EXHIBIT 2.1
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT, dated as of the 5th day of September,
2001, is by and between IMPULSE MEDIA TECHNOLOGIES INC., a Nevada corporation
("Company") and XXXXXXX.XXX, INC., a Colorado corporation ("Purchaser").
WHEREAS:
A. Purchaser and Company have agreed that Purchaser will acquire Company
pursuant to a share exchange;
B. The respective Boards of Directors of Purchaser and Company have approved the
acquisition of Company by Purchaser on the terms and subject to the conditions
set forth in this Agreement (the "Acquisition");
C. The Board of Directors of Company is recommending that Company's
securityholders (the "Company Securityholders") accept the offer set forth
herein;
D. Purchaser and Company desire to make certain representations, warranties,
covenants and agreements in connection with the Acquisition and also to
prescribe various conditions to the Acquisition; and
E. Purchaser is a reporting issuer to the United States Securities and Exchange
Commission ("SEC") and its shares are approved for quotation and trading on the
National Association of Securities Dealers over-the-counter Bulletin Board
(respectively the "NASD" and the "OTCBB").
NOW, THEREFORE, in consideration of the mutual benefits to be derived
and the representations and warranties, conditions, covenants and agreements
herein contained, and intending to be legally bound hereby, the parties agree
as. follows:
ARTICLE 1.
THE OFFER
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1.1 THE OFFER. Subject to the terms and conditions of this Agreement (any of
which may be waived by Purchaser in its sole discretion), Purchaser offers to
purchase all the issued and outstanding shares of Company (the "Offer").
1.2 COMPANY ACTIONS.
(a) Company hereby approves of and consents to the Offer and the
Acquisition and represents that the Board of Directors of Company, at a meeting
duly called and held, duly and unanimously adopted resolutions approving this
Agreement, the Offer and the Acquisition, determining that the terms of the
Offer and the Acquisition are fair to, and in the best interests of, the Company
Securityholders and recommending that the Company Securityholders approve and
adopt this Agreement, and accept the Offer and tender their securities (the
"Company Securities") pursuant to the Offer.
(b) In connection with the Offer, Company shall cause a plan of
exchange (the "Plan of Exchange") to be prepared setting forth the terms of the
Offer. The Company shall deliver the Plan of Exchange to all Company
Securityholders along with a recommendation that the Company Securityholders
approve the Offer and the Acquistion. The Company agrees that the Plan of
Exchange shall comply in all material respects with the requirements of
applicable corporate and securities laws, and rules and regulations promulgated
thereunder, and on the date first published, sent or given the Company
Securityholders; shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that no representation is made by Company
with respect to information supplied by Purchaser specifically for inclusion in
the Plan of Exchange. Each of Company and Purchaser agree promptly to correct
any information provided by it for use in the Plan of Exchange of and to the
extent that such information shall have become false or misleading in any
material respect. Purchaser and its counsel shall be given a reasonable
opportunity to review and comment upon the Plan of Exchange prior to its
dissemination to Company Securityholders.
ARTICLE 2
THE ACQUISITION
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2.1 THE ACQUISITION. Upon the terms and subject to the conditions set forth in
this Agreement, at Closing (as hereafter defined), Purchaser shall issue one
share of Purchaser common stock (the "Exchange Shares") for each share of
Company Securities validly tendered by Company Securityholders pursuant to the
Offer.
2.2 DISSENTING SHARES. Holders of Company Securities who do not accept the Offer
and validly tender their Company Securities pursuant thereto shall be
"Dissenting Shareholders," and their Company Securities shall be "Dissenting
Shares." Purchaser shall have the right, but not the obligation, to take such
actions as are necessary or appropriate to acquire the Dissenting Shares under
applicable law.
2.3 THE CLOSING. The closing of the Acquisition (the "Closing) shall take place
at 2:00 p.m. on September 14, 2001 at such place as the parties shall agree,
unless another date is agreed to in writing by the parties.
ARTICLE 3
COVENANTS, REPRESENTATIONS AND WARRANTIES OF PURCHASER
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3.1 COVENANTS, REPRESENTATIONS AND WARRANTIES. Purchaser covenants, represents
and warrants in favour of Company that:
(a) it is a corporation duly incorporated under the laws of the State
of Colorado and that it is a valid, subsisting corporation in good standing
under all of the applicable corporate or other laws, and that it is unrestricted
in its right to enter into this Agreement;
(b) it is a reporting issuer and quoted on the OTCBB, and that it is in
good standing relative to such capacities with the SEC and the NASD and is not
the subject of any regulatory, or threatened regulatory, action by any
governmental or regulatory agency having, or claiming to have, jurisdiction over
it, its business affairs or its shares;
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(c) its authorized and issued capital is, at the date hereof,
50,000,000 preferred shares, none of which are issued, and 100,000,000 voting
common shares, with a par value of $0.001 per share, of which 11,002,000 are
issued as of the date hereof;
(d) the audited financial statements of Purchaser dated as of February
28, 2001 (the "Financial Statements"), copies of which have been delivered to
Company, fully, fairly and accurately represent the financial affairs and
condition of Purchaser as of the said date and as at the date hereof, and no
material adverse changes have occurred in or to the condition of Purchaser or
its financial position since February 28, 2001;
(e) it will not, prior to the Closing, without the prior written
consent of Company, enter into any agreements which shall require it to issue
any shares, or securities convertible to shares, in its capital, or to acquire
any assets, or to assume or incur any debts or other obligations, except as
would be required in the normal course to satisfy its obligations under this
Agreement;
(f) it has no liabilities, due or accruing due, contingent or absolute,
liquidated or unliquidated, of any kind except
(i) liabilities disclosed or provided for in the
Financial Statements,
(ii) liabilities incurred in the ordinary course of the
business since the date of the Financial Statements,
which are consistent with past practice and are not,
in the aggregate, material and adverse to the
business of Purchaser, or to the financial condition
or results of the Purchaser;
(g) the Exchange Shares will, when issued, be validly issued as fully
paid and non-assessable and free and clear of all encumbrances;
(h) the issuance of the Exchange Shares will be effected in such a
manner as to be exempt from registration under the SECURITIES ACT of 1933 (the
"SECURITIES ACT") and all applicable state securities or blue sky laws;
(i) it will, upon Closing, dispose of all of its shares or other
interests in any subsidiaries it may own or control.
ARTICLE 4
COVENANTS, REPRESENTATIONS AND WARRANTIES OF COMPANY
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4.1 COVENANTS, REPRESENTATIONS AND WARRANTIES. Company covenants, represents and
warrants in favour of Purchaser that:
(a) it is the sole legal and beneficial owner of all its assets, free
and clear of all liens, charges and encumbrances whatsoever;
(b) it is not subject to any agreements, judgments or orders of any
nature or kind whatsoever which would require it to issue any shares in its
capital other than the voting common shares in its capital which are either
issued and outstanding or are due to be issued to the Company Securityholders;
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(c) it is a corporation duly incorporated under the laws of the State
of Nevada, and it is valid, subsisting and in good standing pursuant to all of
the applicable corporate or other laws applicable to it, and that it is
unrestricted in its right to enter into this Agreement.
(d) the issued share capital of Company together with the names and
number, class and kind of shares held by each of the shareholders of the Company
is as set forth in Schedule A.
(e) except as set out in Schedule A, each of the Company
Securityholders owns and has good and marketable title to all of the Company
Securities opposite his name on Schedule A as the legal and beneficial owner
thereof, free and clear of all encumbrances and such securities have been duly
and validly issued and, with respect to the shares, are outstanding as fully
paid and non-assessable shares in the capital of the Company.
ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO CLOSING, AFTER CLOSING
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5.1 ACCESS TO RECORDS AND PROPERTIES.
(a) OF THE COMPANY. Company shall give Purchaser and Purchaser's
counsel, accountants, lenders and their respective employees, agents and
representatives such access (during normal business hours) to, and opportunity
to examine, the books, records, files, documents, properties and assets of the
Company, and cause the officers, directors, employees, agents, representatives,
legal counsel, accounts and auditors of the Company to furnish such financial
and operating data and other information, as Purchaser shall from time to time
reasonably request. Any investigation pursuant to this Section 5.1 shall be
conducted in such manner as not to interfere unreasonably with the ordinary
course of the business and operations of the Company or with the confidentiality
respecting the transactions contemplated by this Agreement.
(b) OF THE PURCHASER. Purchaser shall give Company and Company's
counsel, accountants, lenders and their respective employees, agents and
representatives such access (during normal business hours) to, and opportunity
to examine, the books, records, files, documents, properties and assets of
Purchaser, and cause the officers, directors, employees, agents,
representatives, legal counsel, accounts and auditors of the Purchaser to
furnish such financial and operating data and other information, as the Company
shall from time to time reasonably request. Any investigation pursuant to this
Section 5.1 shall be conducted in such manner as not to interfere unreasonably
with the ordinary course of the business and operations of the Purchaser or with
the confidentiality respecting the transactions contemplated by this Agreement.
5.2 ACTIVITIES PRIOR TO CLOSING.
(a) OPERATION OF THE COMPANY. From the date hereof to the Closing Date,
except to the extent that Purchaser shall consent in writing, Company shall
operate its business in such a manner as would be the ordinary course of
business consistent with recent past practice. Without limiting the generality
of the foregoing, Company shall:
(i) not merge or consolidate with any other entity, acquire
any other business or entity, or agree to do any of the foregoing;
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(ii) notify Purchaser of any significant loss of, damage to or
destruction of any of its material properties or assets;
(iii) maintain in full force and effect all present insurance
coverages and apply the proceeds received under any such coverages as a result
of any loss of, damage to or destruction of any properties or assets to the
repair, restoration or replacement thereof;
(iv) use its reasonable efforts to preserve the present
managerial employees, reputation and business relationships of the Company with
persons and entities having business dealings with them;
(v) refrain from taking any action which (if not remedied)
would render any representation and warranty contained in Article 4 inaccurate
at and as of the Closing Date., and shall promptly advise Purchaser of any such
event or circumstance.
(b) OPERATION OF PURCHASER. From the date hereof to the Closing Date,
except to the extent that Company shall consent in writing, Purchaser will not
conduct business activities.
5.3 BEST EFFORTS TO SATISFY CONDITIONS. Purchaser and the Company shall use
their best efforts to cause the conditions to the Closing set forth in Article 6
hereof to be satisfied, to the extent that the satisfaction of such conditions
is in the control of such party, as soon as practicable after the date hereof;
provided, however, the foregoing shall not constitute a limitation upon the
covenants and obligations of any party otherwise expressly set forth in this
Agreement.
5.4 BOARD OF DIRECTORS AND OFFICERS. Upon Closing, Purchaser's Board of
Directors and officers shall resign in favour of nominees of Company.
5.5 STOCK OPTION PLAN. Purchaser shall issue options to replace options
previously awarded under the Company's stock option plan only to those option
holders that have not exercised such options prior to Closing, on the same terms
and conditions as granted under Company's prior stock option plan. Company's
stock option plan shall be cancelled and all options issued thereunder shall
terminate.
ARTICLE 6.
CONDITIONS OF CLOSING
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6.1 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of Purchaser to
consummate the purchase and sale are subject to the satisfaction of the
following conditions, each of which may be waived by Purchaser:
(a) REPRESENTATIONS AND WARRANTIES: PERFORMANCE OF OBLIGATIONS. The
representations and warranties of Company set forth herein shall be true and
correct in all materials respects on the Closing Date as though made on and as
of the Closing Date. Company shall have performed the agreements and obligations
required to be performed by it under this Agreement prior to the Closing Datc.
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(b) LEGAL RESTRAINTS. There shall not have been proposed or enacted any
law, or any change in any existing law, which prohibits or delays, or threatens
to prohibit or delay, the consummation of any of the purchase and sale or any of
the other transactions contemplated by thisAgreement or which could reasonably
have a material adverse effect.
(c) APPROVAL OF PLAN OF EXCHANGE. The Plan of Exchange shall have been
approved in writing by a majority of all Company Securities held by Company
Securityholders entitled to vote.
(d) COMPLIANCE WITH SECURITIES MATTERS. The transactions contemplated
hereby shall, in the opinion of counsel for Purchaser, qualify for exemptions
from registration with respect to all applicable federal, state and provincial
securities laws.
(e) LEGAL OPINION. Company will deliver to Purchaser on the Closing
Date an opinion of Company's legal counsel, addressed to Purchaser's legal
counsel, in form satisfactory to Purchaser's counsel that:
(i) Company is duly organized and validly existing under the
laws of the State of Nevada and is in good standing with the Secretary of State
of Nevada;
(ii) all necessary steps and corporate proceedings have been
taken to permit the Company Securities to be duly and validly transferred to and
registered in the name of the Purchaser;
(iii) the number of authorized and issued securities in the
capital of the Company is as warranted by the Company and all issued shares are
duly authorized, validly issued and outstanding as fully paid and
non-assessable.
6.2 CONDITIONS TO OBLIGATIONS OF COMPANY. The obligations of Company at Closing
are subject to the satisfaction of the following conditions each of which may be
waived by Company:
(a) REPRESENTATIONS AND WARRANTIES: Performance of Obligations. The
representations and warranties of Purchaser set forth herein shall be true and
correct in all material respects on the Closing Date as though made on and as of
the Closing Date. Purchaser shall have performed the agreements and obligations
required to be performed by it under this Agreement prior to the Closing Date.
(b) LEGAL RESTRAINTS. There shall not have been proposed or enacted any
law, or any change in any existing law, which prohibits or delays, or threatens
to prohibit or delay, the consummation of the transactions contemplated by this
Agreement or which could reasonably have a material adverse effect.
(c) EXCHANGE SHARES. Purchaser shall have delivered to the Company
Securityholders the Exchange Shares in the manner provided in paragraph 2.1.
(d) COMPLIANCE WITH SECURITIES MATTERS. The transactions contemplated
hereby. shall, in the opinion of counsel for Company, qualify for exemptions
from. registration with respect to all applicable federal, state and provincial
securities laws.
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(e) LEGAL OPINION. Purchaser will deliver to Company on the Closing
Date one or more legal opinions, addressed to Company's legal counsel, in form
satisfactory to Company's legal counsel that:
(i) Purchaser is duly organized and validly existing under the
laws of the State of Colorado and is in good standing with the Secretary of
State of Colorado;
(ii) all necessary steps and corporate proceedings have been
taken to permit the Exchange Shares to be duly and validly issued to and
registered in the name of the Company Securityholders;
(iii) the number of authorized and issued shares in the
capital of the Purchaser is as warranted by Purchaser and all issued shares are
duly authorized, validly issued and outstanding as fully paid and
non-assessable.
(iv) Purchaser may issue the Exchange Shares as provided for
under this Agreement in reliance upon Regulation S or Regulation D under the
SECURITIES ACT and such issuance will not violate the registration requirements
of the SECURITIES ACT.
ARTICLE 7
TERMINATION
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7.1 TERMINATION OF AGREEMENT.
(a) BY PURCHASER. This Agreement may be terminated by Purchaser, upon
notice to the Company, if (i) the Closing shall not have occurred on the Closing
Date, for any reason whatsoever, other than a material breach by Purchaser, (ii)
the Company shall have breached any representation, warranty or covenant of this
Agreement, whether or not such breach is susceptible of cure, or (iii) the
results of Purchaser's due diligence review shall not be satisfactory to
Purchaser, in its sole discretion.
(b) BY COMPANY. Company may terminate this Agreement, upon notice to
Purchaser, only in the event of a material breach by Purchaser of any
representation, warranty or covenant of Purchaser set forth in this Agreement
that is not cured by Purchaser within 30 days of written notice of such breach.
(c) EFFECT OF TERMINATION. Termination of this Agreement under this
Section shall automatically and irrevocably terminate all liabilities and
obligations of the terminating party arising under this Agreement. All rights of
the terminating party arising under this Agreement, and all liabilities and
obligations of the other party or parties hereto, shall survive any such
termination.
ARTICLE 8
MISCELLANEOUS
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8.1 FURTHER ACTIONS. The parties shall. execute and deliver (or cause to be
executed and delivered) such other and further documents and instruments and
shall take, (or cause to be taken) such other and further actions, as any other
party hereto may reasonably' request in order to further effect and/or evidence
the transactions, contemplated, hereby or to otherwise consummate and give
effect to the covenants and agreements set forth herein.
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8.2 ENTIRE AGREEMENT. This Agreement and the Schedules hereto contain the entire
agreement between Company and Purchaser with respect to the subject matter
hereof, and supersede all prior agreements, arrangements and understandings with
respect thereto.
8.3 NOTICES. Any notice or other communication which is required or permitted
hereunder or under any other Company Document or Purchaser Document shall be in
writing and shall be deemed to have been delivered and received (a) on the day
of (or, if not a business day, the first business day after) its having been
personally delivered or faxed to the following address or fax number; (b) on the
first business day after its having been sent by overnight delivery service to
the following address: (c) if sent by regular, registered or certified mail,
when actually received at the following address:
If to Purchaser:
0000 Xxxx Xxxxxx
Xxxxx 000 Xxxxxxx Xxxxx, XX 00000
If to Company:
0000-0000 X. Xxxxxxx Xx.
Xxxxxxxxx, XX X0X 0X
Any party may by notice, change the address or telecopier number to which
notices or other communications to it are to be delivered, telecopied or sent.
8.4 GOVERNING LAW. Because the parties are incorporated in different
jurisdictions and because they both have business offices in the Province of
British Columbia, it is agreed that this Agreement will be interpreted according
to the laws of the Province of British Columbia and the laws of Canada
applicable therein, and the parties agree that they will be subject to the
jurisdiction and authority of the courts of the Province of British Columbia.
8.5 WAIVERS AND AMENDMENTS. Any waiver of any term or condition of this
Agreement, or any amendment or supplementation of this Agreement, shall be
effective only if in writing and is executed by each of the parties hereto. A
waiver of any breach or failure to enforce any of the terms or conditions, of
this Agreement shall not in any way affect, limit or waive a party's rights
hereunder at any time to enforce strict compliance thereafter with every term
and condition of this Agreement.
8.6 ILLEGALITIES. In the event that any provision contained in this Agreement
shall be determined to be invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect, and the remammg provisions of this Agreement, shall not, at
the election of the party for whose benefit the provision exists, be in any way
impaired.
8.7 COUNTERPARTS. This Agreement may be executed in any number of counterparts,
and by facsimile, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts. together shall constitute but one
agreement.
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8.8 DISPUTE RESOLUTION. Any dispute, controversy or claim arising out of or
relating to this Agreement or the interpretation of any of the provisions hereof
will be finally settled by arbitration in accordance with the Arbitration Rules
of The British Columbia International Commercial Arbitration Centre ("Centre")
in effect on the date hereof. The parties agree that:
(a) The appointing authority will be the Centre;
(b) The case will be administered by the Centre in accordance with its
"Procedures for Cases under the BCICAC Arbitration Rules";
(c) The place of arbitration will be Vancouver, British Columbia;
(d) The number of arbitrators will be one (1);
(e) The language used in the proceedings will be English;
(f) The arbitrator's fees will be paid by the parties in equal parts,
during the course of the arbitration. In his final decision the arbitrator shall
assess liability against one or both of the arbitrating parties for the costs
incurred by the parties in the arbitration and for the arbitration costs.
8.9 CURRENCY. All references to money herein are to United States dollars unless
otherwise specified.
8.10 ENUREMENT. This Agreement shall enure to the benefit of and be binding upon
the parties and their respective heirs, successors, administrators and assigns.
THE PARTIES INTENDING TO BE LEGALLY BOUND have executed this Agreement
as of the date first above written.
Purchaser: Company:
XXXXXXX.XXX, INC. IMPULSE MEDIA TECHNOLOGIES INC.
a Colorado corporation a Nevada corporation
By: By.
NAME: XXXXXXX XXXXX NAME: XXX XXXXX
TITLE: PRESIDENT TITLE: PRESIDENT
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SCHEDULE A
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SHAREHOLDERS OF IMPULSE MEDIA TECHNOLOGIES INC.
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Shareholder No. of Shares
1Westin Trust Company 250,000
2Heather Xxxxxxx 21,000
3Keith Xxxxxxx 95,000
4Gillian Xxxxx 15,000
5J.X. Xxxxxxx 10,000
6Olga Xxxxxxx 10,000
7J.Xxxxx Xxxxxx 51,000
8Lorna Hunter 5,300
9Bruce Xxxxx 50,000
10M&S Trust Company Limited 150,000
11Peter Giroday 19,994
12Michael Xxxxx 68,500
13Nancy Xxxxx 46,000
14Michael Xxxxx 1,350
15Lloyd Xxxxxxxxx 5,000
16Donald Nicolson 16,698
17Lori Xxxxxxxx 5,000
18James Xxxxxxxx 10,000
19Nancy Lees 17,500
20Mike Xxxx 15,000
21Keith XxXxxx 32,500
22Rhodes Talent Management Inc. 3,352
23John Xxxxx 50,000
24Craig Xxxxxxx 10,000
25Gary Xxxx 140,000
26Art Xxxxxxx 5,000
27Zoeshan Holdings Inc. 60,000
28John Xxxxxxx 10,000
29Bentley Trading Company 250,000
30Jeff Xxxxxx 20,000
31David Xxxx 54,000
32Franco Aporusso 20,000
33Armstrong Mifflin Investments 40,000
34Darshan Xxxxxx 40,000
35Everett Abbey 30,000
36Ian Toews 260,000
37Ken Xxxx 250,000
38Ted Xxxxx 600,000
39Curtis Xxxx 820,000
40Eric Hawthorne 760,000
41Matthew XxXxxxx 150,000
42Mike Xxxxxx 200,000
43Derrick Xxxxxxx 450,000
00Xxxxxxxxxxx.xxx Inc. 1,200,000
45Michael Stunden 100,000
46John Xxxx 50,000
47Adrian Xxxxxxxx 50,000
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6,517,194
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