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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ________)*
AUTOEYE INC.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
052773 10 8
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(CUSIP Number)
Autoeye Inc.
Suite 1650, Waterfront Centre
200 Burrard Street
Vancouver, British Columbia V6C 3L6
(604) 689-3355
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
31 January 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and
is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box. [ ]
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See
ss.240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that
<PAGE>
section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
CUSIP No. .......052773 10 8.......
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1. Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only).
...........TEACO PROPERTIES LTD...........................
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2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) ............................................................
(b) ........X...................................................
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3. SEC Use Only ....................................................
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4. Source of Funds (See Instructions).........OO....................
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) .................
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6. Citizenship or Place of Organization ....................BRITISH
COLUMBIA, CANADA.................
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Number of
Shares
Beneficially 7. Sole Voting Power...........6,900,000......................
Owned by
Each --------------------------------------------------------------
Reporting
Person With 8. Shared Voting Power .......................................
--------------------------------------------------------------
9. Sole Dispositive
Power.......................6,900,000......................
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<PAGE>
10. Shared Dispositive Power.....................................
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
..........6,900,000.........................
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) ...........
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13. Percent of Class Represented by Amount in Row (11)
.........49%.....................................................
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14. Type of Reporting Person (See Instructions)
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..............CO.................................................
.................................................................
.................................................................
.................................................................
.................................................................
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Item 1. Security and Issuer
This statement on Schedule 13D relates to the Common Stock, $.001 par value (the
"Common Stock"), of Autoeye Inc., a Delaware corporation (the "Issuer"). The
principal executive offices of the Issuer are located at Suite #6, 2150 Bowen
Road, Nanaimo, British Columbia, V9S 1H7.
Item 2. Identity and Background
(a) Teaco Properties Ltd. ("Teaco" or the "reporting person") As
explained in Item 3 of this Schedule, the Issuer acquired all of the
outstanding shares of Forest Industry Online in exchange for
10,000,000 shares of the Issuer's common stock which were issued to
the following persons:
Joe Perraton 2,400,000
<PAGE>
Lara Perraton 700,000
Teaco Properties Ltd. 6,900,000
Following the acquisition of Forest Industry Online, Joe Perraton and
Marc White became officers and directors of the Issuer.
Lara Perraton is the sister of Joe Perraton.
Mark White is a controlling person of Teaco Properties Ltd. and may be
considered the beneficial owner of the shares issued to Teaco
Properties Ltd.
(b) Teaco is a limited liability company formed to develop, invest and
manage properties. The principal business address of Teaco is 649
Belle View Place, Nanaimo, British Columbia, V9V 1B5
(c) The managing partners of Teaco are Marc R. White and David
McNaught. The foregoing individuals are citizens of Canada and their
principal business address is c/o Teaco, 649 Belle View Place,
Nanaimo, B.C., V9V 1B5. Their principal occupations in Teaco are set
forth below.
Name Occupation
Marc R. White Managing Partner, Secretary, Teaco
Director, Autoeye Inc.
David McNaught Managing Partner, President, Teaco
(d) None of the entities or person identified in this Item 2 has,
during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) None of the entities or persons identified in this Item 2 has,
during the last five years, been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(f) The persons identified in this Item 2 are citizens of Canada.
<PAGE>
Item 3. Source and Amount of Funds or Other Consideration
Teaco Properties Ltd. was the beneficial owner of 69 shares of the common stock
of The Forest Industry Online Inc. which were transferred to Autoeye Inc. in
exchange for 6,900,000 shares of the common stock of Autoeye Inc. The
consideration for the shares are documented in the Share Exchange Agreement
filed as an exhibit to this Schedule.
Item 4. Purpose of Transaction
The securities of the Issuer were acquired by Teaco Properties Ltd. in
connection with the Issuer's acquisition of Forest Industry Online, Inc. See
Item 3 of this Schedule.
Item 5. Interest in Securities of the Issuer
(a) The reporting entity or persons beneficially owns, directly or
indirectly, an aggregate of 6,900,000 shares (the "total
shares") of Common Stock, or approximately 49% of the Issuer's
Common Stock as part of the Transaction and more fully
described in Item 6.
(b) Teaco may be deemed to have the sole power and ownership of
6,900,000 shares of the Total shares. Messrs. White and
McNaught in their respective positions in Teaco as listed in
Item 2 above, may also be deemed to share the power to vote or
direct the voting of the Total shares.
(c) See Item 3 of this Schedule.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer
None.
Item 7. Material to Be Filed as Exhibits
Exhibit A - Share Exchange Agreement
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Feb/8/2000
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Date
/s/ MARC WHITE
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Signature
MARC WHITE, Secretary for TEACO PROPERTIES LTD.
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Name/Title
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of the filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement: provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
Attention: Intentional misstatements or omissions of fact
constitute Federal criminal violations (See 18 U.S.C. 1001)
<PAGE>
EXHIBIT A
SHARE EXCHANGE AGREEMENT
THIS AGREEMENT is made as of the 20th day of January, 2000.
AMONG:
AUTOEYE INC., a body corporate formed pursuant to the laws of
the State of Delaware and having an office for business
located at Suite 1650, 200 Burrard Street, Vancouver, British
Columbia, V6C 3L6
(the "Purchaser")
AND:
TEACO PROPERTIES LTD., a body corporate formed pursuant to the
laws of the Province of British Columbia and having an office
for business located at 649 Belle View Place, Nanaimo, British
Columbia, V9V 1B5
("Teaco")
AND:
JOE PERRATON, Businessman, of 7491 Elizabeth Way, Lantzville,
British Columbia, V0R 2H0
AND:
LARA PERRATON, Businesswoman, of 485 Howard Avenue, Nanaimo,
British Columbia, V9R 3S2
(Teaco, Joe Perraton, and Lara Perraton being hereinafter
collectively referred to as the "Vendors")
WHEREAS:
A. The Forest Industry Online Inc. (the "Company") is a body corporate
formed pursuant to the laws of the Province of British Columbia and
engaged in the business of providing direct customer service and
support to businesses, individuals and organizations within the
worldwide forest and wood product industries;
B. The Vendors own all of the issued and outstanding common shares in the
capital stock of the Company (the "Company Common Shares"); and
C. The Vendors have agreed to sell and the Purchaser has agreed to
purchase the Company Common Shares, subject to the terms and conditions
of this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, the parties hereto hereby agree as follows:
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<PAGE>
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement the following terms will have the following meanings:
(a) "Acquisition Shares" means the 10,000,000 Purchaser Common
Shares to be issued in the names of the Vendors at Closing;
(b) "Agreement" means this agreement among the Purchaser and the
Vendors;
(c) "Audited Company Financial Statements" means the audited
financial statements of the Company for the fiscal years ended
July 31, 1998 and 1999, prepared in accordance with United
States' generally accepted accounting principles, together
with the unqualified auditors' report thereon attached hereto
as Schedule "A";
(d) "Business" means all aspects of the business conducted by the
Company, including, without limitation, the services and
support provided to the forest and wood product industries;
(e) "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 10
hereof;
(f) "Closing Date" means the day on which all conditions precedent
to the completion of the transaction as contemplated hereby
have been satisfied or waived; provided that in no event shall
the Closing Date be later than January 31, 2000;
(g) "Company" means The Forest Industry Online Inc.;
(h) "Company Accounts Payable and Liabilities" means all accounts
payable and liabilities of the Company due and owing as of
December 31, 1999 as set forth in Schedule "E" hereto;
(i) "Company Accounts Receivable" means all accounts receivable
and other debts owing to the Company as of December 31, 1999
as set forth in Schedule "D" hereto;
(j) "Company Assets" means the undertaking and all the property
and assets of the Business of every kind and description
wheresoever situated including, without limitation, the
Company Equipment, the Company Inventory, the Company Material
Contracts, the Company Accounts Receivable, the Company Cash,
the Company Intangible Assets and the Company Goodwill, and
all credit cards, charge cards and banking cards issued to the
Company;
(k) "Company Cash" means all cash on hand or on deposit to the
credit of the Company on the Closing Date;
(l) "Company Common Shares" means Common Shares without par value
in the capital stock of the Company;
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<PAGE>
(m) "Company Equipment" means all machinery, equipment, furniture,
and furnishings used in the Business, including, without
limitation, the items more particularly described in Schedule
"B" hereto;
(n) "Company Financial Statements" means, collectively, the
Audited Company Financial Statements and the Quarterly Company
Financial Statements, true copies of which are attached as
Schedule "A" hereto;
(o) "Company Goodwill" means the goodwill of the Business together
with the exclusive right of the Purchaser to represent itself
as carrying on the Business in succession of the Company
subject to the terms hereof, the right to all corporate,
operating and trade names associated with the Business, or any
variations of such names as part of or in connection with the
Business, all telephone listings and telephone advertising
contracts, all lists of customers, books and records and other
information relating to the Business, all necessary licenses
and authorizations and any other rights used in connection
with the Business;
(p) "Company Insurance Policies" means the public liability
insurance and insurance against loss or damage to the Company
Assets and the Business as described in Schedule "G" hereto;
(q) "Company Intangible Assets" means all of the intangible assets
of the Company, including, without limitation, the Company
Goodwill, all trademarks, logos, copyrights, designs, and
other intellectual and industrial property including, without
limiting the generality of the foregoing, the domain names
"www.forestindustry.com", www.forestindustry.net, and
"www.forestind.com" and all other domain names registered by
or in the name of the Company or the Vendors and related to
the Business;
(r) "Company Inventory" means all inventory and supplies of the
Business existing on the Closing Date;
(s) "Company Material Contracts" means the burden and benefit of
and the right, title and interest of the Company in, to and
under all trade and non-trade contracts, engagements or
commitments, whether written or oral, to which the Company is
entitled in connection with the Business whereunder the
Company is obligated to pay or entitled to receive the sum of
$10,000 or more including, without limitation, any pension
plans, profit sharing plans, bonus plans, loan agreements,
security agreements, indemnities and guarantees, any
agreements with employees, lessees, licensees, managers,
accountants, suppliers, agents, distributors, officers,
directors, attorneys or others which cannot be terminated
without liability on not more than one month's notice, and
those contracts listed in Schedule "C" hereto;
(t) "Employment Agreement" means the employment agreement among
the Company and Joe Perraton to be entered into pursuant to
Article 7 hereof substantially in the form attached hereto as
Schedule "K";
(u) "Place of Closing" means the offices of Century Capital
Management Ltd. or such other place as the Purchaser and the
Vendors may mutually agree upon;
(v) "Private Placement" means the private sale by the Purchaser of
not less than 750 Purchaser Preferred Shares at a price of
$1,000.00 per Purchaser Preferred Share;
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<PAGE>
(w) "Purchaser" means Autoeye Inc.;
(x) "Purchaser Accounts Payable and Liabilities" means all
accounts payable and liabilities of the Purchaser due and
owing as of December 31, 1999 as set forth is Schedule "I"
hereto;
(y) "Purchaser Common Shares" means the shares of common stock in
the capital of the Purchaser;
(z) "Purchaser Financial Statements" means the audited financial
statements of the Purchaser for the periods ended May 31, 1998
and 1999 and the management prepared financial statements of
the Purchaser for the six month period ended November 30, 1998
and 1999, true copies of which are attached as Schedule "H"
hereto;
(aa) "Purchaser Preferred Shares" means the 750 shares of the
Purchaser's Series A Convertible Preferred Stock to be issued
in the Private Placement pursuant to the terms of the
Subscription;
(bb) "Quarterly Company Financial Statements" means the management
prepared financial statements of the Company for the three
month period ended October 31, 1998 and 1999, prepared in
accordance with United States' generally accepted accounting
principles, attached hereto as Schedule "A";
(cc) "Subscription" means the subscription for Purchaser Preferred
Shares to be entered into at or prior to closing pursuant to
the Private Placement, substantially in the form attached
hereto as Schedule "J"; and
(dd) "Teaco" means Teaco Properties Ltd.
Any other terms defined within the text of this Agreement will have the meanings
so ascribed to them.
Captions and Section Numbers
1.2 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.
Section References and Schedules
1.3 Any reference to a particular "Article", "section", "paragraph", "clause" or
other subdivision is to the particular Article, section, clause or other
subdivision of this Agreement and any reference to a Schedule by letter will
mean the appropriate Schedule attached to this Agreement and by such reference
the appropriate Schedule is incorporated into and made part of this Agreement.
The Schedules to this Agreement are as follows:
Information concerning the Company
Schedule "A" Company Financial Statements
Schedule "B" Company Equipment
Schedule "C" Company Material Contracts
Schedule "D" Company Accounts Receivable
Schedule "E" Company Accounts Payable and Liabilities
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<PAGE>
Schedule "F" Debts to Related Parties
Schedule "G" Company Insurance Policies
Information concerning the Purchaser
Schedule "H" Purchaser Financial Statements
Schedule "I" Purchaser Accounts Payable and Liabilities
Schedule "J" Subscription
Schedule "K" Employment Agreement
Severability of Clauses
1.4 If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed without reference to
any portion which may, for any reason, be hereafter declared or held to be
invalid.
Currency
1.5 Unless otherwise specified, all sums referred to herein and all payments to
be made hereunder will be in lawful money of the United States of America.
ARTICLE 2
PURCHASE AND SALE OF COMPANY COMMON SHARES
Sale of Company Common Shares
2.1 The Vendors agree to sell to the Purchaser, and the Purchaser agrees to
purchase from the Vendors, all the Company Common Shares at Closing subject to
the terms and conditions of this Agreement.
Consideration
2.2 In consideration of the sale of the Company Common Shares by the Vendors to
the Purchaser, the Purchaser agrees to issue the Acquisition Shares to the
Vendors at Closing.
Adherence with Applicable Securities Laws
2.3 The Vendors agree that they are acquiring the Acquisition Shares for
investment purposes and will not offer, sell or otherwise transfer, pledge or
hypothecate any of the Acquisition Shares (other than pursuant to an effective
Registration Statement under the Securities Act of 1933 (United States), as
amended) directly or indirectly unless:
(a) the sale is to the Purchaser;
(b) the sale is made pursuant to the exemption from registration under the
Securities Act of 1933 (United States) provided by Rule 144 thereunder;
or
(c) the Acquisition Shares are sold in a transaction that does not require
registration under the Securities Act of 1933 (United States) or any
applicable United States state laws and regulations governing the offer
and sale of securities, and the Vendor selling same has furnished to
the Purchaser an opinion of counsel to that
-5-
<PAGE>
effect or such other written opinion as may be reasonably required by
the Purchaser.
The Vendors acknowledge that the certificates representing the
Acquisition Shares shall bear the following legend:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE SHALL BE MADE UNLESS
A REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES
ACT OF 1933, AS AMENDED, IN RESPECT OF SUCH SHARES IS
THEN IN EFFECT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE
TO SAID SHARES.
The Vendors further acknowledge that trades of Acquisition Shares
within British Columbia will be subject to restrictions imposed by the
Securities Act (British Columbia) and that the Acquisition Shares may not be
traded within British Columbia unless the trade is made solely through a
registered dealer and a prospectus is filed with the British Columbia Securities
Commission in respect of the Acquisition Shares (and a final receipt obtained
for such prospectus) or an exemption from the registration and prospectus
requirements may be relied upon.
Allocation
2.4 The Acquisition Shares shall be allocated and issued to the Vendors on the
following basis:
(a) 6,900,000 Acquisition Shares to Teaco;
(b) 2,400,000 Acquisition Shares to Joe Perraton; and
(c) 700,000 Acquisition Shares to Lara Perraton.
ARTICLE 3
REGISTRATION RIGHTS
3.1 As soon as practicable after the Closing the Purchaser shall file a
registration statement on Form SB-2 (or similar form) under the Securities Act
of 1933 (United States) covering not more than 200,000 of the Acquisition Shares
and will use its best efforts to cause such registration statement to be
declared effective by the Securities and Exchange Commission at the earliest
practicable date, all at the Purchaser's sole cost and expense. Such best
efforts shall include responding to all comments received by the staff of the
Securities and Exchange Commission and promptly preparing and filing amendments
to such registration statement which are responsive to the comments received
from the staff of the Securities and Exchange Commission. Such registration
statement shall name the Vendors as selling shareholders and shall provide for
the sale by the Vendors of the Acquisition Shares being registered from time to
time directly to purchasers or in the over-the-counter market or through or to
securities brokers or dealers that may receive compensation in the form of
discounts, concessions, or commissions. None of the foregoing shall in any way
limit the Vendors' rights to sell any Acquisition Shares held by them in
reliance on an exemption from the registration requirements under the Securities
Act of 1933 (United States) in connection with a particular transaction.
3.2 The Purchaser shall use its best efforts to maintain the currency of the
registration
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<PAGE>
statement filed with the Securities and Exchange Commission in respect of the
Acquisition Shares being registered for a period of twelve months following the
effective date thereof.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
THE VENDORS
Representations and Warranties
4.1 Each of the Vendors jointly and severally represent and warrant in all
material respects to the Purchaser, with the intent that the Purchaser will rely
thereon in entering into this Agreement and in completing the transactions
contemplated hereby, that:
The Company - Corporate Status and Capacity
(a) Incorporation. The Company is a corporation duly incorporated
and validly subsisting under the laws of the Province of
British Columbia, and is in good standing with the office of
the Registrar of Companies;
(b) Carrying on Business. The Company carries on business in the
Province of British Columbia. The Company has an office in
Nanaimo, British Columbia and in no other locations. The
nature of the Business does not require the Company to
register or otherwise be qualified to carry on business in any
other jurisdiction;
(c) Corporate Capacity. The Company has the corporate power,
capacity and authority to own the Company Assets and to carry
on the Business;
The Vendors - Capacity and Tax Matters
(d) Capacity. Each of the Vendors, as to their portion of the
Company Common Shares, has the full right, power and authority
to enter into and complete this Agreement on the terms and
conditions contained herein and to transfer and cause the
transfer of full legal, registered and beneficial title and
ownership of their portion of the Company Common Shares to the
Purchaser;
(e) Resident in Canada. Each of the Vendors is a resident of
Canada within the meaning of the Income Tax Act (Canada).
The Company - Capitalization
(f) Authorized Capital. The authorized capital of the Company
consists of 10,000 Common Shares without par value (being the
Company Common Shares);
(g) Ownership of Company Common Shares. The issued and outstanding
share capital of the Company will on to Closing consist of 100
Common Shares without par value(being the Company Common
Shares), which shares on Closing shall be validly issued and
outstanding as fully paid and non-assessable shares. Each of
the Vendors will be immediately prior to Closing the
registered and beneficial owner of the number of the Company
Common Shares set forth opposite their name as follows:
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<PAGE>
Teaco - 69 Company Common Shares
Joe Perraton - 24 Company Common Shares
Lara Perraton - 7 Company Common Shares
Each of the Vendors owns or will immediately prior to Closing
own his portion of the Company Common Shares free and clear of
any and all liens, charges, pledges, encumbrances,
restrictions on transfer and adverse claims whatsoever;
(h) No Option. No person, firm or corporation has any agreement or
option or any right capable of becoming an agreement or option
for the acquisition of the Company Common Shares or for the
purchase, subscription or issuance of any of the unissued
shares in the capital of the Company;
(i) No Restrictions. The transfer of the Company Common Shares to
the Purchaser will not be restricted under the charter
documents of the Company or under any agreement, and will be
permitted under all applicable laws and regulations;
The Company - Records and Company Financial Statements
(j) Charter Documents. The charter documents of the Company have
not been altered since the incorporation of the Company,
except as filed in the record book of the Company;
(k) Books and Records. The books and records of the Company fairly
and correctly set out and disclose in all material respects
the financial position of the Company, and all material
financial and other transactions of the Company relating to
the Business, including any and all Company Material Contracts
and any amendments thereto, have been accurately recorded or
filed in such books and records;
(l) Company Financial Statements. The Company Financial Statements
are true and correct and present fairly and correctly the
assets and liabilities (whether accrued, absolute, contingent
or otherwise) of the Company as of the respective dates
thereof, and the sales and earnings of the Business during the
periods covered thereby, in all material respects, and have
been prepared in substantial accordance with United States'
generally accepted accounting principles consistently applied;
(m) Company Accounts Receivable. All Company Accounts Receivable
are bona fide and are good and collectible without, to the
knowledge and belief of the Vendors, set-off or counterclaim;
(n) Company Accounts Payable and Liabilities. There are no
material liabilities, contingent or otherwise, of the Company
which are not disclosed in Schedules "E" or "F" hereto or
reflected in the Company Financial Statements except those
incurred in the ordinary course of business since the date of
the said financial statements, and the Company has not
guaranteed or agreed to guarantee any debt, liability or other
obligation of any person, firm or corporation. Without
limiting the generality of the foregoing, all accounts payable
and liabilities of the Company are described in Schedules "E"
or "F" hereto;
(o) No Debt to Related Parties. The Company is not, and on Closing
will not be, materially indebted to any of the Vendors nor to
any family member of any of the Vendors, nor to any affiliate,
director or officer of the Company or the Vendors except as
set forth in Schedule "F" hereto;
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<PAGE>
(p) No Related Party Debt to the Company. None of the Vendors is
now indebted to or under any financial obligation to the
Company on any account whatsoever, except for advances on
account of travel and other expenses not exceeding $5,000 in
total;
(q) No Dividends. No dividends or other distributions on any
shares in the capital of the Company have been made, declared
or authorized since the date of the Company Financial
Statements;
(r) No Payments. No payments of any kind have been made or
authorized since the date of the Company Financial Statements
to or on behalf of the Vendors or to or on behalf of officers,
directors, shareholders or employees of the Company or under
any management agreements with the Company, except payments
made in the ordinary course of business and at the regular
rates of salary or other remuneration payable to them;
(s) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation
plans affecting the Company;
(t) No Adverse Events. Since the date of the Company Financial
Statements
(i) there has not been any material adverse change in the
financial position or condition of the Company, its
liabilities or the Company Assets or any damage, loss
or other change in circumstances materially affecting
the Company, the Business or the Company Assets or
the Company's right to carry on the Business, other
than changes in the ordinary course of business,
(ii) there has not been any damage, destruction, loss or
other event (whether or not covered by insurance)
materially and adversely affecting the Company, the
Business or the Company Assets,
(iii) there has not been any material increase in the
compensation payable or to become payable by the
Company to the Vendors or to any of the Company's
officers, employees or agents or any bonus, payment
or arrangement made to or with any of them,
(iv) the Business has been and continues to be carried on
in the ordinary course,
(v) the Company has not waived or surrendered any right
of material value,
(vi) the Company has not discharged or satisfied or paid
any lien or encumbrance or obligation or liability
other than current liabilities in the ordinary course
of business, and
(vii) no capital expenditures in excess of $10,000
individually or $30,000 in total have been authorized
or made;
The Company - Income Tax Matters
(u) Tax Returns. All tax returns and reports of the Company
required by law to be filed have been filed and are true,
complete and correct, and any taxes payable in accordance with
any
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return filed by the Company or in accordance with any notice
of assessment or reassessment issued by any taxing authority
have been so paid;
(v) Current Taxes. Adequate provisions have been made for taxes
payable for the current period for which tax returns are not
yet required to be filed and there are no agreements, waivers,
or other arrangements providing for an extension of time with
respect to the filing of any tax return by, or payment of, any
tax, governmental charge or deficiency by the Company. The
Vendors are not aware of any contingent tax liabilities or any
grounds which would prompt a reassessment including aggressive
treatment of income and expenses in filing earlier tax
returns;
The Company- Applicable Laws and Legal Matters
(w) Licences. The Company holds all licences and permits as may be
requisite for carrying on the Business in the manner in which
it has heretofore been carried on, which licences and permits
have been maintained and continue to be in good standing;
(x) Applicable Laws. The Company has not been charged with or
received notice of breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which it is subject
or which apply to it the violation of which would have a
material adverse effect on the Company, and the Company is not
in breach of any laws, ordinances, statutes, regulations,
by-laws, orders or decrees the contravention of which would
result in a material adverse impact on the Business;
(y) Pending or Threatened Litigation. There is no material
litigation or administrative or governmental proceeding or
enquiry pending or threatened against or relating to the
Company, the Business, or any of the Company Assets, nor does
the Company have any knowledge of any deliberate act or
omission of the Company that would form any material basis for
any such action, proceeding or enquiry;
(z) No Bankruptcy. The Company has not made any voluntary
assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been
filed or presented against the Company and no order has been
made or a resolution passed for the winding-up, dissolution or
liquidation of the Company;
(aa) Labour Matters. The Company is not party to any collective
agreement relating to the Business with any labour union or
other association of employees and no part of the Business has
been certified as a unit appropriate for collective bargaining
or, to the knowledge of the Vendors, has made any attempt in
that regard;
(bb) Finder's Fees. The Company is not party to any agreement which
provides for the payment of finder's fees, brokerage fees,
commissions or other fees or amounts which are or may become
payable to any third party in connection with the execution
and delivery of this Agreement and the transactions
contemplated herein except as due to Century Capital
Management Ltd.;
Execution and Performance of Agreement
(cc) Authorization and Enforceability. The execution and delivery
of this Agreement, and the completion of the transactions
contemplated hereby, have been duly and validly authorized by
all necessary corporate action on the part of Teaco and this
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Agreement constitutes a legal, valid and binding obligation of
the Vendors and is enforceable against each of them in
accordance with its terms;
(dd) No Violation or Breach. The performance of this Agreement will
not
(i) violate the charter documents of the Company or
result in any breach of, or default under, any loan
agreement, mortgage, deed of trust, or any other
agreement to which the Vendors or the Company, or any
of them, is a party,
(ii) give any person any right to terminate or cancel any
agreement including, without limitation, the Company
Material Contracts, or any right or rights enjoyed by
the Company,
(iii) result in any alteration of the Company's obligations
under any agreement to which the Company is party
including, without limitation, the Company Material
Contracts,
(iv) result in the creation or imposition of any lien,
encumbrance or restriction of any nature whatsoever
in favour of a third party upon or against the
Company Assets,
(v) result in the imposition of any tax liability to the
Company relating to the Company Assets or the Company
Common Shares, or
(vi) violate any court order or decree to which the
Company and the Vendors or any of them are subject.
The Company Assets - Ownership and Condition
(ee) Business Assets. The Company Assets comprise all of the
property and assets of the Business, and none of the Vendors
nor any other person, firm or corporation owns any assets used
by the Company in operating the Business, whether under a
lease, rental agreement or other arrangement;
(ff) Title. The Company is the legal and beneficial owner of the
Company Assets, free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other
claims whatsoever;
(gg) No Option. No person, firm or corporation has any agreement or
option or a right capable of becoming an agreement for the
purchase of any of the Company Assets;
(hh) Company Insurance Policies. The Company maintains the public
liability insurance and insurance against loss or damage to
the Company Assets and the Business as described in Schedule
"G" hereto;
(ii) Company Material Contracts. The Company Material Contracts
listed in Schedule "C" constitute all of the material
contracts of the Company;
(jj) No Default. There has not been any default in any material
obligation of either of the Company, the Vendors or any other
party to be performed under any of the Company Material
Contracts, each of which is in good standing and in full force
and effect and unamended, and the Vendors are not aware of any
default in the obligations of any other party to any of the
Company Material Contracts;
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(kk) No Compensation on Termination. There are no agreements,
commitments or understandings relating to severance pay or
separation allowances on termination of employment of any
employee of the Company. The Company is not obliged to pay
benefits or share profits with any employee after termination
of employment except as required by law;
The Company Assets - Company Equipment
(ll) Company Equipment. The Company Equipment has been maintained
in a manner consistent with that of a reasonably prudent
owner;
The Company Assets - Company Goodwill and Other Assets
(mm) Company Goodwill. The Company carries on the Business only
under the names "The Forest Industry Online Inc.", "The Forest
Industry Network", "The FIN", "forestindustry.com",
"forestindustry.net", and "forestind.com" and under no other
business or trade names. The Company has the legal right to
use its corporate name in the Province of British Columbia and
neither the Company nor any of the Vendors are aware of any
names similar to The Forest Industry Online in use in any
areas where the Business is conducted. None of the Vendors has
any knowledge of any infringement by the Company of any
patent, trademark, copyright or trade secret;
The Business
(nn) Maintenance of Business. Since the date of the Company
Financial Statements, the Business has been carried on in the
ordinary course and the Company has not entered into any
material agreement or commitment except in the ordinary
course; and
(oo) No Ownership of Company. The Company does not own any
subsidiary and does not otherwise own, directly or indirectly,
any shares or interest in any other corporation, partnership,
joint venture or firm.
Non-Merger and Survival
4.2 The representations and warranties of the Vendors contained herein will be
true at and as of Closing in all material respects as though such
representations and warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by the Purchaser, the
representations and warranties of the Vendors shall survive the Closing.
Indemnity
4.3 The Vendors jointly and severally agree to indemnify and save harmless the
Purchaser from and against any and all claims, demands, actions, suits,
proceedings, assessments, judgments, damages, costs, losses and expenses,
including any payment made in good faith in settlement of any claim (subject to
the right of the Vendors to defend any such claim), resulting from the breach by
any of them of any representation or warranty of such party under this Agreement
or from any misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished by the Vendors to the Purchaser
hereunder.
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ARTICLE 5
COVENANTS OF THE VENDORS
Covenants
5.1 The Vendors jointly and severally covenant and agree with the Purchaser
that they will:
(a) Conduct of Business. Until the Closing, conduct the Business
diligently and in the ordinary course consistent with the
manner in which the Business generally has been operated up to
the date of execution of this Agreement;
(b) Preservation of Business. Until the Closing, use their best
efforts to preserve the Business and the Company Assets and,
without limitation, preserve for the Purchaser the Company's
relationships with their suppliers, customers and others
having business relations with them;
(c) Insurance. Until the Closing, maintain in full force and
effect the Company Insurance Policies;
(d) Access. Until the Closing, give the Purchaser and its
representatives full access to all of the properties, books,
contracts, commitments and records of the Company relating to
the Company, the Business and the Company Assets, and furnish
to the Purchaser and its representatives all such information
as they may reasonably request; and
(e) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party
consents required to permit the transfer of the Company Common
Shares to the Purchaser and to preserve and maintain the
Company Assets, including the Company Material Contracts,
notwithstanding the change in control of the Company arising
from the purchase of the Company Common Shares by the
Purchaser.
Authorization
5.2 The Vendors hereby agree to promptly cause the Company, upon the request of
the Purchaser, to authorize and direct any and all federal, provincial,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting the Company to release any and all information in
their possession respecting the Company to the Purchaser. The Vendors shall
promptly cause the Company to execute and deliver to the Purchaser any and all
consents to the release of information and specific authorizations which the
Purchaser reasonably requires to gain access to any and all such information.
Survival
5.3 The covenants set forth in this Article shall survive until the Closing for
the benefit of the Purchaser.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Representations and Warranties
6.1 The Purchaser represents and warrants in all material respects to the
Vendors, with the intent that the Vendors will rely thereon in entering into
this Agreement and in completing the transactions contemplated hereby, that:
The Purchaser - Corporate Status and Capacity
(a) Incorporation. The Purchaser is a corporation duly
incorporated and validly subsisting under the laws of the
State of Delaware, and is in good standing with the office of
the Secretary of State for the State of Delaware;
(b) Carrying on Business. The Purchaser has not carried on and
does not now carry on any material business activity. The
Purchaser has an office in Vancouver, British Columbia and in
no other locations;
(c) Corporate Capacity. The Purchaser has the corporate power,
capacity and authority to enter into and complete this
Agreement;
(d) Reporting Status. The Purchaser Common Shares have been
registered pursuant to s. 12(g) of the Securities and Exchange
Act of 1934 (United States);
The Purchaser - Capitalization
(e) Authorized Capital. The authorized capital of the Purchaser
consists of 30,000,000 Purchaser Common Shares, $0.0001 par
value and 5,000,000 shares of preferred stock. $0.0001 par
value, of which 4,927,040 Purchaser Common Shares and no
shares of preferred stock are presently issued and
outstanding;
(f) No Option. No person, firm or corporation has any agreement or
option or any right capable of becoming an agreement or option
for the acquisition of Purchaser Common Shares or for the
purchase, subscription or issuance of any of the unissued
shares in the capital of the Purchaser;
(g) Capacity. The Purchaser has the full right, power and
authority to enter into and complete this Agreement on the
terms and conditions contained herein;
(h) No Restrictions. There are no restrictions on the transfer,
sale or other disposition of the Acquisition Shares contained
in the charter documents of the Purchaser or under any
agreement to which the Purchaser is a Party;
The Purchaser - Records and Financial Statements
(i) Charter Documents. The charter documents of the Purchaser have
not been altered since the incorporation of the Purchaser,
except as filed in the record books of the Purchaser;
(j) Books and Records. The books and records of the Purchaser
fairly and correctly set out and disclose in all material
respects the financial position of the Purchaser, and all
material financial and other transactions of the Purchaser,
including any and all contracts and any amendments thereto,
have been accurately recorded or filed in such books and
records;
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<PAGE>
(k) Purchaser Financial Statements. As at the date of this
Agreement, the Purchaser Financial Statements are true and
correct and present fairly and correctly the assets and
liabilities (whether accrued, absolute, contingent or
otherwise) of the Purchaser as of the respective dates thereof
and have been prepared in substantial accordance with United
States' generally accepted accounting principles consistently
applied;
(l) Purchaser Accounts Payable and Liabilities. There are no
material liabilities, contingent or otherwise, of the
Purchaser which are not disclosed in Schedule "I" hereto or
reflected in the Purchaser Financial Statements except those
incurred in the ordinary course of business since the date of
the said financial statements, and the Purchaser has not
guaranteed or agreed to guarantee any debt, liability or other
obligation of any person, firm or corporation. Without
limiting the generality of the foregoing, all accounts payable
and liabilities of the Purchaser are described in Schedule "I"
hereto;
(m) No Dividends. No dividends or other distributions on any
shares in the capital of the Purchaser have been made,
declared or authorized since the date of the Purchaser
Financial Statements;
(n) No Payments. No payments of any kind have been made or
authorized since the date of the Purchaser Financial
Statements to or on behalf of officers, directors,
shareholders or employees of the Purchaser or under any
management agreements with the Purchaser;
(o) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation
plans affecting the Purchaser;
(p) No Adverse Events. Since the date of the Purchaser Financial
Statements there has not been any material adverse change in
the financial position or condition of the Purchaser or its
liabilities or any damage, loss or other change in
circumstances materially affecting the Purchaser;
(q) Applicable Laws. The Purchaser has not been charged with or
received notice of breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which it is subject
or which apply to it the violation of which would have a
material adverse effect on the Purchaser;
(r) Pending or Threatened Litigation. There is no material
litigation or administrative or governmental proceeding or
enquiry pending or threatened against or relating to the
Purchaser nor does the Purchaser have any knowledge of any
deliberate act or omission of the Purchaser that would form
any material basis for any such action, proceeding or enquiry;
(s) No Bankruptcy. The Purchaser has not made any voluntary
assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been
filed or presented against the Purchaser and no order has been
made or a resolution passed for the winding-up, dissolution or
liquidation of the Purchaser;
(t) Finder's Fees. The Purchaser is not party to any agreement
which provide for the payment of finder's fees, brokerage
fees, commissions or other fees or amounts which are or may
become payable to any third party in connection with the
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execution and delivery of this Agreement and the transactions
contemplated herein except as due to Century Capital
Management Ltd.;
Execution and Performance of Agreement
(u) Authorization and Enforceability. The execution and delivery
of this Agreement, and the completion of the transactions
contemplated hereby, have been duly and validly authorized by
all necessary corporate action on the part of the Purchaser
and this Agreement constitutes a legal, valid and binding
obligation of the Purchaser and is enforceable against it in
accordance with its terms;
(v) No Violation or Breach. The performance of this Agreement will
not violate the charter documents of the Purchaser or result
in any breach of, or default under, any agreement to which the
Purchaser is a party; and
The Purchaser - Acquisition Shares
(w) Acquisition Shares. The Acquisition Shares when delivered to
the Vendors shall be validly issued and outstanding as fully
paid and non-assessable shares, subject to the provisions of
this Agreement, and the Acquisition Shares shall be
transferable upon the books of the Purchaser, in all cases
subject to the provisions and restrictions of all applicable
securities laws.
Non-Merger and Survival
6.2 The representations and warranties of the Purchaser contained herein will be
true at and as of Closing in all material respects as though such
representations and warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by the Vendors, the
representations and warranties of the Purchaser shall survive the Closing.
Indemnity
6.3 The Purchaser agrees to indemnify and save harmless the Vendors from and
against any and all claims, demands, actions, suits, proceedings, assessments,
judgments, damages, costs, losses and expenses, including any payment made in
good faith in settlement of any claim (subject to the right of the Purchaser to
defend any such claim), resulting from the breach by it of any representation or
warranty of such party under this Agreement or from any misrepresentation in or
omission from any certificate or other instrument furnished or to be furnished
by the Purchaser to the Vendors hereunder.
ARTICLE 7
EMPLOYMENT AGREEMENTS
At the Closing, the Company shall enter into the Employment Agreement
with Joe Perraton pursuant to which each of them will provide services to the
Company.
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ARTICLE 8
CONDITIONS PRECEDENT
Conditions Precedent in favour of the Purchaser
8.1 The Purchaser's obligations to carry out the transactions contemplated
hereby is subject to the fulfillment of each of the following conditions
precedent on or before the Closing:
(a) all documents or copies of documents required to be executed
and delivered to the Purchaser hereunder will have been so
executed and delivered;
(b) pro forma financial statements showing the combined assets,
liabilities, stockholders' equity and results of operations of
the Purchaser and the Company, prepared in prepared in
accordance with United States' generally accepted accounting
principles and the requirements of the Securities and Exchange
Commission will have been delivered to the Purchaser;
(c) the Purchaser shall have completed its due diligence review of
the affairs of the Company, and shall be satisfied with same
in all material respects;
(d) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by the Vendors at or prior to
the Closing will have been complied with or performed;
(e) title to the Company Common Shares and Company Assets will be
free and clear of all mortgages, liens, charges, pledges,
security interests, encumbrances or other claims whatsoever;
(f) the Vendors will have transferred the Company Common Shares to
the Purchaser and the Company Common Shares will be issued to
the Purchaser and registered on the books of the Company in
the name of the Purchaser at Closing;
(g) subject to Article 9 hereof, there will not have occurred
(i) any material adverse change in the financial position
or condition of the Company, its liabilities or the
Company Assets or any damage, loss or other change in
circumstances materially and adversely affecting the
Vendors, the Business or the Company Assets or the
Company's right to carry on the Business, other than
changes in the ordinary course of business, none of
which has been materially adverse, or
(ii) any damage, destruction, loss or other event,
including changes to any laws or statutes applicable
to the Company or the Business (whether or not
covered by insurance) materially and adversely
affecting the Company, the Business or the Company
Assets; and
(h) the transactions contemplated hereby shall have been approved
by all other regulatory authorities having jurisdiction over
the subject matter hereof, if any.
Waiver by the Purchaser
8.2 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of the Purchaser and any such condition may be waived in
whole or in part by the Purchaser at or prior to Closing by delivering to the
Vendors a written waiver to that effect signed by the Purchaser. In the event
that the conditions precedent set out in the preceding
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section are not satisfied on or before the Closing the Purchaser shall be
released from all obligations under this Agreement.
Conditions Precedent in Favour of Vendors
8.3 The obligation of the Vendors to carry out the transactions contemplated
hereby is subject to the fulfillment of each of the following conditions
precedent on or before the Closing:
(a) all documents or copies of documents required to be executed
and delivered to the Vendors hereunder will have been so
executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by the Purchaser at or prior
to the Closing will have been complied with or performed;
(c) the Purchaser will have delivered the Acquisition Shares to
the Vendors and the Acquisition Shares will be registered on
the books of the Purchaser in the name of the Vendors at
Closing;
(d) title to the Acquisition Shares will be free and clear of all
mortgages, liens, charges, pledges, security interests,
encumbrances or other claims whatsoever;
(e) the board of directors of the Purchaser shall have appointed
Marc White and Joe Perraton as directors of the Purchaser; and
(f) the Purchaser shall have received duly executed Subscriptions
for not less that 750 Purchaser Preferred Shares pursuant to
the Private Placement and shall have received in full the
subscription funds therefore, such funds being held in escrow
pending Closing.
Waiver by Vendors
8.4 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of the Vendors and any such condition may be waived in
whole or in part by the Vendors at or prior to the Closing by delivering to the
Purchaser a written waiver to that effect signed by the Vendors. In the event
that the conditions precedent set out in the preceding section are not satisfied
on or before the Closing the Vendors shall be released from all obligations
under this Agreement.
Nature of Conditions Precedent
8.5 The conditions precedent set forth in this Article are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $1.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions of precedent in favour of the other party or parties set forth in
this Article.
Termination
8.6 Notwithstanding any provision herein to the contrary, if Closing does not
occur on or before January 31, 2000 this Agreement will be at an end and will
have no further force or effect, unless otherwise agreed upon by the parties in
writing.
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Confidentiality
8.7 Notwithstanding any provision herein to the contrary, the parties hereto
agree that the existence and terms of this Agreement are confidential and that
if this Agreement is terminated pursuant to the preceding section the parties
agree to return to one another any and all financial, technical and business
documents delivered to the other party or parties in connection with the
negotiation and execution of this Agreement and shall keep the terms of this
Agreement and all information and documents received from the Company and the
contents thereof confidential and not utilize nor reveal or release same,
provided, however, that the Purchaser will be required to issue one or more news
releases and file a Current Report on Form 8-K with the Securities and Exchange
Commission respecting the proposed share purchase contemplated hereby.
ARTICLE 9
RISK
If any material loss or damage to the Business occurs prior to Closing
and such loss or damage, in the Purchaser's reasonable opinion, cannot be
substantially repaired or replaced within sixty (60) days, the Purchaser shall,
within seven (7) days following any such loss or damage, by notice in writing to
the Vendors, at its option, either:
(a) terminate this Agreement, in which case no party will be under
any further obligation to any other party; or
(b) elect to complete the purchase of the Company Common Shares
and the other transactions contemplated hereby, in which case
the proceeds and the rights to receive the proceeds of all
insurance covering such loss or damage will, as a condition
precedent to the Purchaser's obligations to carry out the
transactions contemplated hereby, be vested in the Company or
otherwise adequately secured to the satisfaction of the
Purchaser on or before the Closing Date.
ARTICLE 10
CLOSING
Closing
10.1 The purchase and sale of the Company Common Shares and the other
transactions contemplated by this Agreement will be closed at the Place of
Closing in accordance with the closing procedure set out in this Article.
Documents to be Delivered by Vendors
10.2 On or before the Closing, the Vendors will deliver or cause to be
delivered to the Purchaser:
(a) a certificate of status in respect of the Company and Teaco
and a certificate of incumbency in respect of the authorized
signatories of Teaco;
(b) certified copies of such resolutions of the directors of Teaco
as are required to be passed to authorize the execution,
delivery and implementation of this Agreement;
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(c) the original or certified copies of the charter documents of
the Company and all corporate records documents and
instruments of the Company, the corporate seals of the Company
and all books and accounts of the Company;
(d) certificates representing the Company Common Shares, duly
endorsed for transfer to the Purchaser, together with a duly
executed share certificate respecting the Company Common
Shares issued to the Purchaser and recorded in the share
register of the Company;
(e) all reasonable consents or approvals required to be obtained
by the Vendors and the Company for the purposes of validly
transferring the Company Common Shares to the Purchaser and
preserving and maintaining the interests of the Company under
any and all Company Material Contracts and in relation to the
Company Assets;
(f) certified copies of such resolutions of the shareholders and
directors of the Company as are required to be passed to
authorize the execution, delivery and implementation of this
Agreement;
(g) an acknowledgement from each of the Vendors of the
satisfaction of the conditions precedent set forth in section
8.3 hereof;
(h) the Employment Agreement, duly executed by the Company and
Joe Perraton; and
(i) such other documents as the Purchaser may reasonably require
to give effect to the terms and intention of this Agreement.
Documents to be Delivered by the Purchaser
10.3 On or before the Closing, the Purchaser shall deliver or cause to be
delivered to the Vendors:
(a) a certificate of status in respect of the Purchaser and a
certificate of incumbency in respect of the authorized
signatories of the Purchaser;
(b) share certificates representing the Acquisition Shares
duly registered in the names of the Vendors;
(c) certified copies of such resolutions of the directors of
the Purchaser as are required to be passed to authorize the
execution, delivery and implementation of this Agreement, the
execution and delivery of the Subscriptions and the closing of
the Private Placement, the appointment of the Significant
Shareholders to the board of directors of the Purchaser, the
change of the authorized signatories on the Purchaser's bank
accounts, and such other resolutions as are reasonably
required by the Vendors to complete this Agreement and the
transactions contemplated hereby;
(d) an acknowledgement from the Purchaser of the satisfaction
of the conditions precedent set forth in section 8.1 hereof;
(e) a certificate signed by an officer of the Purchaser
confirming the accuracy, at and as of the Closing Date, of the
representations and warranties of the Purchaser contained in
Article 6 hereof;
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(f) an opinion from counsel for the Purchaser confirming the
accuracy, at and as of the Closing Date, of paragraphs 6.1(a),
(c), (d), (h), (u), (w) of the Share Exchange Agreement, that
the Acquisition Shares have been validly issued to the Vendors
in compliance with all applicable United States' laws and
regulations and that the form of Acquisition Share certificate
have been duly authorized, executed and delivered by the
Purchaser, are in compliance with the laws of Delaware, and do
not conflict with articles of the Purchaser;
(g) such other documents as the Vendors may reasonably require
to give effect to the terms and intention of this Agreement.
ARTICLE 11
GENERAL PROVISIONS
Arbitration
11.1 The parties hereto shall attempt to resolve any dispute, controversy,
difference or claim arising out of or relating to this Agreement by negotiation
in good faith. If such good negotiation fails to resolve such dispute,
controversy, difference or claim within fifteen (15) days after any party
delivers to any other party a notice of its intent to submit such matter to
arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration in the City of Vancouver, British
Columbia. The arbitration panel shall consist of a single arbitrator selected by
the joint agreement of the parties to the dispute; provided that if the parties
cannot agree upon the identity of a single arbitrator within fifteen (15) days,
then the arbitration panel shall consist of three (3) arbitrators, one (1) of
whom shall be appointed by each party within ten (10) days and the third duly
appointed by mutual agreement of the two (2) arbitrators so appointed by the
parties; provided further that if the two arbitrators cannot select the third
arbitrator within ten (10) days after their appointment, the selection of the
third arbitrator shall be made in accordance with the general rules of
arbitration in relation to arbitrations in the Province of British Columbia (the
"Rules"). If no such arbitrator is appointed within ten (10) days of such
request, either party may apply to a court having jurisdiction to make such
appointment. Once the arbitration panel has been selected, the arbitration of
the dispute shall be conducted in English in accordance with the Rules in the
City of Vancouver, British Columbia, unless otherwise provided or limited by the
Rules. The arbitrator(s) shall give each of the parties a fair opportunity to
prepare, including pre-arbitration hearing discoveries, and present its position
with respect to the dispute, and each party shall be entitled to call witnesses
to testify, examine and cross-examine witnesses that the other party calls to
testify, introduce documents and other materials and submit written statements
of position and arguments. The arbitration panel shall make a final
determination, to be provided in writing to each party, that resolves the
dispute and includes an allocation of the aggregate fees, costs and expenses of
the arbitration between the parties to the dispute, such allocation to be made
in the sole discretion of the arbitration panel after giving due consideration
to the relative merits of the parties positions in the dispute. All results of
the arbitration proceedings shall be final, conclusive and binding on all
parties to this Agreement, and shall not be subject to judicial review. Judgment
upon the award rendered by the arbitrator may be entered in the Province of
British Columbia or any other court having competent jurisdiction. For the
purposes of this section, the Vendors shall collectively be deemed to be one
party, and their selection of an arbitrator or concurrence therein shall be made
by notice in writing duly executed by a simple majority of the Vendors.
Notice
11.2 Any notice required or permitted to be given by any party will be deemed to
be given when in writing and delivered to the address for notice of the intended
recipient by personal delivery, prepaid single certified or registered mail, or
telecopier. Any notice delivered by mail
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shall be deemed to have been received on the fourth business day after and
excluding the date of mailing, except in the event of a disruption in regular
postal service in which event such notice shall be deemed to be delivered on the
actual date of receipt. Any notice delivered personally or by telecopier shall
be deemed to have been received on the actual date of delivery.
Addresses for Service
11.3 The address for service of notice of each of the parties hereto is as
follows:
(a) the Vendors:
Teaco Properties Ltd.
649 Belle View Place
Nanaimo, British Columbia
V9V 1B5
Telecopier: (250) 751-7966
Joe Perraton
7491 Elizabeth Way
Lantzville, British Columbia
V0R 2H0
Lara Perraton
485 Howard Avenue
Nanaimo, British Columbia
V9R 3S2
Lang Michener Lawrence & Shaw
Attention: Leo Raffin and Susan Goscoe
500 Royal Centre
1055 West Georgia Street
Vancouver, British Columbia
V6E 4N7
Telecopier: (604) 685-7084
(b) the Purchaser:
1650, 200 Burrard Street
Vancouver, British Columbia
V6C 3L6
Telecopier: (604) 689-5320
Change of Address
11.4 Any party may, by notice to the other parties change its address for notice
to some other address in North America and will so change its address for notice
whenever the existing address or notice ceases to be adequate for delivery by
hand. A post office box may not be used as an address for service.
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Further Assurances
11.5 Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party may
reasonably require to carry out and give effect to the terms and intention of
this Agreement.
Time of the Essence
11.6 Time is expressly declared to be the essence of this Agreement.
Entire Agreement
11.7 The provisions contained herein constitute the entire agreement among the
Vendors and the Purchaser respecting the subject matter hereof and supersede all
previous communications, representations and agreements, whether verbal or
written, among the Vendors and the Purchaser with respect to the subject matter
hereof.
Enurement
11.8 This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
Assignment
11.9 This Agreement is not assignable without the prior written consent of the
parties hereto.
Counterparts
11.10 This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by telecopier will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
Applicable Law
11.11 This Agreement is subject to the laws of the Province of British Columbia
and the laws of Canada applicable therein and, subject to section 11.1 hereof,
the parties hereto to attorn to the exclusive jurisdiction of the Courts of the
Province of British Columbia.
Independent Legal Advice
11.12 The parties hereto acknowledge that they have each received independent
legal advice with respect to the terms of this Agreement and the transactions
contemplated herein or have knowingly and willingly elected not to do so. The
parties hereto further acknowledge that this Agreement has been prepared by
Century Capital Management Ltd. as a convenience to the parties only, and that
Century Capital Management Ltd. has not provided any of the parties hereto with
any professional advice with respect to this Agreement.
Novation
11.13 This Agreement supercedes and novates the Share Exchange Agreement made as
of the 24th day of December, 1999 between the parties hereto, which agreement is
hereby agreed by the parties hereto to be cancelled and of no further force or
effect.
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IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
AUTOEYE INC.
/s/ John William Legg By: /s/ Andrew Hromyk
- ------------------------------------- ---------------------
Witness Authorized Signatory
John William Legg
- -------------------------------------
Name Barrister and Solicitor
- -------------------------------------
Address
200 Burrard Street Suite 1650
Vancouver, British Columbia
Canada V6C 3L6
TEACO PROPERTIES LTD.
/s/ Catherine MacArthur By: /s/ Marc White
- ------------------------------------- --------------------------
Witness Authorized Signatory
Catherine MacArthur
- -------------------------------------
Name
Address
6150 Glacier Way
Nanaino BC V9T 6C8
- -------------------------------------
/s/ Catherine MacArthur /s/ JOE PERRATON
- ------------------------------------- -----------------
Witness JOE PERRATON
Catherine MacArthur
- -------------------------------------
Name
Address
6150 Glacier Way
Nanaino BC V9T 6C8
- -------------------------------------
/s/ Catherine MacArthur /s/ LARA PERRATON
- ------------------------------------- ------------------
Witness LARA PERRATON
Catherine MacArthur
- -------------------------------------
Name
Address
6150 Glacier Way
Nanaino BC V9T 6C8
- -------------------------------------
This is Page 24 to the Share Exchange Agreement dated January 20, 2000 among
Autoeye Inc., Teaco Properties Ltd., Joe Perraton and Lara Perraton.
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