Exhibit 3.66
SECURITIES EXCHANGE AGREEMENT
-----------------------------
THIS SECURITIES EXCHANGE AGREEMENT made as of the 6/th/ day of June,
2000.
AMONG:
OPUS MINERALS INC., a corporation incorporated under the laws of the
Province of Ontario;
(hereinafter referred to as "Purchaser")
OF THE FIRST PART
- and -
IL DATA CANADA, INC., a corporation incorporated under the laws of the
Province of Ontario;
(hereinafter referred to as "Seller")
OF THE SECOND PART
- and -
All shareholders of Seller listed on the Schedule "A"
(hereinafter referred to as the "Seller's Shareholders")
OF THE THIRD PART
WHEREAS:
A. Purchaser wishes to acquire all of the issued and outstanding shares in the
capital of Seller from the Seller's Shareholders in exchange for shares in
the capital of Purchaser; and
B. The Seller's Shareholders wish to exchange their shares in the capital of
Seller for shares in the capital of Purchaser;
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the mutual
covenants and agreements herein contained and for other good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged), the
parties hereto agree with each other as follows:
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ARTICLE I
DEFINITIONS
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1.1 Definitions. In this Agreement, unless there is something in the context or
subject matter inconsistent therewith, the following words and terms set forth
in this Article 1 shall have the meanings respectively assigned to them:
(1) "Affiliate" means an affiliated body corporate within the meaning
of the Ontario Business Corporations Act;
(2) "Agreement" means this Agreement and all instruments supplemental
hereto or in amendment or confirmation hereof; "herein", "hereof"
and similar expressions mean and refer to this Agreement and not
to any particular article, section, clause or subclause; and
"Section", "clause" or "subclause" means and refers to the
specified article, section, clause or subclause of this
Agreement;
(3) "Business Day" means a day other than a Saturday or Sunday on
which the principal commercial banks located in Toronto, Ontario
are open for business during normal banking hours;
(4) "Closing" means the completion of the Exchange (as defined in
Section 2.1 below) with the Purchaser and the Seller's
Shareholders which shall take place on the Closing Date at the
offices of Xxxx & Xxxxxx in Toronto, Ontario;
(5) "Closing Date" means, unless otherwise expressly agreed to by the
parties hereto in writing, the earlier of (i) June 6, 2000; or
(ii) the first Business Day which is two (2) Business Days after
Purchaser receives from Seller and Seller receives from Purchaser
written confirmation that each of the condition precedents to the
completion of the Agreement set out in Sections 6.1 and 6.2
hereof have either been satisfied or waived by Seller and
Purchaser, as the case may be;
(6) "Effective Date" means the date first written above;
(7) "Exchange" means the exchange of the Seller Shares for the
Exchange Shares in accordance with Section 2.1 hereof;
(8) "Exchange Shares" means that number of Purchaser Common Shares
which are to be issued from the treasury of Purchaser to Seller's
Shareholders and to be exchanged for all of the then issued and
outstanding Seller Shares in accordance with Section 2.1 hereof;
(9) "Generally Accepted Accounting Principles" means the generally
accepted accounting principles from time to time approved by the
Canadian Institute of Chartered Accountants, or any successor
institute, applicable as at the date on which such calculation is
made or required to be made in accordance with such principles;
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(10) "Interim Period" means the period from the Effective Date to the
Closing Date;
(11) "Xxxxxxxxxxxxx.xxx LLC Option" means. . . ;
(12) "Material Fact" in relation to any party hereto includes,
without limitation, any fact that significantly affects, or
would reasonably be expected to have a significant effect on,
the market price or value of the shares of such party;
(13) "Person" means any individual, corporation, partnership,
unincorporated syndicate, unincorporated organization, trust,
trustee, executor, administrator or other legal representative;
(14) "Proceeding" means any suit, action, dispute, claim, litigation,
arbitration or any legal, administrative or other proceeding or
governmental investigation, including appeals and applications
for review, at law or in equity or before any court or
arbitrator or any federal, provincial, municipal or other
governmental department, commission, tribunal, board or agency;
(15) "Purchaser" means Opus Minerals Inc., a corporation incorporated
under the laws of the Province of Ontario;
(16) "Purchaser's Auditors" means BDO Dunwoody, Chartered
Accountants;
(17) "Purchaser's Business" means holding equity interests in mineral
exploration companies, including First Strike Diamonds Inc. and
Xxxxxx Resources Ltd.,
(18) "Purchaser's Documents" means those certain documents to be
delivered or caused to be delivered by Purchaser to Seller on or
before the Closing Date as set out in subsection 6.3(a) of this
Agreement;
(19) "Purchaser's Financial Statements" means the audited financial
statements of Purchaser for the fiscal year ended April 30,
1999, and the unaudited financial statements of Purchaser for
the nine (9) month period ended January 31, 2000, consisting of
the balance sheet and the statements of earnings, retained
earnings and changes in financial position and all notes
thereto;
(20) "Purchaser's Stock Option Plan" means the proposed stock option
plan of Purchaser in the form attached hereto as Schedule "C";
------------
(21) "Purchaser Common Shares" means common shares in the capital
stock of Purchaser, an unlimited number of which are authorized
for issuance.
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(22) "Sales Tax Laws" means the Excise Tax Act (Canada), any
applicable goods and services, sales or use taxation statute of
a province, and any similar foreign legislation, all as from
time to time amended, and any successors thereto;
(23) "Seller" means IL Data Canada, Inc., a corporation incorporated
under the laws of the Province of Ontario;
(24) ["Seller's Auditors" means *****, Chartered Accountants];
(25) "Seller's Business" means the business previously and heretofore
carried on by Seller;
(26) "Seller's Contracts" means all rights and interests of Seller in
and to all agreements, leases and other arrangements of Seller,
whether written or oral, pending and/or executory, to or by
which Seller or any of Seller's Assets or Seller's Business is
bound or affected including, without limitation, Seller's
Employment Contracts, Seller's Equipment Contracts and Seller's
Leases, all of which are as listed and described in Schedule "D"
------------
attached hereto;
(27) "Seller's Documents" means those certain documents to be
delivered or caused to be delivered by Seller and Seller's
Shareholders to Purchaser on or before the Closing Date as set
out in subsection 6.3(a)(ii) of this Agreement;
(28) "Seller's Financial Statements" means the [un]audited
consolidated financial statements of Seller for the period ended
[May 25], [2000], consisting of the balance sheet and the
statements of earnings, retained earnings and changes in
financial position and all notes thereto;
(29) "Seller's Shareholders" means Sierra Holdings Limited, Xxxxxxxx
Xxxxxxx, Xxxxxx Xxxxxx, Iguana Investments Limited, Laiy
Limited, Aberdeen Holdings and Xxxxx Resources, as more
completely described on Schedule "A";
(30) "Seller Shares" means all of the issued and outstanding common
shares in the capital stock of Seller all of which shall be
beneficially owned by Seller Shareholders as at the Closing
Date, it being acknowledged that [6,800] common shares
constitute all of the issued and outstanding common shares in
the capital stock of Seller as at the Effective Date;
(31) "Seller Subsidiary" means IL Data Corporation, Inc., a company
incorporated in the State of Nevada [and Xxxxxxxxxxxxx.xxx, once
the Xxxxxxxxxxxxx.xxx Option is exercised];
(32) "Regulatory Body" and "Regulatory Bodies" means, collectively
and individually, the NASD OTC Bulletin Board, the Securities
and Exchange Commission, the Ontario Securities Commission and
The Canadian Dealing Network Inc.;
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(33) "Tax Act" means the Income Tax Act (Canada), as it may be
amended from time to time, and any successor thereto. Any
reference herein to a specific section or sections of the Tax
Act, or regulations promulgated thereunder, shall be deemed to
include a reference to all corresponding provision of future
law;
(34) "Tax Laws" shall mean the Tax Act and any applicable provincial,
or foreign income taxation statute(s), as from time to time
amended, and any successors thereto;
(35) "Third Party" means any Person other than the parties to this
Agreement;
1.2 Currency. Unless otherwise indicated, all dollar amounts referred to
in this Agreement are in Canadian funds.
1.3 Tender. Any tender of documents or money hereunder may be made upon
the parties or their respective counsel and money may be tendered by official
bank draft drawn upon a Canadian chartered bank or trust company or by
negotiable cheque payable in Canadian funds and certified by a Canadian
chartered bank or trust company.
1.4 Number and Gender. Where the context requires, words imparting the
singular shall include the plural and vice versa, and words imparting gender
include all genders.
1.5 Headings. Article and Section headings contained in this Agreement are
included solely for convenience, are not intended to be full or accurate
descriptions of the content thereof and shall not be considered part of this
Agreement or affect the construction or interpretation of any provision hereof.
1.6 Schedules. The Schedules and Exhibits to this Agreement shall be
construed with and as an integral part of this Agreement to the same extent as
if the same had been set forth verbatim herein. The following Schedules and
Exhibits are attached hereto:
Schedule "A" - Shareholders of Seller
Schedule "B" - Purchaser Options
Schedule "C" - Purchaser's Stock Option Plan
Schedule "D" - Seller's Contracts
Schedule "E" - Officers and Directors of Purchaser
Schedule "F" - Officers and Directors of Seller
1.7 Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with Generally Accepted Accounting Principles.
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ARTICLE II
EXCHANGE OF SHARES WITH SELLER SHAREHOLDERS
-------------------------------------------
1.8 Exchange of Shares
(1) Seller's Shareholders agree to sell, and Purchaser agrees to purchase,
the Seller Shares on Closing in consideration of the issuance of
6,800,000 fully paid, issued and outstanding Purchaser Common Shares
(the "Exchange Shares") for all of the issued and outstanding Seller
Shares (being one thousand (1,000) Purchaser Common Shares for each
one (1) Seller Share); and
(2) [On or before July *, 2000, Seller and Purchaser, acting reasonably
and in good faith, shall allocate, in a mutually agreeable manner
after consultation with their respective professional advisors, an
appropriate value of consideration in Canadian dollars for Purchaser's
purchase of the Seller Shares on a per share basis.]
ARTICLE III
CLOSING
-------
1.9 In the event that the Exchange contemplated under Section 2.1 hereof cannot
close by July 31, 2000 due to the failure to obtain any required approval of the
Regulatory Bodies to the transactions contemplated herein, or due to the failure
of each of the conditions precedent set out in Section 6.1 or 6.2 hereof not
having been either satisfied or waived by Seller or Purchaser in writing, as the
case may be, then subject to the parties otherwise agreeing in writing and
except as concerns covenants, warranties, representations or other obligations
breached prior to such time, this Agreement shall terminate without any party
incurring any liability to any other party, and all parties shall bear their own
costs in connection with the transactions contemplated by this Agreement,
subject to Section 8.3 hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
1.10 Representations and Warranties of Purchaser. Purchaser represents and
warrants to Seller and Seller's Shareholders as follows, and acknowledges that
Seller and Seller's Shareholders are relying upon such representations and
warranties in connection with entering into this Agreement and completing the
transactions contemplated thereby:
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(1) Status and Capacity
-------------------
Purchaser is a corporation incorporated and subsisting under the laws of
Ontario, has all requisite corporate power to own its properties and
conduct its business as presently being conducted by it, and is registered
or otherwise qualified to carry on business in all jurisdictions in which
the nature of its assets or business makes such registration or
qualification necessary or advisable.
(2) Due Authorization
-----------------
Subject to obtaining the required approval of the Regulatory Bodies,
Purchaser has full legal capacity and corporate power to enter into this
Agreement and to take, perform or execute all proceedings, acts and
instruments necessary or advisable to consummate the actions and
transactions contemplated in this Agreement; all necessary corporate action
has been taken, or will be taken prior to the Closing Date, by or on the
part of Purchaser to authorize its execution and delivery of this
Agreement, and the taking, performing or executing of such proceedings,
acts and instruments as are necessary or advisable for consummating the
actions and transactions contemplated in this Agreement and for fulfilling
its obligations hereunder.
(3) Enforceability
--------------
This Agreement has been duly executed and delivered on behalf of Purchaser
and constitutes a legal, valid and binding obligation of each of them,
enforceable against each of them in accordance with its terms, except as
such terms may be limited by bankruptcy, insolvency, re-organization or
other laws relating to the enforcement of creditors' rights generally.
(4) Absence of Conflict
-------------------
Neither the execution nor delivery of this Agreement, nor the consummation
of the transactions contemplated hereby, nor compliance with and fulfilment
of the terms and provisions of this Agreement will:
(1) conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under:
(1) any of the constating documents or by-laws of Purchaser; or
(2) any instrument, agreement, mortgage, judgment, order, award,
decree or other instrument or restriction to which Purchaser is a
party of or by which it is bound; or
(2) require any affirmative approval, consent, authorization or other
order or action by any court, governmental authority or
regulatory
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body or by any creditor of Purchaser or any party to any
agreement to which Purchaser is a party or by which Purchaser is
bound, except as shall have been obtained prior to Closing.
(5) Authorized and Issued Capital of Purchaser
------------------------------------------
The authorized capital of Purchaser on the Closing Date will be an
unlimited number of common shares, and an unlimited number of special
shares, of which only [6,944,576] common shares and no special shares are
presently issued and outstanding as at the Effective Date and [6,944,576
shares - 3,930,000 warrants] shall be issued and outstanding immediately
prior to the Closing. All of the presently issued and outstanding common
shares of Purchaser have been validly allotted and issued and are
outstanding as fully-paid and non-assessable shares and on the Closing Date
no more than [3,930,000 warrants - 6,944,576 common shares] of Purchaser
will be, together with the Exchange Shares, the only issued and outstanding
shares in the capital stock of Purchaser as at that time.
(6) Shares Non-Assessable
---------------------
At the time of Closing, all of the Exchange Shares to be issued hereunder
to Seller's Shareholders will be validly issued and outstanding as fully
paid and non-assessable Purchaser Common Shares, free and clear of all
mortgages, liens, charges, security deposits, adverse claims, pledges,
encumbrances, options, warrants, rights, privileges and demands whatsoever.
(7) Options, etc.
-------------
At Closing, no person, firm or corporation will have any agreement or
option or any right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an agreement or option, including
convertible securities, warrants or convertible obligations of any nature,
for the purchase from Purchaser of any Purchaser Common Shares or for the
subscription, allotment or issuance of any unissued shares in the capital
of Purchaser.
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(8) Financial Records of Purchaser
------------------------------
The books and records of Purchaser fairly and correctly set out and
disclose in all material respects, in accordance with Generally Accepted
Accounting Principles, the financial position of Purchaser as at the date
hereof and all material financial transactions of Purchaser relating to
Purchaser's Business have been accurately recorded in such books and
records. Purchaser does not have any of its records, systems, controls,
data or information recorded, stored, maintained, operated or otherwise
wholly or partly dependent upon or held by any means (including any
electronic, mechanical or photographic process, whether computerized or
not) which (including all means of access thereto and therefrom) are not
under the exclusive ownership and direct control of Purchaser and, at
Closing, Purchaser will have originals or copies of all such records,
systems, controls, data or information in its possession or control.
(9) Purchaser's Financial Statements
--------------------------------
Purchaser's Financial Statements fairly present the financial position of
Purchaser as at April 30, 1999 and fairly present the results of operations
for the periods ended on such dates, all in accordance with Generally
Accepted Accounting Principles consistently applied throughout the period
covered thereby except as stated therein. Purchaser's books of account
reflect items of income and expense and all assets and liabilities and
accruals required to be reflected therein.
(10) Absence of Change
-----------------
Save and except for matters which are disclosed in Purchaser's Financial
Statements, Purchaser has not (nor has it agreed to):
(1) incurred any debts, obligations or liabilities (absolute, accrued,
contingent or otherwise and whether due or to become due), except
debts, obligations and liabilities incurred in the ordinary course of
business;
(2) discharged or satisfied any liens or paid any obligation or liability
other than liabilities shown on Purchaser's Financial Statements,
other than in the ordinary course of business;
(3) declared or made any payment, distribution or dividend based on its
shares, or purchased, redeemed or otherwise acquired any of the shares
in its capital or other securities or obligated itself to do so;
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(4) mortgaged, pledged or subjected to lien or other security interest any
of its assets, tangible or intangible other than the usual security
granted to secure a bank line of credit;
(5) sold, assigned, leased, transferred or otherwise disposed of any of
its assets (excluding inventory) either having a book value or fair
market value in excess of $10,000, whether or not in the ordinary
course of business;
(6) increased materially the compensation payable or to become payable by
Purchaser, to any of its officers, directors or employees, or in any
bonus payment to or arrangement made with any officer, director or
employee, or made any material changes in the personnel policies or
employee benefits of Purchaser;
(7) cancelled, waived, released or compromised any debt, claim or right
resulting in a material adverse effect on the business, prospects or
financial condition of Purchaser;
(8) significantly altered or revised any of its accounting principles,
procedures, methods or practices;
(9) changed its credit policy as to provision of services, sales of
inventories or collection or accounts receivable (except as dictated
by competitive conditions);
(10) suffered any material damage, destruction or loss (whether or not
covered by insurance) materially and adversely affecting the
properties, business or prospects of Purchaser;
(11) entered into any transaction, contract or commitment other than in the
ordinary course of business (except for the transactions set forth in
this Agreement);
(12) made or authorized any capital expenditures in excess of $10,000 in
the aggregate;
(13) issued or sold any shares in its capital stock or other securities, or
granted any options with respect thereto; or
(14) suffered or experienced any material adverse change in, or event or
circumstance affecting, the condition (financial or otherwise),
properties, assets, liabilities, earnings, business, operations or
prospects of Purchaser (and Purchaser has no knowledge, information or
belief of any fact, event or circumstances which might
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reasonably be expected to affect materially and adversely the
condition (financial or otherwise), properties, assets, liabilities,
earnings, business operations or prospects of Purchaser), and has not
changed any shares of its capital stock, whether by way of
reclassification, stock split or otherwise.
(11) Corporate Records
-----------------
The corporate records and minute books of Purchaser as provided to Seller
or its legal counsel contain complete and accurate minutes of all meetings
of and corporate actions or written consents by the directors and
shareholders of Purchaser, including, without limitation, all by-laws and
resolutions passed by the board of directors and shareholders of Purchaser,
held since the incorporation of Purchaser; and all such meetings were duly
called and held. The shareholders' list maintained by Purchaser's registrar
and transfer agent has been provided for review to Seller and Seller's
Shareholders and is, to the best of Purchaser's knowledge, complete and
accurate in all respects.
(12) Subsidiaries
------------
Other than shares held from the Purchaser's Business, the Purchaser does
not hold or own, beneficially or otherwise, any securities of any other
corporate entity. In furtherance and for the sole purpose of the
consummation of this transaction, on the Closing Date Purchaser shall be
the registered and beneficial owner of [none] of the shares held by virtue
of the Purchaser's Business.
(13) No Other Business
-----------------
Purchaser does not operate or engage in any business activities, operations
or management of any nature or kind whatsoever other than Purchaser's
Business.
(14) Affiliates
----------
With the exception of its relationship through operation of the Purchaser's
Business, the Purchaser has no Affiliates or agreements of any nature to
acquire any subsidiary or to acquire or lease any other business activities
or operations. Purchaser will not prior to the Closing Date acquire, or
agree to acquire, any subsidiary or business without the prior written
consent of Seller.
(15) Liabilities
-----------
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Except as reflected in Purchaser's Financial Statements, there will be at
the Closing Date no material liabilities of Purchaser of any kind
whatsoever, whether or not accrued and whether or not determined or
determinable, in respect of which Purchaser may become liable on or after
the transaction contemplated by this Agreement.
(16) Bonds, Debentures, Guarantees
-----------------------------
(1) Except as expressly referred to in Purchaser's Financial Statements,
Purchaser does not have outstanding any bonds, debentures, mortgages,
notes or other similar indebtedness or liabilities whatsoever and
Purchaser is not bound under any agreement to create, issue or incur
any bonds, debentures, mortgages, notes or other similar indebtedness
or liabilities whatsoever.
(2) Except as set out in Purchaser's Financial Statements, Purchaser is
not a party to or bound by any agreement of guarantee,
indemnification, assumption or endorsement or any other like
commitment of the obligations, liabilities (contingent or otherwise)
or indebtedness of any other person.
(17) Non-Arm's Length Payments
-------------------------
Since April 30, 1999, no payments have been made or authorized by Purchaser
to its officers, directors, employees, shareholders or former directors,
officers, employees or shareholders or to any person not dealing at Arm's
Length with any of the foregoing, except those expressly disclosed herein,
reflected in Purchaser's Financial Statements or made in the ordinary
course of business and at the regular rates payable to them of salary,
pension, bonuses or other remuneration of any nature.
(18) Tax Matters
-----------
(1) Purchaser has filed all tax returns required to be filed by it prior
to the date hereof in all applicable jurisdictions and has paid,
collected and remitted all taxes, customs duties, tax instalments,
levies, assessments, reassessments, penalties, interest and fines due
and payable, collectible or remittable by it at present. All such tax
returns properly reflect, and do not in any respect understate, the
income, taxable income or the liability for taxes of Purchaser in the
relevant period and the liability of Purchaser for the collection,
payment and remittance of tax under applicable Tax Laws and Sales Tax
Laws.
(2) Adequate provision has been made in Purchaser's Financial Statements
for all taxes, governmental charges and assessments,
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including interest and penalties thereon, payable by Purchaser for all
periods up to the date of the balance sheets comprising part of
Purchaser's Financial Statements.
(3) After the Closing Date, no payments will be required to be made by
Purchaser pursuant to any tax indemnity, allocation or sharing
agreement for any taxable year up to and including April 30, 1999 and
all such agreements will be terminated with respect to Purchaser as of
the Closing Date.
(4) Purchaser has withheld and remitted all amounts required to be
withheld and remitted by it in respect of any taxes, governmental
charges or assessments in respect of any taxable year up to and
including April 30, 1999 .
(5) There are no actions, suits or other proceedings, investigations or
claims in progress or pending and, to the best of Purchaser's belief
and knowledge, there are no actions, suits or other proceedings or
investigations or claims threatened, against Purchaser in respect of
any taxes, governmental charges or assessments. No waivers have been
filed by Purchaser with any taxing authority.
(19) Compliance with Legislation
---------------------------
Purchaser is conducting, has always conducted and shall continue to conduct
until the Closing Date, Purchaser's Business in compliance with all
applicable laws, rules and regulations of each jurisdiction in which
Purchaser's Business is carried on, is not currently in breach of any such
laws, rules or regulations and is duly licensed, registered or qualified,
in each jurisdiction in which Purchaser owns or leases property or carries
on Purchaser's Business, to enable Purchaser's Business to be carried on as
now conducted and its property and assets to be owned, leased and operated,
and all such licences, registrations and qualifications are valid and
subsisting and in good standing and none of the same contains any
burdensome term, provision, condition or limitation which has or may have
an adverse effect on the operation of Purchaser's Business.
(20) Consents
--------
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Other than approvals which may be required from any Regulatory Body, no
consent, licence, approval, order or authorization of, or registration,
filing or declaration with any governmental authority that has not been
obtained or made by Purchaser and no consent of any Third Party is required
to be obtained by Purchaser in connection with the execution, delivery and
performance by Purchaser of this Agreement or the consummation of the
transactions contemplated hereby. The issuance of the Exchange Shares to
Seller's Shareholders will not result in the loss of any regulatory
consent, licence, approval, order, authorization or registration materially
benefitting Purchaser.
(21) Absence of Proceedings
----------------------
There is no action, lawsuit, claim, proceeding, or investigation pending
or, to the best knowledge of Purchaser, threatened against, relating to or
affecting Purchaser before any court, government agency, or any arbitrator
of any kind. Purchaser is not aware of any existing ground on which any
such proceeding might be commenced with any reasonable likelihood of
success; and there is not presently outstanding against Purchaser any
judgment, decree, injunction, rule or order of any court, governmental
agency, or arbitrator relating to or affecting Purchaser in connection with
Purchaser's Business.
(22) Change in Contracts
-------------------
There is not now outstanding any arrangement (contractual or otherwise)
between Purchaser and any Person which will or may be, terminated or, to
the best of the knowledge of Purchaser, prejudicially affected as a result
of the issuance of the Exchange Shares.
(23) Officers and Directors
----------------------
(1) Attached as Schedule "E" is a complete list of the names of the
------------
directors and officers of Purchaser.
(2) No employee has made any claim or, to the best of Purchaser's
knowledge, has any basis for any action or proceeding against
Purchaser, arising out of any statute, ordinance or regulation
relating to discrimination in employment or employment practices,
harassment, occupational health and safety standards or worker's
compensation.
(3) Purchaser has not made any agreements with any labour union or
employee association nor made any commitments to or conducted
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any negotiations with any labour union or employee association with
respect to any future agreements.
(4) No trade union, council of trade unions, employee bargaining agency or
affiliated bargaining agent holds bargaining rights with respect to
any of Purchaser's employees by way of certification, interim
certification, voluntary recognition, designation or successor rights.
(24) Existence and Standing of Agreements
------------------------------------
Save and except for Purchaser's Contracts, Purchaser is not a party to or
bound by any material contract or commitment, whether oral or written.
(25) Leases
------
Purchaser is not a party to any lease or agreement in the nature of a
lease, whether as lessor or lessee.
(26) Insurance
---------
Purchaser does not currently own any material insurable assets and does not
currently maintain any policies of insurance.
(27) Employment Contracts, etc,
-------------------------
There are no outstanding written or oral employment contracts, sales,
services, management or consulting agreements, employee benefit or profit-
sharing plans, or any bonus arrangements with any employee of Purchaser,
nor are there any outstanding oral contracts of employment which are not
terminable on the giving of reasonable notice in accordance with applicable
law. There are no pension or retirement plans established by or for
Purchaser for the employees of Purchaser's Business.
(28) Continuous Disclosure
---------------------
Purchaser has made all necessary disclosure and filings in a timely fashion
and Purchaser is now a reporting issuer in good standing under the
Securities Act (Ontario), and all other applicable securities regulations
in the Province of Ontario. The Purchaser is also a registrant in good
standing with the U.S. Securities and Exchange Commission by virtue of its
annual filing of Form 20F. Purchaser will use its best efforts to maintain
such reporting issuer status up to and including the Closing Date.
(29) Disclosure
----------
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No representation or warranty made by Purchaser in this Agreement, and
no statement made in any schedule, exhibit, certificate or other
document furnished pursuant to this Agreement, contains, or will
contain, any untrue statement of a Material Fact or omits, or will
omit, to state any Material Fact necessary to make such representation
or warranty or any such statement not misleading. Purchaser does not
know of any fact which, if known to Seller or Seller's Shareholders,
would deter them from consummating the transactions contemplated
herein.
1.11 Representations and Warranties of Seller. Seller and where applicable
Seller's Shareholders, represent and warrant to Purchaser as follows, and
acknowledge that Purchaser is relying upon such representations and warranties
in connection with entering into this Agreement and completing the transactions
contemplated thereby:
(1) Status and Capacity
-------------------
Seller is a corporation formed and subsisting under the laws of the
Province of Ontario, has all legal capacity to own its properties and
conduct its business as presently being conducted by it, and is duly
registered or otherwise qualified to carry on business in all
jurisdictions in which the nature of its assets or business makes such
registration or qualification necessary or advisable.
(2) Status and Capacity of Seller's Subsidiaries
--------------------------------------------
The Seller's Subsidiary is a corporation formed and subsisting under
the laws of the State of Nevada, has all legal capacity to own its
properties and conduct its business as presently being conducted by
them, and is duly registered or otherwise qualified to carry on
business in all jurisdictions in which the nature of its assets or
business makes such registration or qualification necessary or
advisable. [The Xxxxxxxxxxxxx.xxx Option is in good standing, and the
Seller's Subsidiary intends to exercise said option to acquire [50%]
of the issued and outstanding shares of Xxxxxxxxxxxxx.xxx LLC, on or
before the Closing. As a result, Xxxxxxxxxxxxx.xxx LLC will be a
Seller's Subsidiary through the Seller owning 100% of the outstanding
shares of IL Data Corporation, Inc.]
-17-
(3) Due Authorization
-----------------
[Subject to obtaining any required shareholder or directors approval],
Seller and Seller's Shareholders have the full legal capacity to enter into
this Agreement and to take, perform or execute all proceedings, acts and
instruments necessary or advisable to consummate the other actions and
transactions contemplated in this Agreement and to fulfil its obligations
under this Agreement; all necessary action has been taken, or will be taken
by the Closing Date, by or on the part of Seller and Seller's Shareholders
to authorize the execution and delivery of this Agreement, and the taking,
performing or executing of such proceedings, acts and instruments as are
necessary or advisable for consummating the other actions and transactions
contemplated in this Agreement and fulfilling its obligations under this
Agreement.
(4) Enforceability
--------------
This Agreement has been duly executed and delivered by Seller and this
Agreement constitutes a legal, valid and binding obligation of Seller
enforceable against it in accordance with its terms, except as such terms
may be limited by bankruptcy, insolvency, re-organization or other laws
relating to the enforcement of creditors' rights generally.
(5) Absence of Conflict
-------------------
Neither the execution, nor delivery of this Agreement, nor the consummation
of the transactions contemplated hereby, nor compliance with and fulfilment
of the terms and provisions of this Agreement will:
(1) conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under:
(1) any of the constating documents or by-laws of Seller; or
(2) any instrument, agreement, mortgage, judgment, order, award,
decree or other instrument or restriction to which Seller is a
party or by which it is bound; or
(2) except as otherwise described herein, require any affirmative
approval, consent, authorization or other order or action by any
court, governmental authority or regulatory body or by any creditor of
Seller, or any party to any agreement to which Seller is a party or by
which Seller is bound, except as shall have been obtained prior to
Closing.
-18-
(6) Options, etc.
-------------
No person, firm or corporation has any agreement or option or any right or
privilege (whether by law, pre-emptive or contractual) capable of becoming
an agreement or option, including convertible securities, warrants or
convertible obligations of any nature, for the purchase from Seller of any
of the Seller Shares or for the subscription, allotment or issuance of any
unissued shares in the capital of Seller.
(7) Authorized and Issued Capital of Seller
---------------------------------------
The authorized capital of Seller is now, and on the Closing Date will be,
an unlimited number of common shares, of which only 6,800 common shares are
presently issued and outstanding. All of the issued and outstanding common
shares of Seller have been validly allotted and issued and are outstanding
as fully-paid and non-assessable shares and on the Closing Date the Seller
Shares will be the only issued and outstanding shares of Seller.
(8) Subsidiaries
------------
Seller is the registered and beneficial holder of all of the issued and
outstanding shares of the Seller's Subsidiary. Upon exercise of the
Xxxxxxxxxxxxx.xxx Option on or before Closing, Seller's Subsidiary will
hold [50%] of the issued and outstanding shares of Xxxxxxxxxxxxx.xxx LLC.
(9) Corporate Records
-----------------
The corporate records and minute books of Seller contain complete and
accurate minutes of all meetings of and corporate actions or written
consents by the directors and shareholders of Seller, including, without
limitation, all by-laws and resolutions passed by the board of directors
and shareholders of Seller, held since the incorporation of Seller; and all
such meetings were duly called and held. The share certificate books,
register of shareholders, register of transfers and register of directors
of Seller are complete and accurate.
(10) Seller's Financial Statements
-----------------------------
Seller's Financial Statements fairly present the financial position of
Seller as at May 25, 2000, and the results of its operations for the period
ended on such date, all in accordance with Generally Accepted Accounting
Principles consistently applied throughout the period covered thereby
except as stated therein. Seller's books of account reflect items of income
and expense and all assets and liabilities and accruals required to be
reflected therein.
-19-
(11) Financial Records
-----------------
The books and records of Seller fairly and correctly set out and disclose
in all material respects, in accordance with Generally Accepted Accounting
Principles, the financial position of Seller as at the date hereof and all
material financial transactions of Seller relating to its business have
been accurately recorded in such books and records. Seller does not have
any of its records, systems, controls, data or information recorded,
stored, maintained, operated or otherwise wholly or partly dependent upon
or held by any means (including any electronic, mechanical or photographic
process, whether computerized or not) which (including all means of access
thereto and therefrom) are not under the exclusive ownership and direct
control of Seller and, at Closing, Seller will have originals or copies of
all such records, systems, controls, data or information in its possession
or control.
(12) Officers and Directors
----------------------
(1) Attached as Schedule "F" is a complete list of the directors and
------------
officers of Seller.
(2) No employee has made any claim or, to the best of the Seller's
knowledge, has any basis for any action or proceeding against Seller,
arising out of any statute, ordinance or regulation relating to
discrimination in employment or employment practices, harassment,
occupational health and safety standards or worker's compensation.
(3) Seller has not made any agreements with any labour union or employee
association in connection with Seller's Business nor made any
commitments to or conducted any negotiations with any labour union or
employee association with respect to any future agreements relating to
Seller's Business.
(4) No trade union, council of trade unions, employee bargaining agency or
affiliated bargaining agent holds bargaining rights with respect to
any of Seller's employees by way of certification, interim
certification, voluntary recognition, designation or successor rights.
(13) No Other Business
-----------------
Seller does not operate or engage in any business activities, operations or
management of any nature or kind whatsoever other than Seller's Business.
(14) Affiliates
----------
-20-
With the exception of the Seller's Subsidiary, Seller has no Affiliates or
agreements of any nature to acquire any subsidiary or to acquire or lease
any other business activities or operations. Seller will not prior to the
Closing Date acquire, or agree to acquire, any subsidiary or business
without the prior written consent of Purchaser.
(15) Liabilities
-----------
Except as reflected in Seller's Financial Statements, there will be at the
Closing Date no material liabilities of Seller of any kind whatsoever,
whether or not accrued and whether or not determined or determinable, in
respect of which Seller may become liable on or after the transaction
contemplated by this Agreement.
(16) Bonds, Debentures, Guarantees
-----------------------------
(1) Except as expressly referred to in Seller's Financial Statements,
Seller does not have outstanding any bonds, debentures, mortgages,
notes or other similar indebtedness or liabilities whatsoever and
Seller is not bound under any agreement to create, issue or incur any
bonds, debentures, mortgages, notes or other similar indebtedness or
liabilities whatsoever.
(2) Except as set out in Seller's Financial Statements, Seller is not a
party to or bound by any agreement of guarantee, indemnification,
assumption or endorsement or any other like commitment of the
obligations, liabilities (contingent or otherwise) or indebtedness of
any other person.
(17) Non-Arm's Length Payments
-------------------------
No payments have been made or authorized by Seller to its officers,
directors, employees, shareholders or former directors, officers, employees
or shareholders or to any person not dealing at Arm's Length with any of
the foregoing, except those expressly disclosed herein, reflected in
Seller's Financial Statements or made in the ordinary course of business
and at the regular rates payable to them of salary, pension, bonuses or
other remuneration of any nature.
-21-
(18) Tax Matters
-----------
(1) Each of Seller and Seller's Subsidiary has filed all tax returns
required to be filed by it prior to the date hereof in all applicable
jurisdictions and has paid, collected and remitted all taxes, customs
duties, tax instalments, levies, assessments, reassessments,
penalties, interest and fines due and payable, collectible or
remittable by it at present. All such tax returns properly reflect,
and do not in any respect understate, the income, taxable income or
the liability for taxes of Seller or Seller's Subsidiary in the
relevant period and the liability of each such party for the
collection, payment and remittance of tax under applicable Tax Laws
and Sales Tax Laws.
(2) Adequate provision has been made in Seller's Financial Statements for
all taxes, governmental charges and assessments, including interest
and penalties thereon, payable by Seller for all periods up to the
date of the balance sheets comprising part of Seller's Financial
Statements.
(3) After the Closing Date, no payments will be required to be made by
Seller or Seller's Subsidiary pursuant to any tax indemnity,
allocation or sharing agreement for any period up to and including May
25, 2000 and all such agreements will be terminated with respect to
Seller as of the Closing Date.
(4) Each of Seller and Seller's Subsidiary has withheld and remitted all
amounts required to be withheld and remitted by it in respect of any
taxes, governmental charges or assessments in respect of any period up
to and including May 25, 2000 .
(5) There are no actions, suits or other proceedings, investigations or
claims in progress or pending and, to the best of Seller's belief and
knowledge, there are no actions, suits or other proceedings or
investigations or claims threatened, against Seller or Seller's
Subsidiary in respect of any taxes, governmental charges or
assessments. No waivers have been filed by Seller or Seller's
Subsidiary with any taxing authority.
(19) Compliance with Legislation
---------------------------
Each of Seller and Seller's Subsidiary is conducting, has always conducted
and shall continue to conduct until the Closing Date, Seller's Business in
compliance with all applicable laws, rules and regulations of each
jurisdiction in which Seller's Business is carried on, is not currently in
breach of any such laws, rules or regulations and is duly licensed,
registered or qualified, in each jurisdiction in which Seller or Seller's
Subsidiary owns or leases property or
-22-
carries on Seller's Business, to enable Seller's Business to be carried on
as now conducted and its property and assets to be owned, leased and
operated, and all such licences, registrations and qualifications are valid
and subsisting and in good standing and none of the same contains any
burdensome term, provision, condition or limitation which has or may have
an adverse effect on the operation of Seller's Business.
(20) Consents
--------
Other than approvals which may be required from any Regulatory Body, no
consent, licence, approval, order or authorization of, or registration,
filing or declaration with any governmental authority that has not been
obtained or made by Seller or Seller's Subsidiary and no consent of any
Third Party is required to be obtained by Seller or Seller's subsidiary in
connection with the execution, delivery and performance by Seller of this
Agreement or the consummation of the transactions contemplated hereby. The
transfer of the Seller Shares to the Purchaser will not result in the loss
of any regulatory consent, licence, approval, order, authorization or
registration materially benefitting Seller or Seller's Subsidiary.
(21) Absence of Proceedings
----------------------
There is no action, lawsuit, claim, proceeding, or investigation pending
or, to the best knowledge of Seller, threatened against, relating to or
affecting Seller or Seller's Subsidiary before any court, government
agency, or any arbitrator of any kind. Seller is not aware of any existing
ground on which any such proceeding might be commenced with any reasonable
likelihood of success; and there is not presently outstanding against
Seller or Seller's Subsidiary any judgment, decree, injunction, rule or
order of any court, governmental agency, or arbitrator relating to or
affecting Seller in connection with Seller's Business.
(22) Change in Contracts
-------------------
There is not now outstanding any arrangement (contractual or otherwise)
between Seller and any Person which will or may be, terminated or, to the
best of the knowledge of Seller, prejudicially affected as a result of the
issuance of the Exchange Shares.
(23) Existence and Standing of Agreements
------------------------------------
Save and except for Seller's Contracts, Seller is not a party to or bound
by any material contract or commitment, whether oral or written.
-23-
(24) Leases
------
Seller is not a party to any lease or agreement in the nature of a lease,
whether as lessor or lessee.
(25) Insurance
---------
Seller does not currently own any material insurable assets and does not
currently maintain any policies of insurance.
(26) Employment Contracts, etc,
-------------------------
Except for Seller's Employment Contracts, there are no outstanding written
or oral employment contracts, sales, services, management or consulting
agreements, employee benefit or profit-sharing plans, or any bonus
arrangements with any employee of Seller or of Seller's Subsidiary, nor are
there any outstanding oral contracts of employment which are not terminable
on the giving of reasonable notice in accordance with applicable law. The
provisions of Seller's Employment Contracts are consistent with applicable
industry standards respecting wage rates, benefits and working rules.
Except for Seller's Employment Contracts, there are no pension or
retirement plans established by or for Seller, Seller's Subsidiary, or for
the employees of Seller's Business.
(27) United States tax treatment of Re-organization
----------------------------------------------
The issuance of the Seller Shares to the Seller's Shareholders by the
Seller in conjunction with the re-organization of the Seller's Subsidiary
and the subsequent transfer of the Seller Shares to the Purchaser under the
terms of this Agreement does not give rise in any manner to any claim by
the United States Internal Revenue Service for any claim against the Seller
Shares or any tracing of proceeds in respect thereof.
(28) Disclosure
----------
No representation or warranty made by Seller on its own behalf or in
respect of Seller's Subsidiary in this Agreement, and no statement made in
any schedule, exhibit, certificate or other document furnished pursuant to
this Agreement, contains, or will contain, any untrue statement of a
Material Fact or omits, or will omit, to state any Material Fact necessary
to make such representation or warranty or any such statement not
misleading. Seller does not know of any fact which, if known to Purchaser,
would deter it from consummating the transactions contemplated herein.
-24-
1.12 Non-Waiver.
(1) No investigations made by or on behalf of Seller or Seller's
Shareholders at any time shall have the effect of waiving, diminishing
the scope of or otherwise affecting any representation, warranty or
covenant made by Purchaser herein or pursuant hereto. No waiver by
Seller or Seller's Shareholders of any condition, in whole or in part,
shall operate as a waiver of any other condition.
(2) No investigations made by or on behalf of Purchaser at any time shall
have the effect of waiving, diminishing the scope of or otherwise
affecting any representation, warranty or covenant made by Seller or
Seller's Shareholders herein or pursuant hereto. No waiver by
Purchaser of any condition, in whole or in part, shall operate as a
waiver of any other condition.
1.13 Survival of Representations, Warranties and Covenants. The
representations, warranties and covenants of the parties contained in this
Agreement and in any document or certificate given pursuant hereto shall survive
the Closing Date, the execution and delivery hereunder of any share certificate
or other document of title to any of the Exchange Shares, Seller Shares,
provided that such representations and warranties shall only survive for a
period of twenty-four (24) months from the Closing Date. After which time, if
prior to the expiry of the applicable warranty period, no claim shall have been
made hereunder by a party with respect to any incorrectness in or breach of any
such representation or warranty made herein by the other party, then such other
party or parties, as applicable, shall have no further liability hereunder with
respect to such representation or warranty.
ARTICLE V
OTHER COVENANTS PRIOR TO CLOSING
--------------------------------
1.14 Conduct of Seller's Business Prior to Closing. Seller agrees that during
the Interim Period, Seller's Business will be conducted in the ordinary course,
there will be no adverse change in the prospects, financial condition or
properties of Seller, and the only changes in the prospects, financial condition
or properties of Seller will be those arising from the normal and regular
conduct of Seller's Business. No material loss, damage or destruction of any of
the assets of Seller which is not covered by insurance will have occurred.
Seller will not, without the prior written consent of Purchaser, enter into any
transaction which, if effected before the date of this Agreement, would
constitute a breach of the representations, warranties or agreements of Seller
or Seller's Shareholders contained in this Agreement.
1.15 Access for Investigation. Subject to Section 8.1 hereof, throughout the
Interim Period, Seller shall, upon reasonable request, give Purchaser, their
solicitors, employees, accountants and other representatives, full access during
business hours to all of the properties, premises, books, contracts,
commitments, leases and other records of Seller for the purpose of investigating
the business and affairs of Seller. Purchaser agrees that, unless and until the
transactions contemplated hereby have been consummated, it will hold in strict
confidence, and not use, any information so obtained and, if the transactions
contemplated
-25-
hereunder are not completed on the Closing Date, it will forthwith return to
Seller all written information and documents in their possession obtained from
Seller.
1.16 Required Consents.
(1) Purchaser will give its consent (and provide such other reasonable
assurances as may be required) and Purchaser shall use its best
efforts to obtain (including the provision of such reasonable
assurances as may be required), consents of all other Persons to the
transactions contemplated by this Agreement, as may be required
pursuant to any statute, law or ordinance or by any governmental or
other regulatory authority having jurisdiction, including, where
applicable, without limitation, any Regulatory Body. Seller and
Seller's Shareholders will cooperate in obtaining such consents to the
extent reasonably necessary, but without material financial
obligation.
(2) Seller and Seller's Shareholders will give their consent (and provide
such reasonable assurances as may be required) and Seller and Seller's
Shareholders shall use their best efforts to obtain (including the
provision of such reasonable assurances as may be required), consents
of all other Persons to the transactions contemplated by this
Agreement, as may be required pursuant to any statute, law or
ordinance or by any governmental or other regulatory authority having
jurisdiction, including, where applicable, without limitation, any
Regulatory Body. Purchaser will cooperate in obtaining such consents
to the extent reasonably necessary, but without material financial
obligation.
(3) Upon Purchaser receiving notification or other information from any
Regulatory Body or other applicable regulatory body concerning the
transactions contemplated hereunder, such information shall be
promptly disclosed in writing to the solicitors for Seller.
1.17 Obtaining Approvals.
(1) Purchaser, in consultation with Seller, Seller's Shareholders and
their counsel, agrees to forthwith use its best efforts to obtain all
necessary regulatory approvals required by any Regulatory Body,
including approval for the qualification for quoting of all reserved,
issued and outstanding common shares of Purchaser, including the
Exchange Shares, and the qualification for quoting of the shares to be
issued upon exercise of the Purchase Options on The Canadian Dealing
Network Inc., if any, and shall assist in making all submissions,
prepare all press releases and circulars and make all notifications
required with respect to this transaction and the issuance of shares
as contemplated hereunder as soon as practicable.
-26-
(2) Purchaser agrees that it shall take all steps necessary to make proper
disclosure within such time as required by any Regulatory Body, and
any other applicable statutes and laws concerning this Agreement and
the transactions contemplated herein.
1.18 Disclosure by Seller. Seller agrees to provide, in a reasonably prompt
manner, all required financial and other information, including Seller's
Financial Statements, together with any other information reasonably required by
Purchaser, sufficient for Purchaser to provide appropriate disclosure concerning
Seller to provide appropriate disclosure to any Regulatory Body.
1.19 Access for Investigation. Subject to Section 8.1 hereof, throughout the
Interim Period, Purchaser shall, upon reasonable request, give Seller, their
solicitors, employees, accountants and other representatives, full access during
business hours to all of the properties, premises, books, contracts,
commitments, leases and other records of Purchaser for the purpose of
investigating the business and affairs of Purchaser. Seller agrees that, unless
and until the transactions contemplated hereby have been consummated, each of
them will hold in strict confidence, and not use, any information so obtained
and, if the transactions contemplated hereunder are not completed on the Closing
Date, they will forthwith return to Purchaser all written information and
documents in their possession obtained from Purchaser.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
-------------------------------
1.20 Conditions Precedent to Seller's and Seller's Shareholders' Obligations.
The obligations of Seller and Seller's Shareholders to complete the transactions
contemplated hereunder shall be subject to the satisfaction of, or compliance
with, at or before the Closing Date, each of the following conditions precedent
(each of which is hereby acknowledged to be for the exclusive benefit of Seller
and Seller's Shareholders, and may be waived by all, but not less than all of
them, in writing, in whole or in part on or before the Closing Date):
(1) Delivery of Purchaser's Documents
---------------------------------
Seller shall on or before the Closing Date have received Purchaser's
Documents, together with all other documents and instruments from
Purchaser as Seller may reasonably request for the purpose of
effecting the Exchange in accordance with the terms of this Agreement.
-27-
(2) Truth and Accuracy of Representations at Closing Date
-----------------------------------------------------
All of the representations and warranties of Purchaser made in or
pursuant to this Agreement, shall be true and correct in all material
respects as at the Closing Date and with the same effect as if made at
and as of the Closing Date. Seller and Seller's Shareholders shall
have received certificates dated the Closing Date in form satisfactory
to Seller, Seller's Shareholders and their solicitors, acting
reasonably, signed by a senior officer or director of Purchaser on
behalf of Purchaser, certifying the truth and correctness in all
material respects of the representations and warranties of Purchaser
set out in this Agreement.
(3) Performance Covenants
---------------------
Purchaser will have performed and complied with all terms, covenants
and conditions required by this Agreement to be performed or complied
with by it on or before the Closing Date.
(4) No Material Adverse Change
--------------------------
At the Closing Date, there shall have been no material adverse change
in the condition (financial or otherwise), properties, assets,
liabilities, earnings, or business operations or prospects of
Purchaser from that shown on or reflected in Purchaser's Financial
Statements.
(5) Opinion of Purchaser's Solicitors
---------------------------------
Purchaser shall deliver to Seller and Seller's Shareholders at the
Closing a favourable opinion of their respective solicitors in form
satisfactory to the solicitors for Seller and Seller's Shareholders,
acting reasonably, that:
(1) they have acted as counsel to Purchaser in connection with this
transaction;
(2) Purchaser is a corporation incorporated and validly subsisting
under the laws of the Province of Ontario;
(3) all necessary corporate actions and proceedings have been taken
by Purchaser to permit the due and valid issuance by Purchaser of
the Exchange Shares to Seller's Shareholders at the Closing Date
and upon the completion of the transactions contemplated
hereunder, such shares will be issued and outstanding as fully
paid and non-assessable;
-28-
(4) the consummation of the transactions contemplated by this
Agreement will not result in a breach of any term or provision of
or constitute a default under the constating documents, by-laws
or resolutions of Purchaser nor to the best of the knowledge of
such counsel, any indenture, agreement, instrument, licence,
permit or understanding to which Purchaser is a party or by which
they are bound, nor, to the best of the knowledge of such
counsel, will the consummation of such transactions accelerate
any commitment or obligation of Purchaser or result in the
creation of any lien or encumbrance upon any of the assets or
property of Purchaser;
(5) the execution and delivery of this Agreement by Purchaser has not
breached and the consummation of the transactions contemplated by
this Agreement will not cause Purchaser to be in breach of laws
of the Province of Ontario and of Canada applicable therein;
(6) Purchaser has outstanding no options, convertible securities,
warrants or other convertible obligations, agreements or other
commitments to allot, reserve, set aside, create, issue or sell
any securities or any of its unissued share capital, other than
the Purchaser Options;
(7) Purchaser has the full power and authority to enter into and
perform its obligations under this Agreement, and all corporate
action necessary to authorize the performance by Purchaser of its
obligations under this Agreement, has been duly taken, and the
Agreement is a legal, valid and binding obligation of Purchaser
enforceable against it in accordance with its terms, subject to
usual qualifications respecting equitable remedies and creditors'
rights;
(8) the authorized capital of Purchaser consists of an unlimited
number of common shares and an unlimited number of special
shares, of which immediately prior to the issuance of the
Exchange Shares approximately [6,944,576] common shares
[3,930,000 warrants] and no special shares have been duly issued
and are outstanding as fully paid and non-assessable shares of
Purchaser;
(9) the Exchange Shares have been duly issued under section 72(l)(j)
of the Securities Act (Ontario) and the Exchange Shares are
validly issued as fully paid and non-assessable shares in the
capital stock of Purchaser in accordance with the Business
Corporations Act (Ontario);
(10) Purchaser is a reporting issuer not in default of any of the
requirements of the Securities Act (Ontario) as at the Closing
Date; and
-29-
(11) such other matters as counsel for Seller or Seller's Shareholders
may consider advisable, acting reasonably.
In rendering such opinion, such counsel may, to the extent that they
do not have knowledge of any facts to the contrary, rely with respect
to subclause (ix) above upon a certified list of the shareholders of
Purchaser prepared by Purchaser's transfer agent, Equity Transfer
Services Inc. and upon statutory declarations and certificates of an
officer of Purchaser as may be reasonable in the circumstances.
(6) Compliance with Regulatory Requirements & Registrations
-------------------------------------------------------
All consents, approvals, orders and authorizations of any Persons or
governmental authorities in Canada or elsewhere (or registrations,
declarations, filings or records with any such authorities),
including, without limitation, all such registrations, recordings and
filings with such securities regulatory and other public authorities
as may be required to be obtained by Purchaser in connection with the
execution of this Agreement, the Closing or the performance of any of
the terms and conditions hereof, including, without limitation, the
completion of the Asset Sale Transaction, shall have been obtained on
or before the Closing Date.
(7) Tax Returns
-----------
Purchaser agrees to file, duly and timely, all tax returns required to
be filed by it and to pay promptly all taxes, assessments and
governmental charges which are claimed by any governmental authority
to be due and owing. Purchaser also agrees not to enter into any
agreement, waiver or other arrangement providing for an extension of
time with respect to the filing of any tax return or the payment or
assessment of any tax, governmental charge or deficiency.
(8) Dividends
---------
Purchaser agrees that it shall neither declare nor pay any dividends
or other distributions or returns of capital on the issued shares of
Purchaser from the date of this Agreement until the Closing Date
without the prior consent of Seller.
(9) Due Diligence Investigation
---------------------------
Seller shall have conducted and completed a due diligence
investigation with respect to Purchaser, and any other matter relating
to any aspect of the transactions contemplated hereunder, including
the ability of either party
-30-
hereto to receive all requisite approvals in respect of the
transactions contemplated hereunder, and, in its sole and absolute
discretion, shall have been satisfied in all respects with the results
of such due diligence investigation;
1.21 Conditions Precedent to Purchaser's Obligations. The obligation of
Purchaser to complete the transactions contemplated hereunder shall be subject
to the satisfaction of or compliance with, at or before the Closing Date, each
of the following conditions precedent (each of which is hereby acknowledged to
be for the exclusive benefit of Purchaser and may be waived by it in writing,
whole or in part, on or before the Closing Date:
(1) Delivery of Seller's Documents
------------------------------
Purchaser shall on or before the Closing Date have received Seller's
Documents together with all other documents and instruments from
Seller and Seller's Shareholders as Purchaser may reasonably request
for the purpose of effecting the Exchange in accordance with the terms
of this Agreement.
(2) Truth and Accuracy of Representations at Closing Date
-----------------------------------------------------
The representations and warranties of Seller made in or pursuant to
this Agreement, shall be true and correct in all material respects as
at the Closing Date and with the same effect as if made at and as of
the Closing Date (except as such representations and warranties may be
affected by the occurrence of events or transactions expressly
contemplated and permitted hereby that are not materially adverse and
arise in the ordinary course of business). Purchaser shall have
received a certificate dated the Closing Date in form satisfactory to
Purchaser's solicitors, acting reasonably, signed under seal by the
President of Seller certifying the truth and correctness in all
material respects of the representations and warranties of Seller set
out in this Agreement.
(3) Performance of Covenants
------------------------
Seller and Seller's Shareholders shall have performed and complied
with all agreements and conditions required by this Agreement to be
performed and complied with by them prior to or on the Closing Date.
(4) Xxxxxxxxxxxxx.xxx Option
------------------------
The Seller's Subsidiary shall have duly exercised the
Xxxxxxxxxxxxx.xxx Option to hold [50%] of the issued and outstanding
shares of Xxxxxxxxxxxxx.xxx LLC on or before the Closing Date.
-31-
(5) No Material Adverse Change
--------------------------
At the Closing Date, there shall have been no material adverse change
in the condition (financial or otherwise), properties, assets,
liabilities, earnings, or business operations or prospects of Seller
from that shown on or reflected in Seller's Financial Statements.
(6) Opinion of Seller's and Seller's Shareholders Solicitors
--------------------------------------------------------
Seller and Seller's Shareholders shall deliver to Purchaser at the
Closing a favourable opinion of their solicitors (and in the case of
Seller's Subsidiary, from Nevada counsel) in form satisfactory to
Purchaser's solicitors that:
(1) they have acted as counsel to Seller and Seller's Shareholders in
connection with this transaction;
(2) Seller and Seller's Subsidiary are each corporations incorporated
and validly subsisting under the laws of Ontario and Nevada,
respectively;
(3) Seller has the corporate power and authority to carry on its
business as now being conducted and is duly qualified as a
corporation to do business and is in good standing under the laws
of each jurisdiction in which the nature of the business
conducted by it makes such qualification necessary;
(4) all necessary corporate action and proceedings have been taken by
Seller to permit the due and valid transfer to Purchaser of all
outstanding Seller Shares in exchange for the Exchange Shares at
the Closing Date;
(5) the consummation of the transactions contemplated by this
Agreement will not result in a breach of any term or provision of
or constitute a default under the constating documents, by-laws
or resolutions of Seller, nor to the best of the knowledge of
such counsel, any indenture, agreement, instrument, licence,
permit or understanding to which Seller is a party or by which it
is bound, nor, to the best of the knowledge of such counsel, will
the consummation of such transactions accelerate any commitment
or obligation of Seller result in the creation of any lien or
encumbrance upon any of the assets or property of Seller;
(6) the execution and delivery of this Agreement by Seller has not
breached and the consummation of the transactions contemplated by
this Agreement will not be in breach of any federal, provincial
or other laws of any jurisdiction in which Seller carries on
business;
-32-
(7) to the best knowledge of such counsel, Seller has outstanding no
options, convertible securities, warrants or other convertible
obligations, or other agreements to allot, reserve, set aside,
create, issue or sell any securities or any of its unissued share
capital;
(8) Seller is not, to the best knowledge of such counsel, engaged in
or threatened with, any legal action or other proceedings, and
has not been charged with, or to the best knowledge of such
counsel, incurred, any violation of any federal, provincial or
local law or administrative regulation, which could materially
adversely affect or impair its financial position, business,
operations, prospectus, properties or assets;
(9) Seller and Seller's Shareholders each have the full power and
authority to enter into and perform their respective obligations
under this Agreement, and all action necessary to authorize the
performance by Seller and Seller's Shareholders hereunder have
been duly taken and the Agreement is a legal, valid and binding
obligation of Seller and Seller's Shareholders enforceable
against each of them in accordance with their terms, subject to
usual qualifications respecting equitable remedies and creditors'
rights;
(10) the authorized capital of Seller consists of an unlimited number
of common shares, of which 6,800 are issued and outstanding as at
the Closing Date;
(11) the authorized capital of Seller's Subsidiary consists of an
unlimited number of [common shares], of which [*] are issued and
outstanding as at the Closing Date;
(12) the Xxxxxxxxxxxxx.xxx Option has been exercised and Seller's
Subsidiary holds [50%] of the issued and outstanding shares of
Xxxxxxxxxxxxx.xxx LLC; and
(13) such other matters as counsel for Purchaser may consider
advisable, acting reasonably.
In rendering such opinion, such counsel may, to the extent that they
do not have knowledge of any facts to the contrary, rely upon
statutory declarations and certificates of an officer of Seller,
Seller's Shareholders or public official as such counsel deems
necessary.
-33-
(7) Compliance with Regulatory Requirements & Registrations
-------------------------------------------------------
All consents, approvals, orders and authorizations of any Persons or
governmental authorities in Canada or elsewhere (or registrations,
declarations, filings or records with any such authorities),
including, without limitation, all such registrations, recordings and
filings with such securities regulatory and other public authorities
as may be required to be obtained by Seller in connection with the
execution of this Agreement, the Closing or the performance of any of
the terms and conditions hereof, shall have been obtained on or before
the Closing Date.
(8) Tax Returns
-----------
Seller agrees to file, duly and timely all tax returns required to be
filed by it and to pay promptly all taxes, assessments and
governmental charges which are claimed by any governmental authority
to be due and owing. Seller also agrees not to enter into any
agreement, waiver or other arrangement providing for an extension of
time with respect to the filing of any tax return or the payment or
assessment of any tax, governmental charge or deficiency.
(9) Dividends
---------
Seller agrees that it shall neither declare nor pay any dividends or
other distributions or returns of capital on the issued shares of
Seller from the date of this Agreement until the Closing Date.
(10) Due Diligence Investigation by Purchaser
----------------------------------------
Purchaser shall have conducted and completed a due diligence
investigation with respect to Seller's Business and, in its sole and
absolute discretion, shall have been satisfied in all respects with
the results of such due diligence investigation.
1.22 Delivery of Closing Documentation.
(1) On or before the Closing Date,
(1) Purchaser shall deliver, or cause to be delivered to Seller the
following documents ("Purchaser's Documents"):
(1) duly issued share certificates representing the Exchange
Shares;
(2) certified copies of extracts from directors' resolutions or
minutes of meetings, and written evidence of such other
-34-
approvals or consents to the issuance of the Exchange Shares
as are required under the articles and by-laws of Purchaser,
and, applicable laws, to carry out the transactions
contemplated by this Agreement;
(3) a favourable opinion from Purchaser's solicitors as
requested hereunder in form satisfactory to the solicitors
for Seller and Seller's Shareholders, acting reasonably;
(4) satisfactory evidence of Regulatory Body and any other
approvals required hereunder; and
(5) such other certificates, agreements or other documents as
may reasonably be required by Seller or Seller's
Shareholders or their solicitors, acting reasonably, to give
full effect to this Agreement.
(2) Seller and, as applicable, Seller's Shareholders, shall deliver
or cause to be delivered to Purchaser the following documents
("Seller's Documents"):
(1) duly issued share certificates representing the Seller
Shares, duly endorsed for transfer to Purchaser;
(2) certified copies of extracts from directors' and
shareholders' resolutions, and written evidence of such
other approvals or consents as are required under the
constating documents of Seller to validly conclude the
transactions contemplated hereunder;
(3) documents evidencing the due exercise of the
Xxxxxxxxxxxxx.xxx Option by the Seller's Subsidiary;
(4) a favourable opinion from the solicitors for Seller as
required in a form which is satisfactory to Purchaser's
solicitors, acting reasonably; and
(5) such other certificates, agreements or other documents as
may reasonably be required by Purchaser or its solicitors,
acting reasonably, to give full effect to this Agreement.
ARTICLE VII
OTHER COVENANTS
---------------
-35-
1.23 Support of Transactions. Purchaser agrees to use its best efforts to
obtain support of its officers and directors in favour of all transactions
contemplated by this Agreement.
ARTICLE VIII
GENERAL
-------
1.24 Confidentiality & Public Notices. Except where compliance with this
Section 8.1 would result in a breach of applicable law, notices, releases,
statements and communications to Third Parties, including employees of the
parties and the press, relating to transactions contemplated by this Agreement
will be made only in such manner as shall be authorized and approved by Seller,
who when required shall use its best efforts to provide such authorization and
approval to Purchaser in a timely manner as shall permit compliance by Purchaser
with all continuous disclosure to any Regulatory Body or obligations under any
applicable securities regulations. Purchaser, Seller and Seller's Shareholders
shall maintain the confidentiality of any information received from each other
in connection with the transactions contemplated by this Agreement. In the
event that the issuance of the Exchange Shares or Exchange Options provided for
in this Agreement is not consummated, each party shall return any confidential
schedules, documents or other written information to the party who provided same
in connection with this Agreement. Seller and Seller's Shareholders agree that
they will not, directly or indirectly, make reciprocal use for their own
purposes of any information or confidential data relating to Purchaser or
Purchaser's Business discovered or acquired by them, their representatives or
accountants as a result of Purchaser making available to them, their
representatives and accountants, any information, books, accounts, records or
other data and information relating to Purchaser or Purchaser's Business and
Seller and Seller's Shareholders agree that they will not disclose, divulge or
communicate orally, in writing or otherwise, any such information or
confidential data so discovered or acquired to any other Person. Purchaser
agrees that it will not, directly or indirectly, make reciprocal use for its own
purposes of any information or confidential data relating to Seller or Seller's
Shareholders discovered or acquired by it, its representatives or accountants as
a result of Seller or Seller's Shareholders making available to it, any
information, books, accounts, records or other data and information relating to
Seller; and Purchaser agrees that it will not disclose, divulge or communicate
orally, in writing or otherwise, any such information or confidential data so
discovered or acquired to any other Person.
1.25 Notices. All notices or other communications required to be given in
connection with this Agreement shall be given in writing and shall be given by
personal delivery, by registered mail or by transmittal by telecopier or other
form of recorded communication addressed to the recipient as follows:
-36-
To Purchaser:
Opus Minerals Inc.
Xxxxx 000, X.X. Xxx 000
1 First Canadian Place
Toronto, Ontario
M5X 1E2
Attention: Xxxxxxxxx X. Xxxxxxxx, President
Telecopier No.: (000) 000-0000
with a copy to:
XXXX & XXXXXX
Barristers and Solicitors
Suite 1600, Exchange Tower
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx X. Xxxx
Telecopier No. (000) 000-0000
To Seller:
IL Data Canada, Inc.
c/x XxXxxxx Xxxxx
Barristers and Solicitors
National Bank Building
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attention: ***
Telecopier No.:***
with a copy to:
DuMoulin & Xxxxxxxxx
Barristers and Solicitors
0000-0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxxx Xxxxxx, CA
-37-
Telecopier No.: (000) 000-0000
To Shareholders:
Shareholders
c/o [address]
Attention: Xxxxxxx Xxxxxxxxx
Telecopier No.: ***
with a copy to:
DuMoulin & Xxxxxxxxx
Barristers and Solicitors
0000-0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxxx Xxxxxx, CA
Telecopier No.: (000) 000-0000
or to such other address, telecopier number or individual as may be
designated by notice given by either party to the other. Any such
communication given by personal delivery shall be conclusively deemed to
have been given on the day of actual delivery thereof and, if given by
registered mail, on the fifth Business Day following the deposit thereof in
the mail and, if given by telecopier or other form of recorded
communication, shall be deemed given and received on the date of such
transmission if received during the normal business hours of the recipient
and on the next Business Day if it is received after the end of such normal
business hours on the date of its transmission. If the party giving any
such communication knows or ought reasonably to know of any difficulties
with the postal system which might affect the delivery of mail, any such
communication shall not be mailed but shall be given by personal delivery
or by telecopier transmittal.
1.26 Expenses. All costs and expenses (including, without limitation, the
fees and disbursements of legal counsel) incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
1.27 Time of the Essence. Time shall be of the essence hereof.
1.28 Further Assurances. The parties hereto shall with reasonable
diligence do all such things and provide all such reasonable assurances as
may be required to consummate the transactions contemplated hereby, and
each party shall execute and deliver such further documents, instruments,
papers and information as may be reasonably requested by another party
hereto in order to carry out the purpose and intent of this Agreement.
-38-
1.29 Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario and the
laws of Canada applicable therein. The parties hereby attorn to the non-
exclusive jurisdiction of the Courts of Ontario in any dispute that may
arise hereunder.
1.30 Counterparts. For the convenience of the parties, this Agreement may
be executed in several counterparts, each of which when so executed shall
be, and be deemed to be, an original instrument and such counterparts
together shall constitute one and the same instrument (and notwithstanding
their date of execution shall be deemed to bear date as of the date of this
Agreement). A signed facsimile or telecopied copy of this Agreement shall
be effective and valid proof of execution and delivery.
1.31 Entire Agreement. This Agreement, including the Schedules attached
hereto, together with the agreements and other documents to be delivered
pursuant hereto, constitute the entire agreement between the parties
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of
the parties and there are no warranties, representations or other
agreements between the parties in connection with the subject matter hereof
except as specifically set forth herein and therein. This Agreement may not
be amended or modified in any respect except by written instrument signed
by all parties.
1.32 Severability. The invalidity or unenforceability of any provision of
this Agreement or any covenant herein contained shall not affect the
validity or enforceability of any other provision or covenant hereof or
herein contained, and this Agreement shall be construed as if such invalid
or unenforceable provision or covenant were omitted.
1.33 Enurement. This Agreement shall be binding upon and shall inure to
the benefit of and be enforceable by the successors and permitted assigns
of the parties hereto.
1.34 Waivers. The parties hereto may, by written agreement:
(1) extend the time for the performance of any of the obligations or
other acts of the parties hereto;
(2) waive any inaccuracies in the warranties, representations,
covenants or other undertakings contained in this Agreement or in
any document or certificate delivered pursuant to this agreement;
or
(3) waive compliance with or modify any of the warranties,
representations, covenants or other undertakings or obligations
contained in this Agreement and waive or modify performance by
any of the parties thereto.
1.35 Form of Documents. All documents to be executed and delivered by Purchaser
to Seller or Seller's Shareholders on the Closing Date shall be in form and
substance satisfactory
-39-
to Seller and Seller's Shareholders, acting reasonably. All documents to be
executed and delivered by Seller and Seller's Shareholders to Purchaser on the
Closing Date shall be in a form and substance satisfactory to Purchaser, acting
reasonably.
1.36 Construction Clause. This Agreement has been negotiated and approved by
counsel on behalf of all parties hereto and, notwithstanding any rule or maxim
of construction to the contrary, any ambiguity or uncertainty will not be
construed against any party hereto by reason of the authorship of any of the
provisions hereof.
-40-
1.37 Termination of the Letter of Intent. Purchaser and Seller each agree that
effective as of the Effective Date, the Letter of Intent shall be terminated and
of no further force or effect. Purchaser and Seller acknowledge and agree as of
the Effective Date to waive without recourse any rights or claims which they may
have or to which they may become entitled under the terms of the Letter of
Intent.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the Closing Date.
SIGNED, SEALED & DELIVERED )
in the presence of ) OPUS MINERALS INC.
)
) Per:_______________________________
) Name: Xxxxxxxxx X. Xxxxxxxx
) Title: President
)
)
) IL DATA CANADA, INC.
)
) Per:_______________________________
) Name:
) Title:
)
)
)
______________________________ ) ___________________________________
Witness ) Xxxxxxxx Xxxxxxx
)
)
)
______________________________ ) ___________________________________
Witness ) Xxxxxx Xxxxxx
)
) Sierra Holdings Limited
)
) Per:_______________________________
) Name:
) Title:
-41-
)
) Iguana Investments Limited
)
) Per:_________________________________
) Name:
) Title:
)
) Laiy Limited
)
) Per:_________________________________
) Name:
) Title:
)
) Aberdeen Holdings
)
) Per:_________________________________
) Name:
) Title:
)
) Xxxxx Resources
)
) Per:_________________________________
) Name:
) Title:
-42-
SCHEDULE "A"
------------
This is Schedule "A" to the Securities Exchange Agreement
SELLERS' SHAREHOLDERS
Name Number of Shares
---- ----------------
Sierra Holdings Limited 3890 shares
00 Xxxx Xxxxxx, 0xx Xxxxx
PO Box HM
3051, Xxxxxxxx XX NX
Xxxxxxxx Xxxxxxx 500 shares
XXX 000, 00 Xxxxxxxx Xxxxx
Xxxxxxxx XXX 00000
Xxxxxx Xxxxxx 500 shares
#000 - 0000 Xxx Xxxxxx
Xxxxxxxxx XX X0X 0X0
Iguana Investments Limited 477.50 shares
Buckingham Sq, Penthouse
Seven Mile Beach
West Bay Road, Grand Cayman
Cayman Islands, BWI
Laiy Limited 477.50 shares
00 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx
Aberdeen Holdings 477.50 shares
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxx
Xxxxx Resources 477.50 shares
Xxxxxx Xxxxx, 0 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx
SCHEDULE "B"
------------
PURCHASER OPTIONS
-------------------------------------------------------------------------------
Number of Shares Option Price Expiry
-------------------------------------------------------------------------------
3,000,000 Warrants $ 0.35 *
-------------------------------------------------------------------------------
Compensation Option to Taurus Capital: 300,000 $ 0.25
300,000 $ 0.25 *
*
-------------------------------------------------------------------------------
IRG Options: 300,000 $ 0.90 *
-------------------------------------------------------------------------------
Kirkwood Management Options: 30,000 $ 0.30 *
-------------------------------------------------------------------------------
DeBeers Consolidated: 40,000 $15.00 June 30, 2000
-------------------------------------------------------------------------------
-3-
SCHEDULE "C"
------------
PURCHASER'S STOCK OPTION PLAN
SCHEDULE "D"
------------
SELLER'S CONTRACTS
-5-
SCHEDULE "E"
------------
OFFICERS AND DIRECTORS
OF
OPUS MINERALS INC.
Name Position(s)
---- -----------
Xxxxxxxxx X. Xxxxxxxx President and Director
Xxx X. Xxxxx Secretary-Treasurer and Director
Xxxxxxx Xxxxxx Director
Xxxxx Xxxxxxx Director
-6-
SCHEDULE "F"
------------
OFFICERS AND DIRECTORS
OF
IL DATA CORPORATION, INC.
Name Position(s)
---- -----------
Xxxxx Xxxxxx President
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxxx Xxxxxx Secretary and Director
#000 - 0000 Xxx Xxxxxx
Xxxxxxxxx XX
X0X 0X0
Xxxxxxx Xxxxxxxxx Treasurer and Director
00000 Xxxx Xxxx, Xxxxxxxxxxxxx
XX 00000
Xxxxxxx Xxxx Director
Xxxxx 000, 000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
