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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 1999
WATERPUR INTERNATIONAL INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-23402 11-2863244
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(State or other (Commission File Number) (I.R.S. Employer
jurisdiction Identification Number)
of incorporation)
6701 B Oldfield Road, Saanichton, B.C., Canada V8M 2AL
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(Address of principal executive offices)
Registrant's telephone number, including area code: (250) 652-4999
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1335 Greg Street, Unit 104, Sparks, Nevada 89431
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(Former name or former address, if changed since last report)
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ITEM 1 CHANGES IN CONTROL OF REGISTANT
Pursuant to that certain Share Exchange Agreement dated as of May 7, 1999
(the "Exchange Agreement") between WaterPur International, Inc. (the "Company"),
on the one hand, and Gary T.C. Joice and Henriette Martinitz (collectively, the
"ProSafe Shareholders"), on the other hand, the Company acquired all of the
outstanding capital stock of ProSafe Fire Training Systems, Inc., an Ontario,
Canada corporation ("ProSafe") in consideration of the issuance to the ProSafe
Shareholders of an aggregate of 218,833 shares of the Series B Convertible
Preferred Stock of the Company (the "Preferred Stock") which are convertible
into an aggregate of 218,833,000 shares of the Common Stock of the Company (the
"ProSafe Acquisition"). The Closing of the ProSafe Acquisition occurred on May
10, 1999.
Pursuant to that certain Asset Purchase Agreement dated as of May 7, 1999
(the "Asset Purchase Agreement") between the Company and Duck Marine Systems
Inc. ("DMS"), the Company acquired from DMS substantially all of the assets,
properties and operating contracts of DMS, subject to certain liabilities of
DMS, in consideration of the issuance to DMS of an aggregate of 218,833 shares
of the Preferred Stock which are convertible into an aggregate of 218,833,000
shares of the Company's Common Stock (the "DMS Acquisition"). The closing of the
DMS Acquisition occurred on May 10, 1999.
The Closings of the DMS Acquisition and ProSafe Acquisition occurred
simultaneously and were conditioned on each other.
Concurrently with the closings of the ProSafe Acquisition and DMS
Acquisition, all of the members of the Company's Board of Directors except Mehdi
Nimjee resigned and the following individuals were elected as directors: Mark
Henrickson, Ronald Rogers, Gary Joice and Henriette Martinitz. In addition, all
of the officers of the Company resigned and Mr. Henrickson was appointed as
Chief Executive Officer, Mr. Rogers as Chief Financial Officer, Mr. Joice as
President and Ms. Martinitz as Secretary.
The following table sets forth certain information and after giving effect
to the issuance of securities at the Closing (including the conversion of
Preferred Stock issued in connection with the ProSafe Acquisition and the DMS
Acquisition) with respect to the beneficial ownership of the outstanding shares
of Common Stock by the persons who acquired control of the Company. Each person
listed below has personal and sole beneficial ownership of the shares of Common
Stock listed with their name:
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Percentage of
Name of Beneficial Owner Number of Shares Ownership(4)
------------------------ ---------------- ------------
Duck Marine Systems,
Inc. 218,833,000(1) 45.7
Mark Henrickson 218,833,000(1)(2) 45.7
Ronald Rogers 218,833,000(1)(3) 45.7
Gary Joice 109,416,500(1) 22.85
Henriette Martinitz 109,416,500(1) 22.85
(1) Represents shares of Common Stock issuable upon the conversion of the
Company's Series B Convertible Preferred Stock.
(2) Mr. Henrickson owns approximately 23% of DMS. Mr. Henrickson disclaims
beneficial ownership of the shares owned by DMS.
(3) Mr. Rogers owns approximately 23% of DMS. Mr. Rogers disclaims beneficial
ownership of the shares owned by DMS.
(4) Based on 478,818,874 shares of Common Stock outstanding consisting of (i)
25,352,866 shares outstanding as of May 10, 1999; (ii) 15,800,008 shares
issuable on conversion of the Series A Convertible Preferred Stock, (iii)
and 437,666,000 issuable upon conversion of the Series B Convertible
Preferred Stock.
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
As described in Item 1 above, pursuant to the Exchange Agreement, the
Company acquired from the ProSafe Shareholders all of the issued and outstanding
Common Stock of ProSafe. In consideration therefor, the Company issued to the
ProSafe Shareholders an aggregate of 218,833 shares of Preferred Stock
convertible into 218,833,000 shares of Common Stock of the Company. As further
indicated, pursuant to the Asset Purchase Agreement, on May 10, 1999, the
Company acquired from DMS substantially all of the assets of DMS and assumed
certain of the liabilities of DMS. In consideration therefor, the Company issued
to DMS an aggregate of 218,833 shares of Preferred Stock which are convertible
into 218,833,000 shares of the Company's Common Stock.
ProSafe is in the business of developing, marketing and installing a line
of fire training apparatus including stationary and mobile buildings, vehicles
and aircraft. ProSafe has developed a proprietary approach to delivering fire
training simulators that meet regulatory training requirements, including the
stringent training standards of aircraft firefighters. ProSafe's customers
include the Canadian and US military, major municipal and state fire academies,
and international airports throughout North America. ProSafe has recently
delivered Mobile Aircraft Fire Training Systems to the US military which are
utilized to train military
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firefighters in live fire situations. ProSafe offers realistic flame signatures
and scope while meeting EPA emission standards through its proprietary propane
delivery system.
DMS is in the business of producing a variety of rapid deployment floating
pump systems to provide access to water for firefighting from a broad range of
resources. Management believes that DMS's proprietary approach to delivering
large volumes of water from mobile, portable, floating pump systems exceeds
conventional pumps and are specifically designed for disaster and emergency
applications. DMS also manufactures the worlds first robotic floating pump
designed to fight fires under wharves. DMS also offers its own line of rapid
response remote video surveillance systems designed to provide emergency
response coordinators with an ability to look out over a city, from a protected
environment, to evaluate and initiate emergency response plans.
ITEM 7 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND RESULTS
a. Financial Statements of Business Acquired
1. Audited Financial Statements for ProSafe consisting of a balance sheet
as of March 31, 1999 and statements of income and cash flow for the two years
ended March 31, 1999.*
2. Audited financials for DMS consisting of a balance sheet as of March
31, 1999 and statements of income and cash flow for the seven months ended
March 31, 1999 and the twelve month period ended August 31, 1998.*
c. Exhibits:
Exhibit
Number Description
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10.1 Share Exchange Agreement dated as of May 7, 1999
10.2 Asset Purchase Agreement dated as of May 7, 1999.
* It is impractical at the present time to provide such documents. Such
documents will be filed as soon as practicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WATERPUR INTERNATIONAL INC.
(Registrant)
Date: May 21, 1999 By: /s/ Mark Henrickson
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Chief Executive Officer
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Exhibit 10.1
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is dated as of May 7 1999,
by and between WaterPur International, Inc., a Delaware corporation (the
"Company"), on the one hand, and Gary T.C. Joice and Henriette Martinitz (the
"Shareholders"), on the other hand.
RECITALS
A. As of the date hereof, the Shareholders own all of the issued and
outstanding shares of the capital stock (the "ProSafe Shares") of ProSafe Fire
Training Systems, Inc. ("ProSafe"), an Ontario corporation ("ProSafe");
B. The Company desires to acquire all of the ProSafe Shares and the
Shareholders desire to exchange all of the ProSafe Shares for shares of the
Convertible Preferred Stock of the Company on the terms and conditions set forth
herein;
C. Concurrently herewith, the Company is entering into an Asset Purchase
Agreement with Duck Marine Systems Inc. ("DMS") pursuant to which DMS will sell
to the Company all of its assets (the "DMS Transaction").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in reliance upon the representations and warranties
hereinafter set forth, the parties agree as follows:
1. EXCHANGE OF THE SHARES AND CONSIDERATION
1.1 Securities Being Exchanged. Effective at the closing of this
Agreement (the "Closing"), and subject to the terms and conditions of this
Agreement, the Shareholders shall assign, transfer and deliver to the Company
all of the ProSafe Shares free and clear of all liens, claims, charges, security
interests or other encumbrances.
1.2 Consideration. Subject to the terms and conditions of this
Agreement, and in consideration of the assignment and delivery of the ProSafe
Shares to the Company, the Company shall, at the Closing, issue to the
Shareholders an aggregate of 218,833 shares (the "Company Shares") of the Series
B Convertible Preferred Stock of the Company ("the "Preferred Stock") which,
assuming conversion thereof immediately following the Closing, shall represent
40.49% of all issued and outstanding stock in the Company, computed on a fully
diluted basis assuming the prior issuance of all the shares of Common Stock
issuable upon conversion of the Company's Series A Preferred Stock and the
exercise of presently outstanding warrants and options of the Company and the
conversion of Preferred Stock issued to the shareholders of DMS in the DMS
Transaction. Attached hereto as Exhibit 1.2 is a copy of the Certificate of
Designation of Preferences and Rights for the Preferred Stock.
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1.3 Closing. The Closing of the transactions contemplated by this
Agreement shall take place at 11:00 a.m. (Los Angeles time) at the offices of
Loeb & Loeb LLP, 1000 Wilshire Blvd., Los Angeles, CA 90017, or at such other
time or place as may be mutually agreed upon, on or before May 7 1999 (or on
such other date as may be mutually agreed upon).
1.4 Method of Closing. The method of closing shall require the
parties to satisfy the conditions specified in Section 6.
2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders hereby represents and warrants to the Company as
follows:
2.1 Organization.
(a) ProSafe is a corporation duly organized, validly existing,
and in good standing under the laws of Ontario. ProSafe has the power and
authority to carry on its business as presently conducted; and ProSafe is
qualified to do business in all jurisdictions where the failure to be so
qualified would have a material adverse effect on its business.
(b) The copies of the charter documents of ProSafe heretofore
furnished to the Company are complete and correct copies thereof as amended and
in effect on the date hereof.
2.2 Capitalization.
(a) All of the issued and outstanding shares of ProSafe are
duly authorized, validly issued, fully paid and nonassessable. The ProSafe
Shares being transferred to the Company pursuant to Section 1.1 hereof
constitute all of the issued and outstanding capital stock of all classes of
ProSafe, are free from any liens, claims, charges, security interests or other
encumbrances, and the Shareholders are the sole beneficial and record owners
thereof, have good title thereto, and the unqualified right to transfer and
dispose of the ProSafe Shares.
(b) There are no outstanding options, warrants, or rights to
purchase or otherwise acquire any securities of ProSafe.
2.3 Subsidiaries and Investments. ProSafe does not own any capital
stock or has any interest in any corporation, partnership, or other form of
business organization.
2.4 Financial Statements. The unaudited balance sheet of ProSafe as
of June 30, 1998 and the unaudited income statement for the ten months ended
June 30, 1998 (the "ProSafe Financial Statements") (a) were prepared in
accordance with the books and records of ProSafe ; (b) were prepared in
accordance with generally accepted accounting principles consistently applied;
and (c) are accurate and fairly present their respective financial condition and
the results of operations as of the relevant dates thereof and for the entities
and periods covered thereby.
2.5 Absence of Material Changes. Since June 30, 1998, there has not
been
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(a) any material adverse change in the condition (financial or
otherwise) of the properties, assets, liabilities or business of the ProSafe,
except changes in the ordinary course of business which, individually and in the
aggregate, have not been materially adverse.
(b) any undisclosed redemption, purchase or other acquisition
of any shares of the capital stock of ProSafe, or any issuance of any shares of
capital stock or membership, as the case may be, or the granting, issuance or
execution of any rights, warrants, options or commitments by ProSafe, as the
case may be, relating to its authorized or issued capital stock or membership
interests, as the case may be.
2.6 Litigation. There is no litigation, proceeding, or investigation
pending or threatened against ProSafe affecting any of their respective
properties or assets, that might result, either in any case or in the aggregate,
in any material adverse change in the business, operations, affairs or financial
condition of ProSafe or their respective properties or assets, or that might
call into question the validity of this Agreement, or any action taken or to be
taken pursuant hereto.
2.7 Title to Assets. ProSafe has good and marketable title to all of
the assets and properties now carried on its books including those reflected in
the most recent balance sheet contained in the ProSafe Financial Statements,
free and clear of all liens, claims, charges, security interests or other
encumbrances, except as described in the ProSafe Financial Statements or arising
thereafter in the ordinary course of business (none of which will be material).
2.8 Contracts and Undertakings. Except as set forth on Schedule 2.8
attached hereto, ProSafe does not have any contracts, agreements, leases,
licenses, arrangements, commitments and other undertakings (collectively the
"ProSafe Contracts") to which it is a party or to which it or its property is
subject. Except as set forth on such Schedule 2.8 attached hereto, neither
ProSafe is not in material default under any of the ProSafe Contracts and, to
the knowledge of the Shareholders, no other party to any ProSafe Contract to
which ProSafe is a party is in default thereunder nor, to the knowledge of the
Shareholders, does there exist any condition or event which, after notice or
lapse of time or both, would constitute a default by any party to any such
ProSafe Contract.
2.9 Transactions with Affiliates, Directors and Shareholders. Except
as set forth on Schedule 2.9 attached hereto, there are no contracts,
agreements, arrangements or other transactions between ProSafe and any officer,
director, member or stockholder of ProSafe, or any corporation or other entity
owned or controlled, directly or indirectly, by any such officer, director,
member of stockholder, a member of any such officer, director, member or
stockholder's family, or any affiliate of any such officer, director, member or
stockholder.
2.10 No Conflict. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby will not conflict with
or result in a breach of any term or provision of, or constitute a default
under, the charter documents of ProSafe or any agreement, contract or instrument
to which any of them is a party or by which any of them or any of their
respective assets are bound.
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2.11 Authority. The Shareholders have full power and authority to
enter into this Agreement and to carry out the transactions contemplated herein.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, have been duly authorized and approved by the
Shareholders and no other proceeding on the part of the Shareholders are
necessary to authorize this Agreement and the transactions contemplated hereby.
2.12 Compliance with Law. ProSafe has in all material respects
complied with and it is now in all material respects in compliance with, all
federal, state and local laws applicable to it. The capital stock of ProSafe was
issued in compliance with all applicable securities laws.
2.13 Securities Laws. The Shareholders understands that the Company
Shares are not being registered under the Securities Act of 1933, as amended
(the "Securities Act"), on the ground that the offer and sale of the Company
Shares are exempt from the registration provisions of Section 5 of the
Securities Act pursuant to Section 4(2) thereof, as transactions by an issuer
not involving any public offering, and/or may be deemed not to involve an offer
or sale within the meaning of Section 5 of the Securities Act pursuant to
Regulation D promulgated thereunder, and that the Company Shares may not be
resold in any transaction subject to Section 5 of the Securities Act unless
registered or an exemption from registration is available for such sale, and
that the certificates representing the Company Shares will bear a legend to that
effect, substantially in the form set forth on Schedule 2.13 attached hereto.
The Shareholders are acquiring the Company Shares for investment purposes only
and not with a view to distribution or resale thereof.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Shareholders as follows:
3.1 Organization
(a) The Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware, has the corporate
power and authority to carry on its business as presently conducted, and is
qualified to do business in all jurisdictions where the failure to be so
qualified would have a material adverse effect on the business of the Company.
(b) The copies of the Certificate of Incorporation of the Company,
and the Bylaws of the Company heretofore furnished to the Shareholders are
complete and correct copies of the Certificate of Incorporation and the Bylaws
of the Company as amended and in effect on the date hereof.
3.2 Capitalization of the Company. The authorized capital stock of
the Company consists of 100,000,000 shares of Common Stock, par value $005 per
share, of which 25,352,866 shares are presently, and will be immediately prior
to the Closing, outstanding; and 10,000.000 shares of Preferred Stock, par value
$.00001 per share, of which 7,900,004 shares of Series A Preferred Stock are
outstanding. All outstanding shares are duly authorized, validly issued, fully
paid and non-assessable, and, at the Closing, the Company Shares will be duly
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authorized, validly issued, fully paid and non-assessable. Except, as set forth
on Schedule 3.2 attached hereto, there are no other outstanding shares of
capital stock or other securities or other equity interests of the Company or
options, warrants. or rights of any kind to acquire such stock, other securities
or other equity interests. Except as set forth on Schedule 3.2 attached hereto,
there are no outstanding agreements which impose an obligation to file a
registration statement or register any of the capital stock of the Company.
3.3 Subsidiaries and Investments. Except as set forth on Schedule
3.3 attached hereto, the Company does not own any capital stock or have any
interest in any corporation, partnership or other form of business organization.
3.4 Financial Statements. The audited consolidated balance sheet of
the Company as of September 30, 1997 and the consolidated statements of
operations and cash flows for the year then ended and the unaudited consolidated
balance sheet as of June 30, 1998 and the unaudited consolidated statements of
operations and cash flow for the nine months then ended (the "Company Financial
Statements") (a) were prepared in accordance with the books and records of the
Company; (b) were prepared in accordance with generally accepted accounting
principles consistently applied; and (c) are accurate and fairly present the
Company's financial condition and the results of its operations as of the
relevant dates thereof and for the period covered thereby.
3.5 Absence of Material Changes. Except as set forth on Schedule 3.5
attached hereto, since June 30, 1998, there has not been:
(a) any material change in the condition (financial or
otherwise) of the properties, assets, liabilities or business of Company, except
changes in the ordinary course of business which, individually and in the
aggregate, have not been materially adverse.
(b) any redemption, purchase or other acquisition of any
shares of the capital stock of Company, or any issuance of any shares of capital
stock or the granting, issuance or execution of any rights, warrants, options or
commitments by the Company relating to its authorized or issued capital stock.
3.6 Litigation. Except as set forth on Schedule 3.6, there is no
litigation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against the Company affecting any of its properties or
assets that might result, either in any case or in the aggregate, in any
material adverse change in the business, operations, affairs or financial
condition of the Company or its properties or assets, or that might call into
question the validity of this Agreement, or any action taken or to be taken
pursuant hereto.
3.7 Title to Assets. The Company has good and marketable title to
all of its assets and properties now carried on its books including those
reflected in the balance sheet contained in the Company Financial Statements,
free and clear of all liens, claims, charges, security interests or other
encumbrances, except as described in the Company Financial Statements or arising
thereafter in the ordinary course of business (none of which will be material).
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3.8 Contracts and Undertakings. Except as set forth on Schedule 3.8
attached hereto, the Company has no contracts, agreements, leases, licenses,
arrangements, commitments or other undertakings (collectively, the "Company
Contracts") to which the Company is a party or to which it or its property is
subject. Except as disclosed in Schedule 3.8 the Company is not in material
default, or alleged to be in material default, under any Company Contract and,
to the knowledge of the Company, no other party to any Company Contract to which
the Company is a party is in default thereunder nor, to the knowledge of the
Company, does there exist any condition or event which, after notice or lapse of
time or both, would constitute a default by any party to any such Company
Contract.
3.9 Transactions with Affiliates, Directors and Shareholders. Except
as set forth on Schedule 3.9 attached hereto, there are no contracts,
agreements, arrangements or other transactions between the Company and any
officer, director, or 5% stockholder, a member of any such officer, director or
5% stockholder's family, or any affiliate of any such officer, director or 5%
stockholder.
3.10 No Conflict. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby will not conflict with
or result in a breach of any term or provision of, or constitute a default
under, the Certificate of Incorporation or Bylaws of the Company, or any
agreement, contract or instrument to which the Company is a party or by which it
or any of its assets are bound.
3.11 Authority. The Company has full power and authority to enter
into this Agreement and to carry out the transactions contemplated herein. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, and the issuance of the Company Shares in accordance with
the terms hereof, have been duly authorized and approved by the Board of
Directors of the Company and no other corporate proceedings on the part of
Company are necessary to authorize this Agreement, the transactions contemplated
hereby and the issuance of the Company Shares in accordance with the terms
hereof.
3.12 Compliance with Law. The Company has in all material respects
complied with and it is now in all material respects in compliance with, all
Federal, State and local laws applicable to the Company. All outstanding
securities have been, and, assuming the accuracy of the investment
representations provided by the issuees to the Company pursuant to the
provisions hereof, the Company Shares will be, issued in full compliance in all
material respects with all state and federal securities laws. The securities
filings of the Company contain no material misstatement or fail to state a
material fact necessary to make the statements made, in light of the
circumstances under which they were made, not misleading.
4. COVENANTS AND AGREEMENTS OF THE PARTIES EFFECTIVE PRIOR TO CLOSING
4.1 Corporate Examinations and Investigations. Prior to the Closing,
each party shall be entitled, through its employees and representatives, to make
such investigations and examinations of the books, records and financial
condition of the Company, and ProSafe as each party may request. In order that
each party may have the full opportunity to do so, the Company, and the
Shareholders shall furnish each party and its representatives during such
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period with all such information concerning the affairs of the Company and
ProSafe, as the case may be, as each party or its representatives may reasonably
request and cause the Company and ProSafe, as the case may be, and their
respective officers, employees, consultants, agents, accountants and attorneys
to cooperate fully with each party's representatives in connection with such
review and examination and to make full disclosure of all information and
documents requested by each party and/or its representatives. Any such
investigations and examinations shall be conducted at reasonable times and under
reasonable circumstances, it being agreed that any examination or original
documents will be at each party's premises, with copies thereof to be provided
to each party and/or its representatives upon request.
4.2 Cooperation; Consents. Prior to the Closing, each party shall
cooperate with the other parties to the end that the parties shall (i) in a
timely manner make all necessary filings with, and conduct negotiations with,
all authorities and other persons the consent or approval of which, or the
license or permit from which is required for the consummation of the
transactions contemplated by this Agreement and (ii) provide to each other party
such information as the other party may reasonably request in order to enable it
to prepare such filings and to conduct such negotiations.
4.3 Conduct of Business. Subject to the provisions hereof, from the
date hereof through the Closing, the Company shall and the Shareholders shall
cause ProSafe to (i) conduct its business in the ordinary course and in such a
manner so that the representations and warranties contained herein shall
continue to be true and correct in all material respects as of the Closing as if
made at and as of the Closing and (ii) not enter into any material transactions
or incur any material liability not required or specifically contemplated
hereby, without first obtaining the written consent of each party. Without the
prior written consent of the Company or the Shareholders, except as required or
specifically contemplated hereby, each party shall not undertake or fail to
undertake any action if such action or failure would render any of said
warranties and representations untrue in any material respect as of the Closing.
4.4 Litigation. From the date hereof through the Closing, each party
hereto shall promptly notify the other parties of any lawsuits, claims,
proceedings or investigations which after the date hereof are threatened or
commenced against such party or any of its affiliates or any officer, director,
employee, consultant, agent or shareholder thereof, in their capacities as such,
which, if decided adversely, could reasonably be expected to have a material
adverse effect upon the condition (financial or otherwise), assets, liabilities,
business, operations or prospects of such party or any of its subsidiaries.
4.5 Notice of Default. From the date hereof through the Closing,
each party hereto shall give to the other parties prompt written notice of the
occurrence or existence of any event, condition or circumstance occurring which
would constitute a violation or breach of this Agreement by such party or which
would render inaccurate in any material respect any of such party's
representations or warranties herein.
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5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations, warranties and covenants of the parties hereto
contained herein shall survive the consummation of the transactions contemplated
herein and remain in full force and effect for a period of one year from the
Closing.
6. CONDITIONS TO CLOSING
6.1 Conditions to Obligation of the Shareholders. The obligations of
the Shareholders under this Agreement shall be subject to each of the following
conditions:
(a) Representations and Warranties of Company to be True. The
representations and warranties of the Company herein contained shall be true in
all material respects at the Closing with the same effect as though made at such
time. The Company shall have performed in all material respects all obligations
and complied in all material respects, to its actual knowledge, with all
covenants and conditions required by this Agreement to be performed or complied
with by it at or prior to the Closing.
(b) No Legal Proceedings. No injunction or restraining order
shall be in effect prohibiting this Agreement, and no action or proceeding shall
have been instituted and, at what would otherwise have been the Closing, remain
pending before the court to restrain or prohibit the transactions contemplated
by this Agreement.
(c) Statutory Requirements. All statutory requirements for the
valid consummation by the Company of the transactions contemplated by this
Agreement shall have been fulfilled. All authorizations, consents and approvals
of all governments and other persons required to be obtained in order to permit
consummation by the Company of the transactions contemplated by this Agreement
shall have been obtained.
(d) DMS Transaction. Concurrently herewith, the DMS
Transaction shall have closed.
(e) Certificate. The Company shall have delivered to the
Shareholders an officer's certificate in form and substance reasonably
satisfactory to the Shareholders, as to the satisfaction of the foregoing
conditions.
6.2 Conditions to Obligations of Company. The obligation of the
Company under this Agreement shall be subject to the following conditions:
(a) Representations and Warranties of the Shareholders to be
True. The representations and warranties of the Shareholders herein contained
shall be true in all material respects as of the Closing and shall have the same
effect as though made at such time except as to effect of transactions, payments
and liabilities incurred in the ordinary course of business since the date
hereof. The Shareholders shall have performed in all material respects all
obligations and complied in all material respects, with all covenants and
conditions required by this Agreement to be performed or complied with by them
prior to the Closing.
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(b) No Legal Proceedings. No injunction or restraining order
shall be in effect, and no action or proceeding shall have been instituted and,
at what would otherwise have been the Closing, remain pending before the court
to restrain or prohibit the transactions contemplated by this Agreement.
(c) Statutory Requirements. All statutory requirements for the
valid consummation by the Shareholders of the transactions contemplated by this
Agreement shall have been fulfilled. All authorization, consents and approvals
of all governments and other persons required to be obtained in order to permit
consummation by the Shareholders of the transactions contemplated by this
Agreement shall have been obtained.
(d) Certificate. The Shareholders shall have delivered to the
Company a certificate in form and substance reasonably satisfactory to the
Company, as to the satisfaction of the foregoing conditions.
7. INDEMNIFICATION.
7.1 Indemnification by the Shareholders. Provided the Company's
claim therefor is instituted by written notice within the time period specified
in Section 5 hereof, the Shareholders, jointly and severally, shall indemnify,
defend and hold harmless and in all respects make whole the Company from and
against any and all damages, judgments and payments ("Losses") which may be
incurred or suffered by the Company or to which it may be subject, which may
arise out of or result from any breach of or exist in violation of any
representation, warranty, covenant or agreement of the Shareholders contained in
this Agreement. Notwithstanding the foregoing, the Shareholders shall have no
liability to the Company hereunder until such time as the aggregate amount of
Losses exceed $25,000 (the "Basket") and then only for the amounts, if any, in
excess thereof. Payment of the indemnity hereunder shall be made by the return
to the Company of Company Shares valued at $7.20 per Share.
7.2 Indemnification by the Company. Provided the claim therefor is
instituted by written notice within the time period specified in Section 5
hereof, the Company shall indemnify, defend and hold harmless and in all respect
make whole the Shareholders from and against any Losses which may be incurred or
suffered by any such party or to which any such party may be subject, which may
arise out of or result from any breach of or exist in violation of any
representation, warranty, covenant or agreement of the Company contained in this
Agreement. Notwithstanding the foregoing, the Company shall have no liability to
the Shareholders hereunder until such time as the aggregate amount of Losses
exceed $25,000 and then only for the amounts in excess, if any, in excess
thereof. Payment of the indemnity shall be made by the issuance by the Company
of additional Company Shares valued at $7.20 per share.
7.3 Computation of Losses. For purposes of calculating any Losses
suffered by an indemnified party pursuant to Sections 7.1 or 7.2 hereof, the
amount of the Losses suffered by the indemnified party shall be the net amount
of damage so suffered after giving effect to any insurance proceeds recovered
with respect to such matter and to any tax benefits attributable to such damage
and actually derived therefrom in the same year or in a subsequent taxable
period.
9
<PAGE>
7.4 Notice to Indemnifying Party. If any party (the "Indemnified
Party") receives notice of any claim or other commencement of any action or
proceeding with respect to which any other party (or parties) (the "Indemnifying
Party") is obligated to provide indemnification pursuant to Sections 7.1 or 7.2
hereof, the Indemnified Party shall promptly give the Indemnifying Party written
notice thereof which notice shall specify, if known, the amount or an estimate
of the amount of the Losses arising therefrom. Such notice shall be a condition
precedent to any liability of the Indemnifying Party for indemnification
hereunder. The Indemnified Party shall not settle or compromise any claim by a
third party for which it is entitled to indemnification hereunder, without the
prior written consent of the Indemnify Party (which shall not be unreasonably
withheld or delayed) unless suit shall have been instituted against it and the
Indemnifying Party shall not have taken control of such suit after notification
thereof as provided in Section 7.5 hereof.
7.5 Defense by Indemnifying Party. In connection with any claim
giving rise to indemnity hereunder resulting from or arising out of any claim or
legal proceeding by a person who is not a party to this Agreement, the
Indemnifying Party at its sole cost and expense shall assume the defense of any
such claim or legal proceeding using counsel of its choice (subject to the
approval of the Indemnified Party, which approval may not be unreasonably
withheld or delayed). The Indemnified Party shall be entitled to participate in
the defense of any such action, with its counsel and at its own expense;
provided, however, that if the Indemnified Party, in its sole reasonable
discretion, determines that there exists a conflict of interest between the
Indemnifying Party (or any constituent party thereof) and the Indemnified Party
or that the Indemnifying Party does not have sufficient financial resources to
fully defend the proceeding or to pay the claim or judgment, the Indemnified
Party (or any constituent party thereof) shall have the right to engage separate
counsel, the reasonable costs and expenses of which shall be paid by the
Indemnifying Party, but in no event shall the Indemnifying Party be liable for
the costs and expenses of more than one such separate counsel. If the
Indemnifying Party does not assume the defense of any such claim or litigation
resulting therefrom, the Indemnified Party may defend against such claim or
litigation, after giving notice of the same to the Indemnifying Party, on such
terms as the Indemnified Party may deem appropriate, and the Indemnifying Party
shall be entitled to participate in (but not control) the defense of such
action, with its counsel and at its own expense.
8. MISCELLANEOUS
8.1. Further Assurances. From time to time, at the other party's
request and without further consideration, each of the parties will execute and
deliver to the others such documents and take such action as the other party may
reasonably request in order to consummate more effectively the transactions
contemplated hereby.
8.2. Expenses of Sale. Except as otherwise provided herein, each
party shall bear its own direct and indirect expenses incurred in connection
with the negotiation and preparation of this Agreement and the consummation and
performance of the transactions contemplated herein. Without limitation, such
expenses shall include the fees and expenses of all attorneys, brokers,
investment bankers, accountants, agents and finders and other professionals
incurred in connection herewith, acting on behalf of such party. The parties
shall indemnify each other against any claims, costs, losses, expenses or
liabilities arising from any
10
<PAGE>
claim or commissions, finder's fees or other compensation in connection with the
contemplated transactions which may be asserted by any person based on any
agreement or arrangement for payment by the other party.
8.3. Use and Confidentiality. All of the information, records,
books, and data to which the parties are given access as set forth herein shall
be used by the parties solely for the purpose of confirming the representations
and warranties set forth herein. Subject to any obligation to comply with (i)
any law (ii) any rule or regulation of any authority or securities exchange of
(iii) any subpoena or other legal process to make information available to the
persons entitled thereto, whether or not the transactions contemplated herein
shall be concluded, all information obtained by any party about the other, and
all of the terms and conditions of this Agreement, shall be kept in confidence
by each party, and each party shall cause its shareholders, directors, trustees,
officers, employees, agents and attorneys to hold such information confidential.
Such confidentiality shall be maintained to the same degree as such party
maintains its own confidential information and shall be maintained until such
time, if any, as any such data or information either is, or becomes, published
or a matter of public knowledge; provided, however, that the foregoing shall not
apply to any information obtained by either party through its own independent
investigations of the other party or received by such party from a third party
not under any obligation to keep such information confidential nor to any
information obtained by such party which is generally known to others engaged in
the trade or business; and provided, further, that, from and after the Closing,
such party shall be under no obligation to maintain confidential any such
information concerning the other party. If this Agreement shall be terminated
for any reason, each party shall return or cause to be returned to the other all
written data, information, files, records and copies of documents, worksheets
and other materials obtained by such party in connection with the transactions
contemplated herein.
8.4. Notices. All notices, requests and other communications
thereunder shall be in writing and shall be delivered by courier or other means
of personal service (including by means of a nationally recognized courier
service or professional messenger service), or sent by telex or telecopy or
mailed first class, postage prepaid, by certified mail, return receipt
requested, or by Federal Express or other reputable overnight delivery service,
in all cases, addressed to:
To the Shareholders:
Fire International Research and Equipment, Inc.
6701 B Oldfield Road
Saanichton, B.C. V8M 2AL
Attention: President
Tel: (250) 652-4999
Fax: (250) 652-7831
To the Company:
WaterPur International Inc.
c/o CTRA Conil - Masdache #11
11
<PAGE>
35572 Tias, Lanzarote
Spain
Attn: Amyn Dahya
With a copy to:
David L. Ficksman, Esq.
Loeb & Loeb LLP
1000 Wilshire Blvd., Suite 1800
Los Angeles, California 90017
Tel: (213) 688-3698
Fax: (213) 688-3460
All notices, requests and other communications shall be deemed given on the date
of actual receipt or delivery as evidenced by written receipt, acknowledgment or
other evidence of actual receipt or delivery to the address. In case of service
by telecopy, a copy of such notice shall be personally delivered or sent by
registered or certified mail, in the manner set forth above, within three (3)
business days thereafter. Either party hereto may from time to time by notice in
writing served as set forth above designate a different address or a different
or additional person to which all such notices or communications thereafter are
to be given.
8.5. Parties in Interest. Except as otherwise expressly provided
herein, all the terms and provisions of this Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by the respective heirs,
beneficiaries, personal and legal representatives, successors and assigns of the
parties hereto; provided, however, that no assignment or transfer by any party
of this Agreement or its rights or obligations hereunder shall occur without the
prior written consent of the other parties hereto.
8.6. Entire Agreement, Amendments. This Agreement, including the
Schedules, Exhibits and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to this subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by the parties or their respective permitted successors or assigns.
8.7. Headings, Etc. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretations of this Agreement.
8.8. Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person, persons, entity or entities may require.
12
<PAGE>
8.9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.10. Governing Law. This Agreement shall be governed by the laws of
the State of California.
8.11. Attorneys' Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement or because of any dispute, breach,
default or claim hereunder, the successful or prevailing party shall be entitled
to recover reasonable attorneys' fees and other costs it incurred in that action
or proceeding, in addition to any other relief to which it may be entitled.
13
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto as of the date first above written.
WaterPur International, Inc.
By:
-------------------------------
Name: Amyn Dahya
Title: President
-------------------------------
Gary T.C. Joice
-------------------------------
Henriette Martinitz
14
<PAGE>
SCHEDULE 2.15
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS PROHIBITED EXCEPT
IN ACCORDANCE WITH THE PROVISIONS OF THE SECURITIES ACT OF 1933 (THE "ACT"). THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR APPLICABLE STATE LAW AND MAY NOT BE OFFERED OR SOLD IN
ANY TRANSACTION SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE ACT OR
APPLICABLE STATE LAW UNLESS SUCH SECURITIES ARE REGISTERED UNDER THE ACT OR
APPLICABLE STATE LAW OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT OR APPLICABLE STATE LAW IS AVAILABLE.
15
<PAGE>
Schedule 2.8
Contracts and Undertakings
1. Agreement to repay Devere Construction Loan $268,200 (Cdn) plus
accumulated interest.
2. Pitney Bowes - 2 Rental Agreements for fax machines, $60.00.
Per month each - expiry dates November 1999.
3. Teletech Financial Lease - Telephone System - Cost $5,406.40.
Terms 60 months at $120.78 per month from August 98.
4. Auto Leases -
Lessor: Tomlinson Pontiac - 1995 Suburban - Cost $29,300
Lease Commencement Date: May 27, 1997
Term: 36 months at $499 per month + PST & GST
Lessor: GMAC - 1998 Blazer - Cost $39,745
Lease Commencement: 28 July, 1998
Term: 36 months at $508.10 + PST & GST
Lessor: GMAC - 1999 Chevrolet Suburban - Cost $48,701
Lease Commencement Date: July 28, 1998
Term: 36 months at $800.85 + PST & GST
Lessor: GMAC - 1999 Chevrolet 4WD Reg Cab - Cost $42,323
Lease Commencement Date: July 28, 1998
Term: 36 months at $635.31 + GST and PST
Lessor: Newcourt Vehicle Leasing 1994 Ford Crew Cab - Cost $37,000
Lease Commencement Date: 14 September 1994
Term: 48 months at $624.00 + PST and GST
<PAGE>
Schedule 2.9
Transaction with Affiliates, etc.
None
<PAGE>
Schedule 3.2
Outstanding Warrants and Options
Amyn S. Dahya 1,000,000 @ $.10
Sandro Kunzle 100,000 @ $.10
Mehdi Nimjee 100,000 @ $.10
Norm Whisenant 50,000 @ $.10
Al-Karim Dahya 50,000 @ $.10
Firdosh Datoo 50,000 @ $.10
Warrants (September 1997 private placement)
3,300,000 shares
Warrants (April 1999 private placement)
1,340,000 shares
Shares issuable to former shareholders of Casmyn International Inc. -
200,000
<PAGE>
Schedule 3.3
Subsidiaries
Vector Ventures Corp. (VVC) 100% owned private Canadian entity
Vector Vietnam Ltd. (VVL) 100% owned Vietnamese subsidiary
STOX Systems Inc. (STOX) 100% owned Canadian entity
Vector Manufacturing Corp. 100% owned US entity
Vector India
<PAGE>
Schedule 3.5
Absence of Material Changes
The Company's activities have been slowed down due to lack of financing
and working capital. The Company is presently insolvent and unable to continue
as a going concern.
<PAGE>
Schedule 3.6
Litigation
(a) Douglas Hughes
Amount: $28,513.82
Representing Attorney: Craig I. Ihara, Esq., Reno, NV
WaterPur Attorney: Michael Morrison, Esq.
(b) Print Consultants Inc.
Amount: $20,000
Representing Attorney: Michael D. Rounds
WaterPur Attorney: Michael Morrison, Esq.
<PAGE>
Schedule 3.8
Contracts and Undertaking
(a) 10 year contract with Amyn S. Dahya effective 1994
(b) A letter of Agreement with Basm Resources Inc. for waste water
treatment which was announced in summer of '98. This agreement has been
cancelled. The cancellation has not been announced.
<PAGE>
Schedule 3.9
Transactions with Affiliates, Directors and Shareholders
The company has borrowed funds from Casmyn Corp. and the amounts have been
disclosed in the Schedule of Liabilities previously provided.
<PAGE>
Exhibit 10.2
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") dated as of May 7, 1999 is
made and entered into by and between WaterPur International, Inc., a Delaware
corporation (the "Company"); and Duck Marine Systems Inc., a British Columbia
corporation ("DMS"), with reference to the following:
A. DMS is engaged in the business (the "Business") of designing
manufacturing and selling rapid deployment floating pump systems.
B. The Company wishes to purchase from DMS and DMS wishes to sell to the
Company the Business together with substantially all of the assets, properties
and operating contracts of DMS, subject to certain liabilities, upon the terms
and conditions of this Agreement.
C. Concurrently herewith, the Company is entering into a Share Exchange
Agreement (the "ProSafe Agreement") with the shareholders (the "ProSafe
Shareholders") of ProSafe Fire Training Systems Inc. ("ProSafe") pursuant to
which the Company will purchase all of the capital stock of ProSafe (the
"ProSafe Transaction").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in reliance upon the representations and warranties
hereinafter set forth, the parties agree as follows:
DEFINITIONS
When used in this Agreement, the following terms shall have the respective
meanings set forth below:
"Accounts Receivable" shall mean all accounts, notes, accounts receivable,
contract rights, drafts, and other forms of claims, demands, instruments,
receivables and rights to the payment of money or other forms of consideration,
whether for goods sold or leased, services performed or to be performed, or
otherwise, owned by DMS or in which DMS has any interest, together with all
guarantees, security agreements and rights and interests securing the same.
"Assets" shall mean all of the Business, goodwill, assets, properties and
rights of every nature, kind and description, whether tangible or intangible,
real, personal or mixed, wherever located and whether or not carried or
reflected on the books and records of DMS, which are owned by DMS or in which
DMS has any interest (including the right to use). The Assets shall include, but
not be limited to, the following:
(a) the Inventories;
(b) the Tangible Personal Property;
(c) the Intangible Personal Property;
<PAGE>
(d) the Prepaid Items;
(e) the Licenses and Permits;
(f) the Contracts and Other Agreements;
(g) the Accounts Receivable;
(h) the Cash and Cash Equivalents;
(i) the Books and Records;
(j) all rights of DMS under express or implied warranties from
suppliers or contractors with respect to the Assets, to the extent assignable;
(k) all of DMS' claims, causes of action, choses in action, rights
of recovery and rights of set-off of any kind;
(l) all of DMS' rights to receive mail and other communications,
other than those, if any;
(m) all certifications and approvals from all certifying agencies
issued to DMS and all of DMS' rights to all data and records held by certifying
agencies;
(n) all goodwill of the Business as a going concern; and
(o) all other properties, tangible and intangible, not otherwise
referred to above which are owned by DMS or in which it has any interest.
"Books and Records" shall mean all books and records, ledgers, employee
records, customer lists, files, correspondence, and other written records of
every kind owned by DMS or in which DMS has any interest.
"Cash and Cash Equivalents" shall mean all cash and cash equivalents, bank
accounts, certificates of deposit, bankers' acceptances, government (or Agency)
securities or other securities owned by DMS or in which DMS has any interest.
"Intangible Personal Property" shall mean all intangible properties owned
by DMS or in which DMS has any interest. The Intangible Personal Property shall
include (i) the names "Duck" and "Fire" and all other registered and
unregistered trademarks, service marks, trade names and slogans, all
applications therefor, and all associated goodwill; (ii) all statutory, common
law and registered copyrights, all applications therefor and all associated
goodwill; (iii) all patents and patent applications, all associated technical
information, shop rights, know-how, trade secrets, processes, operating,
maintenance and other manuals, drawings and specifications, process flow
diagrams and related data, and all associated goodwill; (iv) all "software" and
documentation thereof, (including all electronic data processing systems and
program specifications, source codes, input data and report layouts and format,
record file layouts, diagrams, functional specifications and narrative
descriptions, flow charts); and (v) all
2
<PAGE>
other inventions, discoveries, improvements, processes, formulae (secret or
otherwise), data, drawings, specifications, trade secrets, confidential
information know-how and ideas (including those in the possession of third
parties, but which are the property of DMS), and all drawings, records, books or
other tangible media embodying the foregoing.
"Inventories" shall mean all inventories, including, without limitation,
inventories of raw materials, work in progress, storehouse stocks, materials,
supplies, finished goods and consigned goods, owned by DMS or in which DMS has
any interest (including the right to use), whether located on the premises of
the Business, in transit to or from such premises, in storage facilities or
otherwise.
"Licenses and Permits" shall mean all licenses and permits issued to the
Company or in which the Company has any interest (including the right to use).
"Prepaid Items" shall mean all prepaid items (such as insurance deposits,
municipal or local tax payments or deposits, utility deposits and the like),
deferred charges, reserve accounts and other security and similar deposits owned
by DMS or in which DMS has any interest.
"Tangible Personal Property" shall mean all machinery, equipment, trucks,
automobiles, furniture, supplies, spare parts, tools, stores and other tangible
personal property owned by DMS or in which DMS has any interest (including the
right to use), other than the Inventories and the Books and Records.
1. SALE AND PURCHASE OF ASSETS
1.1 Assets to be Transferred. Subject to the terms and conditions set
forth in this Agreement and in reliance upon the representations and warranties
of the Company and DMS herein set forth, at the Closing, DMS shall sell,
transfer, convey, assign and deliver to the Company, by appropriate deeds, bills
of sale, assignments and other instruments satisfactory to the Company and its
counsel, and the Company shall purchase from DMS, all of the DMS' right, title
and interest, as of the Closing, in and to the Assets.
1.2 Title to Assets. The Assets shall be conveyed free and clear of all
liabilities, obligations, liens or other encumbrances, excepting only those
liabilities and obligations which are expressly to be assumed by the Company
hereunder and those liens or other encumbrances securing the same which are
specifically disclosed herein or expressly permitted by the terms hereof.
2. ASSUMPTION OF LIABILITIES
2.1 Liabilities Assumed. As further consideration for the purchase and
sale of the Assets, the Company shall, from and after the Closing, assume,
perform, discharge and pay when due those obligations and liabilities of DMS
relating to the Business which are specifically set forth in this Section 2.1,
but only to the extent specifically set forth in this Section 2.1 and subject to
any contrary provisions which may be contained in Section 2.2 hereof:
3
<PAGE>
(a) all unpaid or unperformed obligations and liabilities of DMS
under the written Contracts and other Agreements assigned to Purchaser hereunder
arising after the Closing;
(b) all unpaid or unperformed obligations and liabilities of the
Company under the Licenses and Permits assigned to Purchaser hereunder arising
after the Closing;
(c) all trade payables and current liabilities of the Company
existing as of the Closing, but only to the extent reflected on the face of the
DMS Financial Statements (as hereinafter defined) or knowingly and intentionally
incurred by DMS in the ordinary course of the Business after June 30, 1998
consistent with past practices and in conformity with DMS' representations,
warranties and covenants contained in this Agreement and not as a result of any
breach of contract, breach of warranty, tort or infringement of the rights of
another by DMS;
(d) all unpaid or unperformed wages, salaries, payroll taxes, sick
pay, vacation pay, fringe benefits and other employee benefits accrued as of the
Closing, but only to the extent reflected on the face of the DMS Financial
Statements or knowingly and intentionally incurred by DMS in the ordinary course
of the Business after June 30, 1998 consistent with past practices and in
conformity with DMS' representations, warranties and covenants contained in this
Agreement and not as a result of any breach of contract, breach of warranty,
tort or infringement of the rights of another by DMS and the Company;
(e) The performance of all warranty work, arising after the Closing
but relating to products of DMS prior to the Closing;
(f) to the extent not covered by insurance in effect for the benefit
of DMS as of the Closing, all claims for real or personal injury or property
damage which is caused by any defect in any product manufactured by DMS but sold
by the Company after the Closing; and
2.2 Liabilities Not Assumed. Except to the extent expressly assumed by the
Company pursuant to Section 2.1, the Company shall not assume or be liable for
any liabilities or obligations of DMS, whether the same are direct or indirect,
fixed, contingent or otherwise, known or unknown, whether existing at the
Closing or arising thereafter as a result of any act, omission or circumstance
taking place prior to the Closing and any of DMS' liabilities or obligations
which would not have existed had each of DMS' representations and warranties
been true as of the date hereof and as of the Closing Date and had DMS complied
with each of its covenants contained in this Agreement.
3. EXCHANGE OF THE SHARES AND CONSIDERATION
3.1 Consideration. Subject to the terms and conditions of this Agreement,
and in consideration of the assignment and delivery of the Assets to the
Company, the Company shall, at the Closing, issue to DMS an aggregate of 218,833
shares (the "Company Shares") of the Series B Convertible Preferred Stock of the
Company ("the "Preferred Stock") which, assuming conversion thereof immediately
following the Closing, shall represent 40.49% of all issued and outstanding
stock in the Company, computed on a fully diluted basis assuming the prior
issuance of all the shares of Common Stock issuable upon conversion of the
Company's Series A
4
<PAGE>
Preferred Stock, the exercise of presently outstanding warrants and options of
the Company and the conversion of the Preferred Stock issued to the ProSafe
Shareholders in the ProSafe Transaction. Attached hereto as Exhibit 3 is a copy
of the Certificate of Designation of Preferences and Rights for the Preferred
Stock.
3.2 Closing. The Closing of the transactions contemplated by this
Agreement shall take place at 11:00 a.m. (Los Angeles time) at the offices of
Loeb & Loeb LLP, 1000 Wilshire Blvd., Los Angeles, CA 90017, or at such other
time or place as may be mutually agreed upon, on or before May 7, 1999 (or on
such other date as may be mutually agreed upon).
3.3 Method of Closing. The method of closing shall require the parties to
satisfy the conditions specified in Section 8.
4. REPRESENTATIONS AND WARRANTIES OF DMS
DMS hereby represents and warrants to the Company as follows:
4.1 Organization.
(a) DMS is a corporation duly organized, validly existing, and in
good standing under the laws of British Columbia. DMS has the power and
authority to carry on its business as presently conducted; and DMS is qualified
to do business in all jurisdictions where the failure to be so qualified would
have a material adverse effect on its business.
(b) The copies of the charter documents of DMS heretofore furnished
to the Company are complete and correct copies thereof as amended and in effect
on the date hereof.
4.2 Capitalization
(a) All of the issued and outstanding shares of DMS are duly
authorized, validly issued, fully paid and nonassessable.
4.3 Subsidiaries and Investments. DMS does not own any capital stock or
has any interest in any corporation, partnership, or other form of business
organization.
4.4 Financial Statements. The unaudited balance sheet of DMS as of June
30, 1998 and unaudited statements of Loss and Deficit for the ten months ended
June 30, 1998 and twelve months ended August 31, 1997 (the "DMS Financial
Statements") (a) were prepared in accordance with the books and records of DMS;
(b) were prepared in accordance with generally accepted accounting principles
consistently applied; and (c) are accurate and fairly present their respective
financial condition and the results of operations as of the relevant dates
thereof and for the entities and periods covered thereby.
4.5 Absence of Material Changes. Since June 30, 1998, there has not been.
5
<PAGE>
(a) any material adverse change in the condition (financial or
otherwise) of the properties, assets, liabilities or business of the DMS, except
changes in the ordinary course of business which, individually and in the
aggregate, have not been materially adverse.
(b) any undisclosed redemption, purchase or other acquisition of any
shares of the capital stock of DMS, or any issuance of any shares of capital
stock or membership, as the case may be, or the granting, issuance or execution
of any rights, warrants, options or commitments by DMS, as the case may be,
relating to its authorized or issued capital stock or membership interests, as
the case may be.
4.6 Litigation. There is no litigation, proceeding, or investigation
pending or threatened against DMS affecting any of its properties or assets,
that might result, either in any case or in the aggregate, in any material
adverse change in the business, operations, affairs or financial condition of
DMS or its properties or assets, or that might call into question the validity
of this Agreement, or any action taken or to be taken pursuant hereto.
4.7 Title to Assets. DMS has good and marketable title to all of the
Assets, free and clear of all liens, claims, charges, security interests or
other encumbrances, except as described in the DMS Financial Statements or
arising thereafter in the ordinary course of business (none of which will be
material).
4.8 Contracts and Undertakings. Except as set forth on Schedule 4.8
attached hereto, DMS does not have any contracts, agreements, leases, licenses,
arrangements, commitments and other undertakings (collectively the "DMS
Contracts") to which it is a party or to which it or its property is subject.
Except as set forth on such Schedule 4.8 attached hereto, DMS is not in material
default under any of the DMS Contracts and, to the knowledge of DMS, no other
party to any DMS Contract to which DMS is a party is in default thereunder nor,
to the knowledge of DMS, does there exist any condition or event which, after
notice or lapse of time or both, would constitute a default by any party to any
such DMS Contract. As of the Closing, DMS will have obtained the consent of any
party to any DMS Contract which requires such consent in connection with the
assignment of such DMS Contract.
4.9 Transactions with Affiliates, Directors and Shareholders. Except as
set forth on Schedule 4.9 attached hereto, there are no contracts, agreements,
arrangements or other transactions between DMS and any officer, director, member
or stockholder of either of them, or any corporation or other entity owned or
controlled, directly or indirectly, by any such officer, director, member of
stockholder, a member of any such officer, director, member or stockholder's
family, or any affiliate of any such officer, director, member or stockholder.
4.10 No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach of any term or provision of, or constitute a default under,
the charter documents of DMS or any agreement, contract or instrument to which
it is a party or by which it or any of its respective assets are bound.
4.11 Authority. DMS has full power and authority to enter into this
Agreement and to carry out the transactions contemplated herein. The execution
and delivery of this Agreement
6
<PAGE>
and the consummation of the transactions contemplated hereby, have been duly
authorized and approved by Fire and no other corporate or other proceedings on
the part of DMS are necessary to authorize this Agreement and the transactions
contemplated hereby.
4.12 Compliance with Law. DMS has in all material respects complied with
and it is now in all material respects in compliance with, all federal, state
and local laws applicable to it
4.13 Securities Laws. DMS understands that the Company Shares are not
being registered under the Securities Act of 1933, as amended (the "Securities
Act"), on the ground that the offer and sale of the Company Shares are exempt
from the registration provisions of Section 5 of the Securities Act pursuant to
Section 4(2) thereof, as transactions by an issuer not involving any public
offering, and/or may be deemed not to involve an offer or sale within the
meaning of Section 5 of the Securities Act pursuant to Regulation D promulgated
thereunder, and that the Company Shares may not be resold in any transaction
subject to Section 5 of the Securities Act unless registered or an exemption
from registration is available for such sale, and that the certificates
representing the Company Shares will bear a legend to that effect, substantially
in the form set forth on Schedule 4.13 attached hereto. DMS is acquiring the
Company Shares for investment purposes only and not with a view to distribution
or resale thereof, except that the Company Shares may be distributed to the
shareholders of DMS in complete liquidation of DMS provided that each such
shareholder delivers to the Company a written representation substantially to
the effect of this Section 4.13.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to DMS as follows:
5.1 Organization
(a) The Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware, has the corporate
power and authority to carry on its business as presently conducted, and is
qualified to do business in all jurisdictions where the failure to be so
qualified would have a material adverse effect on the business of the Company.
(b) The copies of the Certificate of Incorporation of the Company,
and the Bylaws of the Company heretofore furnished to DMS are complete and
correct copies of the Certificate of Incorporation and the Bylaws of the Company
as amended and in effect on the date hereof.
5.2 Capitalization of the Company. The authorized capital stock of the
Company consists of 100,000,000 shares of Common Stock, par value $005 per
share, of which 25,352,866 shares are presently, and will be immediately prior
to the Closing, outstanding; and 10,000.000 shares of Preferred Stock, par value
$.00001 per share, of which 7,900,004 shares of Series A Preferred Stock are
outstanding. All outstanding shares are duly authorized, validly issued, fully
paid and non-assessable, and, at the Closing, the Company Shares will be duly
authorized, validly issued, fully paid and non-assessable. Except, as set forth
on Schedule 5.2 attached hereto, there are no other outstanding shares of
capital stock or other securities or other equity
7
<PAGE>
interests of the Company or options, warrants. or rights of any kind to acquire
such stock, other securities or other equity interests. Except as set forth on
Schedule 5.2 attached hereto, there are no outstanding agreements which impose
an obligation to file a registration statement or register any of the capital
stock of the Company.
5.3 Subsidiaries and Investments. Except as set forth on Schedule 5.3
attached hereto, the Company does not own any capital stock or have any interest
in any corporation, partnership or other form of business organization.
5.4 Financial Statements. The audited consolidated balance sheet of the
Company as of September 30, 1997 and the consolidated statements of operations
and cash flows for the year then ended and the unaudited consolidated balance
sheet as of June 30, 1998 and the unaudited consolidated statements of
operations and cash flow for the nine months then ended (the "Company Financial
Statements") (a) were prepared in accordance with the books and records of the
Company; (b) were prepared in accordance with generally accepted accounting
principles consistently applied; and (c) are accurate and fairly present the
Company's financial condition and the results of its operations as of the
relevant dates thereof and for the period covered thereby.
5.5 Absence of Material Changes. Except as set forth on Schedule 5.5
attached hereto, since June 30, 1998, there has not been:
(a) any material change in the condition (financial or otherwise) of
the properties, assets, liabilities or business of Company, except changes in
the ordinary course of business which, individually and in the aggregate, have
not been materially adverse.
(b) any redemption, purchase or other acquisition of any shares of
the capital stock of Company, or any issuance of any shares of capital stock or
the granting, issuance or execution of any rights, warrants, options or
commitments by the Company relating to its authorized or issued capital stock.
5.6 Litigation. Except as set forth on Schedule 5.6, there is no
litigation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against the Company affecting any of its properties or
assets that might result, either in any case or in the aggregate, in any
material adverse change in the business, operations, affairs or financial
condition of the Company or its properties or assets, or that might call into
question the validity of this Agreement, or any action taken or to be taken
pursuant hereto.
5.7 Title to Assets. The Company has good and marketable title to all of
its assets and properties now carried on its books including those reflected in
the balance sheet contained in the Company Financial Statements, free and clear
of all liens, claims, charges, security interests or other encumbrances, except
as described in the Company Financial Statements or arising thereafter in the
ordinary course of business (none of which will be material).
5.8 Contracts and Undertakings. Except as set forth on Schedule 5.8
attached hereto, the Company has no contracts, agreements, leases, licenses,
arrangements, commitments or other undertakings (collectively, the "Company
Contracts") to which the Company is a party
8
<PAGE>
or to which it or its property is subject. Except as disclosed in Schedule 5.8
the Company is not in material default, or alleged to be in material default,
under any Company Contract and, to the knowledge of the Company, no other party
to any Company Contract to which the Company is a party is in default thereunder
nor, to the knowledge of the Company, does there exist any condition or event
which, after notice or lapse of time or both, would constitute a default by any
party to any such Company Contract.
5.9 Transactions with Affiliates, Directors and Shareholders. Except as
set forth on Schedule 5.9 attached hereto, there are no contracts, agreements,
arrangements or other transactions between the Company and any officer,
director, or 5% stockholder, a member of any such officer, director or 5%
stockholder's family, or any affiliate of any such officer, director or 5%
stockholder.
5.10 No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach of any term or provision of, or constitute a default under,
the Certificate of Incorporation or Bylaws of the Company, or any agreement,
contract or instrument to which the Company is a party or by which it or any of
its assets are bound.
5.11 Authority. The Company has full power and authority to enter into
this Agreement and to carry out the transactions contemplated herein. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, and the issuance of the Company Shares in accordance with
the terms hereof, have been duly authorized and approved by the Board of
Directors of the Company and no other corporate proceedings on the part of
Company are necessary to authorize this Agreement, the transactions contemplated
hereby and the issuance of the Company Shares in accordance with the terms
hereof.
5.12 Compliance with Law. The Company has in all material respects
complied with and it is now in all material respects in compliance with, all
Federal, State and local laws applicable to the Company. All outstanding
securities have been, and, assuming the accuracy of the investment
representations provided by the issuees to the Company pursuant to the
provisions hereof, the Company Shares will be, issued in full compliance in all
material respects with all state and federal securities laws. The securities
filings of the Company contain no material misstatement or fail to state a
material fact necessary to make the statements made, in light of the
circumstances under which they were made, not misleading.
6. COVENANTS AND AGREEMENTS OF THE PARTIES EFFECTIVE PRIOR TO CLOSING
6.1 Corporate Examinations and Investigations. Prior to the Closing, each
party shall be entitled, through its employees and representatives, to make such
investigations and examinations of the books, records and financial condition of
the Company and DMS as each party may request. In order that each party may have
the full opportunity to do so, the Company, and DMS shall furnish each party and
its representatives during such period with all such information concerning the
affairs of the Company and DMS, as the case may be, as each party or its
representatives may reasonably request and cause the Company and DMS, as the
case may be, and their respective officers, employees, consultants, agents,
accountants and attorneys to
9
<PAGE>
cooperate fully with each party's representatives in connection with such review
and examination and to make full disclosure of all information and documents
requested by each party and/or its representatives. Any such investigations and
examinations shall be conducted at reasonable times and under reasonable
circumstances, it being agreed that any examination or original documents will
be at each party's premises, with copies thereof to be provided to each party
and/or its representatives upon request.
6.2 Cooperation; Consents. Prior to the Closing, each party shall
cooperate with the other parties to the end that the parties shall (i) in a
timely manner make all necessary filings with, and conduct negotiations with,
all authorities and other persons the consent or approval of which, or the
license or permit from which is required for the consummation of the
transactions contemplated by this Agreement and (ii) provide to each other party
such information as the other party may reasonably request in order to enable it
to prepare such filings and to conduct such negotiations.
6.3 Conduct of Business. Subject to the provisions hereof, from the date
hereof through the Closing, the Company and DMS shall (i) conduct its respective
businesses in the ordinary course and in such a manner so that the
representations and warranties contained herein shall continue to be true and
correct in all material respects as of the Closing as if made at and as of the
Closing and (ii) not enter into any material transactions or incur any material
liability not required or specifically contemplated hereby, without first
obtaining the written consent of each party. Without the prior written consent
of the Company or DMS, except as required or specifically contemplated hereby,
each party shall not undertake or fail to undertake any action if such action or
failure would render any of said warranties and representations untrue in any
material respect as of the Closing.
6.4 Litigation. From the date hereof through the Closing, each party
hereto shall promptly notify the other parties of any lawsuits, claims,
proceedings or investigations which after the date hereof are threatened or
commenced against such party or any of its affiliates or any officer, director,
employee, consultant, agent or shareholder thereof, in their capacities as such,
which, if decided adversely, could reasonably be expected to have a material
adverse effect upon the condition (financial or otherwise), assets, liabilities,
business, operations or prospects of such party or any of its subsidiaries.
6.5 Notice of Default. From the date hereof through the Closing, each
party hereto shall give to the other parties prompt written notice of the
occurrence or existence of any event, condition or circumstance occurring which
would constitute a violation or breach of this Agreement by such party or which
would render inaccurate in any material respect any of such party's
representations or warranties herein.
10
<PAGE>
7. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations, warranties and covenants of the parties hereto
contained herein shall survive the consummation of the transactions contemplated
herein and remain in full force and effect for a period of one year from the
Closing.
8. CONDITIONS TO CLOSING
8.1 Conditions to Obligation of DMS. The obligations of DMS under this
Agreement shall be subject to each of the following conditions:
(a) Representations and Warranties of Company to be True. The
representations and warranties of the Company herein contained shall be true in
all material respects at the Closing with the same effect as though made at such
time. The Company shall have performed in all material respects all obligations
and complied in all material respects, to its actual knowledge, with all
covenants and conditions required by this Agreement to be performed or complied
with by it at or prior to the Closing.
(b) No Legal Proceedings. No injunction or restraining order shall
be in effect prohibiting this Agreement, and no action or proceeding shall have
been instituted and, at what would otherwise have been the Closing, remain
pending before the court to restrain or prohibit the transactions contemplated
by this Agreement.
(c) Statutory Requirements. All statutory requirements for the valid
consummation by the Company of the transactions contemplated by this Agreement
shall have been fulfilled. All authorizations, consents and approvals of all
governments and other persons required to be obtained in order to permit
consummation by the Company of the transactions contemplated by this Agreement
shall have been obtained.
(d) ProSafe Closing. The ProSafe Transaction shall be consummated
concurrently with the Closing.
(e) Certificate. The Company shall have delivered to DMS an
officer's certificate in form and substance reasonably satisfactory to DMS, as
to the satisfaction of the foregoing conditions.
8.2 Conditions to Obligations of Company. The obligation of the Company
under this Agreement shall be subject to the following conditions:
(a) Representations and Warranties of DMS to be True. The
representations and warranties of DMS herein contained shall be true in all
material respects as of the Closing and shall have the same effect as though
made at such time except as to effect of transactions, payments and liabilities
incurred in the ordinary course of business since the date hereof. DMS shall
have performed in all material respects all obligations and complied in all
material respects, with all covenants and conditions required by this Agreement
to be performed or complied with by them prior to the Closing.
11
<PAGE>
(b) No Legal Proceedings. No injunction or restraining order shall
be in effect, and no action or proceeding shall have been instituted and, at
what would otherwise have been the Closing, remain pending before the court to
restrain or prohibit the transactions contemplated by this Agreement.
(c) Statutory Requirements. All statutory requirements for the valid
consummation by DMS of the transactions contemplated by this Agreement shall
have been fulfilled. All authorization, consents and approvals of all
governments and other persons required to be obtained in order to permit
consummation by DMS of the transactions contemplated by this Agreement shall
have been obtained.
(d) Certificate. DMS shall have delivered to the Company a
certificate and officer's certificate, respectively, in form and substance
reasonably satisfactory to the Company, as to the satisfaction of the foregoing
conditions.
9. INDEMNIFICATION.
9.1 Indemnification by DMS. Provided the Company's claim therefor is
instituted by written notice within the time period specified in Section 5
hereof, DMS shall indemnify, defend and hold harmless and in all respects make
whole the Company from and against any and all damages, judgments and payments
("Losses") which may be incurred or suffered by the Company or to which it may
be subject, which may arise out of or result from any breach of or exist in
violation of any representation, warranty, covenant or agreement of DMS
contained in this Agreement. Notwithstanding the foregoing, DMS shall have no
liability to the Company hereunder until such time as the aggregate amount of
Losses exceed $25,000 (the "Basket") and then only for the amounts, if any, in
excess thereof. Payment of the indemnity hereunder shall be made by the return
to the Company of Company Shares valued at $7.20 per Share.
9.2 Indemnification by the Company. Provided the claim therefor is
instituted by written notice within the time period specified in Section 5
hereof, the Company shall indemnify, defend and hold harmless and in all respect
make whole DMS from and against any Losses which may be incurred or suffered by
any such party or to which any such party may be subject, which may arise out of
or result from any breach of or exist in violation of any representation,
warranty, covenant or agreement of the Company contained in this Agreement.
Notwithstanding the foregoing, the Company shall have no liability to DMS
hereunder until such time as the aggregate amount of Losses exceed $25,000 and
then only for the amounts in excess, if any, in excess thereof. Payment of the
indemnity shall be made by the issuance by the Company of additional Company
Shares valued at $7.20 per share.
9.3 Computation of Losses. For purposes of calculating any Losses suffered
by an indemnified party pursuant to Sections 9.1 or 9.2 hereof, the amount of
the Losses suffered by the indemnified party shall be the net amount of damage
so suffered after giving effect to any insurance proceeds recovered with respect
to such matter and to any tax benefits attributable to such damage and actually
derived therefrom in the same year or in a subsequent taxable period.
9.4 Notice to Indemnifying Party. If any party (the "Indemnified Party")
receives notice of any claim or other commencement of any action or proceeding
with respect to which
12
<PAGE>
any other party (or parties) (the "Indemnifying Party") is
obligated to provide indemnification pursuant to Sections 9 or 9.1 hereof, the
Indemnified Party shall promptly give the Indemnifying Party written notice
thereof which notice shall specify, if known, the amount or an estimate of the
amount of the Losses arising therefrom. Such notice shall be a condition
precedent to any liability of the Indemnifying Party for indemnification
hereunder. The Indemnified Party shall not settle or compromise any claim by a
third party for which it is entitled to indemnification hereunder, without the
prior written consent of the Indemnify Party (which shall not be unreasonably
withheld or delayed) unless suit shall have been instituted against it and the
Indemnifying Party shall not have taken control of such suit after notification
thereof as provided in Section 9.4 hereof.
9.5 Defense by Indemnifying Party. In connection with any claim giving
rise to indemnity hereunder resulting from or arising out of any claim or legal
proceeding by a person who is not a party to this Agreement, the Indemnifying
Party at its sole cost and expense shall assume the defense of any such claim or
legal proceeding using counsel of its choice (subject to the approval of the
Indemnified Party, which approval may not be unreasonably withheld or delayed).
The Indemnified Party shall be entitled to participate in the defense of any
such action, with its counsel and at its own expense; provided, however, that if
the Indemnified Party, in its sole reasonable discretion, determines that there
exists a conflict of interest between the Indemnifying Party (or any constituent
party thereof) and the Indemnified Party or that the Indemnifying Party does not
have sufficient financial resources to fully defend the proceeding or to pay the
claim or judgment, the Indemnified Party (or any constituent party thereof)
shall have the right to engage separate counsel, the reasonable costs and
expenses of which shall be paid by the Indemnifying Party, but in no event shall
the Indemnifying Party be liable for the costs and expenses of more than one
such separate counsel. If the Indemnifying Party does not assume the defense of
any such claim or litigation resulting therefrom, the Indemnified Party may
defend against such claim or litigation, after giving notice of the same to the
Indemnifying Party, on such terms as the Indemnified Party may deem appropriate,
and the Indemnifying Party shall be entitled to participate in (but not control)
the defense of such action, with its counsel and at its own expense.
10. MISCELLANEOUS
10.1 Further Assurances. From time to time, at the other party's request
and without further consideration, each of the parties will execute and deliver
to the others such documents and take such action as the other party may
reasonably request in order to consummate more effectively the transactions
contemplated hereby.
10.2 Expenses of Sale. Except as otherwise provided herein, each party
shall bear its own direct and indirect expenses incurred in connection with the
negotiation and preparation of this Agreement and the consummation and
performance of the transactions contemplated herein. Without limitation, such
expenses shall include the fees and expenses of all attorneys, brokers,
investment bankers, accountants, agents and finders and other professionals
incurred in connection herewith, acting on behalf of such party. The parties
shall indemnify each other against any claims, costs, losses, expenses or
liabilities arising from any claim or commissions, finder's fees or other
compensation in connection with the contemplated transactions which may
13
<PAGE>
be asserted by any person based on any agreement or arrangement for payment by
the other party.
10.3 Use and Confidentiality. All of the information, records, books, and
data to which the parties are given access as set forth herein shall be used by
the parties solely for the purpose of confirming the representations and
warranties set forth herein. Subject to any obligation to comply with (i) any
law (ii) any rule or regulation of any authority or securities exchange of (iii)
any subpoena or other legal process to make information available to the persons
entitled thereto, whether or not the transactions contemplated herein shall be
concluded, all information obtained by any party about the other, and all of the
terms and conditions of this Agreement, shall be kept in confidence by each
party, and each party shall cause its shareholders, directors, trustees,
officers, employees, agents and attorneys to hold such information confidential.
Such confidentiality shall be maintained to the same degree as such party
maintains its own confidential information and shall be maintained until such
time, if any, as any such data or information either is, or becomes, published
or a matter of public knowledge; provided, however, that the foregoing shall not
apply to any information obtained by either party through its own independent
investigations of the other party or received by such party from a third party
not under any obligation to keep such information confidential nor to any
information obtained by such party which is generally known to others engaged in
the trade or business; and provided, further, that, from and after the Closing,
such party shall be under no obligation to maintain confidential any such
information concerning the other party. If this Agreement shall be terminated
for any reason, each party shall return or cause to be returned to the other all
written data, information, files, records and copies of documents, worksheets
and other materials obtained by such party in connection with the transactions
contemplated herein.
10.4 Notices. All notices, requests and other communications thereunder
shall be in writing and shall be delivered by courier or other means of personal
service (including by means of a nationally recognized courier service or
professional messenger service), or sent by telex or telecopy or mailed first
class, postage prepaid, by certified mail, return receipt requested, or by
Federal Express or other reputable overnight delivery service, in all cases,
addressed to:
To DMS:
Fire International Research and Equipment, Inc.
6701 B Oldfield Road
Saanichton, B.C. V8M 2AL
Attention: President
Tel: (250) 652-4999
Fax: (250) 652-7831
To the Company:
WaterPur International Inc.
c/o CTRA Conil - Masdache #11
35572 Tias, Lanzarote
14
<PAGE>
Spain
Attn: Amyn Dahya
With a copy to:
David L. Ficksman, Esq.
Loeb & Loeb LLP
1000 Wilshire Blvd., Suite 1800
Los Angeles, California 90017
Tel: (213) 688-3698
Fax: (213) 688-3460
All notices, requests and other communications shall be deemed given on the date
of actual receipt or delivery as evidenced by written receipt, acknowledgment or
other evidence of actual receipt or delivery to the address. In case of service
by telecopy, a copy of such notice shall be personally delivered or sent by
registered or certified mail, in the manner set forth above, within three (3)
business days thereafter. Either party hereto may from time to time by notice in
writing served as set forth above designate a different address or a different
or additional person to which all such notices or communications thereafter are
to be given.
10.5 Parties in Interest. Except as otherwise expressly provided herein,
all the terms and provisions of this Agreement shall be binding upon, shall
inure to the benefit of and shall be enforceable by the respective heirs,
beneficiaries, personal and legal representatives, successors and assigns of the
parties hereto; provided, however, that no assignment or transfer by any party
of this Agreement or its rights or obligations hereunder shall occur without the
prior written consent of the other parties hereto.
10.6 Entire Agreement, Amendments. This Agreement, including the
Schedules, Exhibits and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to this subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by the parties or their respective permitted successors or assigns.
10.7 Headings, Etc. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretations of this Agreement.
10.8 Pronouns. All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person, persons, entity or entities may require.
15
<PAGE>
10.9 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
10.10 Governing Law. This Agreement shall be governed by the laws of the
State of California.
10.11 Attorneys' Fees. If any legal action or other proceeding is brought
for the enforcement of this Agreement or because of any dispute, breach, default
or claim hereunder, the successful or prevailing party shall be entitled to
recover reasonable attorneys' fees and other costs it incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
16
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto as of the date first above written.
WaterPur International, Inc.
By:________________________________
Name: Amyn Dahya
Title: President
Duck Marine Systems Inc.
By:________________________________
Name:
Title:
17
<PAGE>
SCHEDULE 4.13
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS PROHIBITED EXCEPT
IN ACCORDANCE WITH THE PROVISIONS OF THE SECURITIES ACT OF 1933 (THE "ACT"). THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR APPLICABLE STATE LAW AND MAY NOT BE OFFERED OR SOLD IN
ANY TRANSACTION SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE ACT OR
APPLICABLE STATE LAW UNLESS SUCH SECURITIES ARE REGISTERED UNDER THE ACT OR
APPLICABLE STATE LAW OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT OR APPLICABLE STATE LAW IS AVAILABLE.
18
<PAGE>
Schedule 4.8
Contracts and Undertakings
None
<PAGE>
Schedule 4.9
Transactions with Affiliates, Directors and Shareholders
Employment contracts with President and Vice-president.
<PAGE>
Schedule 5.2
Outstanding Warrants and Options
Amyn S. Dahya 1,000,000 @ $.10
Sandro Kunzle 100,000 @ $.10
Mehdi Nimjee 100,000 @ $.10
Norm Whisenant 50,000 @ $.10
Al-Karim Dahya 50,000 @ $.10
Firdosh Datoo 50,000 @ $.10
Warrants (September 1997 private placement)
3,300,000 shares
Warrants (April 1999 private placement)
1,340,000 shares
Shares issuable to former shareholders of Casmyn International Inc. -
200,000
<PAGE>
Schedule 5.3
Subsidiaries
Vector Ventures Corp. (VVC) 100% owned private Canadian entity
Vector Vietnam Ltd. (VVL) 100% owned Vietnamese subsidiary
STOX Systems Inc. (STOX) 100% owned Canadian entity
Vector Manufacturing Corp. 100% owned US entity
Vector India
<PAGE>
Schedule 5.5
Absence of Material Changes
The Company's activities have been slowed down due to lack of financing
and working capital. The Company is presently insolvent and unable to continue
as a going concern.
<PAGE>
Schedule 5.6
Litigation
(a) Douglas Hughes
Amount: $28,513.82
Representing Attorney: Craig I. Ihara, Esq., Reno, NV
WaterPur Attorney: Michael Morrison, Esq.
(b) Print Consultants Inc.
Amount: $20,000
Representing Attorney: Michael D. Rounds
WaterPur Attorney: Michael Morrison, Esq.
<PAGE>
Schedule 5.8
Contracts and Undertaking
(a) 10 year contract with Amyn S. Dahya effective 1994
(b) A letter of Agreement with Basm Resources Inc. for waste water
treatment which was announced in summer of '98. This agreement has been
cancelled. The cancellation has not been announced.
<PAGE>
Schedule 5.9
Transactions with Affiliates, Directors and Shareholders
The company has borrowed funds from Casmyn Corp. and the amounts have been
disclosed in the Schedule of Liabilities previously provided.
