EXHIBIT 10.1
THIS SHARE PURCHASE AGREEMENT is made the 3rd day of November, 2000,
AMONG:
CYOP SYSTEMS INC.,
-----------------
of Suite 29, 1st Floor, Beckwith Mall, Lower Broad Street,
Bridgetown, Barbados
(the "Company")
AND:
THE SHAREHOLDERS OF CYOP SYSTEMS INC.,
-------------------------------------
of Suite 29, 1st Floor, Beckwith Mall, Lower Broad Street,
Bridgetown, Barbados
(the "Vendors")
AND:
CYOP SYSTEMS INTERNATIONAL INCORPORATED,
---------------------------------------
of Suite 880, 50 West Liberty Street,
Reno, Nevada, 89501 USA
(the "Purchaser")
WHEREAS:
A. The Vendors are the legal and beneficial owners of all of the issued and
outstanding common shares of the Company (the "Company Shares"); and
B. The Vendors have agreed to sell all of their right, title and interest in and
to the Company Shares free and clear of all liens, charges and encumbrances on
the terms and conditions set forth in this agreement to the Purchaser in
consideration for 9,000,000 shares of the Purchaser.
NOW THEREFORE WITNESSETH that in consideration of the premises and of the mutual
covenants and agreements set forth herein, the parties hereto covenant and agree
as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
------------------------------
Definitions
-----------
1.01 In this Agreement, including the recitals hereto, the following words an
phrases shall have the following meanings:
(a) "Closing" means the completion of the transactions contemplated by
this Agreement;
(b) "Company Shares" means all of the issued and outstanding common shares
of CYOP Systems Inc.;
(c) "Person" includes a firm, corporation or other entity; and
(d) "Purchaser's Shares" means 9,000,000 common shares of the Purchaser
issuable to the Vendors in consideration for the Company Shares.
Captions and Section Numbers
----------------------------
1.02 The headings and section references in this Agreement are for
convenience of reference only and do not form a part of this Agreement and are
not intended to interpret, define or limit the scope, extent or intent of this
Agreement or any provision thereof.
Extended Meanings
-----------------
1.03 The words "hereof", "herein", "hereunder" and similar expressions used
in any clause, paragraph or section of this Agreement shall relate to the whole
of this Agreement and not to that clause, paragraph or section only, unless
otherwise expressly provided.
Number and Gender
-----------------
1.04 Whenever the singular or masculine or neuter is used in this
Agreement, the same shall be construed to mean the plural or feminine or body
corporate where the context of this Agreement or the parties hereto so require.
Section References
------------------
1.05 Any reference to a particular "article", "section", "subsection" or
other subdivision is to the particular article, section or other subdivision of
this Agreement.
Governing Law
-------------
1.06 This Agreement and all matters arising hereunder shall be governed by,
construed and enforced in accordance with the laws of the State of Nevada and
all disputes arising under this Agreement shall be referred to the Courts of the
State of Nevada.
Currency
--------
1.07 All sums of money to be paid or calculated pursuant to this Agreement
shall be paid or calculated in currency of the United States unless otherwise
expressly stated.
Schedules
---------
1.08 The schedules attached hereto are hereby incorporated into this
Agreement and form a part hereof. All terms defined in this Agreement shall have
the same meaning in such schedules. The schedules to this Agreement are as
follows:
Schedule "A" - The Vendors and Allocation of Purchaser's Shares
ARTICLE 2
PURCHASE AND SALE OF SHARES
---------------------------
Purchase and Sale
-----------------
2.01 Upon the terms and conditions of this Agreement, at the Closing the
Vendors will sell the Company Shares free and clear of all liens, charges and
encumbrances to the Purchaser in consideration for the Purchaser's Shares.
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Purchase Price
--------------
2.02 The purchase price payable by the Purchaser to the Vendors for the
Company Shares is 9,000,000 common shares of the Purchaser with a par value of
$0.0001 per share (the "Purchase Price"). The Purchase Price shall be paid to
the Vendors at Closing by the Purchaser's delivery of share certificates
representing the Purchaser's Shares allocated to the Vendors as set out in
Schedule "A".
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE VENDORS AND THE COMPANY
------------------------------
Representations and Warranties
------------------------------
3.01 The Vendors and the Company jointly and severally represent and
warrant to the Purchaser, with the intent that the Purchaser will rely thereon
in entering into this Agreement and in concluding the transactions contemplated
hereby, that:
(a) the Company is duly incorporated, validly exists, is in good standing
with respect to the filing of annual returns under the laws of
Barbados, has the necessary corporate power, authority and capacity to
own its property and assets and to carry on its business as presently
conducted and is duly licensed to carry on business in all
jurisdictions in which it presently carries on business;
(b) the Company is not a "reporting company" or a "reporting issuer" under
the laws of the United States of America;
(c) the Company owns and possesses and has good and marketable title to
all of its properties and assets, both real and personal, free and
clear of all liens, charges and encumbrances;
(d) none of the Company's properties or assets are in the possession of or
under the control of any other Person;
(e) the Company's financial statements have been prepared in accordance
with generally accepted accounting principles applied on a basis
consistent with the Company's prior fiscal periods. The financial
statements present fairly the financial position of the Company as at
the date thereof and fairly state the Company's income and deficit for
the period covered thereby;
(f) except to the extent reflected or reserved against in its financial
statements or incurred subsequent to the date thereof in the ordinary
and usual course of the business, the Company does not have any
outstanding indebtedness or any liabilities or obligations (whether
accrued, contingent or otherwise);
(g) since the date of incorporation of the Company, there has not been:
(i) any changes in the condition or operations of the business,
assets or financial position of the Company which are,
individually or in the aggregate, materially adverse; or
(ii) any damage, destruction or loss or other event, development or
condition, of any character (whether or not covered by insurance)
which is not generally known or which has not been disclosed to
the Purchaser, which has or may materially and
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adversely affect the business, assets, properties or future
prospects of the Company;
(h) all material financial transactions of the Company have been
accurately recorded in the books and records of the Company and such
books and records fairly present the financial position and the
corporate affairs of the Company;
(i) since the date of incorporation of the Company, the Company has not:
(i) transferred, assigned, sold or otherwise disposed of any assets
or cancelled any debts or claims except in each case in the
ordinary and usual course of business;
(ii) incurred or assumed any obligation or liability (fixed or
contingent), except unsecured current obligations and liabilities
incurred in the ordinary and normal course of business;
(iii) declared or made, or committed itself to make, any payment of
any dividend or other distribution in respect of any of its
shares or purchased or redeemed any of its shares or split,
consolidated or reclassified any of its shares;
(iv) suffered any operating loss or any material extraordinary loss or
entered into any material commitment or transaction not in the
ordinary and usual course of business;
(v) waived or surrendered any right of substantial value;
(vi) made any gift of money or of any property or assets to any
Person;
(vii) amended or changed or taken any action to amend or change its
memorandum or articles;
(viii) increased or agreed to increase the pay of, or paid or agreed
to pay any pension, bonus, share of profits or other similar
benefit of, any director, employee or officer or former director,
employee or officer of the Company;
(ix) made payments of any kind to or on behalf of the Vendors or any
affiliate or associate of the Vendors or under any management
agreement with the Company save and except business related
expenses and salaries in the ordinary course of business and at
the regular rates payable to them;
(x) mortgaged, pledged, subjected to lien, granted a security
interest in or otherwise encumbered any of its assets or
property, whether tangible or intangible; or
(xi) authorized or agreed or otherwise have become committed to do any
of the foregoing;
(j) save and except as disclosed in writing to the Purchaser, all accounts
receivable have been recorded by the Company in accordance with its
usual accounting practices. The reserve taken for doubtful or bad
accounts is adequate based on past experience of the Company and is
consistent with the accounting procedures used by the Company in
previous fiscal periods. There is nothing which would indicate that
such reserve is not adequate or that a higher reserve should be taken;
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(k) the Company does not own or possess any material assets;
(l) the Company is not party to, bound by or subject to any indenture,
mortgage, lease, agreement, instrument, judgment or decree which would
be violated or breached by, or under which default would occur or
which could be terminated, cancelled or accelerated, in whole or in
part, as a result of the execution and delivery of this Agreement or
the consummation of any of the transactions provided for herein;
(m) there is not any suit, action, litigation, arbitration proceeding or
governmental proceeding, including appeals and applications for
review, in progress, pending or threatened against, or relating to the
Company or affecting its assets, properties or business which might
materially and adversely affect the assets, properties, business,
future prospects or financial condition of the Company; and there is
not presently outstanding against any of the Company any judgment,
decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or arbitrator;
(n) to the best of the knowledge of the Vendors, the Company has kept the
records required to be kept by the laws of Barbados and any other
applicable corporate legislation and such records are complete and
accurate and contain all minutes of all meetings of directors and
members of the Company;
(o) the Company holds all permits, licenses, consents and authorities
issued by any government or governmental authority, or any municipal,
regional or other authority, or any subdivision thereof, including,
without limitation, any governmental department, commission, bureau,
board or administrative agency, which are necessary or desirable in
connection with the conduct and operation of the Company's business
and the ownership or leasing of its assets and the conduct and
operation of the Company's business as the same are now owned, leased,
conducted or operated and is not in breach of or in default under any
term or condition of any thereof;
(p) the Company:
(i) has filed in a timely manner all income tax returns and election
forms and the tax returns of any other jurisdiction required to
be filed and all such returns and forms have been completed
accurately and correctly in all respects;
(ii) has paid all taxes (including all federal, provincial, state,
local and property taxes, assessments or other imposts in respect
of its income, business, assets or property) and all interest and
penalties thereon with respect to the Company, for all previous
years and all required instalment payments due for the current
fiscal year have been paid;
(iii) has provided adequate reserves for all taxes;
and there is no agreement, waiver or other arrangement providing for
an extension of time with respect to the filing of any tax return, or
payment of any tax, governmental charge or deficiency by the Company
nor is there any action, suit, proceeding, investigation or claim now
threatened or pending against the Company in respect of, or discussion
underway with any governmental authority relating to, any such tax or
governmental charge or deficiency;
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(q) the Company has not:
(i) disposed of anything to a Person with whom it was not
dealing at arm's length for proceeds less than the fair
market value thereof; or
(ii) discontinued carrying on any business in respect of which
non-capital losses were incurred, and any non-capital losses
which the Company has are not losses from property or
business investment losses;
(r) the financial statements and schedules attached to the corporate
income tax returns as filed by the Company for each of its
taxation years reflect and disclose all transactions to which the
Company was party as required by applicable revenue laws and all
of the transactions to which the Company was or is a party are
reflected or disclosed in such financial statements and schedules
and the corporate income tax returns;
(s) the authorized capital of the Company consists of an unlimited
number of common shares without par value, of which 20,000,000
common shares are issued and outstanding as fully paid and
non-assessable. No Person has any agreement or option, present or
future, contingent, absolute or capable of becoming an agreement
or option or which with the passage of time or the occurrence of
any event could become an agreement or option:
(i) to require the Company to issue any further or other shares
in its capital or any other security convertible or
exchangeable into shares in its capital or to convert or
exchange any securities into or for shares in the capital of
the Company;
(ii) for the issue or allotment of any of the authorized but
unissued shares in the capital of the Company;
(iii) to require the Company to purchase, redeem or otherwise
acquire any of the issued and outstanding shares in the
capital of the Company; or
(iv) to acquire the Company Shares;
(t) the Vendors are the registered holders and beneficial owners of
and have good marketable title to the Company Shares, free and
clear of all liens, charges and encumbrances whatsoever;
(u) the Company Shares have been duly and validly allotted and issued
and are outstanding as a fully paid and non-assessable shares in
the capital of the Company;
(v) the Vendors have good and sufficient right and authority to enter
into this Agreement on the terms and conditions herein contained
and to transfer the legal and beneficial title to the Company
Shares to the Purchaser;
(w) the Company Shares are not subject to any "hold period" under any
federal, state or provincial laws or under any regulatory policy
or rule;
(x) this Agreement constitutes a valid, binding and enforceable
obligation of the Vendors. On Closing, the Vendors will not be a
party to, bound by or subject to any indenture, mortgage, lease,
agreement, instrument, statute, regulation, order, judgment,
decree or law which would be violated, contravened or breached by
or under which any default
6
would occur as a result of the execution and delivery by the
Vendors of this Agreement or the performance by the Vendors of
any of the terms hereof;
(y) at Closing the Company will not be indebted to the Vendors or any
employees of the Company or any affiliate or associate of the
Vendors, on any account whatsoever.
Survival
--------
3.02 The representations and warranties contained in section 3.01 shall
survive the completion of the transactions contemplated by this Agreement and
shall continue in full force and effect for the benefit of the Purchaser
thereafter, notwithstanding any independent enquiry or investigation by the
Purchaser.
Indemnity
---------
3.03 The Vendors covenant to indemnify and hold harmless the Purchaser from
and against any loss, claims, damages, liability, expenses and costs, including
any payment made in good faith in settlement of any claim or potential claim,
arising from any of the representations and warranties set forth in section 3.01
being incorrect or breached.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
4.01 The Purchaser represents and warrants to the Vendors and the Company,
with the intent that the Vendors and the Company will rely thereon in entering
into this Agreement and in concluding the transactions contemplated hereby,
that, to the best of its knowledge, information and belief:
(a) the Purchaser was duly incorporated in the state of Nevada on
October 29, 1999. The Purchaser is a valid and subsisting
corporation in good standing under the laws of Nevada, has the
necessary corporate power, authority and capacity to own its
property and assets and to carry on its business as presently
conducted and is duly licensed to carry on business in all
jurisdictions in which it presently carries on business;
(b) the Purchaser is not a "reporting company" under the Securities
Exchange Act of 1934;
(c) the Purchaser's Financial Statements have been prepared in
accordance with generally accepted accounting principles of the
United States of America (U.S. GAP) applied on a basis consistent
with the Purchaser's prior fiscal periods. The Purchaser's
Financial Statements present fairly the financial position of the
Purchaser as at the date thereof and fairly state the Purchaser's
income and deficit for the period covered thereby;
(d) the authorized capital of the Purchaser consists of 100,000,000
common shares of which 19,223,000 common shares are issued and
outstanding as fully paid and non-assessable. No Person has any
agreement or option, present or future, contingent, absolute or
capable of becoming an agreement or option or which with the
passage of time or the occurrence of any event could become an
agreement or option:
(i) to require the Purchaser to issue any further or other
shares in its capital or any other security convertible or
exchangeable into shares in its capital or to convert or
exchange any securities into or for shares in the capital of
the Purchaser;
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(ii) for the issue or allotment of any of the authorized but
unissued shares in the capital of the Purchaser;
(iii)to require the Purchaser to purchase, redeem or otherwise
acquire any of the issued and outstanding shares in the
capital of the Purchaser; or
(iv) to acquire the Purchaser's Shares;
(e) the Purchaser's shares have been duly and validly allotted and
issued and are outstanding as a fully paid and non-assessable
shares in the capital of the Purchaser;
(f) the Purchaser has good and sufficient right and authority to
enter into this Agreement on the terms and conditions herein
contained;
(g) this Agreement constitutes a valid, binding and enforceable
obligation of the Purchaser. On Closing, the Purchaser will not
be a party to, bound by or subject to any indenture, mortgage,
lease, agreement, instrument, statute, regulation, order,
judgement, decree or law which would be violated, contravened or
breached by or under which any default would occur as a result of
the execution and delivery by the Purchaser of this Agreement or
the performance by the Purchaser of any of the terms hereof;
(h) at Closing, the Purchaser will not be indebted to any party;
(i) The current sole director and officer of the Purchaser is Keith
A. Ebert;
Survival
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4.02 The representations and warranties contained in section 4.01 shall
survive the completion of the transactions contemplated by this Agreement and
shall continue in full force and effect for the benefit of the Company and the
Vendors thereafter, notwithstanding any independent enquiry or investigation by
such parties.
Indemnity
---------
4.03 The Purchaser covenants to indemnify and hold harmless the Company and
the Vendors from and against any loss, claims, damages, liability, expenses and
costs, including any payment made in good faith in settlement of any claim or
potential claim, arising from any of the representations and warranties set
forth in section 4.01 being incorrect or breached.
ARTICLE 5
CONDITIONS PRECEDENT TO COMPLETION
----------------------------------
Conditions Precedent to Obligation of the Purchaser
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5.01 The obligation of the Purchaser to carry out the terms and conditions
of this Agreement is subject to and conditional upon the fulfilment, on Closing
of the following conditions:
(a) the representations and warranties of the Vendors and the Company
set out in Article 3 shall be true and correct at and as of the
Closing as if such representations and warranties were made at
and as of the Closing;
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(b) the Vendors shall have performed and complied with all
agreements, covenants and conditions required by this Agreement
to be performed or complied with by the Vendors on or before the
Closing; and
5.02 The conditions described in section 5.01 are conditions only to the
Purchaser being required to complete the transactions contemplated by this
Agreement and are not conditions to the existence of a binding agreement. If the
conditions described in section 5.01 have not been satisfied or waived at or
prior to the Closing, the Purchaser may elect not to complete.
5.03 All of the conditions precedent set out in section 5.01 are for the
sole and exclusive benefit of the Purchaser and may be waived, in whole or in
part, by notice in writing to the Vendors. Subject to section 7.02, all such
conditions precedent shall merge in the closing documents on Closing.
Conditions Precedent to Obligation of the Vendors
-------------------------------------------------
5.04 The obligation of the Vendors to carry out the terms and conditions of
this Agreement is subject to and conditional upon the fulfilment, on or before
the Closing of the Purchaser having performed and complied with all agreements,
covenants and conditions required by this Agreement to be performed or complied
with by the Purchaser on or before the Closing.
5.05 The conditions described in section 5.04 are conditions only to the
Vendors being required to complete the transactions contemplated by this
Agreement and are not conditions to the existence of a binding agreement. If
such conditions have not been satisfied or waived at or prior to the Closing,
the Vendors may elect not to complete.
5.06 The conditions precedent set out in section 5.04 are for the sole and
exclusive benefit of the Vendors and may be waived, in whole or in part, by
notice in writing to the Purchaser. Subject to section 7.02, all such conditions
precedent shall merge in the closing documents on Closing.
5.07 The Vendors covenant and agree as follows:
(a) to vote in favour of all resolutions placed before shareholders of the
Company which are contemplated hereunder;
(b) to provide full access to the books, records and property of the
Company and to cooperate and provide assistance to the Purchaser in
connection with all filings with and approvals required as a result of
the transactions contemplated hereunder; and
(c) not to do or cause to be done anything outside the ordinary course of
business of the Company and to not purchase any assets or properties
which collectively exceed a value of $10,000.
5.08 The Purchaser covenants and agrees to maintain confidentiality with
respect to the business and affairs of the Company resulting from the review by
the Purchaser of the books and records of the Company.
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ARTICLE 6
CLOSING
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Time and Place of Closing
-------------------------
6.01 The purchase and sale of the Company Shares and the other transactions
contemplated by this Agreement shall be completed at 10:00 a.m. (local time in
Bridgetown, Barbados) on the Closing date at the offices of the Company or at
such other time and place as may be agreed to by the parties.
Closing Documents
-----------------
6.02 At the Closing, the Vendors shall deliver to the Purchaser the
following:
(a) share certificates representing the Company Shares duly endorsed for
transfer to the Purchaser;
(b) the corporate minute book and all other books and corporate and
financial records of the Company;
(c) the common seal of the Company;
(d) a legal opinion satisfactory to counsel for the Purchaser; and
(e) such other documents and instruments that may be necessary to complete
the transactions contemplated hereunder.
6.03 At the Closing, the Purchaser shall deliver or cause to be delivered
to the Vendors the Purchase Price for the Company Shares in accordance with
section 2.01 and such other documents and instruments that may be necessary to
complete the transactions contemplated hereunder.
ARTICLE 7
GENERAL PROVISIONS
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Notices
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7.01 All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered by
hand, faxed or mailed postage prepaid addressed as follows:
To the Company:
CYOP Systems Inc.
Suite 29, 1st Floor
Beckwith Mall, Lower Broad Street
Bridgetown, Barbados
Facsimile: (246)435-1429
To the Vendors:
Shareholders of CYOP Systems Inc.
Suite 29, 1st Floor
Beckwith Mall, Lower Broad Street
Bridgetown, Barbados
Facsimile: (246)435-1429
10
To the Purchaser:
CYOP Systems International Incorporated
Suite 880
50 West Liberty Street
Reno, Nevada 89501 USA
Facsimile: (604)688-4933
or to such other address as may be given in writing by the parties and shall be
deemed to have been received, if delivered by hand, on the date of delivery, if
faxed to the facsimile numbers set out above, on the business day next following
the date of transmission and if mailed as aforesaid to the addresses set out
above then on the fifth business day following the posting thereof provided that
if there shall be between the time of mailing and the actual receipt of the
notice a mail strike, slowdown or other labour dispute which might affect the
delivery of the notice by the mails, then the notice shall only be effective if
actually delivered or faxed to the facsimile numbers set out above.
Non-Merger
----------
7.02 Notwithstanding the completion of the transactions contemplated by
this Agreement, the waiver of any condition contained herein (unless such waiver
expressly releases a party from any such representation, warranty, covenant or
agreement) or any investigation made by the Purchaser or the Vendors, the
representations, warranties, covenants and agreements of the parties set forth
herein shall survive the Closing and will remain in full force and effect and
shall not be extinguished or merged in any way by the delivery or recording of
any deed or any other instrument relating to the Shares or the Company or the
completion of the transactions contemplated by this Agreement.
Time of Essence
---------------
7.03 Time is hereby expressly made of the essence of this Agreement with
respect to the performance by the parties of their respective obligations under
this Agreement.
Binding Effect
--------------
7.04 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, personal
representatives, successors and assigns.
Entire Agreement
----------------
7.05 This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
expectations, understandings, communications, representations and agreements
whether verbal or written between the parties with respect to the subject matter
hereof.
Further Assurances
------------------
7.06 Each of the parties hereto hereby covenants and agrees to execute such
further and other documents and instruments and do such further and other things
as may be necessary or desirable to implement and carry out the intent of this
Agreement.
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Amendments
----------
7.07 No amendment to this Agreement shall be valid unless it is evidenced
by a written agreement executed by all of the parties hereto.
Counterparts
------------
7.08 This Agreement may be executed in counterpart and/or by facsimile.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on
the day and year first above written.
THE COMMON SEAL OF )
CYOP SYSTEMS INC. )
was hereunto affixed in the presence of: )
) c/s
(signed) )
--------
Authorized Signatory )
CYOP SYSTEMS INC. SHAREHOLDERS:
------------------------------
GREENDAY INC.
Per: /s/ Michael W. Taylor
----------------------
Michael W. Taylor, Director
CASKA TRUST JAZZCO TRUST
Per: (signed) Per: (signed)
---------------------- ------------------------
Authorized Signatory Authorized Signatory
LANCASTER ESTATE TRUST
Per: (signed)
Authorized Signatory
/s/ Mitch White /s/ Andrea Rewa Carley
------------------------------- --------------------------
Mitch White Andrea Rewa Carley
THE COMMON SEAL OF )
CYOP SYSTEMS INTERNATIONAL INCORPORATED )
was hereunto affixed in the presence of: )
) c/s
/s/ Keith Ebert, President and Director )
--------------------------------------- )
Keith Ebert )
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SCHEDULE "A"
THE VENDORS AND ALLOCATION OF PURCHASER'S SHARES
NUMBER OF NUMBER OF CYOP SYSTEMS
CYOP SYSTEMS INC. INTERNATIONAL INCORPORATED
NAME OF SHAREHOLDER SHARES OWNED SHARES TO BE RECEIVED
------------------- ------------ ---------------------
Greenday Inc. 8,000,000 4,000,000
Andrea Carley 1,000,000 500,000
Mitch White 1,000,000 500,000
Caska Trust 2,500,000 1,250,000
Jazzco Trust 2,500,000 1,250,000
Lancaster Estate Trust 3,000,000 1,500,000
-----------------------------------------------
TOTALS: 18,000,000 9,000,000