Exhibit 99.1
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made the 31st day of July, 2005 (this "Agreement") with
respect to the purchase of all of the issued and outstanding shares of Xxxxxxxx
Pass Electronics Inc./Electroniques Xxxxxxxx Pass Inc. (the "Company" or
"Xxxxxxxx Pass") from Mr. Xxxxx XxxXxxxxx, Xx. Xxxxxxxx Xxxxxxx, Xx. Xxxxxx
XxxXxxxxx and Mr. Xxxxx Xxxxx (collectively, the "Vendors") by Xxxxxx
Distributors Ltd., a company incorporated pursuant to the laws of Canada
("Xxxxxx").
WHEREAS the Vendors are the registered holders and beneficial owners of an
aggregate 1,000 shares in the capital of the Company as set forth in Schedule
"B" hereto (the "Purchased Shares");
AND WHEREAS the Vendors have agreed to sell and Xxxxxx have agreed to
purchase all of the Purchased Shares on the terms and conditions set out in this
Agreement;
AND WHERAS Xxxxxx is a wholly owned subsidiary of Wireless Age
Communications, Inc. ("WACI");
NOW THEREFORE THEIR AGREEMENT WITNESSES THAT, in consideration of the
premises, covenants, terms, conditions representations and warranties
hereinafter set forth, the Parties agree each with the other as follows:
ARTICLE 1 - PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale. Subject to the conditions and upon the terms hereinafter
set forth, Xxxxxx agrees to purchase and the Vendors agree to sell to Xxxxxx all
of their right, title and interest in and to the Purchased Shares.
1.2 Purchase Price. The purchase price for the Purchased Shares shall consist of
an aggregate of 540,000 shares of WACI to be issued to the Vendors as set out in
Schedule "B" hereto.
1.3 Management Services Agreement. On or before Closing, Xxxxxxxx Pass and a
company incorporated pursuant to the laws of Ontario ("2078198 Ontario Limited")
shall enter into the Management Services Agreement in the form attached hereto
as Schedule "E".
1.4 Accounting Consequences. It is intended by the parties hereto that the
purchase and sale of the Purchased Shares under this Agreement shall qualify for
accounting treatment as a purchase under U.S. generally-accepted accounting
principles.
1.5 Securities Law Exemptions and Resale Restrictions. The sale of the Purchased
Shares and the distribution of the WACI Shares to the Vendors shall be made in
reliance on the exemptions from registration and prospectus filing requirements
contained in applicable provisions of Canadian Securities Law. The distribution
of the WACI Shares to the Vendors on the exchange of the Purchased Shares shall
be made in reliance on an exemption order from the relevant Canadian
SHARE EXCHANGE AGREEMENT
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Securities Regulators (if necessary) and the exemption from the registration
requirements of U.S. Securities Law contained in Regulation S promulgated under
the U.S. Securities Act of 1933, as amended. The Vendors hereby acknowledges
that as a result:
(a) The WACI Shares that they receive pursuant to this Agreement will be
subject to resale restrictions in accordance with applicable Canadian
Securities Law and U.S. Securities Law and that as a result:
(i) the certificates representing such WACI Shares will be affixed with
legends describing such restrictions, including, without limitation,
the following:
THE SECURITY OR SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED OR SOLD TO ANY PERSON EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. THE HOLDER HEREOF AGREES THAT: (1) IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE SHARES EVIDENCED HEREBY EXCEPT (A) IN AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S OR (B) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR
ANOTHER THEN AVAILABLE EXEMPTION UNDER THE SECURITIES ACT AND STATE
SECURITIES LAWS OR, (C) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS,
OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO ANY SUCH
TRANSFER, IT WILL FURNISH TO WIRELESS AGE COMMUNICATIONS, INC. (THE
"COMPANY"), THE TRANSFER AGENT FOR THE COMMON STOCK SUCH
CERTIFICATIONS, LEGAL OPINIONS, OR OTHER INFORMATION AS THE COMPANY
OR SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR STATE SECURITIES LAWS; AND (3) IT WILL DELIVER TO
EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
and
(ii) such WACI Shares cannot be sold, pledged, transferred or otherwise
dealt with other than pursuant to a prospectus or registration
statement filed with the relevant Canadian Securities Regulators or
the SEC, or pursuant to an exemption therefrom provided under
applicable Canadian Securities Law and U.S. Securities Law, as
amended;
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(b) in some provinces of Canada, WACI Shares cannot be transferred or
sold unless an appropriate exemption from the prospectus
requirements in Canadian Securities Law is available or the relevant
Canadian Securities Regulators issue a discretionary relief order
permitting the exchange;
(c) the resale exemptions provided under Canadian Securities Law and
U.S. Securities Law may not be generally available because of the
conditions and limitations of such exemptions, and that Xxxxxx and
WACI are under no obligation to take any action to make any of said
exemptions available to the Vendors; and
(d) only WACI can register the WACI Shares or file a prospectus or
registration statement to qualify the WACI Shares for resale.
1.6 Securities Law Compliance. The Vendors hereby agrees that they shall
not sell, pledge, transfer or otherwise deal with the WACI Shares
without obtaining a favourable opinion of WACI counsel or such other
evidence as may be required by WACI, that the proposed dealing will
not be in violation of Canadian Securities Law, U.S. Securities Law
or any other applicable state or provincial securities laws.
1.7 Registration Rights. WACI agrees to include the WACI Shares issuable
hereunder in the next registration statement filed by WACI. Such
registration statement to be filed by WACI on a best efforts basis,
within 90 days of issuance.
ARTICLE 2 - CLOSING MATTERS
2.1 Date, Time and Place of Closing. The Closing shall take place at the Closing
Time on the Closing Date at the offices of WACI or such place as the Parties may
agree on.
2.2 Mutual Conditions of Closing. Xxxxxx shall be obliged to complete the
purchase and sale of the Purchased Shares only if each of the conditions
precedent set out in Part 1 of Schedule "C" hereto have been satisfied in full
at or before the Closing Time. Each of such conditions precedent is for the
benefit of Xxxxxx, and only Xxxxxx may consent to waive any of them in whole or
in part in writing if such conditions are performed as of Closing.
2.3 Conditions for WACI's and Marlon's Benefit. Xxxxxx shall not be obliged to
complete the purchase of the Purchased Shares or the delivery of the WACI Shares
unless each of the closing conditions in part 1 of Schedule "C" shall have been
satisfied on or before the Closing Date. Each of such conditions precedent is
for the exclusive benefit of Xxxxxx and only Xxxxxx may waive any of such
conditions in whole or in part in writing.
2.4 Conditions for the Vendors' Benefit. The Vendors shall not be obliged to
complete the sale of the Purchased Shares unless each of the conditions set out
in Part 2 of Schedule "C" shall have been satisfied on or before the Closing
Date. Each of such conditions precedent is for the
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exclusive benefit of the Vendors and the Vendors may waive any of them in whole
or in part in writing.
2.5 Failure to Satisfy Condition. If any condition set forth in Schedule "C" is
not satisfied at the Closing Time, or if it becomes apparent that any such
condition cannot be satisfied at the Closing Time, any Party entitled to the
benefit of such condition (the "First Party") may terminate this Agreement by
notice in writing to the other Parties and in such event:
(a) unless the other Parties can show that the condition or conditions which
have not been satisfied and for which the First Party has terminated this
Agreement are reasonably capable of being performed or caused to be
performed by the First Party or have not been satisfied by reason of a
default by the First Party hereunder, the First Party shall be released
from all obligations hereunder; and
(b) unless the First Party can show that the condition or conditions which
have not been satisfied and for which the First Party has terminated this
Agreement are reasonably capable of being performed or caused to be
performed by the other Party or have not been satisfied by reason of a
default by the other Party hereunder, then the other Party shall also be
released from all obligations hereunder.
2.7 Deliveries on Closing. On the Closing Date:
(a) Xxxxxx and the Vendors will execute and deliver the Escrow Agreement
attached hereto as Schedule F (the "Escrow Agreement") to Wuersch & Xxxxxx
LLP serving as escrow agent (the "Escrow Agent");
(b) Xxxxxx shall deliver to the Escrow Agent the certificates representing the
WACI Shares;
(b) the Vendors will deliver to the Escrow Agent the certificates representing
their respective Purchased Shares duly signed off for transfer, together
with any and all other documentation required to transfer unqualified
title to their Purchased Shares to Xxxxxx, provided that if there are no
certificates representing the Purchased Shares, the Vendors shall each
deliver to the Escrow Agent a duly executed stock power or other document
evidencing the due transfer of the Purchased Shares from the Vendors to
Xxxxxx; and
(c) Xxxxxxxx Pass and 2078198 Ontario Limited shall execute and deliver an
executed Management Services Agreement.
2.8 Escrow; Post-Closing Rescission Rights. The WACI Shares and Purchased
Shares delivered into Escrow of the Escrow Agent shall be held for the
benefit of the Vendors and Xxxxxx until such time as all post-Closing due
diligence of the Company is completed by Xxxxxx. The date for completion
of such due diligence is October 1, 2005 (the "Diligence Completion
Date"). In the event that all such due diligence of the Company is
completed by Xxxxxx to its reasonable satisfaction without objections or
exceptions by Xxxxxx, the Escrow WACI Shares shall be released from Escrow
to the Vendors. Notwithstanding anything to the contrary herein or in any
Schedule attached
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hereto, in the event that due diligence could not be completed because of
Company deficiencies or if any material objections or exceptions are
delivered by notice from Xxxxxx to the Vendors with respect to the results
of such due diligence, which deficiencies, objections and/or exceptions
are not remediated by the Vendors to the reasonable satisfaction of Xxxxxx
prior to 10 days after such notice (the "Remediation Date"), then Xxxxxx
shall have the right exercisable at its sole discretion to rescind the
purchase of the Purchased Shares (the "Rescission Right"). Notice of any
due diligence deficiencies, objections and/or exceptions may be delivered
to the Vendors up to and including 30 days after the Diligence Completion
Date. The Rescission Right may be exercised at any time for a period of up
to 5 days after the expiration of the Remediation Date (the "Rescission
Right Period"). In the event of exercise of the Rescission Right, the
Escrow WACI Shares shall be released to Xxxxxx and the Purchased Shares
shall be returned to the Vendors. All of the Purchased Shares and the WACI
Shares shall remain in the Escrow of the Escrow Agent until the earlier
of: (i) notice to the Escrow Agent by Xxxxxx of satisfaction of
post-Closing due diligence: (ii) exercise of the Rescission Right by
Xxxxxx; (iii) termination of the Rescission Right Period. In respect of
the exercise of any such exercise the Rescission Right, Xxxxxx may, at its
sole discretion, cause the termination to the Company of any and all
financing, loans, advances and/or other support services (collectively,
the "Support Services") provided by or through Xxxxxx, provided, however,
no such action shall act as a termination of any accrued liability for
repayment or performance by the Company to Xxxxxx or any other party in
respect of such Support Services. Nothing herein shall be interpreted or
construed to impair Marlon's ownership of the Company from and after the
Closing and no rights of ownership of the Company by Xxxxxx after Closing
shall be altered unless the Rescission Right is exercised.
2.9 Rescission Right Matters for the Benefit of Xxxxxx. On or before Diligence
Completion Date, the Vendors will have: i) delivered audit financial
statements of the Company for the year ended April 30, 2005 prepared under
United States generally accepted accounting principles, ii) delivered
unaudited interim financial statements of the Company for the three month
period ended July 31, 2005, iii) paid all outstanding payroll source
deductions outstanding as of Diligence Completion Date, and iv) satisfied
Xxxxxx that any former creditors of MaxTel Wireless Inc. cannot make any
claims against Xxxxxx or WACI.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Vendors. The Vendors hereby represent
and warrant to Xxxxxx as set out in Part 1 of Schedule "D" and acknowledge that
Xxxxxx is relying on these representations and warranties in entering into this
Agreement and performing their obligations under the same. Vendors furthermore
expressly authorize and any and all third parties to rely upon such
representations and warranties to the same and full extent as Xxxxxx as
necessary to perform the Management Services Agreement and the Escrow Agreement.
3.2 Representations and Warranties of Xxxxxx. Xxxxxx represents and warrants to
the
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Vendors as set out in Part 2 of Schedule "D" and acknowledges that the Vendors
are relying on these representations and warranties in entering into this
Agreement and performing their obligations under the same.
3.3 Survival of Representations and Warranties. All representations and
warranties contained in this Agreement shall survive the Closing.
3.4 Certificates and Instruments Included. 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 4 - INDEMNIFICATION
4.1 Indemnification for Breaches of Covenant or Warranty. Subject to the
limitation period set out in section 3.3, above, Xxxxxx hereby covenants and
agree with the Vendors and the Vendors hereby covenants and agrees with Xxxxxx
(the parties covenanting and agreeing to indemnify another party under this
Article 4 are hereinafter individually referred to as "Indemnifying Party" and
the parties that are being indemnified by another Party under this Article 4 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-fulfillment of any material covenant, obligation or agreement on the part of
the Indemnifying Party under this Agreement or any material incorrectness in or
breach of any representation or warranty of the Indemnifying Party contained in
this Agreement. In the event of exercise of the Rescission Right, Vendors shall
indemnify and hold harmless Xxxxxx and its officers, directors, employees,
agents, attorneys and management services providers (but excluding any persons
serving in such capacities who are Vendors) from and against any and all damages
(including, without limitation, reasonable fees of legal counsel) arising
directly or indirectly from the acquisition of the Company by Xxxxxx and/or
services rendered by Spectrum with respect to ownership and operation of the
Company.
ARTICLE 5 - INTERPRETATION AND GENERAL
5.1 Definitions. Where used in this Agreement and the recitals and any schedules
hereto, words not otherwise defined in the body of the Agreement will have the
meanings ascribed to them in Schedule "A" hereto.
5.2 Interpretation. In this Agreement, except as otherwise expressly provided:
(a) all references in this Agreement to a designated "paragraph" or other
subdivision or to a Schedule is to the designated paragraph or other
subdivision of, or Schedule, to this Agreement;
(b) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular
paragraph or other subdivision or Schedule;
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(c) the headings are for convenience only and do not form a part of this
Agreement and are not intended to interpret, define, or limit the scope,
extent or intent of this Agreement or any provision hereof;
(d) the singular of any term includes the plural, and vice versa, the use of
any term is equally applicable to any gender and, where applicable, a body
corporate, the word "or" is not exclusive and the word "including" is not
limited (whether or not non-limited language, such as "without limitation"
or "but not limited" or words of similar import, are used with reference
thereto);
(e) any accounting term not otherwise defined has the meanings assigned to it
in accordance with generally accepted accounting principles applicable to
the United States of America;
(f) any reference to a statute includes and is a reference to that statute and
to the regulations made pursuant thereto, with all amendments made thereto
and in force from time to time, and to any statute or regulations that may
be passed which has the effect of supplementing or superseding that
statute or regulations; and
(g) any other term defined within the text of this Agreement has the meaning
so ascribed.
5.3 Schedules. The following are the Schedules to this Agreement:
Schedule Description
-------- -----------
A Definitions
B Shareholdings
C Conditions of Closing
D Representations and Warranties
E Management Services Agreement
F Escrow Agreement
5.4 Entire Agreement. This Agreement, together with the Schedules and other
documents to be delivered pursuant to this Agreement, constitutes the entire
agreement between the Parties pertaining to the matters contemplated herein 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.
5.5 Notices. All notices, requests, demands and other communications hereunder
must be made in writing and will be deemed to have been duly given if delivered
personally or by courier to the addressee at the address appearing on the first
page hereof or to such other address as may be given in writing by the Party.
Any notice given by personal delivery shall be deemed to be received on the date
of delivery. Any notice sent by courier shall be deemed to be received on the
next business day on which such courier deliveries are made following the
deposit of the communication with the courier service.
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5.6 Time of Essence. Time shall be of the essence in all respects of this
Agreement.
5.7 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.
5.8 Transaction Expenses. Each Party to this Agreement will bear all costs and
expenses incurred by it in negotiating this Agreement and in closing and
carrying out the transactions contemplated by this Agreement. All costs and
expenses related to satisfying any condition or fulfilling any covenant
contained in this Agreement will be borne by the party whose responsibility it
is to satisfy the condition or fulfil the covenant in question.
5.9 Amendment. No supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing by both Parties.
5.10 Waiver. 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.
5.11 Assignment. This Agreement and the rights or obligations hereunder or
thereunder may not be assigned by either Party without the prior written consent
of the other Parties.
5.12 Enurement. This Agreement shall be binding on and enure to the benefit of
both Parties and their respective heirs, administrators, executors, successors
and permitted assigns. In addition all obligations of the Parties under this
Agreement shall also be binding upon any and all directors, officers, employees,
consultants, advisors and agents of each Party as well as all parent
corporations, subsidiaries, related and affiliated companies thereof.
5.13 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the province of Ontario without giving effect to
provisions of conflicts of law thereto. Each Party irrevocably submits to the
non-exclusive jurisdiction of the courts of the Province of Ontario with respect
to any matter arising hereunder or related hereto.
5.14 Severability. If any provision of this Agreement is determined to be
prohibited, void or unenforceable in whole or in part, such void or
unenforceable provision shall not affect or impair the validity of any other
provision of this Agreement and shall be severable from this Agreement. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
5.15 Independent Legal Advice. Each of the Vendors acknowledge that he has been
advised to seek independent legal counsel in respect of this Agreement and the
other agreements and documents referred to herein and the matters contemplated
herein. To the extent that the
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Vendors declines to receive independent legal counsel in respect of this
Agreement, the Vendors hereby waives the right, should a dispute later develop,
to rely on its lack of independent legal counsel to avoid its obligations, to
seek indulgences from the other Parties hereto, or to otherwise attack, in whole
or in part, the integrity of this Agreement and the documents related thereto.
5.16 Counterparts. This Agreement may be executed by the Parties in one or more
counterparts by facsimile, each of which when so executed and delivered shall be
an original and such counterparts shall together constitute one and the same
instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF the parties have duly executed this Agreement on the day and
year first above written.
XXXXXX DISTRIBUTORS LTD. XXXXXXXX PASS ELECTRONICS INC.
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxx XxxXxxxxx
------------------------------------- ---------------------------------
Name: Xxxx Xxxxxxxx Name: Xxxxx XxxXxxxxx
Title: Chief Financial Officer Title: General Manager
WIRELESS AGE COMMUNICATIONS, INC.
By: /s/ Xxxx Xxxxxxxx
------------------------------------- ---------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
)
)
) /s/ Xxxxx XxxXxxxxx
----------------------------------------) -----------------------------------
Witness ) XXXXX XXXXXXXXX
)
----------------------------------------) -----------------------------------
)
)
) /s/ Xxxxxxxx Xxxxxxx
----------------------------------------) -----------------------------------
Witness ) XXXXXXXX XXXXXXX
)
)
)
) /s/ Xxxxxx XxxXxxxxx
----------------------------------------) -----------------------------------
Witness ) XXXXXX XXXXXXXXX
)
----------------------------------------) -----------------------------------
)
)
) /s/ Xxxxx Xxxxx
----------------------------------------) -----------------------------------
Witness ) XXXXX XXXXX
)
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SCHEDULE "A"
DEFINITIONS
Where used in this Agreement and the recitals and any schedules hereto, each of
the following words will have the following meanings:
(a) "Agreement" means this agreement, including the preamble and the schedules
hereto, as it may from time to time be supplemented or amended in effect;
(b) "Canadian Securities Law" means the securities laws of any province or
territory of Canada in which recipients of any shares issued or
transferred under this Agreement may reside, and the regulations, rules
and policies promulgated thereunder, both as amended from time to time.
(c) "Canadian Securities Regulators" means the securities commissions or other
Governmental Authorities authorized to administer and enforce securities
laws in any province or territory of Canada.
(d) "Claim" means any claims, demands, actions, causes of action, damages,
losses, costs, fines, penalties, interest, liabilities and expenses,
including, without limitation, reasonable legal fees and other expenses
reasonably incurred in connection with any of the foregoing.
(e) "Closing" means the completion of the purchase of the Purchased Shares by
Xxxxxx in accordance with the terms and conditions of this Agreement.
(f) "Closing Date" means the date hereof, or such earlier or later date as the
Parties may agree on.
(g) "Closing Time" means 2:00 p.m. (Toronto time) on the Closing Date, or such
earlier or later time on the Closing Date as the Parties may agree to.
(h) "Company" means Xxxxxxxx Pass Electronics Inc./Electroniques Xxxxxxxx Pass
Inc.
(i) "Constating Documents" means (i) the articles or certificate of
incorporation and the bylaws of a corporation; (ii) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person and (iii) any amendment to any of the foregoing.
(j) "Encumbrance" means any mortgage, charge, pledge, hypothecation,
debenture, lien, security interest, encumbrance, claim, option, right of
first refusal, community of property or restriction of any kind, including
any restriction on the use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership, regardless of form and
whether consensual or arising by operation of law. The definition of
Encumbrance shall not include the Rescission Right of Xxxxxx during the
period in which Xxxxxx may exercise such Rescission Right.
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(k) "Escrow" means the respective WACI Shares and Purchased Shares delivered
into escrow of the Escrow Agent pursuant to Section 2.8 herein, to be held
by the Agent for the benefit of the Vendors and Xxxxxx pursuant to the
terms of Section 2.8 herein and under the terms and conditions of the
Escrow Agreement.
(l) "Escrow Agent" means Wuersch & Xxxxxx LLP, Attention Xxxxxx X. Xxxxxx, 000
Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Telephone: (000) 000-0000, Fax (212)
000-0000.
(m) "Escrow Agreement" means the escrow agreement executed among the Vendors,
Xxxxxx and the Escrow Agent.
(n) "Xxxxxx" means Xxxxxx Inc.
(o) "Governmental Authority" means any applicable Canadian or U.S. federal,
provincial, state or municipal government, agency, ministry, commission,
crown corporation, department, inspector, official or body of any kind
exercising or entitled to exercise any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power of
any nature.
(p) "material" means, when used with respect to an obligation, contract,
liability or any other matter, that the obligation, contract, liability or
such other matter is of such a nature as to be substantially likely to be
considered important to a reasonable investor in making an investment
decision, including a decision to purchase, hold or sell securities of the
Person in question.
(q) "Material Adverse Change" a material adverse change in or a material
adverse effect on the businesses, assets, operations, results of
operations or financial condition of a Person and its subsidiaries (if
any) taken as a whole, provided that any adverse effects arising from or
relating to the following matters (individually and in the aggregate)
shall be excluded in determining whether such a material adverse effect
has occurred: (i) general economic conditions or conditions (including
conditions in financial markets) generally prevailing in the industry or
market segment in which the corporate entity and its subsidiaries conduct
their respective businesses, (ii) the announcement or pendency of the
transactions contemplated in this Agreement or the closing or pendency of
any transaction of the Parties which was publicly announced as of the date
of this Agreement; and (iii) the taking by any Party of any action (or
omission by any Party to take any action) at the request of or with the
permission of the other Parties; provided, further, that a decline in the
public trading price of WACI Shares shall not by itself constitute a
Material Adverse Change.
(r) "Ordinary Course of Business", with respect to an action taken by a
Person, means:
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(i) an action consistent with the past practices of such Person and
taken in the ordinary course of the normal operations of such
Person;
(ii) an action not required to be authorized by the board of directors of
such Person (or by any Person or group of Persons exercising similar
authority) and not required to be specifically authorized by the
parent company (if any) of such Person; and
(iii) an action similar in nature and magnitude to actions customarily
taken, without any authorization by the board of directors (or by
any Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons
that are in the same line of business as such Person.
(s) "Parties" means the parties to this Agreement and "Party" means any one of
them.
(t) "Person" means any individual, corporation (including any non-profit
corporation), body corporate, partnership, limited partnership, limited
liability company, joint venture, society, association, trust,
unincorporated organization, Governmental Authority or other entity, or
any trustee, executor, administrator, or other legal representative.
(u) "Purchased Shares" means Common shares of the Company held by the Vendors
as set out in Schedule "B" hereto.
(v) "Rescission Right" means the rescission right of Xxxxxx as set forth in
Section 2.8.
(w) "SEC" means the U.S. Securities and Exchange Commission;
(x) "Management Services Agreement" means the Management Services Agreement to
be entered into by Xxxxxxxx Pass and 2078198 Ontario Limited on or before
Closing.
(y) "Tax Act" means the Income Tax Act (Canada), as amended from time to time.
(z) "U.S. Securities Law" means the United States Securities Act of 1933 and
the United States Securities Exchange Act of 1934, the securities laws of
any State of the United States of America, and the regulations, rules and
policies promulgated thereunder, all as amended from time to time.
(aa) "Vendors" means Mr. Xxxxx XxxXxxxxx, Xx. Xxxxxxxx Xxxxxxx, Xx. Xxxxxx
XxxXxxxxx and Mr. Xxxxx Xxxxx
(bb) "WACI" means Wireless Age Communications, Inc.
(cc) "WACI Shares" means shares in the common stock of WACI.
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# # #
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SHARE EXCHANGE AGREEMENT
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SCHEDULE "B"
SHAREHOLDINGS
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Name and Address Number of Number of WACI Shares to
Of Shareholder Purchased Shares Held be Delivered
-------------------------------------------------------------------------------
Xxxxx XxxXxxxxx 212.5 114,750
-------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx 212.5 114,750
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Xxxxxx XxxXxxxxx 150 81,000
-------------------------------------------------------------------------------
Xxxxx Xxxxx 425 229,500
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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SHARE EXCHANGE AGREEMENT
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SCHEDULE "C"
CONDITIONS OF CLOSING
1. Mutual Conditions of Closing. The Parties shall be obliged to complete the
purchase and sale of the Purchased Shares only if each of the following
conditions precedent have been satisfied in full at or before the Closing Time:
(a) Consents, Authorizations and Registrations - All consents, approvals,
orders and authorizations of, from or notifications to any Persons or
Governmental Authorities required (if any) 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.
(b) No Claims - 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.
2. Conditions for Marlon's Benefit. Xxxxxx shall not be obliged to complete the
purchase of the Purchased Shares unless each of the following conditions shall
have been satisfied or waived on or before the Closing Time:
(a) Accuracy of Representations - The representations and warranties of the
Vendors set forth in section 3.1 of this Agreement and Part 1 of Schedule
"D" thereto shall be true and correct as of the Closing Time.
(b) Performance of Obligations - The Vendors shall have performed all of the
obligations hereunder to be performed by him at or prior to the Closing,
and shall not be in breach of any provision of this Agreement.
(c) No Material Changes - There shall have been no Material Adverse Change in
the business, assets, liabilities, prospects, operations of the Company,
and the Company shall not have sold or pledged any assets, issued any
shares or entered into any transactions outside the Ordinary Course of
Business.
(d) Management Services Agreement - On or before Closing, Xxxxxxxx Pass and
2078198 Ontario Limited have entered into the Management Services
Agreement.
(e) Escrow Agreement - On or before Closing, the Vendors have executed and
delivered the Escrow Agreement and the Purchased Shares to the Escrow
Agent.
3. Conditions for the Vendors' Benefit. The Vendors shall not be obliged to
complete the sale of the Purchased Shares unless each of the following
conditions shall have been satisfied or waived on or before the Closing Time:
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SHARE EXCHANGE AGREEMENT
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(a) Accuracy of Representations - The representations and warranties of Xxxxxx
set forth in this Agreement and Schedule "D" thereto shall be true and
correct as of the Closing Time.
(b) Performance of Obligations - Xxxxxx shall have, and shall have caused WACI
to have, performed all of the obligations hereunder to be performed by it
or WACI at or prior to the Closing, and shall not be in breach of any
provision of this Agreement.
(f) Escrow Agreement - On or before Closing, Xxxxxx has executed and delivered
the Escrow Agreement and the WACI Shares to the Escrow Agent.
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SHARE EXCHANGE AGREEMENT
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SCHEDULE "D"
REPRESENTATIONS AND WARRANTIES
Part 1. Representations and Warranties of the Vendors. The Vendors hereby
severally represent and warrant to Xxxxxx as follows, and acknowledge that
Xxxxxx is relying on these representations and warranties in entering into this
Agreement and performing its obligations under the same:
(a) Capacity and Authority - If the Vendor is a corporation, the Vendor (i)
has been duly formed and is a valid and subsisting corporation, (ii) has
the necessary corporate capacity and authority to own the Purchased
Shares, to execute and deliver this Agreement and to observe and perform
its covenants and obligations hereunder, (iii) has taken all necessary
corporate action in respect and (iv) the individual signing this Agreement
on behalf of the Vendor has the authority to do so and to bind the Vendors
by their signature. If the Vendor is a natural person, he or she
represents and warrants for him or herself that he or she has attained the
age of majority, is legally competent and has the capacity to (i) own the
Purchased Shares and (ii) execute this Agreement and to take all actions
required pursuant thereto.
(b) Title to Purchased Shares - Each Vendor, for him or herself represents and
warrants, that he/she is the sole legal and beneficial owner of the
Purchased Shares set out opposite his/her name in Schedule "B" hereto with
good and marketable title thereto, free and clear of any Encumbrances.
(c) No Option - Each Vendor, for him or herself and in respect of the
Purchased Shares owned by him or her, represents and warrants that no
Person has any agreement, warrant, option or right, or a right capable of
becoming an agreement for, the purchase of such Purchased Shares, or the
purchase of any other securities of the Company.
(d) Absence of Conflict - The Vendors 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
Purchased Shares as a consequence of the execution and delivery of this
Agreement or the consummation of the transactions contemplated in this
Agreement. 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 Documents of the Vendors
(if not an individual), any court or administrative order or process, any
agreement or instrument to which the Vendors are party or by which it is
bound.
(e) Residence - Each Vendor is a resident, within the meaning of the Tax Act,
of the jurisdiction set out under their name in Schedule "B" hereto [Need
to add this to Sched B, Province and Canada]. Each Vendor is a "Non-U.S.
Person" as defined under Regulation S promulgated under U.S. Securities
Law.
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SHARE EXCHANGE AGREEMENT
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(f) Binding Agreement - This Agreement constitutes a legal, valid and binding
obligation of the Vendors enforceable against the Vendors in accordance
with its terms except as may be limited by laws of general application
affecting the rights of creditors.
(g) Bankruptcy / Liquidation - No proceedings have been taken, are pending or
have been authorized, and no receiver or trustee has been appointed for
the Vendors by the Vendors or by any other person in respect to the
bankruptcy, insolvency, liquidation, dissolution or winding up of the
Vendors.
(h) Litigation - There are no judgements, decrees, injunctions, rulings or
orders of any court, arbitrator, federal, provincial, state, municipal or
other governmental authority, department, commission, board, bureau or
agency, or any actions, suits, grievances or proceedings (whether or not
on behalf of the Vendors) commenced, pending or threatened against or
relating to the Vendors which may result in the imposition of a
Encumbrance on the Purchased Shares or which may prevent, delay, make
illegal or otherwise interfere with the consummation of the transactions
contemplated in this Agreement.
(i) Due Incorporation of the Company - The Company is a corporation duly
incorporated and validly existing under the laws of its jurisdiction of
incorporation.
(j) Share Capital of the Company - The only issued and outstanding shares of
the Company are 1,000 common shares and the Purchased Shares are all
validly issued and outstanding as fully paid and non-assessable shares.
(k) Shareholders of the Company - Schedule "B" hereto contains a complete and
accurate list of each registered holder of issued and outstanding
Purchased Shares and sets out the residence or principal place of business
of each holder. The Vendors are the sole registered holders and beneficial
owners of all of the issued and outstanding common shares of the Company
set out in Schedule "B" hereto.
(l) Purchased Shares Validly Issued - The Purchased Shares have been validly
issued and are outstanding as fully paid and non-assessable.
(m) EACH VENDOR: (I) ACKNOWLEDGES THAT INVESTMENT IN THE SECURITIES OF WACI IS
HIGHLY SPECULATIVE AND INVOLVES A VERY HIGH DEGREE OF RISK AND SHOULD NOT
BE MADE UNLESS THE VENDOR IS PREPARED TO, AND CAN AFFORD TO, LOSE THE
ENTIRE INVESTMENT; (II) HAS SUFFICIENT KNOWLEDGE, SOPHISTICATION AND
EXPERIENCE IN BUSINESS AND FINANCE TO CAPABLY EVALUATE INFORMATION
CONCERNING WACI, (III) HAS HAD AN OPPORTUNITY TO REVIEW WACI'S PUBLICLY
FILED REPORTS, AND TO ASK DETAILED QUESTIONS AND RECEIVE
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SHARE EXCHANGE AGREEMENT
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SATISFACTORY ANSWERS FROM REPRESENTATIVES OF WACI, (IV) HAS HAD ADEQUATE
OPPORTUNITY TO REQUEST AND REVIEW ANY AND ALL OTHER DOCUMENTS INFORMATION
RELEVANT TO VENDOR'S CONSIDERATION OF INVESTMENT IN THE WACI SECURITIES
AND HAS OTHERWISE OBTAINED SUFFICIENT INFORMATION FROM WACI TO EVALUATE
THE MERITS AND RISKS OF AN INVESTMENT IN WACI; (V) HAS INDEPENDENTLY
CONSIDERED AND DISCUSSED SUCH PROSPECTIVE INVESTMENT WITH THE VENDOR'S
BUSINESS, LEGAL, TAX AND FINANCIAL ADVISERS AS TO THE SUITABILITY OF SUCH
INVESTMENT WITH RESPECT TO THE VENDOR'S PARTICULAR FINANCIAL SITUATION,
AND (VI) ON THE BASIS OF THE FOREGOING, EACH VENDOR HAS DETERMINED THAT
INVESTMENT IN THE SECURITIES OFFERED HEREBY IS A SUITABLE INVESTMENT.
Part 2. Representations and Warranties of Xxxxxx. Xxxxxx represents and warrants
to the Vendors as follows and acknowledges that the Vendors are relying on these
representations and warranties in entering into this Agreement and performing
their obligations under the same:
(a) Due Incorporation - Xxxxxx is a corporation duly incorporated and validly
existing under the laws of its jurisdiction of incorporation.
(b) Capacity and Authority - Xxxxxx has the power and capacity and good and
sufficient right and authority to enter into this Agreement on the terms
and conditions herein set forth, to perform its obligations under this
Agreement. The execution and delivery of this Agreement and the completion
of the transaction contemplated herein has been duly and validly
authorized by all necessary corporate action on the part of Xxxxxx.
(c) Binding Obligation - This Agreement has been duly executed and delivered
by Xxxxxx and constitutes a valid and binding obligation on its part.
(d) Absence of Conflict - Xxxxxx 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
WACI Shares as a consequence of the execution and delivery of this
Agreement or the consummation of the transactions contemplated in this
Agreement. Marlon's execution 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 Documents Xxxxxx, any court or administrative
order or process, any agreement or instrument to which Xxxxxx is party or
by which it is bound.
(e) Bankruptcy / Liquidation - No proceedings have been taken, are pending or
have been authorized, and no receiver or trustee has been appointed for
Xxxxxx by Xxxxxx or by any other person in respect to the bankruptcy,
insolvency, liquidation, dissolution or winding up of Xxxxxx.
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SHARE EXCHANGE AGREEMENT
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(f) Litigation - There are no judgements, decrees, injunctions, rulings or
orders of any court, arbitrator, federal, provincial, state, municipal or
other governmental authority, department, commission, board, bureau or
agency, or any actions, suits, grievances or proceedings (whether or not
on behalf of Xxxxxx) commenced, pending or threatened against or relating
to Xxxxxx which may result in the imposition of a Encumbrance on the WACI
Shares or which may prevent, delay, make illegal or otherwise interfere
with the consummation of the transactions contemplated in this Agreement.
(g) Residence - Xxxxxx is not a non-Canadian within the meaning of the
Investment Canada Act.
# # #
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SHARE EXCHANGE AGREEMENT
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SCHEDULE "E"
MANAGEMENT SERVICES AGREEMENT
[Attached]
- 1 -
SCHEDULE "F"
ESCROW AGREEMENT
[Attached]
- 1 -
