Stock Exchange Agreement - American Uranium Inc. and Visual Bible Inc.
STOCK EXCHANGE AGREEMENT
AMONG
AMERICAN URANIUM, INC., a Florida corporation
AND
THE HOLDERS OF ALL OF THE ISSUED AND OUTSTANDING CAPITAL STOCK OF
VISUAL BIBLE, INC., a Florida corporation
July 24, 2000
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TABLE OF CONTENTS
Page
1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Exchange of American Uranium Shares for Visual Bible Shares. 4
2.1 Basic Transaction. . . . . . . . . . . . . . . . . . . 4
2.2 Exchange . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 The Closing. . . . . . . . . . . . . . . . . . . . . . 5
2.4 Deliveries at the Closing. . . . . . . . . . . . . . . 5
3. Due Diligence Review Period. . . . . . . . . . . . . . . . . 5
3.1 Due Diligence Review . . . . . . . . . . . . . . . . . 5
3.2 Termination. . . . . . . . . . . . . . . . . . . . . . 5
4. Representations and Warranties Concerning the Transaction. . 5
4.1 Representations and Warranties of the Shareholders . . 5
4.2 Representations and Warranties of American Uranium . . 8
4.3 Representations and Warranties Concerning Visual Bible
and Its Subsidiaries . . . . . . . . . . . . . . . . . 8
5. Pre-Closing Covenants. . . . . . . . . . . . . . . . . . . . 17
5.1 General. . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Notices and Consents . . . . . . . . . . . . . . . . . 17
5.3 Operation of Business. . . . . . . . . . . . . . . . . 17
5.4 Preservation of Business . . . . . . . . . . . . . . . 18
5.5 Full Access. . . . . . . . . . . . . . . . . . . . . . 18
5.6 Notice of Developments . . . . . . . . . . . . . . . . 18
5.7 Exclusivity. . . . . . . . . . . . . . . . . . . . . . 18
6. Post-Closing Covenants . . . . . . . . . . . . . . . . . . . 18
6.1 General. . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Litigation Support . . . . . . . . . . . . . . . . . . 18
6.3 Confidentiality. . . . . . . . . . . . . . . . . . . . 19
7. Conditions to Obligation to Close. . . . . . . . . . . . . . 19
7.1 Conditions to Obligation of American Uranium . . . . . 19
7.2 Conditions to Obligation of the Shareholders . . . . . 20
8. Survival and Indemnification . . . . . . . . . . . . . . . . 20
8.1 Survival of Representations and Warranties . . . . . . 20
8.2 Indemnification Provisions for Benefit of American
Uranium. . . . . . . . . . . . . . . . . . . . . . . . 21
8.3 Indemnification Provisions for Benefit of the
Shareholders . . . . . . . . . . . . . . . . . . . . . 21
8.4 Matters Involving Third Parties. . . . . . . . . . . . 21
8.5 Determination of Adverse Consequences. . . . . . . . . 22
8.6 Other Indemnification Provisions . . . . . . . . . . . 22
9. Termination. . . . . . . . . . . . . . . . . . . . . . . . . 23
9.1 Termination of Agreement . . . . . . . . . . . . . . . 23
9.2 Effect of Termination. . . . . . . . . . . . . . . . . 23
10. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 23
10.1 Amendments and Waivers . . . . . . . . . . . . . . . . 23
10.2 Construction . . . . . . . . . . . . . . . . . . . . . 24
10.3 Counterparts . . . . . . . . . . . . . . . . . . . . . 24
10.4 Entire Agreement . . . . . . . . . . . . . . . . . . . 24
10.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . 24
10.6 Facsimile Execution. . . . . . . . . . . . . . . . . . 24
10.7 Governing Law. . . . . . . . . . . . . . . . . . . . . 24
10.8 Headings . . . . . . . . . . . . . . . . . . . . . . . 24
10.9 Incorporation of Exhibits, Annexes, and Schedules. . . 24
10.10 Nature of Certain Obligations. . . . . . . . . . . . . 24
10.11 No Third-Party Beneficiaries . . . . . . . . . . . . . 25
10.12 Notices. . . . . . . . . . . . . . . . . . . . . . . . 25
10.13 Press Releases and Public Announcements. . . . . . . . 25
10.14 Severability . . . . . . . . . . . . . . . . . . . . . 25
10.15 Specific Performance . . . . . . . . . . . . . . . . . 26
10.16 Submission to Jurisdiction . . . . . . . . . . . . . . 26
10.17 Succession and Assignment. . . . . . . . . . . . . . . 26
Exhibit 4.1 Shareholder Representations and Warranties
Exhibit 4.1(f)(2) American Uranium Shareholder Voting Agreement
Exhibit 4.2 American Uranium Representations and Warranties
Exhibit 4.3( Disclosure Schedule
<PAGE>
STOCK EXCHANGE AGREEMENT
Stock Exchange Agreement (the "Agreement") entered into on July
__________, 2000, by and among American Uranium, Inc., a Florida
corporation ("American Uranium") and the holders of all of the
issued and outstanding capital stock (collectively, the
"Shareholders") of Visual Bible, Inc., a Florida corporation
("Visual Bible"). American Uranium and the Shareholders are
hereinafter referred to collectively as the "Parties."
This Agreement contemplates a transaction in which American Uranium
will exchange 12,750,001 of the $.001 par value common shares of
American Uranium (the "American Uranium Shares") with Shareholders
for all of the issued and outstanding $.0001 par value common stock
of Visual Bible (the "Visual Bible Shares"), whereupon Visual Bible
will become a wholly owned Subsidiary of American Uranium.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree as
follows.
1. Definitions.
"Accredited Investor" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues,
penalties, fines, costs, amounts paid in settlement, Liabilities,
obligations, Taxes, liens, losses, expenses, and fees, including
court costs and attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of
Code Sec. 1504, or any similar group defined under a similar
provision of state, local or foreign law.
"American Uranium" has the meaning set forth in the preface
above.
"American Uranium Shares" has the meaning set forth in the
preface above.
"Applicable Rate" means the prime rate of interest announced from
time to time by First Union National Bank per annum.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction that forms or could
form the basis for any specified consequence.
"Closing" has the meaning set forth in Paragraph 2.3 below.
"Closing Date" has the meaning set forth in Paragraph 2.3 below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of Visual Bible and its Subsidiaries that is
not already generally available to the public.
"Controlled Group of Corporations" has the meaning set forth in
Code Sec. 1563.
"Deferred Intercompany Transaction" has the meaning set forth in
Treas. Reg. Section1.1502-13.
"Disclosure Schedule" has the meaning set forth in Paragraph 4.3(
below.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee
Pension Benefit Plan, (b) qualified defined contribution retirement
plan or arrangement which is an Employee Pension Benefit Plan, (c)
qualified defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer Plan), or
(d) Employee Welfare Benefit Plan or material fringe benefit plan or
program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Sec. 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Sec. 3(1).
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Resource Conservation and Recovery Act of 1976, and the Occupational
Safety and Health Act of 1970, each as amended, together with all
other laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies
thereof) concerning pollution or protection of the environment,
public health and safety, or employee health and safety, including
laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface
water, ground water, or lands or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Excess Loss Account" has the meaning set forth in Treas. Reg.
Section1.1502-19.
"Extremely Hazardous Substance" has the meaning set forth in Sec.
302 of the Emergency Planning and Community Right-to-Know Act of
1986, as amended.
"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Financial Statement" has the meaning set forth in Paragraph 4.3(k)
below.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time.
"Indemnified Party" has the meaning set forth in Paragraph 8.4( below.
"Indemnifying Party" has the meaning set forth in Paragraph 8.4(
below.
"Intellectual Property" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice),
all improvements thereto, and all patents, patent applications, and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all
goodwill associated therewith, and all applications, registrations,
and renewals in connection therewith, (c) all copyrightable works,
all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, customer and supplier
lists, pricing and cost information, and business and marketing
plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h)
all copies and tangible embodiments thereof (in whatever form or
medium).
"Knowledge" means actual knowledge after reasonable investigation.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and
whether due or to become due), including any liability for Taxes.
"Most Recent Balance Sheet" means the balance sheet contained
within the Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in
Paragraph 4.3(k) below.
"Most Recent Fiscal Month End" has the meaning set forth in
Paragraph 4.3(k) below.
"Most Recent Fiscal Year End" has the meaning set forth in
Paragraph 4.3(k) below.
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to
quantity and frequency).
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Process Agent" has the meaning set forth in Paragraph 10.16% below.
"Prohibited Transaction" has the meaning set forth in ERISA Sec.
406 and Code Sec. 4975.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for Taxes not yet due
and payable, or for Taxes that the taxpayer is contesting in good
faith through appropriate proceedings, (c) purchase money liens and
liens securing rental payments under capital lease arrangements, and
(d) other liens arising in the Ordinary Course of Business and not
incurred in connection with the borrowing of money.
"Shareholders" has the meaning set forth in the preface above.
"Visual Bible" has the meaning set forth in the preface above.
"Visual Bible Shares" has the meaning set forth in the preface
above.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the
common stock or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors.
"Survey" has the meaning set forth in Paragraph ? below.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including
taxes under Code Sec. 59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including
any interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any
amendment thereof.
"Third Party Claim" has the meaning set forth in Paragraph 8.4( below.
2. Exchange of American Uranium Shares for Visual Bible
Shares.
2.1 Basic Transaction. On and subject to the terms and
conditions of this Agreement, American Uranium agrees to acquire
from each of the Shareholders and each of the Shareholders agrees to
transfer to American Uranium, such amount of the Visual Bible Shares
owned by each such Shareholder for the number of American Uranium
Shares specified below in this Paragraph 2".
2.2 Exchange. American Uranium agrees, at the Closing, to
deliver to each Shareholder one (1) American Uranium Share for each
one (1) Visual Bible Share held by such Shareholder. The respective
holdings of Visual Bible Shares by each Shareholder is as set forth
in Paragraph 1 of Exhibit 4.1.
2.3 The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at
the offices of Edward H. Gilbert, P.A. in Boca Raton, Florida,
commencing at 10:00 a.m. local time on the second business day
following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions
the respective Parties will take at the Closing itself) or such
other date as American Uranium and the Shareholders may mutually
determine (the "Closing Date"); provided, however, that the Parties
shall use their mutual best efforts to undertake the Closing within
five (5) business days after expiration of the Due Diligence Review
Period (as hereinafter defined).
2.4 Deliveries at the Closing. At the Closing:
(a) each Shareholder will deliver to American Uranium
the various certificates, instruments, and documents referred
to in Paragraph 7& below;
(b) American Uranium will deliver to the Shareholders
the various certificates, instruments, and documents referred
to in Paragraph 7.2( below;
(c) each Shareholders will deliver to American Uranium
stock certificates representing all of such Shareholder's
Visual Bible Shares, endorsed in blank or accompanied by duly
executed assignment documents; and
(d) American Uranium will deliver to each of the
Shareholders, either the American Uranium Shares or an
executed irrevocable instruction (the "Issuance Instruction")
to the transfer agent of American Uranium (the "Transfer
Agent") directing the Transfer Agent to issue the American
Uranium Shares in accordance herewith.
3. Due Diligence Review Period.
3.1 Due Diligence Review. American Uranium shall have a
period of time (the "Due Diligence Review Period") commencing upon
the date of execution hereof by the Parties hereto and ending at
5:00 P.M. five (5) business days thereafter (the "Due Diligence
Review Period Expiration Date") to review such business, legal and
accounting due diligence matters, in such manner as American Uranium
may deem necessary or appropriate, associated with Visual Bible and
its Subsidiaries and the Visual Bible Shares.
3.2 Termination. American Uranium shall have the absolute
right to terminate this Agreement, in the exercise of the sole and
exclusive discretion of American Uranium, at any time prior to the
expiration of the Due Diligence Review Period Expiration Date. If
American Uranium elects to cancel this Agreement, American Uranium
shall deliver written notice to Shareholders of such election prior
to the Due Diligence Review Period Expiration Date, and thereupon,
this Agreement shall terminate and the Parties hereto shall be
released from any further obligation hereunder.
4. Representations and Warranties Concerning the Transaction.
4.1 Representations and Warranties of the Shareholders.
Each of the Shareholders represents and warrants to American Uranium
that the statements contained in this Paragraph 4.1 are correct and
complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement
throughout this Paragraph 4.1 ) with respect to such Shareholder,
except as set forth in Exhibit 4.1 attached hereto.
(a) Organization of Certain Shareholders. If the
Shareholder is a corporation or other entity, the Shareholder
is duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its organization.
(b) Authorization of Transaction. Each Shareholder
has full power and authority (including, if the Shareholder is
a corporation or other organization, full organizational power
and authority) to execute and deliver this Agreement and to
perform the obligations of Shareholder hereunder. This
Agreement constitutes the valid and legally binding obligation
of the Shareholder, enforceable in accordance with its terms
and conditions. The Shareholder need not give any notice to,
make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
(c) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which any
Shareholder is subject or, if a Shareholder is an entity, any
provision of its organizational documents, or conflict with,
result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Shareholder is a
party or by which any Shareholder is bound or to which any of
the assets of such Shareholder is subject.
(d) Brokers' Fees. No Shareholder has any Liability
or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated
by this Agreement for which American Uranium could become
liable or obligated.
(e) Investment. Each Shareholder:
(1) understands that the American Uranium Shares have
not been, and will not be, registered under the Securities
Act, or under any state securities laws, and are being offered
and sold in reliance upon federal and state exemptions for
transactions not involving any public offering, which depends
upon, among other things, the accuracy of the required
representations and warranties of Shareholders;
(2) that there shall be imprinted on the face of each
certificate representing the American Uranium Shares acquired
by Shareholders the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT WITH RESPECT TO SUCH SECURITIES, OR AN OPINION
OF THE ISSUER'S COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT
REQUIRED UNDER THE ACT.
(3) understands that the American Uranium Shares must
be held indefinitely unless subsequently registered under the
Act or an exemption from such registration is available, and
Shareholders acknowledge that American Uranium shall have no
obligation whatsoever to register the American Uranium Shares
under that Act;
(4) understands the provisions of Rule 144 (the
"Rule") promulgated under the Act permit limited resale of
securities purchased in a private transaction, subject to the
satisfaction of certain conditions as set forth in the Rule;
(5) is acquiring the American Uranium Shares solely
for the account of such Shareholder for investment purposes,
and not with a view to the distribution thereof;
(6) is a sophisticated investor with knowledge and
experience in business and financial matters;
(7) has received certain information concerning
American Uranium, including but not limited to the Form 10-KSB
filed by American Uranium for the year ended December 31,
1999, the Notice of Annual Meeting and Proxy Statement filed
by American Uranium for the meeting scheduled for June 19,
2000 and the Form 10-QSB filed by American Uranium for the
quarter ended March 31, 2000 (all of which are incorporated
herein by this reference), and has had the opportunity to
obtain additional information as desired in order to evaluate
the merits and the risks inherent in acquiring and holding the
American Uranium Shares;
(8) is able to bear the economic risk and lack of
liquidity inherent in holding the American Uranium Shares; and
(9) is familiar with the requirements required to be
designated as an Accredited Investor, and is such an
Accredited Investor.
(f) Visual Bible Shares.
(1) Each Shareholder holds of record and owns
beneficially the number of Visual Bible Shares set forth next
the name of such Shareholder on Exhibit 4.1 , free and clear
of any restrictions on transfer (other than any restrictions
under the Securities Act and state securities laws), Taxes,
Security Interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. No
Shareholder is a party to any option, warrant, purchase right,
or other contract or commitment that could require the
Shareholder to sell, transfer, or otherwise dispose of Visual
Bible Share (other than this Agreement). The Visual Bible
Shares held by the Shareholders represents all of the issued
and outstanding capital stock of Visual Bible.
(2) Each Shareholder is a party to a certain
shareholder voting agreement dated March 2, 2000 and an
irrevocable proxy associated therewith (collectively, the
"Visual Bible Shareholder Voting Agreement"), with respect to
the voting of any Visual Bible Share. Each Shareholder agrees
that at the Closing each such Shareholder shall execute a
shareholder voting agreement and irrevocable proxy associated
therewith (collectively, the "American Uranium Shareholder
Voting Agreement") in the form attached hereto as Exhibit
4.1(f)(2), ant that upon issuance of the American Uranium
Shares, the ability of each such Shareholder to vote such
American Uranium Shares will be restricted as set forth in the
American Uranium Shareholder Voting Agreement.
4.2 Representations and Warranties of American Uranium.
American Uranium represents and warrants to the Shareholders that
the statements contained in this Paragraph 4.2 are correct and
complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement
throughout this Paragraph 4.2), except as set forth in Exhibit 4.2
attached hereto.
(a) Organization of American Uranium. American
Uranium is a corporation duly organized, validly existing, and
in good standing under the laws of the jurisdiction of its
incorporation.
(b) Authorization of Transaction. American Uranium
has full power and authority (including full corporate power
and authority) to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of American Uranium,
enforceable in accordance with its terms and conditions.
American Uranium need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(c) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which American
Uranium is subject or any provision of its charter or bylaws
or conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which American Uranium is
a party or by which it is bound or to which any of its assets
is subject.
(d) Brokers' Fees. American Uranium has no Liability
or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated
by this Agreement for which any Shareholder could become
liable or obligated.
(e) Investment. American Uranium is not acquiring
Visual Bible Shares with a view to or for sale in connection
with any distribution thereof within the meaning of the
Securities Act.
4.3 Representations and Warranties Concerning Visual Bible
and Its Subsidiaries.
(a) The Shareholders have caused John Hamilton, the
chairman of the board of directors of Visual Bible (the
"Visual Bible Responsible Party") to have provided, and
American Uranium acknowledges having received, copies of the
following:
(1) that certain Amended and Restated Agreement in
connection with the Purchase and Sale of Assets and Assignment
of Rights (the "Asset Purchase Agreement") between Visual
International (Pty) Ltd. ("Visual International") and Guardian
Productions, LLC ("Guardian"), the predecessor by merger to
Visual Bible, along with copies of all of the schedules,
exhibits, and closing documents associated with the Asset
Purchase Agreement (collectively, the "Asset Purchase
Transaction Documents");
(2) that certain Share Exchange Agreement (the "Visual
Entertainment Agreement") between Visual Entertainment, Inc.
("Visual Entertainment") and Visual Bible, along with copies
of all of the schedules, exhibits, and closing documents
associated with the Visual Entertainment Agreement
(collectively, the Visual Entertainment Transaction
Documents"); and
(3) that certain Agreement of Merger between Guardian
and Visual Bible (the Visual Bible Guardian Merger
Agreement"), along with copies of all of the schedules,
exhibits, and closing documents associated with the Visual
Bible Guardian Merger Agreement (collectively, the Visual
Bible Guardian Transaction Documents");
(b) The Asset Purchase Transaction Documents, the
Visual Entertainment Transaction Documents and the Visual
Bible Guardian Transaction Documents (collectively, the
"Transaction Documents") are incorporated herein by this
reference.
(c) The Visual Bible Responsible Party represents and
warrants to American Uranium that the Transaction Documents
are complete as of the date of this Agreement and will be
complete as of the Closing Date as though provided on the
Closing Date.
(d) American Uranium has had the opportunity to obtain
such additional information as desired in order to evaluate
the merits and the risks inherent in acquiring and holding the
Visual Bible Shares.
(e) The Visual Bible Responsible Party represents and
warrants to American Uranium that the statements contained in
this Paragraph 4.3( are correct and complete as of the date of
this Agreement and will be correct and complete as of the
Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement
throughout this Paragraph 4.3() with respect to such
Shareholder, except as set forth in Exhibit 4.3( (the
"Disclosure Schedule"). The Disclosure Schedule will be
arranged in paragraphs corresponding to the following lettered
and numbered paragraphs contained in this Paragraph 4.3(.
(f) Organization, Qualification, and Corporate Power.
Each of Visual Bible and its Subsidiaries is a corporation
duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation. Each of
Visual Bible and its Subsidiaries is duly authorized to
conduct business and is in good standing under the laws of
each jurisdiction where such qualification is required. Each
of Visual Bible and its Subsidiaries has full corporate power
and authority and all licenses, permits, and authorizations
necessary to carry on the businesses in which it is engaged
and to own and use the properties owned and used by it.
Paragraph 4.3(f) of the Disclosure Schedule lists the
directors and officers of each of Visual Bible and its
Subsidiaries. None of Visual Bible and its Subsidiaries is in
default under or in violation of any provision of its charter
or bylaws.
(g) Capitalization. The entire authorized capital
stock of Visual Bible consists of One Hundred Million
(100,000,000) shares of capital stock of which Eighty Million
(80,000,000) is designated as $.0001 par value common shares
and of which Twenty Million (20,000,000), is designated as
$.0001 par value preferred shares, and only the Visual Bible
Shares are issued and outstanding. All of the issued and
outstanding Visual Bible Shares have been duly authorized, are
validly issued, fully paid, and nonassessable, and are held of
record by the respective Shareholders as set forth in on
Exhibit 4.1 . There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments
that could require Visual Bible to issue, sell, or otherwise
cause to become outstanding any of its capital stock. There
are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or similar rights with respect to
Visual Bible. Except for the Visual Bible Shareholder Voting
Agreement, there are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the
capital stock of Visual Bible.
(h) Noncontravention. None of Visual Bible and its
Subsidiaries, if any, must give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
Neither the execution and the delivery of this Agreement nor
the consummation of the transactions contemplated hereby will:
(1) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or
court to which any of Visual Bible and its Subsidiaries, if
any, is subject or any provision of the charter or bylaws of
any of Visual Bible and its Subsidiaries; or
(2) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which any of
Visual Bible and its Subsidiaries is a party or by which it is
bound or to which any of its assets is subject (or result in
the imposition of any Security Interest upon any of its assets).
(i) Title to Assets. Visual Bible and its
Subsidiaries have good and marketable title to, or a valid
leasehold interest in, their respective properties and assets,
whether acquired as a result of the transactions
(collectively, the "Transactions") undertaken pursuant to the
Transaction Documents or otherwise, free and clear of all
Security Interests, except as indicated in the Transaction
Documents or in paragraph 4.3(i) of the Disclosure Schedule
and except for properties and assets disposed of in the
Ordinary Course of Business since the date of the conclusion
of the Transactions.
(j) Subsidiaries. All of the issued and outstanding
shares of capital stock of each Subsidiary of Visual Bible
have been duly authorized and are validly issued, fully paid,
and nonassessable. Each of Visual Bible and its Subsidiaries
holds of record and owns beneficially all of the outstanding
shares of each Subsidiary of Visual Bible, free and clear of
any restrictions on transfer (other than restrictions under
the Securities Act and state securities laws), Taxes, Security
Interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. There are no
outstanding or authorized options, warrants, purchase rights,
conversion rights, exchange rights, or other contracts or
commitments that could require any of Visual Bible and its
Subsidiaries to sell, transfer, or otherwise dispose of any
capital stock of any of its Subsidiaries or that could require
any Subsidiary of Visual Bible to issue, sell, or otherwise
cause to become outstanding any of its own capital stock.
There are no outstanding stock appreciation, phantom stock,
profit participation, or similar rights with respect to any
Subsidiary of Visual Bible. There are no voting trusts,
proxies, or other agreements or understandings with respect to
the voting of any capital stock of any Subsidiary of Visual
Bible. None of Visual Bible and its Subsidiaries controls
directly or indirectly or has any direct or indirect equity
participation in any corporation, partnership, trust, or other
business association which is not a Subsidiary of Visual Bible.
(k) Financial Statements. Paragraph 4.3(k) of the
Disclosure Schedule sets forth certain financial statements of
Visual Bible (collectively the "Financial Statements"). The
Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby, present fairly the
financial condition of Visual Bible and its Subsidiaries as of
such dates and the results of operations of Visual Bible and
its Subsidiaries for such periods, are correct and complete,
and are consistent with the books and records of Visual Bible
and its Subsidiaries (which books and records are correct and
complete); provided, however, that the Most Recent Financial
Statements are subject to normal year-end adjustments (which
will not be material individually or in the aggregate) and
lack footnotes and other presentation items. Accordingly, the
Financial Statements are as follows:
(1) unaudited pro forma consolidated balance sheets
and statements of income for the fiscal year ended December
31, 1999 (the "Most Recent Fiscal Year End") for Visual Bible
and its Subsidiaries; and
(2) unaudited pro forma consolidated balance sheets
and statements of income for the three months ended March 31,
2000 (the "Most Recent Fiscal Month End") for Visual Bible and
its Subsidiaries.
(l) Events Subsequent to Most Recent Fiscal Year End
and Most Recent Fiscal Month End. Since the Most Recent
Fiscal Year End and the Most Recent Fiscal Month End, there
has not been any material adverse change in the business,
financial condition, operations, results of operations, or
future prospects of any of Visual Bible and its Subsidiaries.
(m) Undisclosed Liabilities. None of Visual Bible and
its Subsidiaries has any Liability (and there is no Basis for
any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any
of them giving rise to any Liability), except for :
(1) Liabilities set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto); and
(2) Liabilities which have arisen after the Most
Recent Fiscal Month End in the Ordinary Course of Business
(none of which results from, arises out of, relates to, is in
the nature of, or was caused by any breach of contract, breach
of warranty, tort, infringement, or violation of law).
(n) Legal Compliance. Each of Visual Bible, its
Subsidiaries and their respective predecessors and Affiliates
has complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), and
no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or
commenced against any of them alleging any failure so to comply.
(o) Tax Matters.
(1) Except as indicated in the Transaction Documents,
each of Visual Bible and its Subsidiaries has filed all Tax
Returns that it was required to file. All such Tax Returns
were correct and complete in all respects. All Taxes owed by
any of Visual Bible and its Subsidiaries (whether or not shown
on any Tax Return) have been paid. None of Visual Bible and
its Subsidiaries currently is the beneficiary of any extension
of time within which to file any Tax Return. No claim has
ever been made by an authority in a jurisdiction where any of
Visual Bible and its Subsidiaries does not file Tax Returns
that it is or may be subject to taxation by that jurisdiction.
There are no Security Interests on any of the assets of any
of Visual Bible and its Subsidiaries that arose in connection
with any failure (or alleged failure) to pay any Tax.
(2) Each of Visual Bible and its Subsidiaries, if any,
has withheld and paid all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or
other third party.
(3) No director or officer (or employee responsible
for Tax matters) of any of Visual Bible and its Subsidiaries
expects any authority to assess any additional Taxes for any
period for which Tax Returns have been filed. There is no
dispute or claim concerning any Tax Liability of any of Visual
Bible and its Subsidiaries either (A) claimed or raised by any
authority in writing or (B) as to which any of the directors
and officers (and employees responsible for Tax matters) of
Visual Bible and its Subsidiaries has Knowledge based upon
personal contact with any agent of such authority.
(4) None of Visual Bible and its Subsidiaries has
waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax
assessment or deficiency.
(5) None of Visual Bible and its Subsidiaries has
filed a consent under Code Sec. 341(f) concerning collapsible
corporations. None of Visual Bible and its Subsidiaries has
made any payments, is obligated to make any payments, or is a
party to any agreement that under certain circumstances could
obligate it to make any payments that will not be deductible
under Code Sec. 280G. None of Visual Bible and its
Subsidiaries has been a United States real property holding
corporation within the meaning of Code Sec. 897(c)(2) during
the applicable period specified in Code Sec. 897(c)(1)(A)(ii).
None of Visual Bible and its Subsidiaries is a party to any
Tax allocation or sharing agreement. None of Visual Bible and
its Subsidiaries has been a member of an Affiliated Group
filing a consolidated federal income Tax Return (other than a
group the common parent of which was Visual Bible) or, other
than as may be associated with the Transactions, has any
Liability for the Taxes of any Person (other than any of
Visual Bible and its Subsidiaries) under Treas. Reg.
Section1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or
otherwise.
(p) Real Property.
(1) Neither Visual Bible nor any of its Subsidiaries
owns any real property.
(2) The Transaction Documents list and describe
briefly all real property leased or subleased to any of Visual
Bible and its Subsidiaries, and provide correct and complete
copies of the leases and subleases.
(q) Intellectual Property.
(1) The Transaction Documents list and describe
briefly the Intellectual Property owned or used, pursuant to
license, sublicense, agreement, or permission, by Visual Bible
and its Subsidiaries. Such Intellectual Property is
sufficient for the operation of the businesses of Visual Bible
and its Subsidiaries as presently conducted and as proposed to
be conducted. Each item of Intellectual Property owned or
used by any of Visual Bible and its Subsidiaries immediately
prior to the Closing hereunder will be owned or available for
use by Visual Bible or the Subsidiary on identical terms and
conditions immediately subsequent to the Closing hereunder.
Each of Visual Bible and its Subsidiaries has taken all
necessary action to maintain and protect each item of
Intellectual Property that it owns or uses.
(2) Except as indicated in the Transaction Documents,
none of Visual Bible and its Subsidiaries has interfered with,
infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of third
parties. To the Knowledge of the Visual Bible Responsible
Party, except as indicated in the Transaction Documents, no
third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any
Intellectual Property rights of any of Visual Bible and its
Subsidiaries.
(3) The Transaction Documents list and describe
briefly each patent or registration which has been issued to
any of Visual Bible and its Subsidiaries with respect to any
of its Intellectual Property, identifies each pending patent
application or application for registration which any of
Visual Bible and its Subsidiaries has made with respect to any
of its Intellectual Property, and identifies each license,
agreement, or other permission which any of Visual Bible and
its Subsidiaries has granted to any third party with respect
to any of its Intellectual Property (together with any
exceptions). The Transaction Documents also identify each
trade name or unregistered trademark used by any of Visual
Bible and its Subsidiaries in connection with any of their
businesses. With respect to each item of Intellectual
Property, unless otherwise indicated in the Transaction
Documents:
(A) Visual Bible and its Subsidiaries possess
all right, title, and interest in and to the item, free
and clear of any Security Interest, license, or other
restriction;
(B) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is
pending or threatened which challenges the legality,
validity, enforceability, use, or ownership of the item;
and
(D) none of Visual Bible and its Subsidiaries
has ever agreed to indemnify any Person for or against
any interference, infringement, misappropriation, or
other conflict with respect to the item.
(4) The Transaction Documents identify each item of
Intellectual Property that any third party owns and that any
of Visual Bible and its Subsidiaries uses pursuant to license,
sublicense, agreement, or permission. With respect to each
such item of Intellectual Property, unless otherwise indicated
in the Transaction Documents:
(A) the license, sublicense, agreement, or
permission covering the item is legal, valid, binding,
enforceable, and in full force and effect;
(B) the license, sublicense, agreement, or
permission will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical
terms following the Closing;
(C) no party to the license, sublicense,
agreement, or permission is in breach or default, and no
event has occurred which with notice or lapse of time
would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(D) no party to the license, sublicense,
agreement, or permission has repudiated any provision
thereof;
(E) with respect to each sublicense, the
representations and warranties set forth in subsections
4.3(q)(4)(A)- through 4.3(q)(4)(D)- above are true and
correct with respect to the underlying license;
(F) the underlying item of Intellectual Property
is not subject to any outstanding injunction, judgment,
order, decree, ruling, or charge;
(G) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is
pending or threatened which challenges the legality,
validity, or enforceability of the underlying item of
Intellectual Property; and
(H) none of Visual Bible and its Subsidiaries
has granted any sublicense or similar right with respect
to the license, sublicense, agreement, or permission.
(I) to the Knowledge of the Visual Bible
Responsible Party, will interfere with, infringe upon,
misappropriate, or otherwise come into conflict with,
any Intellectual Property rights of third parties as a
result of the continued operation of its business as
presently conducted.
(r) Tangible Assets. Visual Bible and its
Subsidiaries own or lease all buildings, machinery, equipment,
and other tangible assets necessary for the conduct of their
businesses as presently conducted.
(s) Inventory. The inventory of Visual Bible and its
Subsidiaries consists of raw materials and supplies,
manufactured and purchased parts, goods in process, and
finished goods, all of which, except as indicated in the
Transaction Documents is merchantable and fit for the purpose
for which it was procured or manufactured, and none of which
is slow-moving, obsolete, damaged, or defective.
(t) Contracts. The Transaction Documents and
paragraph 4.3(t) of the Disclosure, collectively, identify
each material written agreement and provide a written summary
setting forth the terms and conditions of each material oral
agreement between Visual Bible and its Subsidiaries and any
third party. With respect to each such agreement:
(1) the agreement is legal, valid, binding,
enforceable, and in full force and effect;
(2) the agreement will continue to be legal, valid,
binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby;
(3) no party is in breach or default, and no event has
occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or
acceleration, under the agreement;
(4) no party has repudiated any provision of the
agreement.
(u) Notes and Accounts Receivable. All notes and
accounts receivable of Visual Bible and its Subsidiaries are
reflected properly on their books and records, are, except as
indicated in the Transaction Documents, valid receivables
subject to no setoffs or counterclaims, are current and
collectible, and will be collected in accordance with their
terms at their recorded amounts, subject only to the reserve
for bad debts set forth on the face of the Most Recent Balance
Sheet, as adjusted for the passage of time through the Closing
Date in accordance with the past custom and practice of Visual
Bible and its Subsidiaries.
(v) Powers of Attorney. There are no outstanding
powers of attorney executed on behalf of any of Visual Bible
and its Subsidiaries.
(w) Insurance.
(1) The Transaction Documents set forth certain
information regarding insurance policies for the benefit of
Visual Bible and its Subsidiaries. With respect to each such
insurance policy:
(A) the policy is legal, valid, binding,
enforceable, and in full force and effect;
(B) the policy will continue to be legal, valid,
binding, enforceable and in full force and effect on
identical terms following the consummation of the
transactions contemplated hereby;
(C) neither any of Visual Bible and its
Subsidiaries nor any other party to the policy is in
breach or default (including with respect to the payment
of premiums or the giving of notices) and no event has
occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit
termination, modification, or acceleration, under the
policy; and
(D) no party to the policy has repudiated any
provision thereof.
(x) Litigation. The Transaction Documents and
paragraph 4.3(x) of the Disclosure Schedule sets forth
information regarding any material litigation matters. Other
than as indicated in the Transaction Documents and paragraph
4.3(x) of the Disclosure Schedule, the Visual Bible
Responsible Party has no reason to believe that any action,
suit, proceeding, hearing, or investigation may be brought or
threatened against any of Visual Bible and its Subsidiaries.
(y) Product Warranty. Each product manufactured,
sold, leased, or delivered by any of Visual Bible and its
Subsidiaries has been in conformity with all applicable
contractual commitments and all express and implied
warranties, and, except as indicated in the Transaction
Documents, none of Visual Bible and its Subsidiaries has any
Liability (and there is no Basis for any present or future
action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of them giving rise to
any Liability) for replacement or repair thereof or other
damages in connection therewith, subject only to the reserve
for product warranty claims set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto) as
adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of Visual Bible
and its Subsidiaries.
(z) Product Liability. None of Visual Bible and its
Subsidiaries, if any, has any Liability (and there is no Basis
for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any
of them giving rise to any Liability) arising out of any
injury to individuals or property as a result of the
ownership, possession, or use of any product manufactured,
sold, leased, or delivered by any of Visual Bible and its
Subsidiaries.
(aa) Employees. To the Knowledge of the Visual Bible
Responsible Party other than as indicated in the Transaction
Documents, no executive, key employee, or group of employees
has any plans to terminate employment with any of Visual Bible
and its Subsidiaries. None of Visual Bible and its
Subsidiaries is a party to or bound by any collective
bargaining agreement, nor has any of them experienced any
strikes, grievances, claims of unfair labor practices, or
other collective bargaining disputes. None of Visual Bible
and its Subsidiaries has committed any unfair labor practice.
The Visual Bible Responsible Party has no Knowledge of any
organizational effort presently being made or threatened by or
on behalf of any labor union with respect to employees of any
of Visual Bible and its Subsidiaries.
(ab) Employee Benefits. The Transaction Documents and
paragraph 4.3(ab)# of the Disclosure Schedule lists each
Employee Benefit Plan that any of Visual Bible and its
Subsidiaries maintains or to which any of Visual Bible and its
Subsidiaries contributes. Each such Employee Benefit Plan
complies in form and in operation in all respects with the
applicable requirements of ERISA, the Code, and other
applicable laws.
(ac) Guaranties. Except as indicated in the
Transaction Documents, none of Visual Bible and its
Subsidiaries is a guarantor or otherwise is liable for any
Liability or obligation (including indebtedness) of any other
Person.
(ad) Environment, Health, and Safety.
(1) Each of Visual Bible, its Subsidiaries, if any,
and their respective predecessors and Affiliates has complied
with all Environmental, Health, and Safety Laws, and no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or
commenced against any of them alleging any failure so to comply.
(2) None of Visual Bible and its Subsidiaries has any
Liability (and none of Visual Bible, its Subsidiaries, and
their respective predecessors and Affiliates has handled or
disposed of any substance, arranged for the disposal of any
substance, exposed any employee or other individual to any
substance or condition, or owned or operated any property or
facility in any manner that could form the Basis for any
present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any
of Visual Bible and its Subsidiaries giving rise to any
Liability) for damage to any site, location, or body of water
(surface or subsurface), for any illness of or personal injury
to any employee or other individual, or for any reason under
any Environmental, Health, and Safety Law.
(ae) Certain Business Relationships with Visual Bible
and Its Subsidiaries. Except as indicated in the Transaction
Documents or in paragraph 4.3(ae)+ of the Disclosure Schedule,
none of the Shareholders and their Affiliates has been
involved in any business arrangement or relationship with any
of Visual Bible and its Subsidiaries within the past 12
months, and none of the Shareholders and their Affiliates owns
any asset, tangible or intangible, which is used in the
business of any of Visual Bible and its Subsidiaries.
(af) Disclosure. The representations and warranties
contained in this Paragraph 4.3( do not contain any untrue
statement of a material] fact or omit to state any material
fact necessary in order to make the statements and information
contained in this Paragraph 4.3( not misleading.
5. Pre-Closing Covenants. The Parties agree as follows
with respect to the period between the execution of this Agreement
and the Closing.
5.1 General. Each of the Parties will use such Parties'
best efforts to take all action and to do all things necessary,
proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction,
but not waiver, of the closing conditions set forth in Paragraph 7&
below).
5.2 Notices and Consents. The Shareholders will cause each
of Visual Bible and its Subsidiaries to give any notices to third
parties, and will cause each of Visual Bible and its Subsidiaries to
use its best efforts to obtain any third-party consents that
American Uranium may reasonably request in connection with the
transactions contemplated hereby.
5.3 Operation of Business. The Shareholders will not cause
or permit any of Visual Bible and its Subsidiaries to engage in any
practice, take any action, or enter into any transaction outside the
Ordinary Course of Business. Without limiting the generality of the
foregoing, the Shareholders will not cause or permit any of Visual
Bible and its Subsidiaries to declare, set aside, or pay any
dividend or make any distribution with respect to its capital stock
or redeem, purchase, or otherwise acquire any of its capital stock.
5.4 Preservation of Business. The Shareholders will cause
each of Visual Bible and its Subsidiaries to keep its business and
properties substantially intact, including its present operations,
physical facilities, working conditions, and relationships with
lessors, licensors, suppliers, customers, and employees.
5.5 Full Access. Each of the Shareholders will permit, and
the Shareholders will cause each of Visual Bible and its
Subsidiaries to permit, representatives of American Uranium to have
full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of Visual Bible and
its Subsidiaries to all premises, properties, personnel, books,
records (including Tax records), contracts, and documents of or
pertaining to each of Visual Bible and its Subsidiaries.
5.6 Notice of Developments. The Shareholders will give
prompt written notice to American Uranium of any material adverse
development causing a breach of any of the representations and
warranties concerning Visual Bible and its Subsidiaries in Paragraph
4.3(. Each Party will give prompt written notice to the other
Parties of any material adverse development causing a breach of any
of such Parties representations and warranties contained herein. No
disclosure by any Party pursuant to this Paragraph 5.6, however,
shall be deemed to amend or supplement Annex I, Annex II, or the
Disclosure Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.
5.7 Exclusivity. None of the Shareholders will (and none
of the Shareholders will vote their Visual Bible Shares in favor
of), nor will the Shareholders cause or permit any of Visual Bible
and its Subsidiaries (and the Shareholders will notify American
Uranium immediately if any Person makes any) of the following:
(a) solicit, initiate, or encourage the submission of
any proposal or offer from any Person relating to the
acquisition of any capital stock or other voting securities,
or any substantial portion of the assets of, any of Visual
Bible and its Subsidiaries (including any acquisition
structured as a merger, consolidation, or share exchange); or
(b) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort
or attempt by any Person to do or seek any of the foregoing.
6. Post-Closing Covenants. The Parties agree as follows
with respect to the period following the Closing.
6.1 General. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes
of this Agreement, each of the Parties will take such further action
(including the execution and delivery of such further instruments
and documents) as any other Party reasonably may request, all at the
sole cost and expense of the requesting Party (unless the requesting
Party is entitled to indemnification therefor under Paragraph 8
below). The Shareholders acknowledge and agree that from and after
the Closing, American Uranium will be entitled to possession of all
documents, books, records (including Tax records), agreements, and
financial data of any sort relating to Visual Bible and its
Subsidiaries.
6.2 Litigation Support. In the event and for so long as any
Party actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or
demand in connection with any transaction contemplated under this
Agreement; or any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date
involving any of Visual Bible and its Subsidiaries each of the other
Parties will cooperate with such other Party or its counsel in the
contest or defense, make available their personnel, and provide such
testimony and access to their books and records as shall be
necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party (unless the
contesting or defending Party is entitled to indemnification
therefor under Paragraph 8 below).
6.3 Confidentiality. Each of the Shareholders will treat
and hold as such all of the Confidential Information, refrain from
using any of the Confidential Information except in connection with
this Agreement, and deliver promptly to American Uranium or destroy,
at the request and option of American Uranium, all tangible
embodiments (and all copies) of the Confidential Information which
are in such Parties' possession. In the event that any of the
Shareholders is requested or required (by oral question or request
for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to
disclose any Confidential Information, then such Shareholder will
notify American Uranium promptly of the request or requirement so
that American Uranium may seek an appropriate protective order or
waive compliance with the provisions of this Paragraph 6.3. If, in
the absence of a protective order or the receipt of a waiver
hereunder, any of the Shareholders is, on the advice of counsel,
compelled to disclose any Confidential Information to any tribunal
or else stand liable for contempt, then such Shareholder may
disclose the Confidential Information to the tribunal; provided,
however, that the disclosing Shareholder shall use such
Shareholder's reasonable best efforts to obtain, at the reasonable
request of American Uranium, an order or other assurance that
confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as American
Uranium shall designate. The foregoing provisions shall not apply
to any Confidential Information which is generally available to the
public immediately prior to the time of disclosure.
7. Conditions to Obligation to Close.
7.1 Conditions to Obligation of American Uranium. The
obligation of American Uranium to consummate the transactions to be
performed by it in connection with the Closing is subject to
satisfaction of the following conditions, unless American Uranium
waives any condition specified in this Paragraph 7.1 by executing a
writing so stating at or prior to the Closing:
(a) the representations and warranties set forth in
Paragraphs 4.1 and 4.3( above shall be true and correct in
all material respects at and as of the Closing Date;
(b) the Shareholders shall have performed and complied
with all of their covenants hereunder in all material respects
through the Closing;
(c) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would prevent consummation of
any of the transactions contemplated by this Agreement, cause
any of the transactions contemplated by this Agreement to be
rescinded following consummation, affect adversely the right
of American Uranium to own Visual Bible Shares and to control
Visual Bible and its Subsidiaries or affect adversely the
right of any of Visual Bible and its Subsidiaries to own its
assets and to operate its businesses (and no such injunction,
judgment, order, decree, ruling, or charge shall be in
effect); and
(d) the Shareholders shall have delivered to American
Uranium a certificate to the effect that each of the
conditions specified above in Paragraphs 7.1(a) through 7.1(c)
is satisfied in all respects
(e) all actions to be taken by the Shareholders in
connection with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated
hereby will be reasonably satisfactory in form and substance
to American Uranium.
7.2 Conditions to Obligation of the Shareholders. The
obligation of the Shareholders to consummate the transactions to be
performed by them in connection with the Closing is subject to
satisfaction of the following conditions, unless the Shareholders
waive any condition specified in this Paragraph 7.2( by executing a
writing so stating at or prior to the Closing:
(a) the representations and warranties set forth in
Paragraph 4.2 above shall be true and correct in all material
respects at and as of the Closing Date;
(b) American Uranium shall have performed and complied
with all of its covenants hereunder in all material respects
through the Closing;
(c) no action, suit, or proceeding shall be pending
before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction or before
any arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would prevent consummation of
any of the transactions contemplated by this Agreement or
cause any of the transactions contemplated by this Agreement
to be rescinded following consummation (and no such
injunction, judgment, order, decree, ruling, or charge shall
be in effect);
(d) American Uranium shall have delivered to the
Shareholders a certificate to the effect that each of the
conditions specified above in Paragraph 7.2(a)-7.2(c) is
satisfied in all respects; and
(e) American Uranium shall have received the
resignations, effective as of the Closing, of each director
and officer, and in substitution thereof shall, effective as
of the Closing, appointed those directors and officers whom
shall have specified in writing to American Uranium at least
three (3) business days prior to the Closing.
(f) all actions to be taken by American Uranium in
connection with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated
hereby will be reasonably satisfactory in form and substance
to the Shareholders.
8. Survival and Indemnification.
8.1 Survival of Representations and Warranties. All of the
representations and warranties of the Shareholders contained in this
Agreement shall survive the Closing hereunder (even if American
Uranium knew or had reason to know of any misrepresentation or
breach of warranty at the time of Closing) and continue in full
force and effect for a period of one (1) year thereafter. All of
the representations and warranties of the American Uranium contained
in this Agreement shall not survive the Closing hereunder (even if
Shareholders knew or had reason to know of any misrepresentation or
breach of warranty at the time of Closing) and shall be merged therein.
8.2 Indemnification Provisions for Benefit of American Uranium.
(a) In the event any of the Shareholders breaches (or
in the event any third party alleges facts that, if true,
would mean any of the Shareholders has breached) any of the
representations, warranties, and covenants of such
Shareholders contained herein, and, if there is an applicable
survival period pursuant to Paragraph 8.1 above, provided that
American Uranium makes a written claim for indemnification
against any of the Shareholders pursuant to Paragraph 10.12
below within such survival period, then each such Shareholders
shall indemnify American Uranium from and against the entirety
of any Adverse Consequences American Uranium may suffer
through and after the date of the claim for indemnification
(including any Adverse Consequences American Uranium may
suffer after the end of any applicable survival period)
resulting from, arising out of, relating to, in the nature of,
or caused by the breach (or the alleged breach); provided,
however, that the Shareholders shall not have any obligation
to indemnify American Uranium from and against any Adverse
Consequences resulting from, arising out of, relating to, in
the nature of, or caused by the breach (or alleged breach) of
any representation or warranty of the Shareholders until
American Uranium has suffered Adverse Consequences by reason
of all such breaches (or alleged breaches) in excess of a
$500,000.00 aggregate threshold (at which point the
Shareholders will be obligated to indemnify American Uranium
from and against all such Adverse Consequences in excess of
such threshold.
8.3 Indemnification Provisions for Benefit of the
Shareholders. American Uranium shall not have any indemnification
obligation in favor of Shareholders in the event American Uranium
breaches (or in the event any third party alleges facts that, if
true, would mean American Uranium has breached) any of its
representations, warranties and covenants contained herein.
8.4 Matters Involving Third Parties.
(a) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third
Party Claim") which may give rise to a claim for
indemnification against any other Party (the "Indemnifying
Party") under this Paragraph 8, then the Indemnified Party
shall promptly notify each Indemnifying Party thereof in
writing; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder
unless (and then solely to the extent) the Indemnifying Party
thereby is prejudiced.
(b) Any Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim
with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as the Indemnifying Party notifies
the Indemnified Party in writing within fifteen (15) days
after the Indemnified Party has given notice of the Third
Party Claim that the Indemnifying Party will indemnify the
Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by
the Third Party Claim; the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder; the
Third Party Claim involves only money damages and does not
seek an injunction or other equitable relief; settlement of,
or an adverse judgment with respect to, the Third Party Claim
is not, in the good faith judgment of the Indemnified Party,
likely to establish a precedential custom or practice
materially adverse to the continuing business interests of the
Indemnified Party; and the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting
the defense of the Third Party Claim in accordance with
Paragraph 8.4(b) above:
(1) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the
defense of the Third Party Claim;
(2) the Indemnified Party will not consent to the
entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (not to be withheld
unreasonably); and
(3) the Indemnifying Party will not consent to the
entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written
consent of the Indemnified Party (not to be withheld
unreasonably).
(d) In the event any of the conditions in Paragraph
8.4(b) above is or becomes unsatisfied, however:
(1) the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any
manner it reasonably may deem appropriate (and the Indemnified
Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith);
(2) the Indemnifying Parties will reimburse the
Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable
attorneys' fees and expenses); and
(3) the Indemnifying Parties will remain responsible
for any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of,
or caused by the Third Party Claim to the fullest extent
provided in this Paragraph 8.
8.5 Determination of Adverse Consequences. The Parties shall
take into account the time cost of money (using the Applicable Rate
as the discount rate) in determining Adverse Consequences for
purposes of this Paragraph 8.
8.6 Other Indemnification Provisions. The foregoing
indemnification provisions are in addition to, and not in derogation
of, any statutory, equitable, or common law remedy any Party may
have for breach of representation, warranty, or covenant. Each of
the Shareholders hereby agrees that such Shareholder will not make
any claim for indemnification against any of Visual Bible and its
Subsidiaries by reason of the fact that such Shareholder was a
director, officer, employee, or agent of Visual Bible and its
Subsidiaries or was serving at the request of any such entity as a
partner, trustee, director, officer, employee, or agent of another
entity (whether such claim is for judgments, damages, penalties,
fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such claim is pursuant to any statute, charter
document, bylaw, agreement, or otherwise) with respect to any
action, suit, proceeding, complaint, claim, or demand brought by
American Uranium against such Shareholder (whether such action,
suit, proceeding, complaint, claim, or demand is pursuant to this
Agreement, applicable law, or otherwise).
9. Termination.
9.1 Termination of Agreement. Certain of the Parties may
terminate this Agreement as provided below:
(a) American Uranium and the Shareholders may
terminate this Agreement by mutual written consent at any time
prior to the Closing;
(b) American Uranium may terminate this Agreement by
giving written notice to the Shareholders at any time prior to
the Closing:
(1) in the event any of the Shareholders has breached
any material representation, warranty, or covenant contained
in this Agreement in any material respect, American Uranium
has notified the Shareholders of the breach, and the breach
has continued without cure for a period of ten (10) business
days after the notice of breach; or
(2) if the Closing shall not have occurred on or
before August 31, 2000, by reason of the failure of any
condition precedent under Paragraph 7.1 hereof (unless the
failure results primarily from American Uranium itself
breaching any representation, warranty, or covenant contained
in this Agreement); and
(c) the Shareholders may terminate this Agreement by
giving written notice to American Uranium at any time prior to
the Closing:
(1) in the event American Uranium has breached any
material representation, warranty, or covenant contained in
this Agreement in any material respect, any of the
Shareholders has notified American Uranium of the breach, and
the breach has continued without cure for a period of ten (10)
business days after the notice of breach; or
(2) if the Closing shall not have occurred on or
before August 31, 2000, by reason of the failure of any
condition precedent under Paragraph 7.2( hereof (unless the
failure results primarily from any of the Shareholders
themselves breaching any representation, warranty, or covenant
contained in this Agreement).
9.2 Effect of Termination. If any Party terminates this
Agreement pursuant to Paragraph 9.1 above, all rights and
obligations of the Parties hereunder shall terminate without any
Liability of any Party to any other Party (except for any Liability
of any Party then in breach).
10. Miscellaneous.
10.1 Amendments and Waivers. No amendment of any provision
of this Agreement shall be valid unless the same shall be in writing
and signed by American Uranium and the Shareholders. No waiver by
any Party of any default, misrepresentation, or breach of warranty
or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any
rights arising by virtue of any prior or subsequent such occurrence.
10.2 Construction. The Parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to
all rules and regulations promulgated thereunder, unless the context
requires otherwise. The word "including" shall mean including
without limitation. The Parties intend that each representation,
warranty, and covenant contained herein shall have independent
significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that
there exists another representation, warranty, or covenant relating
to the same subject matter (regardless of the relative levels of
specificity) which the Party has not breached shall not detract from
or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.
10.3 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all
of which together will constitute one and the same instrument.
10.4 Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement among
the Parties and supersedes any prior understandings, agreements, or
representations by or among the Parties, written or oral, to the
extent they related in any way to the subject matter hereof.
10.5 Expenses. Each of the Parties will bear such their own
costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated
hereby. American Uranium acknowledges that Visual Bible and its
Subsidiaries may bear all or a part of the Shareholders' costs and
expenses (including any of their legal fees and expenses) in
connection with this Agreement or any of the transactions
contemplated hereby.
10.6 Facsimile Execution. Facsimile signatures on
counterparts of this Agreement are hereby authorized and shall be
acknowledged as if such facsimile signatures were an original
execution, and this Agreement shall be deemed as executed upon
transmission of an executed facsimile.
10.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of
Florida without giving effect to any choice or conflict of law
provision or rule (whether of the State of Florida or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Florida.
10.8 Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in
any way the meaning or interpretation of this Agreement.
10.9 Incorporation of Exhibits, Annexes, and Schedules. The
Exhibits, Annexes, and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
10.10 Nature of Certain Obligations.
(a) The covenants of each of the Shareholders in
Paragraph 2.1 above concerning the sale of such Shareholder's
Visual Bible Shares to American Uranium and the
representations and warranties of each of the Shareholders in
Paragraph 4.1 above concerning the transaction are several
obligations. Accordingly, the particular Shareholder making
the representation, warranty, or covenant will be solely
responsible to the extent provided in Paragraph 8 above for
any Adverse Consequences American Uranium may suffer as a
result of any breach thereof.
(b) The remainder of the representations, warranties,
and covenants in this Agreement are joint and several
obligations. Accordingly, each Shareholder will be
responsible to the extent provided in Paragraph 8 above for
the entirety of any Adverse Consequences American Uranium may
suffer as a result of any breach thereof.
10.11 No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties
and their respective successors and permitted assigns.
10.12 Notices. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any Party may
send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth below
using registered or certified mail, return receipt requested,
postage prepaid, personal delivery, recognized overnight delivery
service, telecopy or electronic mail, and such notice, request,
demand, claim, or other communication shall be deemed to have been
duly given three (3) days after mailing if sent by registered or
certified mail, on the day same is provided to the party undertaking
personal delivery, provided that such party provides an
acknowledgment of the delivery thereof at the address indicated
thereon, on the day after same is provided to the recognized
overnight delivery service, provided that such party provides an
acknowledgment of the delivery thereof at the address indicated
thereon and on the day same is transmitted by telecopy or electronic
mail, provided that the party sending same obtains a written
confirmation of the electronic delivery thereof. Any Party may
change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth. The addresses
of the Parties are as set forth below:
If to the Shareholders: To the Address listed on
Exhibit 4.1
If to American Uranium: 121 Richmond Street West
7th Floor
Toronto, Ontario M5H 2L3 Canada
If to Visual Bible: 5100 Town Center Circle
Suite 330
Boca Raton, Florida 33486
10.13 Press Releases and Public Announcements. No Party
shall issue any press release or make any public announcement
relating to the subject matter of this Agreement without the prior
written approval of American Uranium; provided, however, that any
Party may make any public disclosure it believes in good faith is
required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case the
disclosing Party will use its reasonable best efforts to advise the
other Parties prior to making the disclosure). After the Closing,
American Uranium shall may such press releases or public
announcements as may be determined by American Uranium, in the
exercise of the reasonable judgement of American Uranium.
10.14 Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
10.15 Specific Performance. Each of the Parties acknowledges
and agrees that the other Parties would be damaged irreparably in
the event any of the provisions of this Agreement are not performed
in accordance with their specific terms or otherwise are breached.
Accordingly, each of the Parties agrees that the other Parties shall
be entitled to an injunction or injunctions (without the necessity
of posting a bond therefor) to prevent breaches of the provisions of
this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court of
the United States or any state thereof having jurisdiction over the
Parties and the matter (subject to the provisions set forth in
Paragraph 10.16% below), in addition to any other remedy to which
they may be entitled, at law or in equity.
10.16 Submission to Jurisdiction. Each of the Parties submits
to the jurisdiction of any state or federal court sitting in Palm
Beach County, Florida, in any action or proceeding arising out of or
relating to this Agreement and agrees that all claims in respect of
the action or proceeding may be heard and determined in any such
court. Each Party agrees that a final judgment in any action or
proceeding so brought shall be conclusive and may be enforced by
suit on the judgment or in any other manner provided by law or at
equity. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other
court. Each of the Parties waives any defense of inconvenient forum
to the maintenance of any action or proceeding so brought and waives
any bond, surety, or other security that might be required of any
other Party with respect thereto. Each Shareholder hereby appoints
the Secretary of State of the State of Florida as such Shareholder's
agent to receive on behalf of such Shareholder service of copies of
the summons and complaint and any other process that might be served
in the action or proceeding. Any Party may make service on any
other Party by sending or delivering a copy of the process as
follows (or in any other manner permitted by law or at equity):
(a) to the Party to be served at the address and in
the manner provided for the giving of notices in Paragraph
10.12 above; or
(b) to the Shareholder to be served in care of the
Secretary of State of the State of Florida.
10.17 Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Parties named herein
and their respective successors and permitted assigns. No Party may
assign either this Agreement or any of such Parties' rights,
interests, or obligations hereunder without the prior written
approval of American Uranium and the Shareholders.
(Signatures appear next page)
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
as of the date first above written.
American Uranium, Inc.
By: /s/Glen Akselrod
Glen Akselrod, President
Visual Bible
Responsible Party
Visual Bible, Inc.
By: /s/John Hamilton
John Hamilton, Chairman
of the Board of
Directors