UNITED STATES
SECURITIES ANDEXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 13,
2015
WOLVERINE EXPLORATION INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of
incorporation)
333-152343
(Commission File Number)
98-0569013
(IRS Employer Identification No.)
4055 McLean Road, Quesnel, British Columbia, Canada V2J
6V5
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code
(250) 992-6972
N/A
(Former name or former address, if
changed since last report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
[ ] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
- 2 -
Item 1.01 Entry
into Material Definitive Agreement
On, April 14, 2015 Wolverine Exploration Inc. (Wolverine)
entered into a Share Exchange and Royalty Agreement (the Agreement) with Dr.
David Chalk, hd.Tech (Chalk). Under the terms of the Agreement, Wolverine will
acquire a 25% interest in the process technology and cyber security company
ENIGMAMobil Inc. (Enigma) from Chalk for the purchase price of USD $3,000,000,
to be paid in shares of common stock of Wolverine at a deemed price of USD$0.01
per share (the Shares). Wolverine will also receive a 25% royalty of all gross
revenue received by Enigma from the sale of licenses of the ENIGMAMobil mobile
security app. The Agreement is subject to Enigma completing a financing of
USD$2,500,000 and Wolverine increasing its authorized capital of common stock to
allow for the issuance of the Shares and Finders Shares (as defined below).
Additionally, closing of the Agreement will involve Wolverine
issuing a finders fee consisting of 30,000,000 common shares of Wolverine (the
Finders Shares) and grant a 10% royalty of all gross revenue received by
Enigma from the sale of licenses of the ENIGMAMobil mobile security app
received by Wolverine to Texada Consulting Inc.
Item 5.02
Appointment of Certain Officers and Directors; Departure of Certain Officers and
Directors
On April 13, 2015 Mr. Lee Costerd resigned as CEO, CFO and a
director of Wolverine.
On April 13, 2015, we received consent to act from Richard
Haderer and David Chalk. Wolverine increased the number of directors to three
(3) and appointed Mr. Haderer and Mr. Chalk to the board of directors. Wolverine
also appointed Mr. Haderer as interim CEO and CFO of Wolverine.
Richard Haderer CEO, CFO and Director
Mr. Haderer has worked as a regulatory consultant for Wolverine
since February of 2006. Mr. Haderer has been President of PubCo Services Inc.
since April 1996. PubCo Services Inc. provides regulatory consulting services to
public traded companies. Mr. Haderer has also served as a director and officer
of several public traded companies. From November 1989 to April 1996, Mr.
Haderer worked as a Listing Analyst with the Alberta Stock Exchange (now the TSX
Venture Exchange).
David Chalk Director
Mr. Chalk is a leading technology and cyber security expert
whose knowledge and understanding regarding the current state of cyber threats
is unsurpassed.
Mr. Chalk is a pioneer in the technology industry having
created Doppler Computers and Chalk Media Inc. which was sold to Research in
Motion, now Blackberry, in 2009. Mr. Chalk has also received numerous awards for
his many innovations in the business and technology worlds. Among his many
accolades, Mr. Chalk has received an Honorary Doctorate of Technology from the
University of Fraser Valley, Ernst and Youngs Entrepreneur Award also industry
leading awards for software development in the mobility, security and education
and digital video fields.
Wolverines board of directors now consists of Richard Haderer,
David Chalk and Luke Rich.
Item 9.01
Financial Statements and Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
WOLVERINE EXPLORATION INC.
/s/ Richard
Haderer |
|
Richard Haderer |
|
CEO |
|
|
|
Date: May 7, 2015 |
|
SHARE EXCHANGE AND ROYALTY AGREEMENT
THIS AGREEMENT is made effective as of the 14th day of
April, 2015.
AMONG:
WOLVERINE EXPLORATION INC., a State of Nevada
corporation with an office at 4055 McLean Road, Quesnel, British Columbia,
Canada, V2J 6V5.
(Pubco)
AND:
ENIGMAMOBIL INC., a Province of Alberta corporation with
an office at 103 Huntcroft Place NE, Calgary, ABN, T2K 4E6.
(Priveco)
AND:
DAVE CHALK, with an address at with an address at 20629
86 Ave, Langley, BC, V1M 3X3 (as listed on Schedule 1 attached hereto).
(the Selling Shareholder)
WHEREAS:
A. |
the Selling Shareholder is the registered and beneficial
owners of all 100 issued and outstanding common shares in the capital
stock of Priveco; |
|
|
B. |
Priveco is the legal and equitable owner of all right,
title and interest in and to the Intellectual Property Assets as defined
in Section 3.18 of this Agreement; |
|
|
C. |
Pubco has agreed to issue 300,000,000 common shares in
the capital stock of Pubco as of the Closing Date (as defined herein) to
the Selling Shareholder as consideration for the purchase by Pubco
of: |
|
i. |
25 common shares of Priveco held by the Selling
Shareholder, representing 25% of all issued and outstanding common shares
of the Priveco, on the Closing Date; and |
|
|
|
|
ii. |
a 25% royalty of all gross revenues from the sales of
licenses to the Intellectual Property Assets as defined in Section 3.18 of
this Agreement; and |
D. |
upon the terms and subject to the conditions set forth in
this Agreement, the Selling Shareholder has agreed to sell 25 of the
issued and outstanding common shares of Priveco held by the Selling
Shareholder to Pubco and Priveco granting a 25% royalty on all sales of
licenses to the Intellectual Property in exchange for the issuance of the
Pubco Shares (as defined herein) by Pubco to the Selling
Shareholder. |
- 2 -
THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties covenant
and agree as follows:
1. |
DEFINITIONS |
|
|
|
1.1 |
Definitions. The following terms have the
following meanings, unless the context indicates otherwise: |
|
|
|
|
(a) |
Agreement shall mean this Agreement, and all the
exhibits, schedules and other documents attached to or referred to in this
Agreement, and all amendments and supplements, if any, to this
Agreement; |
|
|
|
|
(b) |
Closing shall mean the completion of the
Transaction, in accordance with Section 7 hereof, at which the Closing
Documents shall be exchanged by the parties, except for those documents or
other items specifically required to be exchanged at a later
time; |
|
|
|
|
(c) |
Closing Date shall mean a date mutually agreed
upon by the parties hereto in writing and in accordance with Section 10.6
following the satisfaction or waiver by Pubco and Priveco of the
conditions precedent set out in Sections 5.1 and 5.2,
respectively; |
|
|
|
|
(d) |
Closing Documents shall mean the papers,
instruments and documents required to be executed and delivered at the
Closing pursuant to this Agreement; |
|
|
|
|
(e) |
Exchange Act shall mean the United States
Securities Exchange Act of 1934, as amended; |
|
|
|
|
(f) |
Liabilities shall include any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency,
cost, expense, obligation or responsibility, fixed or unfixed, known or
unknown, asserted choate or inchoate, liquidated or unliquidated, secured
or unsecured; |
|
|
|
|
(g) |
Priveco Accounting Date shall mean the date
being that of the end of the most recent financial quarter of
Priveco; |
|
|
|
|
(h) |
Priveco Financial Statements shall mean the
audited balance sheet of Priveco dated as of the most recent fiscal year
end of Priveco, together with related statements of income, cash flows,
and changes in shareholders equity for the most recent fiscal year end of
Priveco and the unaudited balance sheet of Priveco dated as of the Priveco
Accounting Date, together with related statements of income, cash flows,
and changes in shareholders equity for the interim period ended on the
Priveco Accounting Date; |
|
|
|
|
(i) |
Priveco Shares shall mean the 25 common shares
of Priveco held by the Selling Shareholder, being 25% of all of the issued
and outstanding common shares of Priveco beneficially held, either
directly or indirectly, by the Selling Shareholder; |
|
|
|
|
(j) |
Pubco Financing shall have the meaning defined
in Section 6.1(d) hereof; |
|
|
|
|
(k) |
Pubco Shares shall mean the 300,000,000 fully
paid and non-assessable common shares of Pubco at a deemed price per share
of USD $0.01, to be issued to the Selling Shareholder by Pubco on the
Closing. |
- 3 -
|
(l) |
SEC shall mean the Securities and Exchange
Commission; |
|
|
|
|
(m) |
Securities Act shall mean the United States
Securities Act of 1933, as amended; |
|
|
|
|
(n) |
Taxes shall include international, federal,
state, provincial and local income taxes, capital gains tax, value-added
taxes, franchise, personal property and real property taxes, levies,
assessments, tariffs, duties (including any customs duty), business
license or other fees, sales, use and any other taxes relating to the
assets of the designated party or the business of the designated party for
all periods up to and including the Closing Date, together with any
related charge or amount, including interest, fines, penalties and
additions to tax, if any, arising out of tax assessments; and |
|
|
|
|
(o) |
Transaction shall mean the purchase of the
Priveco Shares by Pubco from the Selling Shareholder and the grant of the
Royalty as defined in Section 2.6 of this Agreement by Priveco to Pubco in
consideration for the issuance of the Pubco Shares to the Selling
Shareholder. |
1.2 |
Schedules. The following schedules are attached to
and form part of this Agreement: |
|
Schedule 1 |
|
Selling Shareholder |
|
Schedule 2 |
|
Certificate of Non-U.S.
Shareholder |
|
Schedule 3 |
|
Directors and Officers of Priveco
|
|
Schedule 4 |
|
Directors and Officers of Pubco
|
|
Schedule 5 |
|
Priveco Material Leases, Subleases, Claims, Capital
Expenditures, Taxes and Other Property Interests |
|
Schedule 6 |
|
Priveco Intellectual Property
|
|
Schedule 7 |
|
Priveco Material Contracts |
|
Schedule 8 |
|
Priveco Employment Agreements and
Arrangements |
|
Schedule 9 |
|
Subsidiaries
|
1.3 |
Currency. All references to currency referred to
in this Agreement are in United States Dollars (USD$), unless expressly
stated otherwise. |
|
|
2. |
THE OFFER, PURCHASE AND SALE OF SHARES AND THE
ROYALTY |
|
|
2.1 |
Offer, Purchase and Sale of Shares. Subject to the
terms and conditions of this Agreement, the Selling Shareholder hereby
covenants and agrees to sell, assign and transfer to Pubco, and Pubco
hereby covenants and agrees to purchase from the Selling Shareholder all
of the Priveco Shares held by the Selling Shareholder. |
|
|
2.2 |
Consideration. As consideration for the sale of
the Priveco Shares by the Selling Shareholder to Pubco, Pubco shall allot
and issue the Pubco Shares to the Selling Shareholder or their nominees in
the amount set out opposite each Selling Shareholders name in Schedule 1.
The Selling Shareholder acknowledges and agrees that the Pubco Shares are
being issued pursuant to an exemption from the prospectus and registration
requirements of the Securities Act. As required by applicable securities
law, the Selling Shareholder agrees to abide by all applicable resale
restrictions and hold periods imposed by all applicable securities
legislation. All certificates representing the Pubco Shares issued on
Closing will be endorsed with the following legend pursuant to the
Securities Act in order to reflect the fact that the Pubco Shares will be
issued to the Selling Shareholder pursuant to an exemption from the
registration requirements of the Securities
Act: |
- 4 -
For the Selling Shareholder who is not
resident in the United States:
THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN
OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN)
PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE 1933 ACT).
NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED
UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. UNITED STATES AND U.S.
PERSON ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.
2.3 |
Share Exchange Procedure. The Selling Shareholder
shall exchange his certificate representing the Priveco Shares by
delivering such certificate to Pubco duly executed and endorsed in blank
(or accompanied by duly executed stock powers duly endorsed in blank), in
each case in proper form for transfer, with signatures guaranteed, and, if
applicable, with all stock transfer and any other required documentary
stamps affixed thereto and with appropriate instructions to allow the
transfer agent to issue certificates for the Pubco Shares to the holder
thereof, together with a Certificate of Non-U.S. Shareholder (the
Certificate of Non-U.S. Shareholder), a copy of which is set out
in Schedule 2. |
|
|
2.4 |
Fractional Shares. Notwithstanding any other
provision of this Agreement, no certificate for fractional shares of the
Pubco Shares will be issued in the Transaction. In lieu of any such
fractional shares the Selling Shareholder would otherwise be entitled to
receive upon surrender of certificates representing the Priveco Shares for
exchange pursuant to this Agreement, the Selling Shareholder will be
entitled to have such fraction rounded up to the nearest whole number of
Pubco Shares and will receive from Pubco a stock certificate representing
same. |
|
|
2.5 |
Restricted Securities. The Selling Shareholder
acknowledges that the Pubco Shares issued pursuant to the terms and
conditions set forth in this Agreement will have such hold periods as are
required under applicable securities laws and as a result may not be sold,
transferred or otherwise disposed, except pursuant to an effective
registration statement under the Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and in each case only in accordance
with all applicable securities laws. |
|
|
2.6 |
Royalty. As consideration for the purchase of the
Priveco Shares by Pubco from the Selling Shareholder, Priveco shall grant
to Pubco the transferrable and assignable, in whole or in part, right to a
25% royalty paid in cash every calendar quarter of all gross revenues from
the sales of licenses to the Intellectual Property Assets as defined in
Section 3.18 of this Agreement (the
Royalty). |
- 5 -
3. |
REPRESENTATIONS AND WARRANTIES OF PRIVECO AND THE
SELLING SHAREHOLDER |
|
|
|
Priveco and the Selling Shareholder, jointly and
severally, represent and warrant to Pubco, and acknowledge that Pubco is
relying upon such representations and warranties, in connection with the
execution, delivery and performance of this Agreement, notwithstanding any
investigation made by or on behalf of Pubco, as follows: |
|
|
3.1 |
Organization and Good Standing. Priveco is a
corporation duly organized, validly existing and in good standing under
the laws of the Province of Alberta and has the requisite corporate power
and authority to own, lease and to carry on its business as now being
conducted. Priveco is duly qualified to do business and is in good
standing as a corporation in each of the jurisdictions in which Priveco
owns property, leases property, does business, or is otherwise required to
do so, where the failure to be so qualified would have a material adverse
effect on the business of Priveco taken as a whole. |
|
|
3.2 |
Authority. Priveco has all requisite corporate
power and authority to execute and deliver this Agreement and any other
document contemplated by this Agreement (collectively, the Priveco
Documents) to be signed by Priveco and to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of each of the Priveco Documents by Priveco and the
consummation of the transactions contemplated hereby have been duly
authorized by Privecos board of directors. No other corporate or
shareholder proceedings on the part of Priveco is necessary to authorize
such documents or to consummate the transactions contemplated hereby. This
Agreement has been, and the other Priveco Documents when executed and
delivered by Priveco as contemplated by this Agreement will be, duly
executed and delivered by Priveco and this Agreement is, and the other
Priveco Documents when executed and delivered by Priveco as contemplated
hereby will be, valid and binding obligations of Priveco enforceable in
accordance with their respective terms except: |
|
(a) |
as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application
affecting enforcement of creditors rights generally; |
|
|
|
|
(b) |
as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies;
and |
|
|
|
|
(c) |
as limited by public policy. |
3.3 |
Capitalization of Priveco. The entire authorized
capital stock and other equity securities of Priveco consists of an
unlimited number of common shares with no par value per share (the
Priveco Common Stock), and unlimited shares of preference shares.
As of the date of this Agreement and on the Closing Date, there are 100
shares of Priveco Common Stock issued and outstanding and no shares of
preferred stock issued and outstanding. All of the issued and outstanding
shares of Priveco Common Stock have been duly authorized, are validly
issued, were not issued in violation of any pre-emptive rights and are
fully paid and non-assessable, are not subject to pre-emptive rights and
were issued in full compliance with the laws of the Province of Alberta.
There are no outstanding options, warrants, subscriptions, conversion
rights, or other rights, agreements, or commitments obligating Priveco to
issue any additional common shares of Priveco Common Stock, or any other
securities convertible into, exchangeable for, or evidencing the right to
subscribe for or acquire from Priveco any common shares of Priveco Common
Stock. There are no agreements purporting to restrict the transfer of the
Priveco Common Stock, no voting agreements, shareholders agreements, voting trusts, or other
arrangements restricting or affecting the voting of the Priveco Common
Stock. |
- 6 -
3.4 |
Title and Authority of Selling Shareholder. The
Selling Shareholder is and will be as of the Closing, the registered and
beneficial owner of and will have good and marketable title to all of the
Priveco Common Stock held by him, her or it and will hold such free and
clear of all liens, charges and encumbrances whatsoever; and such Priveco
Common Stock held by such Selling Shareholder has been duly and validly
issued and are outstanding as fully paid and non-assessable common shares
in the capital stock of Priveco. Each of the Selling Shareholder has due
and sufficient right and authority to enter into this Agreement on the
terms and conditions herein set forth and to transfer the registered,
legal and beneficial title and ownership of the Priveco Common Stock held
by it. |
|
|
3.5 |
Shareholders of Priveco Common Stock. Schedule 1
contains a true and complete list of the holders of all issued and
outstanding shares of the Priveco Common Stock including each holders
name, address and number of Priveco Shares held. |
|
|
3.6 |
Directors and Officers of Priveco. The duly
elected or appointed directors and the duly appointed officers of Priveco
are as set out in Schedule 3. |
|
|
3.7 |
Corporate Records of Priveco. The corporate
records of Priveco, as required to be maintained by it pursuant to all
applicable laws, are accurate, complete and current in all material
respects, and the minute book of Priveco is, in all material respects,
correct and contains all records required by all applicable laws, as
applicable, in regards to all proceedings, consents, actions and meetings
of the shareholders and the board of directors of Priveco. |
|
|
3.8 |
Non-Contravention. Neither the execution, delivery
and performance of this Agreement, nor the consummation of the
Transaction, will: |
|
(a) |
conflict with, result in a violation of, cause a default
under (with or without notice, lapse of time or both) or give rise to a
right of termination, amendment, cancellation or acceleration of any
obligation contained in or the loss of any material benefit under, or
result in the creation of any lien, security interest, charge or
encumbrance upon any of the material properties or assets of Priveco or
any of its subsidiaries under any term, condition or provision of any loan
or credit agreement, note, debenture, bond, mortgage, indenture, lease or
other agreement, instrument, permit, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Priveco or any
of its subsidiaries, or any of their respective material property or
assets; |
|
|
|
|
(b) |
violate any provision of the constating documents of
Priveco, any of its subsidiaries or any applicable laws; or |
|
|
|
|
(c) |
violate any order, writ, injunction, decree, statute,
rule, or regulation of any court or governmental or regulatory authority
applicable to Priveco, any of its subsidiaries or any of their respective
material property or assets. |
3.9 |
Actions and Proceedings. To the best knowledge of
Priveco, there is no basis for and there is no action, suit, judgment,
claim, demand or proceeding outstanding or pending, or threatened against
or affecting Priveco, any of its subsidiaries or which involves any of the
business, or the properties or assets of Priveco or any of its
subsidiaries that, if adversely resolved or determined, would have a
material adverse effect on the business, operations, assets, properties,
prospects, or conditions of Priveco and its subsidiaries taken as a
whole (a Priveco Material Adverse Effect). There is no reasonable
basis for any claim or action that, based upon the likelihood of its being
asserted and its success if asserted, would have such a Priveco Material
Adverse Effect. |
- 7 -
|
(a) |
To the best knowledge of Priveco, Priveco and each of its
subsidiaries is in compliance with, is not in default or violation in any
material respect under, and has not been charged with or received any
notice at any time of any material violation of any statute, law,
ordinance, regulation, rule, decree or other applicable regulation to the
business or operations of Priveco and its subsidiaries; |
|
|
|
|
(b) |
To the best knowledge of Priveco, neither Priveco nor any
of its subsidiaries is subject to any judgment, order or decree entered in
any lawsuit or proceeding applicable to its business and operations that
would constitute a Priveco Material Adverse Effect; |
|
|
|
|
(c) |
Each of Priveco and, if any, its subsidiaries has duly
filed all reports and returns required to be filed by it with governmental
authorities and has obtained all governmental permits and other
governmental consents, except as may be required after the execution of
this Agreement. All of such permits and consents are in full force and
effect, and no proceedings for the suspension or cancellation of any of
them, and no investigation relating to any of them, is pending or to the
best knowledge of Priveco, threatened, and none of them will be adversely
affected by the consummation of the Transaction; and |
|
|
|
|
(d) |
Each of Priveco and its subsidiaries has operated in
material compliance with all laws, rules, statutes, ordinances, orders and
regulations applicable to its business. Neither Priveco nor any of its
subsidiaries has received any notice of any violation thereof, nor is
Priveco aware of any valid basis therefore. |
3.11 |
Filings, Consents and Approvals. No filing or
registration with, no notice to and no permit, authorization, consent, or
approval of any public or governmental body or authority or other person
or entity is necessary for the consummation by Priveco or any of its
subsidiaries of the Transaction contemplated by this Agreement or to
enable Pubco to continue to conduct Privecos business after the Closing
Date in a manner which is consistent with that in which the business is
presently conducted. |
|
|
|
3.12 |
Absence of Undisclosed Liabilities. Neither
Priveco nor any of its subsidiaries has any material Liabilities or
obligations either direct or indirect, matured or unmatured, absolute,
contingent or otherwise that exceed $5,000, which have either been
disclosed or: |
|
|
|
|
(a) |
will be set forth in the Priveco Financial
Statements; |
|
|
|
|
(b) |
did not arise in the regular and ordinary course of
business under any agreement, contract, commitment, lease or plan
specifically disclosed in writing to Pubco; or |
|
|
|
|
(c) |
have not been incurred in amounts and pursuant to
practices consistent with past business practice, in or as a result of the
regular and ordinary course of its business since the date of the last
Priveco Financial Statements. |
- 8 -
|
(a) |
As of the date hereof: |
|
|
|
|
|
|
(i) |
each of Priveco and its subsidiaries has timely filed all
tax returns in connection with any Taxes which are required to be filed on
or prior to the date hereof, taking into account any extensions of the
filing deadlines which have been validly granted to Priveco or its
subsidiaries, and |
|
|
|
|
|
|
(ii) |
all such returns are true and correct in all material
respects; |
|
(b) |
each of Priveco and its subsidiaries has paid all Taxes
that have become or are due with respect to any period ended on or prior
to the date hereof, and has established an adequate reserve therefore on
its balance sheets for those Taxes not yet due and payable, except for any
Taxes the non-payment of which will not have a Priveco Material Adverse
Effect; |
|
|
|
|
(c) |
neither Priveco nor any of its subsidiaries is presently
under or has received notice of, any contemplated investigation or audit
by regulatory or governmental agency of body or any foreign or state
taxing authority concerning any fiscal year or period ended prior to the
date hereof; |
|
|
|
|
(d) |
all Taxes required to be withheld on or prior to the date
hereof from employees for income Taxes, social security Taxes,
unemployment Taxes and other similar withholding Taxes have been properly
withheld and, if required on or prior to the date hereof, have been
deposited with the appropriate governmental agency; and |
|
|
|
|
(e) |
to the best knowledge of Priveco, the Priveco Financial
Statements will contain full provision for all Taxes including any
deferred Taxes that may be assessed to Priveco or its subsidiaries for the
accounting period ended on the Priveco Accounting Date or for any prior
period in respect of any transaction, event or omission occurring, or any
profit earned, on or prior to the Priveco Accounting Date or for any
profit earned by Priveco on or prior to the Priveco Accounting Date or for
which Priveco is accountable up to such date and all contingent
Liabilities for Taxes have been provided for or disclosed in the Priveco
Financial Statements. |
3.14 |
Absence of Changes. Since the Priveco Accounting
Date, neither Priveco or any of its subsidiaries has: |
|
|
|
|
(a) |
incurred any Liabilities, other than Liabilities incurred
in the ordinary course of business consistent with past practice, or
discharged or satisfied any lien or encumbrance, or paid any Liabilities,
other than in the ordinary course of business consistent with past
practice, or failed to pay or discharge when due any Liabilities of which
the failure to pay or discharge has caused or will cause any material
damage or risk of material loss to it or any of its assets or
properties; |
|
|
|
|
(b) |
sold, encumbered, assigned or transferred any material
fixed assets or properties except for ordinary course business
transactions consistent with past practice; |
|
|
|
|
(c) |
created, incurred, assumed or guaranteed any indebtedness
for money borrowed, or mortgaged, pledged or subjected any of the material
assets or properties of Priveco or its subsidiaries to any mortgage, lien, pledge, security
interest, conditional sales contract or other encumbrance of any nature
whatsoever; |
- 9 -
|
(d) |
made or suffered any amendment or termination of any
material agreement, contract, commitment, lease or plan to which it is a
party or by which it is bound, or cancelled, modified or waived any
substantial debts or claims held by it or waived any rights of substantial
value, other than in the ordinary course of business; |
|
|
|
|
(e) |
declared, set aside or paid any dividend or made or
agreed to make any other distribution or payment in respect of its capital
shares or redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or acquire any of its capital shares or equity
securities; |
|
|
|
|
(f) |
suffered any damage, destruction or loss, whether or not
covered by insurance, that materially and adversely effects its business,
operations, assets, properties or prospects; |
|
|
|
|
(g) |
suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or
otherwise); |
|
|
|
|
(h) |
received notice or had knowledge of any actual or
threatened labour trouble, termination, resignation, strike or other
occurrence, event or condition of any similar character which has had or
might have an adverse effect on its business, operations, assets,
properties or prospects; |
|
|
|
|
(i) |
made commitments or agreements for capital expenditures
or capital additions or betterments exceeding in the aggregate
$5,000; |
|
|
|
|
(j) |
other than in the ordinary course of business, increased
the salaries or other compensation of, or made any advance (excluding
advances for ordinary and necessary business expenses) or loan to, any of
its employees or directors or made any increase in, or any addition to,
other benefits to which any of its employees or directors may be
entitled; |
|
|
|
|
(k) |
entered into any transaction other than in the ordinary
course of business consistent with past practice; or |
|
|
|
|
(l) |
agreed, whether in writing or orally, to do any of the
foregoing. |
3.15 |
Absence of Certain Changes or Events. Since the
Priveco Accounting Date, there will have not been: |
|
|
|
|
(a) |
a Priveco Material Adverse Effect; or |
|
|
|
|
(b) |
any material change by Priveco in its accounting methods,
principles or practices. |
3.16 |
Subsidiaries. Except as set forth on Schedule 9,
Priveco does not have any subsidiaries or agreements of any nature to
acquire any subsidiary or to acquire or lease any other business
operations. Each subsidiary of Priveco is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction
of incorporation and has the requisite corporate power and authority to
own, lease and to carry on its business as now being conducted. Each
subsidiary of Priveco is duly qualified to do business and is in good
standing as a corporation in each of the jurisdictions in which Priveco
owns property, leases property, does business, or is otherwise required to
do so, where the failure to be so qualified would have a material
adverse effect on the business of Priveco and its subsidiaries
taken as a whole. Priveco owns all of the shares of each subsidiary of
Priveco and there are no outstanding options, warrants, subscriptions,
conversion rights, or other rights, agreements, or commitments obligating
any subsidiary of Priveco to issue any additional common shares of such
subsidiary, or any other securities convertible into, exchangeable for, or
evidencing the right to subscribe for or acquire from any subsidiary of
Priveco any shares of such subsidiary. |
- 10 -
3.17 |
Personal Property. Each of Priveco and its
subsidiaries possesses, and has good and marketable title of all property
necessary for the continued operation of the business of Priveco and its
subsidiaries as presently conducted and as represented to Pubco. All such
property is used in the business of Priveco and its subsidiaries. All such
property is in reasonably good operating condition (normal wear and tear
excepted), and is reasonably fit for the purposes for which such property
is presently used. All material equipment, furniture, fixtures and other
tangible personal property and assets owned or leased by Priveco and its
subsidiaries is owned by Priveco or its subsidiaries free and clear of all
liens, security interests, charges, encumbrances, and other adverse
claims, except as disclosed in Schedule 5. |
|
|
3.18 |
Intellectual Property |
|
(a) |
Intellectual Property Assets. Priveco and its
subsidiaries own or hold an interest in all intellectual property assets
necessary for the operation of the business of Priveco and its
subsidiaries as it is currently conducted as of the date of this Agreement
and immediately prior to the Closing (collectively, the Intellectual
Property Assets), including: |
|
|
|
|
|
|
(i) |
all functional business names, trading names, registered
and unregistered trademarks, service marks, and applications
(collectively, the Marks); |
|
|
|
|
|
|
(ii) |
all patents, patent applications, and inventions,
methods, processes and discoveries that may be patentable (collectively,
the Patents); |
|
|
|
|
|
|
(iii) |
all copyrights in both published works and unpublished
works (collectively, the Copyrights); and |
|
|
|
|
|
|
(iv) |
all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process technology,
plans, drawings, and blue prints owned, used, or licensed by Priveco and
its subsidiaries as licensee or licensor (collectively, the Trade
Secrets). |
|
(b) |
Agreements. Schedule 6 contains a complete and
accurate list and summary description, including any royalties paid or
received by Priveco and its subsidiaries, of all contracts and agreements
relating to the Intellectual Property Assets to which Priveco and its
subsidiaries is a party or by which Priveco and its subsidiaries is bound,
except for any license implied by the sale of a product and perpetual,
paid-up licenses for commonly available software programs with a value of
less than $500 under which Priveco or its subsidiaries is the licensee. To
the best knowledge of Priveco, there are no outstanding or threatened
disputes or disagreements with respect to any such agreement. |
|
|
|
|
(c) |
Intellectual Property and Know-How Necessary for the
Business. Except as identified in Schedule 6, Priveco and its
subsidiaries is the owner of all right, title, and interest in and to each
of the Intellectual Property Assets, free and clear of all liens, security
interests, charges, encumbrances, and other adverse claims, and has the
right to use without payment to a third party of all the Intellectual Property
Assets. Except as set forth in Schedule 6, all former and current
employees and contractors of Priveco and its subsidiaries have executed
written contracts, agreements or other undertakings with Priveco and its
subsidiaries that assign all rights to any inventions, improvements,
discoveries, or information relating to the business of Priveco and its
subsidiaries. No employee, director, officer or shareholder of Priveco or
any of its subsidiaries owns directly or indirectly in whole or in part,
any Intellectual Property Asset which Priveco or any of its subsidiaries
is presently using or which is necessary for the conduct of its business.
To the best knowledge of Priveco, no employee or contractor of Priveco or
its subsidiaries has entered into any contract or agreement that restricts
or limits in any way the scope or type of work in which the employee may
be engaged or requires the employee to transfer, assign, or disclose
information concerning his work to anyone other than Priveco or its
subsidiaries. |
- 11 -
|
(d) |
Patents. Except as set out in Schedule 6, neither
Priveco nor any of its subsidiaries holds any right, title or interest in
and to any Patent and Priveco has not filed any patent application with
any third party. To the best knowledge of Priveco, none of the products
manufactured and sold, nor any process or know-how used, by Priveco or any
of its subsidiaries infringes or is alleged to infringe any patent or
other proprietary night of any other person or entity. |
|
|
|
|
(e) |
Trademarks. Except as set out in Schedule 6,
neither Priveco nor any of its subsidiaries holds any right, title or
interest in and to any Mark and Priveco has not registered or filed any
application to register any Mark with any third party. To the best
knowledge of Priveco, none of the Marks, if any, used by Priveco or any of
its subsidiaries infringes or is alleged to infringe any trade name,
trademark, or service mark of any third party. |
|
|
|
|
(f) |
Copyrights. Schedule 6 contains a complete and
accurate list and summary description of all Copyrights. Priveco and its
subsidiaries is the owner of all right, title, and interest in and to each
of the Copyrights, free and clear of all liens, security interests,
charges, encumbrances, and other adverse claims. If applicable, all
registered Copyrights are currently in compliance with formal legal
requirements, are valid and enforceable, and are not subject to any
maintenance fees or taxes or actions falling due within ninety days after
the Closing Date. To the best knowledge of Priveco, no Copyright is
infringed or has been challenged or threatened in any way and none of the
subject matter of any of the Copyrights infringes or is alleged to
infringe any copyright of any third party or is a derivative work based on
the work of a third party. All works encompassed by the Copyrights have
been marked with the proper copyright notice. |
|
|
|
|
(g) |
Trade Secrets. Each of Priveco and its
subsidiaries has taken all reasonable precautions to protect the secrecy,
confidentiality, and value of its Trade Secrets. Each of Priveco and its
subsidiaries has good title and an absolute right to use the Trade
Secrets. The Trade Secrets are not part of the public knowledge or
literature, and to the best knowledge of Priveco, have not been used,
divulged, or appropriated either for the benefit of any person or entity
or to the detriment of Priveco or any of its subsidiaries. No Trade Secret
is subject to any adverse claim or has been challenged or threatened in
any way. |
3.19 |
Employees and Consultants. All employees and
consultants of Priveco and its subsidiaries have been paid all salaries,
wages, income and any other sum due and owing to them by Priveco or its
subsidiaries, as at the end of the most recent completed pay period, or
such amounts have been accrued, as indicated on the Priveco Financial
Statements. Neither Priveco nor any of its subsidiaries is aware of any labor conflict with any
employees that might reasonably be expected to have a Priveco Material
Adverse Effect. To the best knowledge of Priveco, no employee of Priveco
or any of its subsidiaries is in violation of any term of any employment
contract, non- disclosure agreement, non-competition agreement or any
other contract or agreement relating to the relationship of such employee
with Priveco or its subsidiaries or any other nature of the business
conducted or to be conducted by Priveco its subsidiaries. |
- 12 -
3.20 |
Real Property. Neither Priveco nor any of its
subsidiaries owns any real property. Each of the material leases,
subleases, claims or other real property interests (collectively, the
Leases) to which Priveco or any of its subsidiaries is a party or
is bound, as set out in Schedule 5, is legal, valid, binding, enforceable
and in full force and effect in all material respects. All rental and
other payments required to be paid by Priveco and its subsidiaries
pursuant to any such Leases have been duly paid and no event has occurred
which, upon the passing of time, the giving of notice, or both, would
constitute a breach or default by any party under any of the Leases. The
Leases will continue to be legal, valid, binding, enforceable and in full
force and effect on identical terms following the Closing Date. Neither
Priveco nor any of its subsidiaries has assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the Leases or
the leasehold property pursuant thereto. |
|
|
3.21 |
Material Contracts and Transactions. Schedule 7
attached hereto lists each material contract, agreement, license, permit,
arrangement, commitment, instrument or contract to which Priveco or any of
its subsidiaries is a party (each, a Contract). Each Contract is
in full force and effect, and there exists no material breach or violation
of or default by Priveco or any of its subsidiaries under any Contract, or
any event that with notice or the lapse of time, or both, will create a
material breach or violation thereof or default under any Contract by
Priveco or any of its subsidiaries. The continuation, validity, and
effectiveness of each Contract will in no way be affected by the
consummation of the Transaction contemplated by this Agreement. There
exists no actual or threatened termination, cancellation, or limitation
of, or any amendment, modification, or change to any Contract. |
|
|
3.22 |
Certain Transactions. Neither Priveco nor any of
its subsidiaries is a guarantor or indemnitor of any indebtedness of any
third party, including any person, firm or corporation. |
|
|
3.23 |
No Brokers. Neither Priveco nor any of its
subsidiaries has incurred any independent obligation or liability to any
party for any brokerage fees, agents commissions, or finders fees in
connection with the Transaction contemplated by this Agreement. |
|
|
3.24 |
Completeness of Disclosure. No representation or
warranty by Priveco in this Agreement nor any certificate, schedule,
statement, document or instrument furnished or to be furnished to Pubco
pursuant hereto contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact required to
be stated herein or therein or necessary to make any statement herein or
therein not materially misleading. |
Notwithstanding Section 10.1 hereof, the representations and
warranties contained in this Section 3 shall survive the Closing indefinitely.
4.
REPRESENTATIONS AND WARRANTIES OF PUBCO
Pubco represents and warrants to Priveco and the Selling
Shareholder and acknowledges that Priveco and the Selling Shareholder is relying
upon such representations and warranties in connection with the execution, delivery and performance of this Agreement,
notwithstanding any investigation made by or on behalf of Priveco or the Selling
Shareholder, as follows:
- 13 -
4.1 |
Organization and Good Standing. Pubco is duly
incorporated, organized, validly existing and in good standing under the
laws of the State of Nevada and has all requisite corporate power and
authority to own, lease and to carry on its business as now being
conducted. Pubco is qualified to do business and is in good standing as a
foreign corporation in each of the jurisdictions in which it owns
property, leases property, does business, or is otherwise required to do
so, where the failure to be so qualified would have a material adverse
effect on the businesses, operations, or financial condition of
Pubco. |
|
|
|
4.2 |
Authority. Pubco has all requisite corporate power
and authority to execute and deliver this Agreement and any other document
contemplated by this Agreement (collectively, the Pubco
Documents) to be signed by Pubco and to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of each of the Pubco Documents by Pubco and the
consummation by Pubco of the transactions contemplated hereby have been
duly authorized by its board of directors and no other corporate or
shareholder proceedings on the part of Pubco is necessary to authorize
such documents or to consummate the transactions contemplated hereby. This
Agreement has been, and the other Pubco Documents when executed and
delivered by Pubco as contemplated by this Agreement will be, duly
executed and delivered by Pubco and this Agreement is, and the other Pubco
Documents when executed and delivered by Pubco, as contemplated hereby
will be, valid and binding obligations of Pubco enforceable in accordance
with their respective terms, except: |
|
|
|
|
(a) |
as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application
affecting enforcement of creditors rights generally; |
|
|
|
|
(b) |
as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies;
and |
|
|
|
|
(c) |
as limited by public policy. |
4.3 |
Capitalization of Pubco. The entire authorized
capital stock and other equity securities of Pubco consists of 500,000,000
shares of common stock with a par value of $0.001 (the Pubco Common
Stock) as of the date of this Agreement. As of the date of this
Agreement, there are 200,563,333 shares of Pubco Common Stock issued and
outstanding. All of the issued and outstanding shares of Pubco Common
Stock have been duly authorized, are validly issued, were not issued in
violation of any pre-emptive rights and are fully paid and non-assessable,
are not subject to pre-emptive rights and were issued in full compliance
with all federal, state, and local laws, rules and regulations. Except as
contemplated by this Agreement, there are no outstanding options,
warrants, subscriptions, phantom shares, conversion rights, or other
rights, agreements, or commitments obligating Pubco to issue any
additional shares of Pubco Common Stock, other than a share exchange
agreement to be entered into among Pubco and or any other securities
convertible into, exchangeable for, or evidencing the right to subscribe
for or acquire from Pubco any shares of Pubco Common Stock as of the date
of this Agreement. There are no agreements purporting to restrict the
transfer of the Pubco Common Stock, no voting agreements, voting trusts,
or other arrangements restricting or affecting the voting of the Pubco
Common Stock. |
|
|
4.4 |
Directors and Officers of Pubco. The duly elected
or appointed directors and the duly appointed officers of Pubco are as
listed on Schedule 4. |
- 14 -
4.5 |
Corporate Records of Pubco. The corporate records
of Pubco, as required to be maintained by it pursuant to the laws of the
State of Nevada are accurate, complete and current in all material
respects, and the minute book of Pubco is, in all material respects,
correct and contains all material records required by the law of the State
of Nevada in regards to all proceedings, consents, actions and meetings of
the shareholders and the board of directors of Pubco. |
|
|
4.6 |
Non-Contravention. Neither the execution, delivery
and performance of this Agreement, nor the consummation of the
Transaction, will: |
|
(a) |
conflict with, result in a violation of, cause a default
under (with or without notice, lapse of time or both) or give rise to a
right of termination, amendment, cancellation or acceleration of any
obligation contained in or the loss of any material benefit under, or
result in the creation of any lien, security interest, charge or
encumbrance upon any of the material properties or assets of Pubco under
any term, condition or provision of any loan or credit agreement, note,
debenture, bond, mortgage, indenture, lease or other agreement,
instrument, permit, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Pubco or any of its material
property or assets; |
|
|
|
|
(b) |
violate any provision of the applicable incorporation or
charter documents of Pubco; or |
|
|
|
|
(c) |
violate any order, writ, injunction, decree, statute,
rule, or regulation of any court or governmental or regulatory authority
applicable to Pubco or any of its material property or
assets. |
4.7 |
Validity of Pubco Common Stock Issuable upon the
Transaction. The Pubco Shares to be issued to the Selling Shareholder
upon consummation of the Transaction in accordance with this Agreement
will, upon issuance, have been duly and validly authorized and, when so
issued in accordance with the terms of this Agreement, will be duly and
validly issued, fully paid and non- assessable. |
|
|
|
4.8 |
Actions and Proceedings. To the best knowledge of
Pubco, there is no claim, charge, arbitration, grievance, action, suit,
investigation or proceeding by or before any court, arbiter,
administrative agency or other governmental authority now pending or, to
the best knowledge of Pubco, threatened against Pubco which involves any
of the business, or the properties or assets of Pubco that, if adversely
resolved or determined, would have a material adverse effect on the
business, operations, assets, properties, prospects or conditions of Pubco
taken as a whole (a Pubco Material Adverse Effect). There is no
reasonable basis for any claim or action that, based upon the likelihood
of its being asserted and its success if asserted, would have such a Pubco
Material Adverse Effect. |
|
|
|
4.9 |
Compliance. |
|
|
|
|
(a) |
To the best knowledge of Pubco, Pubco is in compliance
with, is not in default or violation in any material respect under, and
has not been charged with or received any notice at any time of any
material violation of any statute, law, ordinance, regulation, rule,
decree or other applicable regulation to the business or operations of
Pubco; |
|
|
|
|
(b) |
To the best knowledge of Pubco, Pubco is not subject to
any judgment, order or decree entered in any lawsuit or proceeding
applicable to its business and operations that would constitute a Pubco
Material Adverse Effect; |
- 15 -
|
(c) |
Pubco has duly filed all reports and returns required to
be filed by it with governmental authorities and has obtained all
governmental permits and other governmental consents, except as may be
required after the execution of this Agreement. All of such permits and
consents are in full force and effect, and no proceedings for the
suspension or cancellation of any of them, and no investigation relating
to any of them, is pending or to the best knowledge of Pubco, threatened,
and none of them will be affected in a material adverse manner by the
consummation of the Transaction; and |
|
|
|
|
(d) |
Pubco has operated in material compliance with all laws,
rules, statutes, ordinances, orders and regulations applicable to its
business. Pubco has not received any notice of any violation thereof, nor
is Pubco aware of any valid basis therefore. |
4.10 |
Filings, Consents and Approvals. No filing or
registration with, no notice to and no permit, authorization, consent, or
approval of any public or governmental body or authority or other person
or entity is necessary for the consummation by Pubco of the Transaction
contemplated by this Agreement to continue to conduct its business after
the Closing Date in a manner which is consistent with that in which it is
presently conducted. |
|
|
|
4.11 |
Absence of Undisclosed Liabilities. Pubco has no
material Liabilities or obligations either direct or indirect, matured or
unmatured, absolute, contingent or otherwise, which: |
|
|
|
|
(a) |
did not arise in the regular and ordinary course of
business under any agreement, contract, commitment, lease or plan
specifically disclosed in writing to Priveco; or |
|
|
|
|
(b) |
have not been incurred in amounts and pursuant to
practices consistent with past business practice, in or as a result of the
regular and ordinary course of its business. |
4.12 |
Tax Matters. |
|
|
|
|
|
(a) |
As of the date hereof: |
|
|
|
|
|
|
(i) |
Pubco has timely filed all tax returns in connection with
any Taxes which are required to be filed on or prior to the date hereof,
taking into account any extensions of the filing deadlines which have been
validly granted to them, and |
|
|
|
|
|
|
(ii) |
all such returns are true and correct in all material
respects; |
|
(b) |
Pubco has paid all Taxes that have become or are due with
respect to any period ended on or prior to the date hereof; |
|
|
|
|
(c) |
Pubco is not presently under and has not received notice
of, any contemplated investigation or audit by the Internal Revenue
Service or any foreign or state taxing authority concerning any fiscal
year or period ended prior to the date hereof; and |
|
|
|
|
(d) |
All Taxes required to be withheld on or prior to the date
hereof from employees for income Taxes, social security Taxes,
unemployment Taxes and other similar withholding Taxes have been properly
withheld and, if required on or prior to the date hereof, have been
deposited with the appropriate governmental
agency. |
4.13 |
Absence of Changes. Except as contemplated in this
Agreement, Pubco has not: |
- 16 -
|
(a) |
incurred any Liabilities, other than Liabilities incurred
in the ordinary course of business consistent with past practice, or
discharged or satisfied any lien or encumbrance, or paid any Liabilities,
other than in the ordinary course of business consistent with past
practice, or failed to pay or discharge when due any Liabilities of which
the failure to pay or discharge has caused or will cause any material
damage or risk of material loss to it or any of its assets or
properties; |
|
|
|
|
(b) |
sold, encumbered, assigned or transferred any material
fixed assets or properties; |
|
|
|
|
(c) |
created, incurred, assumed or guaranteed any indebtedness
for money borrowed, or mortgaged, pledged or subjected any of the material
assets or properties of Pubco to any mortgage, lien, pledge, security
interest, conditional sales contract or other encumbrance of any nature
whatsoever; |
|
|
|
|
(d) |
made or suffered any amendment or termination of any
material agreement, contract, commitment, lease or plan to which it is a
party or by which it is bound, or cancelled, modified or waived any
substantial debts or claims held by it or waived any rights of substantial
value, other than in the ordinary course of business; |
|
|
|
|
(e) |
declared, set aside or paid any dividend or made or
agreed to make any other distribution or payment in respect of its capital
shares or redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or acquire any of its capital shares or equity
securities; |
|
|
|
|
(f) |
suffered any damage, destruction or loss, whether or not
covered by insurance, that materially and adversely effects its business,
operations, assets, properties or prospects; |
|
|
|
|
(g) |
suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or
otherwise); |
|
|
|
|
(h) |
received notice or had knowledge of any actual or
threatened labor trouble, termination, resignation, strike or other
occurrence, event or condition of any similar character which has had or
might have an adverse effect on its business, operations, assets,
properties or prospects; |
|
|
|
|
(i) |
made commitments or agreements for capital expenditures
or capital additions or betterments exceeding in the aggregate
$5,000; |
|
|
|
|
(j) |
other than in the ordinary course of business, increased
the salaries or other compensation of, or made any advance (excluding
advances for ordinary and necessary business expenses) or loan to, any of
its employees or directors or made any increase in, or any addition to,
other benefits to which any of its employees or directors may be
entitled; |
|
|
|
|
(k) |
entered into any transaction other than in the ordinary
course of business consistent with past practice; or |
|
|
|
|
(l) |
agreed, whether in writing or orally, to do any of the
foregoing. |
4.14 |
Absence of Certain Changes or Events. There has
not been: |
|
(a) |
a Pubco Material Adverse Effect;
or |
- 17 -
|
(b) |
any material change by Pubco in its accounting methods,
principles or practices. |
4.15 |
Subsidiaries. Except as disclosed in this
Agreement, Pubco does not have any subsidiaries or agreements of any
nature to acquire any subsidiary or to acquire or lease any other business
operations. |
|
|
4.16 |
Personal Property. There are no material
equipment, furniture, fixtures and other tangible personal property and
assets owned or leased by Pubco. |
|
|
4.17 |
Employees and Consultants. Pubco does not have any
employees or consultants. |
|
|
4.18 |
Material Contracts and Transactions. Other than as
expressly contemplated by this Agreement, there are no material contracts,
agreements, licenses, permits, arrangements, commitments, instruments,
understandings or contracts, whether written or oral, express or implied,
contingent, fixed or otherwise, to which Pubco is a party except as
disclosed in writing to Priveco. |
|
|
4.19 |
No Brokers. Pubco has not incurred any obligation
or liability to any party for any brokerage fees, agents commissions, or
finders fees in connection with the Transaction contemplated by this
Agreement. |
|
|
4.20 |
Completeness of Disclosure. No representation or
warranty by Pubco in this Agreement nor any certificate, schedule,
statement, document or instrument furnished or to be furnished to Priveco
pursuant hereto contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact required to
be stated herein or therein or necessary to make any statement herein or
therein not materially misleading. |
5. |
CLOSING CONDITIONS |
|
|
|
5.1 |
Conditions Precedent to Closing by Pubco. The
obligation of Pubco to consummate the Transaction is subject to the
satisfaction or written waiver of the conditions set forth below by a date
mutually agreed upon by the parties hereto in writing and in accordance
with Section 10.6. The Closing of the Transaction contemplated by this
Agreement will be deemed to mean a waiver of all conditions to Closing.
These conditions precedent are for the benefit of Pubco and may be waived
by Pubco in its sole discretion. |
|
|
|
|
(a) |
Representations and Warranties. The
representations and warranties of Priveco and the Selling Shareholder set
forth in this Agreement will be true, correct and complete in all respects
as of the Closing Date, as though made on and as of the Closing Date and
Priveco will have delivered to Pubco a certificate dated as of the Closing
Date, to the effect that the representations and warranties made by
Priveco in this Agreement are true and correct. |
|
|
|
|
(b) |
Performance. All of the covenants and obligations
that Priveco and the Selling Shareholder is required to perform or to
comply with pursuant to this Agreement at or prior to the Closing must
have been performed and complied with in all material respects. |
|
|
|
|
(c) |
Transaction Documents. This Agreement, the Priveco
Documents, the Priveco Financial Statements and all other documents
necessary or reasonably required to consummate the Transaction, all in
form and substance reasonably satisfactory to Pubco, will have been
executed and delivered to Pubco. |
- 18 -
|
(d) |
Financing. Priveco shall close a financing of debt
and/or equity for an aggregate of USD $2,500,000, (the Priveco
Financing) prior to the Closing Date and on mutually agreeable terms
by the parties to this Agreement. |
|
|
|
|
(e) |
Third Party Consents. Pubco will have received
duly executed copies of all third party consents and approvals
contemplated by this Agreement, in form and substance reasonably
satisfactory to Pubco. |
|
|
|
|
(f) |
No Liabilities. The Priveco Financial Statements
will be free of any material liabilities as of the Priveco Accounting
Date, other than as stated in the Priveco financial statements. |
|
|
|
|
(g) |
Employment Agreements. Pubco will have received
from Priveco copies of all agreements or arrangements that evidence the
employment of all of the hourly and salaried employees of Priveco as set
out on Schedule 8 attached hereto, which constitute all of the employees
reasonably necessary to operate the business of Priveco substantially as
presently operated. |
|
|
|
|
(h) |
No Material Adverse Change. No Priveco Material
Adverse Effect will have occurred since the date of this
Agreement. |
|
|
|
|
(i) |
No Action. No suit, action, or proceeding will be
pending or threatened which would: |
|
(i) |
prevent the consummation of any of the transactions
contemplated by this Agreement; or |
|
|
|
|
(ii) |
cause the Transaction to be rescinded following
consummation. |
|
(j) |
Outstanding Shares. Priveco will have no more than
100 shares of Priveco Common Stock issued and outstanding on the Closing
Date. |
|
|
|
|
(k) |
Due Diligence Review of Financial Statements.
Pubco and its accountants will be reasonably satisfied with their due
diligence investigation and review of the Priveco Financial
Statements. |
|
|
|
|
(l) |
Due Diligence Generally. Pubco and its solicitors
will be reasonably satisfied with their due diligence investigation of
Priveco that is reasonable and customary in a transaction of a similar
nature to that contemplated by the Transaction,
including: |
|
(i) |
materials, documents and information in the possession
and control of Priveco and the Selling Shareholder which are reasonably
germane to the Transaction; |
|
|
|
|
(ii) |
a physical inspection of the assets of Priveco by Pubco
or its representatives; and |
|
|
|
|
(iii) |
title to the material assets of
Priveco. |
|
(m) |
Compliance with Securities Laws. Pubco will have
received evidence satisfactory to Pubco that the Pubco Shares issuable in
the Transaction will be issuable without registration pursuant to the
Securities Act in reliance on an exemption from the registration
requirements of the Securities Act provided by Regulation S and/or
Regulation D. |
- 19 -
In order to establish the availability
of the safe harbor from the registration requirements of the Securities Act for
the issuance of the Pubco Shares to the Selling Shareholder or their nominees,
Priveco will deliver to Pubco on Closing, the applicable Certificate duly
executed by each Selling Shareholder.
5.2 |
Conditions Precedent to Closing by Priveco. The
obligation of Priveco and the Selling Shareholder to consummate the
Transaction is subject to the satisfaction or written waiver of the
conditions set forth below by a date mutually agreed upon by the parties
hereto in writing and in accordance with Section 10.6. The Closing of the
Transaction will be deemed to mean a waiver of all conditions to Closing.
These conditions precedent are for the benefit of Priveco and the Selling
Shareholder and may be waived by Priveco and the Selling Shareholder in
their discretion. |
|
|
|
|
(a) |
Representations and Warranties. The
representations and warranties of Pubco set forth in this Agreement will
be true, correct and complete in all respects as of the Closing Date, as
though made on and as of the Closing Date and Pubco will have delivered to
Priveco a certificate dated the Closing Date, to the effect that the
representations and warranties made by Pubco in this Agreement are true
and correct. |
|
|
|
|
(b) |
Performance. All of the covenants and obligations
that Pubco are required to perform or to comply with pursuant to this
Agreement at or prior to the Closing must have been performed and complied
with in all material respects. Pubco must have delivered each of the
documents required to be delivered by it pursuant to this
Agreement. |
|
|
|
|
(c) |
Transaction Documents. This Agreement, the Pubco
Documents and all other documents necessary or reasonably required to
consummate the Transaction, all in form and substance reasonably
satisfactory to Priveco, will have been executed and delivered by
Pubco. |
|
|
|
|
(d) |
No Material Adverse Change. No Pubco Material
Adverse Effect will have occurred since the date of this
Agreement. |
|
|
|
|
(e) |
Management. Pubco shall have appointed Dave Chalk
as a director of Pubco prior to the Closing Date. |
|
|
|
|
(f) |
No Action. No suit, action, or proceeding will be
pending or threatened before any governmental or regulatory authority
wherein an unfavorable judgment, order, decree, stipulation, injunction or
charge would: |
|
(i) |
prevent the consummation of any of the transactions
contemplated by this Agreement; or |
|
|
|
|
(ii) |
cause the Transaction to be rescinded following
consummation. |
|
(g) |
Outstanding Shares. On the Closing Date, Pubco
will have a maximum of 680,563,333 common shares issued and outstanding in
the capital stock of Pubco, consisting of: |
|
|
|
|
|
|
(i) |
300,000,000 Pubco Shares issued pursuant to this
Agreement; |
|
|
|
|
|
|
(ii) |
30,000,000 common shares of the capital stock of Pubco
issued pursuant to Section 7.5 of this Agreement (the Finders
Shares); and |
- 20 -
|
(iii) |
200,563,333common shares of the capital stock of Pubco
held by the current shareholders of Pubco as of this Agreement. |
|
|
|
|
(iv) |
A maximum of 150,000,000 common shares of the capital
stock of Pubco to be issued pursuant to a private placements and debt
settlement prior to closing. |
|
(h) |
Authorized Share Capital of Pubco. As of the
Closing Date, to provide for the valid issuance of the Pubco Shares the
Finders Shares, Pubco shall have increased the entire authorized capital
of common stock by Pubco to an amount that is greater than or equal to the
aggregate of the Pubco Shares, the Finders Shares and all of the issued
and outstanding common shares of Pubco as of the date of this
Agreement. |
|
|
|
|
(i) |
Due Diligence Generally. Priveco will be
reasonably satisfied with their due diligence investigation of Pubco that
is reasonable and customary in a transaction of a similar nature to that
contemplated by the Transaction. |
6. |
ADDITIONAL COVENANTS OF THE
PARTIES |
|
|
6.1 |
Notification of Financial Liabilities. Priveco and
Pubco will immediately notify the other in accordance with Section 10.6
hereof, if either party receives any advice or notification from its
independent certified public accounts that the other party has used any
improper accounting practice that would have the effect of not reflecting
or incorrectly reflecting in the books, records, and accounts of such
party, any properties, assets, Liabilities, revenues, or expenses.
Notwithstanding any statement to the contrary in this Agreement, this
covenant will survive Closing and continue in full force and
effect. |
|
|
6.2 |
Access and Investigation. Between the date of this
Agreement and the Closing Date, Priveco, on the one hand, and Pubco, on
the other hand, will, and will cause each of their respective
representatives to: |
|
(a) |
afford the other and its representatives full and free
access to its personnel, properties, assets, contracts, books and records,
and other documents and data; |
|
|
|
|
(b) |
furnish the other and its representatives with copies of
all such contracts, books and records, and other existing documents and
data as required by this Agreement and as the other may otherwise
reasonably request; and |
|
|
|
|
(c) |
furnish the other and its representatives with such
additional financial, operating, and other data and information as the
other may reasonably request. |
|
All of such access, investigation and communication by a
party and its representatives will be conducted during normal business
hours and in a manner designed not to interfere unduly with the normal
business operations of the other party. Each party will instruct its
auditors to co- operate with the other party and its representatives in
connection with such investigations. |
|
|
6.3 |
Confidentiality. All information regarding the
business of Priveco including, without limitation, financial information
that Priveco provides to Pubco during Pubcos due diligence investigation
of Priveco will be kept in strict confidence by Pubco and will not be used
(except in connection with due diligence), dealt with, exploited or
commercialized by Pubco or disclosed to any third party (other than
Pubcos professional accounting and legal advisors) without the prior
written consent of Priveco. If the Transaction contemplated by this
Agreement does not proceed for any reason, then upon receipt of a written request from
Priveco, Pubco will immediately return to Priveco (or as directed by
Priveco) any information received regarding Privecos business. Likewise,
all information regarding the business of Pubco including, without
limitation, financial information that Pubco provides to Priveco during
its due diligence investigation of Pubco will be kept in strict confidence
by Priveco and will not be used (except in connection with due diligence),
dealt with, exploited or commercialized by Priveco or disclosed to any
third party (other than Privecos professional accounting and legal
advisors) without Pubcos prior written consent. If the Transaction
contemplated by this Agreement does not proceed for any reason, then upon
receipt of a written request from Pubco, Priveco will immediately return
to Pubco (or as directed by Pubco) any information received regarding
Pubcos business. |
- 21 -
6.4 |
Notification. Between the date of this Agreement
and the Closing Date, each of the parties to this Agreement will promptly
notify the other parties in writing if it becomes aware of any fact or
condition that causes or constitutes a material breach of any of its
representations and warranties as of the date of this Agreement, if it
becomes aware of the occurrence after the date of this Agreement of any
fact or condition that would cause or constitute a material breach of any
such representation or warranty had such representation or warranty been
made as of the time of occurrence or discovery of such fact or condition.
Should any such fact or condition require any change in the Schedules
relating to such party, such party will promptly deliver to the other
parties a supplement to the Schedules specifying such change. During the
same period, each party will promptly notify the other parties of the
occurrence of any material breach of any of its covenants in this
Agreement or of the occurrence of any event that may make the satisfaction
of such conditions impossible or unlikely. |
|
|
|
6.5 |
Exclusivity. Until such time, if any, as this
Agreement is terminated pursuant to the terms of this Agreement, Priveco
and Pubco will not, directly or indirectly, solicit, initiate, entertain
or accept any inquiries or proposals from, discuss or negotiate with,
provide any non-public information to, or consider the merits of any
unsolicited inquiries or proposals from, any person or entity relating to
any transaction involving the sale of the business or assets (other than
in the ordinary course of business), or any of the capital stock of
Priveco or Pubco, as applicable, or any merger, consolidation, business
combination, or similar transaction other than as contemplated by this
Agreement. |
|
|
|
6.6 |
Conduct of Priveco and Pubco Business Prior to
Closing. From the date of this Agreement to the Closing Date, and
except to the extent that Pubco otherwise consents in writing, Priveco
will operate its business substantially as presently operated and only in
the ordinary course and in compliance with all applicable laws, and use
its best efforts to preserve intact its good reputation and present
business organization and to preserve its relationships with persons
having business dealings with it. Likewise, from the date of this
Agreement to the Closing Date, and except to the extent that Priveco
otherwise consents in writing, Pubco will operate its business
substantially as presently operated and only in the ordinary course and in
compliance with all applicable laws, and use its best efforts to preserve
intact its good reputation and present business organization and to
preserve its relationships with persons having business dealings with
it. |
|
|
|
6.7 |
Certain Acts Prohibited Priveco. Except as
expressly contemplated by this Agreement or for purposes in furtherance of
this Agreement, between the date of this Agreement and the Closing Date,
Priveco will not, without the prior written consent of Pubco: |
|
|
|
|
(a) |
amend its Certificate of Incorporation, Articles of
Incorporation or other incorporation
documents; |
- 22 -
|
(b) |
incur any liability or obligation or encumber or permit
the encumbrance of any properties or assets of Priveco except in the
ordinary course of business; |
|
|
|
|
(c) |
dispose of or contract to dispose of any Priveco property
or assets, including the Intellectual Property Assets, except in the
ordinary course of business consistent with past practice of
Priveco; |
|
|
|
|
(d) |
issue, deliver, sell, pledge or otherwise encumber or
subject to any lien any shares of the Priveco Common Stock, or any rights,
warrants or options to acquire, any such shares, voting securities or
convertible securities; |
|
|
|
|
(e) |
|
|
(i) |
declare, set aside or pay any dividends on, or make any
other distributions in respect of the Priveco Common Stock, or |
|
|
|
|
(ii) |
split, combine or reclassify any Priveco Common Stock or
issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of Priveco Common Stock;
or |
|
(f) |
materially increase benefits or compensation expenses of
Priveco, other than as contemplated by the terms of any employment
agreement in existence on the date of this Agreement, increase the cash
compensation of any director, executive officer or other key employee or
pay any benefit or amount not required by a plan or arrangement as in
effect on the date of this Agreement to any such
person. |
6.8 |
Certain Acts Prohibited - Pubco. Except as
expressly contemplated by this Agreement, between the date of this
Agreement and the Closing Date, Pubco will not, without the prior written
consent of Priveco: |
|
|
|
|
(a) |
incur any liability or obligation or encumber or permit
the encumbrance of any properties or assets of Pubco except in the
ordinary course of business consistent with past practice; |
|
|
|
|
(b) |
dispose of or contract to dispose of any Pubco property
or assets except in the ordinary course of business consistent with past
practice; |
|
|
|
|
(c) |
declare, set aside or pay any dividends on, or make any
other distributions in respect of the Pubco Common Stock; or |
|
|
|
|
(d) |
materially increase benefits or compensation expenses of
Pubco, increase the cash compensation of any director, executive officer
or other key employee or pay any benefit or amount to any such
person. |
6.9 |
Public Announcements. Pubco and Priveco each agree
that they will not release or issue any reports or statements or make any
public announcements relating to this Agreement or the Transaction
contemplated herein without the prior written consent of the other party,
except as may be required upon written advice of counsel to comply with
applicable laws or regulatory requirements after consulting with the other
party hereto and seeking their reasonable consent to such
announcement. |
- 23 -
6.10 |
Employment Agreements. Between the date of this
Agreement and the Closing Date, Priveco will have made necessary
arrangements to employ all of the hourly and salaried employees of Priveco
reasonably necessary to operate such business substantially as presently
operated. Priveco agrees to provide copies of all such agreements and
arrangements that evidence such employment at or prior to
Closing. |
|
|
|
6.11 |
Royalty Audit. Priveco shall: |
|
|
|
|
(a) |
grant the right to any holder(s) of all or part of the
Royalty to inspect the ordinary course of business, corporate and
financial records of Priveco (the Royalty Records) for the
purpose of determining due payment of the Royalty pursuant to this
Agreement; and |
|
|
|
|
(b) |
make the Royalty Records available for inspection for the
purpose set out in Section 6.11(a) of this Agreement at least two
consecutive business hours per day between 9:00 a.m. to 4:00 p.m., Monday
to Friday, excluding statutory holidays observed, in
Alberta. |
7. |
CLOSING |
|
|
|
7.1 |
Closing. The Closing shall take place on the
Closing Date at the offices of the lawyers for Pubco or at such other
location as agreed to by the parties. Notwithstanding the location of the
Closing, each party agrees that the Closing may be completed by the
exchange of undertakings between the respective legal counsel for Priveco
and Pubco, provided such undertakings are satisfactory to each partys
respective legal counsel. |
|
|
|
7.2 |
Closing Deliveries of Priveco and the Selling
Shareholder. At Closing, Priveco and the Selling Shareholder will
deliver or cause to be delivered the following, fully executed and in the
form and substance reasonably satisfactory to Pubco: |
|
|
|
|
(a) |
copies of all resolutions and/or consent actions adopted
by or on behalf of the board of directors of Priveco evidencing approval
of this Agreement and the Transaction; |
|
|
|
|
(b) |
if the Selling Shareholder appoints any person, by power
of attorney or equivalent, to execute this Agreement or any other
agreement, document, instrument or certificate contemplated by this
agreement, on behalf of the Selling Shareholder, a valid and binding power
of attorney or equivalent from such Selling Shareholder; |
|
|
|
|
(c) |
share certificates, if issued, representing the Priveco
Shares as required by Section 2.3 of this Agreement; |
|
|
|
|
(d) |
all certificates and other documents required by Sections
2.3 and 5.1 of this Agreement; |
|
|
|
|
(e) |
the Priveco Documents and any other necessary documents,
each duly executed by Priveco, as required to give effect to the
Transaction; and |
|
|
|
|
(f) |
copies of all agreements and arrangements required by
this Agreement. |
7.3 |
Closing Deliveries of Pubco. At Closing, Pubco
will deliver or cause to be delivered the following, fully executed and in
the form and substance reasonably satisfactory to Priveco: |
|
|
|
|
(a) |
copies of all resolutions and/or consent actions adopted
by or on behalf of the board of directors of Pubco evidencing approval of
this Agreement and the Transaction; |
- 24 -
|
(b) |
all certificates and other documents required by Section
5.2 of this Agreement; |
|
|
|
|
(c) |
all certificates, stock powers, and other documents
required for the cancellation or consolidation of a sufficient amount of
Pubco common shares to comply with Section 5.2(g) herein; and |
|
|
|
|
(d) |
the Pubco Documents and any other necessary documents,
each duly executed by Pubco, as required to give effect to the
Transaction. |
7.4 |
Delivery of Financial Statements. Prior to the
Closing Date, Priveco will have delivered to Pubco the Priveco Financial
Statements and financial statements for the interim period ended on the
Priveco Accounting Date. |
|
|
7.5 |
Finders Fee. On the Closing Date, Pubco, Priveco
and the Selling Shareholder agree that Pubco shall enter into an agreement
with a person (the Finder), as compensation for the introduction
of Priveco and the Selling Shareholder to Pubco and assistance to Pubco in
the negotiation of the acquisition of the Priveco Shares, to issue
30,000,000 restricted common shares of Pubco to the Finder. |
|
|
7.6 |
Additional Closing Delivery of Pubco. At Closing,
Pubco will deliver or cause to be delivered the share certificates
representing the Pubco Shares. |
|
|
8. |
TERMINATION |
|
|
8.1 |
Termination. This Agreement may be terminated at
any time prior to the Closing Date contemplated hereby
by: |
|
(a) |
mutual agreement of Pubco and Priveco; |
|
|
|
|
(b) |
Pubco, if there has been a material breach by Priveco or
the Selling Shareholder of any material representation, warranty, covenant
or agreement set forth in this Agreement on the part of Priveco or the
Selling Shareholder that is not cured, to the reasonable satisfaction of
Pubco, within ten business days after notice of such breach is given by
Pubco (except that no cure period will be provided for a breach by Priveco
or the Selling Shareholder that by its nature cannot be cured); |
|
|
|
|
(c) |
Priveco, if there has been a material breach by Pubco of
any material representation, warranty, covenant or agreement set forth in
this Agreement on the part of Pubco that is not cured by the breaching
party, to the reasonable satisfaction of Priveco, within ten business days
after notice of such breach is given by Priveco (except that no cure
period will be provided for a breach by Pubco that by its nature cannot be
cured); |
|
|
|
|
(d) |
Pubco or Priveco, if the Transaction is not closed by
June 30, 2015, unless the parties hereto agree to extend such date in
writing; or |
|
|
|
|
(e) |
Pubco or Priveco if any permanent injunction or other
order of a governmental entity of competent authority preventing the
consummation of the Transaction contemplated by this Agreement has become
final and non-appealable. |
8.2 |
Effect of Termination. In the event of the
termination of this Agreement as provided in Section 8.1, this Agreement
will be of no further force or effect, provided, however, that no
termination of this Agreement will relieve any party of liability for
any breaches of this Agreement that are based on a wrongful refusal or
failure to perform any obligations. |
- 25 -
9. |
INDEMNIFICATION, REMEDIES,
SURVIVAL |
|
|
|
9.1 |
Certain Definitions. For the purposes of this
Article 9, the terms Loss and Losses mean any and all
demands, claims, actions or causes of action, assessments, losses,
damages, Liabilities, costs, and expenses, including without limitation,
interest, penalties, fines and reasonable attorneys, accountants and other
professional fees and expenses, but excluding any indirect, consequential
or punitive damages suffered by Pubco or Priveco including damages for
lost profits or lost business opportunities. |
|
|
|
9.2 |
Agreement of Priveco to Indemnify. Priveco will
indemnify, defend, and hold harmless, to the full extent of the law, Pubco
and its shareholders from, against, and in respect of any and all Losses
asserted against, relating to, imposed upon, or incurred by Pubco and its
shareholders by reason of, resulting from, based upon or arising out
of: |
|
|
|
|
(a) |
the breach by Priveco of any representation or warranty
of Priveco contained in or made pursuant to this Agreement, any Priveco
Document or any certificate or other instrument delivered pursuant to this
Agreement; or |
|
|
|
|
(b) |
the breach or partial breach by Priveco of any covenant
or agreement of Priveco made in or pursuant to this Agreement, any Priveco
Document or any certificate or other instrument delivered pursuant to this
Agreement. |
9.3 |
Agreement of the Selling Shareholder to Indemnify.
The Selling Shareholder will indemnify, defend, and hold harmless, to the
full extent of the law, Pubco and its shareholders from, against, and in
respect of any and all Losses asserted against, relating to, imposed upon,
or incurred by Pubco and its shareholders by reason of, resulting from,
based upon or arising out of: |
|
|
|
|
(a) |
any breach by the Selling Shareholder of Section 2.2 of
this Agreement; or |
|
|
|
|
(b) |
any misstatement, misrepresentation or breach of the
representations and warranties made by the Selling Shareholder contained
in or made pursuant to the Certificate executed by the Selling Shareholder
or their nominee as part of the share exchange procedure detailed in
Section 2.3 of this Agreement. |
9.4 |
Agreement of Pubco to Indemnify. Pubco will
indemnify, defend, and hold harmless, to the full extent of the law,
Priveco and the Selling Shareholder from, against, for, and in respect of
any and all Losses asserted against, relating to, imposed upon, or
incurred by Priveco and the Selling Shareholder by reason of, resulting
from, based upon or arising out of: |
|
|
|
|
(a) |
the breach by Pubco of any representation or warranty of
Pubco contained in or made pursuant to this Agreement, any Pubco Document
or any certificate or other instrument delivered pursuant to this
Agreement; or |
|
|
|
|
(b) |
the breach or partial breach by Pubco of any covenant or
agreement of Pubco made in or pursuant to this Agreement, any Pubco
Document or any certificate or other instrument delivered pursuant to this
Agreement. |
- 26 -
10. |
MISCELLANEOUS PROVISIONS |
|
|
10.1 |
Effectiveness of Representations; Survival. Each
party is entitled to rely on the representations, warranties and
agreements of each of the other parties and all such representation,
warranties and agreement will be effective regardless of any investigation
that any party has undertaken or failed to undertake. Unless otherwise
stated in this Agreement, and except for instances of fraud, the
representations, warranties and agreements will survive the Closing Date
and continue in full force and effect until one year after the Closing
Date. |
|
|
10.2 |
Further Assurances. Each of the parties hereto
will co-operate with the others and execute and deliver to the other
parties hereto such other instruments and documents and take such other
actions as may be reasonably requested from time to time by any other
party hereto as necessary to carry out, evidence, and confirm the intended
purposes of this Agreement. |
|
|
10.3 |
Amendment. This Agreement may not be amended
except by an instrument in writing signed by each of the
parties. |
|
|
10.4 |
Expenses. Pubco will bear all costs incurred in
connection with the preparation, execution and performance of this
Agreement and the Transaction contemplated hereby, including all fees and
expenses of agents, representatives, legal and accountants. |
|
|
10.5 |
Entire Agreement. This Agreement, the schedules
attached hereto and the other documents in connection with this
transaction contain the entire agreement between the parties with respect
to the subject matter hereof and supersede all prior arrangements and
understandings, both written and oral, expressed or implied, with respect
thereto. Any preceding correspondence or offers are expressly superseded
and terminated by this Agreement. |
|
|
10.6 |
Notices. All notices and other communications
required or permitted under to this Agreement must be in writing and will
be deemed given if sent by personal delivery, faxed with electronic
confirmation of delivery, internationally-recognized express courier or
registered or certified mail (return receipt requested), postage prepaid,
to the parties at the addresses (or at such other address for a party as
will be specified by like notice) on the first page of this
Agreement. |
|
|
|
All such notices and other communications will be deemed
to have been received: |
|
(a) |
in the case of personal delivery, on the date of such
delivery; |
|
|
|
|
(b) |
in the case of a fax, when the party sending such fax has
received electronic confirmation of its delivery; |
|
|
|
|
(c) |
in the case of delivery by internationally-recognized
express courier, on the business day following dispatch; and |
|
|
|
|
(d) |
in the case of mailing, on the fifth business day
following mailing. |
10.7 |
Headings. The headings contained in this Agreement
are for convenience purposes only and will not affect in any way the
meaning or interpretation of this Agreement. |
|
|
10.8 |
Benefits. This Agreement is and will only be
construed as for the benefit of or enforceable by those persons party to
this Agreement. |
- 27 -
10.9 |
Assignment. This Agreement may not be assigned
(except by operation of law) by any party without the consent of the other
parties. |
|
|
10.10 |
Governing Law. This Agreement will be governed by
and construed in accordance with the laws of the State of Nevada
applicable to contracts made and to be performed therein. |
|
|
10.11 |
Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their
mutual intent, and no rule of strict construction will be applied against
any party. |
|
|
10.12 |
Gender. All references to any party will be read
with such changes in number and gender as the context or reference
requires. |
|
|
10.13 |
Business Days. If the last or appointed day for
the taking of any action required or the expiration of any rights granted
herein shall be a Saturday, Sunday or a legal holiday in the State of
Nevada, then such action may be taken or right may be exercised on the
next succeeding day which is not a Saturday, Sunday or such a legal
holiday. |
|
|
10.14 |
Counterparts. This Agreement may be executed in
one or more counterparts, all of which will be considered one and the same
agreement and will become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties, it
being understood that all parties need not sign the same
counterpart. |
|
|
10.15 |
Fax and PDF Execution. This Agreement may be
executed by delivery of executed signature pages by fax or PDF document
via Email and such execution will be effective for all purposes. |
|
|
10.16 |
Independent Legal Advice. Priveco and the Selling
Shareholder jointly and severally acknowledge
that: |
|
(a) |
this Agreement was prepared by the W.L. Macdonald Law
Corporation for Pubco; |
|
|
|
|
(b) |
W.L. Macdonald Law Corporation received instructions from
Pubco and does not represent Priveco or the Selling Shareholder in regards
to this Agreement; |
|
|
|
|
(c) |
Priveco and the Selling Shareholder have been requested
by Pubco and W.L. Macdonald Law Corporation to obtain independent legal
counsel and advice on this Agreement prior to signing this
Agreement; |
|
|
|
|
(d) |
Priveco and the Selling Shareholder have been given
adequate time to obtain independent legal advice; |
|
|
|
|
(e) |
by signing this Agreement, Priveco and the Selling
Shareholder confirm that Priveco and the Selling Shareholder fully
understand this Agreement; and |
|
|
|
|
(f) |
by signing this Agreement without first obtaining
independent legal advice, Priveco and the Selling Shareholder waive their
respective rights to obtain independent legal
advice. |
[THIS PART LEFT INTENTIONALLY BLANK]
- 28 -
10.17 |
Schedules and Exhibits. The schedules and exhibits
are attached to this Agreement and incorporated
herein. |
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day and year first above written.
WOLVERINE EXPLORATION INC.
|
/s/ Richard Haderer |
|
Per: |
|
|
|
Name: Richard Haderer |
|
|
Title: Director, Principal
Executive Officer, |
|
|
Principal Financial Officer and
Principal |
|
|
Accounting Officer |
|
ENIGMAMOBIL INC.
|
/s/ David Chalk |
|
Per: |
|
|
|
Name: Dave Chalk |
|
|
Title: President and Director |
|
Signed, sealed and delivered by |
) |
|
DAVE CHALK in the presence of: |
) |
|
|
) |
|
/s/ Jacquelyn C. Peterson |
) |
|
|
) |
|
Signature of Witness |
) |
/s/ David Chalk |
|
) |
|
Jacquelyn C. Peterson |
) |
DAVE CHALK |
|
) |
|
Name of Witness |
) |
|
|
) |
|
SCHEDULE 1
TO THE SHARE EXCHANGE AGREEMENT AMONG
WOLVERINE EXPLORATION INC.,
ENIGMAMOBIL INC. AND THE SELLING SHAREHOLDER AS
SET OUT IN THE
SHARE EXCHANGE AGREEMENT
THE SELLING SHAREHOLDER
Name
|
Number of Common Shares
of Priveco held before Closing
|
Number of Common Shares
of Priveco held after Closing
|
Total Number of Pubco
Shares to be issued by Pubco on Closing
|
Dave Chalk |
100 |
75 |
300,000,000 |
|
|
|
|
SCHEDULE 2
TO THE SHARE EXCHANGE AGREEMENT AMONG
WOLVERINE EXPLORATION INC.,
ENIGMAMOBIL INC. AND THE SELLING SHAREHOLDER AS
SET OUT IN THE
SHARE EXCHANGE AGREEMENT
CERTIFICATE OF NON-U.S. SHAREHOLDER
In connection with the issuance of common stock (the Pubco
Shares and, together with the Pubco Shares, the Pubco Securities) of
Wolverine Exploration Inc., a company incorporated pursuant to the laws of the
State of Nevada (Pubco), to the undersigned, pursuant to that certain
Share Exchange Agreement dated April ______________, 2015 (the
Agreement), among Pubco, EnigmaMobil Inc., a company incorporated
pursuant to the laws of the Province of Alberta (Priveco), and the
shareholders of Priveco as set out in the Agreement (each, a Selling
Shareholder), the undersigned hereby agrees, acknowledges, represents and
warrants that:
1.
the undersigned is not a U.S. Person as such term is defined by Rule 902 of
Regulation S under the United States Securities Act of 1933, as amended
(U.S. Securities Act) (the definition of which includes, but is not
limited to, an individual resident in the U.S. and an estate or trust of which
any executor or administrator or trust, respectively is a U.S. Person and any
partnership or corporation organized or incorporated under the laws of the
U.S.);
2.
none of the Pubco Securities have been or will be registered under the U.S.
Securities Act, or under any state securities or blue sky laws of any state of
the United States, and may not be offered or sold in the United States or,
directly or indirectly, to U.S. Persons, as that term is defined in Regulation
S, except in accordance with the provisions of Regulation S or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the U.S. Securities Act and in compliance with any applicable
state and foreign securities laws;
3.
the undersigned understands and agrees that offers and sales of any of the Pubco
Securities prior to the expiration of a period of one year after the date of
original issuance of the Pubco Securities (the one year period hereinafter
referred to as the Distribution Compliance Period) shall only be made in
compliance with the safe harbor provisions set forth in Regulation S, pursuant
to the registration provisions of the U.S. Securities Act or an exemption
therefrom, and that all offers and sales after the Distribution Compliance
Period shall be made only in compliance with the registration provisions of the
U.S. Securities Act or an exemption therefrom and in each case only in
accordance with applicable state and foreign securities laws;
4.
the undersigned understands and agrees not to engage in any hedging transactions
involving any of the Pubco Securities unless such transactions are in compliance
with the provisions of the U.S. Securities Act and in each case only in
accordance with applicable state and provincial securities laws;
5.
the undersigned is acquiring the Pubco Securities for investment only and not
with a view to resale or distribution and, in particular, it has no intention to
distribute either directly or indirectly any of the Pubco Securities in the
United States or to U.S. Persons;
6.
the undersigned has not acquired the Pubco Securities as a result of, and will
not itself engage in, any directed selling efforts (as defined in Regulation S
under the U.S. Securities Act) in the United States in respect of the Pubco
Securities which would include any activities undertaken for the purpose of, or
that could reasonably be expected to have the effect of, conditioning the market
in the United States for the resale of any of the Pubco Securities;
provided, however, that the undersigned may sell or otherwise dispose of the
Pubco Securities pursuant to registration thereof under the U.S. Securities Act
and any applicable state and provincial securities laws or under an exemption
from such registration requirements;
- 2 -
7.
the statutory and regulatory basis for the exemption claimed for the sale of the
Pubco Securities, although in technical compliance with Regulation S, would not
be available if the offering is part of a plan or scheme to evade the
registration provisions of the U.S. Securities Act or any applicable state and
provincial securities laws;
8.
the undersigned has not undertaken, and will have no obligation, to register any
of the Pubco Securities under the U.S. Securities Act;
9.
Pubco is entitled to rely on the acknowledgements, agreements, representations
and warranties and the statements and answers of the Selling Shareholder
contained in the Agreement and those of the undersigned contained in this
Certificate, and the undersigned will hold harmless Pubco from any loss or
damage either one may suffer as a result of any such acknowledgements,
agreements, representations and/or warranties made by the Selling Shareholder
and/or the undersigned not being true and correct;
10.
the undersigned has been advised to consult their own respective legal, tax and
other advisors with respect to the merits and risks of an investment in the
Pubco Securities and, with respect to applicable resale restrictions, is solely
responsible (and Pubco is not in any way responsible) for compliance with
applicable resale restrictions;
11.
none of the Pubco Securities are listed on any stock exchange or automated
dealer quotation system and no representation has been made to the undersigned
that any of the Pubco Securities will become listed on any stock exchange or
automated dealer quotation system, except that currently certain market makers
make market in the common shares of Pubco on the OTC Bulletin Board;
12.
the undersigned is outside the United States when receiving and executing
this Agreement and is acquiring the Pubco Securities as principal for their own
account, for investment purposes only, and not with a view to, or for, resale,
distribution or fractionalization thereof, in whole or in part, and no other
person has a direct or indirect beneficial interest in the Pubco Securities;
13. neither the SEC nor any other securities
commission or similar regulatory authority has reviewed or passed on the merits
of the Pubco Securities;
14. the Pubco Securities are not being acquired,
directly or indirectly, for the account or benefit of a U.S. Person or a person
in the United States;
15. the undersigned acknowledges and agrees that
Pubco shall refuse to register any transfer of Pubco Securities not made in
accordance with the provisions of Regulation S, pursuant to registration under
the U.S. Securities Act, or pursuant to an available exemption from registration
under the U.S. Securities Act;
16. the undersigned understands and agrees that
the Pubco Securities will bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN
OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE 1933 ACT).
- 3 -
NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED
UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. UNITED STATES AND U.S.
PERSON ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.
17. the address of the undersigned
included herein is the sole address of the undersigned as of the date of this
certificate.
IN WITNESS WHEREOF, I have executed this Certificate of
Non-U.S. Shareholder.
|
Dated: April_____, 2015 |
Signature |
|
|
|
|
|
Print Name |
|
|
|
|
|
Title (if applicable) |
|
|
|
|
|
Address |
|
|
|
|
|
SCHEDULE 3
TO THE SHARE EXCHANGE AGREEMENT AMONG
WOLVERINE EXPLORATION INC.,
ENIGMAMOBIL INC. AND THE SELLING SHAREHOLDER AS
SET OUT IN THE
SHARE EXCHANGE AGREEMENT
DIRECTORS AND OFFICERS OF PRIVECO
Directors:
Officers:
SCHEDULE 4
TO THE SHARE EXCHANGE AGREEMENT AMONG
WOLVERINE EXPLORATION INC.,
ENIGMAMOBIL INC. AND THE SELLING SHAREHOLDER AS
SET OUT IN THE
SHARE EXCHANGE AGREEMENT
DIRECTORS AND OFFICERS OF PUBCO
Directors:
|
1. |
Richard Haderer |
|
|
|
|
2. |
Luke Rich |
|
|
|
|
3. |
David Chalk |
Officers:
|
1. |
Richard Haderer Chief Executive Officer and Chief
Financial Officer; and |
|
|
|
|
2. |
Luke Rich Vice President, Exploration and Business
Development. |
SCHEDULE 5
TO THE SHARE EXCHANGE AGREEMENT AMONG
WOLVERINE EXPLORATION INC.,
ENIGMAMOBIL INC. AND THE SELLING SHAREHOLDER AS
SET OUT IN THE
SHARE EXCHANGE AGREEMENT
PRIVECO MATERIAL LEASES, SUBLEASES, CLAIMS, CAPITAL
EXPENDITURES,
TAXES AND OTHER PROPERTY INTERESTS
|
With: |
Dated: |
Material
Terms/Description: |
1. |
None |
|
|
SCHEDULE 6
TO THE SHARE EXCHANGE AGREEMENT AMONG
WOLVERINE EXPLORATION INC.,
ENIGMAMOBIL INC. AND THE SELLING SHAREHOLDER AS
SET OUT IN THE
SHARE EXCHANGE AGREEMENT
PRIVECO INTELLECTUAL PROPERTY
|
Identifier: |
Description: |
1. |
N/A |
ENIGMA Mobile Security
App |
2. |
|
|
3. |
|
|
4. |
|
|
5. |
|
|
SCHEDULE 7
TO THE SHARE EXCHANGE AGREEMENT AMONG
WOLVERINE EXPLORATION INC.,
ENIGMAMOBIL INC. AND THE SELLING SHAREHOLDER AS
SET OUT IN THE
SHARE EXCHANGE AGREEMENT
PRIVECO MATERIAL CONTRACTS
|
With: |
Dated: |
Material
Terms/Description: |
1. |
None. |
|
|
SCHEDULE 8
TO THE SHARE EXCHANGE AGREEMENT AMONG
WOLVERINE EXPLORATION INC.,
ENIGMAMOBIL INC. AND THE SELLING SHAREHOLDER AS
SET OUT IN THE
SHARE EXCHANGE AGREEMENT
PRIVECO EMPLOYMENT AGREEMENTS AND ARRANGEMENTS
As of the date of this Agreement, the following hourly and
salaried employees of Priveco are reasonably necessary to operate the business
of Priveco as substantially presently operated:
|
With: |
Dated: |
Material
Terms/Description: |
1. |
None. |
|
|
SCHEDULE 9
TO THE SHARE EXCHANGE AGREEMENT AMONG
WOLVERINE EXPLORATION INC.,
ENIGMAMOBIL INC. AND THE SELLING SHAREHOLDER AS
SET OUT IN THE
SHARE EXCHANGE AGREEMENT
SUBSIDIARIES
Pubco:
None.
Priveco:
None.
Wolverine Resources (PK) (USOTC:WOLV)
Historical Stock Chart
From Jun 2024 to Jul 2024
Wolverine Resources (PK) (USOTC:WOLV)
Historical Stock Chart
From Jul 2023 to Jul 2024