EXHIBIT 10.1
AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF
OCTOBER 10, 2003
BY AND AMONG
IKONA GEAR INTERNATIONAL, INC.,
AND
OBAN MINING INC.
TABLE OF CONTENTS
SECTION 1: GENERAL DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . -1-
1.1 BEST KNOWLEDGE. . . . . . . . . . . . . . . . . . . . . . . . -1-
1.2 BUSINESS DAY. . . . . . . . . . . . . . . . . . . . . . . . . -1-
1.3 CODE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
1.4 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
1.5 EXCHANGE ACT . . . . . . . . . . . . . . . . . . . . . . . . -1-
1.6 GOVERNMENTAL AUTHORITY . . . . . . . . . . . . . . . . . . . -2-
1.7 GOVERNMENTAL REQUIREMENT . . . . . . . . . . . . . . . . . . -2-
1.8 IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
1.9 LEGAL REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . -2-
1.10 OWNERSHIP INTEREST. . . . . . . . . . . . . . . . . . . . . . -2-
1.11 PERSON. . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
1.12 SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
1.13 SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
1.14 SECURITIES ACT. . . . . . . . . . . . . . . . . . . . . . . . -2-
1.15 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
SECTION 2: ACQUISITION . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
2.1 EXCHANGE OF SHARES. . . . . . . . . . . . . . . . . . . . . . -3-
2.2 INCOME TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . -3-
2.3 COMPLIANCE WTIH SECURITIES LAWS . . . . . . . . . . . . . . . -3-
2.4 RESTRICTIVE LEGEND. . . . . . . . . . . . . . . . . . . . . . -3-
SECTION 3: APPROVALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
3.1 OBAN BOARD OF DIRECTORS APPROVAL. . . . . . . . . . . . . . . -3-
3.2 IKONA BOARD OF DIRECTOR APPROVAL. . . . . . . . . . . . . . . -3-
3.3 IKONA SHAREHOLDER APPROVAL. . . . . . . . . . . . . . . . . . -4-
3.4 SEC APPROVAL. . . . . . . . . . . . . . . . . . . . . . . . . -4-
SECTION 4: ADDITIONAL AGREEEMENTS. . . . . . . . . . . . . . . . . . . . . . -4-
4.1 IKONA FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . -4-
4.2 OBAN FINANCIAL CONDITION. . . . . . . . . . . . . . . . . . . -5-
4.3 ACHRON SHARE CANCELLATION . . . . . . . . . . . . . . . . . . -5-
4.4 NAME CHANGE . . . . . . . . . . . . . . . . . . . . . . . . . -5-
4.5 NOTIFICATION OF CERTAIN MATTERS . . . . . . . . . . . . . . . -6-
4.6 FURTHER ACTION. . . . . . . . . . . . . . . . . . . . . . . . -6-
4.7
4.8
4.90
SECTION 5: CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
5.1 GENERAL PROCEDURE . . . . . . . . . . . . . . . . . . . . . . -6-
5.2 TIME AND PLACE. . . . . . . . . . . . . . . . . . . . . . . . -6-
5.3 COVENANTS REGARDING CLOSING . . . . . . . . . . . . . . . . . -6-
5.4 CONDITIONS TO OBLIGATION OF OBAN. . . . . . . . . . . . . . . -7-
5.5 CONDITIONS TO OBLIGATION OF IKONA AND SHAREHOLDERS. . . . . . -9-
5.6 SPECIFIC ITEMS TO BE DELIVERED AT THE CLOSING . . . . . . . .-11-
5.7 ELECTION OF DIRECTORS AND EXECUTIVE OFFICERS OF OBAN
AND IKONA . . . . . . . . . . . . . . . . . . . . . . . . . .-13-
SECTION 6: REPRESENTATIONS AND WARRANTIES BY IKONA AND SHAREHOLDERS. . . . .-13-
6.1 ORGANIZATION AND STANDING . . . . . . . . . . . . . . . . . .-13-
6.2 SUBSIDIARIES, ETC . . . . . . . . . . . . . . . . . . . . . .-13-
6.3 QUALIFICATION . . . . . . . . . . . . . . . . . . . . . . . .-13-
6.4 CORPORATE RECORDS . . . . . . . . . . . . . . . . . . . . . .-13-
6.5 CORPORATE AUTHORITY . . . . . . . . . . . . . . . . . . . . .-13-
6.6 FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . .-14-
6.7 FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . .-14-
6.8 CAPITALIZATION OF THE CORPORATION . . . . . . . . . . . . . .-14-
6.9 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . .-14-
6.10 NO ACTIONS, PROCEEDINGS, ETC. . . . . . . . . . . . . . . . .-15-
6.11 POST BALANCE SHEET CHANGES. . . . . . . . . . . . . . . . . .-15-
6.12 NO BREACHES . . . . . . . . . . . . . . . . . . . . . . . . .-15-
6.13 CONDITION OF THE CORPORATION'S ASSETS . . . . . . . . . . . .-16-
6.14 CORPORATE ACTS AND PROCEEDINGS. . . . . . . . . . . . . . . .-16-
6.15 REGISTERED RIGHTS AND PROPRIETARY INFORMATION . . . . . . . .-16-
6.16 NO LIENS OR ENCUMBRANCES. . . . . . . . . . . . . . . . . . .-17-
6.17 EMPLOYEE MATTERS. . . . . . . . . . . . . . . . . . . . . . .-18-
6.18 LEGAL PROCEEDINGS AND COMPLIANCE WITH LAW . . . . . . . . . .-18-
6.19 CONTRACT SCHEDULES. . . . . . . . . . . . . . . . . . . . . .-18-
6.20 LABOR MATTERS . . . . . . . . . . . . . . . . . . . . . . . .-19-
6.21 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . .-19-
6.22 ENVIRONMENTAL . . . . . . . . . . . . . . . . . . . . . . . .-19-
6.23 DISCLOSURE OF INFORMATION . . . . . . . . . . . . . . . . . .-21-
6.24 ABSENCE OF QUESTIONABLE PAYMENTS. . . . . . . . . . . . . . .-24-
6.25 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . .-24-
SECTION 7: COVENANTS OF IKONA. . . . . . . . . . . . . . . . . . . . . . . .-21-
7.1 PRESERVATION OF BUSINESS. . . . . . . . . . . . . . . . . . .-21-
7.2 ORDINARY COURSE . . . . . . . . . . . . . . . . . . . . . . .-23-
7.3 NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . .-23-
7.4 ADDITIONAL COVENANTS. . . . . . . . . . . . . . . . . . . . .-23-
7.5 ACCESS TO BOOKS AND RECORDS, PREMISES, ETC. . . . . . . . . .-23-
7.6 COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . .-23-
7.7 NO SOLICITATION . . . . . . . . . . . . . . . . . . . . . . .-23-
SECTION 8: REPRESENTATIONS AND WARRANTIES OF OBAN. . . . . . . . . . . . . .-24-
8.1 ORGANIZATION AND STANDING . . . . . . . . . . . . . . . . . .-21-
8.2 SUBSIDIARIES, ETC . . . . . . . . . . . . . . . . . . . . . .-21-
8.3 QUALIFICATION . . . . . . . . . . . . . . . . . . . . . . . .-21-
8.4 CORPORATE AUTHORITY . . . . . . . . . . . . . . . . . . . . .-21-
8.5 CORPORATE DOCUMENTS . . . . . . . . . . . . . . . . . . . . .-21-
8.6 SEC DOCUMENTS; FINANCIAL STATEMENTS . . . . . . . . . . . . .-25-
8.7 CAPITALIZATION OF THE CORPORATION . . . . . . . . . . . . . .-25-
8.8 NO ACTIONS, PROCEEDINGS, ETC. . . . . . . . . . . . . . . . .-26-
8.9 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . .-26-
8.10 POST BALANCE SHEET CHANGES. . . . . . . . . . . . . . . . . .-26-
8.11 NO BREACHES . . . . . . . . . . . . . . . . . . . . . . . . .-31-
8.12 CORPORATE ACTS AND PROCEEDINGS. . . . . . . . . . . . . . . .-26-
8.13 NO LIENS OR ENCUMBRANCES. . . . . . . . . . . . . . . . . . .-28-
8.14 EMPLOYEE MATTERS. . . . . . . . . . . . . . . . . . . . . . .-28-
8.15 CONTRACT SCHEDULES. . . . . . . . . . . . . . . . . . . . . .-33-
8.16 LEGAL PROCEEDINGS AND COMPLIANCE WITH LAW . . . . . . . . . .-34-
8.17 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . .-35-
8.18 ENVIRONMENTAL . . . . . . . . . . . . . . . . . . . . . . . .-35-
8.19 DISCLOSURE OF INFORMATION . . . . . . . . . . . . . . . . . .-36-
8.20 ABSENCE OF QUESTIONABLE PAYMENTS. . . . . . . . . . . . . . .-36-
8.21 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . .-36-
SECTION 9: COVENANTS OF OBAN . . . . . . . . . . . . . . . . . . . . . . . .-29-
9.1 PRESERVATION OF BUSINESS. . . . . . . . . . . . . . . . . . .-29-
9.2 ORDINARY COURSE . . . . . . . . . . . . . . . . . . . . . . .-29-
9.3 NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . .-29-
9.4 ADDITIONAL COVENANTS. . . . . . . . . . . . . . . . . . . . .-30-
9.5 ACCESS TO BOOKS AND RECORDS, PREMISES, ETC. . . . . . . . . .-30-
9.6 COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . .-39-
9.7 NO SOLICITATION . . . . . . . . . . . . . . . . . . . . . . .-39-
9.8 DELIVERY OF ADDITIONAL FILINGS; ADDITIONAL ACCESS . . . . . .-31-
SECTION 10: INTENTIONALLY OMITTED.
SECTION 11: TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . .-31-
11.1 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . .-31-
11.2 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . .-31-
SECTION 12: INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . .-32-
12.1 INDEMNIFICATION COVENANTS OF OBAN . . . . . . . . . . . . . .-32-
12.2 INDEMNIFICATION COVENANTS OF IKONA. . . . . . . . . . . . . .-33-
12.3 LIMITATION ON CLAIMS AND LIABILITY. . . . . . . . . . . . . .-44-
12.4 METHOD OF ASSERTING CLAIMS. . . . . . . . . . . . . . . . . .-44-
SECTION 13: NONDISCLOSURE OF CONFIDENTIAL INFORMATION. . . . . . . . . . . .-34-
13.1 NONDISCLOSURE OF CONFIDENTIAL INFORMATION . . . . . . . . . .-34-
13.2 NO PUBLICITY. . . . . . . . . . . . . . . . . . . . . . . . .-35-
SECTION 14: EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . .-35-
SECTION 15: MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . .-36-
15.1 ATTORNEY'S FEES . . . . . . . . . . . . . . . . . . . . . . .-36-
15.2 NO BROKERS. . . . . . . . . . . . . . . . . . . . . . . . . .-36-
15.3 SURVIVAL AND INCORPORATION OF REPRESENTATIONS . . . . . . . .-36-
15.4 INCORPORATION BY REFERENCE. . . . . . . . . . . . . . . . . .-36-
15.5 PARTIES IN INTEREST . . . . . . . . . . . . . . . . . . . . .-36-
15.6 AMENDMENTS AND WAIVERS. . . . . . . . . . . . . . . . . . . .-36-
15.7 WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . .-36-
15.8 GOVERNING LAW - CONSTRUCTION. . . . . . . . . . . . . . . . .-37-
15.9 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . .-37-
15.10 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . .-37-
15.11 FAX/COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . .-38-
15.12 CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . .-38-
15.13 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . .-38-
15.14 GOOD FAITH COOPERATION AND ADDITIONAL DOCUMENTS. . . . . . .-38-
15.15 SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . .-38-
15.16 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . .-39-
15.17 TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . .-39-
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT ("Agreement") is made and entered into effective this 10th
day of October, 2003, by and among OBAN MINING INC., a Nevada corporation,
("Oban") and IKONA GEAR INTERNATIONAL, INC., a Nevada corporation, ("Ikona").
WITNESSETH
WHEREAS, Oban desires to acquire Ikona (the "Acquisition") through the
acquisition of not less than 80% of the issued and outstanding shares of common
stock of Ikona (the "Shares") from the shareholders of Ikona ("Shareholders") in
consideration of the issuance of shares of common stock, $.00001 par value of
Oban; and
WHEREAS, the parties intend this Agreement to be a Plan of Reorganization
within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended, (the "Code") and the regulations thereunder; and
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, and other good and
valuable consideration, the receipt and adequacy whereof is hereby acknowledged,
the parties agree as follows:
SECTION 1: GENERAL DEFINITIONS
For purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
1.1 BEST KNOWLEDGE. "Best Knowledge" shall mean both what a Person
knew as well as what the Person should have known had the Person exercised
reasonable diligence. When used with respect to a Person other than a natural
person, the term "Best Knowledge" shall include matters that are known or should
have known as the result of the exercise of reasonable diligence by the current
directors and executive officers of the Person.
1.2 BUSINESS DAY. "Business Day" means any day which is not a
Saturday, Sunday or a permitted or required bank holiday in Vancouver, BC. or
Las Vegas, Nevada.
1.3 CODE. "Code" means the Internal Revenue Code of 1986, as amended.
1.4 ERISA. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
1.5 EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
1.6 GOVERNMENTAL AUTHORITY. "Governmental Authority" shall mean any
and all foreign, federal, state, provincial or local governments, governmental
institutions, public authorities and governmental entities of any nature
whatsoever, and any subdivisions or instrumentalities thereof, including, but
not limited to, departments, boards, bureaus, commissions, agencies, courts,
administrations and panels, and any division or instrumentalities thereof,
whether permanent or ad hoc and whether now or hereafter constituted or
existing.
1.7 GOVERNMENTAL REQUIREMENT. "Governmental Requirement" shall mean
any and all laws (including, but not limited to, applicable common law
principles), statutes, ordinances, codes, rules regulations, interpretations,
guidelines, directions, orders, judgments, writs, injunctions, decrees,
decisions or similar items or pronouncements, promulgated, issued, passed or set
forth by any Governmental Authority.
1.8 IRS. "IRS" means the Internal Revenue Service.
1.9 LEGAL REQUIREMENTS. "Legal Requirements" means applicable common
law and any statute, ordinance, code or other laws, rule, regulation, order,
technical or other standard, requirement, judgment, or procedure enacted,
adopted, promulgated, applied or followed by any governmental authority,
including, without limitation, any order, decree, award, verdict, findings of
fact, conclusions of law, decision or judgment, whether or not final or
appealable, of any court, arbitrator, arbitration board or administrative
agency.
1.10 OWNERSHIP INTEREST. "Ownership Interest" shall mean any form of
direct or indirect interest in the ownership, equity or profits of a Person,
whether certificated or non-certificated, issued or unissued, contingent or
otherwise, including, without limitation, the following: shares, or the right
thereto, executory rights to receive shares, options, warrants, instruments or
obligations convertible into shares or profit interests.
1.11 PERSON. "Person" shall mean any natural person, any Governmental
Authority and any entity the separate existence of which is recognized by any
Governmental Authority or Governmental Requirement, including, but not limited
to, corporations, partnerships, joint ventures, joint stock companies, trusts,
estates, companies and associations, whether organized for profit or otherwise.
1.12 SEC. "SEC" shall mean the United States Securities and Exchange
Commission.
1.13 SECTION. Unless otherwise stated herein, the term "Section" when
used in this Agreement shall refer to the Sections of this Agreement.
1.14 SECURITIES ACT. "Securities Act" shall mean the Securities Act of
1933, as amended.
1.15 TAXES. "Tax" and "Taxes" shall mean any and all income, excise,
franchise or other taxes and all other charges or fees imposed or collected by
any Governmental Authority or pursuant to any
Governmental Requirement, and shall also include any and all penalties,
interest, deficiencies, assessments and other charges with respect thereto.
SECTION 2: ACQUISITION
2.1 EXCHANGE OF SHARES. Subject to the terms and conditions of this
Agreement, on the Closing Date (as hereinafter defined), the Shareholders shall
execute and deliver to Oban and Ikona, and Oban and Ikona shall accept from
Shareholders and execute Share Exchange Agreements and Questionnaries
substantially in the form of Exhibit 2.1 hereto (the "Exchange Agreements").
Pursuant to the Exchange Agreements, Shareholders owning not less than 80% and
up to one hundred percent (100%) of the issued and outstanding common stock and
equity securities of Ikona (the "Ikona Common Stock") shall agree to exchange
all of their Ikona Shares for shares of Oban Common Stock. Under the Exchange
Agreements, in exchange for the Ikona Common Stock, Oban shall issue and deliver
to the Shareholders at Closing, pro rata and proportionately, 1.25 shares of
common stock, $.00001 par value per share, of Oban (the "Oban Common Stock" and
also referred to as the "Exchange Shares"), for each share of Ikona Common
Stock, not to exceed an aggregate of 16,000,000 Exchange Shares being issued by
Oban to the Shareholders in the Exchange. (The exchange of the Ikona Common
Stock for the Exchange Shares shall be referred to as the "Exchange" or the
"Acquisition.").
2.2 INCOME TAX CONSIDERATIONS. It is the intention of the parties
hereto that the exchange of stock contemplated by this Agreement will qualify
for treatment as a tax-free reorganization under Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended, and the parties hereby agree to
undertake all reasonable actions necessary both before and after the
consummation of the Exchange to effect such treatment.
2.3 COMPLIANCE WITH SECURITIES LAWS. The Exchange provided for in this
Section 2 shall be undertaken in reliance upon an exemption from the
registration requirements contained in Section 5 of the Securities Act contained
in Regulation S. The Exchange Shares shall be "restricted securities" within
the meaning of Rule 144 under the Securities Act. Oban shall take such actions
as may be necessary or advisable in order to consummate the Exchange in
conformity with applicable laws including, without limitation, federal and state
securities laws; and Ikona, together with its directors and officers, agrees to
take such actions as may be necessary or advisable upon the reasonable request
of Oban to consummate the Exchange in conformity with such Legal Requirements.
2.4 RESTRICTIVE LEGEND. Certificates representing the Exchange Shares
to be issued to the Shareholders shall bear a legend in substantially the
following form:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE "ACT"), AND ARE PROPOSED TO BE ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S
PROMULGATED UNDER THE ACT. UPON ANY SALE, SUCH SECURITIES MAY NOT BE REOFFERED
FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE ACT.
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES
SHALL NOT TRADE THE SECURITIES BEFORE THE EARLIER OF (i) THE DATE THAT IS 12
MONTHS AND A DAY AFTER THE DATE THE ISSUER FIRST BECAME A REPORTING ISSUER IN
ANY OF ALBERTA, BRITISH COLUMBIA, MANITOBA, NOVA SCOTIA, ONTARIO, QUEBEC AND
SASKATCHEWAN, IF THE ISSUER IS A SEDAR FILER, AND (ii) THE DATE THAT IS 12
MONTHS AND A DAY AFTER THE LATER OF (a) THE DISTRIBUTION DATE, AND (b) THE DATE
THE ISSUER BECAME A REPORTING ISSUER IN THE LOCAL JURISDICTION OF THE PURCHASER
OF THE SECURITIES THAT ARE THE SUBJECT OF THE TRADE.
SECTION 3: APPROVALS
3.1 OBAN BOARD OF DIRECTORS APPROVAL. Subject to the provisions hereof,
the Board of Directors of Oban shall, by written unanimous consent, approve the
Exchange and the transactions provided for or contemplated by this Agreement;
provided, however, that such approval shall be subject to their satisfaction
that the issuance of the Exchange Shares to the Shareholders shall be and is
exempt from the registration requirements of the Securities Act, is undertaken
without violation of the anti-fraud provisions of the Securities Act and has
been consummated in conformity with all other applicable Legal Requirements,
including an exemption from prospectus in all Canadian jurisdictions, in which
any Shareholder resides.
3.2 IKONA BOARD OF DIRECTORS APPROVAL. Subject to the provisions
hereof, the Board of Directors of Ikona shall, by written unanimous consent,
approve the Exchange and the transactions provided for or contemplated by this
Agreement; provided, however, that such approval shall be subject to their
satisfaction that the issuance of the Exchange Shares to the Shareholders shall
be and is exempt from the registration requirements of the Securities Act, is
undertaken without violation of the anti-fraud provisions of the Securities Act
and has been consummated in conformity with all other applicable Legal
Requirements, including an exemption from prospectus in all Canadian
jurisdictions, in which any Shareholder resides.
3.3 IKONA SHAREHOLDER APPROVAL. As promptly as practicable after the
date hereof, Ikona shall exercise reasonable efforts to take all action
necessary or appropriate to prepare an Information Statement and other documents
necessary to solicit and obtain the approval of the Exchange and the other
transactions provided for or contemplated by this Agreement by the execution and
delivery of Exchange Agreements by Shareholders owning not less than eighty
percent (80%) of the issued and outstanding shares of Ikona common stock.
3.4 SEC APPROVAL. If Oban together with its legal counsel determines
that it is required, as promptly as practicable after the date hereof, Oban
shall exercise reasonable effort to prepare and file with the SEC, and mail to
its shareholders of record, an information statement conforming to the
requirements of Rule 14f-1 under the Exchange Act (the "14f-1 Filing"). It
shall be a condition precedent to the obligation of the parties to consummate
the Exchange that the 14f-1 Filing be cleared by the SEC and mailed to the Oban
shareholders of record in conformity with Rule 14f-1 under the Exchange Act and
other applicable Legal Requirements.
SECTION 4: ADDITIONAL AGREEMENTS
4.1 IKONA FINANCIAL STATEMENTS. Ikona will deliver to Oban at or
before Closing copies of audited balance sheets and income statements as of and
for the two year period ended August 31, 2003 (the "Ikona Financial
Statements"). The Ikona Financial Statements (including any related schedules
and/or notes), will show all liabilities, direct or contingent, required at the
time of preparation to be shown in accordance with U.S. generally accepted
accounting principles ("GAAP") and fairly present the financial position and
results of operations of Ikona as of the date thereof and for the periods
indicated in accordance with GAAP, consistently applied. Except as otherwise
disclosed herein, Ikona will have no material liability or obligation of any
nature (whether liquidated, unliquidated, accrued, absolute, contingent or
otherwise, whether due or to become due) except those set forth on the Ikona
Financial Statements except liabilities incurred and current liabilities
(determined in accordance with GAAP) incurred since the date of the Ikona
Financial Statements in the ordinary course of business consistent with past
practice. The Ikona Financial Statements shall conform in all respects to the
requirements of Regulation SB, Item 310 under the Securities Act and shall
include, at a minimum, audited balance sheets as of August 31, 2003, audited
statements of operation and statements of cash flow for the two year period
ended August 31, 2003, and audited statements of stockholders' equity at August
31, 2003. The Financial Statements to be prepared following the Closing shall
also include pro forma financial information ("Pro Forma Financial Information")
in accordance with the requirements of Regulation SB, Item 310. Ikona covenants
and agrees to cause the Ikona Financial Statements and Pro Forma Financial
Information to be filed with the SEC under cover of Form 8-K in accordance and
conformity with the requirements of such form, applicable SEC rules and other
Legal Requirements. Ikona agrees to indemnify, defend and hold harmless Oban
and its respective past and present officers and directors from any debt,
damage, liability or obligation whatsoever arising from any failure on the part
of Ikona to prepare the Ikona Financial Statements and Pro Forma Financial
Information and to file same with the SEC under cover of Form 8-K in conformity
with all applicable Legal Requirements. All costs and expenses incurred in
connection with the preparation of the Ikona Financial Statements, and the Pro
Forma Financial Information, including fees and disbursements of the Auditor,
shall be borne exclusively by Ikona.
4.2 OBAN FINANCIAL CONDITION. At closing, Oban shall have no
liabilities or obligations of any nature, whether liquidated, unliquidated,
accrued, absolute, contingent or otherwise, whether due or to become due except
liabilities approved in writing by Ikona. Oban agrees to indemnify, defend and
hold harmless Ikona from any debt, damage, liability or obligation incurred
prior to the Closing Date not specifically approved in writing by Ikona.
4.3 ACHRON SHARE CANCELLATION. Subject to closing of this Agreement,
Xxxxxxx Xxxxxx ("Achron") shall surrender to Oban for cancellation an aggregate
of 14.5 million shares of Oban common stock.
4.4 NAME CHANGE. Subject to and prior to or concurrently with the
Closing, Ikona shall take all actions necessary to change its name to "Ikona
Gear USA, Inc."
4.5 NOTIFICATION OF CERTAIN MATTERS. Ikona shall give prompt notice to
Oban and Oban shall give prompt notice to Ikona of (i) the occurrence or
non-occurrence of any event which would cause any representation or warranty
made by the respective parties in this Agreement to be materially untrue or
inaccurate and (ii) any failure of Oban or Ikona, as the case may be, to
materially comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this section shall not limit or otherwise affect the
remedies
available hereunder to the party receiving such notice and, provided further,
that the failure to give such notice shall not be treated as a breach of
covenant for the purposes of this Agreement unless the failure to give such
notice results in material prejudice to the other party.
4.6 FURTHER ACTION. Upon the terms and subject to the conditions
hereof, each of the parties hereto shall use reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, to obtain in a
timely manner all necessary waivers, consents and approvals and to effect all
necessary registrations and filings, and to otherwise satisfy or cause to be
satisfied all conditions precedent to its obligations under this Agreement.
4.7 PUBLIC ANNOUNCEMENTS. Ikona and Oban shall consult with each other
before issuing any press release or other public statement with respect to the
Acquisition or this Agreement and shall not issue any such press release or make
any such public statement without the prior consent of the other party, which
consent shall not be unreasonably withheld; provided, however, that a party may,
without the prior consent of the other party, issue such press release or make
such public statement as may, upon the advice of counsel, be required by law if
it has used reasonable efforts to first consult with the other party.
4.8 COOPERATION IN SECURITIES FILINGS. Ikona shall provide such
information regarding Ikona, its business, its officers, directors and
affiliates, as is reasonably required by Oban for purposes of preparing any
notices, reports and other filings with the SEC. Moreover, following the
Closing, the current officer and director of Oban shall provide such information
as the post-closing management of Oban shall reasonably request for the purpose
of preparing any notices, reports and other filings by Oban with the SEC,
including but not limited to, in connection with the preparation of any
financial statements required to be filed under the Exchange Act or Securities
Act by Oban.
4.9 ADDITIONAL DOCUMENTS. The parties shall deliver or cause to be
delivered such documents or certificates as may be necessary, in the reasonable
opinion of counsel for either of the parties, to effectuate the transactions
provided for in this Agreement. If at any time the parties or any of their
respective successors or assigns shall determine that any further conveyance,
assignment or other document or any further action is necessary desirable to
further effectuate the transactions set forth herein or contemplated hereby, the
parties and their officers, directors and agents shall execute and deliver, or
cause to be executed and delivered, all such documents as may be reasonably
required to effectuate such transactions.
SECTION 5: CLOSING
5.1 GENERAL PROCEDURE. Subject to the terms and conditions hereinafter
set forth, at the Closing each party shall deliver such documents, instruments
and materials as may be reasonably required in order to effectuate the intent
and provisions of this Agreement, and all such documents, instruments and
materials shall be satisfactory in form and substance to counsel for each party.
5.2 TIME AND PLACE. Upon the terms and subject to the conditions set
forth in this Agreement, the Exchange transactions contemplated by Section 2.1
shall be consummated and closed (the "Closing") at a time and place to be
determined by mutual agreement on or before five business days after the date on
which the conditions set forth in Sections 5.5 and 5.6 hereinbelow shall have
been satisfied or waived or
such other time, date and place as the parties shall agree upon but in any event
no later than October 31, 2003 unless extended with the mutual consent of the
parties (the date of the Closing being herein referred to as the "Closing
Date").
5.3 COVENANTS REGARDING CLOSING. Ikona and Oban each hereby covenant
and agree that they shall (i) use reasonable efforts to cause any amendments to
their respective exhibits to be prepared and exchanged with the other party, and
its legal counsel, prior to Closing, except to the extent the express terms of
this Agreement provide for a different time period for such delivery to be
accomplished, (ii) use reasonable efforts to cause all of their respective
representations and warranties set forth in this Agreement, and exhibits hereto,
to be true on and as of the Closing Date, (iii) use reasonable efforts to cause
all of their respective obligations that are to be fulfilled on or prior to the
Closing Date to be so fulfilled, (iv) use reasonable efforts to cause all
conditions to the Closing set forth in this Agreement to be satisfied on or
prior to the Closing Date, and (v) use reasonable efforts to deliver to each
other at the Closing the certificates, updated lists, notices, consents,
authorizations, approvals, agreements, transfer documents, receipts and
amendments required hereby (with such additions or exceptions to such items as
are necessary to make the statements set forth in such items true and correct,
provided that if any such additions or exceptions cause any of the conditions to
its respective obligations hereunder as set forth herein below not to be
performed, satisfied or fulfilled, such additions and exceptions shall in no way
limit the rights of the parties hereto to terminate this Agreement or refuse to
consummate the transactions contemplated hereby).
5.4 CONDITIONS TO OBLIGATION OF OBAN. The obligation of Oban to
complete the Exchange on the Closing Date on the terms set forth in this
Agreement is, at the option of Oban, subject to the satisfaction or written
waiver by Oban of each of the following conditions:
(a) Accuracy of Representations and Warranties. The representations
and warranties made by Ikona in this Agreement shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though such representations and warranties had been made on the Closing Date,
except to the extent that such representations and warranties expressly relate
to an earlier date in which case they shall have been true and correct as of
such earlier date.
(b) Compliance with Covenants. All covenants which Ikona is
required to perform, satisfy or comply with on or before the Closing Date shall
have been fully complied with or performed in all material respects.
(c) Corporate Approvals. Any action required to be taken by the
Board of Directors of Ikona or its Shareholders to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly and validly taken. The
Exchange shall be approved by Ikona shareholders holding at least 80% of the
issued and outstanding shares of capital stock of Ikona entitled to participate
in the Exchange.
(d) Consents and Approvals. To the extent that any material
lease, mortgage, deed of trust, contract or agreement to which Ikona is a party
shall require the consent of any person to the Exchange or any other transaction
provided for herein, such consent shall have been obtained and Oban shall have
received reasonably satisfactory evidence thereof; provided, however, that Ikona
shall not make, as a condition for the obtaining of any such consent, any
agreements or undertakings not approved in writing by Oban to the extent that
such condition otherwise has an effect on Oban. Oban shall have been
furnished with evidence satisfactory to it of the timely consent or approval of,
filing with or notice to, each Governmental Authority or Person which in the
good faith judgment of Oban is necessary or required with respect to the
execution and delivery by Ikona and the consummation by Ikona of the
transactions contemplated hereby.
(e) Review and Due Diligence. Oban, its investment bankers, legal
counsel and/or auditors shall have had the opportunity to complete, and shall
have completed, a satisfactory due diligence investigation of Ikona, together
with a satisfactory review of Ikona's corporate status and Ikona's property, all
of which shall be satisfactory in form and substance to Oban in its sole
discretion.
(f) No Litigation, Etc. No action, investigation, litigation or
arbitration or proceeding by or before any Governmental Authority, or before any
arbitral, mediation panel or tribunal of any kind shall have been instituted or
threatened (i) to restrain or prohibit the transactions contemplated by this
Agreement, or (ii) to claim that the consummation of any such transaction is
illegal or (iii) which, if determined adversely, would effect adversely Oban or
Ikona following consummation of the transactions contemplated hereby and Ikona
shall have delivered to Oban a certificate dated as of the Closing Date and
executed by Ikona, stating that to its Best Knowledge, no such items exist. No
governmental authority or arbitral, mediation panel or tribunal of any kind
shall have taken any other action as a result of which the management of Oban,
in its sole discretion, reasonably deems it inadvisable to proceed with the
transactions contemplated by this Agreement.
(g) No Material Adverse Change. No material adverse change in the
business, property or assets of Ikona shall have occurred since August 31, 2003,
and no loss or damage to any of the assets, whether or not covered by insurance,
with respect to Ikona hereto has occurred, and Ikona shall have delivered to
Oban a certificate dated as of the Closing Date to such effect.
(h) No Adverse Information. The investigations with respect to
Ikona, the assets and the respective businesses of Ikona, performed by Oban's
respective professional advisors and other representatives shall not have
revealed any information concerning Ikona, its assets, liabilities or its
business that has not been made known to Oban, in writing prior to the date of
this Agreement and that, in the opinion of such party and its advisors,
materially and adversely affects the business or assets of the other party or
the viability of the transaction contemplated by this Agreement.
(i) Ordinary Course of Business. During the period from the date
of this Agreement until the Closing Date, Ikona shall have carried on its
business in the ordinary and usual course, and shall have delivered to Oban a
certificate to that effect.
(j) Liens. Ikona shall have delivered to Oban a reasonably
current lien and judgment search (both state and county levels in each
jurisdiction where the party is qualified to or is doing business or owns
material assets) confirming the absence of any judicial liens, security
interests, tax liens and similar such liens ("Liens") affecting any of its
business or assets, except for such liens as may be acceptable to Oban.
(k) Approval of Counsel. All actions, proceedings, instruments
and documents required or incidental to carry out this Agreement, including all
schedules and exhibits thereto, and all other related legal matters shall have
been approved by DuMoulin Xxxxxxxxx, counsel to Oban.
(l) Other Documents. Ikona shall have delivered or caused to be
delivered all other documents, agreements, resolutions, certificates or
declarations as Oban or its attorneys may have reasonably requested.
(m) Compliance with Securities Laws. Oban shall have undertaken
all actions necessary or advisable to consummate the Exchange, in conformity
with all Governmental Requirements including, without limitation, applicable
federal, state and provincial securities laws.
(n) Share Exchange Agreements and Questionnaires. At Closing, not
less than 80% of the combined voting power of the issued and outstanding shares
of Ikona Common Stock shall have been delivered for exchange pursuant to Section
2 of this Agreement. Surrendering Ikona Shareholders shall have executed and
delivered to Oban Share Exchange Agreements substantially in the form of Exhibit
2.1 hereto assigning to Oban their Ikona Common Stock and Questionnaires with
responses satisfactory to Oban
(o) Financial Advisory Fees. At or prior to Closing, all
obligations or commitments of Oban and Ikona to their respective financial
advisors and investment bankers shall have been paid, provided for or otherwise
satisfied upon terms satisfactory to the parties, and Oban and Ikona shall each
have been delivered and received such written consents, approvals, estoppel
certificates or other instruments or undertakings from its advisors or other
third parties as each may deem reasonable, necessary or advisable.
(p) Ikona Financial Statements. The Ikona Financial Statements
described in Section 4.1 shall have been completed and shall be in a form and
substance satisfactory to Oban.
(q) Ikona Option and Warrant Cancellation. At or prior to
closing, Ikona shall have effected the cancellation of all outstanding options,
warrants and other rights to acquire shares of Ikona common stock and securities
convertible into shares of Ikona common stock.
5.5 CONDITIONS TO OBLIGATION OF IKONA. The obligations of Ikona on
the Closing Date under the terms set forth in this Agreement are, at the option
of Ikona, subject to the satisfaction or written waiver by Ikona of each of the
following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties made by Oban in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made on
the Closing Date, except to the extent that such representations and warranties
expressly relate to an earlier date in which case they shall have been true and
correct as of such earlier date.
(b) Compliance with Covenants. All covenants which Oban is
required to perform, satisfy or comply with on or before the Closing Date shall
have been fully complied with or performed in all material respects.
(c) Corporate Approvals. Any action required to be taken by the
Board of Directors of Oban and shareholders to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby, shall have been duly and validly taken.
(d) Consents and Approvals. To the extent that any material
lease, mortgage, deed of trust, contract or agreement to which Oban is a party
shall require the consent of any person to the exchange of Oban's shares of
Common Stock or any other transaction provided for herein, such consent shall
have been obtained and Ikona shall have received reasonably satisfactory
evidence thereof; provided, however, that Oban shall not make, as a condition
for the obtaining of any such consent, any agreements or undertakings not
approved in writing by Ikona to the extent that such condition otherwise has an
effect on Ikona or Oban. Ikona shall have been furnished with evidence
satisfactory to it of the timely consent or approval of, filing with or notice
to, each Governmental Authority or Person which in the good faith judgment of
Ikona is necessary or required with respect to the execution and delivery by
Oban and the consummation by Oban of the transactions contemplated hereby.
(e) Review and Due Diligence. Ikona, its investment bankers,
legal counsel and/or auditors shall have had the opportunity to complete, and
shall have completed, a satisfactory due diligence investigation of Oban, its
assets and liabilities, together with a satisfactory review of Oban's corporate
status and the marketability of title to Oban's property, all of which shall be
satisfactory in form and substance to Ikona in its sole discretion. In
connection therewith, immediately following the execution of this Agreement,
Oban shall provide Ikona and its counsel a Schedule 5.6(e), dated as of August
31, 2003, setting forth in reasonable detail all liabilities, obligations,
expenses, claims, and similar items accrued or provided for on the books of Oban
but not paid, satisfied or discharged as of such date (the "Oban Debt
Schedule"), and shall provide an update of such schedule dated as of the date
immediately prior to the Closing Date. In addition, at or prior to Closing,
Oban shall provide to Ikona evidence to Ikona's satisfaction that all such
liabilities, obligations, expenses, claims, or similar items accrued but not
paid, satisfied or discharged have been so paid, satisfied or discharged by Oban
prior to Closing and that, at Closing, Oban will have a positive working capital
position.
(f) No Litigation, Etc. No action, investigation, litigation or
arbitration or proceeding by or before any Governmental Authority, or before any
arbitral, mediation panel or tribunal of any kind shall have been instituted or
threatened (i) to restrain or prohibit the transactions contemplated by this
Agreement or (ii) to claim that the consummation of any such transaction is
illegal or (iii) which, if determined adversely, would effect adversely Oban or
Ikona following consummation of the transactions contemplated hereby and Oban
shall have delivered to Ikona a certificate dated as of the Closing Date and
executed by Oban, stating that to its Best Knowledge, no such items exist. No
Governmental Authority or arbitral or mediation panel or tribunal of any kind
shall have taken any other action as a result of which the management of Ikona,
in its sole discretion, reasonably deems it inadvisable to proceed with the
transactions contemplated by this Agreement.
(g) No Material Adverse Change. No material adverse change in the
business, property, assets or liabilities of Oban shall have occurred, and no
loss or damage to any of the assets, whether or not covered by insurance, with
respect to Oban has occurred, and Oban shall have delivered to Ikona a
certificate dated as of the Closing Date to such effect.
(h) No Adverse Information. The investigations with respect to
Oban, the assets, liabilities and their respective businesses performed by
Ikona's respective professional advisors and other representatives shall not
have revealed any information concerning Oban, its assets, liabilities or
business that has not been made known to Ikona, in writing prior to the date of
this Agreement and that, in the opinion of Ikona and its advisors, materially
and adversely affects the business, liabilities or assets of Oban or the
viability of the transactions contemplated by this Agreement.
(i) Ordinary Course of Business. During the period from the date
of this Agreement until the Closing Date, Oban shall have undertaken no material
business operations and shall have delivered to Ikona a certificate to that
effect.
(j) Approval of Counsel. All actions, proceedings, instruments
and documents required or incidental to carry out this Agreement, including all
schedules and exhibits thereto, and all other related legal matters shall have
been approved as to substance and form by Xxxxxxxx X. Xxxxxx, P.C, counsel to
Ikona.
(k) Other Documents. Oban shall have delivered or caused to be
delivered all other documents, agreements, resolutions, certificates or
declarations as Ikona or its attorneys may have reasonably requested.
(l) Compliance with Securities Laws. Oban shall otherwise have
undertaken all actions necessary or advisable to consummate the Exchange in
conformity with all Governmental Requirements, including, without limitation,
applicable federal and state securities laws.
(m) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Exchange shall be in effect.
(n) Liens. Oban shall have delivered to Ikona a reasonably
current lien and judgment search (both state and county levels in each
jurisdiction where the party is qualified to or is doing business or owns
material assets) confirming the absence of any judicial liens, security
interests, tax liens and similar such liens ("Liens") affecting any of its
business or assets, except for such liens as may be acceptable to Ikona.
(o) Achron Cancellation of Shares and lock-up. Xxxxxxx Xxxxxx
shall have surrendered for cancellation to Oban 14,500,000 (on a post-split
basis) shares of Oban common stock held by him.
(p) Oban Debt Schedule. At Closing, Oban shall have delivered to
Ikona the Oban Debt Schedule demonstrating to the satisfaction of Ikona that all
debts, obligations and liabilities of Oban have been satisfied and discharged.
(q) Share Exchange Agreements. At Closing, not less than eighty
percent (80%) of the combined voting power of the issued and outstanding shares
of Ikona Common Stock shall have been delivered for exchange pursuant to Section
2 of this Agreement and Ikona shareholders shall have executed
and delivered to Oban Share Exchange Agreements substantially in the form of
Exhibit 2.1 hereto assigning to Oban their Ikona Common Stock.
(r) Ikona Option and Warrant Cancellation. At or prior to
closing, Ikona shall have effected the cancellation of all outstanding options,
warrants and other rights to acquire shares of Ikona common stock and securities
convertible into shares of Ikona common stock.
(s) Achron release. At or prior to Closing, Xxxxxxx Xxxxxx shall
resign as an executive officer and shall execute and deliver a written release
in favor of Oban releasing Oban and its affiliates from any claims, obligations
or liabilities arising from any fact or event prior to the Closing Date.
5.6 SPECIFIC ITEMS TO BE DELIVERED AT THE CLOSING. The parties shall
deliver the following items to the appropriate party at the Closing of the
transactions contemplated by this Agreement.
(a) To be delivered by Ikona:
(i) A certificate dated the Closing Date of Ikona, signed by the
President of Ikona stating that the representations and
warranties of Ikona set forth in this Agreement are true and
correct in all material respects. Said certificate shall
further verify and affirm that all consents or waivers, if
any, which may be necessary to execute and deliver this
Agreement have been obtained and are in full force and
effect.
(ii) A certificate dated the Closing Date of Ikona, signed by the
President of Ikona, in form and substance satisfactory to
Oban and its legal counsel, certifying that all conditions
precedent set forth in this Agreement to the obligations of
Oban to close, have been fulfilled or waived in writing, and
that no event of default hereunder and no event which, with
the giving of notice or passage of time, or both, would be
an event of default, has occurred as of such date.
(iii) Certificates dated the Closing Date of Ikona, signed by the
Secretary of Ikona, (i) certifying attached copies of
resolutions duly adopted by the Board of Directors of Ikona,
authorizing the execution of this Agreement and the other
transactions to be consummated pursuant thereto; (ii)
certifying the names and incumbency of the officers of Ikona
who executed the Agreement and any certificates delivered
pursuant to this Section 5.6(a) for and on behalf of Ikona;
(iii) certifying the authenticity of copies of the
Certificate of Incorporation and Bylaws of Ikona, as
amended; and (iv) certifying the authenticity of a
reasonably current Certificate of Good Standing, from all
jurisdictions in which the company is qualified to conduct
business.
(iv) Audited financial statements of Ikona containing balance
sheets, together with statements of operation as of and for
the periods ended August 31, 2003 and August 31, 2002.
(v) Evidence of name change described in Section 4.4.
(vi) Share Exchange Agreements and Questionnaires representing
not less than 80% percent of the issued and outstanding
common shares of Ikona.
(b) To be delivered by Oban and Achron:
(i) Certificate or certificates representing the Exchange
Shares; and
(ii) A certificate dated the Closing Date of Oban, signed by the
President of Oban stating that the representations and
warranties of Oban set forth in this Agreement are true and
correct in all material respects. Said certificate shall
further verify and affirm that all consents or waivers, if
any, which may be necessary to execute and deliver this
Agreement have been obtained and are in full force and
effect.
(iii) A certificate dated the Closing Date of Oban, signed by the
Chief Executive Officer and the Chief Financial Officer of
Oban, in form and substance satisfactory to Ikona and its
legal counsel, certifying that all conditions precedent set
forth in this Agreement to the obligations of Oban to close,
have been fulfilled or waived in writing, and that no event
of default hereunder and no event which, with the giving of
notice or passage of time, or both, would be an event of
default, has occurred as of such date.
(iv) Certificates dated the Closing Date of Oban, signed by the
Secretary of Oban, (i) certifying attached copies of
resolutions duly adopted by the Board of Directors of Oban,
authorizing the execution of this Agreement and the other
transactions to be consummated pursuant thereto, including
but not limited to the election of the directors to be
designated by Ikona pursuant to Section 5.7 below; (ii)
certifying the names and incumbency of the officers of Oban
who executed the Agreement and any certificates delivered
pursuant to this Section for and on behalf of Oban; (iii)
certifying the authenticity of copies of the Articles of
Incorporation and Bylaws of Oban and its Subsidiariesand
(iv) certifying the authenticity of a reasonably current
Certificate of Good Standing, from all jurisdictions in
which Oban and its Subsidiaries are qualified to conduct
business.
(v) A list of shareholders of Oban, dated as of a date five (5)
business days prior to the Closing Date, certified by Oban's
stock transfer agent.
(vi) All Xxxxx codes and other information and authorizations
necessary to enable Oban to make all filings that may be
required to be made under the Exchange Act and Securities
Act with the SEC post-Closing.
(vii) Evidence satisfactory to Ikona that Achron has surrendered
to Oban for cancellation an aggregate of 14.5 million shares
of Oban common stock.
(viii) the Oban Debt Schedule and other evidence of Oban's
financial condition at Closing as required by Section
5.5(e).
(x) Officer, Director and Employee resignations and releases
provided for in Section 5.5(s) above.
5.7 ELECTION OF DIRECTORS AND EXECUTIVE OFFICERS OF OBAN AND IKONA.
(a) At Closing, the following persons will be appointed to the
Board of Directors of Oban: Messrs. Laith Nosh, Xxx Xxxxxxxxx, Barrie Freeke and
Xxxxx Xxxxxxxx. Xx. Xxxxxxx Xxxxxx may remain on Oban's board of directors for
one year following the Closing if he desires to do so.
(b) At Closing, the executive officers of Oban shall resign and
the newly-constituted Board of Directors of Oban shall elect persons determined
by the newly constituted Board to serve as executive officers of Oban until the
next regular annual meeting of the Company's directors. Notwithstanding the
foregoing, Mr. Laith Nosh will be elected to serve as President and Chief
Executive Officer and Xxxxxxx Xxxxxx shall be elected to serve as Chief
Financial Officer of Oban.
SECTION 6: REPRESENTATIONS AND WARRANTIES BY IKONA
As a material inducement to Oban to enter into this Agreement and with the
understanding and expectations that Oban will be relying thereon in consummating
the Exchange contemplated hereunder, Ikona (hereinafter referred to as the
"Corporation" or "Ikona" for the purposes of this Section 6 only) represents
and warrants as follows:
6.1 ORGANIZATION AND STANDING. Ikona is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
has all requisite corporate power and authority to own its assets and properties
and to carry on its business as it is now being conducted.
6.2 SUBSIDIARIES, ETC. The Corporation does not have any direct or
indirect Ownership Interest in any corporation, partnership, joint venture,
association or other business enterprise.
6.3 QUALIFICATION. Except for any jurisdiction where the failure to be
qualified to engage in business as a foreign corporation would not have a
material adverse affect on the Corporation, the Corporation is not qualified to
engage in business as a foreign corporation in any state and there is no other
jurisdiction wherein the character of the properties presently owned by the
Corporation or the nature of the activities presently conducted by the
Corporation makes necessary the qualification, licensing or domestication of the
Corporation as a foreign corporation.
6.4 CORPORATE RECORDS. The corporate records and minute books of Ikona
accurately reflect all material proceedings of its directors and shareholders,
and include complete and accurate minutes of all meetings of its directors and
shareholders, copies of all resolutions passed, up-to-date and accurate
shareholder and director registers, transfer registers and any other corporate
registers required to be maintained by Ikona. All meetings of shareholders and
directors were duly called and held and all resolutions, whether passed at
meetings, or in writing, are valid and effectual in all cases where the xxxxxx
dealt with at such meetings or in such resolutions could have a material effect
on Ikona.
6.5 CORPORATE AUTHORITY. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby nor
compliance by the Corporation with any on the provisions hereof will:
(a) Conflict with or result in a breach of any provision of its
Certificate of Incorporation or By-Laws;
(b) Result in a default (or give rise to any right of termination,
cancellation, or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, agreement or other instrument
or obligation to which the Corporation is a party, or by which any of its
properties or assets may be bound except for such default (or right of
termination, cancellation, or acceleration) as to which requisite waivers or
consents shall either have been obtained by the Corporation prior to the Closing
Date or the obtaining of which shall have been waived by Oban; or
(c) Violate any order, writ, injunction, decree or, to the
Corporation's Best Knowledge, any statute, rule or regulation applicable to the
Corporation or any of its properties or assets. No consent or approval by any
Governmental Authority is required in connection with the execution and delivery
by the Corporation of this Agreement or the consummation by the Corporation of
the transactions contemplated hereby.
6.6 FINANCIAL STATEMENTS. Except as otherwise provided, the following
statements will be attached to this Agreement as Exhibit 6.6 on or before the
Closing Date:
(a) Audited financial statements of Ikona containing balance
sheets and statements of operations as of and for the periods ended August 31,
2003.
Such financial statements, together with and subject to the disclosures and
notes thereto: (i) are in accordance with the books and records of the
Corporation; (i) present fairly and accurately the financial condition of the
Corporation as of the dates of the balance sheets; (iii) present fairly and
accurately the results of operations for the periods covered by such statements;
(iv) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis; and (v) include all adjustments
(consisting of only normal recurring accruals) which are necessary for a fair
presentation of the financial condition of the Corporation, and of the results
of operations of the Corporation for the periods covered by such statements.
6.7 FINANCIAL INFORMATION. In connection with the investigations
performed by and audit to be undertaken by Oban of Ikona, Ikona furnished
certain financial information and data including, without limitation, tax and
accounting records, financial records, statements, worksheets and other
information requested by Ikona and its auditors necessary to undertake the
complete the audited financial examinations. Ikona represents and warrants that
any and all such information furnished in connection with the conduct of such
investigations and audits shall be true, accurate and complete in all material
respects and shall not contain any material misstatements nor any material
omissions of fact or information respecting the financial condition or results
of operation of the business for the respective periods covered by the audits.
6.8 CAPITALIZATION OF THE CORPORATION. The authorized capital stock of
Ikona consists of 100,000,000 shares of Common Stock, $.00001 par value per
share, of which 12,033,306 shares are issued and outstanding. The names of one
hundred percent (100%) of the record owners of the issued and outstanding Common
Stock are set forth on Exhibit 6.8 hereto. All issued and outstanding shares of
Ikona Common Stock have been duly authorized and validly issued and are fully
paid and non-assessable. All issued and outstanding shares of Ikona have been
issued and transferred in compliance with all law, rules and regulations
regarding the issuance, distribution and trading of shares and securities in
each jurisdiction that Ikona has issued and/or distributed its shares or any of
its shareholders has traded its shares since inception. There are no other
outstanding rights, options, warrants, subscriptions, calls, convertible
securities or agreement of any character or nature under which the Corporation
is or may become obligated to issue any shares of its capital stock of any kind,
other than those shares indicated in this Section as presently outstanding.
There are no voting trusts, stockholder agreements, or other voting arrangements
to which the Corporation is a party or, to the Best Knowledge of the
Corporation, to which any of the Corporation's stockholders is a party or bound.
6.9 TAXES.
(a) The Corporation has filed (or has obtained extensions for
filing) all income, excise, sales, corporate franchise, property, payroll and
other tax returns or reports required to be filed by it, as of the date hereof
by the United States of America, any state or other political subdivision
thereof or any foreign country and has paid all Taxes or assessments relating to
the time periods covered by such returns or reports; and
(b) The Corporation has paid all tax liabilities imposed or
assessed by any governmental authority for all periods prior to the Closing Date
for which such taxes have become due and payable and has received no notice from
any such governmental authority of any deficiency or delinquency with respect to
such obligation. The Corporation is not currently undergoing any audit
conducted by any taxing authority and has received no notice of audit covering
any prior period for which taxes have been paid or are or will be due and
payable prior to the Closing Date. There are no present disputes as to taxes of
any nature payable by the Corporation.
6.10 NO ACTIONS, PROCEEDINGS, ETC. There is no action or proceeding
(whether or not purportedly on behalf of the Corporation) pending or to its
knowledge threatened by or against the Corporation which might result in any
material adverse change in the condition, financial or otherwise, of the
Corporation's business or assets. No order, writ or injunction or decree has
been issued by, or requested of any court or Governmental Agency which does, nor
may result in, any material adverse change in the
Corporation's assets or properties or in the financial condition or the business
of the Corporation. Except for liabilities referred to in attached Exhibit 6.9,
the Corporation is not liable for damages to any employee or former employee as
a result of any violation of any state, federal or foreign laws directly or
indirectly relating to such employee or former employee.
6.11 POST BALANCE SHEET CHANGES. Except as contemplated by this
Agreement, since August 31, 2003, the Corporation has not (a) issued, bought,
redeemed or entered into any agreements, commitments or obligations to sell, buy
or redeem any shares of its capital stock; (b) incurred any obligation or
liability (absolute or contingent), other than current liabilities incurred, and
obligations under contracts entered into, in the ordinary course of business;
(c) discharged or satisfied any lien or encumbrance or paid any obligation or
liability (absolute or contingent), other than current liabilities incurred in
the ordinary course of business; (d) mortgaged, pledged or subjected to lien
charges, or other encumbrance any of its assets, other than the lien of current
or real property taxes not yet due and payable; (e) waived any rights of
substantial value, whether or not in the ordinary course of business; (f)
suffered any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting its assets or its business; (g) made or
suffered any amendment or termination of any material contract or any agreement
which adversely affects its business; (h) received notice or had knowledge of
any labor trouble other than routine grievance matters, none of which is
material; (i) increased the salaries or other compensation of any of its
directors, officers or employees or made any increase in other benefits to which
employees may be entitled, other than employee salary increases made in the
ordinary course of business and reflected on an exhibit hereto; (j) sold,
transferred or otherwise disposed of any of its assets, other than in the
ordinary course of business; (k) declared or made any distribution or payments
to any of its shareholders, officers or employees, other than wages and salaries
made to employees in the ordinary course of business; (l) revalued any of its
assets; or (m) entered into any transactions not in the ordinary course of
business save and except for entering into a loan agreement with Oban.
6.12 NO BREACHES. The Corporation is not in violation of, and the
consummation of the transactions contemplated hereby do not and will not result
in any material breach of, any of the terms or conditions of any mortgage, bond,
indenture, agreement, contract, license or other instrument or obligation to
which the Corporation is a party or by which its assets are bound; nor will the
consummation of the transactions contemplated hereby cause Ikona to violate any
statute, regulation, judgment, writ, injunction or decree of any court,
threatened or entered in a proceeding or action in which the Corporation is, was
or may be bound or to which any of the Corporation's assets are subject.
6.13 CONDITION OF THE CORPORATION'S ASSETS. Except as set forth on
Exhibit 6.13, Ikona's assets are currently in good and usable condition and
there are no defects or other conditions which, in the aggregate, materially and
adversely affect the operation or values of such assets taken as a whole.
Except as disclosed on Exhibit 6.13, no person other than Ikona (including any
officer or employee of the Corporation) has any proprietary interest in any
know-how or other intangible assets used by the Corporation in the conduct of
its business. The Company does not currently market any products for sale.
6.14 CORPORATE ACTS AND PROCEEDINGS. This Agreement has been duly
authorized by all necessary corporate action on behalf of Ikona, has been duly
executed and delivered by an authorized officer of Ikona, and is a valid and
binding Agreement on the part of Ikona that is enforceable against Ikona in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, fraudulent transfers, reorganization or
other similar laws affecting the enforcement of
creditors' rights generally and to judicial limitations on the enforcement of
the remedy of specific performance and other equitable remedies.
6.15 REGISTERED RIGHTS AND PROPRIETARY INFORMATION.
(a) Exhibit 6.15 hereto contains a true and complete list of all
patents, letters patent and patent applications, service marks, trademark and
service xxxx registrations and applications, copyright, copyright registrations
and applications, grants of licenses and rights to the Corporation with respect
to the foregoing, both domestic and foreign, claimed by the Corporation or used
or proposed to be used by the Corporation in the conduct of its business
(collectively herein, "Ikona Registered Rights"). Exhibit 6.15 hereto also
contains a true and complete list of all and every trade secret, know-how,
process, formula, discovery, development, research, design, technique, customer
and supplier list, contracts, product development plans, product development
concepts, author contracts, marketing and purchasing strategy, invention, and
any other matter required for, incident to, or related to the conduct of its
business (hereafter collectively the "Ikona Proprietary Information"). Except
as described in Exhibit 6.15 hereto, the Corporation is not obligated or under
any liability whatever to make any payments by way of royalties, fees or
otherwise to any owner or licensor of, or other claimant to, any Ikona
Registered Right or Ikona Proprietary Information with respect to the use
thereof in the conduct of its business or otherwise.
(b) Except as described in Exhibit 6.15 hereto, to the
Corporation's Best Knowledge, the Corporation owns and has the unrestricted
right to use the Ikona Registered Rights and Ikona Proprietary Information
required for or incident to the design, development, manufacture, operation,
sale and use of all products and services sold or rendered or proposed to be
sold or rendered by the Corporation or relating to the conduct or proposed
conduct of its business free and clear of any right, title, interest, equity or
claim of others. As soon as practicable following the execution of this
Agreement, and except as described in Exhibit 6.15 hereto, the Corporation
agrees to take all necessary steps (including without limitation entering into
appropriate confidentiality, assignment of rights and non-competition agreements
with all officers, directors, employees and consultants of the Corporation and
others with access to or knowledge of the Ikona Proprietary Information) to
safeguard and maintain the secrecy and confidentiality of, and its proprietary
rights in, the Ikona Proprietary Information and all related documentation and
intellectual property rights therein necessary for the conduct or proposed
conduct of its business.
(c) Except as described in Exhibit 6.15 hereto, the Corporation
has not sold, transferred, assigned, licensed or subjected to any right, lien,
encumbrance or claim of others, any Ikona Proprietary Information, including
without limitation any Ikona Registered Right, or any interest therein, related
to or required for the design, development, manufacture, operation, sale or use
of any product or service currently under development or manufactured, or
proposed to be developed, sold or manufactured, by it. Exhibit 6.15 contains a
true and complete list and description of all licenses of Ikona Proprietary
Information granted to the Corporation by others or to others by the
Corporation. Except as described in Exhibit 6.15 hereto, there are no claims or
demands of any person pertaining to, or any proceedings that are pending or
threatened, which challenge the rights of the Corporation in respect of any
Ikona Proprietary Information used in the conduct of its business.
(d) Except as described in Exhibit 6.15 hereto, the Corporation
owns and on the Closing Date shall own, has and shall have, holds and shall
hold, exclusively all right, title and interest in the Ikona Registered Rights,
free and clear of all liens, encumbrances, restrictions, claims and equities of
any kind
whatsoever, has and shall have the exclusive right to use, sell, license or
dispose of, and has and shall have the exclusive right to bring action for the
infringement of the Ikona Registered Rights and the Ikona Proprietary
Information. To the Best Knowledge of Corporation, the marketing, promotion,
distribution or sale by the Corporation of any products or interests subject to
the Ikona Registered Rights or making use of Ikona Proprietary Information shall
not constitute an infringement of any patent, copyright, trademark, service xxxx
or misappropriation or violation of any other party's proprietary rights or a
violation of any license or agreement by the Corporation. Except as described in
Exhibit 6.16 hereto, to the knowledge of the Corporation after due inquiry no
facts or circumstances exist that could result in the invalidation of any of the
Ikona Registered Rights.
6.16 NO LIENS OR ENCUMBRANCES. The Corporation has good and marketable
title to all of the property and assets, tangible and intangible, employed in
the operations of its business, free of any material mortgages, security
interests, pledges, easements or encumbrances of any kind whatsoever and except
for such property and assets as may be leased by Ikona.
6.17 EMPLOYEE MATTERS. The Corporation has no salaried employees. The
Corporation has no employee benefit plans (including, but not limited to,
pension plans and health or welfare plans), arrangements or understandings,
whether formal or informal. The Corporation does not now and has never
contributed to a "multi-employer plan" as defined in Section 400(a)(3) of the
ERISA. The Corporation has complied with all applicable provisions of ERISA and
all rules and regulations promulgated thereunder, and neither the Corporation
nor any trustee, administrator, fiduciary, agent or employee thereof has at any
time been involved in a transaction that would constitute a "prohibited
transaction" within the meaning of Section 406 of ERISA as to any covered plan
of the Corporation. The Corporation is not a party to any collective bargaining
or other union agreement. The Corporation has not, within the past five (5)
years had, or been threatened with, any union activities, work stoppages or
other labor trouble with respect to its employees which had a material adverse
effect on the Corporation, its business or assets. The Corporation has not made
any commitment or agreements to increase the wages or modify the conditions or
terms of employment of any of the employees of the Corporation used in
connection with its business, and between the date of this Agreement and the
Closing Date, the Corporation will not make any agreement to increase the wages
or modify the conditions or terms of employment of any of the employees of the
Corporation used in the conduct of its business, without the prior written
consent of all parties hereto.
6.18 LEGAL PROCEEDINGS AND COMPLIANCE WITH LAW. Ikona has not
received notice of any legal, administrative, arbitration or other proceeding or
governmental investigation pending or threatened (including those relating to
the health, safety, employment of labor, or protection of the environment)
pertaining to Ikona which might result in the aggregate in money damages payable
by Ikona in excess of insurance coverage or which might result in a permanent
injunction against Ikona. Ikona has substantially complied with, and is not in
default in any respect under any laws, ordinances, requirements, regulations, or
orders applicable to the business of Ikona, the violation of which might
materially and adversely affect it. Ikona is not a party to any agreement or
instrument, nor is it subject to any charter or other corporate restriction or
any judgment, order, writ, injunction, decree, rule, regulation, code or
ordinance which materially and adversely affects, or might reasonably be
expected materially and adversely to affect the business, operations, prospects,
property, assets or condition, financial or otherwise, of Ikona.
6.19 CONTRACT SCHEDULES. Attached as Exhibit 6.19 hereto is an
accurate list of the following:
(a) All contracts, leases, agreements, covenants, licenses,
instruments or commitments of Ikona pertaining to the business of Ikona calling
for the payment of Five Thousand Dollars ($5,000) or more or which is otherwise
material to the business of Ikona, including, without limitation, the following:
(i) Licenses and contracts held in the ordinary course of
business;
(ii) Executory contracts for the purchase, sale or lease of any
assets;
(iii) Management or consulting contracts;
(iv) Patent, trademark and copyright applications, registrations
or licenses, and know-how, intellectual property and trade
secret agreements or other licenses;
(v) Note agreements, loan agreements, indentures and the like,
other than those entered into and executed in the ordinary
course of business;
(vi) All sales, agency, distributorship or franchise agreements;
and
(vii) Any other contracts not in the ordinary course of business.
(b) All labor contracts, employment agreements and collective
bargaining agreements to which Ikona is a party.
(c) All instruments evidencing any liens or security interest
securing any indebtedness of Ikona covering any asset of Ikona.
(d) All profit sharing, pension, stock option, severance pay,
retirement, bonus, deferred compensation, group life and health insurance or
other employee benefit plans, agreements, arrangements or commitments of any
nature whatsoever, whether or not legally binding, and all agreements with any
present or former officer, director or shareholder of the Corporation.
(e) Any and all documents, instruments and other writings not
listed in any other schedule hereto which are material to the business
operations of Ikona.
Except as set forth in Exhibit 6.19, all of such contracts,
agreements, leases, licenses, plans, arrangements and commitments and all other
such items set forth above are valid, binding and in full force and effect in
accordance with their terms and conditions, except as the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium, fraudulent transfer,
reorganization or other similar laws affecting the enforcement of contracts
generally, and there is no existing material default thereunder or breach
thereof by the Corporation, or to Ikona's knowledge by any party to such
contracts, or any conditions which, with the passage of time or the giving of
notice or both, might constitute such a default by the Corporation or by any
other party to the contracts.
6.20 LABOR MATTERS. There are no strikes, slowdowns, stoppages,
organizational efforts, discrimination charges or other labor disputes pending
or, to the knowledge of Ikona or any of its agent or employees, threatened
against Ikona.
6.21 INSURANCE. Ikona maintains no insurance coverage on its assets
and business.
6.22 ENVIRONMENTAL. Ikona has never owned or operated any real
property except for leased office space:
(a) To the Best Knowledge of Ikona, no real property (or the
subsurface soil and the ground water thereunder) now or previously leased by
Ikona (the "Leased Premises") either contains any Hazardous Substance (as
hereinafter defined) or has underneath it any underground fuel or liquid storage
tanks;
(b) To the Best Knowledge of Ikona, there has been no generation,
transportation, storage, treatment or disposal of any Hazardous Substance on or
beneath the Leased Premises, now or in the past;
(c) Ikona is not aware of any pending or threatened litigation or
proceedings before any court or administrative agency in which any person
alleges, or threatens to allege, the presence, release, threat of release,
placement on or in the Leased Premises, or the generation, transportation,
storage, treatment or disposal at the Leased Premises, of any Hazardous
Substance;
(d) Ikona has not received any written notice and has no knowledge
that any Governmental Authority or any employee or agent thereof has determined
or alleged, or is investigating the possibility, that there is or has been any
presence, release, threat of release, placement on or in the Leased Premises, or
any generation, transportation, storage, treatment or disposal at the Leased
Premises, of any Hazardous Substance;
(e) To the Best Knowledge of Ikona, there have been no
communications or agreements with any Governmental Authority or agency (federal,
state, or local) or any private person or entity (including, without limitation,
any prior owner of the Leased Premises and any present or former occupant or
tenant of the Leased Premises) relating in any way to the presence, release,
threat of release, placement on or in the Leased Premises, or any generation,
transportation, storage, treatment or disposal at the Leased Premises, of any
Hazardous Substance. Ikona further agrees and covenants that Ikona will not
store or deposit on, otherwise release or bring onto or beneath, the Leased
Premises any Hazardous Substance prior to the Closing Date; and
(f) There is no litigation, proceeding, citizen's suit or
governmental or other investigation pending, or, to Ikona's Best Knowledge,
threatened, against Ikona, and Ikona knows of no facts or circumstances which
might give rise to any future litigation, proceeding, citizen's suit or
governmental or other investigation, which relate to Ikona's compliance with
environmental laws, regulations, rules, guidelines and ordinances.
For purposes of this Section 6.22, "Hazardous Substance" shall mean
and include (i) a hazardous substance as defined in 42 U.S.C. Section 9601(14),
the Regulations at 40 C.F.R. Part 302,
(2) any substance regulated under the Emergency Planning and Community Right to
Know Act (including without limitation any extremely hazardous substances listed
at 40 C.F.R. Part 355 and any toxic chemical listed at 40 C.F.R. Part 372),
(iii) hazardous wastes and hazardous substances as specified under any
California state or local Governmental Requirement governing water pollution,
groundwater protection, air pollution, solid wastes, hazardous wastes, spills
and other releases of toxic or hazardous substances, transportation of hazardous
substances, materials and wastes and occupational or employee health and safety,
and (iv) any other material, gas or substance known or suspected to be toxic or
hazardous (including, without limitation, any radioactive substance, methane
gas, volatile hydrocarbon, industrial solvent, and asbestos) or which could
cause a material detriment to, or materially impair the beneficial use of, the
Leased Premises, or constitute a material health, safety or environmental risk
to any person exposed thereto or in contact therewith. For purposes of this
Section 6.22, "Hazardous Substance" shall not mean and shall not include the
following, to the extent used normally and required for everyday uses or normal
housekeeping or maintenance: (a) fuel oil and natural gas for heating, (b)
lubricating, cleaning, coolant and other compounds customarily used in building
maintenance, (c) materials routinely used in the day-to-day operations of an
office, such as copier toner, (d) consumer products, (e) material reasonably
necessary and customarily used in construction and repair of an office project,
and (f) fertilizers, pesticides and herbicides commonly used for routine office
landscaping.
6.23 DISCLOSURE OF INFORMATION. The Corporation represents and
warrants that all statements, data and other written information provided by it
to any party hereto as well as their respective consultants and representatives
have been accurate copies or true originals. The Corporation represents and
warrants that, to its Best Knowledge, (i) there exists no material information
concerning the Corporation which has been requested but not been disclosed to or
made available to the other parties and their representatives or consultants and
which would be material to a decision to consummate the transactions provided
for in this Agreement and (ii) in the aggregate, such information does not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made in them, in light of the
circumstances under which they are made, not misleading.
6.23 ABSENCE OF QUESTIONABLE PAYMENTS. To the Best Knowledge of
Ikona, neither Ikona, nor any director, officer, agent, employee or other person
acting on any its behalf has (i) used any corporate or other funds for unlawful
contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others or
established or maintained any unlawful or unrecorded funds in violation of
Section 30A of the Exchange Act or any other applicable foreign, federal or
state law; or (ii) accepted or received any unlawful contributions, payments,
expenditures or gifts.
6.24 REPRESENTATION AND WARRANTIES. The representations and warranties
contained in this Agreement shall be true on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date. Such representations and warranties shall
survive the Closing Date and shall remain operative in full force and effect for
the period of three years from the date of Closing regardless of any
investigation at any time made by or on behalf of Oban and shall not be deemed
merged in any document or instruction so executed and/or delivered by Ikona or
Shareholders.
SECTION 7: COVENANTS OF IKONA
7.1 PRESERVATION OF BUSINESS. Until Closing, Ikona shall use its best
efforts to cause Ikona to:
(a) Preserve intact the present business organization of Ikona;
(b) Maintain its property and assets in its present state of repair,
order and condition, reasonable wear and tear excepted;
(c) Preserve and protect the goodwill and advantageous relationships
of Ikona with its customers and all other persons having business dealings
with Ikona;
(d) Preserve and maintain in force all licenses, permits,
registrations, franchises, patents, trademarks, tradenames, trade secrets,
service marks, copyrights, bonds and other similar rights of Ikona; and
(e) Comply with all laws applicable to the conduct of its business
7.2 ORDINARY COURSE. Until Closing, Ikona shall conduct its business
only in the usual, regular and ordinary course, in substantially the same manner
as previously, and shall not make any substantial change to its methods of
management or operation in respect of such business or property. Without
limiting the foregoing, Ikona shall not, with respect to Ikona:
(a) Sell, mortgage, pledge or encumber or agree to sell, mortgage,
pledge or encumber, any of its property or assets, other than in the ordinary
course of business;
(b) Incur any obligation (contingent or otherwise) or purchase,
acquire, transfer, or convey, any material assets or property or enter into any
contract or commitment, except in the ordinary course of business.
7.3 NEGATIVE COVENANTS. Until Closing, except as contemplated by this
Agreement or disclosed in exhibits to this Agreement, from the date hereof until
the Closing Date, unless and until Oban otherwise consents in writing, which
consent shall not be unreasonably withheld, Ikona will not (a) change or alter
the physical contents or character of the tangible and intangible assets so as
to materially affect the nature of Ikona's business; (b) incur any obligations
or liabilities (absolute or contingent) other than current liabilities incurred
and obligations under contracts entered into in the ordinary course of business;
(c) mortgage, pledge or voluntarily subject to lien, charge or other encumbrance
any assets, tangible or intangible, other than the lien of current property
taxes not due and payable; (d) sell, assign or transfer any of its assets or
cancel any debts or claims, other than in the ordinary course of business; (e)
waive any right of any substantial value; (f) declare or make any payment or
distribution to Shareholders or issue, purchase or redeem any shares of its
capital stock or other equity securities or issue or sell any rights to acquire
the same, or effect any stock split or recapitalization or reorganization; (g)
grant any increase in the salary or other compensation of any of its directors,
officers, or employees or make any increase in any benefits to which such
employees might be entitled; (h) institute any bonus, benefit, profit sharing,
stock option, pension, retirement plan or similar arrangement, or make any
changes in any such plans or arrangements
presently existing; or (i) enter into any material transactions or series of
transactions other than in the ordinary course of business.
7.4 ADDITIONAL COVENANTS.
(a) Ikona will promptly pay and discharge, or cause to be paid and
discharged, when due and payable, all lawful taxes, assessments, and
governmental charges or levies imposed upon the income, profits, property or
business of Ikona or any subsidiary; provided, however, that any such tax,
-------- -------
assessment, charge or levy need not be paid if the validity thereof shall
currently be contested in good faith by appropriate proceedings and if Ikona
shall have set aside on its books adequate reserves therefor; and provided,
--------
further, that Ikona will pay all such taxes, assessments, charges or levies
-------
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor. Ikona will promptly pay or cause to be paid
when due, or in conformance with customary trade terms, all other indebtedness
incident to the operations of Ikona;
(b) Ikona will keep its properties and those of its subsidiaries
in good repair, working order and condition, reasonable wear and tear excepted,
and from time to time make all needful and proper repairs, renewals,
replacements, additions and improvements thereto; and Ikona will at all times
comply with the provisions of all material leases to which any of them is a
party or under which any of them occupies property so as to prevent any loss or
forfeiture thereof or thereunder;
(c) Ikona will keep its assets that are of an insurable character
insured by financially sound and reputable insurers against loss or damage by
fire, extended coverage and explosion insurance in amounts customary for
companies in similar businesses similarly situated; and immediately following
the Closing, Ikona will maintain, with financially sound and reputable insurers,
insurance against other hazards, risks and liabilities to persons and property
to the extent and in the manner customary for companies in similar businesses
similarly situated;
(d) Ikona will keep true records and books of account in which
full, true and correct entries will be made of all dealings or transactions in
relation to its business and affairs in accordance with its past practices
consistently applied;
(e) Ikona will comply with the requirements of all applicable
laws, rules, regulations and orders of any governmental authority, a breach of
which could have a material adverse effect on its business or credit;
(f) Ikona shall maintain in full force and effect its corporate
existence, rights and franchises and all licenses and other rights to use
patents, processes, licenses, trademarks, trade names or copyrights owned or
possessed by it or any subsidiary and deemed by Ikona to be necessary to the
conduct of its business;
(g) Ikona will, consistent with its practices in the ordinary
course of business, endeavor to retain its business relationships with its
customers and suppliers that it believes to be advantageous; and
(h) Ikona shall deliver to Oban copies of its statements of
operation and financial condition and similar statements as and when prepared
(if at all) in the ordinary course of its business.
7.5 ACCESS TO BOOKS AND RECORDS, PREMISES, ETC. From the date of this
Agreement through the Closing Date, Ikona will grant Oban and its authorized
representatives reasonable access to its books and records, premises, products,
employees and customers and other parties with whom it has contractual relations
during reasonable business hours and in a manner not to disrupt or interfere
with Ikona's business relationships for purposes of enabling Oban to fully
investigate the business of Ikona. Ikona will also deliver copies of its
monthly statements of operations and financial condition for the period
subsequent to its financial statements referred to in Section 6.6 to Oban within
a reasonable time of such statements becoming available.
7.6 COMPENSATION. Except as contemplated by this Agreement, Ikona
shall not enter into or agree to enter into any employment contract or agreement
for consulting, professional, or other services which will adversely and
materially affect the operation of Ikona prior to the Closing Date, except for
any extensions of said contracts or agreements on substantially the same terms
and conditions as were previously in effect.
7.7 NO SOLICITATION.
(a) Except in connection with the transactions contemplated by
this Agreement, Ikona shall not, nor shall it permit any of its subsidiaries to,
nor shall it authorize or permit any officer, director or employee of or any
investment banker, attorney or other advisor or representative of, Ikona or any
of its subsidiaries to, (i) solicit, initiate or encourage the submission of,
any takeover proposal, (ii) enter into any agreement with respect to any
takeover proposal or (iii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any takeover proposal.
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any executive officer of
Ikona or any of its subsidiaries or any investment banker, attorney or other
advisor or representatives of Ikona or any of its subsidiaries or otherwise,
shall be deemed to be a breach of this Section by Ikona. For purposes of this
Agreement, "takeover proposal" means any proposal for a merger, consolidation or
reorganization or other business combination involving Ikona or any of its
subsidiaries or any proposal or offer to acquire in any manner, directly or
indirectly, an equity interest in, any voting securities of, or options, rights,
warrants or other interests convertible or exercisable for or into such voting
securities, or a substantial or material portion of the assets or business of
Ikona or any of its subsidiaries, other than the transactions contemplated by
this Agreement.
(b) Except upon a material breach of this Agreement by Oban or
following termination hereof and except for action permitted or contemplated by
this Agreement, including a party's right to terminate this Agreement under
certain circumstances, neither the Board of Directors of Ikona nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Oban, the approval or recommendation by such Board of
Directors of any such committee of this Agreement or the Exchange or (ii)
approve or recommend, or propose to approve or recommend, any takeover proposal.
(c) Ikona promptly shall advise Oban orally and in writing of any
takeover proposal or any inquiry with respect to or which could lead to any
takeover proposal and the identity of the person
making any such takeover proposal or inquiry. Ikona will keep Oban fully
informed of the status and details of any such takeover proposal or inquiry.
SECTION 8: REPRESENTATIONS AND WARRANTIES OF OBAN
As a material inducement to Ikona to enter into this Agreement and with the
understanding and expectations that Ikona will be relying thereon in
consummating the Exchange contemplated hereunder, Oban and each of its
subsidiaries (hereinafter Oban and its subsidiaries shall be referred to as the
"Corporation" unless the context otherwise requires for the purposes of this
Section 8 only) hereby represents and warrants as follows:
8.1 ORGANIZATION AND STANDING. The Corporation is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Nevada, and has all requisite corporate power and authority to own its assets
and properties and to carry on its business as it is now being conducted.
8.2 SUBSIDIARIES, ETC. Except as set forth in the SEC Documents, the
Corporation does not have any direct or indirect Ownership Interest in any
corporation, partnership, joint venture, association or other business
enterprise.
8.3 QUALIFICATION. Except as set forth in the SEC Documents and for
any jurisdiction where the failure to be qualified to engage in business as a
foreign corporation would not have a material adverse effect on the corporation,
the Corporation is not qualified to engage in business as a foreign corporation
in any state, and there is no other jurisdiction wherein the character of the
properties presently owned by the Corporation or the nature of the activities
presently conducted by the Corporation makes necessary the qualification,
licensing or domestication of the Corporation as a foreign corporation.
8.4 CORPORATE AUTHORITY. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby nor
compliance by Oban with any on the provisions hereof will:
(a) Conflict with or result in a breach of any provision of its
Articles of Incorporation or By-Laws or similar documents of any Subsidiary;
(b) Result in a default (or give rise to any right of termination,
cancellation, or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, agreement or other instrument
or obligation to which the Corporation is a party, or by which any of its
properties or assets may be bound except for such default (or right of
termination, cancellation, or acceleration) as to which requisite waivers or
consents shall either have been obtained by the Corporation prior to the Closing
Date or the obtaining of which shall have been waived by Ikona; or
(c) Violate any order, writ, injunction, decree or, to the
Corporation's Best Knowledge, any statute, rule or regulation applicable to the
Corporation or any of its properties or assets. No consent or
approval by any Governmental Authority is required in connection with the
execution and delivery by the Corporation of this Agreement or the consummation
by the Corporation of the transactions contemplated hereby, except for possible
notice under plant closing laws.
8.5 CORPORATE DOCUMENTS. The corporate records and minute books of
Oban accurately reflect all material proceedings of its directors and
shareholders, and include complete and accurate minutes of all meetings of its
directors and shareholders, copies of all resolutions passed, up-to-date and
accurate shareholder and director registers, transfer registers and any other
corporate registers required to be maintained by Oban. All meetings of
shareholders and directors were duly called and held and all resolutions,
whether passed at meetings, or in writing, are valid and effectual in all cases
where the xxxxxx dealt with at such meetings or in such resolutions could have a
material effect on Oban.
8.6 SEC DOCUMENTS; FINANCIAL STATEMENTS. The Common Stock of Oban is
registered pursuant to Section 12(g) of the Exchange Act. Ikona has had the
opportunity to obtain on Ikona's behalf true and complete copies of the SEC
Documents (except for exhibits and incorporated documents). Oban has not
provided to Ikona any information which, according to applicable law, rule or
regulation, should have been disclosed publicly by Oban but which has not been
so disclosed, other than with respect to the transactions contemplated by this
Agreement.
As of their respective dates, all of Oban's reports, statements and other
filings with the Commission (the "SEC Documents") complied in all material
respects with the requirements of the Act or the Exchange Act as the case may be
and the rules and regulations of the Commission promulgated thereunder and other
federal, state and local laws, rules and regulations applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Oban included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the Commission or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements) and fairly present in all material
respects the financial position of Company as of the dates thereof and the
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments).
8.7 CAPITALIZATION OF THE CORPORATION. The authorized capital stock of
Oban consists entirely of 100,000,000 shares of Common Stock having a par value
of $00001 per share, and no shares of Preferred Stock. As of August 31, 2003,
there were a total of 21,000,000 shares of Common Stock issued and outstanding
and no shares of Preferred Stock issued and outstanding. As of the Closing Date,
after giving effect to the surrender for cancellation by Achron of 14.5 million
shares as provided for in Section 4.3 of this Agreement and to the issuance of
up to 400,000 shares of Common Stock pursuant to a proposed private placement,
there will be no more than 6,900,000 shares of Common Stock and no shares of
Preferred Stock issued and outstanding. All outstanding shares of Oban's
capital stock have been or will be in the case of the proposed private placement
validly issued, are fully paid and non-assessable, and are not subject to
pre-emptive rights. All issued and outstanding shares of Oban have been issued
and
transferred in compliance with all law, rules and regulations regarding the
issuance, distribution and trading of shares and securities in each jurisdiction
that Oban has issued and/or distributed its shares or any of its shareholders
has traded its shares since inception. The issuance of the shares of Oban Common
Stock to be issued to the Shareholders on the Closing Date in accordance with
Sections 2.1 hereof have been duly approved by the Directors of Oban and will,
upon their issuance, have been validly issued and will be fully paid and
non-assessable, free of any liens, encumbrances and claims of any kind and
nature except restrictions against transferability without compliance with
applicable federal, state and provincial securities laws. Except as described in
Oban's SEC Documents, there are no equity securities of Oban authorized, issued
or outstanding, and there are no authorized, issued or outstanding
subscriptions, options, warrants, contracts, calls, commitments or other
purchase rights of any nature or character relating to any of Oban's capital
stock, equity securities, debt or other securities convertible into stock or
equity securities of Oban. As of the date of this Agreement, there are no
outstanding contractual obligations of Oban to repurchase, redeem or otherwise
acquire any shares of capital stock of Oban. There are no voting trusts,
stockholder agreements or other voting arrangements to which the Corporation is
a party or, to the Best Knowledge of Oban, to which any of the Oban stockholders
is a party or bound.
8.8 NO ACTIONS, PROCEEDINGS, ETC. Except as described in the SEC
Documents, there is no action or proceeding (whether or not purportedly on
behalf of the Corporation) pending or to its knowledge threatened by or against
the Corporation, which might result in any material adverse change in the
condition, financial or otherwise, of the Corporation's business or assets. No
order, writ or injunction or decree has been issued by, or requested of any
court or Governmental Agency which does nor may result in any material adverse
change in the Corporation's assets or properties or in the financial condition
or the business of the Corporation. The Corporation is not liable for damages to
any employee or former employee as a result of any violation of any state,
federal or foreign laws directly or indirectly relating to such employee or
former employee.
8.9 TAXES. Except as set forth in the SEC Documents:
(a) The Corporation has filed (or has obtained extensions for
filing) all income, excise, sales, corporate franchise, property, payroll and
other tax returns or reports required to be filed by it, as of the date hereof
by the United States of America, any state or other political subdivision
thereof or any foreign country and has paid all Taxes or assessments relating to
the time periods covered by such returns or reports; and
(b) The Corporation has paid all tax liabilities imposed or
assessed by any governmental authority for all periods prior to the Closing Date
for which such taxes have become due and payable and has received no notice from
any such governmental authority of any deficiency or delinquency with respect to
such obligation. The Corporation is not currently undergoing any audit
conducted by any taxing authority and has received no notice of audit covering
any prior period for which taxes have been paid or are or will be due and
payable prior to the Closing Date. There are no present disputes as to taxes of
any nature payable by the Corporation.
8.10 POST BALANCE SHEET CHANGES. Except for the issuance of up to
400,000 shares of common stock at a price of $.50 per share in a private
placement or as contemplated by this Agreement, since the date of the latest SEC
Documents, the Corporation has not (a) issued, bought, redeemed or
entered into any agreements, commitments or obligations to sell, buy or redeem
any shares of its capital stock, including but not limited to any options or
warrants to purchase any securities of the Corporation or any securities
convertible into capital stock of the Corporation; (b) suffered any damage,
destruction or loss, whether or not covered by insurance, materially and
adversely affecting its assets or its business; (c) made or suffered any
amendment or termination of any material contract or any agreement which
adversely affects its business; (d) received notice or had knowledge of any
labor trouble other than routine grievance matters, none of which is material;
(e) increased the salaries or other compensation of any of its directors,
officers or employees or made any increase in other benefits to which employees
may be entitled; (f) sold, transferred or otherwise disposed of any of its
assets, other than in the ordinary course of business; (g) declared or made any
distribution or payments to any of its shareholders, officers or employees,
other than wages and salaries made to employees in the ordinary course of
business; (h) revalued any of its assets; or (i) entered into any transactions
not in the ordinary course of business.
8.11 NO BREACHES. Except as set forth in the SEC Documents, the
Corporation is not in violation of, and the consummation of the transactions
contemplated hereby do not and will not result in any material breach of, any of
the terms or conditions of any mortgage, bond, indenture, agreement, contract,
license or other instrument or obligation to which the Corporation is a party or
by which its assets are bound; nor will the consummation of the transactions
contemplated hereby cause Oban or any Subsidiary to violate any statute,
regulation, judgment, writ, injunction or decree of any court, threatened or
entered in a proceeding or action in which the Corporation is, was or may be
bound or to which any of the Corporation's assets are subject.
8.12 CORPORATE ACTS AND PROCEEDINGS. This Agreement has been duly
authorized by all necessary corporate action on behalf of Oban, has been duly
executed and delivered by authorized officers of Oban, and is a valid and
binding Agreement on the part of Oban that is enforceable against Oban in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, fraudulent transfers, reorganization or
other similar laws affecting the enforcement of creditors' rights generally and
to judicial limitations on the enforcement of the remedy of specific performance
and other equitable remedies. All corporate action necessary to issue and
deliver to the Ikona Shareholders the Exchange Shares (each as described in
Sections 2.1 and 2.3) has been taken by Oban.
8.13 NO LIENS OR ENCUMBRANCES. The Corporation has good and marketable
title to all of the property and assets, tangible and intangible, employed in
the operations of its business, free of any material mortgages, security
interests, pledges, easements or encumbrances of any kind whatsoever and except
for such property and assets as may be leased by Corporation.
8.14 EMPLOYEE MATTERS. The Corporation does not currently have nor has
it ever had any employees, paid, or undertaken or commited to pay any wages,
salaries or fringe benefits to any Person. Except as specifically described in
the SEC Documents, Oban has no employee benefit plans (including, but not
limited to, pension plans and health or welfare plans), arrangements or
understandings, whether formal or informal. The Corporation does not now and
has never contributed to a "multi-employer plan" as defined in Section 400(a)(3)
of the ERISA. The Corporation has complied with all applicable provisions of
ERISA and all rules and regulations promulgated thereunder, and neither the
Corporation nor any trustee, administrator, fiduciary, agent or employee thereof
has at any time been involved in a transaction that would constitute a
"prohibited transaction" within the meaning of Section 406 of ERISA as to any
covered plan of the Corporation. The Corporation is not a party to any
collective bargaining or other union
agreement. The Corporation has not, within the past five (5) years had, or been
threatened with, any union activities, work stoppages or other labor trouble
with respect to its employees which had a material adverse effect on the
Corporation, its business or assets. Between the date of this Agreement and the
Closing Date, the Corporation will not make any agreement to engage the services
of any employee or pay any wages or compensation without the prior written
consent of all parties hereto.
8.15 CONTRACT SCHEDULES. Except as described in the SEC Documents and
in a proposed loan agreement between the Corporation and Ikona, the Corporation
is not a party to any contracts, leases, agreements, covenants, licenses,
instruments or commitments pertaining to its business calling for the payment of
$5,000 or more or which is otherwise material to its business.
8.16 LEGAL PROCEEDINGS AND COMPLIANCE WITH LAW. Oban has not received
notice of any legal, administrative, arbitration or other proceeding or
governmental investigation pending or threatened (including those relating to
the health, safety, employment of labor, or protection of the environment)
pertaining to Oban which might result in the aggregate in money damages payable
by Oban in excess of insurance coverage or which might result in a permanent
injunction against Oban. Oban has substantially complied with, and is not in
default in any respect under any laws, ordinances, requirements, regulations, or
orders applicable to the business of Oban, the violation of which might
materially and adversely affect it. Oban is not a party to any agreement or
instrument, nor is it subject to any charter or other corporate restriction or
any judgment, order, writ, injunction, decree, rule, regulation, code or
ordinance which materially and adversely affects, or might reasonably be
expected materially and adversely to affect the business, operations, prospects,
property, assets or condition, financial or otherwise, of Oban.
8.17 INSURANCE. Oban maintains no insurance coverage on its assets and
business.
8.18 ENVIRONMENTAL. Except as disclosed in the SEC Documents:
(a) To the Best Knowledge of Oban, no real property (or the
subsurface soil and the ground water thereunder) now or previously leased,
occupied or operated by Oban(the "Property") either contains any Hazardous
Substance (as hereinafter defined) or has underneath it any underground fuel or
liquid storage tanks;
(b) To the Best Knowledge of Oban, there has been no generation,
transportation, storage, treatment or disposal of any Hazardous Substance on or
beneath the Property, now or in the past;
(c) Oban is not aware of any pending or threatened litigation or
proceedings before any court or administrative agency in which any person
alleges, or threatens to allege, the presence, release, threat of release,
placement on or in the Property, or the generation, transportation, storage,
treatment or disposal at the Property, of any Hazardous Substance;
(d) Oban has not received any written notice and has no knowledge
that any Governmental Authority or any employee or agent thereof has determined
or alleged, or is investigating the possibility, that there is or has been any
presence, release, threat of release, placement on or in the Property, or any
generation, transportation, storage, treatment or disposal at the Property, of
any Hazardous Substance;
(e) To the Best Knowledge of Oban, there have been no
communications or agreements with any Governmental Authority or agency (federal,
state, or local) or any private person or entity (including, without limitation,
any prior owner of the Property and any present or former occupant or tenant of
the Property) relating in any way to the presence, release, threat of release,
placement on or in the Property, or any generation, transportation, storage,
treatment or disposal at the Property, of any Hazardous Substance. Ikona
further agrees and covenants that Oban will not store or deposit on, otherwise
release or bring onto or beneath, the Property any Hazardous Substance prior to
the Closing Date; and
(f) There is no litigation, proceeding, citizen's suit or
governmental or other investigation pending, or, to Oban's Best Knowledge,
threatened, against Oban, and Oban knows of no facts or circumstances which
might give rise to any future litigation, proceeding, citizen's suit or
governmental or other investigation, which relate to Oban's compliance with
environmental laws, regulations, rules, guidelines and ordinances.
For purposes of this Section 8.18, "Hazardous Substance" shall mean and
include (i) a hazardous substance as defined in 42 U.S.C. Section 9601(14), the
Regulations at 40 C.F.R. Part 302, (2) any substance regulated under the
Emergency Planning and Community Right to Know Act (including without limitation
any extremely hazardous substances listed at 40 C.F.R. Part 355 and any toxic
chemical listed at 40 C.F.R. Part 372), (iii) hazardous wastes and hazardous
substances as specified under any state or local Governmental Requirement
governing water pollution, groundwater protection, air pollution, solid wastes,
hazardous wastes, spills and other releases of toxic or hazardous substances,
transportation of hazardous substances, materials and wastes and occupational or
employee health and safety, and (iv) any other material, gas or substance known
or suspected to be toxic or hazardous (including, without limitation, any
radioactive substance, methane gas, volatile hydrocarbon, industrial solvent,
and asbestos) or which could cause a material detriment to, or materially impair
the beneficial use of, the Leased Premises, or constitute a material health,
safety or environmental risk to any person exposed thereto or in contact
therewith. For purposes of this Section 8.18, "Hazardous Substance" shall not
mean and shall not include the following, to the extent used normally and
required for everyday uses or normal housekeeping or maintenance: (a) fuel oil
and natural gas for heating, (b) lubricating, cleaning, coolant and other
compounds customarily used in building maintenance, (c) materials routinely used
in the day-to-day operations of an office, such as copier toner, (d) consumer
products, (e) material reasonably necessary and customarily used in construction
and repair of an office project, and (f) fertilizers, pesticides and herbicides
commonly used for routine office landscaping.
8.19 DISCLOSURE OF INFORMATION. Oban represents and warrants that all
statements, data and other written information provided by it to any party
hereto as well as their respective consultants and representatives have been
accurate copies or true originals. Oban represents and warrants that, to its
Best Knowledge, (i) there exists no material information concerning Oban which
has been requested but not been disclosed to or made available to the other
parties and their representatives or consultants and which would be material to
a decision to consummate the transactions provided for in this Agreement and
(ii) in the aggregate, such information does not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements made in them, in light of the circumstances under which they are
made, not misleading.
8.20 ABSENCE OF QUESTIONABLE PAYMENTS. To the Best Knowledge of the
Corporation, neither the Corporation, nor any director, officer, agent, employee
or other person acting on any its behalf
has (i) used any corporate or other funds for unlawful contributions, payments,
gifts or entertainment, or made any unlawful expenditures relating to political
activity to government officials or others or established or maintained any
unlawful or unrecorded funds in violation of Section 30A of the Exchange Act or
any other applicable foreign, federal or state law; or (ii) accepted or received
any unlawful contributions, payments, expenditures or gifts.
8.21 REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in this Agreement shall be true on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date. Such representations and warranties shall
survive the Closing Date and shall remain operative in full force and effect for
a period of three years from the date of Closing regardless of any investigation
at any time made by or on behalf of Ikona and shall not be deemed merged in any
document or instruction so executed and/or delivered by Oban.
SECTION 9: COVENANTS OF OBAN
9.1 PRESERVATION OF BUSINESS. Until Closing, except as provided for in
this Agreement, Oban shall:
(a) Preserve intact the present business organization of the
Corporation;
(b) Prepare and file in a timely fashion all notices, reports and
other information required to be filed with the United States Securities and
Exchange Commission (the "Commission") pursuant to Section 13(a) of the Exchange
Act, and take all actions reasonable and necessary to maintain the qualification
of the Corporation's shares of common stock for quotation on the OTC Electronic
Bulletin Board;
(c) Preserve and protect the goodwill and advantageous
relationships of the Corporation with all persons having business dealings with
the Corporation;
(d) Preserve and maintain in force all licenses, permits,
registrations, franchises, patents, trademarks, tradenames, trade secrets,
service marks, copyrights, bonds and other similar rights of the Corporation;
and
9.2 ORDINARY COURSE. Until Closing, except as provided for in this
Agreement, Oban shall not, without the prior written consent of Ikona, conduct
any material business operations other than activities undertaken in connection
with this Agreement, or incur any obligation (contingent or otherwise) or enter
into any contract or commitment.
9.3 NEGATIVE COVENANTS. Until Closing, except as contemplated by this
Agreement or as disclosed in Exhibits to this Agreement, from the date hereof
until the Closing Date, unless and until Ikona otherwise consents in writing,
Oban will not (a) waive any right of any substantial value; (b) declare or make
any payment or distribution to Shareholders or issue, purchase or redeem any
shares of its capital stock or other equity securities or issue or sell any
rights to acquire the same or effect any stock split,
recapitalization, combination, or reclassification of its capital stock, or
reorganization; (c) grant any salary or other compensation of any of its
directors, officers, or employees or pay any benefits or enter into any
employment agreement or consulting agreement; (d) institute any bonus, benefit,
profit sharing, stock option, pension, retirement plan or similar arrangement,
or make any changes in any such plans or arrangements presently existing; (e)
enter into any transactions or series of transactions other than in this
Agreement; (f) amend or propose to amend its Articles of Incorporation or
By-Laws; (g) make any change in accounting methods, principles or practices; (h)
authorize capital expenditures or make any acquisition of, or investment in,
assets or stock of any other Person; (i) enter into or amend any material
contract or agreement other than in the ordinary course of business; (j) make
any tax election or settle or compromise any material federal, state, local or
foreign income tax liability; (k) assume, guarantee or endorse, or otherwise as
an accommodation become responsible for, the obligations of any person or make
any loans or advances other than as contemplated between the Corporation and
Ikona.
9.4 ADDITIONAL COVENANTS.
(a) Oban will promptly pay and discharge, or cause to be paid and
discharged, when due and payable, all lawful taxes, assessments, and
governmental charges or levies imposed upon the income, profits, property or
business of Oban; provided, however, that any such tax, assessment, charge or
-------- -------
levy need not be paid if the validity thereof shall currently be contested in
good faith by appropriate proceedings and if Oban shall have set aside on its
books adequate reserves therefor and deposited at Closing into an escrow account
an amount to cover any such tax, assessment, charge or levy; and provided,
--------
further, that Oban will pay all such taxes, assessments, charges or levies
-------
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor. Oban will promptly pay or cause to be paid
when due, or in conformance with customary trade terms, all other indebtedness
incident to the operations of Oban;
(b) Oban will keep its properties and those of its subsidiaries in
good repair, working order and condition, reasonable wear and tear excepted, and
from time to time make all needful and proper repairs, renewals, replacements,
additions and improvements thereto; and Oban will at all times comply with the
provisions of all material leases to which any of them is a party or under which
any of them occupies property so as to prevent any loss or forfeiture thereof or
thereunder;
(c) Oban will keep its assets that are of an insurable character
insured by financially sound and reputable insurers against loss or damage by
fire, extended coverage and explosion insurance in amounts customary for
companies in similar businesses similarly situated; and Oban will maintain, with
financially sound and reputable insurers, insurance against other hazards, risks
and liabilities to persons and property to the extent and in the manner
customary for companies in similar businesses similarly situated;
(d) Oban will keep true records and books of account in which
full, true and correct entries will be made of all dealings or transactions in
relation to its business and affairs in accordance with its past practices
consistently applied;
(e) Oban will comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority, a breach of which
could have a material adverse effect on its business or credit;
(f) Oban shall maintain in full force and effect its corporate
existence, rights and franchises and all licenses and other rights to use
mineral properties, patents, processes, licenses, trademarks, trade names or
copyrights owned or possessed by it or any subsidiary and deemed by Oban to be
necessary to the conduct of its business;
(g) Oban will, consistent with its practices in the ordinary
course of business, endeavor to retain its business relationships with its
customers and suppliers that it believes to be advantageous; and
(h) Oban shall deliver to Ikona copies of its statements of
operation and financial condition and similar statements as and when prepared
(if at all) in the ordinary course of its business.
9.5 ACCESS TO BOOKS AND RECORDS, PREMISES, ETC. From the date of this
Agreement through the Closing Date, Oban will grant Ikona and its authorized
representatives reasonable access to its books and records, premises, products,
employees and customers and other parties with whom it has contractual relations
during reasonable business hours for purposes of enabling Ikona to fully
investigate the business of Oban. Oban will also deliver copies of the monthly
statements of operations and financial condition for the period subsequent to
the latest financial statements to Ikona within a reasonable time of such
statements becoming available.
9.6 COMPENSATION. Except as contemplated by this Agreement, Oban shall
not enter into or agree to enter into any employment contract or agreement for
consulting, professional, or other services which will adversely and materially
affect the operation of Oban prior to the Closing Date.
9.7 NO SOLICITATION.
(a) Except in connection with the transactions contemplated by
this Agreement, Oban shall not, nor shall it permit any of its subsidiaries to,
nor shall it authorize or permit any officer, director or employee of or any
investment banker, attorney or other advisor or representative of, Oban or any
of its subsidiaries to, (i) solicit, initiate or encourage the submission of,
any takeover proposal, (ii) enter into any agreement with respect to any
takeover proposal or (iii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any takeover proposal.
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any executive officer of
Oban or any of its subsidiaries or any investment banker, attorney or other
advisor or representatives of Oban or any of its subsidiaries or otherwise,
shall be deemed to be a breach of this Section by Oban. For purposes of this
Agreement, "takeover proposal" means any proposal for a merger, consolidation or
reorganization or other business combination involving Oban or any of its
subsidiaries or any proposal or offer to acquire in any manner, directly or
indirectly, an equity interest in, any voting securities of, or options, rights,
warrants or other interests convertible or exercisable for or into such voting
securities, or a substantial or material portion of the assets or business of
Oban or any of its subsidiaries, other than the transactions contemplated by
this Agreement.
(b) Except upon a material breach of this Agreement by Ikona or
following termination hereof and except for action permitted or contemplated by
this Agreement, including a party's right to terminate this Agreement under
certain circumstances, neither the Board of Directors of Oban nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to
Ikona, the approval or recommendation by such Board of Directors of any such
committee of this Agreement or the Exchange or (ii) approve or recommend, or
propose to approve or recommend, any takeover proposal.
(c) Oban promptly shall advise Ikona orally and in writing of any
takeover proposal or any inquiry with respect to or which could lead to any
takeover proposal and the identity of the person making any such takeover
proposal or inquiry. Oban will keep Ikona fully informed of the status and
details of any such takeover proposal or inquiry.
(d) The provisions of this Section 9.7 shall not be construed to
prevent any investment banker, attorney or other advisor or representative of
Oban to engage in discussions with third parties in the ordinary course of
business with respect to transactions not involving the parties to this
Agreement.
9.8 DELIVERY OF ADDITIONAL FILINGS; ADDITIONAL ACCESS. Following the
execution of this Agreement and until the Closing Date, Oban shall provide Ikona
with copies of any and all reports, filings, notices or other information which
Oban may prepare and file with or receive from the Commission, Nasdaq or any
other regulatory authority, (and shall give Ikona an opportunity to review and
comment on any such filings) as well as copies of any pleadings, notices or
other filings made in connection with any pending litigation, arbitration,
investigation or proceeding in which Oban or any Subsidiary is party or
otherwise involved.
SECTION 10: INTENTIONALLY OMITTED
SECTION 11: TERMINATION
11.1 TERMINATION. This Agreement may be terminated and abandoned
solely as follows:
(a) At any time until the Closing Date by the mutual agreement of
Oban and Ikona.
(b) By any party hereto, if for any reason the parties have failed
to close this Agreement on or before October 31, 2003 or agreed to any extension
to this date, provided that the party requesting termination is not then in
default thereunder.
(c) By any party hereof, if the other party shall have breached
any representation, warranty or covenant contained in this Agreement and shall
have failed to cure such breach within ten (10) days following written notice
thereof by the party seeking termination.
11.2 EFFECT OF TERMINATION. If the Exchange is terminated and
abandoned as provided for in this Section 11, this Agreement shall forthwith
become wholly void and of no effect without liability to any party to this
Agreement; provided, however, that no such termination shall terminate or limit
the rights of any such terminating party to enforce any remedy otherwise
available for any breach hereof.
SECTION 12: INDEMNIFICATION
12.1 INDEMNIFICATION COVENANTS OF OBAN. Subject to the limitations set
forth in this Section 12, Oban shall defend, indemnify, save and keep harmless
the Ikona and its affiliates, directors, officers, agents, attorneys,
accountants, or representatives and their respective successors and permitted
assigns (the "Ikona Indemnitees"), against and from all liability, demands,
claims, actions or causes of action, assessments, losses, fines, penalties,
costs, damages and expenses, including reasonable attorneys' fees (collectively,
the "Damages") sustained or incurred by any of the Ikona Indemnitees as a result
of or arising out of or relating to:
(a) Any inaccuracy in a representation or breach of a warranty
made by the Oban and in this Agreement or in any document or instrument
delivered to Ikona in connection with this Agreement; or
(b) The failure of the Oban to comply with, or the breach by the
Oban of, any of the covenants contained in this Agreement or in any document or
instrument delivered to Ikona in connection with this Agreement, to be performed
by the Oban; or
(c) Any Oban Liability except to the extent that any such
------
liability is expressly assumed by Ikona pursuant to this Agreement.
12.2 INDEMNIFICATION COVENANTS OF IKONA. Subject to the limitations
set forth in this Section 12, Ikona shall defend, indemnify, save and keep
harmless the Oban and its affiliates, managers, officers, members, agents,
attorneys, accountants or representatives and their respective successors and
permitted assigns (the "Oban Indemnitees"), against and from all Damages
sustained or incurred by any of the Oban Indemnitees as a result of or arising
out of or relating to:
(a) Any inaccuracy in a representation or breach of a warranty
made by Ikona in this Agreement or in any document or instrument delivered to
the Oban in connection with this Agreement; or
(b) The failure of Ikona to comply with, or the breach by Ikona
of, any of the covenants contained in this Agreement or in any document or
instrument delivered to the Oban in connection with this Agreement, to be
performed by Ikona; or
(c) Any Ikona Liability except to the extent that any such
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liability is expressly assumed by Ikona pursuant to this Agreement.
12.3 LIMITATION ON CLAIMS AND LIABILITY.
Notwithstanding any provision of this Agreement to the contrary, no party
shall have liability to indemnify the other and neither party may assert a claim
for indemnification for damages suffered by it until and unless the party's
claims for damages for which the other party is entitled to indemnification
equal or exceed, in the aggregate, the sum of $10,000 (the "Damages Threshold").
Upon a party's cumulative claims for indemnification equaling the Damages
Threshold, a party may assert claims for indemnification pursuant to Section
12.4 below for the full amount of such party's damages for which it is entitled
to indemnification hereunder.
12.4 METHOD OF ASSERTING CLAIMS. For purposes of this Section 12.4,
the following terms shall be defined as follows:
(a) "Claims" shall mean all claims asserted pursuant to this
Section 12, whether or not arising as a result of a Third Party Claim.
(b) "Indemnified Person" shall mean any Ikona Indemnitee, any Oban
Indemnitee or Oban/Ikona Indemnitees, as the context requires.
(c) "Indemnifying Person" shall mean any person obligated to
indemnify an Indemnified Person pursuant to this Section 12, as the context
requires.
(d) "Third Party Claims" shall mean any Claim asserted by any
person not a party to this Agreement (including without limitation any
Governmental Authority), asserting that an Indemnified Person is liable for
monetary or other obligations which may constitute or result in Damages for
which such Indemnified Person may be entitled to indemnification pursuant to
this Section 12.
(e) All Claims shall be made in writing and shall set forth with
reasonable specificity the facts and circumstances of the Claim, as well as the
basis upon which indemnification pursuant to this Section 12 is sought.
Notwithstanding the foregoing, no delay or failure by any Indemnified Person to
provide notification of any Claim shall preclude any Indemnified Person from
recovering for Damages pursuant to this Section 12, except to the extent that
such delay or failure materially compromises the rights of any Indemnifying
Person under this Section 12.
(f) Within ten (10) days after receipt by an Indemnifying
Person of any notification of a Claim, the Indemnifying Person may, upon written
notice thereof to the Indemnified Person, assume (at the Indemnifying Person's
expense) control of the defense of such action, suit or proceeding with counsel
reasonably satisfactory to the Indemnified Person, provided the Indemnifying
Person acknowledges in writing to the Indemnified Person that any Damages that
may be assessed against the Indemnified Person in connection with such action,
suit or proceeding constitute Damages for which the Indemnified Person shall be
entitled to indemnification pursuant to this Section 12. If the Indemnifying
Person does not so assume control of such defense, the Indemnified Person shall
control such defense, but in so doing shall not waive or limit its right to
recover under this Section 12 for any Damages that may be assessed against the
Indemnified Person in connection with such action, suit or proceeding. The
party not controlling such defense may participate therein at its own expense;
provided that if the Indemnifying Person assumes control of such defense, and
the Indemnified Person has been advised in writing by outside legal counsel that
under the applicable standards of professional conduct, the Indemnifying Person
and the Indemnified Person may not be represented by the same counsel with
respect to such action, suit or proceeding, the reasonable fees and expenses of
one law firm for the Indemnified Person shall be paid by the Indemnifying
Person. The party controlling such defense shall keep the other party advised
of the status of such action, suit or proceeding and the defense thereof and
shall consider in good faith recommendations made by the other party with
respect thereto. The Indemnified Person shall not agree to any settlement of
such action, suit or proceeding without the prior written consent of the
Indemnifying Person, which (with respect to an action, suit or proceeding as to
which the Indemnifying Person has not elected to assume control of the defense)
shall not be unreasonably withheld, conditioned or delayed. The Indemnifying
Person shall not agree to any settlement of such action, suit or proceeding
without the prior written consent of the Indemnified Person, which shall not be
unreasonably withheld, conditioned or delayed so long as the settlement includes
a complete release of the Indemnified Person from all liability
and does not contain or contemplate any payment by, or injunctive or other
equitable relief binding upon, the Indemnified Person.
SECTION 13: NONDISCLOSURE OF CONFIDENTIAL INFORMATION
13.1 NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Each of the parties
hereto recognizes and acknowledges that it has and will have access to certain
nonpublic information of the others which shall be deemed the confidential
information of the other party (including, but not limited to, business plans,
costs, trade secrets, licenses, research projects, profits, markets, sales,
customer lists, strategies, plans for future development, financial information
and any other information of a similar nature) that after the consummation of
the transactions contemplated hereby will be valuable, special and unique
property of the Companies. Information received by the other party or its
representatives shall not be deemed Confidential Information and afforded the
protections of this Section 13.1 if, on the Closing Date, such information has
been (i) developed by the receiving party independently of the disclosing party,
(ii) rightfully obtained without restriction by the receiving party from a third
party, provided that the third party had full legal authority to possess and
disclose such information, (iii) publicly available other than through the fault
or negligence of the receiving party, (iv) released without restriction by the
disclosing party to anyone, including the United States government, (v) properly
and lawfully known to the receiving party at the time of its disclosure, as
evidenced by written documentation conclusively established to have been in the
possession of the receiving party on the date of such disclosure, or (vi) in the
opinion of counsel to the party, required to be disclosed under applicable
Federal or state securities laws, or the rules of any national securities
exchange, Nasdaq, or any over the counter market upon which the securities of
the party are then traded. Each of the parties hereto agrees that it shall not
disclose, and that it shall use its best efforts to prevent disclosure by any
other Person of, any such confidential information to any Person for any purpose
or reason whatsoever, except to authorized representatives of the Companies who
agree to be bound by this confidentiality agreement. Notwithstanding, a party
may use and disclose any such confidential information to the extent that a
party may become compelled by Legal Requirements to disclose any such
information; provided, however, that such party shall use all reasonable efforts
and shall have afforded the other party the opportunity to obtain an appropriate
protective order or other satisfactory assurance of confidential treatment for
any such information compelled to be disclosed. In the event of termination of
this Agreement, each party shall use all reasonable efforts to cause to be
delivered to the other parties, and to retain no copies of, any documents, work
papers and other materials obtained by such party or on such party's behalf
during the conduct of the matters provided for in this Agreement, whether so
obtained before or after the execution hereof. Each of the parties recognizes
and agrees that violation of any of the agreements contained in this Section
13.1 will cause irreparable damage or injury to the parties, the exact amount of
which may be impossible to ascertain, and that, for such reason, among others,
the parties shall be entitled to an injunction, without the necessity of posting
bond therefor, restraining any further violation of such agreements. Such
rights to any injunction shall be in addition to, and not in limitation of, any
other rights and remedies the parties may have against each other. The
provisions of this Section 13.1 shall survive any termination of this Agreement.
13.2 NO PUBLICITY. Until the Closing or the termination of this
Agreement in accordance with its terms, neither Oban nor Ikona shall, directly
or indirectly, issue any press release, or make any public statement, concerning
the transactions contemplated by this Agreement without the prior written
consent of Oban (in the case of such a release or statement by Ikona) or of
Ikona (in the case of such a release or statement by Oban). This Section 13.2
shall not, however, preclude any party from making any disclosure
required by applicable law, and in the event any party, or any officer,
director, employee, agent or representative of a party, believes that any press
release, public statement or other disclosure is so required, such party will
notify and consult with the other parties with respect thereto as promptly as is
practicable under the circumstances.
SECTION 14: EXPENSES
Each of the parties will pay all costs and expenses of its performance and
compliance with this Agreement and the transactions contemplated hereby. In no
event will any party to this Agreement be liable to any other party for
incidental damages, lost profits, income tax consequences, lost savings or any
other consequential damages, even if such party has been advised of the
possibility of such damages, or for punitive damages, resulting from the breach
of any obligation under this Agreement. The provisions of this Section 14 shall
survive any termination hereof.
SECTION 15: MISCELLANEOUS
15.1 ATTORNEY'S FEES. In any action at law or in equity or in any
arbitration proceeding, for declaratory relief or to enforce any of the
provisions or rights or obligations under this Agreement, the unsuccessful party
to such proceeding, shall pay the successful party or parties all statutorily
recoverable costs, expenses and reasonable attorneys' fees incurred by the
successful party or parties including without limitation costs, expenses, and
fees on any appeals and the enforcement of any award, judgment or settlement
obtained, such costs, expenses and attorneys' fees shall be included as part of
the judgment. The successful party shall be that party who obtained
substantially the relief or remedy sought, whether by judgment, compromise,
settlement or otherwise.
15.2 NO BROKERS. Oban represents and warrants to Ikona and Ikona
represents and warrants to Oban, that neither it nor any party acting on its
behalf has incurred any liability, either express or implied, to any "broker,"
"finder," financial advisor, employee or similar person in respect of any of the
transactions contemplated hereby. Oban agrees to indemnify Ikona against, and
hold it harmless from, and Ikona agrees to indemnify Oban against, and hold it
harmless from, any liability, cost or expense (including, but not limited to,
fees and disbursements of counsel) resulting from any agreement, arrangement or
understanding made by such party with any third party, including employees of
Ikona, for brokerage, finders' or financial advisory fees or other commissions
in connection with this Agreement or the transactions contemplated hereby. The
provisions of this Section 15.2 shall survive any termination of this Agreement.
15.3 SURVIVAL AND INCORPORATION OF REPRESENTATIONS. The
representations, warranties, covenants and agreements made herein or in any
certificates or documents executed in connection herewith shall survive the
execution and delivery thereof for a period of three years from the Closing, and
all statements contained in any certificate or other document delivered by any
party hereunder or in connection herewith shall be deemed to constitute
representations and warranties made by that party to this Agreement.
15.4 INCORPORATION BY REFERENCE. All Exhibits to this Agreement and
all documents delivered pursuant to or referred to in this Agreement are herein
incorporated by reference and made a part hereof.
15.5 PARTIES IN INTEREST. Nothing in this Agreement, whether express
or implied, is intended to, or shall, confer any rights or remedies under, or by
reason of, this Agreement, on any person other than the parties hereto and their
respective and proper successors and assigns and indemnitees. Nothing in this
Agreement shall act to relieve or discharge the obligation or liability of any
third persons to any party to this Agreement.
15.6 AMENDMENTS AND WAIVERS. This Agreement may not be amended, nor
may compliance with any term, covenant, agreement, condition or provision set
forth herein be waived (either generally or in a particular instance and either
retroactively or prospectively) unless such amendment or waiver is agreed to in
writing by all parties hereto.
15.7 WAIVER. No waiver of any breach of any one of the agreements,
terms, conditions, or covenants of this Agreement by the parties shall be deemed
to imply or constitute a waiver of any other agreement, term, condition, or
covenant of this Agreement. The failure of any party to insist on strict
performance of any agreement, term, condition, or covenant, herein set forth,
shall not constitute or be construed as a waiver of the rights of either or the
other thereafter to enforce any other default of such agreement, term,
condition, or covenant; neither shall such failure to insist upon strict
performance be deemed sufficient grounds to enable either party hereto to forego
or subvert or otherwise disregard any other agreement, term, condition, or
covenants of this Agreement.
15.8 GOVERNING LAW - CONSTRUCTION. This Agreement, and the rights and
obligations of the respective parties, shall be governed by and construed in
accordance with the laws of the State of Nevada. Notwithstanding the preceding
sentence, it is acknowledged that each party hereto is being represented by, or
has waived the right to be represented by, independent counsel. Accordingly,
the parties expressly agree that no provision of this Agreement shall be
construed against any party on the ground that the party or its counsel drafted
the provision. Nor may any provision of this Agreement be construed against any
party on the grounds that party caused the provision to be present.
15.9 REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Sections 6 and 8 of this Agreement shall survive the
Closing Date and shall remain operative in full force and effect for three years
from the date of Closing regardless of any investigation at any time made by or
on behalf of either Oban or Ikona and shall not be deemed merged in any document
or instrument so executed or delivered by either Oban or Ikona.
15.10 NOTICES. Any notice, communication, offer, acceptance, request,
consent, reply, or advice (herein severally and collectively, for convenience,
called "Notice"), in this Agreement provided or permitted to be given, served,
made, or accepted by any party or person to any other party or parties, person
or persons, hereunder must be in writing, addressed to the party to be notified
at the address set forth below, or such other address as to which one party
notifies the other in writing pursuant to the terms of this Section 15.10, and
must be served by (i) telefax or other similar electronic method, or (i)
depositing the same in the United States mail, certified, return receipt
requested and postage paid to the party or parties, person or persons to be
notified or entitled to receive same, or (iii) delivering the same in person to
such party.
Notice shall be deemed to have been given immediately when sent by telefax
and confirmed received or other electronic method and seventy-two hours after
being deposited in the United States mail,
or when personally delivered in the manner herein above described. Notice
provided in any manner not specified above shall be effective only if and when
received by the party or parties, person or persons to be, or provided to be
notified.
All notices, requests, demands and other communications required or
permitted under this Agreement shall be addressed as set forth below:
If Oban, to: OBAN MINING, INC.
000-000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX
Xxxxxx
Fax: (000) 000-0000
With copy to: Xxxxx Xxxxxx, CA
DuMoulin Xxxxxxxxx
1800 - 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Xxxxxx
Fax: (000) 000-0000
If Ikona or Shareholders, to: IKONA GEAR INTERNATIONAL, INC.
Xxxxx 000-000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Xxxxxx
Fax (000) 000-0000
With copy to: Xxxxxxxx X. Xxxxxx, Esq.
Xxxxxxxx X. Xxxxxx, P.C.
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
USA
Any party receiving a facsimile transmission shall be entitled to rely upon
a facsimile transmission to the same extent as if it were an original. Any
party may alter the address to which communications or copies are to be sent by
giving notice of such change of address in conformity with the provisions of
this Section 15.10 for the giving of notice.
15.11 FAX/COUNTERPARTS. This Agreement may be executed by telex,
telecopy or other facsimile transmission, and such facsimile transmission shall
be valid and binding to the same extent as if it were an original. Further,
this Agreement may be signed in one or more counterparts, all of which when
taken together shall constitute the same documents. For all evidentiary
purposes, any one complete counter set of this Agreement shall be considered an
original.
15.12 CAPTIONS. The caption and heading of various sections and
paragraphs of this Agreement are for convenience only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
15.13 SEVERABILITY. Wherever there is any conflict between any
provision of this Agreement and any Governmental Requirement or judicial
precedent, the latter shall prevail, but in such event the provisions of this
Agreement thus affected shall be curtailed and limited only to the extent
necessary to bring it within the requirement of the law. In the event that any
part, section, paragraph or clause of this Agreement shall be held by a court of
proper jurisdiction to be invalid or unenforceable, the entire Agreement shall
not fail on account thereof, but the balance of the Agreement shall continue in
full force and effect unless such construction would clearly be contrary to the
intention of the parties or would result in unconscionable injustice.
15.14 GOOD FAITH COOPERATION AND ADDITIONAL DOCUMENTS. The parties
shall use their best good faith efforts to fulfill all of the conditions set
forth in this Agreement over which it has control or influence. Each party
covenants and agrees to cooperate in good faith and to enter into and deliver
such other documents and papers as the other party reasonably shall require in
order to consummate the transactions contemplated hereby, provided in each
instance, any such document is in form and substance approved by the parties and
their respective legal counsel.
15.15 SPECIFIC PERFORMANCE. The obligations of the parties under
Sections 2 and 3 are unique. If either party should default in its obligations
under said Section, the parties each acknowledge that it would be extremely
difficult and impracticable to measure the resulting damages; accordingly, the
non-defaulting party, in addition to any other available rights and remedies,
may xxx in equity for injunction (mandatory or prohibitive) or specific
performance (all without the need to post a bond or undertaking of any nature),
and the parties each expressly waive the defense that a remedy at law in damages
is adequate.
15.16 ASSIGNMENT. Neither party may directly or indirectly assign or
delegate, by operation of law or otherwise, all or any portion of its/their/his
rights, obligations or liabilities under this Agreement without the prior
written consent of all other parties, which consent may be withheld in their
respective sole and absolute discretion. Any purported assignment or delegation
without such consent shall be null and void.
For purposes of this Section, the term "Agreement" shall include this
Agreement and the Exhibits and other documents attached hereto or described in
this Section 15.16. This Agreement, and other documents delivered pursuant to
this Agreement, contain all of the terms and conditions agreed upon by the
parties relating to the subject matter of this Agreement and supersede all prior
and contemporaneous agreements, letters of intent, representations, warranties,
disclosures, negotiations, correspondence, undertakings and communications of
the parties, oral or written, respecting that subject matter.
15.17 TIME. Time is of the essence of this Agreement and each of its
provisions.
IN WITNESS WHEREOF, the parties have signed the Agreement the date and year
first above written.
OBAN: OBAN MINING INC., A NEVADA CORPORATION
By:________________________________________
IKONA IKONA GEAR INTERNATIONAL, INC.,
A NEVADA CORPORATION
By:________________________________________
________________________________________
EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
SHARE EXCHANGE AGREEMENT AND QUESTIONNAIRE
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THE SECURITIES IN THE FORM OF COMMON STOCK OF OBAN MINING, INC. HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND ARE BEING
ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY REGULATION S
PROMULGATED THEREUNDER. SUCH SECURITIES CANNOT BE SOLD, TRANSFERRED,
ASSIGNED, OR OTHERWISE DISPOSED OF, EXCEPT IN ACCORDANCE WITH
PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
AND APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING
THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.
SHARE EXCHANGE AGREEMENT
THIS AGREEMENT is dated for reference October 10, 2003 between Oban Mining Inc.,
a company incorporated under the laws of the State of Nevada (the "Company"),
Ikona Gear International, Inc., a company incorporated under the laws of the
State of Nevada ("Ikona"), and the undersigned shareholder of Ikona (the
"Undersigned").
WHEREAS:
A. The Undersigned owns that number Ikona Shares as set out next to
his/her/its name on the execution page of this Agreement;
B. The Company desires to acquire all of the issued and outstanding common
stock of Ikona in exchange for Shares of the Company, subject to the terms
set forth in this Agreement; and
C. The Undersigned proposes to exchange all of his/her/its shares in the
capital of Ikona for Shares of the Company. NOW THEREFORE, in consideration
of the mutual covenants and agreements contained in this Agreement and
other good and valuable consideration, the receipt and sufficiency of which
is acknowledged, the parties agree as follows:
1 INTERPRETATION
1.1 Definitions: In this Agreement and in any schedules and amendments, the
-----------
following terms shall have the meanings set forth below unless the context
otherwise requires:
(a) "Agreement" means this Agreement including the Schedules attached as
the same may be amended or supplemented from time to time;
(b) "Closing" means the completion of the sale and purchase of the Ikona
Shares as provided for in this Agreement;
(c) "Closing Date" means October 31, 2003 or such earlier or later date as
determined by Ikona and the Company;
(d) "Effective Date" means October 31, 2003;
(e) "Encumbrances" means and includes, whether or not registered or
recorded, any and all:
(i) mortgages, assignments of rent, liens, licences, leases, charges,
security interests, hypothecs, and
pledges whether fixed or floating against property (whether real,
personal, mixed, tangible or intangible), or conditional sales
contracts or title retention agreements or equipment trusts or
financing leases relating thereto, or any subordination to any
right or claim of others in respect thereof;
(ii) claims, interests and estates against or in proper (whether real,
personal, mixed, tangible or intangible) including easements,
rights-of-way servitudes or other similar rights in property
granted to or reserved or taken by any person or any governmental
body or authority;
(iii) any option, or other right to acquire, or acquire any interest
in, any property; and
(iv) other encumbrances of whatsoever nature and kind against property
(whether real, personal, mixed, tangible or intangible);
(f) "Exchange Shares" means the Shares issued by the Company in exchange
for Ikona Shares.
(g) "Ikona Shares" means that number of shares of the common stock,
$0.00001 par value, of Ikona that is set out opposite the
Undersigned's name on the execution page hereof;
(h) "Person" means an individual, a corporation, a partnership, a trust,
an unincorporated organization or a government agency or
instrumentality;
(i) "Place of Closing" means the offices of DuMoulin Xxxxxxxxx, 0000-0000
Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, XX Xxxxxx;
(j) "SEC" means the United States Securities and Exchange Commission;
(k) "Shares" means shares of common stock, $0.00001 par value, of the
Company;
(l) "Timing of Closing" means 10:00 a.m. (Pacific Standard Time) on the
Closing Date;
(m) "U.S. Exchange Act" means the United States Securities Exchange Act of
1934, as amended; and
(n) "U.S. Securities Act" means the United States Securities Act of 1933,
as amended.
1.2 Division, Headings, Index: The division of this Agreement into sections,
-------------------------
subsections and paragraphs and the insertion of headings and any index
provided are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
1.3 Gender and Number: Unless the context otherwise requires, words importing
-----------------
the singular include the plural and vice versa and words importing gender
include both genders.
1.4 Currency: All dollar amounts referred to in this Agreement are stated in
--------
United States of America currency, unless otherwise expressly stated.
2 SHARE EXCHANGE
2.1 Share Exchange: On the Closing Date and subject to the terms and
---------------
conditions contained in this Agreement, the Undersigned shall sell, assign
and transfer and deliver to the Company all of the Ikona Shares owned by
the Undersigned and in exchange therefor, the Company shall issue to the
Undersigned one and one-quarter (1.25) Exchange Shares for each Ikona Share
exchanged. The parties mutually agree that the total fair market value of
the Exchanged Shares to be issued to the Undersigned is equal to the total
fair market value of the Ikona Shares being exchanged. As Closing, the
Company shall deliver certificates evidencing the Exchange Shares as set
forth in Section 2.2 of this Agreement.
2.2 Transfer of Ikona Shares. Subject to and concurrently with the Closing
-------------------------
of the Reorganization Agreement, as defined below, the Undersigned
irrevocably and unconditionally transfers and assigns all of the
Undersigned's right, title and interest to the Ikona Shares to Oban. The
Undersigned represents and warrants that the Undersigned has never been
tendered or delivered a Certificate representing the Ikona Shares and that
the Ikona Shares have and are uncertificated as of the date of this
Agreement. The Undersigned has not sold, assigned, pledged, transferred,
deposited under any agreement or hypothecated such Ikona Shares or any
interest therein; and no person, firm, corporation, agency or government
has or has asserted any right, title, claim, equity or interest in, to or
respecting such Ikona Shares. The Undersigned agrees to indemnify, defend
and hold harmless the Company, and any person, firm or corporation acting
as its transfer agent, registrar or trustee or in any other capacity and
also any successors in any such capacities from and against any and all
liability, loss, damage or expense in connection with or arising out of
their reliance upon the representations and warranties contained herein.
2.3 Company Shares: The Undersigned directs the Company to deliver to Laith
---------------
Nosh at Closing share certificates representing the Exchange Shares in the
amount of 1.25 times that number of Ikona Shares shown below or opposite,
as the case may be, the Undersigned's name on the execution page of this
Agreement with the Exchange Shares to be registered in the name of the
Undersigned.
2.4 Effective Date: Notwithstanding the Closing Date, all transactions
---------------
contemplated in this Agreement will be effective on the Effective Date and
all income from the business of Ikona will accrue to the benefit of the
Company from the Effective Date.
2.5 Agreement and Plan of Reorganization. The agreements contained herein and
-------------------------------------
the exchange by the Undersigned of the Ikona Shares for the Exchange Shares
is, in all respects, subject to the terms and conditions of that certain
Agreement and Plan of Reorganization by and between Ikona and the Company
dated as of October 10, 2003 (the "Reorganization Agreement"). The
Undersigned acknowledges that he, she or it has been provided with a copy
of the Reorganization Agreement and that the Undersigned has read,
understands and accepts the terms and conditions contained therein. The
parties agree that this Share Exchange Agreement is given as part of and
shall be deemed integrated with the transactions provided for or
contemplated by the Reorganization Agreement and the covenants,
representations and warranties of the respective parties in the
Reorganization Agreement shall be deemed merged with and into this Share
Exchange Agreement as if fully set forth herein.
3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLING SHAREHOLDER
The Undersigned represents and warrants to the Company and Ikona as follows
and acknowledges that the Company is relying upon such representations and
warranties in connection with the exchange of the Ikona Shares for the
Exchange Shares:
3.1 Individual Authority: The Undersigned has the legal capacity, power and
--------------------
authority to hold the Ikona Shares to be owned by him on the Closing Date,
to enter into this Agreement and to transfer the legal and beneficial title
and ownership of the Ikona Shares free of Encumbrances.
3.2 Shareholder Questionnaire: The Undersigned shall deliver to the Company
-------------------------
a duly completed and executed Shareholder Questionnaire, attached as
Schedule A to this Agreement.
----------
3.3 Delivery of Documents: The Undersigned shall deliver to the Company all
---------------------
necessary transfers, assignments and other documentation to transfer to the
Company the Ikona Shares owned by him with good and marketable title, free
of Encumbrances and without any right of set-off.
4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company represents, warrants and covenants to and with the
Undersigned's as follows and acknowledges that the Undersigned is relying
upon such representations, warranties and covenants in connection with the
exchange of the Ikona Shares for the Exchange Shares:
4.1 Corporate Status and Authority: The Company is a valid and subsisting
---------------------------------
corporation, duly incorporated and in good standing under the law of the
State of Nevada, and is duly qualified and authorized to carry on its
businesses as they are presently carried on and is in good standing as a
foreign corporation and is duly qualified and authorized to carry on
business in each jurisdiction in which the character of its properties or
the nature of its businesses made such qualification or authorization
necessary and has all requisite power and authority to carry on its
business as it is now carried on and to own, lease and operate its
properties and assets.
4.2 Authorization: The Company has full corporate power, capacity and
-------------
authority to enter into this Agreement on the terms and conditions hereof
and all necessary corporate acts have been performed in order to authorize
this Agreement.
4.3 Regulatory Approval: The Company has complied and will comply fully with
-------------------
the requirements of all applicable corporate and securities laws in
relation to the issue of the Exchange Shares on the exchange of the Ikona
Shares (subject to the accuracy of the representations of the Undersigned
contained herein). The entering into and performance of this Agreement and
the transactions contemplated herein will not result in the violation of
any of the terms and provisions of the articles of incorporation, bylaws or
other constating documents of the Company, any shareholders' or directors'
resolution or of any indenture or other agreement, written or oral, to
which the Company may be a party or by which the Company may be bound or to
which it may be subject or any judgment, decree, order, rule or regulation
of any court or administrative body by which the Company is bound or to the
knowledge of the Company, any statute or regulation applicable to the
Company.
4.4 Share Transfer Restrictions: No order ceasing or suspending trading in
-----------------------------
securities of the Company nor prohibiting the sale of such securities has
been issued to the Company or its directors, officers or promoters or to
any other companies that have common directors, officers or promoters and
no investigations or proceedings for such purposes are pending or
threatened in writing by an officer or official of a competent authority.
4.5 Fully Paid Shares: Upon completion of the transactions contemplated in
-------------------
this Agreement, the Exchange Shares issued by the Company to the
Undersigned will be fully paid and non-assessable shares of the common
stock of the Company, and clear of all restrictions on transfer (other than
restrictions under applicable securities laws or as otherwise contemplated
in this Agreement), liens, charges and encumbrances.
4.6 Quotation: The Company's Shares are quoted on the NASD's OTC Bulletin
---------
Board ("NASD OTCBB") and, prior to the Closing, the Company will do all
necessary acts and things to maintain the quotation of the Company's Shares
on the NASD OTCBB. The Company has not received notice from NASD or the SEC
that the Company's Shares are ineligible for quotation on the NASD OTCBB.
5 CONDITIONS OF CLOSING
5.1 Conditions of Closing in Favour of the Company: The obligation of the
-------------------------------------------------
Company to complete the exchange of the Ikona Shares for the Exchange
Shares is subject to the following terms and conditions for the exclusive
benefit of the Company, to be fulfilled or performed at or prior to the
Time of Closing or waived in whole on in part by the Company at its sole
discretion without prejudice to any rights that the Company may otherwise
have:
(a) Representations and Warranties: The representations and warranties
-------------------------------
of the Undersigned contained in this Agreement shall be true and correct in
all material respects at the Time of Closing, with the same force and
effect as if such representations and warranties were made at and as of
such time;
(b) Covenants: All of the covenants and agreements of the Undersigned
---------
and all other terms of this Agreement to be complied with or performed by
the Undersigned at or before the Time of Closing shall have been complied
with or performed;
(c) Shareholder Questionnaire: The Undersigned has delivered to the
--------------------------
Company a Shareholder Questionnaire in the form attached as Schedule A to
this Agreement that is satisfactory to the Company;
(d) Regulatory Consents: There shall have been obtained, from all
--------------------
appropriate federal and state or other governmental or administrative
bodies or stock exchanges, such licences, permits, consents, approvals,
certificates, registrations and authorization as are required to permit the
change of ownership of the Ikona Shares and the transactions as
contemplated herein;
(e) Shareholder Participation: The Company has entered into Share
--------------------------
Exchange Agreements whereby on closing such agreements, the Company will
own 80% of the issued common stock of Ikona.
If any of the conditions contained in this Subsection 5.1 shall not be
performed or fulfilled at or prior to the time of closing to the
satisfaction of the Company, acting reasonably, the Company may, by notice
to the Undersigned, terminate this Agreement and the obligations of the
Undersigned, the Company under this Agreement, provided that the Company
may also bring an action against the Undersigned for damages suffered by
the Company where the non-performance or non-fulfillment of the relevant
condition is as a result of a breach of covenant, representation or
warranty (as the same may be modified by a notice) by the Undersigned. Any
such condition may be waived in whole or in part by the Company without
prejudice to any claims it may have for breach of covenant, representation
or warranty.
5.2 Conditions of Closing in Favour of the Undersigned: The exchange of the
---------------------------------------------------
Ikona Shares for the Exchange Shares is subject to the following terms and
conditions for the exclusive benefit of the Undersigned to be fulfilled or
performed at or prior to the Time of Closing:
(a) Representations and Warranties: The representations and warranties
-------------------------------
of the Company contained in this Agreement shall be true and correct at the
Time of Closing, with the same force and effect as if such representations
and warranties were made at and as of such time;
(b) Covenants: All of the terms, covenants and conditions of this
---------
Agreement to be complied with or performed by the Company at or before the
Time of Closing shall have been complied with or performed.
If any of the conditions contained in this Subsection 5.2 shall not be
performed or fulfilled at or prior to the Time of closing to the
satisfaction of the Undersigned, acting reasonably, the Undersigned may, by
notice to the Company, terminate this Agreement and the obligations of the
Undersigned and the Company under this Agreement, provided that the
Undersigned may also bring an action against the Company for damages
suffered by the Undersigned where the non-performance or non-fulfillment of
the relevant condition is as a result of a breach of covenant,
representations or warranty by the Company. Any such condition may be
waived in whole or in part by the Undersigned without prejudice to any
claims they may have for breach of covenant, representation or warranty.
5.3 Parties' Efforts: The parties shall use reasonable commercial efforts to
----------------
satisfy the conditions contained in Section 5.
6 GENERAL MATTERS
6.1 Governing Law and Arbitration: This Agreement shall be governed by and
-------------------------------
construed in accordance with the laws of the State of Nevada. Any dispute
arising out of or in connection with this Agreement, including any question
regarding its existence, validity or termination, shall be referred to and
finally resolved by arbitration under the rules of the American Arbitration
Association which rules are deemed to be incorporated by reference into
this clause. The number of arbitrators shall be one. The place of
arbitration shall be Vancouver, British Columbia. The parties expressly
waive and forego any right to punitive, exemplary or other similar damages
unless an applicable statute requires the award of such damages or that
compensatory damages be increased in a specified manner. This provision is
not intended to apply to any award of arbitration costs to a party to
compensate for dilatory or bad faith conduct in the arbitration pursuant to
this paragraph. The prevailing parties shall also be entitled to an award
of reasonable attorney's fees.
6.2 Entire Agreement: Except as may be otherwise expressly agreed between
-----------------
the parties in writing, this Agreement constitutes the entire agreement
between the parties pertaining to the subject matter and there are no oral
statements, warranties, representations or other agreements between the
parties in connection with the
subject matter except as specifically set forth or referred to herein. No
amendment, waiver or termination of this Agreement shall be binding unless
executed in writing by the party or parties to be bound thereby. No waiver
of any provision of this Agreement shall be deemed or shall constitute a
waiver of any other provision nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided.
6.3 Assignment: The Undersigned will not assign their interests in this
----------
Agreement without prior written consent of the Company. Prior to shares
exchange, the Company may not assign its interests in this Agreement
without prior written consent of the Undersigned.
6.4 Confidential Information: The Company and the Undersigned covenant to
-------------------------
hold in strict confidence all information obtained in connection with the
transactions which are the subject matter of this Agreement. If the
transactions, which are the subject matter of this Agreement, are not
completed, this covenant shall continue in full force and effect. All
confidentiality obligations of the Company with respect to the Undersigned,
shall cease upon Closing. Notwithstanding the Closing, the Undersigned
covenants to maintain as confidential all confidential information
respecting the Company in the Undersigned's possession prior to Closing and
all information obtained in connection with the transactions which are the
subject matter of this Agreement including all information concerning the
Company other than information provided to the Undersigned's personal
advisers for the purpose of filing personal tax returns and other similar
matters and other than as may be required to be disclosed by law and other
than information that becomes generally available to the public other than
as a result of a disclosure by the Undersigned or his representatives.
6.5 Non-Waiver: No investigations made by or on behalf of the Company at any
----------
time shall have the effect of waiving, diminishing the scope of or
otherwise affecting any representations or warranties made herein or
pursuant hereto. No investigations made by or on behalf of the Undersigned
at any time shall have the effect of waiving, diminishing the scope of or
otherwise affecting any representations or warranties made herein or
pursuant hereto.
6.6 Expenses: All costs and expenses incurred in connection with this
--------
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expense. The Company shall not bear any legal,
accounting or other costs incurred by the Undersigned.
6.7 Notices: Any notice or other communication required or permitted to be
-------
given hereunder shall be in writing and delivered or sent by overnight
mail, overnight delivery or telefax and, if telefaxed, shall be deemed to
have been received on the next Business Day following transmittal and
acknowledgment of receipt by the recipient's telefax machine or if
delivered by hand shall be deemed to have been received at the time it is
delivered. Notices addressed to an individual shall be validly given if
left on the premises indicated below. Notice of change of address shall
also be governed by this Subsection 6.7. Notices shall be delivered or
addressed as follows:
(a) If to the Company:
Oban Mining Inc.
000-000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX
X0X 0X0
(b) If to the Undersigned, at the address set forth on the execution page
of this Agreement.
With copies to:
Xxxxxxxx X. Xxxxxx, P.C.
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx, Esq.
Any party may give written notice of change of address in the same manner,
in which event such notice shall thereafter be given to it as above
provided at such changed address.
6.8 Time of the Essence: Time shall be of the essence of this Agreement.
----------------------
6.9 Further Assurances: Each of the parties hereto agrees promptly to do,
-------------------
make, execute, deliver or cause to be done, made, executed or delivered at
their own expense all such further acts, documents and things as the other
party hereto may reasonably require for the purpose of giving effect to
this Agreement whether before or after the Closing.
6.10 Severability: If any covenant, obligation or agreement of this Agreement,
------------
or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement or the
application of such covenant, obligation or agreement to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each covenant, obligation
and agreement of this Agreement shall be separately valid and enforceable
to the fullest extent permitted by the law.
[The remainder of this page has been intentionally left blank]
6.11 Counterparts: This Agreement may be executed in any number of counterparts,
------------
each of which when delivered shall be deemed to be an original and all of
which together shall constitute one and the same document. A signed
facsimile or telecopied copy of this Agreement shall be effectual and valid
proof of execution and delivery.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first hereinabove written.
If Undersigned is an Individual:
)
SIGNED, SEALED AND DELIVERED by )
in the presence of :
_______________________________________ __________________________________
) Shareholder Signature
)
)
_______________________________________ __________________________________
Witness Signature ) Print Name
)
)
_______________________________________ __________________________________
Print Name ) Residential Address
)
)
_______________________________________ __________________________________
Address ) Number of Shares of Ikona Gear
International, Inc. Held by
Shareholder
If Undersigned is a Corporate Entity:
)
)
_______________________________________ __________________________________
Print Name of Corporate Entity ) Number of Shares of Ikona Gear
International, Inc. Held by
Shareholder
)
)
_______________________________________
Authorized Signatory )
)
)
_______________________________________
Print Name and Title )
)
)
_______________________________________
Corporate Address )
IKONA GEAR INTERNATIONAL, INC. OBAN MINING INC.
Per: Per:
____________________________ ________________________________
Laith Nosh Xxxxxxx Xxxxxx
President and Director President and Director
SCHEDULE A
SHARE EXCHANGE AGREEMENT
SHAREHOLDER QUESTIONNAIRE
The Undersigned, a shareholder of Ikona Gear International, Inc. ("Ikona"), does
hereby execute and deliver to Oban Mining Inc., a Nevada corporation (the
"Company"), this Shareholder Questionnaire in connection with the issuance of
shares of common stock by the Company (the "Shares") in exchange for shares of
Ikona under the terms of the Share Exchange Agreement by and among the Company,
Ikona and the shareholder of Ikona.
The Undersigned understands that the Company is relying on this information in
determining to offer securities to the undersigned in a manner exempt from the
registration requirements of the Securities Act of 1933, as amended (the "Act"),
and applicable state securities laws.
1. The Undersigned understands and agrees that the Shares have not been and
will not be registered under the United States Act of 1933, as amended (the
"1933 Act"), and the Shares are being offered and issued to the Undersigned
in reliance upon an exemption from registration available under Regulation
S under the 1933 Act.
2. The Undersigned represents warrants and covenants (which representations,
warranties and covenants shall survive the Closing) to the Company (and
acknowledges that the Company is relying thereon) that:
(a) the Undersigned alone, or with the assistance of professional
advisors, has such knowledge and experience in financial and business
matters that the undersigned is capable of evaluating the merits and
risks of Undersigned's purchase of the securities, or has a
pre-existing personal or business relationship with the Company or any
of its officers, directors, or controlling persons of a duration and
nature that enables the undersigned to be aware of the character,
business acumen and general business and financial circumstances of
the Company or such other person;
(b) it acknowledges that it has not purchased the Shares as a result of
any form of general solicitation or general advertising, including
advertisements, articles, notices or other communications published in
the 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;
(c) The Undersigned represents and warrants that he, she or it is
purchasing the securities solely for the Undersigned's own account for
investment and not with a view to or for sale or distribution of the
securities or any portion thereof and without any present intention of
selling, offering to sell or otherwise disposing of or distributing
the securities or any portion thereof in any transaction other than a
transaction complying with the registration requirements of the 1933
Act, and applicable state securities or "blue sky" laws, or pursuant
to an exemption therefrom. Purchaser also represent that the entire
legal and beneficial interest of the securities that he, she or it is
purchasing is being purchased for, and will be held for, the
Undersigned's account only, and neither in whole or in part for any
other person or entity;
(d) the Undersigned acknowledges that he, she or it has received all such
information, including an Information Statement and documents and
materials submitted therewith that describes the risks inherent in the
Shares and that the Undersigned deems necessary and appropriate to
enable him, her or it to evaluate the financial risk inherent in
making an investment in the Shares (the "Disclosure Documents");
(e) the Undersigned has carefully read the Disclosure Documents and the
documents and the materials submitted therewith, and the Company has
made available to the Undersigned or Undersigned's advisors all
information and documents requested by the Undersigned relating to
investment in the securities, and has provided answers to
Undersigned's satisfaction to all of Undersigned's questions
concerning the Company;
(f) there may be material tax consequences to the Undersigned of an
acquisition or disposition of Shares. The Company gives no opinion and
makes no representation with respect to the tax consequences to the
Undersigned under United State, state, local, or foreign tax law of
the Undersigned's acquisition or disposition of such securities;
(g) upon the issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the 1933 Act or
applicable U.S. state laws and regulations and Canadian laws and
regulations, the certificates representing the Shares will bear a
legend in substantially the following form:
"THE SECURITIES IN THE FORM OF COMMON STOCK OF OBAN MINING, INC. HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND ARE BEING
ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY
REGULATION S PROMULGATED THEREUNDER. SUCH SECURITIES CANNOT BE SOLD,
TRANSFERRED, ASSIGNED, OR OTHERWISE DISPOSED OF, EXCEPT IN ACCORDANCE
WITH PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
AND APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING
THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT."
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE
SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE THE EARLIER OF (I)
THE DATE THAT IS 12 MONTHS AND A DAY AFTER THE DATE THE ISSUER FIRST
BECAME A REPORTING ISSUER IN ANY OF ALBERTA, BRITISH COLUMBIA,
MANITOBA, NOVA SCOTIA, ONTARIO, QUEBEC AND SASKATCHEWAN, IF THE ISSUER
IS A SEDAR FILER, AND (II) THE DATE THAT IS 12 MONTHS AND A DAY AFTER
THE LATER OF (A) THE DISTRIBUTION DATE, AND (B) THE DATE THE ISSUER
BECAME A REPORTING ISSUER IN THE LOCAL JURISDICTION OF THE PURCHASER
OF THE SECURITIES THAT ARE THE SUBJECT OF THE TRADE.
(h) it is understood that the Company will instruct its transfer agent not
to record any transfer of Shares without first being notified by the
Company that it is satisfied that such transfer is exempt from or not
subject to the registration requirements of the 1933 Act;
(i) the Undersigned consents to the Company making a notation on its
records or giving instruction to the registrar and transfer agent of
the Company in order to implement the restrictions on transfer set
forth and described herein;
(j) the Undersigned agrees that if it decides to offer, sell or otherwise
transfer any of the Shares, (i) it will not offer, sell or otherwise
transfer any of such securities directly or indirectly, unless the
securities are sold in a transaction that does not require
registration under the 1933 Act of any applicable U.S. state laws and
regulations governing the offer and sale of securities and (ii) prior
to such sale, it will furnish to the Company an opinion of counsel
reasonably satisfactory to the Company the availability of such
exemption; and
(k) hedging transactions involving the Shares may not be conducted unless
in compliance with the U.S. Securities Act.
3. (a) The undersigned acknowledges that the Company is offering the
Exchange Shares in reliance upon an exemption from the registration
requirements of the Securities Act contained in Regulation S
thereunder. The undersigned agrees that all offers and sales of the
Shares prior to the expiration of the distribution compliance period
specified in Rule 902, of Regulation S, as applicable, shall be made
only in accordance with the provisions of Rule 903 or 904 of
Regulation S under the Securities Act, pursuant to registration of the
securities under the Securities Act, or pursuant to an available
exemption from the registration requirements of the Securities Act.
(b) The undersigned represents that the offer and sale by the Company of
the Securities has been made in an "Off-Shore Transaction" as defined
in Rule 902(h) of Regulation S, inasmuch as:
i. at the time the offer of the Exchange Shares and the execution of
this Agreement, the undersigned is and was outside the United
States;
ii. no offers to sell the Shares were made by any person to the
undersigned while the undersigned was in the United States;
iii. the Disclosure Documents were received by the undersigned while
the undersigned was outside the United States; and
iv. the Shares are not being acquired directly or indirectly for the
account or benefit of a U.S. Person, as defined below, or a
person in the United States.
(c) The undersigned represents and warrants that the undersigned is not a
"U.S. Person" as defined in Rule 902(k) of Regulation S. Without
limiting the generality of the foregoing, the undersigned swears and
affirms that the undersigned is not:
i. any natural person resident in the United States;
ii. any partnership or corporation organized or incorporated under
the laws of the United States;
iii. any estate of which any executor or administrator is a U.S.
Person;
iv. any trust of which any trustee is a U.S. Person;
v. any agency or branch of a foreign entity located in the United
States;
vi. any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the
benefit or account of a U.S. Person;
vii. any discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary organized,
incorporated or (if an individual) resident in the United States;
and
viii. any partnership or corporation if:
1. organized or incorporated under the laws of any foreign
jurisdiction; and
2. formed by a U.S. Person principally for the purpose of
investing in securities not registered under the Securities
Act, unless it is organized or incorporated, and owned, by
accredited investors (as defined in Rule 501(a) under the
Securities Act) who are not natural persons, estates or
trusts.
NOTE: Notwithstanding the foregoing, any discretionary account or similar
account (other than an estate or trust) held for the benefit or account of a non
U.S. Person by a dealer or other professional fiduciary organized, incorporated,
or (if an individual) resident in the United States shall not be deemed a "U.S.
Person"; and any estate of which any professional fiduciary acting as executor
or administrator is a U.S. Person shall not be deemed a U.S. Person if (i) an
executor or administrator of the estate who is not a U.S. Person has sole or
shared investment discretion with respect to the assets of the estate; and (ii)
the estate is governed by foreign law. Further, any trust of which any
professional fiduciary acting as trustee is a U.S. Person shall not be deemed a
U.S. Person if a trustee who is not a U.S. Person has sole or shared investment
discretion with respect to the trust assets, and no beneficiary of a trust (and
no settlor if the trust is revocable) is a U.S. Person. Further, an employee
benefit plan established and administered in accordance with the law of a
country other than the United States and customary practices and documentation
of such country shall not be deemed a U.S. Person. Any agency or branch of a
U.S. Person located outside the United States shall not be deemed a "U.S.
Person" if (i) the agency or branch operates for valid business reasons and (ii)
the agency or branch is engaged in the business of insurance or banking and is
subject to substantive insurance or banking regulations, respectively, in the
jurisdiction where located. For the purposes of Regulation S, "United States"
means the United States of America, its territories and possessions, and any
state of the United States, and the District of Columbia.
4. NASD Affiliation. The undersigned represents and warrants that the
-----------------
information set forth below in response to the questions regarding NASD
affiliation is accurate and complete.
(a) Is the undersigned a member of the NASD1, a person associated with a
member2 of the NASD, or an affiliate of a member?
Yes ______ No ______
If "Yes," please list all members of the NASD with whom the
undersigned is associated or affiliated.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(b) If the undersigned is a corporation, are any of its officers,
directors or 5% shareholders a member of the NASD, a person
associated with a member of the NASD, or an affiliate of a
member?
Yes ______ No ______
If "Yes," please list the name of each such officer, director or 5%
shareholder and all members of the NASD with whom they are associated
or affiliated.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
____________________________________
1 The NASD defines a "member" as being any broker or dealer admitted to
membership in the NASD, or any officer or partner of such a member, or the
executive representative of such a member or the substitute for such
representative.
2 The NASD defines a "person associated with a member" as being every sole
proprietor, general or limited partner, officer, director or branch manager
of such member, or any natural person occupying a similar status or
performing similar functions, or any natural person engaged in the
investment banking or securities business who is directly or indirectly
controlling or controlled by such member (for example, any employee),
whether or not any such person is registered or exempt for registration
with the NASD. Thus, "person associated with a member" includes a sole
proprietor, general or limited partner, officer, director or branch manager
or an organization of any kind (whether a corporation, partnership or other
business entity) which itself is a "member" or a "person associated with a
member." In addition, an organization of any kind is a "person associated
with a member" if its sole proprietor or anyone of its general or limited
partners, officers, director or branch managers is a "member" or "person
associated with a member."
5. Ownership of Ikona Shares: At the time of Closing of the Share Exchange
--------------------------
Agreement (as defined therein), the Undersigned shall own that number of
Ikona Shares as set out opposite his name on the execution page hereof. The
Undersigned represents and warrants that no third party claims an interest
in the Ikona Shares and the Undersigned exercises the sole power to vote
and invest such shares, except the following:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
If the Undersigned exercises the shared power to vote or invest such Ikona
Shares, the Undersigned represents and warrants that the elections and
agreements contained herein have been ratified and approved by all persons
exercising the shared power to vote or invest such shares.
The foregoing representations, warranties and covenants are made by the
Undersigned with the intent that they be relied upon in determining its
suitability as Undersigned to receive the Shares. The Undersigned undertakes to
notify that Company immediately at 000-000 Xxxxxx Xxxxxx, Xxxxxxxxx, X.X. X0X
0X0 or by facsimile transmission to (000) 000-0000, of any change in any
representation, warranty or other information relating to the Undersigned set
forth herein which takes place prior to the Closing.
Number of Ikona Shares Held: ____________ ______________________________
(Signature of the Undersigned)
______________________________
(Name of the Undersigned -
please print)
______________________________
(Capacity)
