Exhibit 2.5
THIS SHARE REPURCHASE AGREEMENT is made as of the 27th day of March,
2002,
BETWEEN:
SIDEWARE SYSTEMS INC., a corporation validly
subsisting under the laws of the Yukon Territory
and having an office at Suite 200 - 304 Jarvis
Street, Whitehorse, Yukon Territory Y1A 2H2
("Sideware")
AND:
SYD ENTERPRISES LTD., a company validly subsisting
under the laws of British Columbia and having an
office at Suite 1620 - 777 Dunsmuir Street,
Vancouver, British Columbia V7Y 1K4
(the "Vendor")
AND:
CHALK MEDIA CORP., a company validly subsisting
under the laws of British Columbia and having an
office at Suite 1600 - 777 Dunsmuir Street,
Vancouver, British Columbia V7Y 1K4
(the "Purchaser")
WHEREAS:
A. In accordance with the Share Purchase Agreement, in payment
and satisfaction of the purchase price payable by the Purchaser to the
Vendor for the 21,925,050 Chalk.com Holding Common Shares purchased and
sold thereunder, the Purchaser allotted and issued the Vendor's Chalk
Media Common Shares to the Vendor;
B. The Vendor and the Purchaser have agreed that the Purchaser
shall have the right to repurchase the Vendor's Chalk Media Common
Shares upon the terms and conditions of this Agreement;
C. The Vendor is a wholly owned subsidiary of Sideware; and
D. Sideware has agreed to become a party to this Agreement for
the purposes of making certain representations and warranties to the
Purchaser and providing certain covenants and agreements to the
Purchaser.
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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 and phrases shall have the following meanings:
(a) "Agreement" means this agreement, including the Schedule hereto,
and all amendments made hereto by written agreement between
Sideware, the Vendor and the Purchaser;
(b) "Chalk.com Holding" means Chalk.com Network (Holding) Corporation,
a corporation validly subsisting under the laws of the State of
Delaware, USA having its registered office in the State of
Delaware c/o Corporation Trust Centre, 1209 Orange Street,
Wilmington, Delaware, USA 19801, County of New Castle;
(c) "Chalk.com Holding Common Shares" means the shares of Common Stock
with a par value of $0.0001 in the capital of Chalk.com Holding;
(d) "Chalk Media Common Shares" means the Common Shares without par
value in the capital of the Purchaser;
(e) "Encumbrance" means any mortgage, charge, pledge, security
interest, lien, encumbrance, action, claim, demand and equity of
any nature whatsoever or howsoever arising and any rights or
privileges capable of becoming any of the foregoing;
(f) "GST" means goods and services tax levied under Part IX of the
Excise Tax Act (Canada);
(g) "Income Tax Act" means the Income Tax Act (Canada), as amended
from time to time;
(h) "Person" includes a firm, corporation or other entity;
(i) "Share Purchase Agreement" means the agreement made as of the 27th
day of March, 2002 between Sideware, the Vendor and the Purchaser
pursuant to which, among other things, the Vendor sold and the
Purchaser purchased 21,925,050 Chalk.com Holding Common Shares
for a purchase price of $2,000,003 US which was paid and
satisfied in full by the allotment and issuance to the Vendor of
21,925,050 Chalk Media Common Shares and warrants to purchase an
additional 500,000 Chalk Media Common Shares;
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(j) "Social Services Tax" means social services tax levied under the
SOCIAL SERVICE TAX ACT (British Columbia);
(k) "Vendor's Chalk Media Common Shares" means the 21,925,050 Chalk
Media Common Shares allotted and issued to the Vendor pursuant to
the Share Purchase Agreement and which are to be sold by the
Vendor and purchased by the Purchaser in accordance with this
Agreement; and
(l) "Vendor's Solicitors" means barrister and solicitor or firm of
barristers and solicitors specified from time to time by the
Vendor in accordance with section 3.05 as its solicitors for the
purposes of this Agreement.
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
Province of British Columbia and all disputes arising under this
Agreement shall be referred to the Courts of the Province of British
Columbia.
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Severability of Clauses
1.07 In the event that any provision of this Agreement or any part
thereof is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Currency
1.08 All sums of money to be paid or calculated pursuant to this
Agreement shall be paid or calculated in currency of the United States
of America unless otherwise expressly stated.
Statutes
1.09 Unless otherwise stated, any reference to a statute includes
and is a reference to such statute and to the regulations made pursuant
thereto, with all amendments made thereto and in force from time to
time, and to any statute or regulations that may be passed which
supplement or supersede such statute or such regulations.
No Contra Proferentum
1.10 The language in all parts of this Agreement shall in all
cases be construed as a whole and neither strictly for nor strictly
against any of the parties.
Schedules
1.11 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" Purchase Notice
ARTICLE 2
PURCHASE AND SALE OF THE VENDOR'S CHALK MEDIA COMMON SHARES
Purchase and Sale
2.01 Upon the terms and conditions of this Agreement, the Vendor
hereby agrees to sell and the Purchaser agrees to purchase some or all
of the Vendor's Chalk Media Common Shares free and clear of all liens,
charges and Encumbrances whatsoever.
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Purchase Price for the Vendor's Chalk Media Common Shares
2.02 The purchase price payable by the Purchaser to the Vendor for
each of the Vendor's Chalk Media Common Shares purchased by the Vendor
pursuant to this Agreement shall be $0.09122 US.
Payment of Purchase Price
2.03 The purchase price payable by the Purchaser for each of the
Vendor's Chalk Media Common Shares purchased by the Vendor pursuant to
this Agreement shall be paid and satisfied in full by way of bank draft,
certified cheque, solicitor's trust cheque or wire transfer concurrently
with the delivery to the Purchaser by the Vendor of the share
certificates representing such shares.
Initial Purchase of Vendor's Chalk Media Common Shares
2.04 The Vendor hereby agrees to sell and the Purchaser agrees to
purchase, concurrently with the execution and delivery of this
Agreement, 3,300,000 of the Vendor's Chalk Media Common Shares free and
clear of all liens, charges and Encumbrances whatsoever for the purchase
price of be $0.09122 US per share or $301,026.00 US in the aggregate.
Upon execution and delivery of this Agreement:
(a) the Vendor will deliver to the Purchaser a share certificate or
certificates representing 3,300,000 Chalk Media Common Shares duly
registered in the name of the Vendor and endorsed for transfer to
the Purchaser; and
(b) the Purchaser will deliver to the Vendor the sum of $301,026.00 US
by way of bank draft, certified cheque, solicitor's trust cheque
or wire transfer.
Subsequent Purchases of Vendor's Chalk Media Common Shares
2.05 The Purchaser may, in its sole discretion, elect to purchase
any or all of the remaining 18,625,050 Vendor's Chalk Media Common
Shares at any time and from time to time prior to 5 p.m. (local time in
Vancouver, British Columbia) on July 19, 2002 by delivering to the
Vendor the following:
(a) a purchase notice, in the form attached to this Agreement as
Schedule "A", specifying the number of Vendor's Chalk Media Common
Shares that the Purchaser is electing to purchase; and
(b) subject to the following proviso, the full purchase price of
$0.09122 US for each of the Vendor's Chalk Media Common Shares
being purchased in accordance with the Purchase Notice, by way of
bank draft, certified cheque, solicitor's trust cheque or wire
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transfer; provided, however, that the Purchaser may, in its sole
discretion, elect to forward the purchase price payable for the
Vendor's Chalk Media Common Shares being purchased in accordance
with the Purchase Notice to the Vendor's Solicitors upon
undertakings not to release the same to the Vendor until such time
as the Vendor has provided to the Purchaser a share certificate or
certificates representing that number of Chalk Media Common Shares
specified in the Purchase Notice, duly registered in the name of
the Vendor and endorsed for transfer to the Purchaser.
The Vendor shall, forthwith following receipt of a Purchase Notice,
deliver to the Purchaser a share certificate or certificates
representing that number of Chalk Media Common Shares specified in the
Purchase Notice, duly registered in the name of the Vendor and endorsed
for transfer to the Purchaser.
Termination of Purchaser's Right to Purchase
2.06 Effective at 5 p.m. (local time in Vancouver, British
Columbia) on July 19, 2002, the Purchaser's right to purchase any of the
Vendor's Chalk Media Common Shares which the Purchaser has not elected
to purchase pursuant to a Purchase Notice delivered to the Vendor prior
to 5 p.m. (local time in Vancouver, British Columbia) on July 19, 2002
shall cease and terminate and be of no further force or effect. For
greater certainty, if the Purchaser delivers a Purchase Notice to the
Vendor prior to 5 p.m. (local time in Vancouver, British Columbia) on
July 19, 2002 and concurrently tenders to the Vendor or the Vendor's
Solicitors the full purchase price of $0.09122 US for each of the
Vendor's Chalk Media Common Shares being purchased in accordance with
the Purchase Notice by way of bank draft, certified cheque, solicitor's
trust cheque or wire transfer, there shall be a binding contract between
the Vendor and the Purchaser for that number of the Vendor's Chalk Media
Common Shares specified in the Purchase Notice notwithstanding that the
purchase and sale of such shares shall not have been completed prior to
5 p.m. (local time in Vancouver, British Columbia) on July 19, 2002.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE VENDOR AND SIDEWARE
Representations and Warranties
3.01 The Vendor and Sideware hereby jointly and severally
represent and warrant to the Purchaser, with the intent that the
Purchaser shall rely thereon in entering into this Agreement and in
concluding the transactions contemplated hereby, that:
(a) the Vendor has full power, authority, right and capacity to enter
into this Agreement on the terms and conditions herein contained,
to sell, assign and transfer the legal and beneficial title to
the Vendor's Chalk Media Common Shares to the Purchaser, to carry
out the transactions contemplated hereby and to duly observe and
perform all of its covenants and obligations under this
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Agreement. The Vendor and its board of directors and Sideware, as
the sole shareholder of the Vendor, have taken all necessary or
desirable actions, steps and corporate and other proceedings to
approve or authorize, validly and effectively, the entering into,
the execution, delivery and performance of this Agreement and the
sale and transfer of the Vendor's Chalk Media Common Shares by the
Vendor to the Purchaser;
(b) Sideware has full power, authority, right and capacity to enter
into this Agreement on the terms and conditions herein contained,
to carry out the transactions contemplated hereby and to duly
observe and perform all of its covenants and obligations under
this Agreement. Sideware and its shareholders and board of
directors have taken all necessary or desirable actions, steps and
corporate and other proceedings to approve or authorize, validly
and effectively, the entering into, the execution, delivery and
performance of this Agreement;
(c) this Agreement has been duly and validly executed and delivered
by each of the Vendor and Sideware and constitutes a legal, valid
and binding obligation of each of the Vendor and Sideware
enforceable in accordance with its terms;
(d) the Vendor presently owns the Vendor's Chalk Media Common Shares
as the registered and beneficial owner thereof and will, on the
date of closing of the sale to the Purchaser of any of the
Vendor's Chalk Media Common Shares in accordance with this
Agreement, own such shares as the registered and beneficial owner
thereof, free and clear of any Encumbrance whatsoever and:
(i) the Vendor does not presently and will not on the date of
closing of the sale to the Purchaser of any of the
Vendor's Chalk Media Common Shares have any liability or
indebtedness, whether disclosed or undisclosed, absolute
or contingent, to any Person which constitutes, or may
constitute, by operation of law or otherwise, an
Encumbrance on any of the Vendor's Chalk Media Common
Shares; and
(ii) 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 to acquire the Vendor's Chalk Media Common Shares,
or any of them;
(e) each of the Vendor and Sideware are resident within Canada within
the meaning of the Income Tax Act; and
(f) the performance by the Vendor and Sideware of this Agreement will
not be in violation of any agreement to which either the Vendor or
Sideware is a party.
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Representations and Warranties in Closing Documents
3.02 All statements contained in any certificate or other
instrument delivered by or on behalf of the Vendor or Sideware pursuant
hereto or in connection with the transactions contemplated hereby shall
be deemed to be representations and warranties by the Vendor and
Sideware under this Agreement.
Survival of Representations and Warranties
3.03 The representations and warranties of the Vendor and Sideware
contained in this Article 3 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.
Vendor to Remain Canadian Resident
3.04 The Vendor and Sideware jointly and severally covenant and
agree with the Purchaser that the Vendor will take no steps and
proceedings prior to July 20, 2007 pursuant to which the Vendor would
become a non-resident of Canada for the purposes of the Income Tax Act.
Vendor's Solicitors
3.05 The Vendor shall, concurrently with the execution and
delivery of this Agreement, provide the Purchaser with a written notice
specifying the name and address of a barrister and solicitor or firm of
barristers and solicitors who shall act as the Vendor's solicitors for
the purposes of this Agreement. If, prior to July 20, 2002, the Vendor
wishes to change the Vendor's Solicitors, the Vendor shall provide the
Purchaser with a written notice specifying the name and address of the
new barrister and solicitor or firm of barristers and solicitors that
will act as the Vendor's Solicitors.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Representations and Warranties
4.01 The Purchaser hereby represents and warrants to the Vendor
and Sideware, with the intent that they shall rely thereon in entering
into this Agreement and in concluding the transactions contemplated
hereby, that:
(a) the Purchaser is a company duly incorporated, validly subsisting
and in good standing under the laws of British Columbia;
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(b) the Purchaser has full power, authority, right and capacity to
enter into this Agreement and to carry out the transactions
contemplated hereby and to duly observe and perform all of its
covenants and obligations herein set forth; and
(c) this Agreement has been duly and validly executed and delivered by
the Purchaser and constitutes a legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as may be limited by laws of
general application affecting the rights of creditors.
Survival
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 Vendor and Sideware thereafter, notwithstanding any independent
enquiry or investigation by the Vendor or Sideware.
Indemnity
4.03 The Purchaser covenants to indemnify and hold harmless the
Vendor and Sideware 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
GENERAL PROVISIONS
Notices
5.01 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 or mailed postage prepaid addressed as
follows:
To Sideware:
Sideware Systems Inc.
Suite 200 - 304 Jarvis Street
Whitehorse, Yukon Territory Y1A 2H2
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To the Vendor:
Syd Enterprises Ltd.
Suite 1620 - 777 Dunsmuir Street
Vancouver, British Columbia V7Y 1K4
To the Purchaser:
Chalk Media Corp.
Suite 1600 - 777 Dunsmuir Street
Vancouver, British Columbia V7Y 1K4
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 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.
Non-Merger
5.02 Notwithstanding the completion of the transactions
contemplated by this Agreement, the waiver of any condition contained
herein (unless such waiver expressly releases a party of any such
representation, warranty, covenant or agreement) or any investigation
made by any of the parties, the representations, warranties, covenants
and agreements of the parties set forth in this Agreement shall survive
the Closing and will remain in full force and effect.
Time of Essence
5.03 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
5.04 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
5.05 This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and shall supersede
all previous expectations, understandings, communications,
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representations and agreements whether verbal or written between the
parties with respect to the subject matter hereof.
Further Assurances
5.06 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.
Amendments
5.07 No amendment to this Agreement shall be valid unless it is
evidenced by a written agreement executed by all of the parties hereto.
Legal and Other Expenses
5.08 Each party shall be responsible for their own legal and other
fees, inclusive of GST and Social Service Tax, which may be incurred in
contemplation of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement
as of the day and year first above written.
SIDEWARE SYSTEMS INC.
Per: /s/ James L Speros
Authorized Signatory
SYD ENTERPRISES LTD.
Per: /s/ James L. Speros
Authorized Signatory
CHALK MEDIA CORP.
Per: /s/ Grant Sutherland
Authorized Signatory
Schedule "A"
Purchase Notice
TO: SYD ENTERPRISES LTD. (the "Vendor")
The undersigned, Chalk Media Corp. (the "Purchaser") hereby gives
formal notice, in accordance with subsection 2.05(a) of the Share
Purchase Agreement (the "Agreement") made as of the 27th day of March,
2002 between Sideware Systems Inc., the Vendor and the Purchaser, that
the Purchaser is electing to purchase _______________ of the Vendor's
Chalk Media Common Shares (as that term is defined in the Agreement)
free and clear of all liens, charges and encumbrances whatsoever for the
purchase price of be $0.09122 US per share or $______________US in the
aggregate. The Purchaser also confirms that:
[select the appropriate option]
1. A [bank draft, certified cheque, solicitor's trust cheque] payable
to the Vendor for the full purchase price of $______________ US payable
for all of the Vendor's Chalk Media Common Shares being purchased in
accordance with this Purchase Notice is enclosed herewith.
OR
2. The Purchaser has forwarded the full purchase price of
$______________ US payable for all of the Vendor's Chalk Media Common
Shares being purchased in accordance with this Purchase Notice to the
Vendor by wire transfer.
OR
3. The Purchaser has forwarded the full purchase price of
$______________ US payable for all of the Vendor's Chalk Media Common
Shares being purchased in accordance with this Purchase Notice to the
Vendor's Solicitors (as that term is defined in the Agreement), the law
firm of ________________________________, by [bank draft, certified
cheque, solicitor's trust cheque, wire transfer] upon undertakings not
to release the same to the Vendor until such time as the Vendor has
provided to the Purchaser a share certificate or certificates
representing the number of Vendor's Chalk Media Common Shares specified
in this Purchase Notice, duly registered in the name of the Vendor and
endorsed for transfer to the Purchaser.
Dated this ____ day of ____________________, 2002.
CHALK MEDIA CORP.
Per:
Authorized Signatory