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Commitments
12 Months Ended
Aug. 31, 2013
Notes  
Commitments

Note 12  Commitments

 

Compensation Agreements

 

On January 14, 2011 we entered into an agreement with Robert Knight pursuant to which in return for serving as Director - Business Development (a non-executive position), Mr. Knight received $7,500 per month and options to purchase 12,000 shares of our common stock exercisable at $6.25 per share. The options vested over a one year period and expire 5 years from the date of the grant. The initial term of the agreement was for a one year period.  On May 18, 2012, upon the resignations of certain officers and directors, the Company appointed Mr. Knight, CEO, CFO, Secretary and a Director. Compensation remains at $7,500 per month on a month to month basis.

 

Pursuant to the compensation agreement, subject to the exceptions and limitations provided therein, the Company has agreed to hold harmless and indemnify the officer and director to the fullest extent permitted by law against any and all liabilities and expenses in connection with any proceeding to which such director or officer was, is or becomes a party, arising out of his services as an officer, director, employee, agent or fiduciary of the Company or its subsidiaries.

 

Pooling Agreement

 

Effective January 13, 2011, certain shareholders (the “Shareholders”) owning approximately 772,000 shares of Company common stock entered into a share pooling agreement. Terms of the agreement are summarized as follows:

 

1.  Voting Rights.  During the term of the pooling agreement, each shareholder may exercise all voting rights attached to such shareholder’s shares, except that:

 

(a)  Shareholder A and B hereby grant to Shareholders C, D, E and F the right and title to vote all of Shareholder A and B’s shares for the exclusive purpose to elect as many members of the board of directors, as necessary to have Shareholders C, D, E and F elect 51% of such Board of Directors; and

 

(b)  Shareholders C, D, E and F hereby grant to Shareholder A and B the right and title to vote all of Shareholders C, D, E and F’s shares for the exclusive purpose to elect as many member of the board of directors, as necessary to have Shareholder A and B elect a maximum 49% of such Board of Directors.

 

Each of the Shareholders understand that the election of directors may be outside of the control of the other Shareholders hereto depending on the number of shares held by persons not party to this pooling agreement and how such persons vote those shares.

 

2.  Release from Pooling Arrangement

 

While the shares are subject to the pooling arrangement, the Shareholders to the pooling agreement shall not assign, deal with, pledge, sell, trade or transfer in any manner whatsoever, or agree to do so in the future, any of the shares or any beneficial interest in them, except as set out in this Section.  Except in respect of the following, the Company shall not effect or acknowledge any transfer, trade, pledge, mortgage, lien, assignment, declaration of trust or any other documents evidencing a change in the legal or beneficial ownership of or interest in the shares.  Any shares sold shall be executed as agreed upon by the Shareholders but the release of shares from the pooling arrangement will be on a pro rata basis.  A Shareholder may elect not to participate in the sale of shares.  The sale of the shares is not cumulative and at the end of each period described below and shares not sold will not carry forward into the next period:

 

(a)     During the first twelve months from the date of this Agreement no shares will be released from the pooling agreement.

 

(b)     Following the initial 1 year hold period, the Shareholders will agree, from time to time, based on market conditions to liquidate part of the position held on the pooling arrangement;  and

 

(c)     At the end of the 36 month of the pooling arrangement, all of the remaining shares shall be released from the pooling arrangement.

 

Notwithstanding the foregoing, the Shares shall be released from pooling arrangement and delivered to the Shareholders if a takeover bid has been accepted by the majority of the outstanding shares in a Shareholders Meeting of the Company such that the purchaser under the takeover bid is entitled to force a sale by all shareholders of the Company.

 

Lease Agreements

In February 2011, we entered into a one year lease for administrative office space in Oro Valley, Arizona. The lease was effective through February 29, 2012 at a cost of $900 per month.  Currently we lease the facility on a month to month basis at a cost of $125 per month.

 

Rent expense for the years ended August 31, 2013 and 2012 amounted to $2,000 and $13,000 (including Axiom Mexico), respectively.