This Agreement supersedes
and replaces an earlier Minority Share and Warrant Exchange
Agreement made by the Parties hereto on August 30, 1999.
(b) Agreement to Purchase. Upon the terms and subject to the
conditions contained in this Agreement, the Vendors shall sell
and the Purchaser shall purchase, as of and with effect from the
opening of business on the Closing Date, the Lynx Shares, Lynx
Warrants and Lynx Special Warrants (the "Purchased Securities").
(c) Purchase Price. The purchase and sale of the Purchased
Securities shall be effected by the issue of the Exchangeable
Shares and/or Exchangeable Warrants from the treasury of the
Purchaser to the Vendors, pursuant to the prospectus and
registration exemptions contained in paragraphs 72(1)(j) and
35(1)(16) of the Securities Act (Ontario) (the "Warrant
Exchange"). The Purchaser shall issue to each Vendor:
(i) one Exchangeable Share for every two Lynx Shares held
by the Vendor;
(ii) one Exchangeable Warrant for every two Lynx Warrants
held by the Vendor; and
(iii) 0.55 Exchangeable Shares and 0.275 Exchangeable
Warrants for every one Lynx Special Warrant held by the
Vendor
(d) Fractional Shares. No fractional Exchangeable Shares or
Exchangeable Warrants shall be issued pursuant to this
Agreement.
The amount of Exchangeable Shares and/or Exchangeable Warrants
issuable to each Vendor shall be rounded up to the nearest whole
Exchangeable Share or Exchangeable Warrant.
(e) Rollover. At the option of each Vendor, the Purchaser
covenants and agrees to elect, jointly with such Vendor if
applicable (referred to in this section as the "Electing
Vendor"), in accordance with the provisions of subsection 85(1)
or 85.1(1) of the Income Tax Act (Canada) (the "Tax Act") (and
the corresponding provisions of any applicable provincial tax
legislation) in the prescribed form and within the prescribed
time for the purposes of the Tax Act, and shall therein agree to
elect in respect of the Purchased Securities of the Electing
Vendor an amount as the Electing Vendor shall direct which shall
be deemed to be the Electing Shareholder's proceeds of
disposition thereof and Purchaser's cost thereof.
Notwithstanding the foregoing, the Electing Vendor may not
direct
the parties to elect an amount which is greater than the fair
market value of the Purchased Securities or an amount which is
less than the adjusted cost base of the Purchased Securities to
the Electing Vendor. The Electing Vendor and the Purchaser
agree
to execute all such documents and forms to make the election
contemplated in this section.
(f) Price Adjustment. The parties hereto covenant and agree
that, in the event that any governmental taxing authority having
jurisdiction issues or proposes to issue, assessments or
reassessments of additional liability for taxes or any other
subject by reason of asserting that the Elected Amount is greater
or less than the adjusted cost base of the Purchased Securities
to the Electing Vendor, or that the adjusted cost base of the
Purchased Securities to the Electing Vendor is greater than or
less than the Elected Amount, then the Elected Amount shall be
increased or decreased by the difference so determined; but only
to the extent that the Elected Amount so revised is accepted by
the taxing authority, the Electing Vendor and the Purchaser, or,
failing such acceptance is established by the courts having
jurisdiction in the matter after all rights of appeal have been
exhausted and all times for appeal have expired without appeals
having been taken by such taxing authority, the Electing Vendor
or the Purchaser. Each of the Electing Vendor and the Purchaser
hereby agrees to make such further elections, enter into such
acknowledgements or agreements, and do or cause to be done such
further acts and things as may be, in the opinion of counsel,
reasonably necessary to give effect to this section and the
change in the Elected Amount.
(g) Exchangeable Shares. The Exchangeable shares to be issued by
the Purchaser pursuant to this Agreement shall be subject to the
following terms:
(a) each Exchangeable Share may be exchanged at the request
of its holder for one common share of PWIN, provided that in
the event of a consolidation, split or other reorganization
of the capital stock of the Purchaser or of PWIN, the number
of PWIN common shares issuable for each one Exchangeable
Share shall be adjusted accordingly;
(b) Of the Exchangeable Shares received by a Lynx
Shareholder on the Closing Date:
(i) none may be exchanged during the period ending on
and including the day of the first anniversary of
the Closing Date;
(ii) up to one-third (1/3) may be exchanged after said
first anniversary;
(iii) an additional one-third (1/3) may be
exchanged after the second anniversary of the
Closing Date; and
(iv) all Exchangeable Shares may be exchanged after the
third anniversary of the Closing Date.
(c) Each Exchangeable Share may be exchanged at the request
of the Purchaser at any time during the period ending on and
including the day of the fifth anniversary of the Closing
Date, and shall be exchanged upon: (i) the occurrence of a
take over bid for all of the issued and outstanding shares
of PWIN; or (ii) the day of the fifth anniversary of the
Closing Date. All Exchangeable Shares shall be automatically
exchanged on the fifth anniversary of the Closing Date.
(g) Exchangeable Warrants. Each Exchangeable Warrant to be
issued by the Purchaser pursuant to this Agreement shall entitle
its holder to acquire one Exchangeable Share at a price of
$1.70.
No Exchangeable Warrant may be exercised on or before the day of
the first anniversary of the Closing Date. The Exchangeable
Warrants shall expire eighteen (18) months after the Closing
Date.
(h) Acknowledgment of Resale Restrictions. The Vendors hereby
acknowledge that any Exchangeable Shares or PWIN common shares
that they receive pursuant to this Agreement are restricted in
accordance with the United States Securities Act of 1933, as
amended, and the rules promulgated thereunder.
(i) PWIN Proceedings. PWIN shall use its best efforts to
complete an S-4 filing with the US Securities and Exchange
Commission so as to permit the PWIN common shares obtained by
the
Lynx Shareholders under this Agreement to be tradeable without
restriction.
2. Representations and Warranties of the Vendors. Each Vendor
represents and warrants to the Purchaser and PWIN as follows and
acknowledges that the Purchaser and PWIN are relying on these
representations and warranties in connection with the completion
of the purchase of the Purchased Securities:
(a) Capacity to own - The Vendor has all necessary power,
authority and capacity to own the Purchased Securities, as
the case may be.
(b) Capacity to Enter Agreement - The Vendor has full power,
right and authority to enter into this Agreement and to
perform his/her/its obligations under it.
(c) Binding Obligation - This Agreement has been duly executed
and delivered by the Vendor and constitutes a valid and
binding obligation of the Vendor.
(d) Absence of Conflict - The Vendor is not a party to, bound or
affected by any agreement which would be violated, breached
or terminated by, or which would result in creation or
imposition of any Encumbrance upon any of the Purchased
Securities as a consequence of the execution and delivery of
this Agreement or the consummation of the transactions
contemplated in this Agreement.
(e) Title - The Vendors is the legal and beneficial owner of the
Purchased Securities, as listed in Schedule 2 hereto, with
good and marketable title, free and clear of any
Encumbrances.
(f) No Bankruptcy - No proceedings have been taken or authorized
by any person in respect of the bankruptcy, insolvency,
liquidation, dissolution or winding up as applicable, of the
Vendor.
(g) No Option - No Person, other than the Purchaser under this
Agreement, has any agreement or any right capable of
becoming an agreement or option for the purchase from the
Vendor of any of the Purchased Securities.
(h) Disclosure - The representations and warranties of the
Vendor in this Agreement are true, correct and do not
contain any untrue or misleading statement of a material
fact or omit to state a material fact necessary to make such
representations and warranties not misleading to the
Purchaser or PWIN.
(i) Non-Violation - The entering into of this Agreement and the
consummation of transactions contemplated herein do not and
will not conflict with, or result in a breach of, or
constitute a default under the terms or conditions of any
constating document or by-laws of the Vendor (if the Vendor
is a corporation) or any court or administrative order or
process, agreement or instrument to which the Vendors is
party or by which he/she/it is bound.
3. Representations and Warranties of The Purchaser. The
Purchaser hereby represents and warrants to Lynx and the Vendors
the facts set forth in Article VI of the Share Exchange
Agreement, which Article V is hereby incorporated by reference
into this Agreement, and acknowledges that Lynx and the Vendors
are relying on those representations and warranties in connection
with the sale of the Purchased Securities.
4. Representations and Warranties of PWIN. PWIN hereby
represents and warrants to Lynx and the Vendors the facts set
forth in Article VII of the Share Exchange Agreement, which
Article VI is hereby incorporated by reference into this
Agreement, and acknowledges that Lynx and the Vendors are relying
on those representations and warranties in connection with the
sale of the Purchased Securities.
5. Representations and Warranties of Lynx. Lynx hereby
represents and warrants to the Purchaser and PWIN the facts set
forth in Article IV of the Share Exchange Agreement, which
Article IV is hereby incorporated by reference into this
Agreement, and acknowledges that the Purchaser and PWIN are
relying on those representations and warranties in connection
with the sale of the Purchased Securities. Lynx hereby also
represents and warrants to the Purchaser that the Lynx Special
Warrants have been duly issued to the holders thereof, as set out
in Schedule 2, and that the Lynx Special Warrants constitute a
valid and binding obligation of Lynx to issue Lynx Shares and
Lynx Warrants to the holders thereof, pursuant to the terms of
the same.
6. Survival or Representations and Warranties. Subject to
section 8(b), all representations and warranties contained in
this Agreement on the part of each of the parties shall survive
the Closing for a period of one (1) year from the Closing Date,
after which time, if no claim shall have been made against a
Party with respect to any incorrectness or in breach of any
representation or warranty, that Party shall have no further
liability under this Agreement with respect to the representation
or warranty.
7. Conditions of Closing.
(a) Conditions for the Purchaser's Benefit. The Purchaser shall
not be obliged to complete the purchase of the Purchased
Securities unless, on the Closing Date, the Share Exchange
Agreement has been executed, each of the conditions of closing
set forth in subsection 10.1 of the Share Exchange Agreement
(with the exception of the closing of the transaction
contemplated in this Agreement) has been satisfied, and the Lynx
Shares and Lynx Warrants, as those terms are defined in the
Share
Exchange Agreement, have been tendered to the Purchaser pursuant
to the terms of the Share Exchange Agreement.
(b) Conditions for the Benefit of the Vendors. The Vendors
shall not be obliged to complete the sale of their Purchased
Securities unless on the Closing Date: (i) each of the
conditions
set forth in subsection 10.2 of the Share Exchange Agreement
(with the exception of the closing of the transaction
contemplated in this Agreement) shall have been satisfied; and
(ii) the Lynx Shares and Lynx Warrants, as those terms are
defined in the Share Exchange Agreement, have been tendered to
the Purchaser pursuant to the terms of the Share Exchange
Agreement.
(c) If Conditions not Satisfied. If any one or more of the above-
mentioned conditions of closing have not been fulfilled on or
before the Closing Date, the Party for whose benefit said
conditions were made (the "Beneficiary") may terminate this
Agreement by notice in writing to the other Parties in which
event the Beneficiary shall be released from all obligations
under this Agreement and (unless the Beneficiary can show that
the condition relied upon could reasonably have been performed
by
the other Parties) the other Parties shall also be released from
all obligations hereunder; provided, however, that the
Beneficiary shall be entitled to waive compliance with any one
or
more of such conditions in whole or in part if it shall see fit
to do so, without prejudice to its rights of termination in the
event of the non-fulfilment of any other condition in whole or
in
part.
8. Indemnification.
(a) Mutual Indemnification's for Breaches of Warranty, etc.
Subject to section 8(c) the Purchaser and PWIN hereby covenant
and agree with the Vendors and Lynx and the Vendors and Lynx
hereby covenant and agree severally with the Purchaser and PWIN
(the parties covenanting and agreeing to indemnify another party
under this section 8 are hereinafter individually referred to as
"Indemnifying Party" and the parties that are being indemnified
by another Party under this section 8 are hereinafter
individually referred to as the "Indemnified Party") to indemnify
and save harmless the Indemnified Party, effective as and from
the Closing Time, from and against any Claims which may be made
or brought against the Indemnified Party and/or which it may
suffer or incur as a result of, or arising out of any
non-fulfilment of any covenant or agreement on the part of the
Indemnifying Party under this Agreement or any Ancillary
Agreement or any incorrectness in or breach of any representation
or warranty of the Indemnifying Party contained in this Agreement
or any Ancillary Agreement.
(b) Undisclosed Liabilities Indemnity. Notwithstanding section
8(a) and without limiting the generality of section 8(a):
i. the Vendors and Lynx shall indemnify and save harmless the
Purchaser and PWIN from all Claims arising from liabilities or
obligations to Persons that arise from the act or failure to
act
of the Vendors prior to the Closing Date that are not disclosed
to PWIN pursuant to sections 2 and 5; and
ii. the Purchaser and PWIN shall indemnify the Vendors from all
Claims arising from liabilities or obligations to Persons that
arise from the act or failure to act of the Purchaser or PWIN
prior to the Closing Date that are not disclosed to the Vendors
pursuant to sections 3 and 4.
(c) Limitation on Mutual Indemnification. The indemnification
obligations of each of the Parties pursuant to section 8(a) and
8(b) shall be subject to the following:
i. the applicable limitation mentioned in section 6 respecting
the survival of the representations and warranties of the
Parties;
ii. the indemnity obligations under section 8(b) shall survive
for a period of five (5) years from the Closing Date;
iii. there shall be no limit as to amount in respect of breaches
of the representations and warranties of the Parties other than
as specifically limited by the provisions of the section; and
iv. an Indemnifying Party shall not be required to indemnify an
Indemnified Party until the aggregate Claims sustained by the
Indemnified Party exceed a value of $5,000, in which case the
Indemnifying Party shall be obligated to the Indemnified party
for all Claims without limit as to amount.
(d) Procedure for Indemnification. The following provisions
shall apply to any Claims for which an Indemnifying Party may be
obligated to indemnify an Indemnified Party pursuant to this
Agreement:
i. upon receipt from a third party by the Indemnified Party of
notice of a Claim or the Indemnified party becoming aware of a
Claim in respect of which the Indemnified Party proposes to
demand indemnification from the Indemnifying Party, the
Indemnified Party shall give notice to that effect to the
Indemnifying Party with reasonable promptness, provided that
failure to give such notice shall not relieve an Indemnifying
Party from any liability it may have to the Indemnified Party
except to the extent that the Indemnifying Party is prejudiced
thereby;
ii. in the case of Claims arising from third parties, the
Indemnifying Party shall have the right by notice to the
Indemnified party not later than thirty (30) days after receipt
of the notice described in paragraph (i) above to assume the
control of the defense, compromise or settlement of the Claims,
provided that such assumption shall, by its terms, be without
costs to the Indemnified Party and the Indemnifying Party shall
at the Indemnified Party's request furnish it with reasonable
security against any costs or other liabilities to which it may
be or become exposed by reason of such defense, compromise or
settlement;
iii. upon the assumption of control by the Indemnifying Party as
aforesaid, the Indemnifying Party shall diligently proceed with
the defense, compromise or settlement of the Claims at its sole
expense, including employment of counsel reasonably
satisfactory
to the Indemnified Party and, in connection therewith, the
Indemnified Party shall co-operate fully, but at the expense of
the Indemnifying Party, to make available to the Indemnifying
Party all pertinent information and witnesses under the
Indemnified Party's control, make such assignments and take
such
other steps as in the opinion of counsel for the Indemnifying
Party are necessary to enable the Indemnifying Party to conduct
such defense; provided always that the Indemnified Party shall
be
entitled to reasonable security from the Indemnifying Party for
the expense, costs of other liabilities to which it may be or
may
become exposed by reason of such co-operation;
iv. the final determination of any such Claims arising from
third parties, including all related costs and expenses, will
be
binding and conclusive upon the Parties as to the validity or
invalidity, as the case may be of such Claims against the
Indemnifying Party hereunder; and
v. should the Indemnifying Party fail to give notice to the
Indemnified Party as provided in paragraph (ii) above, the
Indemnified Party shall be entitled to make such settlement of
the Claims as in its sole discretion may appear advisable, and
such settlement or any other final determination of the Claims
shall be binding upon the Indemnifying Party.
9. Closing.
(a) Closing. The Closing shall take place at the offices of
Xxxxxxx & Associates, Barristers and Solicitors, 0 Xxxxx Xxxxxxxx
Xxxxx, Xxxxx 000, 000 Xxxx Xxxxxx Xxxx, Xxxxxxx X0X 0X0,Xxxxxxx,
Xxxxxx at the Closing Time on the Closing Date.
(b) Closing Procedures. At the Closing Time:
i. the Purchaser shall issue and deliver to the Vendors
possession of the Exchangeable Shares and Exchangeable
Warrants;
ii. the Vendors shall deliver up to the Purchaser the Purchased
Securities;
iii. the Parties shall take or shall have taken, as the case may
be, the other actions contemplated to be taken by them at or
before the Closing contemplated in this Agreement.
(c) Non-Waiver. No investigations made by or on behalf of the
Purchaser, PWIN, Lynx or the Vendors at any time shall have the
effect of waiving or diminishing the scope of or otherwise
affecting any representation, warranty or indemnity made by or
imposed upon the Parties pursuant to this Agreement.
10. General.
(a) Definitions. The terms used in this Agreement shall have the
meanings set forth in Schedule 1 hereto, failing which they
shall
have the meanings set forth in the Share Exchange Agreement.
(b) Entire Agreement. This Agreement together with the
agreements and other documents to be delivered pursuant to this
Agreement, constitute the entire agreement between the Parties
pertaining to the purchase and sale of the Purchased Securities
by the Purchaser, and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or
written, and there are no warranties, representations and other
agreements between the Parties in connection with the subject
matter hereof except as specifically set forth in this Agreement
or any other agreement or document to be delivered pursuant to
this Agreement.
(c) Governing Law. The Parties agree that this Agreement shall
be governed by the laws of the Province of Ontario, and the
federal laws of Canada applicable therein, that Ontario will be
the proper forum for any controversy arising in connection with
this Agreement and that the courts of which will be the
exclusive
forums for all such suits, actions or proceedings.
(d) Currency. Unless otherwise specified, the word "dollar", or
the symbol "$" refers to Canadian currency.
(e) Termination. This agreement may be terminated at any time
prior to the Closing Date if the Share Exchange Agreement is
terminated pursuant to the provisions of the Share Exchange
Agreement. Such termination shall be without liability of
either
Party to the other parties, or to any of their shareholders,
directors, officers, employees, agents, consultants or
representatives provided that if such termination shall result
from the wilful failure of the Party to fulfil a condition to
the
performance of the other Parties or to perform a covenant of
this
agreement or from a wilful breach by the party to this
Agreement,
the Party shall be fully liable for any and all damages, costs
and expenses (including, but not limited to, reasonable counsel
fees and disbursements) sustained or incurred by the other
Parties.
(f) Time of Essence. Time shall be of the essence in all
respects of this Agreement.
(g) Amendment and Waiver. No supplement, modification, waiver
or termination of this Agreement shall be binding unless
executed
in writing by the party to be bound. No waiver of any of the
Provisions of this Agreement shall constitute a waiver of any
other provision (whether or not similar) nor shall such waiver
constitute a continuing waiver unless otherwise expressly
provided.
(h) Assignment. This Agreement and the rights or obligations
hereunder or thereunder are not assignable by any Party without
the prior written consent of the other Parties, which consent
shall not be unreasonably withheld. This Agreement shall enure
to
the benefit of and be binding upon the Parties and their
respective successors and permitted assigns.
(i) Severability. Any provision of this Agreement, which is
prohibited or unenforceable in any jurisdiction, shall not
invalidate the remaining provisions hereof. Any such prohibition
or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
(j) Counterparts. This Agreement may be executed by the Parties
in one or more counterparts, each of which when so executed and
delivered shall be an original and such counterparts shall
together constitute one and the same instrument.
IN WITNESS WHEREOF this agreement has been executed by the
Parties each as of the day and year first before written.
THIS AGREEMENT IS HEREBY EXECUTED on the date set forth
above.
PLAYANDWIN CANADA INC.
Per:
_________________________________
A.S.O.
PLAYANDWIN, INC.
Per:_______________________________
__
A.S.O.
LYNX GAMING CORP.
Per:
________________________________
A.S.O.
THE HOLDERS OF LYNX
SHARES AND LYNX WARRANTS
Per:________________________________
Xxxxxxx Xxxxxx
acting as attorneys for all of
the holders of Lynx Shares and
Lynx Warrants identified in
Schedule 2 (except the holders
of the Lynx Special Warrants)
pursuant to a power of
attorney granted by the same
THE HOLDERS OF LYNX SPECIAL
WARRANTS:
______________________________ ______________________________
Witness Xxxxxxx Xxxxxx
______________________________ ______________________________
Witness Xxxxxxxx X. Xxxxxx
______________________________ ______________________________
Witness Xxxxx X. Xxxxxx
TAUNTON ASSOCIATES LTD.
Per:___________________________
A.S.O.
______________________________ ______________________________
Witness Xxxx X. Xxxxxx
______________________________
______________________________
Witness Xxxxxx Xxxx
FMF INVESTMENT GROUP S.A.
Per:___________________________
A.S.O.
TRADEWINDS INVESTMENTS LTD.
Per:___________________________
A.S.O.
B-MAC TRADING INC.
Per:___________________________
A.S.O.
G:\Corp\P\PWIN\agr\SHREXCHG-warrants final.doc
SCHEDULE 1
DEFINITIONS
"Agreement" means this Minority Share and Warrant Exchange
Agreement and any instrument supplemental or ancillary to
it.
"Ancilliary Agreement" means all documents, agreements,
certificates and instruments to be executed or delivered by
any Person under this Agreement, as well as the Share
Exchange Agreement and the Support Agreement appended as
Schedule 5 to the Share Exchange Agreement.
"Claims" means claims, demands, actions, causes of action,
damages, losses, costs, fines, penalties, interest,
liabilities and expenses, including, without limitation,
reasonable legal fees.
"Closing" means the completion of the transactions contemplated
in this Agreement.
"Closing Date" means September 15, 1999, or such other later
date as may be agreed to by the Parties, provided that the
Closing Date shall not be later than October 1, 1999.
"Closing Time" means 2:00 p.m. (Toronto time) on the Closing Date
or such other time on the Closing Date as may be agreed to
by the Parties.
"Encumbrances" means any mortgage, charge, pledge, hypothecate,
lien, encumbrance, restriction, option, right of others or
security interest of any kind.
"Exchangeable Shares" means Class B shares of the Purchaser,
being subordinate, non-voting preferred shares authorized in
an unlimited number, redeemable and retractable subject to
the terms of this Agreement.
"Exchangeable Warrants" means warrants to purchase one
Exchangeable Share each at a price of $1.70, expiring on the
fifth anniversary of the Closing Date. Each Exchangeable
Warrant shall entitle its holder to acquire one Exchangeable
Share at a price of $1.70. The Exchangeable Warrants shall
expire eighteen (18) months after the Closing Date.
"Lynx Shares" means the common shares of Lynx held by the Vendors
as set out in Schedule 2 hereto.
"Lynx Special Warrants" means the special warrants held by the
Vendors as set out in Schedule 2 hereto, each special
warrant entitling its holder to 1.1 Lynx Shares and 0.55
Lynx Warrants for no further consideration.
"Lynx Warrants" means the special share purchase warrants held by
the Vendors as set out in Schedule 2 hereto, each warrant
entitling its holder to purchase one Lynx Share each at a
price of $0.85 exercisable for 18 months after Lynx becomes
a reporting issuer.
"NASD" means the National Association of Securities Dealers.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"Parties" means the parties to this Agreement and "Party" means
any one of them.
"Purchased Securities" means those Lynx Shares, Lynx Warrants and
Lynx Special Warrants of which the Vendors are the
registered and beneficial holders as set out in Schedule 2.
"Share Exchange Agreement" means the agreement dated August 30,
1999, between the Purchaser, PWIN, Lynx and the principal
shareholders of Lynx whereby the Purchaser is to acquire all
of the issued and outstanding Lynx Shares and Lynx Warrants
held by said principal shareholders of Lynx.
SCHEDULE 2
THE VENDORS
1. HOLDERS OF COMMON SHARES
Name Shares Held Exchangeable Shares
Issuable
Colony Investments Limited 400,000 200,00
0
Xxxxxxx X. Bloovol 50,000 25,000
Xxxx X.X. Xxxxxxx 5,000 2,500
Xxxxx X. Xxxxxxxx 25,000 12,500
Xxxx X. X. Xxxxxxx 10,000 5,000
W. A. Peneycad 25,000 12,500
R. K. R. Xxxxxx 20,000 10,000
Xxxxxx Xxxxxx 25,000 12,500
Xxxxxxx XxxXxxxxx 10,000 5,000
Xxxxxx Xxxx 56,000 28,000
Xxxxxx Xxxxxxx 10,000 5,000
Xxxx Xxxxxxxx 45,000 22,500
Xxxx X'Xxxxxx 15,000 7,500
1112614 Ontario Inc. 10,000 5,000
Xxxxx Xxxxxx 5,000 2,500
Xxxx-Xxxx Xx 10,000 5,000
Xxxxx Xxxxxx 5,000 2,500
Xxxxxxx Xxxxx 5,000 2,500
Xxxx X. Xxxxxxxx 5,000 2,500
Xxxxx Xxxxx 45,000 22,500
Xxxxx XxxXxxxxxx 5,000 2,500
Xxxxx X. Xxxxx 25,000 12,500
Xxxxx Xxxxx 7,500 3,750
Xxxxxx Xxxxxxx 12,500 6,250
Xx Xxxxxxxxx 10,000 5,000
Xxxxxxx Xxxxxxx 65,000 32,500
J. Xxxxxxx Xxxxxx 60,000 30,000
Xxxxxx-Xxxx Xxxxxxx 45,000 22,500
Xxxxx X. Xxxxxxx 10,000 5,000
K. Island Investments Ltd. 10,000 5,000
Xxxxxx Xxxxxx 80,000 40,000
Xxxxxxx Xxxx 10,000 5,000
Xxxx XxXxxx 10,000 5,000
Xxxx Xxxxxxxxxx 40,000 20,000
Xxxxxx & Xxxx Xxxxxxx 40,000 20,000
Xxxx Xxxxxxx 40,000 20,000
Xxxx Xxxxxx 40,000 20,000
Xxxxxx & Xxxx Xxxxxx 132,500 66,250
Xxxxxx Xxxx 40,000 20,000
Wm. X. Xxxxxx 40,000 20,000
Xxxx & Xxxxxxx Xxxxxx 40,000 20,000
J. Xxxxxxx Xxx 40,000 20,000
Xxxxxx X. Thast 40,000 20,000
Xxxxx Xxxxxxxx 40,000 20,000
Xxx Xxxxx 40,000 20,000
2. HOLDERS OF LYNX WARRANTS
Name Warrants Exchangeable Warrants
Held Issuable
Xxxxxxx X. Bloovol 25,000 12,50
0
Xxxx X.X. Xxxxxxx 2,500 1,250
Xxxxx X. Xxxxxxxx 12,500 6,250
Xxxxx Xxxxxxx 2,500 1,250
Xxxx X. X. Xxxxxxx 5,000 2,500
W. A. Peneycad 12,500 6,250
R. K. R. Xxxxxx 10,000 5,000
Xxxxxx Xxxxxx 12,500 6,250
Xxxxxxx XxxXxxxxx 5,000 2,500
Xxxxxx Xxxx 16,600 8,300
Xxxxxx Xxxxxxx 5,000 2,500
Xxxx Xxxxxxxx 2,500 1,250
Xxxx X'Xxxxxx 7,500 3,750
1112614 Ontario Inc. 5,000 2,500
Xxxxx Xxxxxx 2,500 1,250
Xxxx-Xxxx Xx 5,000 2,500
Xxxxx Xxxxxx 2,500 1,250
Xxxxxxx Xxxxx 2,500 1,250
Xxxx X. Xxxxxxxx 2,500 1,250
Xxxxx Xxxxx 2,500 1,250
Xxxxx XxxXxxxxxx 2,500 1,250
Xxxxx X. Xxxxx 12,500 6,250
Xxxxx Xxxxxx 5,000 2,500
Xxxxx Xxxxx 3,750 1,875
Xxxxxx Xxxxxxx 6,250 3,125
Xx Xxxxxxxxx 5,000 2,500
Xxxxxxx Xxxxxxx 12,500 6,250
Xxxxx XxXxxxxxxx 6,250 3,125
J. Xxxxxxx Xxxxxx 10,000 5,000
Xxxxxx-Xxxx Xxxxxxx 2,500 1,250
Xxxxx X. Xxxxxxx 5,000 2,500
K. Island Investments Ltd. 5,000 2,500
Xxxxxx Xxxxxx 45,000 22,500
Xxxxxxx Xxxx 5,000 2,500
Xxxx XxXxxx 5,000 2,500
3. HOLDERS OF LYNX SPECIAL WARRANTS
Name Warrants Exchangeabl Exchangeabl
Held e Shares e Warrants
Issuable Issuable
Xxxxxxx Xxxxxx 17,200 9,460 4,73
0
Xxxxxxxx X. Xxxxxx 17,200 9,460 4,730
Xxxxx X. Xxxxxx 17,200 9,460 4,730
Taunton Associates Ltd. 214,286 117,858 58,929
Xxxx X. Xxxxxx 17,200 9,460 4,730
Xxxxxx Xxxx 17,200 9,460 4,730
FMF Investment Group S.A. 142,587 78,423 39,212
Tradewinds Investments 142,587 78,423 39,212
Ltd.
B-MAC Trading Inc. 214,286 117,858 58,929
