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EXHIBIT 2.1
SHARE EXCHANGE AGREEMENT
MADE EFFECTIVE AS OF 5 OCTOBER 1999 (the "Effective Date"),
BETWEEN: F. XXXXXXX X. XXXXXX, Sea Rocks, Island Harbour, The Valley, Anguila,
British West Indies
(the "Shareholder");
AND: XXXXX XXXXXX, 2006 - 1238 Xxxxxxxx Xx., Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
X0X 0X0, and XXXXX XXXXXXXX, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0
(the "Managers");
AND: BLUE ZONE PRODUCTIONS LTD., a corporation continued under the laws of
Bermuda, and having a registered office at Xxxx Xxxxx, 00 Xxxxxx
Xxxxxx, Xxxxxxxx, XX00, Xxxxxxx;
("Blue Zone");
AND: BLUE ZONE ENTERTAINMENT INC., a corporation incorporated under the laws
of the Province of British Columbia and having a place of business at
000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0;
("BZE");
AND: BLUE ZONE INTERNATIONAL INC., a corporation incorporated under the laws
of Barbados, and having a registered office at Xxxxxxxxx Xxxxx, Xxxxx
Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx;
("BZI");
AND: WESTERN FOOD DISTRIBUTORS, INC., a company incorporated under the laws
of the State of Nevada having a place of business at 688 - 6 Ishikawa,
Kanagawa, Japan, 252 0815
("WFD");
WHEREAS:
A. The authorized share capital of Blue Zone consists of 12,000 common shares
with a par value of U.S.$1.00 each, of which all 12,000 shares (the "Blue Zone
Shares") are issued and outstanding;
B. The Shareholder is the legal and beneficial owner of all the Blue Zone
Shares;
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C. The authorized share capital of BZE is 1,000,000 common shares without par
value, of which only 100 common shares (the "BZE Shares") are issued and
outstanding;
D. The authorized share capital of BZI is an unlimited number of common shares
without par value, of which only 1,667 common shares (the "BZI Shares") are
issued and outstanding;
E. Blue Zone is the legal and beneficial owner of all the BZE Shares and the
BZI Shares (collectively, the "Subsidiary Shares"), and BZE and BZI (the
"Subsidiaries") are the only subsidiaries of Blue Zone;
F. The Shareholder and WFD have agreed to exchange the Blue Zone Shares for
voting common shares of WFD, on the terms and conditions described in this
Agreement; and
G. The Managers have been actively involved in the management of BZE and expect
to benefit directly and indirectly from the completion of the transactions
contemplated herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants
and agreements herein contained, the parties hereto do covenant and agree (the
"Agreement") as follows:
1. SHARE EXCHANGE
1.1 Subject to the terms and conditions of this Agreement, the Shareholder
and WFD agree that the Shareholder shall transfer all of the Blue Zone
Shares to WFD at an agreed value of U.S.$120,000, in exchange for the
issue to the Shareholder of 12,000,000 voting common shares of WFD (the
"WFD Shares") at the deemed price of US$0.01 per WFD Share.
1.2 The transactions contemplated under this Agreement (the "Transactions")
shall be completed (the "Completion") at the offices of WFD's
solicitors, Messrs. Xxxxxxx & Xxxxxx, 2100 - 1111 West Georgia Street,
Vancouver, British Columbia, or at such other place as may be agreed
between the parties, at 11:00 o'clock a.m. local time in Vancouver,
B.C., or at such other time as may be agreed between the parties, (the
"Time of Closing") on 8 October 1999, or on such other date as may be
agreed between the parties, (the "Closing Date").
2. CONDITIONS PRECEDENT
2.1 WFD's obligation to carry out the terms of this Agreement and to
complete its transactions contemplated under this Agreement is subject
to the fulfilment to the satisfaction of WFD of each of the following
conditions that:
(a) on or before 7 October 1999 (the "Subject Removal Date"), WFD shall have
been able to complete WFD's Investigation (defined below) with results
to its reasonable satisfaction;
(b) at the Time of Closing, the solicitors for the Shareholder shall provide
opinions dated as of the Closing Date, substantially in the form of
Schedule A to this Agreement (the "Blue Zone Solicitor Opinions");
(c) at the Time of Closing, the common shares of WFD will be quoted on the
Over the Counter Bulletin Board of NASDAQ (the "OTC Board");
(d) as of the Time of Closing, the Shareholder, the Managers, Blue Zone and
the Subsidiaries (collectively, the "Blue Zone Group") shall have
complied in all material respects with all of their respective covenants
and agreements contained in this Agreement; and
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(e) as of the Time of Closing, the representations and warranties of each of
the Blue Zone Group contained in this Agreement or contained in any
certificates or documents delivered by any of them pursuant to this
Agreement shall be true in all material respects as if such
representations and warranties had been made as of the Time of Closing.
The conditions set forth above are for the exclusive benefit of WFD and may be
waived by WFD in whole or in part at any time at or before the Time of Closing.
2.2 The Shareholder's obligations to carry out the terms of this Agreement and
to complete its transactions contemplated under this Agreement are subject to
the fulfilment to its satisfaction of each of the following conditions that:
(a) on or before the Subject Removal Date, the Shareholder shall have been
able to complete the Shareholder's Investigation (defined below) with
results to its reasonable satisfaction;
(b) on or before the Subject Removal Date, WFD shall have restructured or
otherwise altered its share capital so that upon the issuance of the
WFD Shares on the Closing Date, WFD's issued share capital and share
capital reserved for issuance pursuant to issued share purchase
warrants will be not more than 22,063,069 common shares;
(c) prior to the Time of Closing, the Financing (defined below) shall have
been completed and the net proceeds in an amount not less than
U.S.$5,000,000 shall have been paid to and shall be held by Xxxxxxx &
Xxxxxx, barristers and solicitors, in trust for WFD, and written
confirmation of same shall have been provided to the solicitors for
Blue Zone which shall include an acknowledgement that such funds will
be released in accordance with instructions of the new board of WFD;
(d) at the Time of Closing, the solicitors for WFD shall provide an
opinion dated as of the Closing Date, substantially in the form of
Schedule B to this Agreement (the "WFD Solicitor Opinion");
(e) at the Time of Closing solicitors for Blue Zone shall receive written
confirmation from WFD's stock transfer agent confirming that the WFD
Shares have been allotted and issued and an undertaking from the stock
transfer agent to deliver the share certificates representing the WFD
Shares to the Shareholder as soon as possible;
(f) at the Time of Closing, the common shares of WFD will be quoted on the
OTC Board;
(g) as of the Time of Closing, WFD shall have complied in all material
respects with all of its covenants and agreements contained in this
Agreement; and
(h) as of the Time of Closing, the representations and warranties of WFD
contained in this Agreement or contained in any certificates or
documents delivered by it pursuant to this Agreement shall be true in
all material respects as if such representations and warranties had
been made by WFD as of the Time of Closing.
The conditions set forth above are for the exclusive benefit of the Shareholder
and may be waived by the Shareholder in whole or in part at or before the Time
of Closing.
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2.3 The parties acknowledge and agree each with the other that this
Agreement and all of the transactions contemplated under this Agreement are
subject to receipt of any regulatory approvals that may be required under
applicable laws. If any such approvals are required but are not obtained by the
Subject Removal Date, then this Agreement shall terminate and be of no further
force or effect.
3. COVENANTS, AGREEMENTS AND ACKNOWLEDGEMENTS
3.1 Each of the Blue Zone Group severally covenants and agrees with WFD
that it shall:
(a) from and including the Effective Date through to and including the
Time of Closing, use its reasonable best efforts to permit WFD,
through its directors, officers, employees and authorized agents and
representatives, at WFD's own cost, full access to the books, records
and property of Blue Zone and the Subsidiaries including, without
limitation, all of the assets, contracts, correspondence, accounts and
minute books of Blue Zone and the Subsidiaries, so as to permit WFD to
make such investigation ("WFD's Investigation") of Blue Zone and the
Subsidiaries as WFD considers advisable;
(b) use its reasonable best efforts to obtain any regulatory approvals for
this Agreement and the transactions contemplated hereunder required by
applicable laws to be obtained by the Shareholder, Blue Zone or either
of the Subsidiaries on or before the Subject Removal Date;
(c) provide to WFD all such further documents, instruments and materials
and do all such acts and things as may be reasonably requested in
writing by WFD to obtain any regulatory approvals that may be required
under applicable laws;
(d) from and including the Effective Date through to and including the
Time of Closing, use its reasonable best efforts to ensure that all of
its representations and warranties contained in this Agreement or any
certificates or documents delivered by it pursuant to this Agreement
remain true and correct;
(e) from and including the Effective Date through to and including the
Time of Closing, use its reasonable best efforts to preserve and
protect all of the goodwill, assets, business and undertaking of Blue
Zone and the Subsidiaries and, without limiting the generality of the
foregoing, carry on the businesses of Blue Zone and the Subsidiaries
in a reasonable and prudent manner; and
(f) from and including the Effective Date through to and including the
Time of Closing, keep confidential all discussions and communications
(including all information communicated therein) between the parties,
and all written and printed materials of any kind whatsoever exchanged
by the parties, except only any information or material that:
(i) was in the public domain at the time of disclosure to a party
(the "Recipient");
(ii) was already in the possession of the Recipient prior to
disclosure, as demonstrated by the Recipient through tangible
evidence;
(iii) subsequently enters the public domain through no fault of the
Recipient or any officer, director, employee or agent of the
Recipient; or
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(iv) is required to be disclosed by law or by a court or regulatory
authority of competent jurisdiction;
and, if so requested by WFD, each of the Blue Zone Group shall use its
reasonable best efforts to cause any director, officer, employee,
authorized agent or representative of Blue Zone or the Subsidiaries to
enter into, and each of the Blue Zone Group themselves shall enter
into, a non-disclosure agreement with WFD in a form acceptable to WFD
acting reasonably.
3.2 Each of the Blue Zone Group severally covenants and agrees with WFD
that, from and including the Effective Date through to and including the Time of
Closing, it shall:
(a) not do any act or thing that would render any representation
or warranty of any of the Blue Zone Group contained in this
Agreement or any certificates or documents delivered by any
of them pursuant to this Agreement untrue or incorrect; and
(b) not sell, encumber or dispose of, or negotiate with any
other person in respect of a sale, encumbrance or
disposition of, any of the Blue Zone Shares, the Subsidiary
Shares or any goodwill, assets, business or undertaking of
Blue Zone or the Subsidiaries, other than a sale of part of
the assets of Blue Zone or the Subsidiaries for at least
fair market value in the ordinary course of business.
3.3 Each of the Blue Zone Group acknowledges to and agrees with WFD that
WFD's Investigation shall in no way limit or otherwise adversely affect the
rights of WFD as provided for hereunder in respect of the representations and
warranties of each of the Blue Zone Group contained in this Agreement or in any
certificates or documents delivered by any of them pursuant to this Agreement.
3.4 WFD covenants and agrees with the Blue Zone Group that WFD shall:
(a) from and including the Effective Date through to and
including the Time of Closing, permit the Shareholder,
through his authorized agents and representatives, at the
Shareholder's own cost, full access to the books, records
and property of WFD including, without limitation, all of
the assets, contracts, correspondence, accounts and minute
books of WFD, so as to permit the Shareholder to make such
investigation (the "Shareholder's Investigation") of WFD as
the Shareholder considers advisable;
(b) use its reasonable best efforts to obtain any regulatory
approvals for this Agreement and the transactions
contemplated hereunder required by applicable laws to be
obtained by WFD on or before the Subject Removal Date
including, without limitation, all approvals required under
applicable securities laws or the rules or policies relating
to the OTC Board and make any and all filings and provide
all notices required under applicable securities laws in
connection with this Agreement and the consummation of the
transactions contemplated herein, including the issue to the
Shareholder of the WFD Shares;
(c) provide to the Shareholder all such further documents,
instruments and materials and do all such acts and things as
may reasonably be requested in writing by the Shareholder to
obtain any regulatory approvals that may be required under
applicable laws;
(d) from and including the Effective Date through to and
including the Time of Closing, do all such acts and things
that may be necessary to ensure that all of the
representations and
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warranties of WFD contained in this Agreement or in any
certificates or documents delivered by it pursuant to this
Agreement remain true and correct; and
(e) from and including the Effective Date through to and
including the Time of Closing, subject to its legal
reporting obligations, keep confidential all discussions and
communications (including all information communicated
therein) between the parties, and all written and printed
materials of any kind whatsoever exchanged by the parties,
except only any information or material that:
(i) was in the public domain at the time of disclosure
to a party (the "Recipient");
(ii) was already in the possession of the Recipient
prior to disclosure, as demonstrated by the
Recipient through tangible evidence;
(iii) subsequently enters the public domain through no
fault of the Recipient or any officer, director,
employee or agent of the Recipient; or
(iv) is required to be disclosed by law or by a court
or regulatory authority of competent jurisdiction;
and, if so requested by the Blue Zone or the Subsidiaries, WFD shall
arrange for any director, officer, employee, authorized agent or
representative of WFD to enter into, and WFD itself shall enter into,
a non-disclosure agreement with Blue Zone and the Subsidiaries in a
form acceptable to Blue Zone and the Subsidiaries acting reasonably.
3.5 WFD acknowledges to and agrees with the Shareholder that the
Shareholder's Investigation shall in no way limit or otherwise adversely affect
the rights of the Shareholder as provided for hereunder in respect of the
representations and warranties of WFD contained in this Agreement or in any
certificates or documents delivered by WFD pursuant to this Agreement.
3.6 WFD covenants and agrees with the Blue Zone Group that, from and
including the Effective Date through to and including the Time of Closing, WFD
shall not do any act or thing that would render any representation or warranty
of WFD contained in this Agreement or any certificates or documents delivered by
it pursuant to this Agreement untrue or incorrect.
3.7 At or prior to the Time of Closing, WFD will take all necessary
corporate action so that the officers and directors of WFD will be as follows:
Directors: Xxxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxx Xxxxxx
Xxxxx (Tarrnie) Xxxxxxxx
Xxxx Xxxxxx
Officers:
Xxxxxxx Xxxxxx Chairman and Chief Financial Officer
Xxxxx Xxxxxx Chief Executive Officer
Xxxxx Xxxxxxx President
Xxxxxxxxx Xxxxxx Chief Operating Officer
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Xxxxx X. Xxxxxxxxxxx Secretary
3.8 On September 23, 1999, WFD closed a financing (the "Financing") which
raised U.S.$5,254,479 for working capital purposes by issuing 933,300 units (the
"Units") of WFD at a price of U.S.$5.63 per Unit. Each Unit consists of one
common share of WFD and one-half of a share purchase warrant. The share purchase
warrants (the "Warrants") have a term of two years. Each pair of one-half
Warrants constitutes one whole share purchase Warrant entitling the holder to
purchase one additional share of WFD in the first year at a price of U.S.$5.63
per share or in the second year at a price of U.S.$6.75 per share.
3.9 After the Financing but prior to the Closing Date, WFD will effect a
1.125 forward split (the "Forward Split") of the common shares of WFD issued and
outstanding and reserved for issuance pursuant to the Warrants.
3.10 Upon Completion, WFD shall pay to Terra Growth Investment Fund
("Terra") on behalf of Blue Zone the full amount of the U.S.$2,000,000 loan
owing by Blue Zone to Terra (the "Terra Loan"), together with all interest due
thereon, in exchange for an assignment by Terra to WFD of the Terra Loan and the
General Security Agreement between Blue Zone and Terra dated 30 August 1999 (the
"Terra GSA") securing repayment of the Terra Loan by Blue Zone.
4. REPRESENTATIONS AND WARRANTIES
4.1 In order to induce WFD to enter into this Agreement and complete its
transactions contemplated hereunder, each of the Blue Zone Group severally
represents and warrants to WFD that:
(a) Blue Zone was duly incorporated under the laws of the
British Columbia and has been duly continued and remains
validly existing under the laws of Bermuda, and Blue Zone:
(i) is not subject to the reporting issuer
requirements of the British Columbia Securities
Act (the "B.C. Act");
(ii) has the power, authority and capacity to enter
into this Agreement and carry out its terms; and
(iii) is in good standing under the laws of Bermuda;
(b) the Directors and Officers of Blue Zone are as follows:
(i) Xxxxx Xxxxxx - Director;
(ii) Xxxxx Xxxxxx - Director;
(iii) Xxxxx Xxxxxx - Director and Secretary; and
(iv) Xxxxxxx Xxxxxx - Director and President;
Bermuda law permits the appointment of alternate directors.
Xxxxxx Xxxxxx has been appointed alternate director for
Xxxxx Xxxxxx and Xxxxxx Xxxxxxxxxx has been appointed
alternate director for Xxxxx Xxxxxx.
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(c) the authorized and issued share capital of Blue Zone is as
set forth in paragraph A of the recitals to this Agreement;
(d) except for the Blue Zone Shares, there are no documents,
instruments or other writings of any kind whatsoever which
constitute a "security" of Blue Zone as that term is defined
in the B.C. Act and, except as is provided for by operation
of this Agreement, there are no options, agreements or
rights of any kind whatsoever to acquire directly or
indirectly any other shares of Blue Zone from Blue Zone;
(e) the constating documents of Blue Zone have not been altered
since the continuance of Blue Zone to Bermuda on 26 August
1999;
(f) BZE was and remains duly incorporated and validly existing
under the laws of British Columbia and BZE:
(i) is not subject to the reporting issuer
requirements of the B.C. Act;
(ii) has the power, authority and capacity to enter
into this Agreement and carry out its terms; and
(iii) is in good standing with respect to the filing of
annual reports required under the laws of British
Columbia;
(g) Xxxxx Xxxxxx is the sole Director and Officer of BZE;
(h) the authorized and issued share capital of BZE is as set
forth in paragraph C of the Recitals to this Agreement;
(i) BZI was and remains duly incorporated and validly existing
under the laws of Barbados and BZI:
(i) is not subject to the reporting issuer
requirements of the B.C. Act;
(ii) has the power, authority and capacity to enter
into this Agreement and carry out its terms; and
(iii) is in good standing with respect to the filing of
annual reports required under the laws of
Barbados;
(j) Xxxxxxx Xxxxxx is the sole Director and Officer of BZI;
(k) the authorized and issued share capital of BZI is as set
forth in paragraph D of the Recitals to this Agreement;
(l) the Subsidiary Shares are and will on the Closing Date
immediately prior to Completion be validly issued and
outstanding fully paid and non-assessable common shares of
the Subsidiaries registered in the name of, and legally and
beneficially owned by, Blue Zone, free and clear of all
voting restrictions, trade restrictions, liens, charges or
encumbrances of any kind whatsoever save and except for the
security interest granted by Blue Zone in favour of Terra
pursuant to the Terra GSA to secure repayment of the Terra
Loan;
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(m) except for the Subsidiary Shares, there are no documents,
instruments or other writings of any kind whatsoever which
constitute a "security" of either of the Subsidiaries as
that term is defined in the B.C. Act and, except as is
provided for by operation of this Agreement, there are no
options, agreements or rights of any kind whatsoever to
directly or indirectly acquire all or any part of the
Subsidiary Shares or any interest in them from Blue Zone, or
to acquire any other shares of either of the Subsidiaries
from anyone;
(n) the constating documents of each of the Subsidiaries have
not been altered since incorporation;
(o) Blue Zone and each of the Subsidiaries has the corporate
power to own the Assets and to carry on the business carried
on by it, and each of Blue Zone and the Subsidiaries is duly
qualified to carry on business in all jurisdictions in which
it carries on business;
(p) each of Blue Zone and each of the Subsidiaries has good and
sufficient power, authority and capacity to enter into this
Agreement and complete its respective transactions
contemplated under this Agreement on the terms and
conditions set forth herein; and
(q) none of the Blue Zone Group has incurred any liability for
agency, brokerage, referral or finder's fees, commissions or
compensation of any kind whatsoever with respect to this
Agreement or any transaction contemplated under this
Agreement.
4.2 In order to induce WFD to enter into this Agreement and complete its
transactions contemplated hereunder, each of the Managers severally represents
and warrants to WFD that:
(a) he has good and sufficient power, authority and capacity to
enter into this Agreement and complete the transactions
contemplated under this Agreement on the terms and
conditions set forth herein;
(b) to the best of his knowledge, no third party privacy or
intellectual property rights, including without limitation,
copyright, trade secret or patent rights, were violated in
the creation, compilation or acquisition of, or are violated
by the use of, any of the Assets by Blue Zone, either of the
Subsidiaries or by any party through whom Blue Zone or
either of the Subsidiaries acquired title or a license or to
whom Blue Zone or either of the Subsidiaries has granted a
license in respect of the Assets, and in particular, to the
best of his knowledge, the use of the Domain Name by Blue
Zone does not infringe upon or induce or contribute to the
infringement of any intellectual property rights, domestic
or foreign, of any other person;
(c) all of the material transactions of Blue Zone have been
promptly and properly recorded or filed in or with the books
or records of Blue Zone and the minute books of Blue Zone
contain all records of the meetings and proceedings of the
shareholders and directors of Blue Zone since its
incorporation;
(d) Blue Zone and the Subsidiaries each holds all material
licences and permits that are required for carrying on their
respective businesses in the manner in which such businesses
have been carried on;
(e) except as specified in Schedule C to this Agreement, Blue
Zone or one of the Subsidiaries is the registered and
beneficial owner of the domain name "Xxxxxxxx.xxx" (the
"Domain
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Name") and the other assets listed on Schedule C to this
Agreement, which are owned as indicated therein
(collectively the "Assets");
(f) to the best of his knowledge, other than the Assets, there
are no material properties or material assets used by Blue
Zone or either of the Subsidiaries in the conduct of its
business;
(g) Blue Zone or one of the Subsidiaries has good and marketable
exclusive title to each of the Assets free and clear of all
licenses, liens, charges and encumbrances of any kind
whatsoever save and except those specified as "Permitted
Encumbrances" on Schedule C to this Agreement, and in
particular:
(i) Blue Zone is to the best of its knowledge the sole
and exclusive legal and beneficial owner of the
Domain Name, free and clear of all encumbrances
whatsoever, and is not a party to or bound by any
contract or any other obligation whatsoever that
limits or impairs its ability to sell, transfer,
assign or convey, or that otherwise affects, the
Domain Name;
(ii) Blue Zone is the registered owner of the Domain
Name, and all fees or other costs associated with
maintaining the registration of the Domain Name
have been paid for the 1999 calendar year and the
registration of the Domain Name is in good
standing with Network Solutions, Inc.; and
(iii) Blue Zone has not granted any other person any
interest in or right to use all or any portion of
the Domain Name;
(h) each item of machinery and equipment of any kind whatsoever
comprised in the Assets is in reasonable operating condition
and in a state of reasonable maintenance and repair taking
into account its age and use;
(i) all of the bank accounts and safety deposit boxes of Blue
Zone or either of the Subsidiaries are listed on Schedule C
to this Agreement;
(j) the unaudited financial statements of Blue Zone and BZE for
the periods ending 31 December 1996, 1997 and 1998
(collectively, the "Blue Zone Statements"), copies of which
are attached as Schedule D to this Agreement, are true and
correct in every material respect and present fairly and
accurately the financial position and results of the
operations of Blue Zone and BZE for the periods indicated,
and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis;
(k) the Blue Zone Statements disclose all material financial
transactions of Blue Zone and BZE since their respective
dates of incorporation to the date of such financial
statements and such transactions have been fairly and
accurately recorded;
(l) except as disclosed in the Blue Zone Statements:
(i) no dividends or other distributions of any kind
whatsoever on any shares in the capital of Blue
Zone or either of the Subsidiaries have been made,
declared or authorized;
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(ii) no new machinery or equipment of any kind
whatsoever has been ordered by, or installed or
assembled on the premises of, Blue Zone or either
of the Subsidiaries, except in the ordinary course
of business and for machinery and equipment
received and/or ordered in connection with the
expansion of Blue Zone and the Subsidiaries all
having a cost of not more than CDN$500,000;
(iii) none of Blue Zone or the Subsidiaries is indebted
to the Shareholder, except in connection with a
demand shareholder loan owing by Blue Zone to the
Shareholder in the amount of CDN$140,000;
(iv) none of the Shareholder or any other officer,
director or employee of Blue Zone or either of the
Subsidiaries is indebted or under obligation to
Blue Zone or either of the Subsidiaries on any
account whatsoever; and
(v) none of Blue Zone or the Subsidiaries has
guaranteed or agreed to guarantee any debt,
liability or other obligation of any kind
whatsoever of any person, firm or corporation of
any kind whatsoever;
(m) there are no material financial liabilities of Blue Zone or
either of the Subsidiaries, whether direct, indirect,
absolute, contingent or otherwise, which are not disclosed
or reflected in the Blue Zone Statements, except for
liabilities arising in the ordinary course of business since
the date thereof and liabilities in respect of the Terra
Loan;
(n) to the best of its knowledge, any accounts receivable of
Blue Zone or either of the Subsidiaries shown in the Blue
Zone Statements are bona fide, good and collectible without
setoff or counterclaim;
(o) the current directors, officers, key employees and
independent contractors and consultants of Blue Zone and of
each of the Subsidiaries, and all of their current
compensation arrangements with Blue Zone or either of the
Subsidiaries, whether as directors, officers or employees,
or as independent contractors or consultants, are as listed
on Schedule E to this Agreement;
(p) no future payments of any kind whatsoever have been
authorized or provided by Blue Zone or the Subsidiary
directly or indirectly to or on behalf of the Shareholder,
the Managers or any of the directors, officers, key
employees, independent contractors or consultants of Blue
Zone or the Subsidiaries except in accordance with those
compensation arrangements specified on Schedule E to this
Agreement or except as contemplated by this Agreement;
(q) there are no pensions, profit sharing, group insurance or
similar plans or other deferred compensation plans of any
kind whatsoever affecting Blue Zone or either of the
Subsidiaries other than those specified on Schedule E to
this Agreement;
(r) none of Blue Zone or the Subsidiaries is now, or has ever
been, a party to any collective agreement with any labour
union or other association of employees of any kind
whatsoever, no collective bargaining agent has been
certified in respect of Blue Zone or either of the
Subsidiaries and there is no application pending for
certification of a collective bargaining agent in respect of
Blue Zone or either of the Subsidiaries;
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(s) the contracts and agreements included on Schedule E to this
Agreement and those additional contracts and agreements
specified on Schedule F to this Agreement constitute all of
the contracts and agreements of Blue Zone and of the
Subsidiaries which are currently outstanding and which
involve expenditures or receipts of CDN$100,000 or more per
annum, or licensing of or access to any of the Assets,
(collectively the "Material Contracts");
(t) except as is noted on the appropriate Schedule to this
Agreement, the Material Contracts are valid and enforceable
and Blue Zone or the Subsidiaries, as the case may be, is
not in material default thereunder and, to the best of its
knowledge, the other party or parties thereto are not in
material default thereunder;
(u) none of Blue Zone or the Subsidiaries has licensed, leased,
transferred, disposed of or encumbered any of the Assets in
any way, or permitted any third party access to any of the
Assets the value of which may be compromised by such access,
including in particular the source code to any computer
software or any trade secret information included in the
Assets, except only in accordance with the terms of the
Material Contracts;
(v) all tax returns and reports of Blue Zone and of BZE required
by law to have been filed have been filed and are
substantially true, complete and correct and all taxes and
other government charges of any kind whatsoever of Blue Zone
and of BZE have been paid or accrued in the Blue Zone
Statements;
(w) none of Blue Zone or the Subsidiaries has:
(i) made any election under any applicable tax
legislation with respect to the acquisition or
disposition of any property at other than fair
market value;
(ii) acquired any property for proceeds greater than
the fair market value thereof; or
(iii) disposed of anything for proceeds less than the
fair market value thereof;
(x) each of Blue Zone and BZE has made all elections required to
have been made under any applicable tax legislation in
connection with any distributions made by either of them and
all such elections were true and correct and filed in the
prescribed form and within the prescribed time period;
(y) adequate provision has been made on the Blue Zone Statements
for taxes payable by Blue Zone and by BZE to the date
thereof and there are no agreements, waivers or other
arrangements of any kind whatsoever providing for an
extension of time with respect to the filing of any tax
return by, or payment of, any tax or governmental charge of
any kind whatsoever by Blue Zone or by either of the
Subsidiaries;
(z) none of Blue Zone or the Subsidiaries has any contingent tax
liabilities of any kind whatsoever, and there are no grounds
which would prompt a material reassessment of Blue Zone or
BZE, including for aggressive treatment of income or
expenses in earlier tax returns filed;
(aa) there are no amounts outstanding and unpaid for which Blue
Zone or BZE has previously claimed a deduction under any
applicable tax legislation;
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(bb) each of Blue Zone and BZE has made all collections,
deductions, remittances and payments of any kind whatsoever,
except for any 1999 instalment payments, and filed all
reports and returns required to be made or filed by it under
the provisions of all applicable statutes requiring the
making of collections, deductions, remittances or payments
of any kind whatsoever in those jurisdictions in which Blue
Zone or BZE carries on business;
(cc) to the best of its knowledge there are no actions, suits,
judgements, investigations or proceedings of any kind
whatsoever outstanding, pending or threatened against or
affecting Blue Zone or either of the Subsidiaries at law or
in equity or before or by any federal, provincial, state,
municipal or other governmental department, commission,
board, bureau or agency of any kind whatsoever and, to the
best of its knowledge, there is no basis therefor;
(dd) the execution and delivery of this Agreement, the
performance of the respective obligations of the Blue Zone
Group under this Agreement and the Completion will not:
(i) conflict with, or result in the breach of or the
acceleration of any indebtedness under, or
constitute default under, any of the constating
documents of Blue Zone or the Subsidiaries or, to
the best of its knowledge, any of the terms of any
indenture, mortgage, agreement, lease, licence or
other instrument of any kind whatsoever to which
any of the Blue Zone Group is a party or by which
any of them is bound, or any judgement or order of
any kind whatsoever of any court or administrative
body of any kind whatsoever by which any of them
is bound, except that it will accelerate payment
of the Terra Loan; nor
(ii) to the best of its knowledge, result in the
violation of any law or regulation of any kind
whatsoever by any of Blue Zone Group; and
(ee) to the best of his knowledge, none of Blue Zone or the
Subsidiaries is in material breach of any applicable law,
ordinance, statute, regulation, by-law, order or decree of
any kind whatsoever including, without limitation, any
applicable securities laws.
4.3 In order to induce WFD to enter into this Agreement and complete its
transactions contemplated hereunder, the Shareholder represents and warrants to
WFD that:
(a) the Blue Zone Shares are and will on the Closing Date
immediately prior to Completion be validly issued and
outstanding fully paid and non-assessable common shares of
Blue Zone registered in the name of, and legally and
beneficially owned by, the Shareholder, free and clear of
all voting restrictions, trade restrictions, liens, claims,
charges or encumbrances of any kind whatsoever;
(b) the Shareholder has good and sufficient power, authority and
capacity to enter into this Agreement and complete the
transactions contemplated under this Agreement on the terms
and conditions set forth herein, and in particular to sell
the Blue Zone Shares to WFD as contemplated herein;
(c) there are no actions, suits, judgements, investigations or
proceedings of any kind whatsoever outstanding, pending or
threatened against or affecting the Shareholder at law or in
equity or before or by any federal, provincial, state,
municipal or other governmental department, commission,
board, bureau or agency of any kind whatsoever which in any
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way relate to the Blue Zone Shares or could affect the
ability of the Shareholder to perform his obligations
hereunder and to the best of his knowledge there is no basis
therefor;
(d) the Shareholder, based solely on having made appropriate
inquiries of the Managers, believes each of the
representations of the Managers in paragraph 4.2 of this
Agreement is correct in all material respects;
(e) the Shareholder has such knowledge and experience in
financial and business matters as to be capable of
evaluating the merits and risks of an investment in the WFD
Shares and is able to bear the economic risk of loss of the
Shareholder's entire investment;
(f) WFD has provided to the Shareholder the opportunity to ask
questions and receive answers concerning the terms and
conditions of the issuance of the WFD Shares and the
Shareholder has had access to such information concerning
WFD as he has considered necessary or appropriate in
connection with the investment decision to acquire the WFD
Shares;
(g) the Shareholder is acquiring the WFD Shares for his own
account, for investment purposes only and not with a view to
any resale, distribution or other disposition of the WFD
Shares in violation of the United States securities laws;
(h) the Shareholder has not agreed to acquire the WFD Shares as
a result of any form of general solicitation or general
advertising, including advertisements, articles, notices or
other communications published in any newspaper, magazine or
similar media or broadcast over radio, or television, or any
seminar or meeting whose attendees have been invited by
general solicitation or general advertising; and
(i) the Shareholder satisfies one or more of the categories
indicated below (the Shareholder must initial at least one
applicable line):
____ Category 1. An organization described in Section
501(c)(3) of the United States Internal Revenue Code, a
corporation, a Massachusetts or similar business trust or
partnership, not formed for the specific purpose of
acquiring the WFD Shares, with total assets in excess of
U.S.$5,000,000;
____ Category 2. A natural person whose individual net
worth, or joint net worth with that person's spouse, at the
date hereof exceeds U.S.$1,000,000;
____ Category 3. A natural person who had an individual
income in excess of U.S.$200,000 in each of the two most
recent years or joint income with that person's spouse in
excess of U.S.$300,000 in each of those years and has a
reasonable expectation of reaching the same income level in
the current year;
____ Category 4. A trust that (a) has total assets in excess
of U.S.$5,000,000, (b) was not formed for the specific
purpose of acquiring the WFD Shares and (c) is directed in
its purchases of securities by a person who has such
knowledge and experience in financial and business matters
that he or she is capable of evaluating the merits and risks
of an investment in the Securities;
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____ Category 5. An investment company registered under the
Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of that Act;
____ Category 6. A Small Business Investment Company
licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act
of 1958;
____ Category 7. A private business development company as
defined in Section 202(a)(22) of the Investment Advisors
Acts of 1940; or
____ Category 8. An entity in which all of the equity owners
satisfy the requirements of one or more of the foregoing
categories.
4.4 The Shareholder acknowledges and agrees that:
(a) the WFD Shares have not been and, subject to paragraph 7.1
of this Agreement, will not be registered under the United
States Securities Act of 1933 (the "Securities Act") or the
securities laws of any state of the United States or other
jurisdiction and that the exchange contemplated hereby is
being made in reliance on the Shareholder's representations
and warranties regarding the circumstances required for an
exemption from such registration requirements;
(b) the issuance of the WFD Shares has not been approved or
disapproved by the United States Securities and Exchange
Commission, any state securities agency, or any foreign
securities agency, and WFD is not registered under the
United States Securities Exchange Act of 1934 (the "Exchange
Act");
(c) the certificates representing the WFD Shares will bear a
legend stating that such shares have not been registered
under the Securities Act or the securities laws of any state
of the United States and may not be traded except in
compliance with the Securities Act and the Exchange Act and,
without limiting the foregoing, may not be traded for a
period of not less than one year following the issuance of
the WFD Shares; and
(d) if the Shareholder decides to offer, sell or otherwise
transfer any of the WFD Shares, he will not offer, sell or
otherwise transfer any of the WFD Shares directly or
indirectly, unless:
(i) the sale is to WFD;
(ii) the sale is made pursuant to a valid registration
or an exemption from the registration requirements
under the Securities Act provided by Rule 144
thereunder and in accordance with any applicable
state securities or "Blue Sky" laws; or
(iii) the WFD Shares are sold in a transaction that does
not require registration under the Securities Act
or any applicable state laws and regulations
governing the offer and sale of securities, and he
has prior to such sale furnished to WFD an opinion
of counsel reasonably satisfactory to WFD.
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4.5 The Shareholder consents to WFD making a notation on its records or
giving instructions to any transfer agent of WFD in order to implement the
restrictions on transfer set forth and described herein.
4.6 The Shareholder acknowledges and accepts that there may be material
tax consequences to a shareholder in respect of an acquisition or disposition of
the WFD Shares, and that WFD gives no opinion and makes no representation with
respect to the tax consequences to the Shareholder under United States, state,
local or foreign tax law in respect of the Shareholder's acquisition or
disposition of the WFD Shares.
4.7 In order to induce the Blue Zone Group to enter into this Agreement
and complete its transactions contemplated hereunder, WFD represents and
warrants to the Blue Zone Group that:
(a) WFD was and remains duly incorporated and validly existing
under the laws of the State of Nevada, and WFD is in good
standing with respect to all filings required by the Nevada
Secretary of State;
(b) as of the Effective Date, the authorized capital of WFD
consisted of 105,000,000 shares, comprised of 100,000,000
common shares with a par value of U.S.$0.001 per share and
5,000,000 preference shares with a par value of U.S.$0.001
per share, of which 9,538,088 common shares and no
preference shares were validly authorized, created,
allotted, issued and outstanding as fully paid and
non-assessable, and 524,981 common shares were reserved for
issuance pursuant to Warrants issued in the course of the
Financing;
(c) other than as contemplated in this Agreement, no further
"securities" (as described in the B.C. Act) of WFD will be
issued after the Effective Date, and there are no
commitments, plans or arrangements of any kind whatsoever to
issue any securities of WFD, nor are there any outstanding
options, warrants, convertible securities or other rights of
any kind whatsoever calling for the issuance of any of the
unissued shares of WFD;
(d) the WFD Shares to be issued on Completion will be, when
issued, validly issued as fully paid and non-assessable and
registered in the name of the Shareholder;
(e) WFD has good and sufficient power, authority and capacity to
enter into this Agreement and complete its transactions
contemplated under this Agreement on the terms and
conditions set forth herein;
(f) the common shares of WFD are currently quoted on the OTC
Board;
(g) WFD is in material compliance with all applicable U.S.
securities laws and to the best of its knowledge, WFD is in
material compliance with all other laws including, without
limitation, the laws of Nevada and Japan;
(h) the constating documents of WFD have not been altered since
the incorporation of WFD;
(i) WFD has never carried on and does not currently carry on any
business;
(j) there has been no material adverse change to the financial
position of WFD since 31 December 1998, as set forth in the
audited financial statements of WFD as of that date, which
financial statements have been prepared in accordance with
generally accepted
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accounting principles applied on a consistent basis with
prior periods and which are attached as Schedule G to this
Agreement and have been filed with appropriate regulatory
authorities (the "WFD Statements");
(k) the WFD Statements disclose all material financial
transactions of WFD since its date of incorporation and such
transactions have been fairly and accurately recorded;
(l) to the best of its knowledge, any accounts receivable WFD
shown in the WFD Statements are bona fide, good and
collectible without setoff or counterclaim;
(m) WFD does not have any property or assets except those
referred to in the WFD Statements;
(n) WFD has not disposed of any property or assets except as
shown in the WFD Statements;
(o) all of the bank accounts and safety deposit boxes of WFD are
listed on Schedule H to this Agreement;
(p) there are no material financial liabilities of WFD, whether
primary, secondary, direct, indirect, absolute, contingent
or otherwise, under or in respect of any contract,
agreement, arrangement, commitment or undertaking which are
not disclosed or reflected in the WFD Statements except for
liabilities arising in the ordinary course since the date
thereof;
(q) WFD has not entered into any indenture, mortgage, agreement,
lease, license or other instrument of any kind whatsoever
relating to any indebtedness;
(r) WFD has not entered into and is not currently a party to any
material contracts which are currently outstanding and which
involve expenditures or receipts of CDN$100,000 or more per
annum;
(s) WFD has not had and does not currently have any employees or
any compensation arrangements with any employees,
independent contractors or consultants;
(t) no payments of any kind whatsoever have been made or
authorized by WFD directly or indirectly to or on behalf of
any of its shareholders, or any of its directors or
officers;
(u) there are no pensions, profit sharing, group insurance or
similar plans or other deferred compensation plans of any
kind whatsoever effecting WFD;
(v) Xxxx XxXxxx is the sole Director and Officer of WFD;
(w) all tax returns and reports of WFD required by law have been
filed and are substantially true, complete and correct and
all taxes and other government charges of any kind
whatsoever of WFD have been paid or accrued in WFD
statements;
(x) WFD has not:
(i) made an election under any applicable tax
legislation with respect to the acquisition or
disposition of any property at other than fair
market value; or
(ii) acquired or disposed of any property at other than
fair market value;
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(y) WFD has made all elections required to have been made under
any applicable tax legislation in connection with any
distributions made by it and all such elections were true
and correct and filed in the prescribed time period;
(z) adequate provisions have been made on the WFD Statements for
taxes payable by WFD for the current period for which tax
returns are not yet required to be filed and there are no
agreements, waivers or other arrangements of any kind
whatsoever providing for an extension of time with respect
to the filing of any tax return by, or payment of, any tax
or governmental charge of any kind whatsoever by WFD;
(aa) WFD does not have any contingent tax liabilities of any kind
whatsoever, and there are no grounds which would prompt a
re-assessment of WFD, including for aggressive treatment of
income or expenses in early tax returns filed;
(bb) WFD has made all collections, deductions, remittances and
payments of any kind whatsoever and filed all reports and
returned required to be made or filed under the provisions
of all applicable statutes requiring the making of
collections, deductions, remittances or payments of any kind
whatsoever;
(cc) to the best of its knowledge, there are no actions, suits,
judgments, investigations or proceedings of any kind
whatsoever outstanding, pending or threatened against or
effecting WFD at law or in equity or by any federal, state,
municipal or other governmental department, commission,
board, bureau or agency of any kind whatsoever and, to the
best of its knowledge, there is no basis therefor;
(dd) the execution and delivery of this Agreement, the
performance of its obligations under this Agreement and the
Completion will not:
(i) conflict with, or result in a breach of, or
constitute default under, any of the material
contracts or the constating documents of WFD; or
(ii) to the best of its knowledge, result in the
violation of any law or regulation of any kind
whatsoever by WFD; and
(ee) WFD has not incurred any liability for agency, brokerage,
referral or finders' fees, commissions or compensation of
any kind whatsoever with respect to this Agreement or any
transaction contemplated by this Agreement.
4.8 The representations and warranties of WFD contained in this Agreement
shall be true at the Time of Closing as though they were made at the Time of
Closing, and they shall survive the Completion and remain in full force and
effect thereafter for the benefit of the Shareholder.
5. INDEMNITIES
5.1 Notwithstanding the Completion of the transactions contemplated under
this Agreement or WFD's Investigation, the representations, warranties and
acknowledgements of any of the Blue Zone Group contained in this Agreement or
any certificates or documents delivered by any of them pursuant to this
Agreement shall survive the Completion and shall continue in full force and
effect thereafter for the benefit of WFD. If any of the representations,
warranties or acknowledgements given by any of the Blue Zone Group is found to
be untrue or there is a breach of any covenant or agreement in this Agreement on
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the part of any of the Blue Zone Group, then the party or parties responsible
shall, subject to paragraph 5.3 of this Agreement, jointly and severally
indemnify and save harmless WFD from and against any and all liability, claims,
debts, demands, suits, actions, penalties, fines, losses, costs (including legal
fees, disbursements and taxes as charged on a lawyer and own client basis),
damages and expenses of any kind whatsoever which may be brought or made against
WFD by any person, firm or corporation of any kind whatsoever or which may be
suffered or incurred by WFD, directly or indirectly, arising out of or as a
consequence of any such misrepresentation or breach of warranty,
acknowledgement, covenant or agreement. Without in any way limiting the
generality of the foregoing, this shall include any loss of any kind whatsoever
which may be suffered or incurred by WFD, directly or indirectly, arising out of
any material assessment or reassessment levied upon Blue Zone or either of the
Subsidiaries for tax, interest and/or penalties relating to any period of
business operations up to and including the Closing Date and all claims,
demands, costs (including legal fees, disbursements and taxes as charged on a
lawyer and own client basis) and expenses of any kind whatsoever in respect of
the foregoing.
5.2 Notwithstanding the Completion of the transactions contemplated under
this Agreement or the Shareholder's Investigation, the representations,
warranties and acknowledgements of WFD contained in this Agreement or any
certificates or documents delivered by WFD pursuant to this Agreement shall
survive the Completion and shall continue in full force and effect thereafter
for the benefit of the Shareholder. If any of the representations, warranties or
acknowledgements given by WFD is found to be untrue or there is a breach of any
covenant or agreement in this Agreement on the part of WFD, then WFD shall,
subject to paragraph 5.3 of this Agreement, indemnify and save the Shareholder
harmless from and against any and all liability, claims, debts, demands, suits,
actions, penalties, fines, losses, costs (including legal fees, disbursements
and taxes as charged on a lawyer and own client basis), damages and expenses of
any kind whatsoever which may be brought or made against the Shareholder by any
person, firm or corporation of any kind whatsoever or which may be suffered or
incurred by the Shareholder, directly or indirectly, arising out of or as a
consequence of any such misrepresentation or breach of warranty,
acknowledgement, covenant or agreement. Without in any way limiting the
generality of the foregoing, this shall include any loss of any kind whatsoever
which may be suffered or incurred by the Shareholder, directly or indirectly,
arising out of any material assessment or reassessment levied upon WFD for tax,
interest and/or penalties relating to any period of business operations up to
and including the Closing Date and all claims, demands, costs (including legal
fees, disbursements and taxes as charged on a lawyer and own client basis) and
expenses of any kind whatsoever in respect of the foregoing.
5.3 Notwithstanding anything else contained in this Agreement, the parties
agree that:
(a) no claim for indemnification may be made under the
provisions of paragraph 5.1 or 5.2 of this Agreement, under
this Agreement or the transactions hereby contemplated
unless notice of the claim including reasonable particulars
thereof is provided to the party against whom the claim is
to be made, no later than eighteen (18) months following the
Effective Date; and
(b) the aggregate liability of the Shareholder and the Managers
under this Agreement including, without limitation, any
liability for any of the representations, warranties or
acknowledgements contained in this Agreement, or any breach
of any covenant or agreement in this Agreement shall be
limited to U.S.$240,000, being the agreed value for the
transfer of all the Blue Zone Shares to WFD; and
(c) the aggregate liability of WFD under this Agreement
including, without limitation, any liability for any of the
representations, warranties or acknowledgements contained in
this Agreement, or any breach of any covenant or agreement
in this Agreement shall be limited
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to U.S.$240,000, being the agreed value for the transfer of
all the Blue Zone Shares to WFD.
6. CLOSING
6.1 At the Time of Closing, the Blue Zone Group shall deliver to the
solicitors for WFD:
(a) certified true copies of the resolutions of the directors of
Blue Zone and the Subsidiaries evidencing that the directors
of Blue Zone and the Subsidiaries have approved this
Agreement and all of the transactions of Blue Zone and the
Subsidiaries contemplated hereunder, and in the case of Blue
Zone specifically referring to:
(i) the exchange and transfer of the Blue Zone Shares
from the Shareholder to WFD as provided for in
this Agreement;
(ii) the cancellation of the share certificates (the
"Old Share Certificates") representing the Blue
Zone Shares held as set forth in paragraph B of
the recitals to this Agreement; and
(iii) the issuance of a new share certificate (the "New
Share Certificate") representing the Blue Zone
Shares registered in the name of WFD;
(b) the Old Share Certificates;
(c) the New Share Certificate;
(d) releases in the form of Schedule I to this Agreement (the
"Releases") from each of the Shareholder and the Managers of
all claims against Blue Zone or the Subsidiary for
outstanding amounts owing by either of Blue Zone or the
Subsidiary on account of any loans, bonuses, reimbursements,
compensation, fees, royalties, dividends or other
consideration whatsoever as at the Closing Date other than
for the advances referred to in paragraph 7.2 and for
accrued salary since the last regular payday;
(e) INTENTIONALLY DELETED
(f) the Blue Zone Solicitor Opinions;
(g) certificates of confirmation from each of the Shareholder,
the Managers, Blue Zone and the Subsidiary substantially in
the form of Schedule J to this Agreement;
(h) the consent of the directors and officers specified in
paragraph 3.6; and
(i) any other materials that are, in the opinion of the
solicitors for WFD, reasonably required to complete the
transactions contemplated under this Agreement.
6.2 At the Time of Closing, WFD shall pay to Terra the amount due in
respect of the Terra Loan, in exchange for an assignment of the Terra Loan and
the Terra GSA, and WFD shall deliver to the solicitors for the Shareholder:
(a) certified true copies of the resolutions of the directors
and, if shareholder approval is required, of the
shareholders of WFD, evidencing that the directors and, as
applicable, the
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shareholders, of WFD have approved this Agreement and all of
the transactions of WFD contemplated hereunder, including
the issuance of the WFD Shares in exchange for the Blue Zone
Shares, the setting of the number of Directors of WFD at
four (4), and the appointment of the directors and officers
specified in paragraph 3.6;
(b) a share certificate representing the WFD Shares registered
in the name of the Shareholder or written confirmation from
WFD's stock transfer agent that the Shareholder has been
registered as the owner of the WFD Shares, the WFD Shares
have been allotted and issued and a share certificate
representing the WFD Shares registered in the name of the
Shareholder will be delivered to the order of the
Shareholder as soon as practicable;
(c) all minute books, business records, files and papers of WFD;
(d) the resignation of the current directors and officers of
WFD, effective on Completion, together with a Release from
each such director and officer in the form of Schedule I;
(e) the WFD Solicitor Opinions; and
(f) a certificate of confirmation signed by a director or
officer of WFD substantially in the form of Schedule K to
this Agreement.
7. BUSINESS MATTERS
7.1 WFD agrees that it will, if requested by the Shareholder, file a
registration statement to effect the qualification and registration under
applicable U.S. securities laws of the resale of the WFD Shares and WFD will pay
all costs and expenses in connection with the preparation and filing of such
registration statement. The Shareholder shall be responsible for underwriting
and brokerage commissions payable in connection with such sale.
7.2 On the closing date, Blue Zone shall repay the following loans and
advances:
Name of Payee Amount
Xxxxxxx Xxxxxx CDN$140,000
Xxxxx Xxxxxx CDN$65,000
Xxxxx Xxxxxxxx CDN$15,000
7.3 WFD shall take all necessary actions prior to the Closing Date to
change its name to "Blue Zone Inc.", provided however that if the transactions
contemplated herein do not complete on the Closing Date, then upon written
request by Blue Zone, WFD shall promptly change its name to another name that
does not contain the words "Blue Zone" or any confusingly similar words.
8. GENERAL
8.1 Time and each of the terms and conditions of this Agreement shall be
of the essence of this Agreement and any waiver by the parties of this paragraph
8.1 or any failure by them to exercise any of their rights under this Agreement
shall be limited to the particular instance and shall not extend to any other
instance or matter in this Agreement or otherwise affect any of their rights or
remedies under this Agreement.
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8.2 The Schedules to this Agreement incorporated by reference and the
recitals to this Agreement constitute a part of this Agreement.
8.3 This Agreement constitutes the entire Agreement between the parties
hereto in respect of the matters referred to herein and there are no
representations, warranties, covenants or agreements, expressed or implied,
collateral hereto other than as expressly set forth or referred to herein.
8.4 The headings in this Agreement are for reference only and do not
constitute terms of the Agreement.
8.5 The provisions contained in this Agreement which, by their terms,
require performance by a party to this Agreement subsequent to the Closing Date
of this Agreement, shall survive the Closing Date of this Agreement.
8.6 No alteration, amendment, modification or interpretation of this
Agreement or any provision of this Agreement shall be valid and binding upon the
parties hereto unless such alteration, amendment, modification or interpretation
is in written form executed by the parties directly affected by such alteration,
amendment, modification or interpretation.
8.7 It is intended that all of the provisions of this Agreement will be
fully binding and effective between the parties. If any particular provision or
provisions or a part of one or more is held to be invalid, illegal, void,
voidable or unenforceable for any reason whatsoever in any jurisdiction, then
that particular provision or part of the provision or those provisions will be
deemed severed from the remainder of this Agreement. The remainder of this
Agreement will not be affected by the severance and will remain in full force
and effect.
8.8 Whenever the singular or masculine is used in this Agreement the same
shall be deemed to include the plural or the feminine or the body corporate as
the context may require.
8.9 The parties hereto shall execute and deliver all such further
documents and instruments and do all such acts and things as any party may,
either before or after the Closing Date, reasonably require in order to carry
out the full intent and meaning of this Agreement.
8.10 Any notice, request, demand and other communication to be given under
this Agreement shall be in writing and shall be delivered by hand to the
appropriate party at the address as first set out above or to such other
addresses or by such other means as may be designated in writing by the parties
hereto in the manner provided for in this paragraph, and shall be deemed to have
been received on the date of delivery by hand, or if delivered by e-mail or
telecopy, then on the date transmission completes.
8.11 This Agreement will enure to the benefit of and be binding on the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
8.12 This Agreement shall be subject to, governed by, and construed in
accordance with the laws of the Province of British Columbia and the laws of
Canada applicable therein.
8.13 This Agreement may be signed by the parties in as many counterparts as
may be deemed necessary, each of which so signed shall be deemed to be an
original, and all such counterparts together shall constitute one and the same
instrument. Counterparts may be executed either in original or faxed form and
the parties adopt any signatures received by a receiving fax machine as original
signatures of the
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parties; provided, however, that any party providing its signature in such
manner shall promptly forward to legal counsel for the other parties an original
of the signed copy of this Agreement which was so faxed.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals as of the
Effective Date:
SIGNED, SEALED & DELIVERED )
by F.XXXXXXX X. XXXXXX in the presence of: )
)
/s/ Xxxxxx X. Xxxxx Xx. )
-------------------------------------- ) /s/ F. Xxxxxxx X. Xxxxxx
Signature of Witness ---------------------------
) F. XXXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxx Xx. )
Address: 00 Xxxxxxxxx Xxxx )
London, England )
Occupation: Banker )
SIGNED, SEALED & DELIVERED )
by XXXXX XXXXXX in the presence of: )
)
/s/ Xxxxxx X. Xxxxx Xx. )
-------------------------------------- ) /s/ Xxxxx Xxxxxx
Signature of Witness ---------------------------
) XXXXX XXXXXX
Name: Xxxxxx X. Xxxxx Xx. )
Address: 00 Xxxxxxxxx Xxxx )
London, England )
Occupation: Banker )
SIGNED, SEALED & DELIVERED )
by XXXXX XXXXXXXX in the presence of: )
)
/s/ Xxxxxx X. Xxxxx Xx. )
-------------------------------------- ) /s/ Xxxxx Xxxxxxxx
Signature of Witness ---------------------------
) XXXXX XXXXXXXX
Name: Xxxxxx X. Xxxxx Xx. )
Address: 00 Xxxxxxxxx Xxxx )
London, England )
Occupation: Banker )
THE CORPORATE SEAL of )
BLUE ZONE PRODUCTIONS LTD. )
was hereunto affixed in the presence
of its authorized signatory(ies): )
) c/s
/s/ F. Xxxxxxx X. Xxxxxx )
--------------------------------------
)
Name: F. Xxxxxxx X. Xxxxxx
Title: Director
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THE CORPORATE SEAL of )
BLUE ZONE ENTERTAINMENT INC. )
was hereunto affixed in the presence
of its authorized signatory(ies): )
) c/s
/s/ Xxxxx Xxxxxx )
--------------------------------------
)
Name: Xxxxx Xxxxxx )
Title: CEO )
THE CORPORATE SEAL of
BLUE ZONE INTERNATIONAL INC. )
was hereunto affixed in the presence
of its authorized signatory(ies): )
)
/s/ F. Xxxxxxx X. Xxxxxx ) c/s
--------------------------------------
)
Name: F. Xxxxxxx X. Xxxxxx ))
Title: Director )
THE CORPORATE SEAL of )
WESTERN FOOD DISTRIBUTORS, INC. )
was hereunto affixed in the presence
of its authorized signatory(ies): )
) c/s
/s/ Xxxx XxXxxx )
--------------------------------------
)
Name: Xxxx XxXxxx )
Title: President
24
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List of Schedules to Share Exchange Agreement
Schedule A Blue Zone Solicitor Opinions.
Schedule B WFD Solicitor Opinion.
Schedule C Assets.
Schedule D Unaudited Financial Statements of Blue Zone and BZE for the
years ended December 31, 1996, December 31, 1997 and December
31, 1998.
Schedule E Current Directors, Officers, Key Employees and Independent
Contractors and consultants of Blue Zone and of each of the
Subsidiaries.
Pensions, Profit Sharing, Group Insurance or Similar Plans or
Other Deferred Compensation Plans.
Schedule F Material Contracts.
Schedule G WFD Statements.
Schedule H Bank Accounts and Safety Deposit Boxes of WFD.
Schedule I Releases.
Schedule J Certificates of Confirmation from each of the Shareholder,
the Managers, Blue Zone and the Subsidiary.
Schedule K Certificate of Confirmation Signed by a Director or Officer of
WFD.
