EXHIBIT 2.1
BETWEEN:
INFOWAVE SOFTWARE, INC.
AND
STRYDENT SOFTWARE INC.
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ASSET PURCHASE AGREEMENT
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FRASER MILNER CASGRAIN
Barristers and Solicitors
15th Floor, 1040 West Georgia Street
Vancouver, BC V6E 4H8
DATED: August 31, 2000
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TABLE OF CONTENTS
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1.0 INTERPRETATION........................................................................................1
1.1 Definitions.....................................................................................1
1.2 Gender and Number...............................................................................6
1.3 Currency........................................................................................6
1.4 Accounting Principles...........................................................................6
1.5 Headings........................................................................................6
1.6 Tax Definitions.................................................................................6
1.7 Schedules.......................................................................................7
2.0 AGREEMENT OF PURCHASE AND SALE........................................................................8
2.1 Property and Assets to be Purchased and Sold....................................................8
3.0 PURCHASE PRICE........................................................................................9
3.1 Purchase Price..................................................................................9
3.2 Allocation of Purchase Price and Tax Elections..................................................9
3.3 Audit Statement................................................................................10
3.4 Final Adjustment of the Purchase Price.........................................................11
3.5 Transfer Taxes.................................................................................11
4.0 LIABILITIES..........................................................................................12
4.1 Assumption of Liabilities......................................................................12
5.0 PAYMENT OF PURCHASE PRICE............................................................................13
5.1 Payment of the Purchase Price..................................................................13
6.0 REPRESENTATIONS AND WARRANTIES OF THE VENDOR.........................................................14
6.1 Representations and Warranties of the Vendor...................................................14
6.1.1 Incorporation, Organization and Qualification of the Vendor............................14
6.1.2 Due Authorization of Agreement.........................................................14
6.1.3 Conflicting Instruments................................................................14
6.1.4 Options................................................................................15
6.1.5 Title to Purchased Assets..............................................................15
6.1.6 Employment and Employee Benefit Matters................................................15
6.1.7 Leases.................................................................................16
6.1.8 Status of Premises.....................................................................16
6.1.9 Status of Agreements...................................................................17
6.1.10 Intellectual Property..................................................................17
6.1.11 Accounts Receivable....................................................................19
6.1.12 Legal Proceedings......................................................................19
6.1.13 Compliance with Applicable Laws........................................................20
6.1.14 Environmental Matters..................................................................20
6.1.15 Condition of Assets....................................................................21
6.1.16 Inventories............................................................................21
6.1.17 Obligations to Customers...............................................................21
6.1.18 Residence of Vendors; GST Status.......................................................21
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6.1.19 Disclosure.............................................................................22
7.0 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER......................................................22
7.1 Representations and Warranties of the Purchaser................................................22
7.1.1 Incorporation, Organization and Authority of the Purchaser, Due
Authorization of Agreement and Enforceability of Obligations...........................22
7.1.2 Conflicting Instruments................................................................22
7.1.3 Legal Proceedings......................................................................23
7.1.4 GST Status.............................................................................23
8.0 SURVIVAL OF REPRESENTATIONS AND WARRANTIES...........................................................23
8.1 Survival of Representations and Warranties of the Vendor.......................................23
8.2 Survival of Representations and Warranties of the Purchaser....................................24
9.0 COVENANTS OF THE VENDOR..............................................................................24
9.1 Covenants of the Vendor........................................................................24
9.1.1 Investigations and Availability of Records.............................................24
9.1.2 Audit Statement........................................................................25
9.1.3 Consents, etc..........................................................................25
9.1.4 Delivery of Books and Records..........................................................26
9.1.5 Delivery of Non-Competition and Non-Solicitation Agreement.............................26
9.1.6 Arrangements re Cheques................................................................26
9.1.7 Social Service Tax Act (British Columbia) Certificate..................................26
9.1.8 Subleases..............................................................................26
10.0 COVENANTS OF THE PURCHASER...........................................................................27
10.1 Covenants of the Purchaser.....................................................................27
10.1.1 Confidentiality........................................................................27
10.1.2 Non-Competition and Non-Solicitation Agreement.........................................28
10.1.3 Taxes..................................................................................28
10.1.4 Maintenance and Access to Records......................................................28
10.1.5 License to Use Infowave Trademark......................................................29
10.1.6 Subleases..............................................................................29
10.1.7 Arrangements re Cheques................................................................29
11.0 EMPLOYEE MATTERS.....................................................................................29
11.1 Employees and Transferred Employees............................................................29
12.0 PURCHASER'S CONDITIONS OF CLOSING....................................................................30
12.1 Conditions for the Benefit of the Purchaser....................................................30
12.1.1 Truth of Representations and Warranties of the Vendor..................................30
12.1.2 Performance of Covenants, etc, by the Vendor...........................................31
12.1.3 Legal Opinion..........................................................................31
12.1.4 Consents, etc..........................................................................31
12.1.5 No Action Taken Restricting Sale.......................................................32
12.1.6 Escrow Agreement.......................................................................32
12.1.7 Performance of Covenants, etc., by the Vendor..........................................32
12.1.8 No Adverse Change......................................................................32
12.2 Non-Fulfillment of Conditions, etc., for the Benefit of the Purchaser..........................33
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13.0 VENDOR'S CONDITIONS OF CLOSING.......................................................................33
13.1 Conditions for the Benefit of the Vendor.......................................................33
13.1.1 Truth of Representations and Warranties of the Purchaser...............................33
13.1.2 Performance of Covenants, etc., by the Purchaser.......................................34
13.1.3 Consents, etc..........................................................................34
13.1.4 No Action Taken Restricting Sale.......................................................34
13.1.5 Escrow Agreement.......................................................................35
13.2 Non-Fulfillment of Conditions, etc., for the Benefit of the Vendor.............................35
14.0 CLOSING ARRANGEMENTS.................................................................................35
14.1 Date, Time and Place of Closing................................................................35
14.2 Closing Arrangements...........................................................................35
14.2.1 Purchase and Sale of Purchased Assets..................................................36
14.2.2 Delivery of Closing Documents..........................................................36
14.2.3 Actual Possession......................................................................36
14.2.4 Payment of Purchase Price..............................................................36
14.2.5 Tender.................................................................................36
14.3 Risk of Loss...................................................................................36
15.0 INDEMNIFICATION......................................................................................37
15.1 Indemnification by Vendor......................................................................37
15.2 Indemnification by Purchaser...................................................................38
15.3 Procedure for Indemnification..................................................................38
15.4 Subsequent Recovery............................................................................40
15.5 Details of Claims..............................................................................40
15.6 De Minimis.....................................................................................40
16.0 MISCELLANEOUS........................................................................................41
16.1 Brokerage, Commissions, etc....................................................................41
16.2 Further Assurances.............................................................................41
16.3 Assignment of Contracts........................................................................41
16.4 Announcements..................................................................................42
16.5 Notices........................................................................................42
16.6 Time of the Essence............................................................................43
16.7 Costs and Expenses.............................................................................43
16.8 Applicable Law.................................................................................43
16.9 Entire Agreement...............................................................................44
16.10 Effect of Closing..............................................................................44
16.11 Counterparts...................................................................................44
16.12 Assignment 45
16.13 Parties in Interest............................................................................45
16.14 Third Parties..................................................................................45
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THIS AGREEMENT dated as of the 31st day of August, 2000
BETWEEN:
INFOWAVE SOFTWARE, INC., a corporation incorporated under the laws of
British Columbia
(hereinafter called the "Vendor")
AND:
STRYDENT SOFTWARE INC., a corporation incorporated under the laws of
Canada
(hereinafter called the "Purchaser")
WHEREAS the Vendor, through its Imaging Division, carries on the business
of developing printer driver software (hereinafter called the "Imaging Division
Business");
AND WHEREAS the Purchaser desires to purchase and the Vendor desires to
sell substantially all of the property and assets of the Imaging Division
Business for the purchase price and upon the terms and conditions hereinafter
set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
covenants, agreements, warranties and payments hereinafter set forth, the
parties hereto agree as follows:
1.0 INTERPRETATION
1.1 Definitions
Whenever used in this Agreement, unless there is something in the subject
matter or context inconsistent therewith, the following words and phrases shall
have the respective meanings ascribed to them as follows:
"Agreement" means this asset purchase agreement and any instrument
amending this Agreement as referred to in Section 16.9; "hereof",
"hereto", "hereunder" and similar expressions mean and refer to this
Agreement and not to a particular section; and the expression
"Section" followed by a number means and refers to the specified
section of this Agreement.
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"Articles of Incorporation" means the original or restated articles of
incorporation, articles of amalgamation, articles of arrangement,
articles of continuance, articles of reorganization, articles of
revival, letters patent, memorandum of agreement, special Act or
statute and any other instrument or constating document by or pursuant
to which a corporation is incorporated or comes into existence; and
"Articles of Amendment" has a corresponding meaning.
"Audit Statement" means the statement prepared in accordance with
Section 3.3.
"Business Day" means a day other than a Saturday, Sunday or any other
day on which the principal chartered banks located at the City of
Vancouver are not open for business during normal banking hours.
"Closing" means the completion of the transactions herein
contemplated, including the sale to and purchase by the Purchaser of
the Purchased Assets hereunder as herein contemplated.
"Closing Date" means September 8, 2000 or such earlier or later date
as may be agreed upon.
"Debt Instrument" means any bond, debenture, promissory note or other
instrument evidencing indebtedness for borrowed money or other
liability.
"Effective Date" means August 31, 2000.
"Effective Time" means 5:00 p.m. (Vancouver time) on the Effective
Date.
"Employee Benefits" means:
(a) salaries, wages, bonuses, vacation entitlements, commissions,
fees, stock option plans, stock purchase plans, incentive plans,
deferred compensation plans, profit-sharing plans and other
similar benefits, plans or arrangements;
(b) insurance, health, welfare, disability, pension, retirement,
travel, hospitalization, medical, dental, legal, counselling, eye
care and other similar benefits, plans or arrangements; and
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(c) agreements or arrangements with any labour union or employee
association, written or oral employment agreements or
arrangements and agreements or arrangements for the retention of
the services of independent contractors, consultants or advisors.
"Encumbrance" means any mortgage, charge, easement, encroachment,
lien, adverse claim, assignment by way of security, security interest,
servitude, pledge, hypothecation, conditional sale agreement, security
agreement, title retention agreement, financing statement or other
encumbrance.
"Guarantee" means any agreement, contract or commitment providing for
the guarantee, indemnification, assumption or endorsement or any like
commitment with respect to the obligations, liabilities (contingent or
otherwise) or indebtedness of any Person.
"Intellectual Property" means any or all of the following and all
rights in, arising out of, or associated with:
(a) all Registered Intellectual Property;
(b) all trade secrets including, without limitation, trade secrets
that are inventions (whether patentable or not) and invention
disclosures and all proprietary and confidential information
including, without limitation, know-how, technical data,
techniques, manuals, documentation, reports, records, formulae,
processes, descriptions, schematics, specifications, designs,
industrial models, design criteria, architectures, schematics for
hardware products, system architecture drawings, product test
scripts, methodologies, algorithms, sketches, photographs, plans,
drawings, samples, reports, studies, findings, inventions,
prototypes and ideas, whether patentable or not, whether trade
secrets or not and whether in written, graphic or oral form;
(c) all business data and information including, without limitation,
customer lists, business models, logos, product documentation and
web-site materials and marketing collaterals;
(d) all rights in the nature of copyright howsoever arising,
worldwide (whether domestic or foreign) that subsist in and to
any original works (including, without limitation, Software) and
which have not been registered under the applicable copyright
legislation;
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(e) all trade names, brand names, logos, unregistered trade-marks;
(f) all data, databases and data collections in whatever form or
media; and
(g) all physical manifestations of any of the foregoing together with
all documentation applicable thereto.
"Interested Person" means any present or former officer, director,
shareholder, employee, consultant or advisor of or to the Vendor or
any Person with which the Vendor or any of the foregoing does not deal
at arm's length within the meaning of the Income Tax Act (Canada).
"Inventories" means inventories of every kind and nature and
wheresoever situate owned by the Vendor relating to the Imaging
Division Business including, without limitation, all finished goods,
work in process, raw materials, new and unused production and shipping
supplies and new and unused major maintenance items and all other
materials and supplies on hand to be used or consumed in the
production of products of the Imaging Division Business.
"Legal Proceeding" means any litigation, action, suit, investigation,
hearing, claim, complaint, grievance, arbitration proceeding or other
proceeding and includes any appeal or review and any application for
same.
"Person" means any individual, corporation, firm, partnership, sole
proprietorship, syndicate, joint venture, trustee, trust and any
unincorporated organization or association, any Tribunal; and pronouns
have a similar extended meaning.
"Premises" means the premises to be subleased by the Vendor to the
Purchaser pursuant to the subleases attached as Schedule 12, which
subleases the Vendor and the Purchaser have covenanted to enter into
hereunder.
"Purchased Assets" means the property and assets described in Section
2.1.
"Purchase Price" means the purchase price payable by the Purchaser to
the Vendor for the Purchased Assets provided for in Section 3.0.
"Purchaser's Representatives" means the directors, officers,
employees, auditors, legal counsel and fiscal and tax advisors of the
Purchaser and any other
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Person authorized in writing by the Purchaser to represent the
Purchaser for purposes of Sections 9.1.1 and 10.1.1.
"Registered Intellectual Property" means all Canadian, United States
and other foreign: (i) patents, patent applications (including
provisional applications) all reissues, divisions, renewals,
extensions, continuations and continuations in part thereof; (ii)
registered trade-marks and servicemarks, applications to register
trade-marks and servicemarks, intent-to-use applications, other
registrations or applications to trade-marks or servicemarks; (iii)
registered copyrights and applications for copyright registration;
(iv) mask work registrations and applications to register mask works;
and (v) registered industrial designs and all applications therefor.
"Software" means all computer software including, without limitation,
application software, systems software, software design tools,
interfaces, object libraries, and microcode in object code or source
code forms and firmware, embedded in or used to develop products, and
any related documentation including, without limitation, technical
documentation, system designs and specifications, flow charts, record
and file layouts, memoranda, correspondence and other such
documentation containing or relating to the design, structure or
coding or testing of, or algorithms or routines used in, or errors
discovered in or corrected in such software, user guides and manuals
related thereto and any other documentations or material (in whatever
form, whether human or machine readable, and in whatever media)
relating to such software.
"Time of Closing" means 9:00 a.m. (Vancouver time) on the Closing Date
or such other time on the Closing Date as the parties may agree as the
time at which the Closing shall take place.
"Transferred Employees" means all those employees who are employed by
the Vendor on the Closing Date and who become employees of the
Purchaser pursuant to the terms of this Agreement.
"Tribunal" means:
(a) any court (including a court of equity);
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(b) any federal, provincial, state, county, municipal or other
government or governmental department, ministry, commission,
board, bureau, agency or instrumentality;
(c) any securities commission, stock exchange or other regulatory or
self-regulatory body;
(d) any board of trade, chamber of commerce or other business or
professional organization or association;
(e) any arbitrator or arbitration tribunal; and
(f) any other tribunal;
whether domestic or foreign.
1.2 Gender and Number
In this Agreement words importing a specific gender include all genders and
words importing the singular include the plural and vice versa.
1.3 Currency
Unless otherwise indicated, all dollar amounts referred to in this
Agreement, including the symbol $, refer to lawful money of the United States of
America.
1.4 Accounting Principles
Wherever in this Agreement reference is made to generally accepted
accounting principles such reference shall be deemed to be to the generally
accepted accounting principles from time to time approved by the Canadian
Institute of Chartered Accountants, or any successor entity, applicable as at
the date on which such principles are applied.
1.5 Headings
The division of this Agreement into Sections and the use of a table of
contents and headings are for convenience of reference only and shall not affect
the interpretation of this Agreement.
1.6 Tax Definitions
Whenever used in this Agreement, the following words and phrases shall have
the respective meanings ascribed to them as follows:
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1.6.1 "GST" means taxes, interest, penalties and fines imposed under Part IX
of the Excise Tax Act (Canada) and the regulations made thereunder (collectively
the "GST Legislation").
1.6.2 "Income Tax Act (Canada)" means, collectively, the Income Tax Act
(Canada) and the Income Tax Regulations, all as amended to date.
1.6.3 "Tax Legislation" means, collectively, the Income Tax Act (Canada) and
the statute law, rules, regulations, interpretation bulletins and releases,
orders and decrees of any other jurisdiction, domestic or foreign which may
impose a tax of any kind.
1.6.4 "Taxes" means all taxes payable under any applicable Tax Legislation,
including, without limitation, income taxes, excise taxes, sales taxes, goods
and services taxes, transfer taxes, property and municipal and school taxes,
capital taxes, import and customs, duties and other governmental charges and
assessments, and includes additions by way of penalties, interest, fines and
other amounts with respect thereto.
1.6.5 "Tax Returns" means all tax returns required to be filed under the
provisions of any applicable Tax Legislation and any tax forms required to be
filed, whether in connection with a Tax Return or not, under any provisions of
any applicable Tax Legislation.
1.7 Schedules
The following are the Schedules attached to and incorporated in this
Agreement by reference and deemed to be a part hereof:
Schedule 1 -- Fixed Assets (Section 2.1(a))
Schedule 2 -- Inventories (Section 2.1(b))
Schedule 3 -- Accounts Receivable (Section 2.1(c))
Schedule 4 -- Unfulfilled orders and contracts (Section 2.1(d))
Schedule 5 -- Intellectual and Industrial Property Rights
(Section 2.1(e))
Schedule 5A -- Application Software (Section 2.1(f))
Schedule 6 -- "Shrink Wrap License" (Section 6.1.10(d))
Schedule 7 -- Accounts Payable (Section 4.1.1)
Schedule 8 -- Employee Benefits (Section 6.1.6(a))
Schedule 9 -- Transferred Employees (Section 6.1.6(b)
Schedule 10 -- Non-Competition and Non-Solicitation Agreement
(Section 9.1.5)
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Schedule 11 -- Escrow Agreement (Section 5.1(b))
Schedule 12 -- Subleases (Section 9.1.8)
2.0 AGREEMENT OF PURCHASE AND SALE
2.1 Property and Assets to be Purchased and Sold
Subject to the terms and conditions hereof, the Vendor agrees to sell,
assign and transfer to the Purchaser and the Purchaser agrees to purchase as, at
and from the Effective Time, the Purchased Assets, which consist of the
following:
(a) Fixed Assets: all machinery, equipment (including, without limitation,
manufacturing and quality control equipment and office equipment,
including computer equipment), furniture, furnishings and accessories
and supplies of all kinds owned by the Vendor, whether located in or
on the premises of the Vendor or elsewhere, described in Schedule 1
(the "Fixed Assets");
(b) Inventories: all Inventories described in Schedule 2;
(c) Accounts Receivable: all accounts receivable and trade accounts
accrued or invoiced, or both, to the Vendor as at August 31, 2000 and
relating to the Imaging Division Business, including, without
limitation, the accounts receivable described in Schedule 3;
(d) Agreements, Contracts and Commitments: the full benefit of all
unfilled orders received by the Vendor and described in Schedule 4 and
all right, title and interest of the Vendor in, to and under all
agreements, contracts whether written or oral, described in Schedule
4;
(e) Intellectual Property: all the right, title, benefit and interest of
the Vendor in and to the Intellectual Property used in whole or in
part by the Vendor in carrying on the Imaging Division Business,
including, without limitation, the Intellectual Property described in
Schedule 5 and excluding the Intellectual Property in third party
Software used by the Vendor for accounting and other business
administration purposes;
(f) Application Software: all the right, title, benefit and interest of
the Vendor in the third party Software described in Schedule 5A, as
installed on the computer equipment described in Schedule 1, subject
to the receipt of any required consents to the assignment of such
right, title, benefit and interest, which consent the
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Vendor shall use commercially reasonable efforts to obtain after the
Closing Date upon request by the Purchaser;
(g) Warranty Rights: the full benefit of all representations, warranties,
guarantees, indemnities, undertakings, certificates, covenants,
agreements and the like and all security therefor received by the
Vendor on the purchase or other acquisition of any part of the
Purchased Assets or otherwise; and
(h) Records: all books, records, files and other documentation and written
materials relating to the Purchased Assets, including, without
limitation, all production, inventory, sales and customer records
except that where the Vendor is required by law to retain a particular
book, record, file, document or other written material, it shall
retain the original thereof and deliver to the Purchaser a copy
thereof.
3.0 PURCHASE PRICE
3.1 Purchase Price
The Purchase Price payable by the Purchaser to the Vendor for the Purchased
Assets shall be the sum of $1,500,000, subject to adjustment pursuant to Section
3.4.
3.2 Allocation of Purchase Price and Tax Elections
Within ninety (90) days following the Closing Date, the Purchaser shall
provide to the Vendor an allocation statement (the "Asset Allocation Statement")
setting out the Purchaser's proposed allocation of the Purchase Price among the
Purchased Assets. Within fifteen (15) days after the receipt of such Asset
Allocation Statement, the Vendor shall propose to the Purchaser any changes to
the Asset Allocation Statement that the Vendor considers appropriate (and in the
event no such changes are proposed in writing to the Purchaser within such time
period, the Vendor will be deemed to have agreed to, and accepted, the Asset
Allocation Statement). The Vendor and the Purchaser shall endeavor in good faith
to resolve any differences with respect to the Asset Allocation Statement within
fifteen (15) days after the Purchaser's receipt of written notice of objection
from the Vendor. If the parties fail to resolve such differences within such
time period, KPMG LLP or such other firm of chartered accountants agreed upon
the parties shall be appointed by the parties to determine the allocation and
finalize the Asset Allocation Statement.
The Vendor and the Purchaser shall cooperate in the filing of such
elections under applicable Tax Legislation as may be necessary or desirable to
give effect to the allocation pursuant to the Asset Allocation Statement. The
Vendor and the Purchaser shall also execute
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and file an election as to the accounts receivables described in clause (c) of
Section 2.1 to the extent permitted under Section 22 of the Income Tax Act
(Canada) using as the consideration paid therefor the amount set out in the
Asset Allocation Statement. In addition, the Vendor and Purchaser shall execute
and file their respective Tax Returns in a manner consistent with the aforesaid
allocations and elections. If either party fails to file its Tax Returns as
aforesaid, such party shall indemnify and save harmless the other party in
respect of any additional Tax, and legal and/or accounting costs paid or
incurred by the other party as a result of the failure to file as aforesaid.
3.3 Audit Statement
As soon as reasonably practicable following the Closing, the Vendor and the
Purchaser shall jointly instruct KPMG LLP to review the Inventories referred to
in Section 2.1(b) and the Fixed Assets, audit the accounts receivable of the
Imaging Division Business, including the accounts receivable referred to in
Section 2.1(c), and prepare an audit statement (the "Audit Statement") on or
before September 30, 2000, setting out:
(a) the aggregate accounts receivable of the Imaging Division Business
accrued or invoiced, or both, as at August 9, 2000 (the "August 9 -
A/R");
(b) the aggregate accounts receivable of the Imaging Division Business
accrued or invoiced, or both, as at the Effective Date (the "Effective
Date A/R");
(c) the aggregate accounts receivable of the Imaging Division accrued or
invoiced, or both (excluding the August 9 - A/R and the Effective Date
A/R), as at the Time of Closing (the "Interim A/R");
(d) the aggregate proceeds realized by the Vendor from the Interim A/R
(the "Interim A/R Realization");
(e) the aggregate amount receivable in respect of all individual accounts
receivable accrued or invoiced, or both, as at the Effective Date (the
"Doubtful A/R") determined to be doubtful by KPMG LLP in accordance
with generally accepted accounting principles; and
(f) the results of the review of the Inventories and Fixed Assets by KPMG
LLP.
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The Vendor and the Purchaser agree that all expenses relating to the foregoing
audit and review by KPMG LLP, including professional fees, shall be borne by the
Vendor, and that the scope of the review of the Inventories and Fixed Assets
shall be mutually agreed upon by the parties upon the engagement of KPMG LLP but
shall include, without limitation, verifying that the Inventories and Fixed
Assets have not been recently re-valued and that accounting principles have been
applied consistently in the valuation of the Inventories and the Fixed Assets.
3.4 Final Adjustment of the Purchase Price
Following the delivery of the Audit Statement, the Purchase Price shall be
adjusted as follows:
(a) the difference between:
(i) the August 9 - A/R; and
(i) the Effective Date A/R,
shall be deducted from the Purchase Price; and
(b) the Interim A/R Realization and the Doubtful A/R shall be deducted
from the Purchase Price.
For the purposes of the Audit Statement and all adjustments to the Purchase
Price, all currency conversions of Canadian dollars to United States dollars
shall be based on the noon rate of the Bank of Canada on August 31, 2000, and
all conversions of other currencies to United States dollars shall be based on
the noon rates on August 31, 2000 of the Federal Reserve Bank of New York.
3.5 Transfer Taxes
The Purchaser shall be liable for and shall pay either to the Vendor at
Closing or directly to the government authority, as required, all land transfer
taxes, federal and provincial sales taxes and all other Taxes or other like
charges properly payable upon and in connection with the transfer of the
Purchased Assets to the Purchaser, including, but not limited to GST, if
applicable, but excluding any income taxes payable by the Vendor as a result of
the completion of the transactions herein contemplated, provided that Taxes
payable pursuant to the Social Service Tax Act (British Columbia) shall be paid
to the Vendor. The Vendor and Purchaser shall
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jointly elect under Section 167(1) of the GST Legislation, following the
prescribed form and including the prescribed information, with respect to the
purchase and sale of the Purchased Assets pursuant to the provisions of this
Agreement. The Vendor shall file the joint election with the return required to
be filed by the Vendor under the GST Legislation for the Vendor's reporting
period in which the sale was made, in compliance with the requirements of the
GST Legislation.
4.0 LIABILITIES
4.1 Assumption of Liabilities
4.1.1 Subject as hereinafter provided, the Purchaser shall, from and after
the Closing Date, assume, perform and fulfill to the extent required thereunder
all obligations of the Vendor under each of the agreements, contracts and
commitments referred to in clause (d) of Section 2.1 and assume and thereafter
pay, discharge and satisfy the accounts payable of the Vendor relating to the
Imaging Division Business described in Schedule 7.
4.1.2 Notwithstanding the provisions of Section 4.1.1 above, the following
liabilities of the Vendor are not being assumed by the Purchaser:
(a) liabilities to capital stock or surplus of the Vendor;
(b) liabilities for any Taxes except as expressly provided in Section 3.5;
(c) liabilities arising from any breach or default by the Vendor, prior to
the Effective Time, of or under any agreement, contract or commitment
referred to in clause (d) of Section 2.1;
(d) liabilities for any damages, penalties, fines or other claims
whatsoever arising or resulting from any Legal Proceeding relating to
the Purchased Assets prior to the Effective Time including, without
limitation, any Legal Proceeding involving any product liability claim
or warranty relating to sales made or products manufactured prior to
the Effective Time including expenses related thereto and to the
return of such goods;
(e) liabilities of the Vendor incurred in connection with any business or
activity of the Vendor other than the Imaging Division Business;
(f) subject to Section 11.1, liabilities for any claims made by any
employees of the Vendor (including Transferred Employees) in respect
of any period prior to the
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Effective Time and liabilities for any claims made by any employees of the
Vendor (except for Transferred Employees who have accepted the Purchaser's
offer of employment hereunder), in respect of any period subsequent to the
Effective Time, including, without limitation, any claims made by employees
of the Vendor who do not accept an offer of employment with the Purchaser,
which claims shall include all severance and termination claims and all
claims made for payment in lieu of notice of termination;
(g) liabilities to any Interested Person except as specifically assumed by
the Purchaser as provided in this Section 4.1;
(h) liabilities of the Vendor with respect to any Debt Instrument or
Guarantee which the Vendor is a party to or bound by or subject to
except as specifically assumed by the Purchaser as provided in this
Section 4.1; and
(i) the Doubtful A/R, which accounts receivable the Vendor may, at its
discretion, attempt to collect or claim as insured losses.
5.0 PAYMENT OF PURCHASE PRICE
5.1 Payment of the Purchase Price
The Purchase Price shall be payable as follows:
(a) as to $1,000,000, by the delivery by the Purchaser to the Vendor at
the Time of Closing of a certified cheque or bank draft payable at par
in Vancouver for such amount to or to the order of the Vendor; and
(b) as to the balance, by the delivery by the Purchaser to the Vendor on
October 14, 2000 of a certified cheque or bank draft payable at par in
Vancouver for such amount to or to the order of the Vendor, less all
adjustments to the Purchase Price pursuant to Section 3.4, which
payment is to be evidenced at the Time of Closing by delivery to the
Vendor of a promissory note of the Purchaser in favour of the Vendor
in the amount of $500,000, payable on demand on or after October 14,
2000 without interest and secured by the deposit with Fraser Milner
Casgrain, as escrow agent, of $500,000 to be held pursuant to the
terms of an escrow agreement (the "Escrow Agreement") to be entered
into by the Purchaser, the Vendor and Fraser Milner Casgrain at the
Time of Closing, in form and substance mutually satisfactory to the
Purchaser and the Vendor.
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6.0 REPRESENTATIONS AND WARRANTIES OF THE VENDOR
6.1 Representations and Warranties of the Vendor
The Vendor hereby represents and warrants to the Purchaser, to the best of
the knowledge of the Vendor, as follows and acknowledges that the Purchaser is
relying on such representations and warranties in connection with the
transactions herein contemplated:
6.1.1 Incorporation, Organization and Qualification of the Vendor
The Vendor is a corporation duly incorporated or continued and
subsisting under the laws of British Columbia. No proceedings have been
instituted or are pending for the dissolution or liquidation of the Vendor. The
Vendor has the necessary corporate power, authority and capacity to own or lease
the Purchased Assets.
6.1.2 Due Authorization of Agreement
The Vendor has the necessary corporate power, authority and capacity
to enter into this Agreement, to sell the Purchased Assets to the Purchaser as
herein contemplated and to perform its other obligations hereunder. The
execution and delivery of this Agreement and the completion of the transactions
herein contemplated have been duly and validly authorized by all necessary
corporate action on behalf of the Vendor and this Agreement has been duly and
validly executed and delivered by the Vendor and is a valid and binding
obligation of the Vendor enforceable against the Vendor in accordance with its
terms.
6.1.3 Conflicting Instruments
The entering into of this Agreement by the parties hereto, the
performance by the Vendor of its obligations hereunder and the completion of the
transactions herein contemplated do not and will not conflict with or result in
the breach or violation of any of the terms and provisions of:
(a) the Articles of Incorporation, Articles of Amendment or by-laws of the
Vendor;
(b) subject to obtaining any consent, approval, permit or acknowledgment
which may be required thereunder in connection with the completion of
the transactions herein contemplated (which the Vendor shall use
reasonable commercial efforts to obtain), any license or registration
or any agreement, contract or commitment which the Vendor is a party
to or bound by or subject to; or
(c) any law or regulation, domestic or foreign, or any judgment, decree,
injunction, ruling, order or award of any Tribunal.
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6.1.4 Options
No Person, other than the Purchaser under this Agreement (or as
otherwise disclosed in this Agreement), has any agreement or option or any right
capable of becoming an agreement or option for the purchase from the Vendor of
any of the Purchased Assets.
6.1.5 Title to Purchased Assets
The Vendor is the owner of the Purchased Assets (other than the
Premises, as to which Section 6.1.7 shall apply and the Licensed Intellectual
Property as to which Section 6.1.10 shall apply) with good and marketable title
thereto free of any Encumbrance, and is exclusively entitled to possess and
dispose of the same.
6.1.6 Employment and Employee Benefit Matters
(a) Except as described in Schedule 8, the Vendor is not:
(i) a party to or bound by or subject to any agreement or arrangement
with respect to Employee Benefits relating to the Transferred
Employees and no such agreement or arrangement contains any
specific provision as to notice of termination of employment or
severance pay in lieu thereof;
(ii) in arrears in the payment of any contribution or assessment
required to be made by it pursuant to any of the agreements or
arrangements described in Schedule 8;
(iii)a party to or bound by or subject to any agreement or
arrangement with any labour union or employee association
relating to employees of the Imaging Division or any of the
Transferred Employees and has made no commitment to or conducted
any negotiation or discussion with any labour union or employee
association with respect to any future agreement or arrangement
relating to employees of the Imaging Division or any of the
Transferred Employees;
(iv) required to recognize any labour union or employee association
representing employees of the Imaging Division or any of the
Transferred Employees or any agent having bargaining rights for
employees of the Imaging Division or any of the Transferred
Employees and, to the best of the knowledge and belief of the
Vendor, there is no current attempt to organize or establish any
labour union or employee association with
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respect to employees of the Imaging Division or any of the
Transferred Employees; and
(v) liable or alleged to be liable for any damages to any Transferred
Employee resulting from the violation or alleged violation of any
applicable employment law or regulation, domestic or foreign,
including any employment equity, health or safety law or
regulation, or any agreement or arrangement with respect to
Employee Benefits.
(b) The Transferred Employees consist of 23 full time employees. The names
of such individuals, their years of service, their job descriptions
and the Employee Benefits to which they are entitled are described in
Schedule 8. The Vendor has no reason to believe that any Transferred
Employee would terminate his or her employment as a result of or in
anticipation of the transactions herein contemplated.
6.1.7 Leases
Each of the leases pursuant to which the Vendor leases any portion of
the Premises is valid and subsisting and in good standing, there is no default
thereunder and the Vendor is entitled to all rights and benefits thereunder. The
Vendor is not in breach of any of the provisions of any such leases and (subject
to obtaining any requisite consent, approval, permit or acknowledgment required
thereunder to the assignment thereof to the Purchaser as herein contemplated),
the completion of the transactions herein contemplated will not afford any of
the parties to any lease or any other Person (other than the Vendor) the right
to terminate any lease nor will the completion of the transactions herein
contemplated result in any additional or more onerous obligation on the Vendor
under any lease.
6.1.8 Status of Premises
All of the plant, buildings, structures, erections, improvements,
appurtenances and fixtures situate on or forming part of the Premises are in
good operating condition and in a state of good maintenance and repair, are
adequate and suitable for the purposes for which they are currently being used
and the Vendor has adequate rights of ingress and egress to and from all such
buildings and structures for the operation of the Imaging Division Business in
the ordinary course. None of such buildings and structures, or the operation or
maintenance thereof, violates any restrictive covenant or any applicable law or
regulation, or encroaches on any property owned by others, and, including,
without limiting the generality of the foregoing:
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(a) no alterations, repairs, improvements or other work had been ordered,
directed or requested in writing under any applicable law or
regulation by any Person with respect to the Premises or the buildings
and structures or with respect to any of the plumbing, heating,
elevating, water, drainage or electrical systems, fixtures or works,
which alteration, repair, improvement or other work has not been
completed;
(b) all accounts for material, work and services with respect to the
Premises (except for current accounts the payment dates of which have
not yet passed) have been fully paid and satisfied and no one is
entitled to claim a lien under the Builder's Lien Act (British
Columbia) or any similar applicable legislation against the Premises;
(c) there is nothing owing by the Vendor in respect of the supply to or
use by it of water, gas, electrical power or energy, steam or hot
water, or other utilities or in respect of municipal, school or other
taxes relating to the Premises (except for current accounts the
payment dates of which have not yet passed); and
(d) no part of the Premises has been taken or expropriated by any Tribunal
nor has any Legal Proceeding or notice or proceeding in respect of any
such expropriations been commenced, given or threatened.
6.1.9 Status of Agreements
Each of the agreements, contracts and commitments described in
Schedule 4 is valid and subsisting and in good standing, there is no default
thereunder and there are no facts which, after notice or lapse of time or both,
would constitute such a default. The Vendor is entitled to all rights and
benefits under each of such agreements, contracts and commitments.
6.1.10 Intellectual Property
(a) Schedule 5 sets forth and describes all Intellectual Property used in
whole or in part by the Vendor for carrying on the Imaging Division
Business (excluding the Intellectual Property in third party Software
used by the Vendor for accounting and other business administration
purposes, as to which Section 6.1.10(j) applies) and specifies, for
each item, whether the Intellectual Property is owned by the Vendor
(in this Section "Owned Intellectual Property") or whether the
Intellectual Property is used by the Vendor under a license agreement
or arrangement with another Person (in this Section "Licensed
Intellectual Property").
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(b) Schedule 5 contains copies of the applications for registration or the
actual registrations for each item of Owned Intellectual Property in
respect of which application has been made or registration has been
completed. Except as described in Schedule 5, all of the Owned
Intellectual Property is valid and subsisting, is owned by the Vendor
with good and marketable title thereto free of any Encumbrance.
(c) Schedule 5 lists all license agreements and describes all other
arrangements entered into by the Vendor under which any Person (other
than end users of the products of the Imaging Division) has been
granted rights by the Vendor to use Owned Intellectual Property. Each
license agreement or arrangement with respect to Owned Intellectual
Property is valid and subsisting and in good standing and there is no
default thereunder, except to the extent that consent is required to
assign such agreements or the benefit of such arrangements in
connection with the completion of the transactions contemplated
hereunder.
(d) Schedule 6 contains a copy of the most recent version of the "Shrink
Wrap" license agreement setting out the terms of end users' possession
and use of the products distributed by the Vendor containing the
Intellectual Property.
(e) Each license agreement or arrangement with respect to Licensed
Intellectual Property is valid and subsisting and in good standing and
there is no default thereunder, except to the extent that consent is
required to assign such agreements or the benefit of such arrangements
in connection with the completion of the transactions contemplated
hereunder.
(f) The consents obtained by the Vendor for the assignment of license
agreements are set out in Schedule 4.
(g) No Person has commenced any Legal Proceeding claiming adverse
ownership, invalidity, lack of distinctiveness or conflict with
respect to any of the Owned Intellectual Property or the Licensed
Intellectual Property or challenging any rights of the Vendor in and
to the Owned Intellectual Property or the Licensed Intellectual
Property or the right of the Vendor to use the Owned Intellectual
Property or the Licensed Intellectual Property in the conduct of the
Imaging Division Business.
(h) The conduct of the Imaging Division Business by the Vendor and its use
of the Owned Intellectual Property and the Licensed Intellectual
Property do not conflict with, infringe upon or violate and are not
alleged by any Person (other than
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General Patent Corporation) to conflict with, infringe upon or violate
the Intellectual Property or the trade secrets, know-how or
confidential or proprietary information of any other Person. The
Vendor has obtained a right and license from General Patent
Corporation covering certain patents owned by General Patent
Corporation or its clients, which patents General Patent Corporation
alleges are infringed by certain printer cables which are bundled with
the Vendor's products, a copy of which license is included in Schedule
5.
(i) The Vendor has not commenced any Legal Proceeding challenging the
Intellectual Property of any other Person and, to the best of the
knowledge and belief of the Vendor no other Person is using any
Intellectual Property which conflicts with, infringes upon or violates
the rights of the Vendor in and to the Owned Intellectual Property or
the Licensed Intellectual Property.
(j) The Vendor owns, or has valid rights to use, the Software referred to
in Section 2.1(f), and each license agreement or arrangement with
respect to such Software is valid and subsisting and in good standing
and there is no default thereunder, except to the extent that consent
is required to assign such agreements or the benefit of such
arrangements in connection with the completion of the transactions
contemplated hereunder.
6.1.11 Accounts Receivable
The accounts receivable referred to in Section 2.1(c) less any
reasonable reserve in respect thereof for doubtful accounts calculated in
accordance with generally accepted accounting principles are bona fide and good
and collectible without set-off or counterclaim.
6.1.12 Legal Proceedings
There is no Legal Proceeding (whether or not purportedly on behalf of
the Vendor) in progress, pending, threatened against or affecting the Vendor
relating to the Purchased Assets at law or in equity or before or by any
Tribunal. To the best of the knowledge and belief of the Vendor there are no
grounds on which any such Legal Proceeding might be commenced with any
reasonable likelihood of success. There is no judgment, decree, injunction,
ruling, order or award of any Tribunal outstanding against or affecting the
Vendor relating to the Purchased Assets. Without limiting the generality of the
foregoing, there is no Legal Proceeding involving any product liability claim in
progress, pending, threatened against or affecting the Vendor relating to the
Imaging Division Business or the Purchased Assets alleging any defect in the
design or manufacture of or the materials used in any of the products of the
Imaging Division Business.
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6.1.13 Compliance with Applicable Laws
Except in respect of environmental matters which are separately dealt
with in Section 6.1.14 and matters relating to the Premises which are separately
dealt with in Section 6.1.8, the Vendor is duly licensed or registered in the
Province of British Columbia so as to enable the Vendor to own or lease the
Purchased Assets as so owned or leased. Each of such licenses and registrations
is valid and subsisting and in good standing and there is no default thereunder.
None of such licenses and registrations:
(a) contains any burdensome term, provision, condition or limitation which
has or could have an adverse effect on the Vendor or the Purchased
Assets; or
(b) except as disclosed in this Agreement, including the Schedules hereto,
requires the consent, approval, permit or acknowledgment of any Person
in connection with the completion of the transaction herein
contemplated.
6.1.14 Environmental Matters
(a) The Vendor is not in violation of, and has not violated, in connection
with the ownership, use, maintenance or operation of the Purchased
Assets, including the Premises, and the conduct of the Imaging
Division Business any applicable federal, provincial, municipal or
local laws, regulations, orders, policies or guidelines, permits,
licenses, certificates or approvals, domestic or foreign, of any
governmental authorities relating to environmental, health or safety
matters (collectively in this Section "environmental laws").
(b) Without limiting the generality of paragraph (a) above, the Vendor:
(i) has conducted the Imaging Division Business and operated the
Premises; and
(ii) has received, handled, used, stored, treated, shipped and
disposed of all pollutants, contaminants, hazardous or toxic
materials, controlled or dangerous substances or wastes
(collectively in this Section "contaminants"),
in strict compliance with all applicable environmental laws and has
removed (or will remove prior to the Closing) all contaminants from
the Premises.
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(c) There are no orders, rulings or directives issued, pending or
threatened against the Vendor under or pursuant to any environmental
laws requiring any work, repairs, construction or capital expenditures
with respect to the Purchased Assets or the Premises.
(d) No notice with respect to any of the matters referred to in paragraphs
(a), (b) or (c) above, including any alleged violations by the Vendor
with respect thereto, has been received by the Vendor and no writ,
injunction, order or judgment is outstanding, and no Legal Proceeding
under or pursuant to any environmental laws or relating to the
ownership, use, maintenance or operation of the Purchased Assets
(including the Premises) is in progress, pending or threatened. To the
best of the knowledge and belief of the Vendor there are no grounds on
which any such Legal Proceeding might be commenced with any reasonable
likelihood of success.
6.1.15 Condition of Assets
All Purchased Assets (specifically excepting the Intellectual Property
which is addressed in Section 6.1.10) are in good operating condition and in a
state of good repair and maintenance, reasonable wear and tear excepted.
6.1.16 Inventories
The Inventories (of whatever type) described in Schedule 2 consist
solely of personal property of the kind regularly used or produced in the
Imaging Division Business, and may include obsolete items.
6.1.17 Obligations to Customers
Except in the form contained in the "Shrink Wrap License" set forth in
Schedule 6, there are no outstanding warranties, repair contracts or other
maintenance obligations with or to end users of the products of the Imaging
Division Business remaining in effect which are not upon substantially the same
terms and conditions as set out in the "Shrink Wrap License".
6.1.18 Residence of Vendors; GST Status
The Vendor is not a non-resident of Canada within the meaning of the
Income Tax Act (Canada). The Vendor is registered for purposes of the GST
Legislation and its registration number is 887105948. This Agreement provides
for the sale to the Purchaser of all or substantially all of the property used
in a commercial activity that forms the Imaging Division Business carried on by
the Vendor.
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6.1.19 Disclosure
The representations and warranties of the Vendor included in this
Agreement and in any agreement, certificate, affidavit, statutory declaration or
other document delivered or given pursuant to this Agreement are, to the best of
the knowledge of the Vendor, true and correct and do not omit to state a
material fact necessary to make the statements contained in such representations
and warranties not misleading to a prospective purchaser of the Purchased
Assets.
7.0 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
7.1 Representations and Warranties of the Purchaser
The Purchaser hereby represents and warrants to the Vendor as follows and
acknowledges that the Vendor is relying on such representations and warranties
in connection with the transactions herein contemplated:
7.1.1 Incorporation, Organization and Authority of the Purchaser, Due
Authorization of Agreement and Enforceability of Obligations
The Purchaser is a corporation duly incorporated or continued and
subsisting under the laws of Canada and has the necessary corporate power,
authority and capacity to enter into this Agreement, to purchase the Purchased
Assets from the Vendor as herein contemplated and to perform its other
obligations hereunder. The execution and delivery of this Agreement and the
completion of the transactions herein contemplated have been duly and validly
authorized by all necessary corporate action on behalf of the Purchaser and this
Agreement has been duly and validly executed and delivered by the Purchaser and
is a valid and binding obligation of the Purchaser enforceable against the
Purchaser in accordance with its terms.
7.1.2 Conflicting Instruments
The entering into of this Agreement by the Purchaser and the
performance of its obligations hereunder do not and will not conflict with or
result in the breach or violation of:
(a) the Articles of Incorporation, Articles of Amendment or by-laws of the
Purchaser; or
(b) any agreement, contract or commitment, written or oral, which the
Purchaser is a party to or bound by or subject to.
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7.1.3 Legal Proceedings
There is:
(a) no Legal Proceeding (whether or not purportedly on behalf of the
Purchaser) in progress, pending, threatened against or affecting the
Purchaser at law or in equity or before or by any Tribunal and, to the
best of the knowledge and belief of the Purchaser, there are no
grounds on which any such Legal Proceeding might be commenced with any
reasonable likelihood of success; and
(b) no judgment, decree, injunction, ruling, order or award of any
Tribunal outstanding against or affecting the Purchaser,
which, in any such case, might adversely affect the ability of the Purchaser to
enter into this Agreement or to perform its obligations hereunder.
7.1.4 GST Status
The Purchaser is registered for purposes of the GST Legislation and
its registration number is 866432248.
8.0 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
8.1 Survival of Representations and Warranties of the Vendor
The representations and warranties of the Vendor contained in this
Agreement and in any agreement, certificate, affidavit, statutory declaration or
other document delivered or given pursuant to this Agreement (except in respect
of a breach thereof which has been disclosed in writing to the Purchaser prior
to the Time of Closing) shall survive the Closing and, notwithstanding such
Closing or any investigation made by or on behalf of the Purchaser with respect
thereto, shall continue in full force and effect for the benefit of the
Purchaser provided, however, that no claim in respect thereof shall be valid
unless it is made within the following time periods:
(a) in the case of a claim in respect of a representation or warranty
relating to a matter other than a Tax matter, within a period of one
year from the Closing Date; and
(b) in the case of a claim in respect of a representation or warranty
relating to a Tax matter, other than a claim in respect of a
misrepresentation made or fraud committed in filing a Tax Return or
supplying information for the purposes of any applicable Tax
Legislation, within a period commencing on the Closing Date and ending
on the date on which the last applicable limitation period under any
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applicable Tax Legislation expires with respect to any taxation year
which is relevant in determining any liability under this Agreement
with respect to Tax matters,
and any such claim as aforesaid shall be made in accordance with the provisions
set forth in Section 15.0 and, upon the expiry of the relevant limitation period
referred to in clauses (a) and (b) above, the Vendor shall have no further
liability to the Purchaser with respect to the representations and warranties
referred to in such clauses, respectively, except in respect of claims which
have theretofore been made in accordance with the provisions set forth above.
8.2 Survival of Representations and Warranties of the Purchaser
The representations and warranties of the Purchaser contained in this
Agreement or in any agreement, certificate, affidavit, statutory declaration or
other document delivered or given pursuant to this Agreement (except in respect
of a breach thereof which has been disclosed in writing to the Vendor prior to
the Time of Closing) shall survive the Closing and, notwithstanding such Closing
or any investigation made by or on behalf of the Vendor with respect thereto,
shall continue in full force and effect for the benefit of the Vendor provided,
however, that no claim in respect thereof shall be valid unless it is made
within a period of one year from the Closing Date and in accordance with the
provisions set forth in Section 15.0 and, upon the expiry of such limitation
period, the Purchaser shall have no further liability to the Vendor with respect
to any of such representations or warranties, except in respect of claims which
have theretofore been made in accordance with the provisions set forth above.
9.0 COVENANTS OF THE VENDOR
9.1 Covenants of the Vendor
The Vendor hereby covenants and agrees with the Purchaser as follows:
9.1.1 Investigations and Availability of Records
Between the date hereof and the Closing Date the Vendor shall permit
the Purchaser's Representatives to make such investigations of the Purchased
Assets, their legal, financial and tax condition and their compliance with such
environmental and other applicable laws or regulations as the Purchaser deems
necessary or desirable; provided that such investigations shall be carried out
without undue interference with the operations of the Vendor and the Vendor
shall cooperate fully in facilitating such investigations and shall furnish
copies, at the Purchaser's cost, of all such documents and materials relating to
such matters as may be
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reasonably requested by or on behalf of the Purchaser. The documents and
materials to be made available by the Vendor shall include, but shall not be
limited to
(a) the books and records referred to in Section 2.1(h); and
(b) the records maintained in connection with the Purchased Assets,
including records of past sales, customer lists, supplier lists,
payroll records, inventory data, inventory master records, accounts
receivable data, and data relating to the Premises and the uses
thereof including uses thereof relating to environmental matters.
Such investigations shall not, however, affect or mitigate the
representations and warranties of the Vendor contained in this Agreement or in
any agreement, certificate, affidavit, statutory declaration or other document
delivered or given pursuant to this Agreement, which representations and
warranties shall continue in full force and effect for the benefit of the
Purchaser as provided in Section 8.0.
9.1.2 Audit Statement
The Vendor shall cooperate fully and provide all reasonable assistance
in the preparation of the Audit Statement after the Closing Date.
9.1.3 Consents, etc.
Commencing forthwith after the date hereof the Vendor shall use
commercially reasonable efforts to obtain at or prior to the Time of Closing:
(a) from all appropriate Tribunals;
(b) from the parties (other than the Vendor) to the agreements, contracts
and commitments referred to in Section 2.1(d); and
(c) from such other Persons from whom any such consent, approval, permit
or acknowledgement may be required,
all necessary consents, approvals, permits and acknowledgements which may be
required in connection with the completion of the transactions herein
contemplated.
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9.1.4 Delivery of Books and Records
At the Time of Closing, the Vendor shall deliver to the Purchaser all
the documents referred to in Section 2.1(h) and all other document files,
records and other data, financial or otherwise, of the Vendor relating to the
Purchased Assets, including, without limitation, all books, records, books of
account, accounting records, lists of suppliers and customers of the Imaging
Division Business, all of which documents, books, records and other materials
shall become the property of the Purchaser.
9.1.5 Delivery of Non-Competition and Non-Solicitation Agreement
The Vendor shall execute and deliver to the Purchaser at the Time of
Closing a non-competition and non-solicitation agreement in the form of the
unexecuted non-competition agreement annexed hereto as Schedule 10.
9.1.6 Arrangements re Cheques
The Vendor shall make arrangements at the Time of Closing,
satisfactory to the Purchaser, to ensure that all cheques or other payments
received by the Vendor from and after the Time of Closing which relate to the
Purchased Assets, including payments in respect of accounts receivable of the
Imaging Division, shall be endorsed over without recourse and delivered to the
Purchaser.
9.1.7 Social Service Tax Act (British Columbia) Certificate
Forthwith upon the execution of this Agreement the Vendor shall apply
for and, when received, deliver to the Purchaser the duplicate copy of the
certificate issued by the commissioner appointed to administer the Social
Service Tax Act (British Columbia) pursuant to Section 99 of the Social Service
Tax Act (British Columbia), which certificate shall indicate that the Vendor has
paid all taxes collected or payable under the Social Service Tax Act (British
Columbia) up to the Effective Time or has entered into an arrangement
satisfactory to the commissioner for the payment of such taxes.
9.1.8 Subleases
As soon as reasonably practicable after the Closing Date, the Vendor
agrees to enter into subleases with the Purchaser in form and substance
substantially the same as the subleases attached as Schedule 12, subject to any
required landlord consents, which the Vendor shall use commercially reasonable
efforts to obtain.
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10.0 COVENANTS OF THE PURCHASER
10.1 Covenants of the Purchaser
The Purchaser hereby covenants and agrees with the Vendor as follows:
10.1.1 Confidentiality
(a) Between the date hereof and the Time of Closing the Purchaser shall
keep confidential any trade secrets, know-how or confidential or
proprietary information and any financial or business documents or
information (collectively in this Section the "Information") received
by it from the Vendor relating to the Purchased Assets and shall not
disclose any of such Information to any third party, provided that any
of such Information may be disclosed to the Purchaser's
Representatives who need to know such Information in connection with
the transactions herein contemplated. The Purchaser shall use all
reasonable efforts to ensure that the Purchaser's Representatives keep
confidential such Information. Notwithstanding the foregoing, the
Purchaser will not be liable for disclosure of any of such Information
upon the occurrence of one or more of the following events:
(i) the completion at the Closing of the transactions herein
contemplated;
(ii) the expiration of one year from the date of this Agreement;
(iii)the Information becoming generally known other than through a
breach of this Agreement;
(iv) the Information being lawfully obtained from a third party
without breach of this Agreement by the Purchaser, provided that
the Purchaser is able to produce documentation or other evidence
sufficient to establish such third party as the source of the
Information;
(v) the Information being known to the Purchaser prior to its
disclosure by the Vendor, provided that the Purchaser is able to
produce documentation or other evidence sufficient to establish
such knowledge; or
(vi) the Vendor having provided its prior written approval of such
disclosure by the Purchaser.
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(b) In the event that this Agreement is terminated in accordance with the
provisions hereof the Purchaser shall:
(i) use all reasonable efforts to insure that all Information and all
copies thereof are either destroyed or returned to the Vendor if
it so requests so that, so far as possible, any Information
obtained during and as a result of any investigation by the
Purchaser's Representatives is not disseminated beyond those
Persons concerned with such investigations; and
(ii) not, directly or indirectly, use for its own purposes, any
Information discovered or acquired by the Purchaser's
Representatives as a result of the Vendor making available to
them those documents and materials referred to in Section 9.1.1.
10.1.2 Non-Competition and Non-Solicitation Agreement
The Purchaser shall execute and deliver to the Vendor at the Time of
Closing the non-competition agreement referred to in Section 9.1.5.
10.1.3 Taxes
After Closing the Purchaser shall furnish or cause to be furnished to
the Vendor, upon request, as promptly as practicable, such information
(including access to books and records) and assistance relating to the Purchased
Assets as is reasonably necessary for the filing by the Vendor of any Tax
Return, for the preparation for any audit or for the prosecution or defense of
any Legal Proceeding or proposed adjustment relating to Taxes of the Vendor or
the Purchaser relating to the Purchased Assets.
10.1.4 Maintenance and Access to Records
The Purchaser agrees that it will retain all books and records and any
other documents, information and files relating to the Purchased Assets
delivered to it by the Vendor and relating to any period ending on or prior to
the Closing Date for a period of six years following the Closing Date. So long
as such books and records and such other documents, information and files are
retained by the Purchaser, the Vendor or its authorized representatives shall
have reasonable access thereto in connection with the affairs of the Vendor
relating to its Tax matters, but the Purchaser shall not be responsible or
liable to the Vendor for or as a result of any loss or destruction of or damage
to any such books, or records or such other documents, information and files.
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10.1.5 License to Use Infowave Trademark
The Vendor hereby grants to the Purchaser a non- exclusive, royalty
free license to use, commencing on the Closing Date, the Infowave trademark
"INFOWAVE" in connection with the Purchaser's marketing, distribution and
licensing of the Intellectual Property transferred to the Purchaser hereunder,
and modifications thereto, subject to the following: (i) the Infowave trademark
may only be used to identify the Software as being originally developed and
distributed by the Vendor prior to the Effective Date of this Agreement in order
to advise the public of the provenance of the Intellectual Property and shall
only be used in a manner and with materials that have been reviewed and approved
by the Vendor in writing prior to such use, which approval shall not be
unreasonably withheld, conditioned or delayed; and (ii) such usage shall be in
accordance with the Vendor's then-current trademark usage policies as provided
and updated by the Vendor. The license to the Purchaser of the Infowave
trademark shall expire, without any further actions by the parties hereto, upon
the earlier of (x) the first anniversary of the Closing Date or (y) termination
of such license due to a breach or default by the Purchaser of its obligations
set out herein.
10.1.6 Subleases
As soon as reasonably practicable after the Closing Date, the
Purchaser agrees to enter into subleases with the Vendor in form and substance
substantially the same as the subleases attached as Schedule 12, subject to any
required landlord consents.
10.1.7 Arrangements re Cheques
The Purchaser shall make arrangements at the Time of Closing,
satisfactory to the Vendor, to ensure that all cheques or other payments
received by the Purchaser from and after the Time of Closing which do not relate
to the Purchased Assets shall be endorsed over without recourse and delivered to
the Vendor.
11.0 EMPLOYEE MATTERS
11.1 Employees and Transferred Employees
Subject to the Closing taking place as herein contemplated, the Purchaser
shall offer employment to each of the Transferred Employees on such terms and
conditions as agreed upon by the Purchaser and the Vendor. The Purchaser shall
assume and shall indemnify the Vendor from and against any and all obligations
with respect to the Transferred Employees arising after the Effective Date and
shall recognize the service of the Transferred Employees for all purposes
including, without limitation, Employee Benefits, as if they had been employed
by the Purchaser since their individual dates of hire by the Vendor.
Notwithstanding the foregoing,
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the Vendor shall not be relieved of any liability including, without limitation,
liability for severance and termination costs and for Employee Benefits in
respect of any Transferred Employee who has not accepted the Purchaser's offer
of employment as aforesaid. The Purchaser shall indemnify the Vendor for any and
all loss, damage, claim, Legal Proceeding, deficiency or expense, including all
out-of-pocket costs, and including, without limitation, all reasonable legal
fees, suffered or incurred by the Vendor as a result of any Transferred
Employee's length of service with the Vendor prior to that Transferred
Employee's acceptance of employment from the Purchaser.
12.0 PURCHASER'S CONDITIONS OF CLOSING
12.1 Conditions for the Benefit of the Purchaser
The transactions herein contemplated, including the sale and purchase of
the Purchased Assets in accordance with the terms of this Agreement, are subject
to the following conditions, each of which is hereby declared to be for the
exclusive benefit of the Purchaser. Each of such conditions is to be fulfilled
and/or performed at or prior to the Time of Closing. The Vendor agrees to use
commercially reasonable efforts to cause each of such conditions to be fulfilled
and/or performed at or prior to the Time of Closing.
12.1.1 Truth of Representations and Warranties of the Vendor
The representations and warranties of the Vendor contained in this
Agreement and in any agreement, certificate, affidavit, statutory declaration or
other document delivered or given pursuant to this Agreement (including, without
limitation, the representations and warranties set forth in Section 6.0) shall
be true and correct on the date hereof and at the Time of Closing with the same
force and effect as if such representations and warranties had been made on and
as of each of such times. The Vendor shall deliver to the Purchaser at the Time
of Closing certificates, affidavits, statutory declarations or other evidence to
such effect and to the effect that as of the Closing Date each of the conditions
set forth in this Section 12.0 have been complied with. Certificates given by
any corporation shall be under its corporate seal and signed by the President or
a Vice-President and by the Secretary or Treasurer or by any two directors
thereof. Notwithstanding the foregoing, the receipt of such certificates,
affidavits, statutory declarations or other evidence and the completion of the
transactions herein contemplated shall not constitute a waiver of any of such
representations and warranties, each of which shall survive the Closing and
remain in full force and effect for the benefit of the Purchaser as provided in
Section 8.1.
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12.1.2 Performance of Covenants, etc, by the Vendor
The Vendor shall have performed all obligations, covenants and
agreements contained in this Agreement to be performed by the Vendor at or prior
to the Time of Closing including, without limitation, the covenants set forth in
Section 9.0.
12.1.3 Legal Opinion
A legal opinion of Messrs. Blake Cassels & Graydon dated the Closing
Date substantially to the following effect shall have been received by the
Purchaser at the Time of Closing:
(a) that the Vendor is a corporation duly incorporated and subsisting
under the laws of British Columbia; that the Vendor has the necessary
corporate power and authority and capacity to own the Purchased
Assets; that it is duly qualified to carry on the business under the
laws of the Province of British Columbia;
(b) that the execution and delivery of this Agreement and the completion
of the transactions herein contemplated have been duly and validly
authorized by all necessary corporate action on behalf of the Vendor;
(c) that this Agreement has been duly and validly executed and delivered
on behalf of the Vendor and is a valid and binding obligation of the
Vendor enforceable against the Vendor in accordance with its terms,
subject, however, to limitations with respect to enforcement imposed
by law in connection with bankruptcy or similar proceedings and to the
extent that equitable remedies such as specific performance and
injunction are in the discretion of the court from which they are
sought;
(d) that the entering into of this Agreement by the Vendor and the
completion of the transactions herein contemplated do not and will not
conflict with or result in the breach or violation of any of the terms
and provisions of:
(i) the Articles of Incorporation, Articles of Amendment or by laws
of the Vendor; or
(ii) any domestic law or regulation.
12.1.4 Consents, etc.
(a) There shall have been obtained from all appropriate Persons, as
referred to in Section 9.1.3, such consents, approvals, permits and
acknowledgements (other
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than the consent of Adobe Systems Incorporated as required under the
Adobe Agreement (as defined in Section 15.1)) as may be required in
connection with the completion of the transactions herein
contemplated.
(b) All filings required to be made under the Competition Act (Canada) in
connection with the completion of the transactions herein contemplated
shall have been made and the waiting periods thereunder shall have
been terminated or shall have expired without any action or proceeding
thereunder having been commenced or threatened by the Director under
such Act.
12.1.5 No Action Taken Restricting Sale
No Legal Proceeding shall have been commenced or shall be pending or
threatened against the Vendor at law or in equity or before or by an Tribunal
which would affect the title of the Vendor to the Purchased Assets or would
enjoin, restrict or prohibit or would have the effect of preventing the
completion of the transactions herein contemplated, including the sale and
purchase of the Purchased Assets in accordance with the terms of this Agreement
or which might adversely affect the ability of the Vendor to enter into this
Agreement or to perform its obligations hereunder.
12.1.6 Escrow Agreement
The Purchaser and the Vendor shall have executed and delivered the
Escrow Agreement.
12.1.7 Performance of Covenants, etc., by the Vendor
The Vendor shall have performed all obligations, covenants and
agreements contained in this Agreement to be performed by it at or prior to the
Time of Closing, including, without limitation, the covenants set forth in
Section 9.0.
12.1.8 No Adverse Change
Between the date hereof and the Time of Closing:
(a) no substantial damage by fire or other hazard to the Purchased Assets
shall have occurred; and
(b) no Legal Proceeding shall have been commenced or shall be pending or
threatened against the Vendor at law or in equity or before or by any
Tribunal
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which, in the case of any such occurrence, would have a material adverse effect
on the Purchased Assets.
12.2 Non-Fulfillment of Conditions, etc., for the Benefit of the Purchaser
In the event that any condition, obligation, covenant or agreement of the
Vendor to be fulfilled and/or performed hereunder at or prior to the Time of
Closing, including, without limitation, the conditions set forth in this Section
12.0, shall not be fulfilled and/or performed at or prior to the Time of
Closing, the Purchaser may rescind this Agreement by notice to the Vendor and in
such event the Purchaser shall be released from all obligations hereunder except
those set forth in Section 10.1.1 and, unless the Purchaser can show that the
one or more conditions, obligations, covenants or agreements for the
non-fulfillment or non-performance of which the Purchaser has rescinded this
Agreement is or are reasonably capable of being fulfilled and/or performed or
caused to be fulfilled and/or performed by the Vendor then the Vendor shall also
be released from all obligations hereunder; provided, however, that any of the
said conditions, obligations, covenants or agreements may be waived in whole or
in part by the Purchaser without prejudice to the Purchaser's right of
rescission in the event of the non-fulfillment and/or non-performance of any
other condition, obligation, covenant or agreement, any such waiver to be
binding on the Purchaser only if the same is in writing.
13.0 VENDOR'S CONDITIONS OF CLOSING
13.1 Conditions for the Benefit of the Vendor
The transactions herein contemplated, including the sale and purchase of
the Purchased Assets in accordance with the terms of this Agreement, are subject
to the following conditions, each of which is hereby declared to be for the
exclusive benefit of the Vendor. Each of such conditions is to be fulfilled
and/or performed at or prior to the Time of Closing. The Purchaser covenants and
agrees to use commercially reasonable efforts to cause each of such conditions
to be fulfilled and/or performed at or prior to the Time of Closing.
13.1.1 Truth of Representations and Warranties of the Purchaser
The representations and warranties of the Purchaser contained in this
Agreement or in any agreement, certificate, affidavit, statutory declaration,
agreement or other document delivered or given pursuant to this Agreement
(including, without limitation, the representations and warranties set forth in
Section 7.0) shall be true and correct on the date hereof and at the Time of
Closing with the same force and effect as if such representations and warranties
had been made on and as of each of such times. The Purchaser shall deliver to
the Vendor at the Time of Closing certificates, affidavits, statutory
declarations or other evidence to that effect and
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to the effect that as of the Closing Date each of the conditions set forth in
this Section 13.0 has been complied with. Certificates given by the Purchaser
shall be under its corporate seal and signed by the President or a
Vice-President and by the Secretary or Treasurer or by any two directors
thereof. Notwithstanding the foregoing, the receipt of such certificates,
affidavits, statutory declarations or other evidence and the completion of the
transactions herein contemplated shall not constitute a waiver of any of such
representations and warranties, each of which shall survive the Closing and
remain in full force and effect for the benefit of the Vendor as provided in
Section 8.2.
13.1.2 Performance of Covenants, etc., by the Purchaser
The Purchaser shall have performed all obligations, covenants and
agreements contained in this Agreement to be performed by it at or prior to the
Time of Closing, including, without limitation, the covenants set forth in
Section 10.0.
13.1.3 Consents, etc.
(a) There shall have been obtained from all appropriate Persons, as
referred to in Section 9.1.3, such consents, approvals, permits and
acknowledgements as may be required in connection with the completion
of the transactions herein contemplated.
(b) All filings required to be made under the Competition Act (Canada) in
connection with the completion of the transactions herein contemplated
shall have been made and the waiting periods thereunder shall have
been terminated or shall have expired without any action or proceeding
thereunder having been commenced or threatened by the Director under
any such Act.
13.1.4 No Action Taken Restricting Sale
No Legal Proceeding shall have been commenced or shall be pending or
threatened against the Vendor at law or in equity or before or by any Tribunal
which would adversely affect the title of the Vendor to the Purchased Assets or
would enjoin, restrict or prohibit or would have the effect of preventing the
completion of the transactions herein contemplated, including the sale and
purchase of the Purchased Assets in accordance with the terms of this Agreement
or which might adversely affect the ability of the Vendor to enter into this
Agreement and to perform its obligations hereunder.
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13.1.5 Escrow Agreement
The Purchaser and the Vendor shall have executed and delivered the
Escrow Agreement.
13.2 Non-Fulfillment of Conditions, etc., for the Benefit of the Vendor
In the event that any condition, obligation, covenant or agreement of the
Purchaser to be fulfilled and/or performed hereunder at or prior to the Time of
Closing, including, without limitation, the conditions set forth in this Section
14.0, shall not be fulfilled and/or performed at or prior to the Time of
Closing, the Vendor may rescind this Agreement by notice to the Purchaser and in
such event the Vendor shall be released from all obligations hereunder and,
unless the Vendor can show that the one or more conditions, obligations,
covenants or agreements for the non-fulfillment or non-performance of which the
Vendor has rescinded this Agreement is or are reasonably capable of being
fulfilled and/or performed or caused to be fulfilled and/or performed by the
Purchaser, then the Purchaser shall also be released from all obligations
hereunder except those set forth in Section 11.1.1; provided, however, that any
of the said conditions, obligations, covenants or agreement may be waived in
whole or in part by the Vendor without prejudice to its right of rescission in
the event of the non-fulfillment and/or non-performance of any other condition,
obligation, covenant or agreement, any such waiver to be binding upon the Vendor
only if the same is in writing.
14.0 CLOSING ARRANGEMENTS
14.1 Date, Time and Place of Closing
The Closing shall take place at the Time of Closing on the Closing Date at
the offices of Fraser Milner Casgrain at 9:00 a.m. or at such other time, on
such other date and/or at such other place as may be agreed upon by the parties
hereto.
14.2 Closing Arrangements
At the Time of Closing and subject to the fulfillment of all the terms and
conditions set forth in this Agreement which have not been waived in writing by
the parties hereto, respectively:
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14.2.1 Purchase and Sale of Purchased Assets
The Vendor shall sell to the Purchaser the Purchased Assets and the
Purchaser shall purchase the Purchased Assets from the Vendor and pay and
satisfy the Purchase Price, all as hereinafter provided.
14.2.2 Delivery of Closing Documents
The Vendor shall deliver to the Purchaser all deeds, conveyances,
bills of sale, assurances, transfers, assignments and consents (including all
necessary consents, approvals, permits and acknowledgements to the assignment of
the contracts, agreements and commitments referred to in Section 2.1(d) and any
other documents as shall be necessary or reasonably required to effectively
transfer the Purchased Assets to the Purchaser with good and marketable title
thereto free of any Encumbrance except as specifically provided in this
Agreement, including the Schedules hereto, and shall deliver to the Purchaser
all books, records, books of account, lists of suppliers and customers and all
other documents, files, records and other data, financial or otherwise, relating
to the Imaging Division Business, as provided in Section 10.1.4.
14.2.3 Actual Possession
The Vendor shall deliver actual possession of the Purchased Assets to
the Purchaser and the transfer of possession shall be deemed to take effect as
at the Effective Time.
14.2.4 Payment of Purchase Price
Upon the fulfillment of the foregoing provisions of this Section 14.0
and subject to all the other terms and conditions contained in this Agreement
being complied with, the Purchaser shall pay and satisfy the Purchase Price in
the manner specified in Section 5.0.
14.2.5 Tender
Any tender of documents or money may be made on the party or parties
designated to receive such documents or money or their respective legal counsel.
14.3 Risk of Loss
From the date hereof up to the Time of Closing, the Purchased Assets
shall be and remain at the risk of the Vendor and the Vendor shall maintain the
policies of insurance in respect of loss or damage to or any other casualty in
respect of the Purchased Assets. If, prior to the Time of Closing, all or any
substantial portion of the Purchased Assets are destroyed or substantially
damaged by fire or any other casualty or shall be appropriated, expropriated or
seized by governmental or other lawful authority, the Purchaser shall have the
option,
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exercisable by notice in writing given within five Business Days of the
Purchaser receiving notice in writing from the Vendor of such destruction,
damage, expropriation or seizure either:
(a) to complete the purchase without reduction of the Purchase Price, in
which event all proceeds of any insurance or compensation for
expropriation or seizure shall be payable to the Purchaser and all
right and claim of the Vendor to any such amounts not paid by the
Closing Date shall be assigned to the Purchaser; or
(b) of canceling this Agreement and not completing the purchase, in which
case all obligations of the Purchaser shall terminate forthwith upon
the Purchaser giving notice as required herein.
15.0 INDEMNIFICATION
15.1 Indemnification by Vendor
(a) Subject to Section 15.6, in the event that the transactions herein
contemplated are completed at the Closing, the Vendor hereby agrees to
indemnify and hold the Purchaser harmless from and against any loss,
damage, claim, Legal Proceeding, deficiency or expense, including all
out-of-pocket costs, and including, without limitation, all reasonable
legal and accounting fees, relating to, arising from or in connection
with the following matters:
(i) any misrepresentation or breach of any warranty, obligation,
covenant or agreement of the Vendor contained in this Agreement
or in any agreement, certificate, affidavit, statutory
declaration or other document delivered or given pursuant to this
Agreement;
(ii) unless constituting a liability of the Vendor to be assumed by
the Purchaser as provided in Section 4.1, the assertion against
the Purchaser of any liability of the Vendor; and
(iii)the failure of the Vendor to discharge any and all liabilities
not to be assumed by the Purchaser pursuant to Section 4.1.
(b) The obligation of the Vendor to indemnify the Purchaser as set forth
in paragraph (a) of this Section 15.1 shall be subject to the
limitation period referred to in Section 8.1.
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(c) The Vendor hereby agrees to indemnify and hold the Purchaser harmless
from and against any Tax resulting from any payment made under this
Section 15.1, including, without limitation, any payment made under
the provisions of this paragraph (c).
15.2 Indemnification by Purchaser
(a) Subject to Section 15.6, in the event that the transactions herein
contemplated are completed at the Closing, the Purchaser agrees to
indemnify and hold the Vendor harmless from and against any loss,
damage, claim, Legal Proceeding, deficiency or expense, including all
out-of-pocket costs and including, without limitation, all reasonable
legal and accounting fees, relating to, arising from or in connection
with the following matters:
(i) any misrepresentation or breach of any warranty, obligation,
covenant or agreement of the Purchaser contained in this
Agreement or in any agreement, certificate, affidavit, statutory
declaration or other document delivered or given pursuant to this
Agreement;
(ii) the failure of the Purchaser to discharge those liabilities
assumed by the Purchaser as provided in Section 4.1.
(b) The obligation of the Purchaser to indemnify the Vendor as set forth
in paragraph (a) of this Section 15.2 shall be subject to the
limitation period referred to in Section 8.2.
(c) The Purchaser agrees to indemnify and hold the Vendor harmless from
and against any Tax resulting from any payment made under this Section
15.2, including, without limitation, any payment made under the
provisions of this paragraph (c).
15.3 Procedure for Indemnification
(a) A party claiming indemnification under Sections 15.1 and 15.2 (in this
Section an "Indemnitee") shall give notice to the party or parties
against which or against whom indemnification is claimed (in this
Section an "Indemnitor") with reasonable promptness upon becoming
aware of the claim or other facts upon which a claim for
indemnification will be based. The notice shall set forth such
information and be accompanied by such documentation with respect
thereto as is then reasonably available to the Indemnitee.
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(b) The Indemnitor shall have the right, exercisable by notice to the
Indemnitee, given within 10 days following receipt of the aforesaid
notice from the Indemnitee, to undertake and assume control of the
defence of any such claim asserted by a third party (in this Section a
"Third Party Claim"), including the right of compromise or settlement
thereof, and the Indemnitee shall co-operate in such defence and make
available all information and documentation requested by the
Indemnitor with respect thereto; provided, however, that:
(i) the Indemnitor shall first deliver to the Indemnitee written
acceptance of liability for indemnification with respect to any
such Third Party Claim and written consent to be joined as a
party to any Legal Proceeding relating thereto;
(ii) the undertaking and assumption of control of the defence,
compromise and/or settlement of any such Third Party Claim shall,
by its terms, be without expense, cost or other liability to the
Indemnitee; and
(iii)the Indemnitor shall at the Indemnitee's request furnish it with
reasonable security against any expenses, costs or other
liabilities to which it may be or may become exposed by reason of
the defence, compromise or settlement of any such Third Party
Claim.
(c) Upon the assumption of control by the Indemnitor as aforesaid, the
Indemnitor shall diligently proceed with the defence, compromise or
settlement of such Third Party Claim at the Indemnitor's sole expense,
including employment of counsel reasonably satisfactory to the
Indemnitee; and in connection therewith, the Indemnitee shall
co-operate fully with, but at the expense of, the Indemnitor, to make
available to the Indemnitor all pertinent information, documentation
and witnesses under the Indemnitee's control and to make such
assignments and take such other steps as in the opinion of counsel for
the Indemnitor are necessary or desirable to enable the Indemnitor to
conduct such defence, provided that the Indemnitee shall be entitled
to reasonable security from the Indemnitor for any expenses, costs or
other liabilities to which it may be or may become exposed by reason
of such co-operation.
(d) The final determination of any such Third Party Claim, including all
related expenses, costs and other liabilities, shall be binding and
conclusive upon the parties hereto as to the validity or invalidity,
as the case may be, of such Third Party Claim against the Indemnitor
hereunder.
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(e) In the event that the Indemnitor fails to give notice to the
Indemnitee as provided in paragraph (b) of this Section 15.3 or in the
event that the Indemnitor declines to undertake the defence of any
such Third Party Claim when first notified thereof, the Indemnitee
shall keep the Indemnitor advised as to the current status and
progress thereof, and the Indemnitor shall retain the right to
undertake the defence thereof as aforesaid until such Third Party
Claim is fully resolved. Unless and until the Indemnitor so undertakes
the defence thereof, the Indemnitee agrees not to make any offer of
compromise or settlement thereof without first having given 10 days'
notice to the Indemnitor. In the event that the Indemnitor so
undertakes the defence of any such Third Party Claim the Indemnitee
shall nevertheless be entitled to participate in (but not control or
direct) the defence, compromise or settlement thereof with counsel of
its own choice, and the parties agree to co-operate fully with one
another in connection with the defence, compromise or settlement
thereof; provided, however, that any decision to settle any such Third
Party Claim shall be at the Indemnitor's sole discretion. From and
after delivery of the items referred to in clauses (i), (ii) and (iii)
of paragraph (b) of this Section 15.3, the Indemnitor shall be
relieved of the obligation to reimburse the Indemnitee for any other
legal, accounting or other out-of-pocket costs and expenses thereafter
incurred by the Indemnitee with respect to the defence, compromise or
settlement of such Third Party Claim notwithstanding any participation
by the Indemnitee therein.
15.4 Subsequent Recovery
In the event that the Indemnitee subsequently recovers all or part of a
Third Party Claim from any other Person legally obligated to pay the same, the
Indemnitee shall forthwith repay to the Indemnitor the amounts so recovered up
to an amount not exceeding the amount theretofore paid by the Indemnitor by way
of indemnity.
15.5 Details of Claims
No claim for indemnity hereunder shall be valid unless and until written
notice providing reasonable details of the reasons supporting the claim,
including such information and documentation with respect thereto as is then
reasonably available to the Indemnitee, is given by the Indemnitee to the
Indemnitor at or prior to the expiration of the applicable limitation periods
herein provided for.
15.6 De Minimis
Notwithstanding any other provision of this Agreement, no party hereto
shall assert against any other party hereto any claim or claims for indemnity
hereunder unless the
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aggregate amount of the claim or claims asserted to that date, including the
claim or claims then being asserted, is at least $25,000.
16.0 MISCELLANEOUS
16.1 Brokerage, Commissions, etc.
It is understood and agreed that no broker, agent or other intermediary has
acted for the Vendor or the Purchaser in connection with the transactions herein
contemplated. The Vendor hereby agrees to indemnify and save harmless the
Purchaser from and against any claim for commission or other remuneration
payable or alleged to be payable to any broker, agent or other intermediary who
purports to act or to have acted for the Vendor in connection with the
transactions herein contemplated. The Purchaser agrees to indemnify and save
harmless the Vendor from and against any claim for any commission or other
remuneration payable or alleged to be payable to any broker, agent or other
intermediary who purports to act or to have acted for the Purchaser in
connection with the transactions herein contemplated.
16.2 Further Assurances
Each of the parties hereto upon the request of the other party or parties
hereto, whether before or after the Time of Closing, shall do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged or delivered
all such further acts, deeds, documents, assignments, transfers, conveyances,
powers of attorney and assurances as may be reasonably necessary or desirable to
effect complete consummation of the transactions herein contemplated.
16.3 Assignment of Contracts
To the extent the assignment of any agreement, contract or commitment,
including, without limitation, any leases covering part or all of the Premises,
or other asset to be assigned to the Purchaser pursuant to the provisions
hereof, shall require the consent, approval, permit or acknowledgement of any
Person, this Agreement shall not constitute a contract to assign the same if an
attempted assignment would constitute a breach thereof. If any of such required
consents, approvals, permits and acknowledgments is not obtained, the Vendor
shall co-operate with the Purchaser in any reasonable arrangement designed to
provide the Purchaser with the benefit of any such agreement, contract or
commitment, including, without limitation, any leases covering part or all of
the Premises, or other asset, including enforcement of any and all rights of the
Vendor against the other party thereto arising out of breach or cancellation
thereof by such party or otherwise. Nothing contained herein shall be construed
to negate or diminish, as between the Vendor and the Purchaser, the Vendor's
covenants and obligations to transfer and deliver to the Purchaser the Purchased
Assets as provided in this Agreement.
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16.4 Announcements
Except to the extent required by law or by any Tribunal the parties hereto
agree that no disclosure or public announcement with respect to this Agreement
or the transactions herein contemplated shall be made by any party hereto
without the prior written consent of each of the other parties hereto, which
consent shall not be unreasonably withheld.
16.5 Notices
(a) Any notice, direction or other instrument required or permitted to be
given to any party hereto shall be in writing and shall be
sufficiently given if delivered personally, mailed or transmitted by
fax or other form of recorded communication tested prior to
transmission to such party, as follows:
(i) in the case of the Vendor, at:
Infowave Software, Inc.
Suite 200, 4664 Lougheed Highway
Burnaby, British Columbia
Canada V5C 6B7
Attention: President and Chief Executive Officer
with a copy to:
David J. Wedge
David J. Wedge Computer Law
#100 - 1525 West 8th Avenue
Vancouver, British Columbia
Canada V6J 1T5
(ii) in the case of the Purchaser, at:
Software 2000 Limited
Magdalen Centre, Oxford Science Park
Oxford, United Kingdom
OX4 4GA
Attention: Peter Lismer and Philip Walker
Facsimile: 44-1865-784-201
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with a copy to:
Fraser Milner Casgrain
Barristers and Solicitors
15th Floor, 1040 West Georgia Street
Vancouver, British Columbia
Canada V6E 4H8
Attention: Bruce M. McKay
Facsimile: (604) 683-5214
(b) Any such notice, direction or other instrument, if delivered
personally, shall be deemed to have been given and received on the
date on which it was delivered, provided that if such day is not a
Business Day then the notice, direction or other instrument shall be
deemed to have been given and received on the first Business Day next
following such day; if mailed, shall be deemed to have been given and
received on the third day after it was mailed, provided that if such
day is not a Business Day then the notice, direction or other
instrument shall be deemed to have been given and received on the
first Business Day next following such day; and if transmitted by fax
or other form of recorded communication, shall be deemed to have been
given and received on the day of its transmission, provided that if
such day is not a Business Day or if it is transmitted or received
after the end of normal business hours then the notice, direction or
other instrument shall be deemed to have been given and received on
the first Business Day next following the day of such transmission.
Any party hereto may change its address for service from time to time by
notice given to the other parties hereto in accordance with the foregoing
provisions.
16.6 Time of the Essence
Time shall be of the essence of this Agreement.
16.7 Costs and Expenses
All costs and expenses (including, without limitation, the fees and
disbursements of legal counsel) incurred in connection with this Agreement and
the transactions herein contemplated shall be paid by the party incurring such
costs and expenses.
16.8 Applicable Law
This Agreement shall be construed and enforced in accordance with, and
the rights of the parties hereto shall be governed by, the laws of the Province
of British Columbia
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and the laws of Canada applicable therein. Any and all disputes arising under
this Agreement, whether as to interpretation, performance or otherwise, shall be
subject to the exclusive jurisdiction of the Courts of the Province of British
Columbia and each of the parties hereto hereby irrevocably attorns to the
exclusive jurisdiction of the Courts of such Province.
16.9 Entire Agreement
This Agreement, including the Schedules hereto, constitutes the entire
agreement between the parties hereto with respect to the transactions herein
contemplated and cancels and supersedes any prior understandings, agreements,
negotiations and discussions between the parties hereto with respect thereto
except as specifically provided or contemplated in this Agreement or in any
agreement, certificate, affidavit, statutory declaration or other document
delivered or given pursuant to this Agreement. There are no representations,
warranties, terms, conditions, undertakings or collateral agreements or
understandings, express or implied, between the parties hereto other than those
expressly set forth in this Agreement or in any such agreement, certificate,
affidavit, statutory declaration or other document as aforesaid. This Agreement
may not be amended or modified in any respect except by written instrument
executed by each of the parties hereto.
16.10 Effect of Closing
Any provision of this Agreement which is capable of being performed after
but which has not been performed at or prior to the Time of Closing and all
obligations, covenants and agreements contained in this Agreement or in any
agreement, certificate, affidavit, statutory declaration or other document
delivered or given pursuant to this Agreement, including, without limitation,
the indemnities herein provided for, shall remain in full force and effect
notwithstanding Closing, subject to the limitation periods referred to in
Sections 8.1 and 8.2.
16.11 Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same agreement.
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16.12 Assignment
This Agreement may not be assigned by the Vendor without the prior written
consent of the Purchaser.
16.13 Parties in Interest
This Agreement shall enure to the benefit of an be binding upon the parties
hereto and their respective successors and permitted assigns.
16.14 Third Parties
Except as specifically set forth or referred to herein, nothing herein is
intended or shall be construed to confer upon or give to any Person, other than
the parties hereto and their respective successors or assigns, any rights or
remedies under or by reason of this Agreement.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto.
INFOWAVE SOFTWARE, INC.
Per: /s/ Bijan Sanii
--------------------------------
Authorized Signatory
STRYDENT SOFTWARE, INC.
Per: /s/ Peter Lismer
--------------------------------
Authorized Signatory
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SCHEDULES
Schedule 1* -- Fixed Assets (Section 2.1(a))
Schedule 2* -- Inventories (Section 2.1(b))
Schedule 3* -- Accounts Receivable (Section 2.1(c))
Schedule 4* -- Unfulfilled orders and contracts (Section 2.1(d))
Schedule 5* -- Intellectual and Industrial Property Rights
(Section 2.1(e))
Schedule 5A* -- Application Software (Section 2.1(f))
Schedule 6* -- "Shrink Wrap License" (Section 6.1.10(d))
Schedule 7* -- Accounts Payable (Section 4.1.1)
Schedule 8* -- Employee Benefits (Section 6.1.6(a))
Schedule 9* -- Transferred Employees (Section 6.1.6(b))
Schedule 10* -- Non-Competition and Non-Solicitation Agreement
(Section 9.1.5)
Schedule 11* -- Escrow Agreement (Section 5.1(b))
Schedule 12* -- Subleases (Section 9.1.8)
----------------------
* These schedules have been omitted from this report pursuant to Item
601(b)(2) of Regulation S-K under the Securities Act of 1933. The
registrant agrees to supplementally furnish a copy of the omitted schedules
to the Commission upon request.
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