EXHIBIT 10.3
SHARE EXCHANGE AGREEMENT
THIS AGREEMENT dated for reference November 29, 2000, is between COMMUNICATE.COM
INC., a Nevada corporation with an office at 360 - 220 Cambie Street, Vancouver,
B.C., V6B 2M9 and fax (604) 687-2192 ("CMNN") and the UNDERSIGNED SHAREHOLDER
(the "SHAREHOLDER").
WHEREAS:
A. CMNN has acquired or has reached an agreement to acquire an aggregate
16,896,335 shares in the capital of Communicate.com Inc., an Alberta
company (the "SUBSIDIARY") and wishes to acquire all of the remaining
issued and outstanding shares of the Subsidiary pursuant to the terms
and conditions of this agreement,
B. the Shareholder is a registered shareholder of the Subsidiary owning
the number of shares as set out in the Register of Shareholders of the
Subsidiary (the "SHARES") as of the date of this agreement,
C. CMNN has made the same share exchange offer to all of the existing
shareholders of the Subsidiary,
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are
acknowledged, the parties agree that:
TERMS AND CONDITIONS OF THE SHARE EXCHANGE
SHARE EXCHANGE
3. The Shareholder will transfer all of its shares in the Subsidiary to
CMNN on the terms and conditions set out in this agreement. For every
5.1470588 shares in the Subsidiary held by the Shareholder CMNN will
issue to the Shareholder one common share in the capital of CMNN (the
"EXCHANGE SHARES") based on a value of US$0.34 per Share and a value of
US$1.75 per Exchange Share. CMNN will deliver a certificate
representing the Exchange Shares to the Shareholder within a reasonable
time.
4. The Shareholder will tender a duly executed stock power of attorney for
the transfer of the Shares to CMNN immediately after signing this
agreement.
5. The obligations of each party are subject to the condition that each
party's representations and warranties are true at the time of Closing
and the covenants of the other party that were to be performed by the
other party on or before the Closing have been performed.
REPRESENTATIONS AND WARRANTIES
6. REPRESENTATIONS, WARRANTIES, COVENANTS AND ACKNOWLEDGMENTS OF THE
SHAREHOLDER
1. SHARE OWNERSHIP. The Shareholder owns the Shares free of any
claim or potential claim by any person and has the authority
to transfer the Shares as described in this agreement.
2. ADDITIONAL RIGHTS. The Shareholder does not have any right to
acquire additional shares of the Subsidiary.
3. INDEPENDENT INVESTIGATION. The Shareholder, in electing to
exchange the Shares for Exchange Shares, relied upon an
independent investigation made by it and its representatives,
if any, and has been given access to and the opportunity to
examine all books and records of CMNN, and all material
contracts and documents of CMNN. The Shareholder has the
experience in business and financial matters that make it
capable of evaluating the risk of its investment and
determining the suitability of its investment.
4. NO GOVERNMENT RECOMMENDATION OR APPROVAL. The Shareholder
understands that no United States federal or state agency,
securities commission or regulatory authority has passed upon
or recommended or endorsed CMNN, this transaction or the
acquisition of the Exchange Shares. Furthermore, the foregoing
authorities have not reviewed, confirmed or determined the
accuracy or adequacy of this document.
5. NO REGISTRATION. The Shareholder understands that the Exchange
Shares have not been registered under
Share Exchange Agreement 2 / 4
the Securities Act of 1933 (the "ACT") or with the United
States Securities and Exchange Commission or the securities
commission of any state, and are being offered and sold
pursuant to the provisions of the Act based in part upon the
representations of the Shareholder, and that CMNN is relying
on the truth and accuracy of the Shareholder's representations
and warranties to determine whether the offer and sale of the
Exchange Shares is exempt from registration under the Act.
This agreement does not constitute an offer to sell nor a
solicitation of an offer to buy the securities in any
jurisdiction in which such offer or solicitation would be
unlawful. The securities may not be resold or transferred
except as permitted pursuant to registration under the Act or
an exemption from it.
6. INVESTMENT INTENT. The Shareholder is acquiring the Exchange
Shares for its own account (or a trust account if the
Shareholder is a trustee) and not as a nominee. The
Shareholder understands that the exchange of the Shares for
Exchange Shares involves a high degree of risk and that the
Shareholder must bear the economic risk of this investment
indefinitely unless sale of the Exchange Shares is registered
pursuant to the Act, or an exemption from registration for
their sale is available. The Shareholder understands that, in
the view of the SEC, the statutory basis for the exemption
claimed for this transaction would not be present if the
offering of the Exchange Shares, although in technical
compliance with Regulation S, is part of a plan or scheme to
evade the registration provisions of the Act. The Shareholder
is acquiring the Exchange Shares for investment purposes and
has no present intention to sell the Exchange Shares to any
person or for the account or benefit of any person. The
Shareholder covenants that neither the Shareholder nor its
affiliates nor any person acting on its or their behalf has
the intention of entering or will enter before the expiration
of one year from the Closing (the "RESTRICTED PERIOD"), into
any put option, short position or other similar instrument or
position or any other hedging transactions or arrangements
with respect to CMNN's common stock, and neither the
Shareholder nor any of its affiliates nor any person acting on
its or their behalf will use at any time Exchange Shares
acquired pursuant to this agreement to settle any put option,
short position or other similar instrument or position or any
other hedging transaction or arrangement that may have been
entered into before the execution of this agreement or during
the Restricted Period.
7. NO SALE IN VIOLATION OF THE SECURITIES LAWS. The Shareholder
covenants that it will not knowingly sell transfer or
otherwise dispose of the Exchange Shares in violation of the
Act, the Securities and Exchange Act of 1934 (the "EXCHANGE
ACT") or the rules and regulations of the Securities and
Exchange Commission (the "COMMISSION"). The Shareholder will
only offer and sell the Exchange Shares pursuant to an
effective registration statement under the Act or an exemption
from the registration provisions of the Act. The Shareholder
will not, during the Restricted Period, offer or sell the
Exchange Shares to any persons or for the account or benefit
of any persons and will offer and sell the Exchange Shares
only in compliance with the provisions of the Act.
8. AUTHORITY. The Shareholder has the full power and authority to
execute, deliver and perform this agreement. This agreement,
when executed and delivered by the Shareholder, constitutes a
legal, valid and binding obligation of the Shareholder,
enforceable against the Shareholder in accordance with its
terms.
9. NO RELIANCE ON TAX ADVICE. The Shareholder has reviewed with
its own tax advisors the tax consequences of the transactions
contemplated by this agreement. The Shareholder is relying
solely on the advisors and not on any statements or
representations of CMNN or any of its agents with respect to
the tax consequences and understands that the Shareholder (and
not CMNN) is responsible for the Shareholder's tax liability
that may arise as a result of this investment or the
transactions contemplated by this agreement.
10. NO LEGAL ADVICE FROM CMNN. The Shareholder acknowledges that
it has had the opportunity to review this agreement and the
transactions contemplated by it with its own legal counsel.
The Shareholder is relying solely on its counsel and not on
any statements or representations of CMNN or any of its agents
for legal advice with respect to this investment or the
transactions contemplated by this agreement except for the
representations, warranties and covenants specifically stated.
11. RESALES. The Shareholder acknowledges and agrees that the
Exchange Shares may only be resold pursuant to a registration
statement under the Act or pursuant to an exemption from
registration under the Act.
Share Exchange Agreement 3 / 4
CMNN will not register any transfer of Exchange Shares that
does not comply with this section 4(l). The Shareholder
covenants that all offering materials and documents (other
than press releases) used in connection with offers and sales
of the Exchange Shares before the expiration of the Restricted
Period must state that (i) the Exchange Shares have not been
registered under the Act and may not be offered or sold to any
person unless they are registered under the Act or an
exemption from the registration requirements of the Act is
available, and that (ii) hedging transactions involving the
Exchange Shares may not be conducted unless they comply with
the Act. These statements must appear on the cover or inside
cover page and in the underwriting section of any prospectus
or offering circular and must appear in any advertisement used
in connection with the offer or sale of the Exchange Shares.
12. RESTRICTIONS ON TRANSFER OF SHARES AND LEGENDS ON
CERTIFICATES. The Shareholder acknowledges that the
certificates representing the Exchange Shares must bear the
following legend and any other legend, if the legend or
legends are reasonably required by CMNN, to comply with state,
federal or foreign law:
"THESE SECURITIES ARE RESTRICTED SECURITIES AS THAT
TERM IS DEFINED IN RULE 144 UNDER THE U.S. SECURITIES
ACT OF 1933 (THE "ACT"). AS RESTRICTED SECURITIES,
THEY MAY BE RESOLD ONLY IN ACCORDANCE WITH THE ACT OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR AN EXEMPTION FROM THE ACT."
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF CMNN.
1. AUTHORIZED CAPITAL. CMNN represents and warrants that it is
authorized to issue 50 million common shares of its capital
stock, of which 10,300,000 common shares are issued and
outstanding. It has no other classes of shares and no
obligation to issue any additional shares for any reason
including options, warrants or convertible instruments.
2. ORGANIZATION AND GOOD STANDING. CMNN is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Nevada and has the requisite corporate
power and authority to carry on its business as now conducted
and as proposed to be conducted.
3. AUTHORIZATION. CMNN has taken the corporate action that is
necessary for the authorization, execution and delivery of
this agreement, the performance of CMNN's obligations, and the
authorization, issuance and delivery of the Exchange Shares,
and this agreement constitutes a legal, valid and binding
obligation of CMNN, enforceable against CMNN in accordance
with its terms.
4. VALID ISSUANCE OF THE EXCHANGE SHARES. The Exchange Shares,
when issued, sold and delivered in accordance with the terms
hereof in exchange for the Shares will be duly and validly
issued and outstanding, fully paid and nonassessable, and
based in part on the representations and warranties of the
Shareholder will be issued in compliance with all applicable
federal, state and other applicable securities laws.
OTHER PROVISIONS
8. Time is of the essence of this agreement.
9. This agreement is governed by the laws of British Columbia and must be
litigated in the courts of British Columbia, except for matters arising
under the Act or the Exchange Act which matters must be construed and
interpreted in accordance with those laws
10. Any notice that must be given or delivered under this agreement must be
in writing and delivered by hand to the address or transmitted by fax
to the fax number given for the party on page 1 and is deemed to have
been received when it is delivered by hand or transmitted by fax unless
the delivery or transmission is made after 4:00 p.m. or on a
non-business day where it is received, in which case it is deemed to
have been delivered or transmitted on the next business day. Any
payments of money must be delivered by hand or wired as instructed
Share Exchange Agreement 4 / 4
in writing by the receiving party. Any delivery other than a written
notice or money must be made by hand at the receiving party's address.
11. Neither the Shareholder nor CMNN may assign this agreement or any part
of it to another party.
12. This agreement constitutes the entire understanding and agreement
between the parties, and no party is liable or bound to any other party
in any manner by any warranties, representations or covenants except as
specifically stated in this agreement. Except as expressly provided,
neither this agreement nor any term of it may be amended, waived,
discharged or terminated other than by a written instrument signed by
the party against whom enforcement of the amendment, waiver, discharge
or termination is sought.
13. This agreement enures to the benefit of and binds the parties and their
respective successors, heirs and permitted assignees.
14. No failure or delay of CMNN in exercising any right under this
agreement operates as a waiver of the right. CMNN's rights under this
agreement are cumulative and do not preclude CMNN from relying on or
enforcing any legal or equitable right or remedy.
15. If any provision of this agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this
agreement continues in full force and effect without the provision,
except that the severability is not effective if it materially changes
the economic benefit of this agreement to any party.
16. This agreement may be signed in counterparts and delivered to the
parties by fax, and the counterparts together are deemed to be one
original document.
THE PARTIES' signatures below are evidence of their agreement.
COMMUNICATE.COM INC.
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- ---------------------------------- SIGNATURE OF SHAREHOLDER
AUTHORIZED SIGNATORY
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NAME OF SHAREHOLDER
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ADDRESS OF SHAREHOLDER
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