SHARE PURCHASE AGREEMENT
------------------------
THIS dated for reference 30th day of November, 1999.
AMONG:
TRADE-FAST, INC., a Delaware corporation with an office at 000 Xxxxxxx Xxx.,
Xxxxx 000, Xxxxxx Xxxx, Xxx Xxxx, 00000
(herein called the "Company")
AND:
XXXX XXXXX
(herein called "Xxxx Xxxxx")
AND:
XXXXXXX HOLDINGS GROUP LIMITED, a closely held corporation with an office
at third Floor, Jonsim Place, 000 Xxxxxx Xxxx Xxxx, Xxxxxxx, Xxxx Xxxx.
(herein called "Xxxxxxx Holdings")
AND:
E-FINANCIAL XXXXX.XXX, INC., a Delaware corporation with an office at 150 - 0000
Xxxxxxx Xxxx Xxxx, Xxxxxxx Xxxx, Xxxxxxxxxx, 00000
(herein "Purchaser")
A. Xxxx Xxxxx and Xxxxxxx Holdings (collectively called the "Vendors")
are the registered and beneficial owners of all of the issued and outstanding
shares of the Company (the "Vendors' Shares");
B. Pursuant to a Letter of Intent dated November 10, 1999 between the
Company and the Purchaser, the Purchaser agreed, subject to completion of a due
diligence review to acquire the Vendors' Shares; and
C. Upon the terms and subject to the conditions set forth in this
Agreement, the Vendors have agreed to sell to the Purchaser, and the Purchaser
has agreed to purchase, the Vendors' Shares for the consideration set forth
below;
THEREFORE in consideration of the premises and of the mutual covenants and
agreements herein set forth, the parties hereto covenant and agree each with the
other as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement:
(a) "Accounts Payable" means all of the trade accounts and other debts and
accrued charges owed by the Company as at the date hereof (other than the
Permitted Liens), and which are enumerated and described in the Financial
Statements, together with those trade accounts reasonably incurred in the normal
and ordinary course of the Business between the date hereof and the Closing
Date, whether the same are due or to become due at or after the Closing Date;
(b) "Accounts Receivable" means all of the trade accounts, notes,
commissions and other debts arising out of the operation of the Business owing
to the Company as at the Closing Date, whether due or to become due as at or
after the Closing Date;
(c) "Business" means the business of managing the broker-dealer business
currently carried on by New World in accordance with the terms of the Management
Services Agreement;
(d) "Business Assets" means all of the real property, personal property,
choses in action, intangible or intellectual property and all other assets of
whatsoever nature owned or leased by any of the Entities, or in which any of the
Entities has any right or interest or the right to acquire an interest,
including the Accounts Receivable, the Contracts and the assets listed in
Schedule "A";
(e) "Closing" means the completion of the transactions contemplated hereby
in accordance with the terms hereof;
(f) "Closing Date" means three business days following the satisfaction or
waiver of the conditions hereto, but in any event no later than April 1, 2000,
unless otherwise agreed to by the parties.
(g) "Consents" means the consents, waivers and approvals set forth in
Schedule "B";
(h) "Contracts" means all of the commitments, agreements, contracts,
instruments, leases and other documents entered into by any of the Entities, by
which any of the Entities is bound or to which any of the Entities or the
Business Assets are subject (other than the Permitted Liens) and which are
described in Schedule "C";
(i) "Due Diligence Period" means the period commencing on November 10, 1999
and ending on November 26, 1999;
(j) "Entities" means collectively the Company, the Subsidiary and New World;
(k) "Escrow Agent" has the meaning set forth in Section 3.5;
(l) "Escrow Agreement" means the escrow agreement attached hereto as
Schedule "N";
(m) "Escrow Shares" has the meaning set forth in Section 3.1;
(n) "Execution Date" means the date of signing of this Agreement;
(o) "Financial Statements" means the most current financial statements of
the Company, copies of which are attached as Schedule "D";
(p) "Indebtedness" means any and all advances, debts, duties, endorsements,
guarantees, liabilities, obligations, responsibilities and undertakings of a
person assumed, created, incurred or made, whether voluntary or involuntary,
however arising, whether due or not due, absolute, inchoate or contingent,
liquidated or unliquidated, determined or undetermined, direct or indirect,
express or implied, and whether such persons may be liable individually or
jointly with others;
(q) "Intellectual Property" means all, copyrights, copyright registrations
and applications, trade names or brand names, Internet domain names, business
names, trade-marks, trade-xxxx registrations and applications, service marks,
service xxxx registrations and applications, trade secrets, proprietary
programming information and know-how, patents and patent applications, and other
patent rights, processes, technology, software (in both source code and object
code format), documentation in relation to software, firmware and other
intellectual property, together with all rights under licences, registered user
agreements, technology transfer agreements, and other agreements or instruments
relating to any of the foregoing, owned by any of the Entities or otherwise used
in connection with the Business or the New World Business, including the
intellectual property described on Schedule "M";
(r) "Lien" means any mortgage, debenture, charge, hypothecation, pledge,
lien, or other security interest or encumbrance of whatever kind or nature,
regardless of form and whether consensual or arising by laws, statutory or
otherwise that secures the payment of any Indebtedness or the performance of any
obligation or creates in favour of or grants to any person any proprietary
right;
(s) "Management Services Agreement" means that management services agreement
between the Company and New World Securities Inc. dated for reference November
30, 1999;
(t) "NASD" means the National Association of Securities Dealers Inc. and its
associated companies including, but not limited to, NASD Regulation, Inc.;
(u) "New World" means Xxxx Kitchen Inc., d.b.a. New World Securities Inc., a
licensed broker dealer;
(v) "New World Business" means the broker-dealer business as currently
conducted by New World;
(w) "New World Financial Statements" means the most current financial
statements of the Company filed with the NASD, copies of which are attached as
Schedule "E";
(x) "New World Option" means the option to be granted to the Purchaser by
Xxxx Xxxxx entitling the Purchaser to acquire all of the issued and outstanding
shares of Xxxx Kitchen Inc. at a price of $1.00 in total;
(y) "OTC BB" means the OTC Bulletin Board;
(z) "Permitted Liens" means the liens described in Schedule "F";
(aa) "Purchase Price" means, for the purposes of section 2 hereof, the
amount of $18,000,000, subject to adjustment pursuant to paragraph 3 therein,
payable by way of issuance of the Purchaser Shares;
(bb) "Purchaser's Closing Documents" means those documents to be delivered
by the Purchaser at Closing as referenced in Section 18.1 hereof;
(cc) "Purchaser Shares" means Four Million (4,000,000) shares of the
Purchaser having a deemed price of $4.50 per share subject to adjustment in
accordance with section 2.3 herein;
(dd) "Purchaser's Solicitors" means Clark, Wilson, Barristers and
Solicitors;
(ee) "SEC" means the Unites States Securities and Exchange Commission;
(ff) "Securities Exchange Act" means the United States Securities Exchange
Act of 1934;
(gg) "Securities Act" means the United States Securities Act of 1933;
(hh) "Subsidiary" means EZ Xxxxx.xxx, Inc.;
(ii) "Vendors' Closing Documents" means those documents, instruments,
resolutions and share certificates referenced in Section 17.1 hereof;
(jj) "Xxxx Xxxxx'x Shares" means the three hundred (300) shares of the
Company of which Xxxx Xxxxx is the registered holder and beneficial owner; and
(kk) "Xxxxxxx Holdings' Shares" means the one thousand and two hundred
(1,200) shares of the Company of which Xxxxxxx Holdings is the registered holder
and beneficial owner.
1.2 In this Agreement, except as otherwise expressly provided:
(a) "Agreement" means this share purchase agreement, including the preamble
and the Schedules hereto, as it may from time to time be supplemented or amended
and in effect;
(b) all references in this Agreement to a designated "Section" or other
subdivision or to a Schedule is to the designated Section or other subdivision
of, or Schedule to, this Agreement;
(c) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Section or
other subdivision or Schedule;
(d) 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;
(e) 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; the word "including" means including
without limitation or prejudice to the generality of any description,
definition, term or phrase preceding that word, and the word "include" and its
derivatives will be construed accordingly; the expression "to the knowledge of"
or any similar expression as applied to a corporation or individual, refers to,
(A) in the case of an individual, the knowledge as at the relevant date that
such individual had or would have had had he exercised due diligence in making
enquiries in relation to the matter in question from all sources of information
likely to provide him with knowledge of same, and (B) in the case of a corporate
person, the knowledge (as aforementioned) of a director or officer thereof as at
the relevant date;
(f) any accounting term not otherwise defined has the meanings assigned to
it in accordance with generally accepted accounting principles applicable in the
United States;
(g) except as otherwise provided, any dollar amount referred to in this
Agreement means the lawful currency of the United States;
(h) any other term defined within the text of this Agreement has the meaning
so ascribed.
1.3 The following are the Schedules to this Agreement:
SCHEDULE DESCRIPTION
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A Business Assets
B Consents
C Contracts
D Financial Statements
E New World Financial Statements
F Permitted Liens
G Authorized and Issued Capital
H Directors and Officers
I Banking Arrangement
J Employee List
K Employee Benefit Plans
L Litigation
M Intellectual Property
N Escrow Agreement
O Insurance Policies
2. PURCHASE AND SALE
2.1 Upon and subject to the terms and conditions of this Agreement, the
Purchaser hereby agrees to purchase from the Vendors, and the Vendors hereby
undertake to sell or procure the sale of and transfer to the Purchaser, all
legal and beneficial interest in the Vendors' Shares.
2.2 The Purchase Price will be paid on the Closing Date by the Purchaser by
issuing the Purchaser Shares to the Vendors in proportion to their shareholdings
in the Company.
2.3 Notwithstanding the above, in circumstances during the period ending 12
months from the Closing Date, the Purchaser issues shares in its capital stock
(a "Dilutive Issuance"), other than pursuant to options or other agreements
existing as of the date hereof and, incentive stock options subsequently granted
to bona fide employees and consultants to the Purchaser, at a price less than
$4.50 per share (the "Dilutive Price"), the Purchase Price shall be adjusted by
issuing to the Vendors such further number of shares of the Purchaser in order
that the Vendors shall have received the Purchase Price in shares of the common
stock of the Purchaser having a deemed price per share equal to the Dilutive
Price and in circumstances where there is more than on Dilutive Issuance, this
Section shall apply to each such Dilutive Issuance.
3. ESCROW SHARES
3.1 Seven Hundred Thousand (700,000) of the Purchaser Shares issued as a
portion of the Purchase Price (the "Escrow Shares") will be escrowed in
accordance with the terms of this Agreement and the Escrow Agreement attached
hereto as Schedule "N".
3.2 The Escrow Shares will be returned to the Purchaser in circumstances
where the Company does not have earnings prior to any distributions of at least
Three Million ($3,000,000) Dollars for the Twelve Month period ending March 31,
2000 as evidenced by the financial statements of the Company for such period
provided that, in circumstances where the Closing Documents are not released
from escrow as contemplated under Section 17.1 by December 15, 1999, the ending
date for the above referenced Twelve Month period will be extended to June 30,
2000.
3.3 For the purpose of calculating earnings, the Company will use accounting
practices consistent with generally accepted accounting principles applicable in
the United States and the Company's prior practices.
3.4 The Vendors agree that in circumstances where the Escrow Shares are
otherwise to be released to the Vendors as contemplated herein, the Purchaser
will be entitled to have returned to it such number of Escrow Shares, having a
deemed value of $3.60 per Escrow Share, as represent a value equal to the
amount, if any, of the liabilities of the Company or New World at Closing which
are in excess of the liabilities as disclosed in the focus report of New World
as at November 30, 1999 and the unaudited financial statements of the Company as
at November 30, 1999 delivered to the Purchaser prior to the Closing or
otherwise disclosed in writing to the Purchaser prior to the Closing.
3.5 At the Closing, the Vendors will be deemed to have received and
deposited with the Escrow Agent (as defined below) the Escrow Shares, without
any act of any Vendors. As soon as practicable after Closing, the Escrow Shares
will be deposited with Clark, Wilson, Barristers and Solicitors (or other entity
acceptable to the Vendors and the Purchaser), as Escrow Agent (the "Escrow
Agent"), to be governed by the terms set forth herein and in the Escrow
Agreement. The Escrow Shares will be held in a trust and will not be subject to
any lien, attachment, trustee process or any other judicial process of any
creditor of any party, and will be held and disbursed solely for the purposes
and in accordance with terms of this Section 3 and the Escrow Agreement.
3.6 Concurrent with the execution of this Agreement, the Vendors and the
Purchaser will execute and deliver the Escrow Agreement attached as Schedule "N"
to this Agreement.
4. RESTRICTED SECURITIES
4.1 The Vendors understand that the Purchaser Shares may not be sold,
transferred or otherwise disposed of without registration under the Securities
Act or an exemption therefrom, and that in the absence of an effective
registration statement covering the Purchaser Shares or an available exemption
from registration under the Securities Act, the Purchaser Shares must be held
indefinitely. In particular, the Vendors are aware that the Purchaser Shares
may not be sold pursuant to Rule 144 promulgated under the Securities Act unless
all of the conditions of that Rule are met. In this connection, the Vendors
represent that the Vendors understand that under Rule 144, the Purchaser Shares
must be held for at least one year after purchase thereof from the Purchaser
prior to resale (two years in the absence of public current information about
the Purchaser) and that, under certain circumstances, the conditions for use of
Rule 144 include the availability of public current information about the
Purchaser, that sales be effected through a "broker's transaction" or
transactions with a "market maker," and that the number of shares being sold not
exceed specified limitations. In this regard the Purchaser shall take steps to
cause the Company to facilitate such sales of the Purchaser Shares as shall be
proposed to be made in accordance with Rule 144. Such public current
information about the Purchaser for purposes of Rule 144 is now available, but
may not be in the future.
4.2 It is understood and agreed that the certificates evidencing the
Purchaser Shares may bear one or all of the following legends:
(a) "The shares represented by this certificate have not been registered
under the United States Securities Act of 1933. They may not be sold, offered
for sale, pledged, hypothecated or otherwise transferred in the absence of a
registration statement in effect with respect to such shares under such Act or
an opinion of counsel or other evidence satisfactory to e-financial xxxxx.xxx,
Inc. and its counsel that such registration is not required."; or
(b) Any legend required by any other jurisdiction.
5. PURCHASER'S COMMITMENTS
5.1 Upon and subject to the completion of the transactions contemplated
herein, the Purchaser will provide a commitment in a form satisfactory to the
principal shareholders of the Company, acting reasonably:
(a) to invest up to Three Million Five Hundred Thousand ($3,500,000) Dollars
in the Company during the Twelve (12)-month period after Closing, to be applied
for the purpose of implementing the Company's' business plan with the intention
that One Million ($1,000,000) Dollars is to be invested on or about December 15,
1999;
(b) to investigate the opportunities for, and the logistics of. setting up
online trading in Europe; and
(c) to retain all current employees, consultants and licensed staff of the
Company at current salaries for a minimum of Twenty (24) months after closing
subject to the right to terminate any such employees for cause.
6. FINDER'S FEE
6.1 The Vendors and the Purchaser will each assume liability for 50% of any
finder's fee or commission payable to Xxx Xxxxx in respect of the transactions
contemplated by this Agreement.
7. CLOSING
7.1 The Closing will take place at 4:00 p.m. local time, on the Closing Date
at the offices of the Purchaser's Solicitors, or at such other place, date and
time, as the parties agree upon.
8. WARRANTIES AND REPRESENTATIONS OF XXXX XXXXX
8.1 Xxxx Xxxxx warrants and represents to the Purchaser, with the intent
that the Purchaser will rely thereon in entering into this Agreement and in
concluding the purchase and sale contemplated herein, that:
(a) Xxxx Xxxxx is the registered holder and beneficial owner of Xxxx Xxxxx'x
Shares, free and clear of all Liens and Xxxx Xxxxx has no interest, legal or
beneficial, direct or indirect, in any shares of, or the assets or business of,
the Company other than Xxxx Xxxxx'x Shares;
(b) Xxxx Xxxxx 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 and will on the Closing Date have the rights to transfer the legal and
beneficial title and ownership of Xxxx Xxxxx'x Shares to the Purchaser;
(c) Xxxx Xxxxx does not have any specific information relating to the
Company which is not generally known or which has not been disclosed to the
Purchaser and which if known could reasonably be expected to have a materially
adverse effect on the value of Xxxx Xxxxx'x Shares;
(d) Xxxx Xxxxx understands that the Purchaser Shares are not registered
under the Securities Act on the ground that the sale provided for in this
agreement and the issuance of the securities hereunder is exempt from
registration under the Securities Act pursuant to Section 4(2) thereof, and that
Purchaser's reliance on such exemption is based on Xxxx Xxxxx'x representation;
(e) Xxxx Xxxxx has had adequate opportunity to obtain from representatives
of the Purchaser such information, in addition to the representations set forth
in this Agreement, as is necessary to evaluate the merits and risks of Xxxx
Xxxxx'x investment in the Purchaser Shares and Xxxx Xxxxx has sufficient
experience in business, financial and investment matters to be able to evaluate
the risks involved in the acquisition of the Purchaser Shares to be issued to
Xxxx Xxxxx pursuant to the terms of this Agreement and to make an informed
investment decisions with respect to such investment; and
(f) Xxxx Xxxxx is also the sole registered and beneficial owner of all of
the issued and outstanding shares of New World, free and clear of any Liens;
9. WARRANTIES AND REPRESENTATIONS OF XXXXXXX HOLDINGS
9.1 Xxxxxxx Holdings warrants and represents to the Purchaser, with the
intent that the Purchaser will rely thereon in entering into this Agreement and
in concluding the purchase and sale contemplated herein, that:
(a) Xxxxxxx Holdings is the registered holder and beneficial owner of
Xxxxxxx Holdings' Shares, free and clear of all Liens and Xxxxxxx Holdings has
no interest, legal or beneficial, direct or indirect, in any shares of, or the
assets or business of, the Company other than Xxxxxxx Holdings' Shares;
(b) Xxxxxxx Holdings 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 and will on the Closing Date have the rights to transfer the
legal and beneficial title and ownership of Xxxxxxx Holdings' Shares to the
Purchaser;
(c) Xxxxxxx Holdings does not have any specific information relating to the
Company which is not generally known or which has not been disclosed to the
Purchaser and which if known could reasonably be expected to have a materially
adverse effect on the value of Xxxxxxx Holdings' Shares;
(d) Xxxxxxx Holdings understands that the Purchaser Shares are not
registered under the Securities Act on the ground that the sale provided for in
this agreement and the issuance of the securities hereunder is exempt from
registration under the Securities Act pursuant to Section 4(2) thereof, and that
Purchaser's reliance on such exemption is based on Xxxxxxx Holdings'
representation; and
(e) Xxxxxxx Holdings has had adequate opportunity to obtain from
representatives of the Purchaser such information, in addition to the
representations set forth in this Agreement, as is necessary to evaluate the
merits and risks of Xxxxxxx Holdings' investment in the Purchaser Shares and
Xxxxxxx Holdings has sufficient experience in business, financial and investment
matters to be able to evaluate the risks involved in the acquisition of the
Purchaser Shares to be issued to Xxxxxxx Holdings pursuant to the terms of this
Agreement and to make an informed investment decisions with respect to such
investment.
10. JOINT AND SEVERAL WARRANTIES AND REPRESENTATIONS OF THE VENDORS
10.1 The Vendors jointly and severally warrant and represent to the
Purchaser, with the intent that the Purchaser will rely thereon in entering into
this Agreement and in concluding the purchase and sale contemplated herein,
that:
(a) Xxxx Xxxxx'x Shares and Xxxxxxx Holdings' Shares together represent all
of the issued and outstanding shares of the Company;
(b) the Company is the sole registered and beneficial owner of all of the
issued and outstanding shares of the Subsidiary, free and clear of any Liens;
(c) the authorized and issued capital of the Company is as described in
Schedule "G";
(d) no person has any agreement, right, option or privilege, consensual or
arising by law, present or future, contingent or absolute, or capable of
becoming an agreement, right or option:
(i) to require any of the Entities to issue any further or other shares in
its capital or any other security convertible or exchangeable into shares in its
capital or to convert or exchange any securities into or for shares in the
capital of any of the Entities;
(ii) for the issue or allotment of any of the authorized but unissued shares
in the capital of any of the Entities;
(iii) to require any of the Entities to purchase, redeem or otherwise
acquire any of the issued and outstanding shares in the capital of such Entity;
(iv) to purchase or otherwise acquire any shares in the capital of any of
the Entities; or
(v) which is capable of becoming an agreement for the acquisition of any of
the Business Assets.
(e) each of the Entities is a private company limited by shares and duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation;
(f) the directors and officers of the Company are identified in Schedule
"H";
(g) all alterations to the constating documents of the Company since its
incorporation, have been duly approved by the shareholders of the Company in
accordance with applicable corporate law and registered with the relevant state
authorities;
(h) the Company carries on the Business in New York and does not carry on
any business in any other state or territory of the United States or in any
other county and does not carry on any business other than the Business;
(i) New World is registered in all jurisdictions in which it currently
carries on the New World Business;
(j) each of the Entities has the power, authority and capacity to carry on
its business as presently conducted by it;
(k) each of the Entities has the power, authority and capacity to own and
use all of the Business Assets owned or used by it;
(l) the Entities own and possess all right, title and interest in, and has
good and marketable title to and possession of, all the Business Assets free and
clear of all Liens (with the exceptions of the Permitted Liens, those Business
Assets subject to the leases included in the Material Contracts and the Excluded
Assets) and neither The Vendors, the Company nor New World have received notice
from any third party claiming an interest in and to the Business Assets other
than an interest which constitutes a Permitted Lien, and neither the Vendors,
the Company nor New World have any reason to believe any such claim may be made;
(m) the Entities have no bank, trust, savings, chequing or other accounts or
deposits, safety deposit boxes or other depositories except as set out in
Schedule "I", which Schedule is a true and complete list showing the name of
each bank, trust company or similar financial institution in which the Entities
have accounts, deposits or safety deposit boxes and the names of all persons
authorized to draw thereon or have access thereto;
(n) each of the Entities and all employees of the Entities hold all
licences, permits and other regulatory approvals required for the conduct in the
ordinary course of the Business or the New World Business, as the case may be,
and for the uses to which the Business Assets have been or may be put and all
such licences, permits and regulatory approvals are in good standing and the
conduct and uses of the same by each of the Entities or the employees of the
Entities, as the case may be, are in compliance with all laws, zoning and other
bylaws, building and other restrictions, rules, regulations and ordinances
applicable to the Entities, the employees of the Entities, the Business, the New
World Business or the Business Assets, and neither the execution and delivery of
this Agreement nor the completion of the purchase and sale hereby contemplated
will give any person the right to terminate or cancel the said licences, permits
or regulatory approvals, or affect such compliance;
(o) the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the terms hereof
does not and will not:
(i) conflict with or result in a breach of or violate any of the terms,
conditions, or provisions of the constating documents of the Company;
(ii) conflict with or result in a breach of or violate any of the terms,
conditions or provisions of any law, judgment, order, injunction, decree,
regulation or ruling of any court or governmental authority, domestic or
foreign, to which any of the Entities or the Vendors is subject or constitute or
result in a default under any agreement, contract or commitment to which any of
the Entities or the Vendors are a party;
(iii) subject to obtaining the Consents, give to any person any remedy,
cause of action, right of termination, cancellation or acceleration in or with
respect to any agreement, contract, or commitment to which any of the Entities
is a party including the Contracts and the Permitted Liens;
(iv) give to any government or governmental authority of the United States
or any state or any regional district, district or municipality or any
subdivision thereof, including any governmental department, commission, bureau,
board, or administrative agency any right of termination, cancellation, or
suspension of, or constitute a breach of or result in a default under any
permit, license, control, or authority issued to any of the Entities and which
is necessary or desirable in connection with the conduct and operation of the
Business, the New World Business and the ownership, leasing or use of the
Business Assets; or
(v) subject to obtaining the Consents, constitute a default by any of the
Entities or an event which, with the giving of notice or lapse of time or both,
might constitute an event of default or non-observance under any agreement,
contract, indenture or other instrument relating to any Indebtedness of any of
the Entities which would give any person the right to accelerate the maturity
for the payment of any amount payable under that agreement, contract, indenture,
or other instrument including the Contracts and the Permitted Liens;
(p) the Financial Statements were prepared in accordance with generally
accepted accounting principles applied on a basis consistent with prior
reporting periods, are true and correct in every material respect and present
fairly and accurately the financial condition and position of the Company as at
the date hereof and the results of the operations of the Company;
(q) the New World Financial Statements were prepared in accordance with
generally accepted accounting principles applied on a basis consistent with
prior reporting periods, are true and correct in every material respect and
present fairly and accurately the financial condition and position of New World
as at the date hereof and the results of the operations of New World;
(r) the Financial Statements and New World Financial Statements meet or
exceed all federal and/or state financial disclosure requirements applicable to
securities brokers and dealers;
(s) the provisions for doubtful accounts receivable of the Company on a
consolidated basis as recorded in the Financial Statements are, and collections
since the date hereof have proven them to be, adequate;
(t) the provisions for doubtful accounts receivable of New World on a
consolidated basis as recorded in the New World Financial Statements are, and
collections since the date hereof have proven them to be, adequate;
(u) the Accounts Receivable of the Company and New World on a consolidated
basis are bona fide, good and collectable without set-off or counterclaim save
and except as described in Schedule "A";
(v) there is no Indebtedness of the Company which is not disclosed or
reflected in the Financial Statements except Accounts Payable;
(w) there is no Indebtedness of New World which is not disclosed or
reflected in the New World Financial Statements except Accounts Payable;
(x) each of the Entities has been assessed for federal and state income tax
for all years to and including fiscal year 1998, and the Company and New World
have withheld and remitted to the relevant taxing authorities except those items
listed and accrued in such Entity's financial statements as attached hereto all
amounts required to be remitted to relevant tax collecting authorities
respecting payments to employees or to non-residents, or otherwise and has paid
all instalments of corporate taxes due and payable;
(y) all tax returns and reports of the Company and New World and the
Subsidiary required by law to be filed prior to the Execution Date (including
all federal and state income tax returns), have been filed and are true,
complete and correct, and all taxes and other government charges (including all
income, excise, sales, business and property taxes and other rates, charges,
assessment, levies, duties, taxes, contributions, fees and licenses) have been
accrued in such Entity's financial statements as attached hereto;
(z) adequate provision has been made for taxes payable by each of the
Entities for which tax returns are not yet required to be filed and there are no
agreements, waivers or other arrangements providing for an extension of time
with respect to the filing of any tax return by or payment of any tax,
governmental charge or deficiency by any of the Entities, and to the knowledge
of the Vendors, there are no contingent tax liabilities or any grounds which
would prompt a re-assessment, including aggressive treatment of income and
expenses in filing earlier tax returns;
(aa) each of the Entities has made all elections required to be made under
applicable tax legislation in connection with any distributions by the Entities
and all such elections were true and correct and in the prescribed forms and
were made within the prescribed time periods;
(bb) none of the Entities has prior to the Execution Date:
(i) acquired or had the use of any property from a person with whom such
Entity was not dealing at arm's length;
(ii) disposed of anything to a person with whom such Entity was not dealing
at arm's length for proceeds less than or greater than the fair market value
thereof; or
(iii) discontinued carrying on any business in respect of which non-capital
losses were incurred;
(cc) other than approvals and filings required under applicable securities
laws, no authorization, approval, order, license, permit or consent of any
governmental authority, regulatory body or court, and no registration,
declaration or filing by Vendors or any of the Entities with any such
governmental authority, regulatory body or court is required in order for the
Vendors to complete the contemplated purchase and sale, to duly perform and
observe the terms and provisions of this Agreement, and to render this Agreement
legal, valid, binding and enforceable in accordance with its terms;
(dd) the Business, the New World Business and the Business Assets comply
with all applicable laws, judgments, decrees, orders, injunctions, rules,
statutes and regulations of all courts, arbitrators or governmental authorities,
including all environmental, health and safety statutes and regulations;
(ee) all material transactions of each of the Entities has been promptly and
properly recorded or filed in or with its respective books and records, and the
minute books of each of the Entities contains all records required to be kept as
provided by applicable state law;
(ff) with respect to the Intellectual Property:
(i) Schedule "M" contains a complete and accurate list of all:
A. trade-names, trade-marks and service marks;
B. trade-xxxx applications and service xxxx applications;
C. registered copyrights and copyright applications;
D. Internet domain name registrations,
owned, used, made or applied for by each of the Entities setting out, in detail,
the relevant dates, reference numbers and jurisdictions of each;
(ii) to The Vendors' knowledge, there is no state of facts which casts doubt
on the validity or enforceability of the Intellectual Property;
(iii) the use of any Intellectual Property will not infringe the industrial,
commercial or intellectual property rights of any other person;
(iv) except as disclosed in Schedule "L", to The Vendors' knowledge, there
are no existing or threatened legal proceedings, claims, or allegations (formal
or informal), or any basis for such proceedings, claims or allegations, in
respect of the use or ownership of any Intellectual Property;
(v) none of the Entities is in default of any of its obligations as licensee
under any technology licence pursuant to which it is a licensee;
(vi) neither the entering into of this Agreement nor the completion of the
transactions contemplated hereby constitute or will constitute a breach of any
agreement in respect of Intellectual Property; and
(vii) no past or present employee, consultant or contractor of any of the
Entities has any right, title, or interest in or to any of any Intellectual
Property, all such employees, consultants and contractors have assigned and
waived in writing their rights (including moral rights) in and to the
Intellectual Property, and all of the present employees of the Entities have
executed and delivered to such Entity or employs them confidentiality and
non-competition agreements in relation to any information or data of such Entity
obtained in the course of his or her employment or other arrangement with such
Entity, copies of which agreements have been provided to the Purchaser prior to
the Closing Date.
(gg) each of the Entities is in full compliance with the rules and
regulations of the applicable top level domain managers, including the domain
managers of the .ca, .com, .net, .gov, and .org top level domains, to maintain
its domain name registrations. To The Vendors' knowledge, there is currently no
libellous, scandalous or illegal content in any of the websites maintained by
any of the Entities in respect of which any complaint has been received by any
of the Entities from any member of the public or from any government or
authority or from any top level domain manager;
(hh) each of the Entities has in effect contingency plans and technologies
for each of the following possible occurrences:
(i) failure of any of the major systems of such Entity's business to
function in accordance with specifications due to the year 2000; and
(ii) failure of any data processing hardware and software, communications
hardware and software, hardware and software storing and/or controlling
databases or any other component of any data processing or communications device
or system used in the Business;
(ii) the Company has not experienced nor, to the knowledge of the Company or
the Vendors, has there been any occurrence or event which has had, or might
reasonably be expected to have, a materially adverse effect on the Business or
the result of its operations;
(jj) New World has not experienced nor, to the knowledge of New World or the
Vendors, has there been any occurrence or event which has had, or might
reasonably be expected to have, a materially adverse effect on the New World
Business or the result of its operations;
(kk) the name of each present employee or consultant of each of the
Entities, the duration of the employment of each such employee or consultant and
the remuneration and benefit obligations in respect of each such employee or
consultant is accurately set out in Schedule "J";
(ll) the Vendors have not received notice of any complaints filed by any
employees against any of the Entities and are not aware of any facts or
circumstances that may give rise to any complaints claiming that any of the
Entities has violated applicable employee or human rights or similar legislation
in jurisdictions which the Business or the New World Business, as the case may
be is conducted or any complaints or proceedings of any kind involving the
Vendors. All levies, assessments and penalties made against any of the Entities
pursuant to applicable worker's compensation legislation have been paid without
reassessment;
(mm) there are no pension, profit sharing, incentive, bonus, group insurance
or similar plans or other compensation plans affecting any of the Entities other
than those described in Schedule "K" and any of the Entities there is no
unfunded or unpaid liability in respect of any such plan;
(nn) except for existing oral and written employment agreements with the
individuals listed in Schedule "J", none of the Entities have any contract,
agreement, undertaking or arrangement, whether oral, written or implied, which
cannot be terminated on not more than one month's notice and none of the
Entities have any outstanding agreement, contract or commitment (whether written
or oral) whatsoever relating to or affecting the conduct of the Business, the
New World Business or any of the Business Assets or for the purchase, sale or
lease of any of the Business Assets other than the Contracts and the Permitted
Liens;
(oo) there is no basis for and there are no actions, suits, judgments,
investigations or proceedings outstanding or pending or to the knowledge of the
Vendors threatened against or affecting any of the Entities at law or in equity
or before or by any court or federal, state, municipal or other governmental
authority, department, commission, board, tribunal, bureau or agency and none of
the Entities are a party to or threatened with any litigation, with the
exception of the matters described in Schedule "L";
(pp) none of the Entities:
(i) is in breach of any of the terms, covenants, conditions, or provisions
of, is not in default under, and has not done or omitted to do anything which,
with the giving of notice or lapse of time or both, would constitute a breach of
or a default under any Contract;
(ii) is in violation of nor is any present use by any of the Entities of any
Business Assets in violation of or contravention of any applicable law, statute,
order, rule or regulation of the United States or any state or any regional
district, district or municipality or any subdivision thereof; and
(iii) is in breach or default under any judgment, injunction or other order
or aware of any judicial, administration, governmental, or other authority or
arbitrator by which any of the Entities is bound or to which any of the Entities
or any Business Assets are subject;
and the Vendors has not received notice that any default, breach, or violation
is being alleged;
(qq) the Company has not guaranteed, or agreed to guarantee, any
Indebtedness or other obligation of any person except as described in the
Financial Statements;
(rr) New World has not guaranteed, or agreed to guarantee, any Indebtedness
or other obligation of any person except as described in the New World Financial
Statements;
(ss) reasonable wear and tear excepted, the Business Assets are in good
working order and in a functional state of repair and to the knowledge of the
Vendors, there are no latent defects;
(tt) since the applicable date hereof:
(i) no dividends of any kind or other distribution on any shares of any of
the Entities has been declared or paid by the Entities;
(ii) there has been no material adverse change in the financial condition or
position of any of the Entities on a consolidated basis and no damage, loss or
destruction materially affecting the Business Assets or the right, capacity, or
ability of the Entities to carry on the Business or the New World Business as
the case may be;
(iii) none of the Entities has increased the pay of or paid or agreed to pay
any pension, bonus, share of profits or other similar benefit to or for the
benefit of any agent, employee, director, or officer of the Company or the
Subsidiaries, except increases in the normal course of business to employees
other than officers and directors;
(iv) the Company and New World have conducted the Business and the New World
Business as applicable in the usual and normal manner and the Entities have
maintained the Business Assets in as good condition as prevailed prior to the
date hereof and have made all necessary repairs and replacements thereto;
(v) none of the Entities has waived or surrendered any right of material
value; and
(uu) none of the Entities are in breach of any federal or state rules or
regulations governing securities brokers in the United States including, but not
limited to, NASD rules and federal securities laws, rules and regulations; and
(vv) without limiting the generality of the foregoing, the Management
Services Agreement is in good standing and remains in full force and effect.
11. PURCHASER'S WARRANTIES AND REPRESENTATIONS
11.1 The Purchaser warrants and represents to the Vendors, with the intent
that the Vendors will rely thereon in entering into this Agreement and in
concluding the purchase and sale contemplated herein that:
(a) the Purchaser is a corporation duly incorporated, validly existing and
in good standing under the laws of Delaware and has the power, authority and
capacity to enter into this Agreement and to carry out its terms;
(b) the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby has been duly and validly authorized by all
necessary corporate action on the part of the Purchaser, and this Agreement
constitutes a legal, valid and binding obligation of the Purchaser in accordance
with its terms except as limited by laws of general application affecting the
rights of creditors;
(c) no consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental authority is required by or with
respect to Purchaser in connection with the execution and delivery of this
Agreement by the Purchaser or the consummation by the Purchaser of the
transactions contemplated hereby, except for such consents, approvals, orders,
authorizations, registrations, declarations, qualifications or filings as may be
required by the OTC BB and under applicable federal and state securities laws in
connection with the transactions set forth herein;
(d) the authorized capital stock of the Purchaser is One Hundred Ten Million
(110,000,000) common shares without par value, of which Two Million, Seven
Hundred Fifty Thousand (2,750,000) common shares are issued and outstanding as
of the date hereof, fully paid and non-assessable;
(e) there is no litigation, proceeding or governmental investigation in
progress, pending, threatened or contemplated against or relating to the
Purchaser, the business of the Purchaser, or the transactions contemplated by
this Agreement;
(f) the following documents have been filed under the Purchaser's former
name, Ballynagee Acquisition Corp., with the SEC under the Securities Exchange
Act and the rules and regulations promulgated thereto: Schedule 14C Information
Statement filed October 13, 1999, Form 8K dated September 20, 1999, Pre 14C
filed October 1, 1999 and Form 10SB filed July 30, 1999. As of their respective
filing dates, the Purchaser's SEC filings complied in all material respects with
the Securities Exchange Act, as of their respective filing dates, the
Purchaser's SEC filings did not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made therein,
in light of the circumstances in which they were made, not misleading;
(g) the Purchaser Shares to be issued to the Vendors hereunder on the
Closing Date, will be validly issued, fully paid and non-assessable; and
(h) there are no orders ceasing or suspending trading in the securities of
the Purchaser and to the best of the knowledge of the Purchaser, no proceedings
for this purpose have been instituted or are pending, contemplated or
threatened.
12. COVENANTS
12.1 Between the Execution Date and the Closing, the Vendors:
(a) will cause the Company to afford to the Purchaser and its authorized
representatives access during normal business hours to all properties, books,
contracts, commitments, records of each of the Entities and furnish such copies
(certified if requested) thereof and other information as the Purchaser may
reasonably request, and to permit the Purchaser and its authorized
representatives to make such audit of the books of account of the Entities and
physical verification of the Business Assets as the Purchaser may reasonably see
fit;
(b) will diligently take all reasonable steps to obtain, prior to the
Closing, all consents and approvals required to complete the transactions
contemplated herein in accordance with the terms and conditions hereof including
the Consents;
(c) will cause each of the Entities to conduct their business and affairs
diligently and only in the ordinary course, and preserve and maintain the
goodwill of each of the Entities, the Business Assets, the Business and the New
World Business;
(d) will cause each of the Entities to maintain insurance coverage of the
scope and in the amounts presently held as more particularly set out in (a);
(e) will not permit any of the Entities to make or agree to make any payment
to any director, officer, employee or agent of any of the Entities except in the
ordinary course of business and at the regular rates of salary and commission
for such person or as reasonable reimbursement for expenses incurred by such
person in connection with the Company.
13. NON-MERGER
13.1 The representations, warranties, covenants and agreements of the
Vendors contained herein and those contained in the documents and instruments
delivered pursuant hereto will be true at and as of the Closing as though made
at the Closing and will survive the Closing Date for a period ending 24 months
after Closing, and notwithstanding the completion of the transactions herein
contemplated, the waiver of any condition contained herein (unless such waiver
expressly releases the Vendors of such representation, warranty, covenant or
agreement), or any investigation by the Purchaser, the same will remain in full
force and effect for the said same 24 month period after Closing.
13.2 The representations, warranties, covenants and agreements of the
Purchaser contained herein and those contained in the documents and instruments
delivered pursuant hereto will be true at and as of the Closing as though made
at the Closing and will survive the Closing Date, and notwithstanding the
completion of the transactions herein contemplated, the waiver of any condition
contained herein (unless such waiver expressly releases the Purchaser of such
representation, warranty, covenant or agreement), or any investigation by the
Vendors, the same will remain in full force and effect.
14. DUE DILIGENCE
14.1 The Vendors will, during the remainder of the Due Diligence Period,
provide or cause the Entities to provide the Purchaser and its representatives
with access to, and will permit the Purchaser and its representatives to make
such investigations of the operations, properties, assets and records of the
Entities and of their financial and legal condition as the Purchaser deems
necessary or advisable for the Purchaser to assess the value thereof and to
familiarise itself with same. The Vendors will cause the Entities to sign such
consents as may be requested by the Purchaser in order for the Purchaser to
conduct due diligence searches at the relevant regulatory or statutory offices
and will permit the Purchaser and its representatives to have access to the
premises leased by the Entities and the other assets of the Entities at
reasonable times so as no to disrupt the routine daily affairs of the Entities,
and will produce for inspection and provide copies to the Purchaser of:
(a) all of the Entities' material contracts, leases of real or personal
property, permits, licences, title documents, title opinions, insurance
policies, pension plans, information relating to employees, information relating
to customer lists, documents relating to indebtedness and credit facilities,
documents relating to legal or administrative proceedings and other documents of
or in possession of the Company or relating to their business and operations;
and
(b) the record books for the Entities and all other corporate documents of
the Entities.
15. CONFIDENTIALITY
15.1 Each party agrees that all information provided to it by another party
(collectively "Confidential Information") shall be held in complete confidence
by it and by its advisors and representatives and shall not, without the prior
written consent of that other party, be disclosed to any other person, nor used
for any other purpose, other than in connection with the evaluation, negotiation
and finalization of the transactions contemplated herein. However, a party's
obligation does not apply to Confidential Information:
(a) which is generally available to third parties (unless available as a
result of a breach of this Agreement);
(b) which is lawfully in the possession of a party and which was not
acquired directly or indirectly from another party; or
(c) the disclosure of which is required by any applicable law or by any
supervisory or regulatory body to whose rules a party is subject.
16. CONDITIONS PRECEDENT
16.1 The obligations of the Purchaser to consummate the transactions herein
contemplated are subject to the fulfilment of each of the following conditions
at the times stipulated:
(a) the representations and warranties of the Vendors contained herein shall
be true and correct in all respects at and as of the Closing except as may be in
writing disclosed to and approved by the Purchaser;
(b) all covenants, agreements and obligations hereunder on the part of the
Vendors to be performed or complied with at or prior to the Closing, including
the Vendors' obligation to deliver the documents and instruments herein provided
for, shall have been performed and complied with at and as of the Closing;
(c) between the Execution Date and the Closing, none of the Entities shall
have experienced any event, circumstance or condition or have taken any action
or become subject to any action of any character adversely affecting such
Entities, the Business or the New World Business or as would materially reduce
the value of the Company, the Business, the New World Business or the Vendors'
Shares to the Purchaser;
(d) the Business Assets shall have suffered no material adverse damage or
change since the Execution Date and prior to the Closing which, in the sole
opinion of the Purchaser, will materially and adversely affect the Business
Assets, the Business, the New World Business or the Entities' operations,
prospects or earnings;
(e) on or before the Closing Date, no federal, state, regional or municipal
government of any country applicable to the Business or the New World Business
or any agency thereof will have enacted any statute or regulation, announced any
policy or taken any action that will materially and adversely affect the
Business, the New World Business or the Business Assets;
(f) the Purchaser is satisfied in its sole discretion as to the state of the
Business Assets and the operations of the Entities after completion of its
investigation thereof during the Due Diligence Period;
(g) with the exception of Xxxx Xxxxx, concurrent with the Closing, the
Purchaser will receive the resignations of the directors and officers of the
Company and the Subsidiary set out in Schedule "H", to be effective immediately
upon Closing;
(h) no action, suit or proceeding concerning any of the Entities or the
Vendors will be pending or threatened by or before any court of competent
jurisdiction or governmental entity wherein an unfavourable judgment, order,
decree, stipulation or injunction would affect materially and adversely the
right of the Entities to own, operate or control the Business or New World
Business or the Business Assets owned by such Entities, and no such judgment,
order, decree stipulation or injunction will be in effect;
(i) Xxxx Xxxxx will have agreed to remain a director of the Company and
entered into an employment contract with the Company and New World, effective as
of the Closing, on terms satisfactory to Xxxx Xxxxx and to the Purchaser;
(j) New World shall have entered into such agreement with the Company to
elaborate and expand on the terms of the Management Services Agreement as the
Purchaser, acting reasonably, shall request; and
(k) Xxxx Xxxxx shall have granted to the Purchaser the New World Option and
shall have entered into such agreements and done such things in furtherance of
the New World Option as the Purchaser, acting reasonably shall request.
16.2 The conditions set forth in Section 16.1 are for the exclusive benefit
of the Purchaser and may be waived by the Purchaser in writing in whole or in
part at any time.
16.3 The obligations of the Vendors to consummate the transactions herein
contemplated are subject to the fulfilment of each of the following conditions
at the times stipulated, that:
(a) the representations and warranties of the Purchaser contained herein are
true and correct in all material respects at and as of the Closing except as may
be in writing disclosed to and approved by the Vendors;
(b) all covenants, agreements and obligations hereunder on the part of the
Purchaser to be performed or complied with at or prior to the Closing, including
in particular the Purchaser's obligations to deliver the documents and
instruments herein provided for, have been performed and complied with as at the
Closing;
(c) between the Execution Date and the Closing, the Purchaser has not
experienced any event, circumstance or condition or have taken any action or
become subject to any action of any character adversely affecting the Purchaser
or as would materially reduce the value of the Purchaser Shares;
(d) the Vendors are satisfied in their sole discretion as to the state of
the business assets and the operations of the Purchaser after completion of its
investigation thereof during the Due Diligence Period;
(e) the Purchaser will appoint a nominee of the Vendors to the Board of
Directors of the Purchaser effective as of the Closing; and
(f) on or before the Closing Date, no federal, state, regional or municipal
government of any country applicable to the Purchaser's business or any agency
thereof will have enacted any statute or regulation, announced any policy or
taken any action that will materially and adversely affect the Purchaser, its
business or its assets.
16.4 The conditions set forth in Section 16.3 are for the exclusive benefit
of the Vendors and may be waived by the Vendors jointly in whole or in part at
any time.
16.5 The respective obligations of each party to this Agreement to
consummate the transactions herein contemplated are subject to the satisfaction
at or prior to the Closing of the following conditions:
(a) all consents, approvals, authorizations, waivers and orders of any
regulatory authorities, shareholders or third parities required or necessary or
desirable for the completion of the transactions contemplated herein shall have
been obtained or received by the Company and the Purchaser with the exception of
the requisite NASD approval, if any; and
(b) the Vendors, the Purchaser and a duly authorized escrow agent enter into
the Escrow Agreement attached hereto as Schedule "N".
17. TRANSACTIONS OF THE VENDORS AT THE CLOSING
17.1 At the Closing, the Vendors will execute and deliver or cause to be
executed and delivered all documents, instruments, resolutions and share
certificates as are necessary to effectively transfer and assign the Vendors'
Shares to the Purchaser, free and clear of all Liens, including:
(a) certified copies of resolutions of the directors of the Company
authorizing the transfer of the Vendors' Shares and the registration of the
Vendors' Shares in the name of the Purchaser and authorizing the issue of new
share certificates representing the Vendors' Shares in the name of the
Purchaser;
(b) share certificates representing the Vendors' Shares in the name of the
Vendors, duly endorsed for transfer to the Purchaser;
(c) duly issued share certificates in the name of the Purchaser representing
the Vendors' Shares;
(d) with the exception of Xxxx Xxxxx, resignations in writing of any of the
directors and officers and signing officers of the Company;
(e) all corporate records and books of account of the Company including,
minute books, share register books, share certificate books and annual reports;
(f) the corporate seal of the Company;
(g) the employment and consulting contracts for all of the current employees
and consultants of the Company;
(h) releases, in form and substance satisfactory to the Purchaser, acting
reasonably, executed by the Vendors in favour of the Company releasing the
Company from any and all manner of actions, causes of action, suits,
proceedings, debts, dues, profits, expenses, contracts, damages, claims, demands
and liabilities whatsoever, in law or equity, which the Vendors ever had, now
has, or may have against either of the Company for or by reason of any matter,
cause or thing whatsoever done or omitted to be done by the Company up to the
Closing other than in respect of obligations of the Company to the Vendors
arising in respect of:
(i) earned but unpaid salary and unpaid benefits for the then current pay
period; and
(ii) any obligations pursuant to indemnities granted to the Vendors by the
Company in connection with his acts as director of the Company provided that
such indemnities shall be ineffective in respect of any act or omission which
would constitute a default or breach pursuant to this Agreement or which render
any representation or warranty given hereunder untrue or inaccurate;
(i) the Consents;
(j) a Closing Warranty and Certificate from the Vendors confirming that the
conditions to be satisfied by the Vendors, unless waived, set out in Section
14.3 have been satisfied at the Closing and that all representations and
warranties of the Vendors contained in this Agreement are true at and as of the
Closing;
(k) an opinion of the Vendors' Solicitors addressed to the Purchaser and the
Purchaser's Solicitors in a form reasonably satisfactory to the Purchaser's
Solicitors;
(l) the Escrow Agreement duly executed by the Vendors;
(m) the New World Option and related agreements and documents, duly executed
by Xxxx Xxxxx; and
(n) all such other documents and instruments as the Purchaser's Solicitors
may reasonably require.
18. TRANSACTIONS OF THE PURCHASER AT THE CLOSING
18.1 The Purchaser will deliver the following at the Closing:
(a) certificates representing the Purchaser Shares less the Escrow Shares in
the names of the Vendors;
(b) certificates representing the Escrow Shares in the names of the Vendors
to be delivered to the Escrow Agent in accordance with the terms of the Escrow
Agreement;
(c) a Closing Warranty and Certificate from the Purchaser confirming that
the conditions to be satisfied by the Purchaser, unless waived, set out in
Section 16.1 have been satisfied at the Closing and that all representations and
warranties of the Purchaser contained in this Agreement are true at and as of
the Closing;
(d) an opinion of the Purchaser's Solicitors addressed to the Vendors and
the Vendors' Solicitors in a form reasonably satisfactory to the Vendors'
solicitors;
(e) certified copies of the resolutions of the directors of the Purchaser
authorizing the acquisition of the Vendors' Shares and the issuance of the
Purchaser Shares to the Vendor' and share certificates evidencing same as
provided herein; and
(f) all such other documents and instruments as the Vendors' Solicitors may
reasonably require.
19. CLOSING ESCROW
19.1 At the Closing the Vendors shall cause the Vendors' Closing Documents
and the Purchaser shall cause the Purchaser's Closing Documents to be lodged
with the Purchaser's Solicitors to be held in escrow subject to the following
conditions:
(a) receipt by the Purchaser of such approvals of the NASD to the
transactions contemplated in this Agreement as shall be required as evidenced by
a letter from counsel to New World; and
(b) the investment of a minimum of $1,000,000 by the Purchaser in the
Company by way of equity or shareholder's loan
following which the Vendors' Closing Documents shall be released to the
Purchaser and the Purchaser's Closing Documents shall be released to the Vendors
provided that, in circumstances where such release does not occur by 4:00 p.m.
Vancouver time on April 1, 2000, the Vendors' Closing Documents shall be
released to the Vendors and the Purchaser's Closing Documents shall be released
to the Purchaser and this Agreement shall terminate and be of no further force
and effect in which case the parties hereto shall have no further obligation or
liability to one another in respect of the matters dealt with herein.
19.2 Notwithstanding the date of release from escrow in accordance with
Section 19.1 herein, the Closing shall for all purposes be deemed to have
occurred effective as at the Closing Date.
20. POST CLOSING AGREEMENTS
20.1 The Vendors will jointly and severally indemnify and hold harmless the
Purchaser from and against:
(a) any and all losses, damages or deficiencies resulting from any
misrepresentation, breach of warranty or non-fulfilment of any covenant on the
part of the Vendors under this Agreement or from any misrepresentation in or
omission from any certificate or other instrument furnished or to be furnished
to the Purchaser hereunder;
(b) any and all losses, damages or deficiencies resulting from any
Indebtedness of any of the Entitles existing as of the Closing Date save and
except the Accounts Payable and Permitted Liens and regular payments pursuant to
the Contracts;
(c) any and all actions, suits, proceedings, demands, assessments,
judgments, costs and legal and other expenses incidental to any of the foregoing
whose cause existed as of the Closing Date;
and the Purchaser is hereby authorized to settle such claims and make any
payment in relation thereto as the Purchaser reasonably sees fit after
consulting and reasonably inquiring of Vendors, and all moneys so paid or any
losses, costs or expenses so incurred by the Purchaser will constitute
indebtedness of the Vendors to the Purchaser hereunder.
20.2 The Vendors will provide reasonable assistance in preparing and filing
all financial statements, tax returns and other documents required by law in
respect of any government charges or in respect of any domestic or foreign
federal, provincial, municipal, state, territorial or other taxing statute for
fiscal periods of the Company ending for tax purposes on or before the time of
Closing.
21. TIME OF THE ESSENCE
21.1 Time is of the essence of this Agreement.
22. FURTHER ASSURANCES
22.1 The parties will execute and deliver all such further documents and
instruments and do all such acts and things as may be reasonably necessary or
required to carry out the full intent and meaning of this Agreement and to
effect the transactions contemplated by this Agreement.
23. SUCCESSORS AND ASSIGNS
23.1 This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns. This Agreement may not be assigned by a party hereto
without the prior written consent of the other parties.
24. COUNTERPARTS
24.1 This Agreement may be executed in several counterparts and by fax
transmission, each of which will be deemed to be an original and all of which
will together constitute one and the same instrument.
25. NOTICE
25.1 Any notice required or permitted to be given under this Agreement will
be validly given if in writing and delivered or sent by pre-paid registered
mail, to the following addresses:
(a) If to Xxxx Xxxxx:
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
(b) If to Xxxxxxx Holdings:
Third Floor, Jonsim Place
000 Xxxxxx Xxxx Xxxx,
Xxxxxxx, Xxxx Xxxx
(c) If to the Purchaser:
150 - 0000 Xxxxxxx Xxxx Xxxx
Xxxxxxx Xxxx, Xxxxxxxxxx, 00000
Attention: Xxxx X. Xxxxxx
with a copy to the Purchaser's Solicitors as follows:
Xxxxx, Xxxxxx
Barristers and Solicitors
#000 - 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX, X0X 0X0
Attention: Xxxxx Xxxxx
or to such other address as any party may specify in writing to the other
parties.
25.2 Any notice delivered on a business day will be deemed conclusively to
have been effectively given on the date notice was delivered.
25.3 Any notice sent by prepaid registered mail will be deemed conclusively
to have been effectively given on the third business day after posting; but if
at the time of posting or between the time of posting and the third business day
thereafter there is a labour disturbance affecting postal service, then the
notice will not be effectively given until actually delivered.
26. ENTIRE AGREEMENT
26.1 This Agreement contains the sole and entire agreement between the
parties and any modifications must be in writing and signed by each party. The
parties will in good faith investigate and negotiate the most tax effective
method of carrying out the intentions of this Agreement.
27. TENDER
27.1 Tender may be made upon the Vendors or Purchaser or upon the
Purchaser's Solicitors and money may be tendered by cheque certified by a
chartered bank or by electronic wire transfer.
28. PROPER LAW
28.1 This Agreement will be governed by and construed in accordance with the
province of the laws of the State of New York and the parties will attorn to the
Courts thereof.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed and
delivered this 30th day of November, 1999.
SIGNED, SEALED and DELIVERED by )
XXXX XXXXX in the presence of: )
)
------------------------------------- )
Signature )
)
------------------------------------- )
Print Name )
) /s/ Xxxx Xxxxx
------------------------------------- ) XXXX XXXXX
Address )
)
------------------------------------- )
)
------------------------------------- )
Occupation )
XXXXXXX HOLDINGS GROUP LIMITED
Per:./s/ signed
Authorized Signatory
TRADE-FAST, INC.
Per: /s/ Xxxx Xxxxx
Authorized Signatory
E-FINANCIAL XXXXX.XXX, INC.
Per: /s/ Xxxx Xxxxxx
Authorized Signatory
SCHEDULE "A"
SEE ATTACHMENTS
SCHEDULE "B"
CONSENTS
NIL
SCHEDULE "C"
CONTRACTS
SCHEDULE "D"
FINANCIAL STATEMENTS
SCHEDULE "E"
NEW WORLD FINANCIAL STATEMENTS
SCHEDULE "F"
PERMITTED LIENS
NIL
SCHEDULE "G"
AUTHORIZED AND ISSUED CAPITAL
I TRADE-FAST, INC.
SCHEDULE "H"
DIRECTORS AND OFFICERS
TRADE-FAST, INC.
DIRECTORS
---------
1. Xxxx Xxxxx
OFFICERS
--------
1. Xxxx Xxxxx
2.
SCHEDULE "I"
BANKING ARRANGEMENT
SCHEDULE "J"
EMPLOYEE LIST
SCHEDULE "K"
EMPLOYEE BENEFIT PLAN
SCHEDULE "L"
LITIGATION
NIL
SCHEDULE "M"
INTELLECTUAL PROPERTY
SCHEDULE "N"
ESCROW AGREEMENT
SCHEDULE "O"
INSURANCE POLICIES
