Exhibit 2.1
SHARE PURCHASE AGREEMENT
Dated the 22nd day August, 2000
JAWS ACQUISITION CANADA CORP.
- AND -
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JAWS TECHNOLOGIES, INC.
- AND -
THE SHAREHOLDERS OF BETACH SYSTEMS INC.
- AND -
THE SHAREHOLDERS OF BETACH ADVANCED SOLUTIONS INC.
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TABLE OF CONTENTS
Page Number
ARTICLE 1.
INTERPRETATION
Section 1.1 DEFINITIONS 1
Section 1.2 EXPANDED MEANINGS 4
Section 1.3 ENTIRE AGREEMENT 5
Section 1.4 HEADINGS AND TABLE OF CONTENTS 5
Section 1.5 SEVERABILITY 5
Section 1.6 NOT A BUSINESS DAY 5
Section 1.7 CONSENTS AND APPROVALS 6
Section 1.8 SCHEDULES 6
ARTICLE 2.
PURCHASE AND SALE
Section 2.1 PURCHASE AND SALE 6
ARTICLE 3.
PAYMENT
Section 3.1 PAYMENT OF PURCHASE CONSIDERATION 6
Section 3.2 WAIVER OF EXCHANGE PUT RIGHT 7
Section 3.3 ESCROW PROVISIONS 7
Section 3.4 INCOME TAX ELECTIONS 8
Section 3.5 RELEASE FOR BETACH EMPLOYEES 8
ARTICLE 4.
REPRESENTATIONS
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Section 4.1 REPRESENTATIONS OF THE VENDORS 8
Section 4.2 REPRESENTATIONS OF THE REMAINING VENDORS 14
Section 4.3 REPRESENTATIONS OF THE PURCHASER AND JAWS 14
ARTICLE 5
COVENANTS
Section 5.1 COVENANTS OF THE VENDORS 16
Section 5.2 COVENANTS OF THE PURCHASER AND JAWS 17
ARTICLE 6.
NO MERGER AND SURVIVAL
Section 6.1 NON-MERGER 18
Section 6.2 SURVIVAL 18
ARTICLE 7.
INDEMNITY
Section 7.1 INDEMNITY 18
ARTICLE 8.
PRE-CLOSING MATTERS
Section 8.1 COVENANTS OF THE VENDORS 19
Section 8.2 COVENANTS OF THE PURCHASER 19
Section 8.3 EXAMINATION AND INVESTIGATION BY PURCHASER 20
Section 8.4 EXAMINATION AND INVESTIGATION BY VENDORS 20
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Section 8.5 CORPORATIONS'S FINANCIAL STATEMENTS 20
Section 8.6 PURCHASER'S FINANCIAL STATEMENTS 20
ARTICLE 9.
NON-DISCLOSURE AND USE OF INFORMATION
Section 9.1 USE OF CORPORATIONS'S INFORMATION 21
Section 9.2 USE OF PURCHASER'S INFORMATION 22
Section 9.3 PRESS RELEASES 23
ARTICLE 10.
CONDITIONS PRECEDENT TO THE PERFORMANCE UNDER THIS AGREEMENT
Section 10.1 PURCHASER'S CONDITIONS 23
Section 10.2 VENDORS' CONDITIONS 26
Section 10.3 RIGHTS OF THE PURCHASER 26
Section 10.4 RIGHTS OF THE VENDORS 26
Section 10.5 RIGHTS OF TERMINATION 27
ARTICLE 11.
CLOSING
Section 11.1 PLACE OF CLOSING AND CLOSING TIME 27
Section 11.2 DELIVERIES BY VENDORS 27
Section 11.3 DELIVERIES OF PURCHASER AT CLOSING 28
Section 11.4 CLOSING ESCROW 28
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ARTICLE 12.
MISCELLANEOUS
Section 12.1 GOVERNING LAW AND ATTORNMENT 28
Section 12.2 TIME OF THE ESSENCE 29
Section 12.3 NOTICES 29
Section 12.4 PRIOR AGREEMENTS 29
Section 12.5 FURTHER ASSURANCES 30
Section 12.6 ENUREMENT 30
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SHARE PURCHASE AGREEMENT
THIS AGREEMENT made the 22nd day of August, 2000.
BETWEEN:
JAWS ACQUISITION CANADA CORP.
a corporation incorporated under the
laws of the Province of Alberta, Canada.
(herein called the "Purchaser")
- and -
JAWS TECHNOLOGIES, INC.
a corporation incorporated under the
laws of the State of Delaware, U.S.A.,
(herein called "JAWS")
- and -
THE PARTIES HEREIN DEFINED
AS AND WHO EXECUTE THIS AGREEMENT AS THE
VENDORS (herein called the "Vendors")
WHEREAS the Vendors wish to sell and convey their respective Vendors's
Rights to the Purchaser and the Purchaser wishes to purchase and receive such
Vendors's Rights from the Vendors in exchange for the Purchase Consideration.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
premises hereto and the mutual covenants, warranties, representations,
agreements and payments herein set forth, the Parties hereto agree as follows:
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ARTICLE 1.
INTERPRETATION
Section 1.1 DEFINITIONS
In this Agreement, including the premises hereto, this clause and any
Schedules hereto, the words and phrases set forth below shall have the meaning
ascribed thereto below, namely:
"Business Day" means a day other than a Saturday or Sunday or a statutory
holiday in the City of Calgary, in the Province of Alberta.
"Closing Date" means August 21, 2000 or such other date as the parties may
mutually determine.
"Closing Time" means 10:00 a.m. on the Closing Date or as agreed upon by the
parties.
"Corporations" means both, jointly and severally, Betach Systems Inc., and
Betach Advanced Solutions Inc.
"Corporations's Assets" means all the Property owned or held by the Corporations
or to which the Corporations are entitled as more particularly described in
Schedule "A".
"Corporations's Financial Statements" means the most recent unaudited financial
statements of the Corporations dated o, a copy of which are attached hereto as
Schedule "B".
"Corporations's Shares" means the common voting shares in the capital of the
Corporations, as the same exist at the date hereof and at the Closing Date.
"Earnout Provisions" means the provisions set out in Schedule F attached hereto;
"Escrow Agent" means Montreal Trust Company of Canada;
"Escrow Agreement" means the escrow agreement between JAWS, the Purchaser, Randy
Walinga, Soon Chong, Lawrence Gordey and the Escrow Agent, dated as of the
Closing Date;
"Exchangeable Shares" means the exchangeable shares of the Purchaser, which
shares have the rights, privileges, restrictions and conditions as more
particularly set out in Schedule "D" attached hereto, to be issued by the
Purchaser as the Purchase Consideration.
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"JAWS" means JAWS Technologies, Inc., a Delaware Corporation, whose common
shares trade on the NASDAQ National Board in the United States of America.
"JAWS Shares" means a total of 1,120,000 common shares in the capital stock of
JAWS that are tradeable on the NASDAQ National Board, to be issued by JAWS in
exchange for the Exchangeable Shares.
"Party" or "Parties" means a party or parties to and bound by this Agreement.
"Permitted Encumbrances" means, in respect of the Corporations's Assets, the
encumbrances set out in Schedule "C" hereto or as the case may be:
(a) inchoate liens, taxes, assessments or governmental charges which are
due or which are not delinquent; and
(b) inchoate liens incurred or created in the ordinary course of
business as security in favour of any other person who is conducting
the development or operation of the property to which such liens
relate for the Corporations's or the Purchaser's share of the costs
and expenses of such development or operation, as the case may be,
the payment of which is not then due;
"Person" means any individual, corporation, body corporate, partnership, joint
venture, association, group, trust, or other legal entity and includes any duly
constituted government of or in Canada and any minister, department, commission,
board, bureau, agency, authority, instrumentality or court and the like of any
such government.
"Property" means the interests of the Corporations, the Purchaser or JAWS, as
the case may be, in and to all property, assets and rights, including, without
limiting the generality of the foregoing, the entire interest of such Party in
and to:
(a) all contracts, agreements, documents, production sales contracts,
books, records and reports relating to the provision of products and
services to its customers and any and all rights in relation
thereto;
(b) all intellectual property and rights developed, acquired or
incorporated into the products and services of the Corporations, the
Purchaser or JAWS, as the case may be, or purchased in the course of
carrying on the business of the Corporations, the Purchaser or JAWS,
as the case may be.
"Purchaser" means Jaws Acquisition Canada Corp., an Alberta Corporation and a
wholly owned subsidiary of JAWS, whose articles of incorporation include a class
of exchangeable shares that are exchangeable into common shares in the capital
stock of JAWS.
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"Purchase Consideration" means:
(1) 1,120,000 Exchangeable Shares to be issued on the Closing Date subject
to Section 3.2; and
(2) 400,000 Warrants to be issued on the Closing Date.
"Purchaser's Assets" means the Property owned or held by the Purchaser or JAWS
Technologies, Inc.;
"Regulations" means all applicable statutes, laws, rules, orders, regulations,
directives or other instruments (and all applicable requirements thereunder) of
any governmental agencies or authorities in the United States of America or
Canada having jurisdiction over the Parties, the Corporations, the
Corporations's Assets, or the specific property or matter in question, in effect
from time to time.
"Registration Right" means the Vendors right to have 373,333 JAWS Shares
registered, in a registration statement Form S-1 pursuant to the Securities Act,
1933 (United States), within 90 days of the Closing Date.
"Support Agreement" means the support agreement between JAWS and the Purchaser,
dated August 15, 2000;
"Vendors" mean:
Stephanie Muzyka;
Lawrence Gordey;
Randy Walinga;
Soon Chong;
Suriya Chong;
Mary Muzyka; and
Roxanne Gordey
"Vendors's Rights" means, in respect of a Vendor, all:
(a) the Vendors's Shares,
(b) amounts owing to the Vendors, by the Corporations, whether presently
due or otherwise, except those amounts listed in Schedule "C"; and
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(c) rights to acquire any securities of the Corporations, from the
Corporations or from any other Person, howsoever granted or
acquired.
"Vendors's Shares" means, in respect of the Vendors, all the issued and
outstanding shares of the Corporations owned by the Vendors, or to which the
Vendors are entitled, at the Closing Date, as follows:
Betach Systems Inc.:
Stephenie Muzyka - 100 Class "A" Voting Shares
Randy Walinga - 100 Class "A" Voting Shares
Lawrence Gordey - 100 Class "A" Voting Shares
Soon Chong - 100 Class "A" Voting Shares
Betach Advanced Solutions Inc.
Randy Walinga - 150 Class "A" Voting Shares;
Suriya Chong - 150 Class "A" Voting Shares;
Roxanne Gordey - 150 Class "A" Voting Shares;
Mary Muzyka - 150 Class "A" Voting Shares;
"Voting and Exchange Trust Agreement" - means the voting and exchange trust
agreement between JAWS, the Purchaser and Montreal Trust Company of Canada,
dated August 11, 2000;
"Warrants" - means the 400,000 JAWS warrants issued with cashless exercise
provisions to the Vendors on the Closing Date as part of the Purchase
Consideration. Each Warrant is exercisable at $5.07 USD for one share in the
common stock of JAWS and expires on the 5th anniversary of the Closing Date.
Section 1.2 EXPANDED MEANINGS
Unless the context otherwise necessarily requires, the
following provisions shall govern the interpretation of this Agreement:
1.2.1 words used herein importing the singular number only shall
include the plural and vice versa, and words importing the use
of any gender shall include all genders;
1.2.2 the terms "in writing" or "written" include printing,
typewriting, or any electronic means of communication by which
words are capable of being visually reproduced at a distant
point
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of reception, including by telecopier or telex;
1.2.3 references herein to any agreement or instrument, including
this Agreement, shall be deemed to be references to the
agreement or instrument as varied, amended, modified,
supplemented or replaced from time to time, and any specific
references herein to any enactment shall be deemed to be
references to such enactment as the same may be amended or
replaced from time to time; and
1.2.4 "this Agreement" "the Agreement" "hereto", "herein", "hereby",
"hereunder", "hereof" and similar expressions refer to this
Share Purchase Agreement and not to any particular Article,
Section, Subsection, clause, subdivision or other portion
hereof and include any and every instrument amending,
supplementing or replacing this agreement.
Section 1.3 ENTIRE AGREEMENT
This Agreement and all schedules attached hereto together with the
agreements and other documents to be executed and delivered pursuant hereto,
constitute the entire agreement between the Parties and supersedes all other
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties and there are no warranties, representations, covenants
or other agreements between the Parties except as specifically set forth herein.
No supplement, modification or waiver or termination of this Agreement shall be
binding unless executed in writing by the Party to be bound thereby. No waiver
of any of the provisions of this Agreement shall be valid unless in writing and
no such waiver shall constitute nor be deemed to constitute a waiver of any
other provisions (whether or not similar) nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
Section 1.4 HEADINGS AND TABLE OF CONTENTS
The division of this Agreement into articles, sections and other
subdivisions, the provision of a table of contents and the insertion of headings
are for convenience of reference only and shall not affect or be utilized in the
construction or interpretation hereof.
Section 1.5 SEVERABILITY
If any one or more of the provisions or parts thereof contained in this
Agreement should be or become invalid, illegal or unenforceable in any respect
in any jurisdiction, the remaining provisions or parts thereof contained herein
shall be and shall be conclusively deemed to be, as to such jurisdiction,
severable therefrom and:
1.5.1 the validity, legality or enforceability of such remaining
provisions or parts thereof shall not in any way be affected
or impaired by the severance of the provisions or parts
thereof severed; and
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1.5.2 the invalidity, illegality or unenforceability of any
provision or any part thereof contained in this Agreement in
any jurisdiction shall not effect or impair such provision or
part thereof or any other provisions of this Agreement in any
other jurisdiction.
Section 1.6 NOT A BUSINESS DAY
In the event that any day on or before which any action is required to
be taken hereunder is not a Business Day, then such action shall be required to
be taken on or before the requisite time on the next succeeding day that is a
Business Day.
Section 1.7 CONSENTS AND APPROVALS
It shall be a condition hereof that any consent or approval of any
Party hereto, required hereby, shall be obtained in writing prior to the event
for which it is required.
Section 1.8 SCHEDULES
The following are the Schedules referred to and incorporated in this
Agreement, which are deemed to be a part hereof:
Schedule "A" - Corporations's Assets
Schedule "B" - Corporations's Financial Statements
Schedule "C" - Permitted Encumbrances & Liabilities
Schedule "D" - Provisions Attaching to the Exchangeable Shares
Schedule "E" - Earnout Provisions
ARTICLE 2.
PURCHASE AND SALE
Section 2.1 PURCHASE AND SALE
Subject to the terms and conditions of this Agreement, the Vendors
hereby sell, assign, transfer and convey to the Purchaser and the Purchaser
hereby purchases and acquires from the Vendors the Vendors's Rights, effective
as of the Closing Date, to have and hold the same together with all benefits and
advantages to be derived therefrom, absolutely, subject only to the terms and
conditions of this Agreement, at and for the Purchase Consideration.
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ARTICLE 3.
PAYMENT
Section 3.1 PAYMENT OF PURCHASE CONSIDERATION
3.1.1 Purchase Consideration - Subject to Article 3.2, the
Purchase Consideration shall be payable by the Purchaser
to the Vendors by:
3.1.1.1 the issuance to the Vendors of 1,120,000
Exchangeable Shares issued on the Closing Date at a
price of $5.07 USD per share and to be released in
accordance with the table set out below and subject
to section 3.2; and
Vendors # of shares to be # of shares to be Total
released on the released 12 months
Closing Date after the Closing Date
Stephanie Muzyka 172413 84920 257333
Randy Walinga 187600 92400 280000
Soon Chong 172413 84920 257333
Lawrence Gordey 172413 84920 257333
Suriya Chong 15187 7480 22667
Roxanne Gordey 15187 7480 22667
Mary Muzyka 15187 7480 22667
Total 1120000
3.1.1.2 the issuance of the Warrants on the Closing Date in
accordance with the table set out below:
Vendors # of Warrants to be released on the Closing Date
Stephanie Muzyka 100000
Randy Walinga 100000
Soon Chong 100000
Lawrence Gordey 100000
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Section 3.2 WAIVER OF EXCHANGE PUT RIGHT
Each of the Vendors hereby waives their right as a Holder, as defined
in the Voting and Exchange Trust Agreement, to exercise the Exchange Put Right
contained in Section 5.1(a) of the Voting and Exchange Trust Agreement and
section 8.1 of the share capital provisions attaching to the Exchangeable Shares
contained in the Articles of Incorporation of the Purchaser.
Section 3.3 ESCROW PROVISIONS
3.3.1 Exchangeable Share Releases - Upon notice being provided
to the Escrow Agent, the Exchangeable Shares to be
released to Randy Walinga, Soon Chong and Lawrence Gordey
on the first (1st) 12 month anniversary of the Closing
Date in accordance with the provisions of section
3.1.1.1, shall be released subject to their being
employed by JAWS, or a subsidiary of JAWS, the earnout
provisions of Schedule "E" and subject to the terms of
the Escrow Agreement. If Randy Walinga, Soon Chong and
Lawrence Gordey are not employed by JAWS, or a subsidiary
of JAWS on the first (1st) anniversary of the Closing
Date, the shares shall be released in accordance with
Schedule "E".
3.3.2 Release from Escrow - All other Exchangeable Shares shall
be released in accordance with the terms of the earnout
provisions set out in Schedule "E" attached hereto.
3.3.3 Release from Escrow - Termination without cause - If
Lawrence Gordey, Randy Walinga or Soon Chong, or any or
all of them are terminated without cause from their
employment with JAWS, or a subsidiary of JAWS, all the
Exchangeable Shares shall be released in accordance with
Schedule "E" or if not released sooner, on the second
(2nd) anniversary of the Closing Date.
Section 3.4 INCOME TAX ELECTIONS
The Purchaser hereby agrees, at the request of the Vendors, to jointly
elect with the Vendors under subsection 85(1) of the Income Tax Act (Canada), in
the prescribed form and within the time referred to in subsection 85(6) of the
Act, with respect to the purchase and sale of the Vendors Shares and for the
purposes of such election, the agreed amount in respect of each of the Vendors
Shares shall be an amount specified by the applicable Vendor provided that such
amount is within the parameters set forth in the Act.
Section 3.5 RELEASE FOR BETACH EMPLOYEES
Notwithstanding section 3.1, the Purchaser hereby agrees that, at the
request of the Vendors, up to 170,688 Exchangeable Shares shall be transferable
by the Vendors to the prior employees of Betach
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Systems Inc., or Betach Advanced Solutions or a corporation owned by them and
the Vendors. The Exchangeable Shares to be transferred shall be transferred in
the same proportion as set out in Section 3.1.1 as to the release of such
Exchangeable Shares. The escrow provisions set out in section 3.3 shall not
apply to these Exchangeable Shares. These shares shall be subject to the
earn-out provisions in Schedule "E".
ARTICLE 4.
REPRESENTATIONS
Section 4.1 REPRESENTATIONS OF THE VENDORS
Each of Lawrence Gordey, Randy Walinga, Soon Chong and Stephanie
Muzyka do hereby separately represent and warrant to the Purchaser and JAWS, in
respect of their Vendors's Rights that:
4.1.1 Restrictions - There are no restrictions in either the charter
documents or the by-laws of the Corporations, each as amended,
nor are there any collateral agreements or rights of first
refusal or other pre-emptive rights of purchase, which would
arise by reason of the execution of this Agreement, completion
of the sale or otherwise and affect the transferability of the
Vendors's Rights from the Vendors to the Purchaser.
4.1.2 Title to the Vendors's Rights - The Vendors each has good and
marketable title to the Vendors's Rights free and clear of any
mortgages, liens, charges, security interests, adverse claims,
pledges, encumbrances, options, pre-emptive rights of purchase
(such as rights of first refusal), restrictions, claims or
demands of any kind or nature whatsoever.
4.1.3 Assets of the Corporations - Other than the Corporations's
Assets and as disclosed in the Corporations's Financial
Statements, the Corporations have no property, assets or
undertakings of any nature or kind whatsoever.
4.1.4 Insurance - During the period from the date of the
Corporations's Financial Statements until the Closing Time:
4.1.4.1 the Corporations's Assets shall be insured by the
Corporations against loss or damage under contracts of
insurance with reputable insurers which insurance is
customary for the Corporations's business for both the
type of coverage and the coverage amount; and
4.1.4.2 all third Party insurable liabilities of the Corporations
shall be insured against on an occurrence basis under the
contracts of insurance.
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4.1.5 Policies of Insurance - In connection with any and all
policies of insurance:
4.1.5.1 neither the Vendors nor the Corporations:
(a) has misrepresented or omitted to disclose to the
insurers thereunder or in connection therewith any
material fact or is in default with respect to any
of the provisions contained in any such insurance
policy,
(b) has failed to give any notice or present any claim
under any such policy in due and timely fashion,
and no such claim is outstanding and in dispute,
4.1.5.2 the Corporations, or the lessor of the equipment
leased by the Corporations, is the named insured
with loss payable to it, or the lessor as the case
may be, on those policies owned by it or obtained
for their benefit; and
4.1.5.3 there is no outstanding request, notice or order
from any insurer for any modification to or
remedial action in respect of any of the insured
assets or premises included in the Corporations's
Assets.
4.1.6 Capital Structure - The authorized share capital of the
Corporations consists of:
4.1.6.1 Betach Systems Inc. - an unlimited number of Class
A Shares, an unlimited number of Class B Shares and
an unlimited number of Class C Shares of which only
400 Class "A" Voting Shares are issued and
outstanding as fully paid and non-assessable. No
securities, options, warrants or other rights to
purchase shares or other securities of the
Corporation have been authorized or agreed to be
issued or are outstanding except as contemplated by
this Agreement.
4.1.6.2 Betach Advanced Solutions Inc. - an unlimited
number of Class A to I Shares, of which 600 Class
"A" Voting Shares and 10,000 Class "G" Non-Voting
Redeemable Preference Shares are issued and
outstanding as fully paid and non-assessable. No
securities, options, warrants or other rights to
purchase shares or other securities of the
Corporation have been authorized or agreed to be
issued or are outstanding except as contemplated by
this Agreement.
4.1.7 Financial Statements of the Corporations - The
Corporations's Financial Statements have been prepared in
accordance with applicable law and generally accepted
accounting principles and present fairly the financial
position as at the dates indicated and the results of
operations of the Corporations for the period indicated
and no material adverse change in such financial position
or such results of operations has occurred since the date
thereof.
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4.1.8 No Undisclosed Liabilities - The Corporations are not
subject to any liability or liabilities, absolute or
contingent, which individually or in the aggregate are
material, and which are not disclosed, or which are in
excess of the amounts disclosed or reserved for in, the
balance sheet of the Corporations or which are not
otherwise disclosed in this Agreement, other than
liabilities of the same nature as those set forth in the
Corporations's Financial Statements or disclosed herein
and reasonably incurred in the usual and ordinary course
of business to the Closing Date, provided that the same
do not materially and adversely affect the financial
position of the Corporations.
4.1.9 Material Contracts - The Corporations are not in default
under any material contract, nor are the Vendors aware of
any default by any other Party under any material
contract, and the Vendors are not aware of any facts or
circumstances which would, with the giving of notice or
the lapse of time, give rise to a default by the
Corporations under a material contract.
4.1.10 Taxes - With respect to its taxes:
4.1.10.1 the Corporations have, at the prescribed times:
(a) filed all tax returns required to be filed by them
in all applicable jurisdictions,
(b) made and remitted all required or desirable
deductions or withholdings at source, and
(c) paid all taxes, levies, assessments, reassessments,
penalties, interest and fines due and payable by
them;
4.1.10.2 all such tax returns properly reflect, and do not in
any respect understate, the taxable income or the
liability for taxes of the Corporations in the
relevant tax year or calendar year;
4.1.10.3 adequate provision has been made in the
Corporations's Financial Statements for all taxes,
governmental charges, and assessments, whether
relating to income, sales, real or personal
property, or other types of taxes, governmental
charges, or assessments, including interest and
penalties thereon, payable in respect of the
business or assets of the Corporations or otherwise,
for all relevant periods;
4.1.10.4 All provincial and federal income tax assessments
have been issued to the Corporations covering all
past periods up to and including the Corporations's
fiscal year ending in December 31, 1999 and any
assessments for stub periods
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thereafter, and such assessments, if any amounts
were owing in respect thereof, have been paid;
4.1.10.5 assessments for all other applicable federal and
Provincial taxes and levies have been issued and any
amounts owing thereunder have been paid;
4.1.10.6 there are no actions, suits or other proceedings or
investigations or claims in progress, pending or, to
the best of the Vendor's knowledge, threatened
against the Corporations in respect of any taxes,
governmental charges, or assessments and, in
particular, there are no currently outstanding
reassessments or written enquiries that have been
issued or raised by any governmental authority
relating to any such taxes, governmental charges and
assessments;
4.1.10.7 to the knowledge of the Vendors, there is no basis
for any adverse reassessment by any taxing authority
for any year remaining open for reassessment; and
4.1.10.8 the Corporations have not waived any statutory
period for assessment of any tax.
Without limiting the generality of the foregoing, the
Corporations are in absolute compliance with all
registration, timely reporting, and remittance
obligations in respect of all Provincial and Federal
sales tax legislation and of any other Provincial or
Federal tax it may be subject to.
4.1.11 No Indebtedness to the Corporations - The Vendors are not
indebted to the Corporations.
4.1.12 Accounts Receivable Collectible - All accounts receivable
are bona fide, good and collectable, without set off or
counterclaim and to the best of the Vendor's knowledge
all such accounts receivable shall be paid in a timely
fashion subject to a reasonable reserve for bad debts.
4.1.13 Amounts In Trust - There are no amounts deposited in
trust, for the benefit of any third party, with the
Corporations as at the date hereof except as listed in
Schedule "C".
4.1.14 No Material Adverse Change - There has been no material
adverse change in the business, assets, liabilities or
financial condition of the Corporations since date of the
Corporations's Financial Statements.
4.1.15 Distributions to Shareholders - Since the date of the
Corporations's Financial Statements, the Corporations
have not declared or made any payment of any dividend
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or other distribution in respect of any shares in its
capital or purchased or redeemed any such shares or
effected any subdivision, consolidation, reclassification
or other modification of its share capital which has not
been approved in writing by the Purchaser prior to the
Closing Date except as required for the re-organization
of Betach Advanced Solutions Inc., as filed on August 18,
2000.
4.1.16 Withholding Amounts - The Corporations have withheld all
amounts required to be withheld, including without
limiting the generality of the foregoing, all amounts
required to be withheld under the Income Tax Act
(Canada), for employment insurance and for the Canada
Pension Plan and any other amounts required by law to be
withheld from any payments made to any of the officers,
directors and employees of the Corporations, and these
witholdings have been or will be paid to the proper
taxing authority or receiving offices.
4.1.17 Corporate Records - The corporate records and minute
books of the Corporations contain all minutes of the
meetings of directors and shareholders of the
Corporations are complete, accurate and up-to-date and
the stock register of the and these documents are
complete and accurate in all material respects.
4.1.18 Breach of Order - The Corporations are not in, and have
not received notice of any, material default under any
order, writ, injunction or decree of any court or
governmental agency or authority having jurisdiction, nor
any agreement or obligation by which the Corporations are
bound or to which they are subject to and which
materially affect or relate to the Corporations.
4.1.19 No Subsidiaries - The Corporations do not have any
ownership interest (either directly or indirectly) in any
other entity, nor is it a party to or bound by any
agreement to acquire such an interest other than as
disclosed herein.
4.1.20 Employees - There are no written employment contracts or
incentive plans in effect between the Corporations and
any employee in respect of which either the Corporations
or the Purchaser shall have any obligations subsequent to
the Closing Date except as noted in Schedule "C".
4.1.21 Guarantee and Indemnity Agreements - The Corporations are
not a party as guarantor or indemnitor to any agreements
of guarantee or indemnity for debts or obligations of the
Vendors or any other person except as between Betach
Systems Inc., and Betach Advanced Solutions Inc.
4.1.22 Debt Instruments - On the Closing Date the Corporations
will not have any outstanding bonds, debentures,
mortgages, notes or other evidence of indebtedness other
than trade debts, trade accounts or similar obligations
entered into in the ordinary course of the Corporations's
business and as listed on Schedule B hereto, and the
Corporations are
NY/301202.1
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not under any obligation to create or issue any bonds,
debentures, mortgages, notes or other indebtedness.
4.1.23 Incentive Payments - To the best knowledge of the
Vendors, the Corporations have not received any
incentives, credits, grants or other governmental
assistance pursuant to the Regulations in effect at the
relevant time which will have to be repaid by the
Corporations, or if accrued in the books and records of
the Corporations, will be disallowed.
4.1.24 Workers' Compensation - All payments due to the Workers
Compensation Board (or similar body in any other
jurisdiction) in respect of the Corporations are current.
4.1.25 Bank Accounts - All information with respect to all
deposits of money with any bank, trust company, treasury
branch or other entity empowered or authorized to receive
and hold deposits of money and includes any and all
deposit certificates or receipts or other instrument of
like tenor, held for or in the name of the Corporations,
have been provided to the Purchaser.
4.1.26 Execution of Agreement - The execution and delivery of
this Agreement and each and every agreement or document
to be executed and delivered hereunder and the
consummation of the transactions contemplated herein will
not violate, nor be in conflict with, any provision of
any agreement or instrument to which the Vendors are a
party or the Corporations are bound, or any judgment,
decree, order, statute, rule or regulation applicable to
the Vendors or the Corporations.
4.1.27 Binding Obligation - This Agreement has been duly
executed and delivered by the Vendors and constitutes
legal, valid and binding obligations of the Vendors
enforceable in accordance with its terms.
4.1.28 Broker's Fees - The Vendors have not incurred any
obligation or liability, contingent or otherwise, for
brokers' or finders' fees in respect of this transaction
for which the Purchaser shall have any obligation or
liability.
4.1.29 Defaults under Statutes - The Corporations have not
received any notices of any breach of any statutes,
regulations, rules, orders and directives, including but
not limited to those pertaining to environmental matters,
of all governmental agencies, departments and authorities
having jurisdiction over the business of the
Corporations.
4.1.30 Operating Records - The books and records of the
Corporations disclose all material transactions entered
into by the Corporations or on their behalf to the
Closing Date.
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4.1.31 Title - The Vendors do not warrant title to the
Corporations's Assets, provided however, the Vendors do
represent and warrant that the Corporations have not done
anything whereby any of the Corporations's interest in
and to the Corporations's Assets may be cancelled or
determined, nor have the Corporations or the Vendors
encumbered or alienated same and the Corporations's
Assets shall be, at the Closing Date, free and clear of
all liens, encumbrances, adverse claims, demands and
royalties created by, through or under the Vendors or the
Corporations except for the Permitted Encumbrances or as
expressly set forth in Schedule "A". Except as otherwise
provided herein, neither the Vendors nor the Corporations
have received notice of any material defect in the
Corporations's title to the Corporations's Assets.
4.1.32 Notices of Default - The Corporations have not received
notices of default relating to the Corporations's Assets
or any of them.
4.1.33 Lawsuits - The Corporations are not a party to any
action, suit or other legal, administrative or
arbitration proceeding or government investigation,
actual or, to the best of the Vendor's knowledge,
threatened, which might reasonably be expected to result
in a material impairment or loss of the Corporations's
interest in the Corporations's Assets or any part thereof
and no particular circumstance, matter or thing has
become known to the Vendors which could reasonably be
anticipated to give rise to any such action, suit or
other legal, administrative or arbitration proceeding or
government investigation.
4.1.34 Financial Commitments - There are no financial
commitments which are outstanding or due, or that
hereafter may become due in respect of the Corporations
or the Corporation's Assets, or operations in respect of
the Corporations's Assets and which shall become the
responsibility of the Purchaser except as disclosed in
Schedule "C".
4.1.35 Pre-emptive Rights - All rights of first refusal or other
pre-emptive rights applicable to any disposition of the
Corporations's Assets have been waived or satisfied in
all respects.
Section 4.2 REPRESENTATIONS OF THE REMAINING VENDORS
Each of Suriya Chong, Roxanne Gordey, and Mary Muzyka do hereby
separately represent and warrant to the Purchaser and JAWS, in respect of their
Vendors's Rights that:
4.2.1 Restrictions - There are no restrictions in either the
charter documents or the by-laws of the Corporations,
each as amended, nor are there any collateral agreements
or rights of first refusal or other pre-emptive rights of
purchase, which would arise by reason of the execution of
this Agreement, completion of the sale or otherwise and
affect the transferability of the Vendors's Rights from
the Vendors to the Purchaser.
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4.2.2 Title to the Vendors's Rights - The Vendors each has good
and marketable title to the Vendors's Rights free and
clear of any mortgages, liens, charges, security
interests, adverse claims, pledges, encumbrances,
options, pre-emptive rights of purchase (such as rights
of first refusal), restrictions, claims or demands of any
kind or nature whatsoever.
Section 4.3 REPRESENTATIONS OF JAWS AND THE PURHASER
JAWS and the Purchaser hereby represent and warrant to the Vendors
in respect of the purchase of the Vendors' Rights that:
4.3.1 Organization of Jaws and The Purchaser - JAWS and the
Purchaser are both corporations duly organized and
existing under the laws of their jurisdiction of
incorporation and the laws of those jurisdictions in
which they are each required to be registered.
4.3.2 Corporate Authority - JAWS and the Purchaser both have
all the requisite power and authority to enter into this
Agreement, to purchase and pay for and accept title to
the Vendors's Rights on the terms described herein and to
perform the Purchaser's and JAWS' other obligations under
this Agreement and they have all necessary corporate
power, authority and capacity to carry on business as it
is now being conducted and to own, lease and operate
properties and assets.
4.3.3 Execution of Agreement - The execution and delivery of
this Agreement and each and every agreement or document
to be executed and delivered hereunder and the
consummation of the transactions contemplated herein will
not violate, nor be in conflict with, any provision of
this Agreement or instrument to which JAWS and the
Purchaser is a party or is bound, or any judgment,
decree, order, statute, rule or regulation applicable to
JAWS and the Purchaser or the constating documents or
bylaws of JAWS or the Purchaser.
4.3.4 Binding Obligation - This Agreement has been duly
executed and delivered by JAWS and the Purchaser and
constitutes a legal, valid and binding obligation of JAWS
and the Purchaser enforceable in accordance with its
terms.
4.3.5 Consent - No consent, approval, permit, authorization,
order of or filing with any court or governmental agency,
or regulatory authority or body of Canada or the United
States or any province of Canada or state of the United
States is required by JAWS or the Purchaser for the
execution and delivery of and the performance by JAWS and
the Purchaser of obligations under this Agreement, except
as may be required under applicable securities laws of
such jurisdiction and by the applicable stock exchange
by-laws, rules and regulations.
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4.3.6 Reporting Issuer - JAWS is, and will at the Closing Date
be a reporting issuer for at least eight (8) months under
the securities laws of the United States of America and
is in material compliance with applicable stock exchange
by-laws, rules and regulations and is not in default in
any material respect of any provision of the Securities
Act of 1933 or any regulation thereof and no material
change relating to JAWS has occurred since the date of
the JAWS' last Securities Act filing with respect to
which the requisite material change report has not been
filed under the applicable securities laws and no such
disclosure has been made on a confidential basis.
4.3.7 Trading Orders - No order ceasing or suspending trading
in securities of the JAWS or prohibiting the sale of
securities by JAWS has been issued and to the best of
JAWS' knowledge, no proceedings for this purpose have
been instituted, are pending, contemplated or threatened.
4.3.8 Dividends - There is not in the articles or by-laws of
JAWS or the Purchaser any restriction upon or impediment
to the declaration or payment of dividends by the
directors of the Purchaser or the payment of dividends by
the Purchaser to the holders of JAWS shares.
4.3.9 JAWS Transfer Agent - US Stock Transfer has been duly
appointed as the transfer agent and registrar for all of
the outstanding JAWS Shares.
4.3.10 JAC Transfer Agent - Montreal Trust Company of Canada has
been duly appointed as the transfer agent and registrar
for all of the outstanding JAC Shares.
4.3.11 Securities Filings - The information and statements set
forth in the documents and information filed by JAWS with
the securities commissions or similar regulatory
authorities in Canada and the United States, as they
relate to JAWS, are, when taken as a whole, true, correct
and complete in all material respects and do not contain
any material misrepresentation, as of the date hereof.
4.3.12 Fully Paid & Non-Assessable - The JAWS and Jac Canada
shares issuable pursuant to this Agreement, when issued,
will be validly issued as fully paid and non-assessable
common shares in the capital of JAWS and exchangeable
shares of Jac Canada.
4.3.13 Resale Restrictions - Upon issue and following
registration in accordance with this Agreement, the JAWS
Shares issuable pursuant to this Agreement will not be
subject to any "hold period" under the securities laws of
Alberta, Ontario or the United States (other than
"control person" restrictions), subject to compliance by
the holder of such shares with the conditions of resale
set forth in applicable securities legislation and to the
terms and conditions contemplated in this Agreement.
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4.3.14 Broker's Fees - Neither JAWS nor the Purchaser have
incurred any obligation or liability, contingent or
otherwise, for brokers' or finders' fees in respect of
this transaction for which the Vendors shall have any
obligation or liability.
ARTICLE 5.
COVENANTS
Section 5.1 COVENANTS OF THE VENDORS
The Vendors hereby separately covenant to and with the Purchaser and
JAWS as follows:
5.1.1 Tax Returns and Other Records - The Vendors shall use
their best efforts to cause cause the Corporations to
deliver to the Purchaser any information, books,
accounts, records, tax returns or other data and
information relating to the Corporations on or as soon
after the Closing Date as reasonably possible.
5.1.2 Filing Tax Information - The Vendors shall use their best
efforts to provide JAWS and the Purchaser with all
information in order for the Corporations to complete and
file on a timely basis all returns, forms and elections
required to be filed by the Corporations in respect of
its taxation year ending immediately before the Closing
Date and assist JAWS and the Purchaser in the filing of
same.
5.1.3 Securities Law Compliance Regarding Purchaser's
Securities Received - The Vendors acknowledges that the
JAWS Shares acquired hereunder may be subject to resale
restrictions under applicable securities legislation and
policies and hereby agrees that the Vendors will comply
with all relevant securities legislation and policies
concerning any resale of such securities and will consult
with the Vendors's own legal advisors with respect to
complying with all applicable restrictions applying to
any such resale. The Vendors agree that the Purchaser
shall legend the JAWS Shares, unless subject to the
Registration Right, as follows: "The securities
represented hereby have not been and will not be
registered under the United States Securities Act of
1933, as amended (the "Securities Act"). These securities
may be offered, sold, pledged or otherwise transferred
only (a) to the corporation, (b) outside the United
States in compliance with Rule 903 or 904 of Regulation S
under the Securities Act, (c) in compliance with the
exemption from the registration requirements under the
Securities Act provided by Rule 144 thereunder, if
available, and in accordance with applicable state
securities laws, or (d) in a transaction that does not
require registration under the Securities Act or any
applicable state laws and regulations governing the offer
and sale of securities, and the holder has, prior to such
sale, furnished to the corporation an opinion of counsel,
of recognized standing, or other evidence of exemption,
reasonably satisfactory to the corporation. Hedging
transactions involving the
NY/301202.1
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securities represented hereby may not be conducted unless
in compliance with the Securities Act."
5.1.4 Compliance for this Trade - If required by applicable
securities legislation, policy or order of any securities
commission, stock exchange or other regulatory authority,
subject always to the conditions precedent contained in
section 10.2 hereof, the Vendors will execute, deliver,
file and otherwise assist the Purchaser in filing, such
reports, undertakings and other documents with respect to
this transaction.
5.1.5 Compliance with Future Stock Exchange Requirements -
Subject always to the conditions precedent contained in
section 10.2 hereof, the Vendors agree that if the
Vendors are required by any stock exchange or securities
commission to give any undertakings, to file any personal
information or to escrow all or any of the JAWS' Common
Shares received hereunder in order for the Purchaser or
any successor corporation to meet the requirements of
such stock exchange or securities commission in
connection with any offering or listing of shares of the
Purchaser or successor corporation, the Vendors will give
all such undertakings, file such personal information
and/or enter into such escrow as shall be required for
such purpose.
Section 5.2 COVENANTS OF THE PURCHASER AND JAWS
JAWS and the Purchaser hereby separately covenant to and with the
Vendors as follows:
5.2.1 Registration Restrictive Legends - JAWS and the Purchaser
shall use their best efforts to file all documentation
required for the Registration Right and for the removal
of any legend restricting the Vendors ability to freely
trade any of the Vendor's Shares that are not still
subject to the Escrow Agreement and the earnout
provisions in Schedule "E".
5.2.2 Automatic Redemption Right - The Purchaser shall not
exercise the Automatic Redemption right, as set out in
the Articles of Incorporation of the Purchaser, until
after the third anniversary of the Closing Date. ARTICLE
6. NO MERGER AND SURVIVAL
Section 6.1 NON-MERGER
The covenants, representations and warranties set forth in Articles 4.
and 5. shall be deemed to apply to all assignments, conveyances, transfers and
documents conveying any of the Vendors's Rights from the Vendors to the
Purchaser and there shall not be any merger of any covenant, representation or
warranty in such assignments, transfers or documents notwithstanding any rule of
law, equity or statute to the contrary and all such rules are hereby waived.
NY/301202.1
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Section 6.2 SURVIVAL
The covenants, representations and warranties set forth in Articles
4. and 5. shall survive the closing of the purchase and sale of the Vendors's
Rights and, notwithstanding such closing or any investigation made by or on
behalf of the Vendors or the Purchaser, shall continue in full force and effect
for the benefit of the other Party, provided, however, that:
6.2.1 the covenants, representations and warranties of the
Vendors, JAWS and the Purchaser, except those relating to
the tax liability of the Corporations, shall terminate at
the expiry of one year following the Closing Date;
6.2.2 those covenants, representations and warranties of the
Vendors, JAWS and the Purchaser relating to the tax
liability of the Corporations, shall, unless resulting
from any negligent misrepresentations made or fraud
committed in filing a return or supplying information for
the purposes of any Regulations or any other legislation
imposing tax on the Corporations terminate at the expiry
of the last of the limitation periods contained in the
applicable Regulations or any other legislation imposing
tax on the Corporations subsequent to the expiry of which
an assessment, reassessment, or other form of recognized
document assessing liability for any year ended or deemed
to have ended prior to the Closing Date cannot be issued
to the Corporations; and
6.2.3 there shall be no limit on the covenants, representations
and warranties of the Vendors relating to tax liability
of the Corporations based upon any negligent
misrepresentations made or fraud committed in filing a
return or in supplying information for the purposes of
any Regulations or other legislation imposing tax on the
Corporations.
ARTICLE 7.
INDEMNITY
Section 7.1 VENDORS'S INDEMNITY
The Vendors shall indemnify and save JAWS, the Purchaser and the
Corporations, harmless from and against any loss whatsoever arising out of,
under or pursuant to:
7.1.1 all claims, liabilities, contracts, undertakings and
arrangements of the Corporations, including, without
limiting the generality of the foregoing, any liabilities
for federal, Provincial, sales, excise, income, corporate
and any other taxes of the Corporations, existing at the
Closing Date and not disclosed in, provided for or
included in the Corporations's Financial Statements save
and except those liabilities;
7.1.1.1 disclosed in this Agreement or any Schedule hereto,
or
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7.1.1.2 accruing or incurred in the ordinary course of
business subsequent to the date of the
Corporations's Financial Statements and up to the
Closing Date; and
7.1.1.3 any and all reassessments for income tax, sales tax,
excise tax and any interest or penalty for any
period ending on or before the Closing Date for
which no adequate reserve has been provided in the
Corporations's Financial Statements in respect of
any matter arising prior to the Closing Date.
7.1.2 any and all claims of and from any and all manner of
action and actions, cause and causes of action, suits,
debts, sums of money, indemnities, expenses, general
damages, special damages, interest, costs and claims of
any and every kind and nature whatsoever, at law or in
equity, or under any statute, which might still arise.
ARTICLE 8.
PRE-CLOSING MATTERS
Section 8.1 COVENANTS OF THE VENDORS
During the period from the date hereof to the Closing Time:
8.1.1 the Vendors shall use their best efforts to cause all of
the conditions for the benefit of the Purchaser to be
fulfilled at or before the Closing Time;
8.1.2 the Vendors shall not submit or entertain any offers from
any other Person in respect of and shall not enter into
discussions with any other Person relating to a proposed
disposition by the Vendors of any interest in the
Corporations or a disposition by the Corporations of the
Corporations's Assets or any part thereof without the
acknowledgement and consent of the Purchaser; and
8.1.3 the Vendors shall not permit, cause or acquiesce in the
issuance of any securities by the Corporations to any
Person.
Section 8.2 COVENANTS OF THE PURCHASER AND JAWS
During the period from the date hereof to the Closing Time, JAWS shall
use their best efforts to cause all of the conditions for the benefit of the
Vendors to be fulfilled at or before the Closing Time;
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Section 8.3 EXAMINATION AND INVESTIGATION BY THE PURCHASER AND JAWS
The Vendors shall permit or cause the Corporations to permit employees,
advisors and representatives of the Purchaser full and complete access to all
facilities and premises and all current and historical records and information
of every nature and kind within the Vendors' or the Corporations's possession or
control which relate to the acquisition, exploration, development, construction,
operation, maintenance, or ownership of any of the Corporations's Assets or the
conduct of its business or with respect to the incorporation, organization,
operations, or financial position of the Corporations or the acquisition or
ownership of the shares of the Corporations for the purposes of reviewing same
and such employees, advisors, and representatives shall be permitted to make
copies of such records and information as they may deem advisable. The Vendors
shall use their best efforts to make available, or cause the Corporations to
make available, to the Purchaser any pertinent information that is possessed by
another Person or which is relevant to the operation, maintenance, and ownership
of the Corporations's Assets or the conduct of its business. The Purchaser and
its employees, advisors, and representatives shall be entitled to make copies of
such information as they reasonably consider necessary. The Vendors shall not
require the return or destruction of any information prior to the Closing Time.
Section 8.4 EXAMINATION AND INVESTIGATION BY THE VENDORS
JAWS shall permit employees and advisors and representatives of the
Vendors full and complete access to all facilities and premises and all current
and historical records and information of every nature and kind within the
Purchaser's or JAWS' possession or control which relate to the acquisition or
ownership of any of the Purchaser's Assets or JAWS Shares or the conduct of
their business or with respect to the incorporation, organization, operations,
or financial position of the Purchaser or JAWS or the acquisition or ownership
of JAWS Shares for the purposes of reviewing same and such employees, advisors,
and representatives shall be permitted to make copies of such records and
information as they may deem advisable. JAWS shall use their best efforts to
make available to the Vendors any pertinent information that is possessed by
another Person or which is relevant to acquisition and ownership of the
Purchaser's Assets or JAWS Shares or the conduct of their business. The Vendors
and their employees, advisors, and representatives shall be entitled to make
copies of such information as they reasonably consider necessary. JAWS shall not
require the return or destruction of any information prior to the Closing Time.
Section 8.5 CORPORATIONS'S FINANCIAL STATEMENTS
To the extent not previously delivered, the Vendors shall cause the
Corporations as soon as practical, to deliver the Corporations's Financial
Statements to the Purchaser.
Section 8.6 JAWS' FINANCIAL STATEMENTS
To the extent not previously delivered, the Purchaser shall deliver
JAWS Financial Statements to the Vendors.
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ARTICLE 9.
NON-DISCLOSURE AND USE OF INFORMATION
Section 9.1 USE OF CORPORATIONS'S INFORMATION
Notwithstanding the obligations of the Vendors to provide
information to the Purchaser pursuant to Article 8 hereof:
9.1.1 the Vendors and the Corporations shall not be under any
obligation to give such access or furnish such
information if to do so would cause the Corporations to
be in violation of any confidentiality agreement with any
Person, if such Person has refused to permit the release
of such information to the Purchaser following exercise
by the Corporations of their best efforts to obtain
consent to such release when the exercise of such best
efforts was requested by the Purchaser;
9.1.2 any information provided to the Purchaser or any
employee, advisor and representative of the Purchaser
hereunder which is not publicly disclosed, is
confidential or is proprietary in nature (the
"Corporations's Information") shall be kept confidential
and shall not, without the prior written consent of the
Corporations, be disclosed by a recipient in any manner
whatsoever, in whole or in part, and shall not be used by
the Purchaser or any such employee, advisor or
representative (other than in connection with this
transaction) or following the termination of this
Agreement in the acquisition of any securities of the
Corporations or any of the Corporations's Assets in
another transaction for a period of one year following
the termination of this Agreement. The Corporations's
Information shall be revealed only to employees, advisors
and representatives who need to know it for the purpose
of implementing the transaction who will be informed of
the confidential nature of the Corporations's Information
and agree to act in accordance herewith;
9.1.3 the term the Corporations's Information shall not include
information which:
9.1.3.1 is or becomes generally available to the public
other than as a result of a disclosure by the
Purchaser or any other recipient of the
Corporations's Information hereunder, or
9.1.3.2 is or becomes available to the Purchaser or any
other recipient of the Corporations's Information
hereunder on a non-confidential basis from a source
other than the Corporations which is not prohibited
from disclosing such Corporations's Information to
the Purchaser by a legal, contractual or fiduciary
obligation to the Corporations; and
9.1.4 in the event that the Purchaser or any other recipient of
the Corporations's Information hereunder becomes legally
obliged to disclose any of the Corporations's
Information, the
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Purchaser shall provide the Corporations with prompt
notice of such obligation (and in any event not less than
24 hours prior to the time that the Corporations's
Information is required to be disclosed) so that the
Corporations may seek a protective order or other
appropriate remedy and/or waive compliance with this
Subsection. In the event that such protective order or
other remedy is not obtained, or that the Corporations
waive compliance with this Subsection, the Purchaser or
any other recipient of the Corporations's Information
hereunder shall furnish only that portion of the
Corporations's Information which is legally required to
be disclosed and exercise their best efforts to obtain
reliable assurance that confidential treatment will be
accorded the Corporations's Information.
Section 9.2 USE OF PURCHASER'S INFORMATION
Notwithstanding the obligations of JAWS to provide information to
the Vendors pursuant to Article 8 hereof:
9.2.1 JAWS shall not be under any obligation to give such
access or furnish such information if to do so would
cause JAWS to be in violation of any confidentiality
agreement with any Person, if such Person has refused to
permit the release of such information to the Vendors
following exercise by JAWS of its best efforts to obtain
consent to such release when the exercise of such best
efforts was requested by the Vendors;
9.2.2 any information provided to the Vendors or the
Corporations or any employee, advisor and representative
of the Vendors or the Corporations hereunder which is not
publicly disclosed, is confidential or is proprietary in
nature ("the Purchaser's Information") shall be kept
confidential and shall not, without the prior written
consent of the Purchaser, be disclosed by a recipient in
any manner whatsoever, in whole or in part, and shall not
be used by the Vendors or the Corporations or any such
employee, advisor or representative (other than in
connection with this transaction) or following the
termination of this Agreement in the acquisition of any
securities of the Purchaser or any of the Purchaser's
Assets in another transaction for a period of one year
following the termination of this Agreement. The
Purchaser's Information shall be revealed only to
employees, advisors and representatives who need to know
it for the purpose of implementing the transaction who
will be informed of the confidential nature of the
Purchaser's Information and agree to act in accordance
herewith;
9.2.3 the term the Purchaser's Information shall not include
information which:
9.2.3.1 is or becomes generally available to the public
other than as a result of a disclosure by the
Vendors or the Corporations or any other recipient
of the Purchaser's Information hereunder, or
9.2.3.2 is or becomes available to the Vendors or the
Corporations or any other recipient of the
Purchaser's Information hereunder on a
non-confidential basis from a source other than
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the Purchaser which is not prohibited from
disclosing such Purchaser's Information to the
Vendors or the Corporations by a legal, contractual
or fiduciary obligation to the Purchaser; and
9.2.4 in the event that the Vendors or the Corporations or any
other recipient of the Purchaser's Information hereunder
becomes legally obliged to disclose any of the
Purchaser's Information, the Vendors or the Corporations
shall provide the Purchaser with prompt notice of such
obligation (and in any event not less than 24 hours prior
to the time that the Purchaser's Information is required
to be disclosed) so that the Purchaser may seek a
protective order or other appropriate remedy and/or waive
compliance with this Subsection. In the event that such
protective order or other remedy is not obtained, or that
the Purchaser waives compliance with this Subsection, the
Vendors, the Corporations or any other recipient of the
Purchaser's Information hereunder shall furnish only that
portion of the Purchaser's Information which is legally
required to be disclosed and exercise their best efforts
to obtain reliable assurance that confidential treatment
will be accorded the Purchaser's Information.
Section 9.3 PRESS RELEASES
All press releases or other similar public written communications of
any sort by JAWS, the Vendors or the Corporations relating to this transaction
and this Agreement and the method of release for publication thereof, will be
subject to the approval of JAWS, the Purchaser and the Vendors. The Purchaser,
JAWS and the Vendors will deal expeditiously with a request for approval of such
a written communication. The Vendors and the Purchaser and JAWS will cooperate
in relation to other public communications with respect to their respective
businesses or this transaction with a view to achieving consistency in the
content of such communication and ensuring that such communications are
consistent with this Agreement.
ARTICLE 10.
CONDITIONS PRECEDENT TO THE PERFORMANCE UNDER THIS AGREEMENT
Section 10.1 PURCHASER'S CONDITIONS
The obligation of the Purchaser and JAWS to complete the purchase
of the Vendors's Rights shall be subject to the satisfaction of, or compliance
with, at or before the Closing Time, each of the following conditions (each of
which is hereby acknowledged to be inserted for the exclusive benefit of the
Purchaser and JAWS and may be unilaterally waived by the Purchaser and JAWS in
whole or in part):
10.1.1 Truth and Accuracy of Representations - All of the
representations and warranties of the Vendors set forth
in this Agreement shall be true and correct as at the
Closing Time with the same force and effect as though
made at the Closing Time except to the extent affected by
the transactions contemplated by this Agreement.
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10.1.2 Satisfactory Due Diligence - All requests for information
about the Vendors and the Corporations shall have been
responded to by the Vendors and the Corporations to the
satisfaction of the Purchaser in its sole discretion and
the Purchaser shall have received all documentation
required to be delivered to the Purchaser at or before
the Closing Time in accordance with this Agreement.
10.1.3 Compliance with Agreement - All of the terms, covenants,
agreements and conditions of this Agreement to be
complied with or performed by the Vendors at or before
the Closing Time shall have been complied with or
performed.
10.1.4 Receipt of Closing Documentation - The Purchaser shall
have received all documentation required to be delivered
to the Purchaser at or before the Closing Time in
accordance with this Agreement.
10.1.5 Approvals - All approvals relating to the consummation of
the transactions hereby contemplated shall have been
obtained from the relevant regulatory bodies;
10.1.6 Discharges - All liens, charges, encumbrances, security
interests and other claims, whatsoever, registered or
made by any Person on or against the Vendors's Rights
shall have been discharged or provision therefor,
satisfactory to the Purchaser shall have been made at or
before the Closing Time.
10.1.7 Legal Formalities - All actions and proceedings and all
instruments and documents required to implement this
Agreement or any other agreements incidental thereto, and
all other legal matters relating to the purchase of the
Vendors's Rights by the Purchaser shall have been
approved as to form and legality by counsel for the
Purchaser.
10.1.8 Condition of Corporation's Financial Statements - The
Purchaser shall have received the Corporations's
Financial Statements in accordance with Section 8.5 and
shall be satisfied with the financial condition of the
Corporations based on the contents of the Corporations's
Financial Statements.
10.1.9 No Restrictions - No action or proceeding, judicial (at
law or in equity) or extra- judicial, shall be pending or
threatened by any Person to enjoin, restrict or prohibit:
10.1.9.1 the purchase and sale of the Vendors's Rights
contemplated hereby or the subsequent use, benefit
and enjoyment thereof; or
10.1.9.2 the right of the Corporations or the Purchaser from
and after the Closing Time to conduct, expand and
develop the business of the
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Corporations.
10.1.10 Opinion of Counsel to Vendors - The Vendors shall have
delivered to the Purchaser and Purchaser's counsel a
favourable opinion of counsel to the Vendors as to:
10.1.10.1 the legal status, power and authority of the
Vendors to execute and perform the terms of this
Agreement and any other agreement, document or
instrument required to be delivered by the Vendors
hereunder;
10.1.10.2 the valid, binding and enforceable nature of all
such agreements, documents and instruments;
10.1.10.3 any other matters which, in the opinion of counsel
for the Purchaser, acting reasonably, are material
in connection with the transactions herein
contemplated; and
Provided that counsel for the Vendors, in rendering the
opinions required in this Section, may rely as to any factual
matters on a certificate or certificates provided to them by
the Vendors, which certificate or certificates shall be
attached to such opinions and as to the laws of any
jurisdiction other than the Province of Alberta, may rely on
opinions addressed to them from other counsel satisfactory to
counsel for the Vendors, and which opinions from other counsel
shall also be addressed to the Purchaser and to counsel for the
Purchaser.
10.1.11 No Change of Laws - After the date hereof and prior to
the Closing Time, there shall have been no change in the
laws in force in any jurisdiction in which any of the
Corporations's business is carried on, or any of the
Corporations's Assets are located including, without
limitation, amendment to or repeal of existing statutes,
regulations, rules or policies and enactment or
implementation of new statutes, regulations, rules or
policies, nor the occurrence of any general or specific
event which, in the opinion of the Purchaser, could
materially adversely affect the Corporations's Assets,
the conduct of its business, or the transactions
contemplated herein or the ability of the Corporations to
conduct, expand or develop its business or to own or
operate the Corporations's Assets after the Closing Time,
and no such change shall have been proposed.
10.1.12 Concurrent Closings - All of the conditions precedent to
the obligations of the Purchaser to complete the
transactions herein contemplated or contemplated in the
other agreements contemplated or required hereby and
Schedules hereto shall have been fulfilled or
satisfactorily performed in accordance therewith
including, without limitation, the delivery of all
documents required to be delivered thereunder.
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10.1.13 No Change in Operations - Except as agreed to in writing
by the Purchaser, the Corporations shall not and the
Vendors shall take such steps as may be necessary to
cause the Corporations not to:
10.1.13.1 acquire or agree to acquire any assets or acquire
or agree to acquire by amalgamating, merging or
consolidating with, purchasing substantially all of
the assets of or otherwise, any business or any
Corporations, partnership, association or other
business organization or division thereof;
10.1.13.2 agree to sell, lease or otherwise dispose of or
grant any option with respect to any of its assets;
10.1.13.3 guarantee the payment of indebtedness or incur
indebtedness for money borrowed or issue any debt
securities; or
10.1.13.4 grant any director, any officer or any employee who
has a policy making function or who manages a
principal business unit, any increase in
compensation or in severance or termination pay
(whether or not such compensation or pay is payable
in cash), or enter into any employment agreement
with any such director, officer or employee, or
hire or promote any Person, except in the ordinary
course of business.
10.1.14 No Damage - No destruction, material damage,
appropriation, expropriation or seizure of any of the
Corporations's Assets or Vendors's Rights or of all the
Corporations's Assets shall have occurred.
10.1.15 Statutory Restrictions - There shall be no impediment,
prohibition or restriction existing and no offence would
occur or result at the Closing Time under any applicable
statute or regulation to which the transactions
contemplated hereby would be subject, by the Closing of
the transactions contemplated hereby.
Section 10.2 VENDORS' CONDITIONS
The obligation of each Vendors to complete the sale of the Vendors's
Rights shall be subject to the satisfaction of, or compliance with, at or before
the Closing Time, each of the following conditions (each of which is hereby
acknowledged to be inserted for the exclusive benefit of each Vendors and may be
unilaterally waived by each Vendors in whole or in part):
10.2.1 Truth and Accuracy of Representations - All of the
representations and warranties of JAWS and the Purchaser
set forth in this Agreement shall be true and correct as
at the Closing Time with the same force and effect as
though made at the Closing Time.
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10.2.2 Performance of Obligations - All of the terms, covenants,
agreements and conditions of this Agreement to be
complied with or performed by JAWS and the Purchaser at
or before the Closing Time shall have been complied with
or performed.
10.2.3 Employment Agreements - JAWS shall have delivered to each
of Randy Walinga, Lawrence Gordey, Soon Chong, and
Stephanie Muzyka a satisfactory employment agreement
and/or consulting services agreement.
Section 10.3 RIGHTS OF THE PURCHASER
If any of the conditions for the exclusive benefit of the Purchaser as
set forth in Section 10.1 shall not have been fulfilled at or prior to the
Closing Time, the Purchaser shall be entitled, by notice to the Vendors prior to
the time of completion of the Closing:
10.3.1 to terminate their obligations hereunder and this
Agreement effective as of the time of such notice; or
10.3.2 to proceed with the Closing as contemplated by Article
11.
If no such notice is given prior to the completion of the Closing, the
Purchaser shall be deemed to have elected to proceed with the Closing as
contemplated by Article 11.
Section 10.4 RIGHTS OF THE VENDORS
If any of the conditions for the exclusive benefit of the Vendors set
forth in Section 10.2 shall not have been fulfilled at or prior to the Closing
Time, the Vendors shall be entitled, by notice to the Purchaser and JAWS prior
to the time of completion of the Closing:
10.4.1 to terminate their obligations hereunder and this
Agreement effective as of the time of such notice; or
10.4.2 to proceed with the Closing as contemplated by Article
11.
If no such notice is given prior to the completion of the Closing, the Vendors
shall be deemed to have elected to proceed with the Closing as contemplated by
Article 11.
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Section 10.5 RIGHTS OF TERMINATION
If this Agreement has been terminated pursuant to Section 10.3.1 or
Section 10.4.1 hereof, all Parties to this Agreement shall be released from all
their obligations under this Agreement.
ARTICLE 11.
CLOSING
Section 11.1 PLACE OF CLOSING AND CLOSING TIME
The Closing shall take place at the Closing Time in Calgary, or at such
other place as may be agreed upon by the Vendors and the Purchaser; PROVIDED
HOWEVER, if the Parties are diligently pursuing completion of the conditions
precedent to Closing, the Parties hereby agree that the Time for Closing shall
be extended for such reasonable period as shall be necessary to complete such
matters.
Section 11.2 DELIVERIES BY VENDORS
At the Closing Time and at the place of the Closing, each Vendors shall
deliver to the Purchaser:
11.2.1 certificates or other instruments representing or
evidencing the Vendors's Rights duly endorsed for
transfer or assignment to the Purchaser;
11.2.2 a certified copy of a resolution of the directors of the
Corporations consenting to the transfer of the Vendors's
Rights and authorizing the registration of such transfer
on the appropriate registers of the Corporations;
11.2.3 one or more certificates or other instruments
representing or evidencing the Vendors's Rights,
registered in the name of the Purchaser duly signed by
the proper officers of the Corporations and evidence
satisfactory to the Purchaser that it is registered as
the holder thereof on the appropriate registers of the
Corporations;
11.2.4 at the Closing Time the resignations, or proof of
termination, of all of the directors, officers and
employees of the Corporations effective immediately upon
the delivery thereof, together with a complete release
and discharge by such directors and officers of any and
all claims against the Corporations which may have arisen
prior to the Closing Time;
11.2.5 a certificate signed by each Vendors to the effect that
the representations and warranties of the Vendors herein
contained are true and correct as at the Closing
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Time;
11.2.6 the opinion of counsel to the Vendors referred to in
Section 10.1.10;
11.2.7 deliver to the Purchaser such other documents as the
Purchaser may reasonably request including employment
agreements for each of Lawrence Gordey, Soon Chong and
Randy Walinga, satisfactory to the Purchaser and JAWS.
Section 11.3 DELIVERIES OF THE PURCHASER AND JAWS AT CLOSING
At the Closing Time and at the Place of Closing, the Purchaser shall
deliver to each of the Vendors:
11.3.1 one or more certificates or other instruments
representing or evidencing the Purchase Consideration
herein payable to each of the Vendors, in accordance with
section 3.1;
11.3.2 an executed Voting and Exchange Trust Agreement;
11.3.3 an executed Support Agreement;
11.3.4 certified resolutions of the Purchaser and JAWS
authorizing the transactions contemplated hereby;
11.3.5 a certificate signed by an officer of the Purchaser and
JAWS to the effect that the representations and
warranties of JAWS, herein contained are true and correct
as at the Closing Time; and
11.3.6 such other documents as the Vendors may reasonably
request.
Section 11.4 CLOSING ESCROW
All payments or documents delivered by any Person at the Closing Time
shall be deemed not to have been delivered until each of the Vendors, the
Purchaser and JAWS has declared that it is satisfied with the form and substance
of the payments or documents to be delivered to such Person and all conditions
to the delivery or release of any payments or documents to be delivered at the
Closing Time by Parties other than the Vendors or the Purchaser shall have been
satisfied.
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ARTICLE 12.
MISCELLANEOUS
Section 12.1 GOVERNING LAW AND ATTORNMENT
This Agreement shall, in all respects, be subject to and be
interpreted, construed and enforced in accordance with the laws in effect within
the Province of Alberta. Each Party hereby expressly attorns to the jurisdiction
of the courts of the Province of Alberta and all courts of appeal therefrom.
Section 12.2 TIME OF THE ESSENCE
Time shall in all respects be of the essence of this Agreement.
Section 12.3 NOTICES
The address for notices of each of the Parties shall be as
follows:
JAWS TECHNOLOGIES, INC.
JAWS ACQUISITION CANADA CORP.
630 - 8th Avenue S.W.,
Calgary, Alberta, T2P 1G8
Attention: Riaz Mamdani
Facsimile No.: (403) 209-6125
Telephone No.: (403) 508-5055
THE VENDORS
c/o Betach Systems Inc.
#1250, 800 - 6th Ave S.W.,
Calgary, Alberta, T2P 3G3
Attention: Stephanie Muzyka
Facsimile No.: (403) 263-8767
Telephone No.: (403) 237-6920
Each of the Parties may from time to time change their address for
service herein by giving written notice to the other Party. Any notice, required
or contemplated hereunder, may be served by personal
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service upon an officer or director of a Party or by telecopy, facsimile
transmission or mailing the same, except during periods of actual or anticipated
postal disruptions, by prepaid registered post in a properly addressed envelope
addressed to the Party at its address for service hereunder, as the same may be
amended from time to time in accordance herewith. Any notice given by service
upon an officer or director of a Party shall be deemed to be given on the date
of such service. Any notice given by mail shall be deemed to be given to and
received by the addressee on the fifth Business Day after the mailing thereof.
Any notice given by telecopy or facsimile transmission shall be deemed to be
given to and received by the addressee on the next Business Day after the
sending thereof.
Section 12.4 PRIOR AGREEMENTS
This Agreement shall supersede and replace any and all prior agreements
between the Parties relating to the sale and purchase of the Vendors's Rights
and may be amended only by written instrument signed by all Parties.
Section 12.5 FURTHER ASSURANCES
Each Party hereto shall, from time to time, and at all times hereafter
at the request of any other Party hereto, but without further consideration, do
all such further acts and execute and deliver all such further instruments,
notices, releases and documents as shall be reasonably required in order to
fully perform and carry out the terms hereof.
This instrument states the entire agreement between the Parties.
Section 12.6 ENUREMENT
This Agreement shall be binding upon and shall enure to the benefit of
and be binding upon the Parties and their respective heirs, executors,
adminstrators, successors, receivers, receiver-managers, trustees and permitted
assigns, as the case may be.
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IN WITNESS WHEREOF the Parties hereto have duly executed this Agreement
as of the date first above written and execution of this Agreement in
counterpart and by facsimile is valid and legally binding.
JAWS ACQUISITION CANADA CORP.
Per: /s/ Riaz Mamdani
--------------------------
Riaz Mamdani, President
JAWS TECHNOLOGIES, INC.
Per: /s/ Riaz Mamdani
--------------------------
Riaz Mamdani, CFO
/s/ Stephanie Muzyka
- ------------------------------- ----------------------------------
STEPHANIE MUZYKA WITNESS
/s/ Randy Walinga
- ------------------------------- ----------------------------------
RANDY WALINGA WITNESS
/s/ Soon Chong
- ------------------------------- ----------------------------------
SOON CHONG WITNESS
/s/ Lawrence Gordey
- ------------------------------- ----------------------------------
LAWRENCE GORDEY WITNESS
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/s/ Suriya Chong
- ------------------------------ ----------------------------------
SURIYA CHONG WITNESS
/s/ Roxanne Gordey
- ------------------------------- ----------------------------------
ROXANNE GORDEY WITNESS
/s/ Mary Muzyka
- ------------------------------- ----------------------------------
MARY MUZYKA WITNESS
NY/301202.1
SCHEDULE "A" TO THAT SHARE PURCHASE AGREEMENT DATED THE
22ND, DAY OF AUGUST, 2000, BETWEEN THE VENDORS AS SET OUT
THEREIN, JAWS ACQUISITION CANADA CORP. AND JAWS
TECHNOLOGIES, INC.
Corporations's Assets
See Financials dated o.
NY/301202.1
SCHEDULE "B" TO THAT SHARE PURCHASE AGREEMENT DATED THE
22ND, DAY OF AUGUST, 2000, BETWEEN THE VENDORS AS SET OUT
THEREIN, JAWS ACQUISITION CANADA CORP. AND JAWS
TECHNOLOGIES, INC.
Corporations's Financial Statements
NY/301202.1
SCHEDULE "C" TO THAT SHARE PURCHASE AGREEMENT DATED THE
22ND, DAY OF AUGUST, 2000, BETWEEN THE VENDORS AS SET OUT
THEREIN, JAWS ACQUISITION CANADA CORP. AND JAWS
TECHNOLOGIES, INC.
Permitted Encumbrances & Liabilities.
See Financial Statements.
NY/301202.1
SCHEDULE "D" TO THAT SHARE PURCHASE AGREEMENT DATED THE
22ND, DAY OF AUGUST, 2000, BETWEEN THE VENDORS AS SET OUT
THEREIN, JAWS ACQUISITION CANADA CORP. AND JAWS
TECHNOLOGIES, INC.
Exhangeable Share Provisions
NY/301202.1
SCHEDULE "E" TO THAT SHARE PURCHASE AGREEMENT DATED THE
22ND, DAY OF AUGUST, 2000, BETWEEN THE VENDORS AS SET OUT
THEREIN, JAWS ACQUISITION CANADA CORP. AND JAWS
TECHNOLOGIES, INC.
Earn-Out Provisions
NY/301202.1