Exhibit 2.1
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT dated this 23rd day of October 2001, is made
BETWEEN
RECEPTAGEN LTD.,
a corporation incorporated under the federal laws
of Canada
(hereinafter referred to as "RECEPTAGEN")
OF THE FIRST PART
AND
SPANTEL COMMUNICATIONS INC.,
a corporation incorporated under the laws
of the British Virgin Islands
(hereinafter referred to as "SPANTEL")
OF THE SECOND PART
AND SPANTEL 2000, S.A.,
a corporation incorporated under the laws
of Spain
(hereinafter referred to as "Spantel 2000, S.A.")
OF THE THIRD PART
AND
MOHAMED KHASHOGGI
(hereinafter collectively referred to as the "Spantel
Shareholder")
OF THE FOURTH PART
WHEREAS Receptagen desires to purchase from the Spantel Shareholder and the
Spantel Shareholder desires to sell to Receptagen the Spantel Securities;
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AND WHEREAS Receptagen and the Spantel Shareholder desire to effect the purchase
and sale of the Spantel Securities pursuant to the Share Exchange in accordance
with the terms and conditions of this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT, in consideration of the mutual
covenants hereinafter contained and provided for and other good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged by
the Parties), the Parties agree as follows:
ARTICLE I
INTERPRETATION
1.1 DEFINITIONS. In this Agreement, unless the context otherwise requires, the
terms set forth in Schedule 1 shall have the meanings set forth therein.
1.2 ENTIRE AGREEMENT. This Agreement together with the agreements and other
documents to be delivered pursuant to this Agreement, constitute the entire
agreement between the Parties pertaining to the Share Exchange and supersedes
all prior agreements, understandings, negotiations and discussions, whether oral
or written, including the letter of intent dated May 15, 2001 (the "Letter of
Intent"), and there are no warranties, representations or other agreements
between the Parties in connection with the subject matter hereof except as
specifically set forth in this Agreement or any other agreement or document to
be delivered pursuant to this Agreement.
1.3 EXTENDED MEANINGS. In this Agreement, words importing the singular number
include the plural and vice versa; words importing the masculine gender include
the feminine and neuter genders.
1.4 HEADINGS. The division of this Agreement into articles, sections,
subsections and paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.
1.5 REFERENCES. References to an article, section, subsection, paragraph,
schedule or exhibit shall be construed as references to an article, section,
subsection, paragraph, schedule or exhibit to this Agreement, unless the context
otherwise requires.
1.6 GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the laws of the Province of Ontario and the laws of Canada applicable
therein.
1.7 CURRENCY. Unless otherwise specified, the word "dollar", or the symbol "$"
refers to Canadian currency.
1.8 SCHEDULES. The following is a list of schedules attached to and incorporated
into this Agreement by reference and deemed as part of this Agreement.
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SCHEDULE DESCRIPTION
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1 Definitions
2 Spantel 2000, S.A. Financial Statements
3 Receptagen Financial Statements
4 Receptagen Management Information Circular
5 Escrow Agreement
ARTICLE II
SHARE EXCHANGE
2.1 AGREEMENT TO PURCHASE. Upon the terms and subject to the conditions
contained in this Agreement, the Spantel Shareholder shall sell and Receptagen
shall purchase, as of and with effect from the opening of business on the
Closing Date, the Spantel Securities.
2.2 SHARE EXCHANGE. The purchase and sale of the Spantel Securities shall be
effected by the issue of 16,500,000 Receptagen Shares to the Spantel Shareholder
pursuant to the prospectus and registration exemptions contained in paragraphs
72(1)(j) and 35(1)(16) of the SECURITIES ACT (ONTARIO), 74(2)(25) and 45(2)(28)
of the SECURITIES ACT (British Columbia), 107(1)(j) and 65(1)(q) of the
SECURITIES ACT (Alberta) in exchange for the Spantel Securities (altogether, the
"Share Exchange").
2.3 HOLD BACK COMPENSATION. To compensate for any potential unascertained debt
owing by Receptagen which accrued prior to the completion of the Share Exchange,
is unsettled and is not statute barred, an additional 60,761 Receptagen Shares
(the "Deposited Shares"), shall be issued at Closing to a trustee (the
"Trustee") in trust for the Spantel Shareholder, which Trustee shall be
appointed pursuant to the escrow agreement (the "Escrow Agreement") attached
hereto as Schedule 6. Subject to applicable hold periods and other requirements
by securities regulators in jurisdictions where Receptagen is a reporting issuer
and the terms and conditions of the Escrow Agreement, the appointed Trustee
shall sell the appropriate amount of the Deposited Shares to pay any debts owed
by Receptagen to creditors whose claims accrued prior to the Closing, are
unsettled and are not statute barred. The remaining Deposited Shares, if any,
shall be returned to Receptagen and cancelled after the expiry of two years from
the date of issuance of the Deposited Shares.
2.4 NAME CHANGE. The Parties hereby agree that, after the completion of the
Share Exchange, Receptagen shall adopt the name "Spantel Communications, Inc."
or such other similar name as may be agreed and approved by Governmental
Authorities having jurisdiction.
2.5 DIRECTORS. The Parties hereby agree that, upon the completion of the Share
Exchange, the board of directors shall consist of five (5) directors, and the
directors of Receptagen who are not already directors of Spantel shall resign
and be replaced by the nominees of Spantel.
2.6 ESCROW AND HOLD PERIODS. Spantel, Spantel 2000, S.A. and the Spantel
Shareholder acknowledge that applicable securities regulators in Canada and/or
the United Sates may require some or all of the common shares issued pursuant to
this Agreement to be held in escrow pursuant
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to the requirements of the said regulatory authorities. Further, Spantel,
Spantel S.A. and the Spantel Shareholder acknowledges that the common shares
issued by Receptagen pursuant to this Agreement are being issued pursuant to
exemptions from registration and prospectus requirements of applicable
securities legislation, and may be subject to applicable regulatory hold
periods.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SPANTEL SHAREHOLDER
3.1 REPRESENTATIONS AND WARRANTIES OF THE SPANTEL SHAREHOLDER. The Spantel
Shareholder represents and warrants to Receptagen as follows and acknowledges
that Receptagen is relying on these representations and warranties in connection
with the completion of the Share Exchange:
(a) CAPACITY TO OWN SPANTEL SECURITIES - The Spantel Shareholder has all
necessary power, authority and capacity to own the Spantel Securities.
(b) CAPACITY TO ENTER AGREEMENT - The Spantel Shareholder has full power,
right and authority to enter into this Agreement and to perform his
obligations under it.
(c) BINDING OBLIGATION - This Agreement has been duly executed and
delivered by the Spantel Shareholder and constitutes a valid and
binding obligation of the Spantel Shareholder.
(d) ABSENCE OF CONFLICT - The Spantel Shareholder is not a party to, bound
or affected by any agreement which would be violated, breached or
terminated by, or which would result in creation or imposition of any
Encumbrance upon any of the Spantel Securities, as a consequence of the
execution and delivery of this Agreement or the consummation of the
transactions contemplated in this Agreement.
(e) TITLE TO SPANTEL SECURITIES - The Spantel Shareholder is the legal
owner of the Spantel Securities with good and marketable title, free
and clear of any Encumbrances, all of which Spantel Securities are
represented by a single share certificate numbered 001 issued on June
7, 1999, registered in bearer form,.
(f) NO BANKRUPTCY - No proceedings have been taken or authorized by any
Spantel Shareholder or by any other person in respect of the
bankruptcy, insolvency, liquidation, dissolution or winding up as
applicable, of any Spantel Shareholder.
(g) NO OPTION - No Person, other than Receptagen, or as otherwise indicated
in this Agreement, has any agreement or any right capable of becoming
an agreement or option for the purchase from the Spantel Shareholder of
any of the Spantel Securities.
(h) DISCLOSURE - The representations and warranties of the Spantel
Shareholder in this Agreement are true, correct and do not contain any
untrue or misleading statement of a material fact or omit to state a
material fact necessary to make such representations and warranties not
misleading to Receptagen.
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(i) NON-VIOLATION - Except for the Cease Trade Orders, the entering into of
this Agreement and the consummation of transactions contemplated herein
do not and will not conflict with, or result in a breach of, or
constitute a default under the terms or conditions of any constating
document of Spantel, any by-laws, any court or administrative order or
process, any agreement or instrument to which Spantel or the Spantel
Shareholder is party or by which it is bound.
ARTICLE IV
REPRESENTATION AND WARRANTIES OF SPANTEL
4.1 REPRESENTATIONS AND WARRANTIES OF SPANTEL. Spantel represents and warrants
to Receptagen as follows and acknowledges that Receptagen is relying on these
representations and warranties in connection with the Share Exchange:
(a) DUE INCORPORATION - Spantel is a corporation duly incorporated and
validly existing under the laws of the British Virgin Islands.
(b) CAPACITY TO ENTER AGREEMENT - Spantel has full corporate power and
authority to enter into this Agreement and to perform its obligations
under it.
(c) DUE AUTHORIZATION - The executing and delivery of this Agreement and
the consummation of the transactions contemplated under it have been
duly authorized by all necessary corporate action on the part of
Spantel.
(d) BINDING OBLIGATION - This Agreement has been duly executed and
delivered by Spantel and constitutes a valid and binding obligation of
it.
(e) ABSENCE OF CONFLICT - Spantel is not a party to, bound or affected by
any agreement which would be violated, breached or terminated by, or
which would result in the creation or imposition of any Encumbrance
upon any of the Spantel Securities as a consequence of the execution
and delivery of this Agreement or the consummation of the transactions
contemplated in this Agreement.
(f) REGULATORY APPROVALS - Except for Shareholder Approval and Regulatory
Approval, no governmental or regulatory authorization, approval, order,
consent or filing is required on the part of Spantel, in connection
with the execution, delivery and performance of this Agreement and the
performance of Spantel's obligations under this Agreement.
(g) NO BANKRUPTCY - No proceedings have been taken, are pending or
authorized by Spantel or by any other person in respect of the
bankruptcy, insolvency, liquidation, dissolution or winding up of
Spantel.
(h) AUTHORIZED AND ISSUED CAPITAL - The authorized capital of Spantel
consists of 60,000,000 common shares, of which 60,000,000 common shares
(being all of the Spantel Securities) are currently outstanding as
fully paid and non-assessable shares of Spantel, all of which shares
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are represented by a single share certificate numbered 001 issued on
June 7, 1999, registered in bearer form. There are no warrants, options
or other rights of any kind in existence, authorized or agreed to,
which could result in any further shares or other securities of Spantel
being allotted or issued or becoming outstanding.
(i) MINUTE BOOKS - The minute books of Spantel contain accurate and
complete minutes of all meetings and resolutions of the directors and
the shareholders of Spantel held or passed by signature in writing,
respectively, since the date of its incorporation. All such meetings
have been duly called and held. The share and warrant certificate books
and share registers of Spantel are complete and accurate.
(j) SPANTEL'S CAPACITY AND POWER - Spantel has full corporate right, power
and authority to own or lease its assets as now owned or leased and to
carry on the Spantel Business.
(k) BUSINESS - The only business carried on by Spantel is the Spantel
Business.
(l) SPANTEL 2000, S.A. FINANCIAL STATEMENTS - The Spantel 2000, S.A.
Financial Statements attached hereto as Schedule 3 have been prepared
in accordance with international generally accepted accounting
principles applied on a consistent basis throughout the periods
indicated, and fairly and accurately present, subject to immaterial
variation, the financial position, assets and liabilities (whether
absolute, contingent, accrued or otherwise) of Spantel on the dates
thereof and the financial results of Spantel for the periods referred
to in the Spantel Financial Statements.
(m) SUBSIDIARY - Spantel owns one hundred percent (100%) of the issued and
outstanding securities of Spantel 2000, S.A.
(n) NO GUARANTEES ETC. - Spantel is not a party to or bound by any
agreement of guarantee, indemnification, assumption or endorsement or
any like commitment of the obligations, liabilities (contingent or
otherwise) or indebtedness of any Person.
(o) RECORDS
(i) The Spantel Records are true and correct and present fairly
and disclose in all material respects the actual results of
the Spantel Business.
(ii) To the best of the knowledge of the Board of Directors of
Spantel, all material financial transactions of Spantel have
been accurately recorded in the Spantel Records. The Spantel
Records (of a financial nature) have been prepared in
accordance with international generally accepted accounting
principles consistently applied.
(iii) The files, documentation and information in writing provided
by Spantel to Receptagen in connection with the negotiation
and completion of the transactions contemplated in this
Agreement are true and correct in all material respects.
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(p) LITIGATION - There are no judgements, decrees, injunctions, ruling or
orders of any court, Governmental Authority or arbitration panel, or
any actions, suits, grievances or proceedings, (whether or not on
behalf of Spantel) and, to the best of the knowledge of the Board of
Directors of Spantel, are pending or threatened or involving Spantel,
or the Spantel Business which may materially adversely affect the
Spantel Business or Spantel's assets.
(q) SECURITIES DOCUMENTS - The Receptagen Information Circular appended
hereto as Schedule 4 (to the extent that it sets forth facts or
information about Spantel, which facts or information was provided or
reviewed by Spantel) does not contain, to the best of the knowledge and
belief of the Board of Directors of Spantel, any untrue statement of a
material fact or omit to state a material fact that is required to be
stated or omit to state a material fact that is necessary to be stated
in order to make a statement contained in those documents not
misleading in light of the circumstances in which it was made.
(r) DISCLOSURE - To the best of the knowledge of the Board of Directors of
Spantel, the representation and warranties of the Spantel Shareholder
in this Agreement are true, complete and correct and do not contain any
untrue or misleading statement of a material fact.
(s) NON-VIOLATION - Except for the Cease Trade Orders, the entering into of
this Agreement and the consummation of transactions contemplated herein
do not and will not conflict with, or result in a breach of, or
constitute a default under the terms or conditions of any constating
document of Spantel, any by-laws, any court or administrative order or
process, any agreement or instrument to which Spantel is party or by
which it is bound.
ARTICLE V
REPRESENTATION AND WARRANTIES OF SPANTEL 2000, S.A.
5.1 REPRESENTATIONS AND WARRANTIES OF SPANTEL 2000, S.A. Spantel 2000, S.A.
represents and warrants to Receptagen as follows and acknowledges that
Receptagen is relying on these representations and warranties in connection with
the Share Exchange:
(a) DUE INCORPORATION - Spantel 2000, S.A. is a corporation duly
incorporated and validly existing under the laws of Spain.
(b) REGULATORY APPROVALS - Except for shareholder approval and regulatory
approval, no governmental or regulatory authorization, approval, order,
consent or filing is required on the part of Spantel 2000, S.A., in
connection with the execution, delivery and performance of this
Agreement and the performance of Spantel 2000, S.A.'s and Spantel's
obligations under this Agreement.
(c) NO BANKRUPTCY - No proceedings have been taken, are pending or
authorized by Spantel 2000, S.A. or by any other person in respect of
the bankruptcy, insolvency, liquidation, dissolution or winding up of
Spantel 2000, S.A.
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(d) ISSUED AND OUTSTANDING SHARE CAPITAL - All of the issued and
outstanding share capital of Spantel 2000, S.A. is beneficially owned
by Spantel as fully paid and non-assessable shares of Spantel 2000,
S.A. There are no warrants, options or other rights of any kind in
existence, authorized or agreed to, which could result in any further
shares or other securities of Spantel 2000, S.A. being allotted or
issued or becoming outstanding.
(e) MINUTE BOOKS - The minute books of Spantel 2000, S.A. contain accurate
and complete minutes of all meetings and resolutions of the directors
and the shareholders of Spantel 2000, S.A. held or passed by signature
in writing, respectively, since the date of its incorporation. All such
meetings have been duly called and held. The share and warrant
certificate books and share registers of Spantel 2000, S.A. are
complete and accurate.
(f) SPANTEL 2000, S.A.'S CAPACITY AND POWER - Spantel 2000, S.A. has full
corporate right, power and authority to own or lease its assets as now
owned or leased and to carry on the Spantel Business.
(g) BUSINESS - The only business carried on by Spantel 2000, S.A. is the
Spantel Business.
(h) SPANTEL 2000, S.A. FINANCIAL STATEMENTS - The Spantel 2000, S.A.
Financial Statements attached hereto as Schedule 3 have been prepared
in accordance with international generally accepted accounting
principles applied on a consistent basis throughout the periods
indicated, and fairly and accurately present, subject to immaterial
variation, the financial position, assets and liabilities (whether
absolute, contingent, accrued or otherwise) of Spantel on the dates
thereof and the financial results of Spantel for the periods referred
to in the Spantel Financial Statements.
(i) NO GUARANTEES ETC. - Spantel 2000, S.A. is not a party to or bound by
any agreement of guarantee, indemnification, assumption or endorsement
or any like commitment of the obligations, liabilities (contingent or
otherwise) or indebtedness of any Person.
(j) RECORDS
(i) The Subsidiary Records are true and correct and present fairly
and disclose in all material respects the actual results of
the Spantel Business.
(ii) To the best of the knowledge of the Board of Directors of
Spantel 2000, S.A., all material financial transactions of
Spantel 2000, S.A. have been accurately recorded in the
Subsidiary Records. The Subsidiary Records (of a financial
nature) have been prepared in accordance with international
generally accepted accounting principles consistently applied.
(iii) The files, documentation and information in writing provided
by Spantel 2000, S.A. to Receptagen in connection with the
negotiation and completion of the transactions contemplated in
this Agreement are true and correct in all material respects.
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(k) LITIGATION - There are no judgements, decrees, injunctions, ruling or
orders of any court, Governmental Authority or arbitration, or any
actions, suits, grievances or proceedings, (whether or not on behalf of
Spantel 2000, S.A.) and, to the best of the knowledge of the Board of
Directors of Spantel 2000, S.A., are pending or threatened or involving
Spantel 2000, S.A., or the Spantel Business which may materially
adversely affect the Spantel Business or Spantel 2000, S.A.'s assets.
(l) SECURITIES DOCUMENTS - The Receptagen Information Circular appended
hereto as Schedule 5 (to the extent that it sets forth facts or
information about Spantel 2000, S.A., which facts or information was
provided or reviewed by Spantel 2000, S.A.) does not contain, to the
best of the knowledge and belief of the Board of Directors of Spantel
2000, S.A., any untrue statement of a material fact or omit to state a
material fact that is required to be stated or omit to state a material
fact that is necessary to be stated in order to make a statement
contained in those documents not misleading in light of the
circumstances in which it was made.
(m) NON-VIOLATION - Except for the Cease Trade Orders, the entering into of
this Agreement and the consummation of transactions contemplated herein
do not and will not conflict with, or result in a breach of, or
constitute a default under the terms or conditions of any constating
document of Spantel 2000, S.A., any by-laws, any court or
administrative order or process, any agreement or instrument to which
Spantel 2000, S.A. is party or by which it is bound.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF RECEPTAGEN
6.1 REPRESENTATIONS AND WARRANTIES OF RECEPTAGEN. Receptagen hereby represents
and warrants to Spantel, Spantel 2000, S.A. and the Spantel Shareholder as
follows and acknowledges that Spantel, Spantel 2000, S.A. and the Spantel
Shareholder is relying on those representations and warranties in connection
with the Share Exchange:
(a) DUE INCORPORATION - Receptagen is a corporation duly incorporated and
validly existing under the federal laws of Canada.
(b) CAPACITY TO ENTER AGREEMENT - Receptagen has full power, right and
authority to enter into this Agreement and to perform the obligations
under it.
(c) DUE CORPORATE AUTHORIZATION - The execution and delivery of this
Agreement and the consummation of the transactions contemplated under
it have been duly authorized by all necessary corporate action on the
part of Receptagen.
(d) BINDING OBLIGATION - This Agreement has been duly executed and
delivered by Receptagen and constitutes a valid and binding obligation
of Receptagen.
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(e) ABSENCE OF CONFLICT - Except for the Cease Trade Orders, Receptagen is
not a party to, bound or affected by or subject to any agreement which
would be violated, breached or terminated by, or which would result in
the creation or imposition of any Encumbrance upon any of the
Receptagen Shares as a consequence of, the execution and delivery of
this Agreement or the consummation of the transactions contemplated in
this Agreement.
(f) REGULATORY APPROVALS - Except for Shareholders Approval and Regulatory
Approval, no governmental or regulatory authorization approval, order,
consent or filing is required on the part of Receptagen, in connection
with the execution, delivery and performance of this Agreement and the
performance of Receptagen's obligations under this Agreement.
(g) NO BANKRUPTCY - No proceedings have been taken, are pending or
authorized by Receptagen or by any other person in respect of the
bankruptcy, insolvency, liquidation, dissolution or winding up of
Receptagen.
(h) AUTHORIZED AND ISSUED CAPITAL - On the date of this Agreement, the
authorized capital of Receptagen consists of an unlimited number of
common shares, of which 6,652,365 common shares are issued and
outstanding, and an unlimited number of preferred shares, of which no
preferred shares are issued and outstanding. The Receptagen Shares
shall be consolidated prior to Closing so that there shall be
approximately 1,215,236 common shares of Receptagen immediately prior
to the Closing, and said Receptagen Shares shall be duly and validly
issued and outstanding as fully paid and non-assessable. There shall
also be 39,250 Receptagen Options and 28,250 Receptagen Warrants
outstanding and no other right of any kind in existence, authorized or
agreed to which could result in any further shares or the securities of
Receptagen being allotted or issued or becoming outstanding.
(i) MINUTE BOOKS - The minute books of Receptagen contain accurate and
complete minutes of all meetings and resolutions of the directors and
the shareholders of Receptagen held or passed by signature in writing,
respectively, since the date of its incorporation. All such meetings
have been duly called and held.
(j) NO SUBSIDIARIES - Receptagen does not own any shares in or securities
of any corporate body.
(k) REPORTING ISSUER - Receptagen is a reporting issuer in the Provinces of
Ontario, British Columbia and Alberta, as well as in the United States
and is currently on the list of defaulting reporting issuers maintained
by the OSC, ASC and BCSC. Receptagen is the subject of cease trading
orders (the "Cease Trade Orders") imposed by the OSC, ASC and BCSC for
failure to file financial statements pursuant to the SECURITIES ACT
(Ontario), the SECURITIES ACT (Alberta) and the SECURITIES ACT (British
Columbia), respectively.
(l) COMPLIANCE WITH LAWS - Except where failure to comply will not have a
material adverse effect on Receptagen and the failure to file financial
statements with the OSC, ASC and BCSC resulting in the Cease Trade
Orders, Receptagen is in compliance with all applicable laws, rules,
regulations, notices, approvals and orders. For greater certainty,
Receptagen confirms that it has at present, no active business
undertakings
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(m) ABSENCE OF MATERIAL CHANGES. Since the execution of the Letter of
Intent to the execution of this Agreement:
(i) no changes have been made in the accounting methods,
practices, or policies followed by Receptagen;
(ii) Receptagen has not increased, incurred or guaranteed any debt,
obligation, or liability (whether absolute or contingent and
whether or not currently due and payable);
(iii) there has been no damage, destruction or loss, labour trouble,
or other event, development or condition of any character
(whether or not covered by insurance) which adversely affects,
or, may adversely affect, the properties or prospects of
Receptagen; and
(iv) Receptagen has not paid any amount or dividend, or otherwise
made any distribution or the payment of any kind or nature
whatsoever to any non-arm's length Person.
(n) RECEPTAGEN FINANCIAL STATEMENTS - The Receptagen Financial Statements
attached hereto as Schedule 4:
(i) have been prepared in accordance with U.S. generally accepted
accounting principles; and
(ii) fairly and accurately present the financial position, assets
and liabilities (whether absolute, contingent, accrued or
otherwise) of Receptagen on the dates thereof the financial
results of Receptagen for the periods referred to in the
Receptagen Financial Statements, which financial position,
assets and liabilities, shall not have materially changed
other than as so contemplated in this agreement.
(o) NO GUARANTEES ETC. - Receptagen is not a party to or bound by any
agreement of guarantee, indemnification, assumption or endorsement or
any like commitment of the obligations, liabilities (contingent or
otherwise) or indebtedness of any Person, so that as at Closing,
Receptagen shall have no debts or liabilities, except for any
potential, unascertained debt as provided in section 2.3 herein and
US$628,748 owed by Receptagen to InterUnion Financial Corporation
("InterUnion") pursuant to unsecured, non-interest bearing promissory
notes issued to InterUnion to cover InterUnion promissory notes to
Receptagen's co-owner creditors (the "InterUnion Promissory Notes").
(p) TITLE TO AND CONDITION OF ASSETS - As of the date hereof, Receptagen
has no tangible assets of any kind.
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(q) RECORDS
(i) All material financial transactions of Receptagen have been
accurately recorded in the Receptagen Records. The Receptagen
Records (of a financial nature) have been prepared in
accordance with U.S. generally accepted accounting principles
consistently applied.
(ii) The files, documentation and information in writing provided
by Receptagen to the Spantel Shareholder in connection with
the negotiation and completion of the transactions
contemplated in this Agreement are true and correct in all
material respects to the best knowledge of the Board of
Directors of Receptagen.
(r) EMPLOYEES - At present, Receptagen does not employ or engage any
employees.
(s) LITIGATION - There are no judgements, decrees, injunctions, ruling or
orders of any court, Governmental Authority or arbitration, or any
actions, suits, grievances or proceedings (whether or not on behalf of
Receptagen) pending or threatened or involving Receptagen.
(t) DISCLOSURE - The representations and warranties of Receptagen in this
Agreement are true, complete and correct and do not contain any untrue
or misleading statement of a material fact or omit to state a material
fact necessary to make such representations and warranties not
misleading to the Spantel Shareholder.
(u) ENVIRONMENTAL - To the knowledge and belief of the Board of Directors
of Receptagen:
(i) all premises used by Receptagen to carry on its business
comply and have at all times complied with, and Receptagen is
not in violation of and has not violated, in connection with
its ownership of such property or conduct of its business, any
applicable laws, regulations or orders of any governmental
authorities relating to environmental matters;
(ii) Receptagen has at all times received, handled, used, stored,
treated, shipped and disposed of all environmental
contaminants in strict compliance with all applicable
environmental health or safety laws, regulations, orders or
approvals; and
(iii) no hazardous or toxic materials, substances, pollutants,
contaminants or wastes have been released into the
environment, or deposited, discharged, placed or disposed of
at, on or near any real property of Receptagen as a result of
the conduct of the business related thereto, nor has
Receptagen's real property been used at any time by any person
as a landfill or waste disposal site.
(v) TAX LIABILITIES - Receptagen has no outstanding tax liabilities
presently due and owing or expected to come due and owing, to any
taxation authority in Canada or elsewhere.
(w) SECURITIES DOCUMENTS - The Receptagen Information Circular in
conjunction with amendments to the resolutions passed by shareholders
of Receptagen at the annual and special meeting of shareholders of
Receptagen held July 12, 2001 (the "Meeting") as provided in the
minutes of the Meeting appended hereto at Schedule 5 (to the extent
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that it sets forth facts or information about Receptagen) does not
contain, to the best of the knowledge and belief of the Board of
Directors of Receptagen, any untrue statement of a material fact or
omit to state a material fact that is required to be stated or omit to
state a material fact that is necessary to be stated in order to make a
statement contained in those documents not misleading in light of the
circumstances in which it was made.
ARTICLE VII
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
7.1 Subject to section 7.2, all representations and warranties contained in this
Agreement on the part of each of the parties shall survive the Closing for a
period of one (1) year from the Closing Date, after which time, if no claim
shall have been made against a Party with respect to any incorrectness or in
breach of any representation or warranty, that Party shall have no further
liability under this Agreement with respect to the representation or warranty.
7.2 The representations, warranties, covenants and indemnities of the Parties
relating to the tax liability of Receptagen and Spantel shall:
(a) unless resulting from any misrepresentation made or fraud committed in
filing a return or supplying information for the purposes of the INCOME
TAX ACT (CANADA), applicable provincial corporation tax legislation or
any other legislation imposing tax on Receptagen and Spantel, terminate
at the expiration of the last of the limitation periods contained in
the INCOME TAX ACT (CANADA), applicable provincial corporation tax
legislation or any other legislation imposing tax on Receptagen and
Spantel, subsequent to the expiration of which an assessment,
reassessment, or other form of recognized document assessing liability
for its year ended immediately prior to the Closing Date; and
(b) if based upon misrepresentation made or fraud committed in filing a
return or in supplying information for the purpose of the INCOME TAX
ACT (CANADA), applicable provincial corporation tax legislation or any
other legislation imposing tax on Receptagen and Spantel, survive
without limit as to time.
7.3 All statements contained in any certificate or any instrument delivered by
or on behalf of a Party pursuant to or in connection with the transactions
contemplated by this Agreement shall be deemed to be made by such Party under
this Agreement.
ARTICLE VIII
COVENANTS
8.1 CONDUCT OF SPANTEL BUSINESS PRIOR TO CLOSING. During the Interim Period,
Spantel shall:
(a) CONDUCT BUSINESS IN ORDINARY COURSE - except as otherwise contemplated
or permitted by this Agreement, conduct the Spantel Business diligently
and prudently, and in the normal course;
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(b) CONTINUE INSURANCE - continue in full force all existing insurance
policies;
(c) COMPLY WITH LAWS - comply with all laws applicable to the Spantel
Business;
(d) MAINTAIN PERMITS - apply for, maintain in good standing and renew all
Permits, licenses, and registrations necessary to enable it to carry on
the Spantel Business as now conducted;
(e) ISSUE SECURITIES, ETC. - not issue any securities, including debt,
except in the ordinary course of business, as contemplated herein or
with the prior written consent of Receptagen;
(f) DIVIDENDS - not declare or pay any dividends or distribute any of its
properties or assets to shareholders or any non-arm's length Person
without the prior written consent of Receptagen;
(g) AGREEMENTS - not enter into any contracts, except in the ordinary
course of business or with the prior written consent of Receptagen;
(h) ARTICLES AND BYLAWS - not alter or amend its articles or bylaws, except
as contemplated herein or with the prior written consent of Receptagen;
(i) BUSINESS ACTIVITY - not engage in any business enterprise or other
activity different from its current activities to date except those
specifically expressed herein or with the prior written consent of
Receptagen;
8.2 CONDUCT OF RECEPTAGEN PRIOR TO CLOSING. During the Interim Period,
Receptagen shall:
(a) ISSUE SECURITIES, ETC. - not issue any securities, including debt,
except in the ordinary course of business, as contemplated herein or
with the prior written consent of Spantel;
(b) DIVIDENDS - not declare or pay any dividends or distribute any of its
properties or assets to shareholders or any non-arm's length Person
without the prior written consent of Spantel;
(c) AGREEMENTS - not enter into any contracts, except in the ordinary
course of business or with the prior written consent of Spantel;
(d) ARTICLES AND BYLAWS - not alter or amend its articles or bylaws, except
as contemplated herein or with the prior written consent of Spantel;
(e) BUSINESS ACTIVITY - not engage in any business enterprise or other
activity different from its current activities to date except those
specifically expressed herein or with the prior written consent of
Spantel;
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8.3 ACCESS FOR INVESTIGATION.
(a) Receptagen and Spantel shall permit the other Party and its Authorized
Representatives, until the Closing Date, to have reasonable access
during normal business hours to their respective premises and their
respective Records to enable confirmation of the accuracy of the
Records and the matters represented and warranted in Articles III, IV,
V and VI.
Until the Closing Date and, in the event the termination of this
Agreement without the completion of the transactions contemplated
hereby, each of the Parties shall thereafter, subject to subsection
8.3(b), use its best efforts to keep confidential and not use for its
own purpose (other than as contemplated by this Agreement) any
information obtained from any other Party with respect to the other
Party's affairs. If this Agreement is terminated, all documents,
working papers and other written material obtained by the Party from
the other party in connection with this Agreement and not previously
made public (and all copies thereof) shall be returned to the other
Party promptly after such termination.
(b) The obligation of each of the Parties under subsection 8.3(a) to keep
confidential and not use any information shall not apply to information
which:
(i) becomes generally available to the public other than as a
result of a disclosure by the Party or its representatives in
violation of this Agreement;
(ii) was available to the Party on a non-confidential basis prior
to its disclosure by the other party or their representatives;
(iii) becomes available to the party on a non-confidential basis
from a source other than the other Party or its
representatives, provided that such source is not bound by a
confidentiality agreement with the other Party; or
(iv) the Party is required by law to disclose.
8.4 CLOSING DOCUMENTS. The Ancillary Agreements and the Conveyance Documents
shall be executed and delivered by the Parties thereto at the Closing Time.
8.5 CORPORATE PROCEEDINGS. On or before the Closing Date, each Party (which is a
corporation) shall provide to the other Parties certified copies of all
necessary proceedings and resolutions, corporate or otherwise, and all other
necessary actions, corporate or otherwise, authorizing the execution and
delivery of this Agreement and the matters contemplated in it.
8.6 ACTIONS TO SATISFY CLOSING CONDITIONS. Each Party shall take all such
actions as are within its power to control, and shall use its best efforts to
cause other actions to be taken which are not within its power to control, so as
to ensure compliance with any conditions set forth in this Agreement that are
for the benefit of itself or any other Party.
8.7 RECEPTAGEN CORPORATE PROCEEDINGS. Receptagen shall have obtained or effected
or shall use its best effort to obtain or effect prior to Closing the following:
(i) the Shareholder Approval;
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(ii) the Regulatory Approval;
(iii) amendment of the articles of Receptagen to consolidate the
common shares on a ratio of ten (10) "old" common shares for
one (1) "new" common share; and
(iv) the completion of the Debt Conversion.
ARTICLE IX
CONDITIONS OF CLOSING
9.1 CONDITIONS FOR RECEPTAGEN'S BENEFIT. Receptagen shall not be obliged to
complete the Share Exchange unless, on the Closing Date, each of the following
conditions shall have been satisfied:
(a) ACCURACY OF REPRESENTATIONS - The representations and warranties of the
Spantel Shareholder, Spantel and Spantel 2000, S.A. set forth in
Articles III, IV and V, respectively, shall be true and correct at the
Closing Date, except as those representations and warranties may be
affected by the occurrence of events or transactions expressly
contemplated and permitted by this Agreement, including, without
limitation, those in the ordinary course of business, and Receptagen
shall have received a certificate from the Spantel Shareholder, Spantel
and Spantel 2000, S.A. confirming the foregoing.
(b) PERFORMANCE OF OBLIGATIONS - Spantel, Spantel 2000, S.A. and the
Spantel Shareholder shall have performed all of the obligations
hereunder to be performed by them at or prior to the Closing. Spantel,
Spantel 2000, S.A. and the Spantel Shareholder shall not be in breach
of any agreement on their part contained herein;
(c) DELIVERIES - Spantel, Spantel 2000, S.A. and the Spantel Shareholder
shall have delivered or caused to be delivered to Receptagen the
Conveyance Documents, and shall deliver up to Receptagen possession of
the Spantel Securities, free and clear of any Encumbrances;
(d) SHAREHOLDER APPROVAL AND REGULATORY APPROVAL - On or before Closing
Time, all items listed in the subarticles of section 8.7 herein shall
have been approved by the shareholders of Receptagen, and the
Regulatory Approval shall have been obtained or given, as the case may
be;
(e) COMPLETION OF INVESTIGATIONS - The investigations and assessments
contemplated in section 8.3 shall have been completed and Receptagen
shall be satisfied with the result of such investigations and
assessments including, without limitation, the accuracy of the Spantel
Records and Subsidiary Records and matters represented and warranted in
Articles III, IV and V;
(f) CONSENTS, AUTHORIZATIONS AND REGISTRATIONS - All consents, approvals,
orders and authorizations of, from or notifications to any persons or
Governmental Authorities required
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in connection with the completion of any of the transactions
contemplated by this Agreement, the execution of this Agreement, the
Closing or the performance of any of the terms and conditions of this
Agreement shall have been obtained on or before the Closing Date.
There shall be no injunction or order issued preventing, and no pending
or threatened claim, action, litigation or proceeding, judicial or
administrative, or investigation against any Party by any Governmental
Authority or Person for the purpose of enjoining or preventing the
consummation of this Agreement, or otherwise claiming that this
Agreement or the consummation thereof is improper or would give rise to
proceedings under any statute or rule of law;
(g) NO LOSS - During the Interim Period, there shall have been no material
damage to the assets of Spantel or the Spantel Business by fire or
other peril, whether or not such damage is covered by insurance; and
(h) NO MATERIAL CHANGES - There shall have been no material adverse changes
in the Spantel Business, assets or financial condition of Spantel
during the Interim Period. For the purposes of this subsection, the
term "material adverse change" shall mean any change in the assets,
liabilities or financial condition of Spantel or the Spantel Business
that may involve material reduction, damage, risk to or destruction of
the assets, whether or not the change is covered by insurance.
If any one or more of the foregoing conditions shall not have been fulfilled on
or before the Closing Date, Receptagen may terminate this Agreement by notice in
writing to the other Parties in which event Receptagen shall be released from
all obligations under this Agreement and (Receptagen can show that the condition
relied upon could reasonably have been performed by the other parties) the other
Parties shall also be released from all obligations hereunder; provided,
however, that Receptagen shall be entitled to waive compliance with any one or
more of such conditions in whole or in part if it shall see fit to do so,
without prejudice to its rights of termination in the event of the
non-fulfilment of any other condition in whole or in part.
9.2 CONDITIONS FOR THE BENEFIT OF SPANTEL AND THE SPANTEL SHAREHOLDER. Spantel
and the Spantel Shareholder shall not be obliged to complete the Share Exchange
unless, on the Closing Date, each of the following conditions shall have been
satisfied:
(a) ACCURACY OF REPRESENTATIONS - The representations and warranties of
Receptagen set forth in Article VI shall be true and correct at the
Closing Date, except as those representations and warranties may be
affected by the occurrence of events or transactions expressly
contemplated and permitted by this Agreement, and the Spantel
Shareholder shall have received a certificate from Receptagen
confirming the foregoing.
(b) PERFORMANCE OF OBLIGATIONS - Receptagen shall have performed all of the
obligations hereunder to be performed by it at or prior to the Closing
and Receptagen shall not be in breach of any agreement on its part
contained herein.
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(c) DELIVERIES - Receptagen shall have delivered or caused to be delivered
to the Spantel Shareholder possession of the 16,500,000 Receptagen
Shares, free and clear of any Encumbrances, and to the Trustee
possession of the Deposited Shares.
(d) SHAREHOLDERS APPROVAL AND REGULATORY APPROVAL - The Shareholders
Approval, the approval of this Agreement and the transactions
contemplated herein by the Spantel Shareholder, the matters
contemplated in section 8.7 and the Regulatory Approval shall have been
obtained, completed or given, as the case may be, on or before the
Closing Time.
(e) COMPLETION OF INVESTIGATIONS - The investigations and assessments
contemplated in section 8.3 shall have been completed and Spantel and
the Spantel Shareholder shall be satisfied with the results of such
investigations and assessments including, without limitation, the
accuracy of the Receptagen Records and matters represented and
warranted in Article VI.
(f) CONSENTS, AUTHORIZATIONS AND REGISTRATIONS - All consents, approvals,
orders and authorizations of, from or notifications to any Persons or
Governmental Authorities required in connection with the completion of
any of the transactions contemplated by this Agreement, the execution
of this Agreement, the Closing or the performance of any of the terms
and conditions of this Agreement shall have been obtained on or before
the Closing Date.
There shall be no injunction or order issued preventing, and no pending
or threatened claim, action, litigation or proceeding, judicial or
administrative, or investigation against any Party by any Governmental
Authority or Person for the purpose of enjoining or preventing the
consummation of this agreement, or otherwise claiming that this
Agreement or the consummation thereof is improper or would give rise to
proceedings under any statute or rule of law.
(g) NO LOSS - During the Interim Period, there has been no material damage
to the assets of Receptagen by fire or other peril, whether or not such
damage is covered by insurance.
(h) NO MATERIAL CHANGES - There shall have been, in the reasonable opinion
of Spantel, Spantel 2000, S.A. and the Spantel Shareholder, no material
adverse changes in the assets or financial condition of Receptagen
during the Interim Period. For the purposes of this subsection, the
term "material adverse change" shall mean any change in the assets,
liabilities or financial condition of Receptagen that may, in the
reasonable opinion of Spantel, Spantel S.A. and the Spantel Shareholder
involve material reduction, damage, risk to or destruction of the
assets whether or not the change is covered by insurance.
(i) RECEPTAGEN DEBT- As of the Closing, Receptagen shall have no
outstanding debt except any potential unascertained debt owed by
Receptagen as described in section 2.3 herein and the InterUnion
Promissory Notes.
(j) RECEPTAGEN SHARES ISSUED AND OUTSTANDING - Immediately prior to the
Closing, there shall be no more than 1,215,236 post-consolidation
common shares of Receptagen
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issued and outstanding (including the shares to be issued pursuant to
the Debt Conversion), 39,250 Receptagen Options outstanding and 28,250
Receptagen Warrants outstanding.
If any one or more of the foregoing conditions shall not have been fulfilled on
or before the Closing Date, Spantel, Spantel 2000, S.A. and the Spantel
Shareholder may terminate this Agreement by notice in writing to Receptagen in
which event Spantel, Spantel 2000, S.A. and the Spantel Shareholder shall be
released from all obligations under this Agreement and (unless Spantel, Spantel
2000, S.A. and the Spantel Shareholder can show that the condition relied upon
could reasonably have been performed by Receptagen) Receptagen shall also be
released from all obligations hereunder; provided, however, that Spantel,
Spantel 2000, S.A. and the Spantel Shareholder shall be entitled to waive
compliance with any one or more of such conditions in whole or in part if they
shall see fit to do so, without prejudice to their rights to termination in the
event of the non-fulfilment of any other condition in whole or in part.
ARTICLE X
INDEMNIFICATION
10.1 MUTUAL INDEMNIFICATION'S FOR BREACHES OF WARRANTY, ETC. Subject to section
10.3, Receptagen hereby covenants and agrees with the Spantel Shareholder,
Spantel 2000, S.A. and Spantel and the Spantel Shareholder, Spantel 2000, S.A.
and Spantel hereby covenant and agree severally with Receptagen (the parties
covenanting and agreeing to indemnify another party under this Article X are
hereinafter individually referred to as "Indemnifying Party" and the parties
that are being indemnified by another Party under this Article X are hereinafter
individually referred to as the "Indemnified Party") to indemnify and save
harmless the Indemnified Party, effective as and from the Closing Time, from and
against any Claims which may be made or brought against the Indemnified Party
and/or which it may suffer or incur as a result of, or arising out of any
non-fulfilment of any covenant or agreement on the part of the Indemnifying
Party under this Agreement or any Ancillary Agreement or any incorrectness in or
breach of any representation or warranty of the Indemnifying Party contained in
this Agreement or any Ancillary Agreement.
10.2 UNDISCLOSED LIABILITIES INDEMNITY. Notwithstanding section 10.1 and without
limiting the generality of section 10.1:
(a) The Spantel Shareholder shall indemnify Receptagen from all Claims
arising from liabilities or obligations to Persons that arise from the
act or failure to act of such Spantel Shareholder prior to the Closing
Date that are not disclosed to Receptagen pursuant to Article III;
(b) Spantel shall indemnify Receptagen from all Claims arising from
liabilities or obligations to Persons that arise from the act or
failure to act of Spantel prior to the Closing Date that are not
disclosed to Receptagen pursuant to Article IV;
(c) Spantel 2000, S.A. shall indemnify Receptagen from all Claims arising
from liabilities or obligations to Persons that arise from the act or
failure to act of Spantel 2000, S.A. prior to the Closing Date that are
not disclosed to Receptagen pursuant to Article V; and
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(d) Receptagen shall indemnify Spantel, Spantel 2000, S.A. and the Spantel
Shareholder from all Claims arising from liabilities or obligations to
Persons that arise from the act or failure to act of Receptagen prior
to the Closing Date that are not disclosed to Spantel, Spantel 2000,
S.A. and the Spantel Shareholder pursuant to Article VI.
10.3 LIMITATION ON MUTUAL INDEMNIFICATION. The indemnification obligations of
each of the Parties pursuant to section 10.1 and 10.2 shall be subject to the
following:
(a) the applicable limitation mentioned in Article VII respecting the
survival of the representations and warranties of the Parties;
(b) the indemnity obligations under section 10.2 shall survive for a period
of one (1) year from the Closing Date;
(c) there shall be no limit as to amount in respect of breaches of the
representations and warranties of the Parties other than as
specifically limited by the provisions of the section; and
(d) an Indemnifying Party shall not be required to indemnify an Indemnified
Party until the aggregate Claims sustained by the Indemnified Party
exceeds a value of $5,000, in which case the Indemnifying Party shall
be obligated to the Indemnified party for all Claims without limit as
to amount.
10.4 PROCEDURE FOR INDEMNIFICATION. The following provisions shall apply to any
Claims for which an Indemnifying Party may be obligated to indemnify an
Indemnified Party pursuant to this Agreement:
(i) upon receipt from a third party by the Indemnified Party of
notice of a Claim or the Indemnified party becoming aware of a
Claim in respect of which the Indemnified Party proposes to
demand indemnification from the Indemnifying Party, the
Indemnified Party shall give notice to that effect to the
Indemnifying Party with reasonable promptness, provided that
failure to give such notice shall not relieve an Indemnifying
Party from any liability it may have to the Indemnified Party
except to the extent that the Indemnifying Party is prejudiced
thereby;
(ii) in the case of Claims arising from third parties, the
Indemnifying Party shall have the right by notice to the
Indemnified party not later than thirty (30) days after
receipt of the notice described in paragraph (i) above to
assume the control of the defense, compromise or settlement of
the Claims, provided that such assumption shall, by its terms,
be without costs to the Indemnified Party and the Indemnifying
Party shall at the Indemnified Party's request furnish it with
reasonable security against any costs or other liabilities to
which it may be or become exposed by reason of such defense,
compromise or settlement;
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(iii) upon the assumption of control by the Indemnifying Party as
aforesaid, the Indemnifying Party shall diligently proceed
with the defense, compromise or settlement of the Claims at
its sole expense, including employment of counsel reasonably
satisfactory to the Indemnified Party and, in connection
therewith, the Indemnified Party shall co-operate fully, but
at the expense of the Indemnifying Party, to make available to
the Indemnifying Party all pertinent information and witnesses
under the Indemnified Party's control, make such assignments
and take such other steps as in the opinion of counsel for the
Indemnifying Party are necessary to enable the Indemnifying
Party to conduct such defense; provided always that the
Indemnified Party shall be entitled to reasonable security
from the Indemnifying Party for the expense, costs of other
liabilities to which it may be or may become exposed by reason
of such co-operation;
(iv) the final determination of any such Claims arising from third
parties, including all related costs and expenses, will be
binding and conclusive upon the Parties as to the validity or
invalidity, as the case may be of such Claims against the
Indemnifying Party hereunder; and
(v) should the Indemnifying Party fail to give notice to the
Indemnified Party as provided in paragraph (ii) above, the
Indemnified Party shall be entitled to make such settlement of
the Claims as in its sole discretion may appear advisable, and
such settlement or any other final determination of the Claims
shall be binding upon the Indemnifying Party.
ARTICLE XI
CLOSING ARRANGEMENTS
11.1 CLOSING. The Closing shall take place at the offices of Xxxxxxxxx Xxxxxxx
Xxxxxxxxx Sugar LLP, Barristers and Solicitors, 000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxxx X0X 0X0,Xxxxxxx, Xxxxxx at the Closing Time on the Closing Date.
11.2 CLOSING PROCEDURES. At the Closing Time:
(a) Receptagen shall issue and deliver to the Spantel Shareholder
possession of the 16,500,000 Receptagen Shares;
(b) the Spantel Shareholder shall deliver up to Receptagen the Spantel
Securities;
(c) Receptagen shall issue and deliver to the Trustee possession of the
Deposited Shares;
(d) Spantel shall provide to Receptagen a certified copy of a unanimous
resolution of the shareholders of Spantel approving the Share Exchange;
(e) Counsel for Spantel shall deliver a legal opinion, addressed to
Receptagen and counsel for Receptagen, in a form satisfactory to
counsel for Receptagen, concerning the status and standing of Spantel
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and Spantel 2000, S.A. and other various material issues addressed
herein concerning Spantel, Spantel 2000, S.A. and the Spantel
Shareholder including various matters addressed in Articles III, IV and
V herein;
(f) Counsel for Receptagen shall deliver a legal opinion, addressed to
Spantel, Spantel 2000, S.A. and the Spantel Shareholder and counsel for
Spantel, Spantel 2000, S.A. and the Spantel Shareholder, in a form
satisfactory to counsel for Spantel, Spantel 2000, S.A. and the Spantel
Shareholder, concerning the status and standing of Receptagen and other
various material issues addressed herein concerning Receptagen
including various matters addressed in Article VI herein;
(g) The current directors of Receptagen who are not already directors of
Spantel shall resign in seriatim from the board of Receptagen in favour
of the nominees of Spantel (as it will be constituted at the Closing);
and
(h) The Parties shall take or shall have taken, as the case may be, the
other actions contemplated to be taken by them at or before the Closing
contemplated in this Agreement.
11.3 NON-WAIVER. No investigations made by or on behalf of Receptagen, Spantel,
Spantel 2000, S.A. and the Spantel Shareholder at any time shall have the effect
of waiving or diminishing the scope of or otherwise affecting any
representation, warranty or indemnity made by or imposed upon the Parties
pursuant to this Agreement.
ARTICLE XII
GENERAL
12.1 TERMINATION
(a) This Agreement may be terminated at any time prior to the Closing:
(i) by the mutual agreement of the Parties;
(ii) by the Parties if:
(I) the Share Exchange shall not have been completed by
January 31, 2002 (or such other date, if any, as the
Parties shall have agreed in writing), if the failure
to complete such purchase and sale on or before such
date is not caused by any breach of this Agreement by
the Party electing to terminate; or
(II) the Share Exchange would violate any non-appealable
final order, decree or judgement of any court or
governmental body having competent jurisdiction.
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(b) If this Agreement is terminated by a Party under subsection 11.1(a),
such termination shall be without liability of either Party to the
other parties, or to any of their shareholders, directors, officers,
employees, agents, consultants or representatives provided that if such
termination shall result from the wilful failure of the Party to fulfil
a condition to the performance of the other Parties or to perform a
covenant of this agreement or from a wilful breach by the party to this
Agreement, the Party shall be fully liable for any and all damages,
costs and expenses (including, but not limited to, reasonable counsel
fees and disbursements) sustained or incurred by the other Parties.
12.2 EXPENSES. Except for Receptagen's auditing costs, all costs and expenses
(including the fees and disbursements of accountants and legal counsel) incurred
in connection with this Agreement and completion of the transactions
contemplated by this Agreement shall be paid by Spantel whether or not the Share
Exchange is completed.
12.3 TIME OF ESSENCE. Time shall be of the essence in all respects of this
Agreement.
12.4 NOTICES. Any notice or other communication which is required or permitted
to be given or made by one Party to the others hereunder shall be in writing and
shall be either:
(1) personally delivered to such Parties; or
(2) sent by facsimile.
Any notice shall be sent to the intended recipient at its address as
follows:
(a) TO RECEPTAGEN:
c/o Xxxxxxxxx Xxxxxxx Xxxxxxxxx Sugar LLP
Barristers and Solicitors
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
AND TO THEIR COUNSEL:
Xxxxxxxxx Xxxxxxx Xxxxxxxxx Sugar LLP
Barristers and Solicitors
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Facsimile No.: (000) 000-0000
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(b) TO SPANTEL, SPANTEL 2000, S.A. AND/OR THE SPANTEL SHAREHOLDER
AT:
Spantel Communications Inc.
c/o Spantel Communications, Inc.
Xxxxx xx xx Xxxxxxxxxx 000, 0-0X
00000
Xxxxxx, Xxxxx
Attention:
Facsimile No.:
AND TO THEIR COUNSEL:
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Attention:
Facsimile No.:
or at such other address as any Party may from time to time advise the others by
notice in writing. Any notice given by personal delivery shall be deemed to be
received on the date of delivery. Any notice sent by facsimile or similar method
of recorded communication shall be deemed to have been received on the next
Business Day following the date of its transmission.
12.5 FURTHER ASSURANCES. The Parties shall with reasonable diligence do all
things and provide all reasonable assurances as may be required to complete the
transactions contemplated by this Agreement, and each Party shall provide such
further documents or instruments required by any other Party as may be
reasonably necessary or desirable to give effect to this Agreement and carry out
its provisions, whether before or after the Closing.
12.6 PUBLIC NOTICE. All public notices to third parties and all other publicity
concerning the transactions contemplated by this Agreement shall be jointly
planned and co-ordinated by the Parties and no Party shall act unilaterally in
this regard without the prior written approval of the other Parties, such
approval not to be unreasonably withheld.
12.7 AMENDMENT AND WAIVER. No supplement, modification, waiver or termination of
this Agreement shall be binding unless executed in writing by the party to be
bound. No waiver of any of the Provisions of this Agreement shall constitute a
waiver of any other provision (whether or not similar) nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
12.8 ASSIGNMENT. This Agreement and the rights or obligations hereunder or
thereunder are not assignable by any Party without the prior written consent of
the other Parties, which consent shall
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not be unreasonably withheld. This Agreement shall enure to the benefit of and
be binding upon the Parties and their respective successors and permitted
assigns.
12.9 SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
hereof. Any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
12.10 INDEPENDENT LEGAL ADVICE. The Parties hereby acknowledge that each has
been advised to seek Canadian and U.S. independent legal counsel in respect of
the Agreement and the matters contemplated herein. To the extent that a Party
declines to receive Canadian and/or U.S. independent legal counsel in respect of
the Agreement, that Party waives the right, should a dispute later develop, to
rely on its lack of Canadian and/or U.S. independent legal counsel to avoid its
obligations, to seek indulgences from the other Parties or to otherwise attack
the integrity of the Agreement and the provisions thereof, in whole or in part.
12.11 COUNTERPARTS. This agreement may be executed by the Parties in one or more
counterparts by original or facsimile signature, each of which when so executed
and delivered shall be an original and such counterparts shall together
constitute one and the same instrument.
(executions on next page)
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IN WITNESS WHEREOF this agreement has been executed by the Parties each
as of the day and year first before written.
THIS AGREEMENT IS HEREBY EXECUTED on the date set forth above.
RECEPTAGEN LTD.
Per: /s/ Xxxxx Xxxx
--------------------------
Authorized Signing Officer
I have authority to bind the company.
SPANTEL COMMUNICATIONS, INC.
Per: /s/ Xxxx Xxxxx Xxxxxxxx
--------------------------
Authorized Signing Officer
I have authority to bind the company.
SPANTEL 2000, S.A.
Per: /s/ Xxxx Xxxxx Xxxxxxxx
--------------------------
Authorized Signing Officer
I have authority to bind the company.
)
)
) /s/ Mohamed Khashoggi
------------------------------- ) ----------------------------------
Witness to signature to Mohamed ) MOHAMED KHASHOGGI
Khashoggi )
)
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SCHEDULE 1
DEFINITIONS
"Affiliate and Associate" means an "affiliate" and "associate", respectively, as
those terms are defined in the CANADA BUSINESS CORPORATION ACT, as amended on
the date hereof.
"Agreement" means the Agreement and any instrument supplemental or ancillary to
it.
"ASC" means Alberta Securities Commission.
"Ancillary Agreements" means all documents, agreements, certificates and
instruments to be executed or delivered by any Person under this Agreement
including the Conveyance Documents.
"Authorized Representatives" means employees, agents, counsel, accountants and
other representatives.
"BCSC" means the British Columbia Securities Commission.
"Business Day" means any day other than a Saturday, Sunday or statutory holiday
in the Province of Ontario.
"Cease Trade Orders" means the cease trading orders imposed on Receptagen by the
OSC, ASC and BCSC for failure to file financial statements pursuant to the
SECURITIES ACT (Ontario), the SECURITIES ACT (Alberta) and the SECURITIES ACT
(British Columbia), respectively.
"Claims" means claims, demands, actions, causes of action, damages, losses,
costs, fines, penalties, interest, liabilities and expenses, including, without
limitation, reasonable legal fees.
"Closing" means the completion of the Share Exchange pursuant to this Agreement.
"Closing Date" means January 31, 2002, or such other later date as may be agreed
to by the Parties.
"Closing Time" means 2:00 p.m. (Toronto time) on the Closing Date or such other
time on the Closing Date as may be agreed to by the Parties.
"Consolidation" means the consolidation of the outstanding common shares of
Receptagen on a 1 for 10 basis as provided herein.
"Conveyance Documents" means all bills of sale, assignments, instruments of
transfer, assurances, consents, and other documents as shall be necessary to
effectively transfer to Receptagen the Spantel Securities.
"Debt Conversion" means, subject to Regulatory Approval, the conversion of
outstanding debt of approximately $358,000 owed by Receptagen to certain
creditors into up to 5,500,000 pre-consolidation common shares of Receptagen
prior to the Closing.
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"Deposited Shares" means the additional 60,761 Receptagen Shares issued at
Closing to the Trustee in trust for the Spantel Shareholder on the terms and
conditions set out in the Escrow Agreement.
"Escrow Agreement" means the escrow agreement attached hereto as Schedule 6.
"Encumbrances" means any mortgage, charge, pledge, hypothecate, lien,
encumbrance, restriction, option, right of others or security interest of any
kind.
"Governmental Authorities" means any applicable Canadian or non-Canadian
federal, provincial and municipal agency, ministry, crown corporation,
department, inspector and official.
"Interim Period" means the period commencing on the date of this Agreement and
ending immediately before the opening of business on the Closing Date.
"InterUnion Promissory Notes" means the US$628,748 owed by Receptagen to
InterUnion Financial Corporation ("InterUnion") pursuant to unsecured,
non-interest bearing promissory notes issued to InterUnion to cover InterUnion
promissory notes to Receptagen's co-owner creditors.
"Letter of Intent" means the letter of intent dated May 15, 2001 between
Receptagen and Spantel which is superseded by this Agreement.
"Meeting" means the annual and special meeting of shareholders of Receptagen
held July 12, 2001 to consider the transactions contemplated herein.
"OSC" means the Ontario Securities Commission.
"Parties" means the parties to the Agreement and "Party" means any one of them.
"Permits" means authorizations, registrations, permits, approvals or licenses
that can be issued or granted by Governmental Authorities.
"Person" means an individual, body corporate, partnership, trustee, trust,
unincorporated association, executor, administrator or legal representative.
"Records" means the Spantel Records, Receptagen Records and Subsidiary Records.
"Regulatory Approval" means the approvals and consents of applicable regulatory
authorities in Canada and the United States which are required to complete the
Share Exchange, including but not limited to, the revocation of the Cease Trade
Orders in Ontario, Alberta and British Columbia and approval of the Debt
Conversion.
"Receptagen Financial Statements" means the financial statements of Receptagen
attached Schedule 4.
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"Receptagen Information Circular" means the draft management information
circular of Receptagen appended hereto as Schedule 5, to be used at the annual
and special meeting of the shareholders of the Corporation relating to, amongst
other things, the Share Exchange.
"Receptagen Options" means the outstanding options to acquire Receptagen Shares
as of the date of this Agreement.
"Receptagen Records" means Receptagen books, records, files including business
and financial records, documentation and information (other than the Receptagen
Financial Statements), whether in writing or stored in any retrieval system or
data base.
"Receptagen Shares" means the common shares of Receptagen.
"Receptagen Stock Option Plan" means the stock option plan of Receptagen adopted
by the board of directors of Receptagen on December 3, 1995 and approved by the
shareholders of Receptagen on June 12, 1995 which will terminate on June 12,
2005.
"Receptagen Warrants" means the outstanding warrants to acquire common shares of
Receptagen as of the date of this Agreement.
"Share Exchange" has the meaning attributed to it in section 2.2.
"Shareholder Approval" means approval by the holders of the common shares in
Receptagen in respect to the Share Exchange, including but not limited to,
approval of: (i) the Share Exchange; (ii) Debt Conversion; (iii) Consolidation;
(iv) change of directors upon the completion of the Share Exchange; (v) change
of name of Receptagen to "Spantel Communications Inc." or such other name as the
board of directors of Receptagen may decide; (vi) application to the OSC, ASC
and BCSC to revoke the Cease Trade Orders; and (vii) application of Receptagen
to cease to be a reporting issuer in Ontario, Alberta and British Columbia.
"Spantel's Business" means Spantel's business, operated through Spantel 2000,
S.A. and headquartered in Madrid, Spain, of providing discount long distance
telecommunications services aimed at a broad base of customers in Spain.
"Spantel 2000, S.A. Financial Statements" means the financial statements of
Spantel 2000, S.A. attached as Schedule 3.
"Spantel Records" means Spantel's books, records, files, including business and
financial records, documentation and information (other than the Spantel
Financial Statements), whether in writing or stored in any retrieval system or
data base.
"Spantel Securities" means all the issued and outstanding securities of Spantel,
being 60,000,000 common shares.
"Spantel Shareholder" means the registered shareholders of Spantel,
respectively, as of the day this Agreement was executed.
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"Subsidiary Records" means Spantel 2000, S.A.'s books, records, files, including
business and financial records, documentation and information, whether in
writing or stored in any retrieval system or data base.
"Trustee" means the trustee appointed pursuant to the Escrow Agreement.
