UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO
FILED PURSUANT TO RULE 13d-2(1)
(Amendment No.)*
InfoInterActive Inc.
---------------------------------------------
(Name of Issuer)
Common Shares, no par value
---------------------------------------------
(Title of Class of Securities)
45691810C
---------------------------------------------
(CUSIP Number)
F. Thomas Dunlap
Vice President, General Counsel and Secretary
Intel Corporation
2200 Mission College Boulevard
Santa Clara, CA 95052
Telephone: (408) 765-8080
---------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 28, 2000
---------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D and is filing this schedule because of Rule 13d-
1 (e), 13d-1 (f) or 13d-1 (g), check the following box [ ].
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter the disclosures provided
in a prior cover page.
The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 (the "Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 11 Pages
<PAGE>
CUSIP No. 45691810C Schedule 13D Page 2 of 11 Pages
1. NAME OF REPORTING PERSON: INTEL CORPORATION
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
94-1672743
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP** (a)[]
(b)[]
3. SEC USE ONLY
4. SOURCE OF FUNDS:
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS []
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
DELAWARE
7. SOLE VOTING POWER:
NUMBER OF 1,803,922
SHARES 8. SHARED VOTING POWER:
BENEFICIALLY 0
OWNED BY EACH 9. SOLE DISPOSITIVE POWER:
REPORTING 1,803,922
PERSON WITH 10. SHARED DISPOSITIVE POWER:
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON: 1,803,922
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES** []
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
9.9%; reflecting ownership by Reporting Person of 1,803,922
newly issued Common Shares and a total of 18,246,643
currently issued and outstanding Common Shares.
<PAGE>
CUSIP No. 45691810C Schedule 13D Page 3 of 11 Pages
ITEM 1. Security and Issuer.
(a) Name and Principal Executive Offices of Issuer:
InfoInterActive Inc. (the "Issuer")
1550 Bedford Highway
Suite 600, Sun Tower
Bedford, Nova Scotia B4A 1E6
(b) Title of Class of Equity Securities:
Common Shares, no par value
ITEM 2. Identity and Background.
(a) Name of Person Filing:
Intel Corporation (the "Reporting Person")
(b) Address of Principal Business Office:
2200 Mission College Boulevard
Santa Clara, CA 95052-8119
(c) Principal Business:
Manufacturer of microcomputer components,
modules and systems.
(d) Criminal Proceedings:
During the last five years, neither the
Reporting Person nor any executive officer or
director of the Reporting Person has been
convicted in any criminal proceeding.
(e) Civil Proceedings:
During the last five years, neither the
Reporting Person nor any executive officer or
director of the Reporting Person has been party
to any civil proceeding of a judicial or
administrative body of competent jurisdiction
as a result of which such person was or is
subject to any judgment, decree or final order
enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or
State securities laws or finding any violation
with respect to such laws.
<PAGE>
CUSIP No. 45691810C Schedule 13D Page 4 of 11 Pages
(f) Place of Organization:
Delaware
Attached hereto as Appendix A is information required
by this Item 2 with respect to the executive officers
and directors of the Reporting Person. All such
individuals are U.S. citizens, except as otherwise
indicated on Appendix A.
ITEM 3. Source and Amount of Funds or Other Consideration.
(a) Source of Funds:
Funds for the purchase of the Common Shares
were derived from the Reporting Person's
working capital.
(b) Amount of Funds:
$6,900,001.65 (Canadian) was paid to acquire
the Common Shares.
ITEM 4. Purpose of the Transaction.
On February 28, 2000, the Reporting Person acquired
1,803,922 Common Shares for C$6,900,001.65 pursuant to
that certain Common Share Purchase Agreement dated
February 28, 2000 (the "Purchase Agreement").
The Reporting Person presently holds the Common
Shares. The Reporting Person will from time to time
explore opportunities for liquidating all or a portion
of the Common Shares, through one or more sales
pursuant to public or private offerings or otherwise
depending upon the Reporting Person's evaluation of
market conditions, market price, alternative
investment opportunities, liquidity needs and other
factors. The Reporting Person may determine to retain
some portion of the Common Shares as an investment.
ITEM 5. Interest in Securities of the Issuer.
(a) Number of Shares 1,803,922 Common
Beneficially Owned: Shares
Right to Acquire: None
Percent of Class: 9.9% of the
Issuer's
outstanding Common
Shares (based upon
16,442,721 shares
of Common Shares
<PAGE>
CUSIP No. 45691810C Schedule 13D Page 5 of 11 Pages
outstanding prior
to issuance of
shares
beneficially owned
by the Reporting
Person, as
determined from
representations
made by the Issuer
to the Reporting
Person in the
Purchase
Agreement, as
defined in Item
4). See Cover
Page Item 13.
(b) Sole Power to Vote, Direct
the Vote of, Dispose of, or
Direct the Disposition of 1,803,922
Shares:
(c) Recent Transactions: As described more
fully in Item 4,
on February 28,
2000, the
Reporting Person
acquired 1,803,922
shares of Common
Shares at a price
of $3.825
(Canadian) per
share.
(d) Rights with Respect to
Dividends or Sales N/A
Proceeds:
(e) Date of Cessation of Five
Percent Beneficial N/A
Ownership:
ITEM 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
Pursuant to the Purchase Agreement, the Reporting
Person has certain registration rights in both the
United States and Canada in connection with its
holdings. Those registration rights shall apply
mutatis mutandis to any shares of capital stock of the
Issuer or any successor company of the Issuer received
by the Reporting Person as the result of any stock
split, consolidation, merger or other capital
reorganization. Also, without the prior approval of
the Reporting Person, the Issuer is prohibited under
the Purchase Agreement from issuing registration
rights superior to those given to the Reporting Person
under the Purchase Agreement. And, so long as the
Reporting Person holds at least 20% of the securities
originally purchased, the Reporting Person has a right
to receive periodic financial reports and budgets from
the Issuer.
<PAGE>
CUSIP No. 45691810C Schedule 13D Page 6 of 11 Pages
The Reporting Person has agreed that, in the event the
Issuer files a registration statement under the
Securities Act with respect to an initial underwritten
public offering of any securities of the Issuer in the
United States, if requested by the lead underwriter,
and provided that all senior employees, directors and
officers of the Issuer and all 10% beneficial holders
also agree to be subject to restrictions which are at
least as restrictive, the Reporting Person will not
effect any public sale or distribution, including any
sale pursuant to Rule 144, of any equity securities of
the Issuer or any securities convertible into or
exchangeable for any equity securities of the Issuer
(other than as part of such underwritten public
offering) during the seven days prior to and 90 days
after, or such longer period as may be required by the
underwriter (not to exceed in any event 180 days), the
effectiveness of the registration statement for such
underwritten offering.
Pursuant to an Undertaking by the Reporting Person to
the Toronto Stock Exchange, dated February 28, 2000,
the Reporting Person has agreed to not sell or
otherwise dispose of any of the Common Shares
purchased by it on February 28, 2000, or any
securities derived therefrom, for a period of six
months from the date of the Closing of the transaction
or such other period as prescribed by applicable law,
whichever is longer.
ITEM 7. Material to be Filed as Exhibits.
Exhibit 1 Common Share Purchase Agreement dated
February 28, 2000
Exhibit 2 Private Placement Questionnaire and
Undertaking dated February 28, 2000
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated as of March 7, 2000.
INTEL CORPORATION
By: /s/F. Thomas Dunlap, Jr.
------------------------
F. Thomas Dunlap, Jr.
Vice President, General
Counsel and Secretary
<PAGE>
CUSIP No. 45691810C Schedule 13D Page 7 of 11 Pages
APPENDIX A
DIRECTORS
The following is a list of all Directors of Intel Corporation and
certain other information with respect to each Director. All
Directors are United States citizens except as indicated below.
Name: Craig R. Barrett
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal President and Chief Executive Officer
Occupation:
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: John Browne
Business BP Amoco p.l.c., Britannic House, 1 Finsbury
Address: Circus, London EC2M 7BA
Principal Group Chief Executive
Occupation:
Name, principal The BP Amoco p.l.c., an integrated oil
business and company.
address of Britannic House, 1 Finsbury Circus
corporation or London EC2M 7BA
other
organization in
which employment
is conducted:
Citizenship: British
<PAGE>
CUSIP No. 45691810C Schedule 13D Page 8 of 11 Pages
Name: Winston H. Chen
Business Paramitas Foundation, 3945 Freedom Circle,
Address: Suite 760, Santa Clara, CA 95054
Principal Chairman
Occupation:
Name, principal Paramitas Foundation, a charitable foundation.
business and 3945 Freedom Circle, Suite 760
address of Santa Clara, CA 95054
corporation or
other
organization in
which employment
is conducted:
Name: Andrew S. Grove
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Chairman of the Board of Directors
Occupation:
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: D. James Guzy
Business 1340 Arbor Road, Menlo Park, CA 94025
Address:
Principal Chairman
Occupation:
Name, principal The Arbor Company, a limited partnership
business and engaged in the electronics and computer
address of industry.
corporation or 1340 Arbor Road
other Menlo Park, CA 94025
organization in
which employment
is conducted:
<PAGE>
CUSIP No. 45691810C Schedule 13D Page 9 of 11 Pages
Name: Gordon E. Moore
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Chairman Emeritus of the Board of Directors
Occupation:
Name, principal intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: David S. Pottruck
Business 101 Montgomery Street, San Francisco, CA 94104
Address:
Principal President and Co-Chief Executive Officer
Occupation:
Name, principal The Charles Schwab Corporation, an investment
business and company
address of 101 Montgomery Street
corporation or San Francisco, CA 94104
other
organization in
which employment
is conducted:
Name: Jane E. Shaw
Business 1310 Orleans Drive, Sunnyvale, CA 94089
Address:
Principal Chairman and Chief Executive Officer
Occupation:
Name, principal AeroGen, Inc., a private company specializing
business and in controlled delivery of drugs to the lungs
address of 1310 Orleans Drive
corporation or Sunnyvale, CA 94089
other
organization in
which employment
is conducted:
<PAGE>
CUSIP No. 45691810C Schedule 13D Page 10 of 11 Pages
Name: Leslie L. Vadasz
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Executive Vice President; President, Intel
Occupation: Capital
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: David B. Yoffie
Business Harvard Business School, Morgan Hall 215,
Address: Soldiers Field Park Road, Boston, MA 02163
Principal Max and Doris Starr Professor of International
Occupation: Business Administration
Name, principal Harvard Business School, an educational
business and institution.
address of Harvard Business School
corporation or Morgan Hall 215,Soldiers Field Park Road
other Boston, MA 02163
organization in
which employment
is conducted:
Name: Charles E. Young
Business 10920 Wilshire Boulevard, Suite 1835, Los
Address: Angeles, CA 90024
Principal A. Chancellor Emeritus
Occupation:
B. Interim President
Name, principal A. University of California at Los Angeles, an
business and educational institution.
address of
corporation or 10920 Wilshire Boulevard, Suite 1835
other Los Angeles, CA 90024
organization in
which employment B. University of Florida
is conducted: 226 Tigert Hall
PO Box 113150
Gainesville, FL 32610
<PAGE>
CUSIP No. 45691810C Schedule 13D Page 11 of 11 Pages
EXECUTIVE OFFICERS
The following is a list of all executive officers of Intel
Corporation excluding executive officers who are also directors.
Unless otherwise indicated, each officer's business address is
2200 Mission College Boulevard, Santa Clara, California 95052-
8119, which address is Intel Corporation's business address.
Name: Paul S. Otellini
Title: Executive Vice President; General Manager, Intel
Architecture Business Group
Name: Gerhard H. Parker
Title: Executive Vice President; General Manager, New
Business Group
Name: Andy D. Bryant
Title: Senior Vice President, Chief Financial Officer, and
Enterprise Services Officer
Name: Sean M. Maloney
Title: Senior Vice President; Director, Sales and Marketing
Group
Name: Michael R. Splinter
Title: Senior Vice President; General Manager, Technology
and Manufacturing Group
Name: Albert Y. C. Yu
Title: Senior Vice President; General Manager,
Microprocessor Products Group
Name: F. Thomas Dunlap, Jr.
Title: Vice President, General Counsel and Secretary
Name: Arvind Sodhani
Title: Vice President, Treasurer
<PAGE>
EXHIBIT 1
COMMON SHARE PURCHASE AGREEMENT
<PAGE>
COMMON SHARE PURCHASE AGREEMENT
BETWEEN
INFOINTERACTIVE INC.
- and -
INTEL CORPORATION
February 28, 2000
<PAGE>
THIS AGREEMENT made as of the 28th day of February, 2000.
BETWEEN:
INFOINTERACTIVE INC., a corporation incorporated pursuant to
the laws of Alberta (hereinafter referred to as "IIA")
OF THE FIRST PART
- and -
INTEL CORPORATION, a corporation incorporated pursuant to
the laws of Delaware (hereinafter referred to as "Intel")
OF THE SECOND PART
WHEREAS Intel wishes to subscribe for common shares in the
capital of IIA for the subscription price and upon the terms and
conditions hereinafter set forth;
WHEREAS Intel and IIA have entered into a Business Agreement
dated as of February 23, 2000 pursuant to which IIA will modify
certain IIA software to operate on Intel devices and will, among
other things, grant Intel a license to use the modified software;
and
NOW THEREFORE THIS AGREEMENT WITNESSETH that in
consideration of the covenants, agreements and premises herein
contained and other good and valuable consideration (the receipt
and sufficiency whereof being hereby acknowledged by each party),
the parties hereto do hereby covenant and agree as follows:
ARTICLE 1
Interpretation
1.1 Definitions. In this Agreement the following capitalized
terms shall have the respective meanings ascribed thereto:
(a) "Agreement" means this Agreement and any and all
schedules and amendments hereto.
(b) "Business Agreement" means the Software Development and
Services Agreement dated as of February 23, 2000 between IIA and
Intel.
(c) "Claim" and "Claim Notice" have the meanings ascribed to
such terms in Section 9.3 herein.
<PAGE> 2
(d) "Closing" means the completion of the transactions
contemplated by this Agreement.
(e) "Closing Date" means February 28, 2000 or such other
date as may be mutually agreed to by the Parties.
(f) "Confidentiality and Non Compete Agreement" means the
Confidentiality and Non Compete Agreement between IIA and its
employees in the form attached as Schedule "A" hereto;
(g) "Damages" has the meaning ascribed to that term in
Section 9.1 herein.
(h) "Encumbrances" means any and all mortgages, pledges,
liens, charges, security interests, title retention agreements or
arrangements, restrictive covenants, adverse claims, assignments,
demands and encumbrances or other arrangement or condition which,
in substance, secures payment or performance of an obligation of
whatsoever nature and howsoever incurred.
(i) "Escrow Agreement" means the Escrow Agreement dated
February 10, 1999 among IIA, certain shareholders of IIA and
Montreal Trust Company of Canada.
(j) "Financial Statement Date" has the meaning ascribed to
that term in Section 4.1(r).
(k) "Holder" shall mean Intel, so long as Intel holds
Registrable Securities, and any holder of Registrable Securities
to whom the registration rights conferred by the Registration
Rights Agreement have been transferred in compliance therewith.
(l) "Key Personnel" means the following officers and
employees of IIA: Bill McMullin, Mike Smith, Patricia Muzyk,
Steve Murphy, Bob Richardson, Bill Power, Jennifer Coltman and
Cheryl Hann.
(m) "Parties" means IIA and Intel.
(n) "Place of Closing" means the offices of IIA located at
1550 Bedford Highway, Suite 600, Sun Tower, Bedford, Nova Scotia,
Canada, B4A 1E6, or such other place as may be agreed to by the
Parties.
(o) "Purchase Price" has the meaning ascribed to that term
in Section 2.1.
(p) "Registrable Securities" shall mean (i) the Subscribed
Shares and (ii) any common shares in the share capital of IIA
issued as a dividend or other distribution with respect to or in
exchange for or in replacement of the Subscribed Shares,
provided, however, that Registrable Securities shall not include
any common shares in the capital of IIA that have previously been
registered or which have been sold to the public in a manner
which is exempt from registration.
<PAGE> 3
(q) "Registration Rights Agreement" means the Registration
Rights Agreement to be dated the Closing Date between IIA and
Intel.
(r) "Rule 144" shall mean Rule 144 as promulgated by the SEC
under the U.S. Securities Act, as such Rule 144 may be amended
from time to time, or any similar successor rule that may be
promulgated by the SEC.
(s) "SEC" shall mean the United States Securities and
Exchange Commission or any other United Stated federal agency at
the time administering the U.S. Securities Act.
(t) "Stock Option Plan" means the Stock Option Plan of IIA
dated January 3, 2000 and all previous stock option plans of IIA.
(u) "Subscribed Shares" has the meaning ascribed to that
term in Section 2.1.
(v) "Subsidiary" means InterActive Telecom Incorporated, a
corporation incorporated under the laws of Nova Scotia.
(w) "Time of Closing" means 2:00 p.m. (Halifax time) on the
Closing Date or such other time as may be agreed to by the
Parties.
(x) "TSE" means The Toronto Stock Exchange.
(y) "U.S. Exchange Act" shall mean the United States
Securities Exchange Act of 1934, as amended, or any similar
successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
(z) "U.S. Securities Act" shall mean the Securities Act of
1933 (United States), as amended, or any similar successor
federal statute and the rules and regulations thereunder, all as
the same shall be in effect from time to time.
1.2 Currency. All references in this Agreement to currency,
unless otherwise specified, are in Canadian dollars.
1.3 Gender and Plural. In this Agreement, all references to the
masculine gender include the feminine and neuter genders and vice
versa and all references to the singular include the plural and
vice-versa. The word "shall" has the same meaning in this
Agreement as the word "will".
1.4 Business Days. All references in this Agreement to business
days are to days excluding Saturdays, Sundays and statutory
holidays in Halifax, Nova Scotia.
1.5 Laws. This Agreement shall be governed by and construed in
accordance with the laws of Nova Scotia and the federal laws of
Canada applicable therein.
1.6 Period of Time. When calculating the period of time within
which or following which any act is to be done or step taken
pursuant to this Agreement, the date which is the reference
<PAGE> 4
date in calculating such period shall be excluded. If the last
day of such period is not a business day, the period in question
shall end on the next business day.
1.7 Section Headings. The section and other headings contained
in this Agreement or in the Schedules are for reference purposes
only and shall not affect in any way the meaning or
interpretation of this Agreement.
1.8 Schedules. The following Schedules attached hereto are
incorporated in this Agreement by reference and are deemed to be
a part hereof:
Schedule Description Section Reference
- ---------- ----------- -----------------
A Confidentiality and Non 1.1(f)
Compete Agreement
B Encumbrances 4.1 (e) and 4.1 (t)
C Certificate and Agreement of 5.1(i)
Institutional Accredited
Investors
D Legal Opinion of Counsel to 8.1(f)
IIA
E Conduct of Business in the 4.1(r)
Ordinary Course
F Material Adverse Changes 4.1(s)
G Material Contracts 4.1(v)(ii) and
4.1(y)
H Employment Contracts and 4.1(gg) and 4.1(hh)
Benefit Plans
I Confidential Information 13.2(b)
Transmittal Record
ARTICLE 2
Subscription for Common Shares
2.1 Subscription. Subject to the terms and conditions hereof and
in particular and without limitation, subject to the closing
arrangements set out herein on the Closing Date, Intel shall
subscribe for and purchase and IIA shall issue and sell to Intel,
1,803,922 common shares of IIA (the "Subscribed Shares") at a
price of $3.825 (Canadian) per share, for an aggregate purchase
price of $ 6,900,001.65 (Canadian) (the "Purchase Price"), which
shall be paid by Intel to IIA by certified cheque or wire
transfer in immediately available funds.
ARTICLE 3
Closing Arrangements
3.1 Closing. The closing of the purchase of the Subscribed
Shares shall occur at the Time of Closing at the Place of Closing
and on such date each of the Parties shall execute and deliver
<PAGE> 5
such documents and take such steps as may be required to carry
out the transactions contemplated in this Agreement.
ARTICLE 4
Representations and Warranties of IIA
4.1 IIA represents and warrants to Intel as follows and
acknowledges and confirms that Intel is relying on such
representations and warranties in connection with the
transactions contemplated in this Agreement:
(a) Incorporation and Organization. Each of IIA and
Subsidiary is duly incorporated under the laws of the
jurisdiction of its incorporation and is duly organized, validly
existing and in good standing under such laws with the corporate
power to own or lease and operate its property and to carry on
its business. Each of IIA and Subsidiary is qualified, licensed
or registered to carry on business in the jurisdictions where it
carries on business. Such jurisdictions include all jurisdictions
in which the nature of the assets or the business of IIA and
Subsidiary makes such qualification, licensing or registration
necessary or where each of IIA and Subsidiary owns or leases any
material assets or conducts any material business.
(b) Authorized Capital - IIA. The authorized capital of IIA
consists of an unlimited number of common shares; an unlimited
number of First Preferred Shares issuable in series; and an
unlimited number of Second Preferred Shares issuable in series;
of which as at the close of business on February 23, 2000,
16,442,721 common shares (and no more) have been duly issued and
are outstanding as fully paid and non-assessable. At the date
hereof, no First Preferred Shares or Second Preferred Shares are
issued or outstanding.
(c) Authorized Capital - Subsidiary. The authorized capital
of Subsidiary consists of 40,000 shares, of which 200 shares (and
no more) have been duly issued and are outstanding as fully paid
and non-assessable (collectively, the "Subsidiary Shares"). All
of the Subsidiary Shares have been issued in compliance with all
applicable laws, including securities laws.
(d) Issuance of Subscribed Shares. Upon issuance, (i) the
Subscribed Shares will be duly authorized, allotted and issued to
Intel from treasury as fully paid and non-assessable common
shares, in compliance with all applicable laws, including in
compliance with the registration, prospectus delivery and
qualification requirements of all applicable securities laws or
in compliance with applicable exemptions therefrom, (ii) the
Subscribed Shares will be free and clear of all Encumbrances and
(iii) Intel will be the registered and beneficial owner of the
Subscribed Shares.
(e) Title to Subsidiary Shares. IIA is the registered and
beneficial owner of all of the issued and outstanding shares of
Subsidiary with good title thereto, free and clear
<PAGE> 6
of any Encumbrances, except for Encumbrances granted by IIA in
favour of the Canadian Imperial Bank of Commerce, as further
described in Schedule "B".
(f) No Pre-Emptive Rights. No person has any rights of
first refusal or any pre-emptive rights in connection with the
sale and issuance of the Subscribed Shares.
(g) Registration Rights. Except for registration rights
granted by IIA to Intel pursuant to the Registration Rights
Agreement, neither IIA nor Subsidiary has granted or agreed to
grant any person or entity any rights (including piggyback
registration rights) to have any securities of IIA or Subsidiary
registered with the SEC or any other governmental authority in
the United States or a prospectus filed and cleared with the
securities regulatory authorities of any province of Canada.
(h) Qualification. IIA has the requisite corporate power and
capacity to enter into this Agreement and to perform its
obligations hereunder.
(i) Due Authorization. All requisite corporate acts and
proceedings have been done and taken by IIA to authorize the
execution and delivery of this Agreement and the performance of
its obligations hereunder, and requisite corporate acts and
proceedings for the authorization, issuance and delivery of the
Subscribed Shares to be issued under this Agreement have been
done or taken, or shall have been done or taken prior to the
Closing Date.
(j) Validity of Agreement. The execution and delivery of
this Agreement and the performance of IIA's obligations hereunder
(i) do not (or would not, with the giving of notice, the lapse of
time or the happening of any other event or condition) conflict
with, result in breach of or allow any other person to exercise
any rights or cause a default under any indenture, mortgage, deed
of trust, loan agreement or any other agreement or instrument to
which any of IIA or Subsidiary is a party or by which any of IIA
or Subsidiary or any of their property or assets is bound, (ii)
do not conflict with nor result in a violation of the provisions
of IIA's or Subsidiary's articles, by-laws or other constating
documents or any resolution of IIA's or Subsidiary's shareholders
or directors or any laws applicable to IIA or Subsidiary or any
order, rule or regulation of any court or governmental agency or
body having jurisdiction over IIA or Subsidiary or any of their
property or assets, (iii) will not result in the breach of, or
cause the termination or revocation of any authorization,
approval or consent held by IIA or Subsidiary necessary to the
ownership or operation of their business, and (iv) will not
result in the creation of any Encumbrance upon any assets of IIA
or Subsidiary.
(k) Enforceability of Agreement. This Agreement has been
duly executed and delivered by IIA and constitutes a legal, valid
and binding obligation of IIA enforceable against it in
accordance with its terms.
(l) Subsidiaries. Except for Subsidiary, IIA has no
subsidiaries nor is it a party to any agreements of any nature to
acquire any subsidiary or any interest in any
<PAGE> 7
partnership, corporation or other entity or to acquire or lease
any other business operations.
(m) Business. Each of IIA and Subsidiary is conducting its
business in compliance in all material respects with all
applicable laws, rules and regulations and is not in breach of
any such laws, rules or regulations. Each of IIA and Subsidiary
holds all material licenses, certificates, registrations,
permits, consents or qualifications required by the appropriate
state, provincial, municipal or federal regulatory agencies or
bodies necessary in order to enable its business to be carried on
as now conducted.
(n) Options, etc. No person has any option, warrant, right,
call, commitment, conversion right, right of exchange or other
agreement or any right or privilege (whether by law, pre-emptive
or contractual) capable of becoming an option, warrant, right,
call, commitment, conversion right, right of exchange or other
agreement for the purchase, subscription, allotment or issuance
of any of the unissued shares in the capital of IIA or Subsidiary
or of any unissued securities of IIA or Subsidiary or for the
purchase or other acquisition from IIA or Subsidiary of any of
their assets, except for sales in the ordinary course and except
for (i) share purchase options outstanding from time to time
under the Stock Option Plan and (ii) share purchase warrants to
acquire an aggregate of 1,929,126 common shares (as at the close
of business on February 23, 2000).
(o) No Consents or Contraventions. Except for the approval
of the TSE, the execution and delivery by IIA of this Agreement
and the performance of its obligations hereunder:
(i) does not require any consent, approval,
authorization or order of or any filing with or notice to any
court or governmental agency or body or any other person except
for the filing of a Form 20 with, and payment of the requisite
filing fees to, the Nova Scotia Securities Commission within 10
days of Closing, the filing of a Form D with the SEC within 15
days of Closing and the filing of the Form D with the California
Securities Commission, along with the requisite filing fees and a
consent to service, within 15 days of Closing;
(ii) will not contravene any statute or regulation
binding on IIA.
The offer, sale and issuance of the Subscribed Shares and the
acceptance of their subscription in conformity with the terms
hereof are exempt from registration and prospectus delivery
requirements of applicable securities laws.
(p) Dissolution. No proceedings are now pending for, and
IIA is unaware of any proceedings leading to, the dissolution or
winding-up of IIA or Subsidiary or the placing of IIA or
Subsidiary in bankruptcy or receivership.
(q) Financial Statements. The consolidated financial
statements of IIA for the year ended December 31, 1998 and the
nine months ended September 30, 1999 (the
<PAGE> 8
"Financial Statements") present fairly, accurately and
completely, in all material respects, the assets, liabilities and
obligations, income, losses, retained earnings or deficit,
reserves and financial position of IIA as at the dates thereof
and the results of operations and the changes in financial
position for the periods then ended in accordance with Canadian
generally accepted accounting principles applied on a consistent
basis and do not omit to state any material facts that are
required by Canadian generally accepted accounting principles or
by applicable law to be stated or reflected therein or which is
necessary to make the statements contained therein not
misleading.
(r) Conduct of Business in the ordinary course. Except as
disclosed in Schedule "E", since September 30, 1999 (the
"Financial Statement Date"), each of IIA and Subsidiary has
carried on its business in the ordinary course and, without
limiting the generality of the foregoing has not:
(i) made or assumed any commitment, obligation or
liability outside the ordinary course;
(ii) sold or exchanged or otherwise in any way
alienated or disposed of any of its assets or rights other than
the sale of inventory in the ordinary course;
(iii) made any loans or advances to any person, other
than ordinary advances for travel expenses;
(iv) entered into any transactions with any officers,
directors or employees of IIA or Subsidiary or any entity
controlled by any such individuals;
(v) split, combined or reclassified any of its shares,
or issued, redeemed, retired, repurchased or otherwise acquired
shares in its capital or any warrants, rights, bonds, debentures,
notes or other corporate security, or reserved, declared, made or
paid any dividend, or made any other distributions or
appropriations of profits or capital;
(vi) made any change in its accounting principles and
practices as utilized in the preparation of the Financial
Statements; or
(vii) modified its capital structure.
(s) No Material Adverse Change. Since Financial Statement
Date, except as disclosed in Schedule "F", there has not been:
(i) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the
business or the assets, properties, financial condition,
operating results or prospects of IIA or Subsidiary (as presently
conducted and as presently proposed to be conducted);
(ii) any waiver by IIA or Subsidiary of a valuable
right or of a material debt owed to it;
<PAGE> 9
(iii) any satisfaction or discharge of any lien, claim
or encumbrance or payment of any obligation by IIA or Subsidiary,
except such a satisfaction, discharge or payment made in the
ordinary course of business that is not material to the business
or the assets, properties, financial condition or operating
results of IIA or Subsidiary;
(iv) any material change or amendment to a material
contract or arrangement by which IIA or Subsidiary or any of
their assets or properties is bound or subject, except for
changes or amendments which are expressly provided for or
disclosed in this Agreement;
(v) any material change in any compensation arrangement
or agreement with any present or prospective employee, contractor
or director of IIA or Subsidiary not approved by the directors of
IIA or Subsidiary, respectively, other than increases in employee
compensation in the ordinary course of business; or
(vi) to the knowledge of IIA, any other event or
condition of any character which would materially and adversely
affect the business or the assets, properties, financial
condition or operating results of IIA or Subsidiary.
(t) Title to Assets. Except for the Encumbrances in favour
of the Canadian Imperial Bank of Commerce, Maritime Office
Equipment Rental Ltd. and Steelcase Financial Services Ltd., as
further described in Schedule "B", each of IIA and Subsidiary
owns (with good title) all of the properties and assets (whether
real, personal or mixed and whether tangible or intangible) that
it purports to own including all the properties and assets
reflected as being owned by IIA and Subsidiary in the Financial
Statements. Each of IIA and Subsidiary has legal and beneficial
ownership of such assets, free and clear of any Encumbrances,
except as provided above. The assets of each of IIA and
Subsidiary include all rights and property necessary to conduct
its business substantially in the manner presently carried on by
it. Each of IIA and Subsidiary are in compliance with all
material terms and conditions of leases of property or assets by
IIA or Subsidiary, respectively, and, to the best of IIA's
knowledge, each of IIA and Subsidiary holds valid leasehold
interests in such property and assets, free and clear of any
Encumbrances, except as provided above.
(u) Insurance. Each of IIA and Subsidiary maintains fire and
casualty insurance policies with extended coverage, sufficient in
amount (subject to reasonable deductibles) to allow it to replace
any of its properties that might be damaged or destroyed.
(v) Intellectual Property Rights.
(i) Ownership. Each of IIA and Subsidiary has full
title and ownership of, or has license to, all patents, patent
applications, trademarks, service marks, trade names, copyrights,
moral rights, maskworks, trade secrets,
<PAGE> 10
confidential and proprietary information, compositions of matter,
formulas, designs, proprietary rights, know-how and processes
(all of the foregoing collectively hereinafter referred to as the
"Intellectual Property") necessary to enable IIA and Subsidiary
to carry on their business as now conducted and as proposed to be
conducted, without any conflict with or infringement of the
rights of others. To the knowledge of IIA, no third party has any
ownership right, title, interest, claim in or lien on any of
IIA's or Subsidiary's Intellectual Property and each of IIA and
Subsidiary has taken, and in the future each of IIA and
Subsidiary will use its best efforts to take, all steps
reasonably necessary to preserve its legal rights in, and the
secrecy of, all its Intellectual Property, except those for which
disclosure is required for legitimate business or legal reasons.
(ii) Licenses; Other Agreements. Except as disclosed
in Schedule "G", neither IIA nor Subsidiary has granted and, to
the knowledge of IIA, there are not outstanding, any options,
licenses or agreements of any kind relating to any Intellectual
Property of either of IIA or Subsidiary, nor is any of IIA or
Subsidiary bound by or a party to any option, license or
agreement of any kind with respect to any of IIA's or
Subsidiary's Intellectual Property, other than licenses of IIA's
or Subsidiary's Intellectual Property which form part of the sale
by either of IIA or Subsidiary of its products or services to
customers in the ordinary course of business. Except for the use
of products with standard off-the-shelf, "shrink wrap" licenses,
neither IIA nor Subsidiary is obligated to pay any royalties or
other payments to third parties with respect to the marketing,
sale, distribution, manufacture, license of any product or use of
any Intellectual Property.
(iii) No Infringement. To the knowledge of IIA,
neither IIA nor Subsidiary has violated or infringed, or is
currently violating or infringing, and has not received any
communications alleging that either IIA or Subsidiary (or any of
its employees or consultants) has violated or infringed or, by
conducting their business as proposed, would violate or infringe,
any Intellectual Property of any other person or entity.
(iv) No Breach by Employee. IIA is not aware that any
employee or consultant of IIA or Subsidiary is obligated under
any agreement (including licenses, covenants or commitments of
any nature) or subject to any judgment, decree or order of any
court or administrative agency, or any other restriction that
would interfere with the use of his or her best efforts to carry
out his or her duties for IIA, Subsidiary or their business or to
promote the interests of IIA or Subsidiary or that would conflict
with their business as proposed to be conducted. The carrying on
of IIA's or Subsidiary's business by the employees and
contractors of IIA or Subsidiary and the conduct of IIA's or
Subsidiary's business as presently proposed, will not, to the
knowledge of IIA, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any of
such
<PAGE> 11
employees or contractors of IIA or Subsidiary is now obligated.
IIA does not believe it is or will be necessary to utilize in
IIA's or Subsidiary's business any inventions of any employees of
IIA or Subsidiary (or persons it currently intends to hire) made
prior to their employment by either IIA or Subsidiary. At no
time during the conception of any of IIA's or Subsidiary's
Intellectual Property was any developer, inventor or other
contributor to such patents operating under any grants from any
governmental entity or agency or private source, performing
research sponsored by any governmental entity or agency or
private source or subject to any employment agreement or
invention assignment or nondisclosure agreement or other
obligation with any third party that could adversely affect IIA's
or Subsidiary's rights in such Intellectual Property.
(w) Year 2000 Compliance. All the software that forms part
of the business and that is owned, developed or used by IIA or
Subsidiary, including, without limitation, hardware and data
used, in whole or in part in, or required for, the carrying on of
the business in the manner heretofore carried on, are designed to
be used during and after the calendar year 2000 A.D. and will
operate during each such time period without interruption and
without error, in any material respect, relating to or arising
from date-related data. Without limiting the foregoing, the said
software will correctly and adequately, in all material respects,
(i) manage and manipulate data involving dates, including single-
century formulas and multi-century formulas, and will not cause
an abnormally ending scenario within the application or generate
incorrect values or invalid results involving either single-
century formulas or multi-century formulas, (ii) provide that all
date-related user interface functionalities and data fields
include the indication of century, and (iii) provide that all
date-related data interface functionalities include the
indication of century.
(x) Tax and Government Returns. Each of IIA and Subsidiary
has filed or caused to be filed, within the times and within the
manner prescribed by law, all federal, provincial, local and
foreign tax returns and tax reports which are required to be
filed by or with respect to it (including any and all available
tax elections). The information contained in such returns and
reports is correct and complete and such returns and reports
reflect accurately all liability for taxes of IIA and Subsidiary,
respectively, for the periods covered thereby. All federal,
provincial, local and foreign income, profits, franchise, sales,
use, occupancy, excise and other taxes and assessments,
(including interest and penalties) ("Tax" or, collectively
"Taxes") that are or may become payable by or due from IIA or
Subsidiary have been fully paid or fully disclosed and fully
provided for in the books and records and in the Financial
Statements. To the best of IIA's knowledge, no examination or
audit of any tax return of IIA or Subsidiary is currently in
progress. There are no outstanding agreements or waivers
extending the statutory period or providing for an extension of
time with respect to the assessment or re-assessment of Tax or
the filing of any tax return, or any payment of any Tax, by IIA
or Subsidiary in respect of Taxes or any matters under
<PAGE> 12
discussion with any governmental entity relating to Taxes. Each
of IIA and Subsidiary has withheld from each payment made by it
the amount of all Taxes and other deductions required to be
withheld therefrom and has paid all such amounts to the proper
taxing or other authority within the time prescribed under any
applicable laws. Each of IIA and Subsidiary has collected from
each receipt from any of the past and present customers the
amount of all Taxes (including goods and services tax and
provincial sales taxes required to be collected and has paid and
remitted such Tax when due in the form required under the
appropriate legislation or made adequate provision for the
payment of such amounts to the proper receiving authorities.
(y) Contracts. Other than as disclosed in Schedule "G"
hereto, there are no agreements, contracts, leases, licenses,
instruments, commitments (oral or written), indebtedness,
liabilities and other obligations to which either IIA or
Subsidiary is a party or by which any of them are bound that are
(i) material to the conduct and operations of IIA's or
Subsidiary's business, (ii) involve any of the officers,
consultants, directors, employees or shareholders of IIA or
Subsidiary in their capacities as such, or (iii) obligate IIA or
Subsidiary to share, license or develop any product or
technology. Copies of such agreements, contracts and
documentation evidencing such liabilities and other obligations
have been made available for inspection by Intel and its counsel.
Neither IIA nor Subsidiary is in default under or in breach of,
in any material respect, any material contract to which it is a
party and there exists no state of facts which, after notice or
lapse of time or both or otherwise, would constitute a default
under or breach of, in any material respect, any of its material
contracts. All of IIA's and Subsidiary's material contracts are
in good standing and in full force and effect.
(z) Books and Records. All accounts, books, ledgers and
official and other records of whatsoever kind have been fully,
properly and accurately kept and completed for each of IIA and
Subsidiary and there are no material inaccuracies or
discrepancies of any kind contained or reflected therein.
(aa) Minute Books. The minute books of each of IIA and
Subsidiary contain accurate and complete copies of its constating
documents (and any and all amendments thereto) and by-laws.
There are no outstanding applications or filings which would
alter in any way the constating documents or corporate status of
IIA or Subsidiary.
(bb) Litigation. There are no judgments, decrees,
injunctions, rules, executions or orders of any court,
governmental department, commission, agency, instrumentality or
arbitration outstanding against IIA or Subsidiary or to which IIA
or Subsidiary is a party or subject to its provisions, and there
are no suits, actions or legal, administrative, arbitration or
other proceedings or governmental investigations (each an
"Action") affecting the business, operations, prospects, property
or affairs of IIA or Subsidiary pending or threatened against
IIA, Subsidiary, their property or the conduct of their business
or, to the knowledge of IIA, against any officer, director or
employee of IIA or Subsidiary in connection
<PAGE> 13
with such officer's, director's or employee's relationship with
or actions taken on behalf of IIA or Subsidiary. To the
knowledge of IIA, there is no factual or legal basis for any such
Action that might result, individually or in the aggregate, in
any material adverse change in the business of IIA or Subsidiary
or their properties, assets, financial condition, affairs or
prospects. By way of example but not by way of limitation, there
are no Actions pending or, to the knowledge of IIA, threatened
(or any basis therefor known to IIA) relating to the prior
employment of any of IIA's or Subsidiary's employees or
consultants, their use in connection with IIA's or Subsidiary's
business of any information, technology or techniques allegedly
proprietary to any of their former employers, clients or other
parties. There is no Action initiated by IIA or Subsidiary
currently pending or which IIA or Subsidiary intends to initiate.
(cc) Condition of Assets. All tangible personal property,
facilities, hardware, and equipment owned or leased and used by
each of IIA and Subsidiary in connection with its business are in
good operating condition and in a state of good repair and
maintenance, reasonable wear and tear excepted.
(dd) No Liabilities, etc. There are no material liabilities
of IIA or Subsidiary, contingent or otherwise, existing on the
date hereof in respect of which IIA or Subsidiary may be liable
on or after the Closing Date other than: (i) liabilities
(including liabilities for unpaid Taxes) disclosed on, reflected
in or provided for in the Financial Statements; and (ii)
liabilities incurred in the ordinary course of business since the
Financial Statement Date in a manner and at a level consistent
with prior periods.
(ee) Environmental Matters. Each of IIA and Subsidiary in
connection with its business has at all times, conducted, held
and used, and is continuing to conduct, hold and use, its
affairs, business and properties in accordance with all
applicable laws relating in whole or in part to the environment
or its protection.
(ff) Shareholder Agreement. Except for the Registration
Rights Agreement and the Escrow Agreement, neither IIA nor
Subsidiary is a party to or is bound by any shareholders'
agreement or by any other agreement, contract, indenture or
instrument which restricts the ability of IIA or Subsidiary,
respectively, to issue shares or other securities, or restricts
or would have the effect of restricting the ability of Intel or
any other shareholder of IIA to transfer any shares in the
capital of IIA.
(gg) Employees.
(i) Each of IIA and Subsidiary in connection with their
business has complied with all applicable laws relating to
employment matters, including, without limitation, any provisions
thereof relating to wages, hours and collective bargaining.
<PAGE> 14
(ii) Schedule "H" describes all material written
employment, service, union, agency, consulting, termination and
severance contracts and agreements entered into by each of IIA or
Subsidiary in connection with its business with or for any or all
of its present or past shareholders, directors, officers,
employees and agents. Except as described in Schedule "H", there
are no officers of IIA or Subsidiary in connection with their
respective business who are entitled to a specific notice of
termination, terms of termination or fixed term of employment or
who cannot be dismissed upon such notice as required by law.
(hh) Benefit Plans. Except (i) as generally described
Schedule "H", (ii) for the Stock Option Plan and (iii) for
employee health and dental plans usual for companies such as IIA
or Subsidiary, neither IIA nor Subsidiary, in connection with its
business, is a party to any pension, retirement, bonus, profit
sharing, compensation, incentive, stock purchase, stock option,
stock appreciation, severance, change of control, savings,
thrift, insurance, medical, hospitalization, disability, death or
other similar program, or practice providing directors, officers,
shareholders or employee benefits.
(ii) Interested Party Transactions. Except as disclosed in
Schedule "H", the Escrow Agreement and options issued pursuant to
the Stock Option Plan, to the knowledge of IIA, no officer or
director of IIA or Subsidiary, and no "affiliate" or "associate"
of any such person has had, either directly or indirectly, a
material interest in: (i) any person or entity which purchases
from or sells, licenses or furnishes to IIA or Subsidiary any
goods, property, technology, intellectual or other property
rights or services; or (ii) any contract or agreement to which
IIA or Subsidiary is a party or by which it may be bound or
affected.
(jj) Option Plans. All option plans and share purchase
plans of IIA, including the Stock Option Plan, provide that
options may be granted with such vesting periods as may be
determined by the board of directors of IIA (or a committee
thereof) before such options granted to the participants of such
plans can be exercised. Subsidiary does not have any stock
option plans.
(kk) Full Disclosure. Neither this Agreement nor any
certificate or statement in writing which has been supplied by or
on behalf of IIA or Subsidiary or by any of the directors,
officers or employees of IIA or Subsidiary in connection with the
transactions contemplated hereby contains any untrue statement of
a material fact, or omits any statement of a material fact
necessary in order to make the statements contained herein or
therein not misleading. There is no fact known to IIA or
Subsidiary which may materially and adversely affect the affairs,
businesses, prospects, operations or conditions of IIA or
Subsidiary, financial or otherwise, or the business or the assets
of IIA or Subsidiary which has not been disclosed to Intel.
<PAGE> 15
(ll) Broker's Fees. There is no person, firm or corporation
acting or purporting to act at the request of IIA or any
shareholder, who is entitled to any brokerage or finder's fee in
connection with the transactions contemplated herein.
ARTICLE 5
Representations and Warranties of Intel
5.1 Intel represents and warrants to IIA as follows and
acknowledges that IIA is relying on such representations and
warranties in entering into this Agreement:
(a) Incorporation and Organization. Intel is duly
incorporated under the laws of Delaware and is duly organized,
validly existing and in good standing under such laws with the
corporate power to own or lease and operate its property and to
carry on business.
(b) Qualification. Intel has the requisite corporate power
and capacity to enter into this Agreement and to perform its
obligations hereunder.
(c) Due Authorization. All requisite corporate acts and
proceedings have been done and taken by Intel to authorize the
execution and delivery of this Agreement and the performance of
its obligations hereunder.
(d) Validity of Agreement. The execution and delivery of
this Agreement and the performance of Intel's obligations
hereunder (i) do not (or would not, with the giving of notice,
the lapse of time or the happening of any other event or
condition) conflict with, result in a breach of or cause a
default or allow any other person to exercise any rights under
any indenture, mortgage, deed of trust, loan agreement or any
other agreement or instrument to which Intel is a party or by
which Intel or any of its property or assets is bound and (ii) do
not conflict with nor result in any violation of the provisions
of Intel's articles, by-laws or other constating documents or any
resolution of Intel's shareholders or directors or any laws of
Intel's jurisdiction of incorporation or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over Intel or any of its property or assets.
(e) Enforceability of Agreement. This Agreement has been
duly executed and delivered by Intel and constitutes a legal,
valid and binding obligation of Intel enforceable against Intel
in accordance with its terms.
(f) Broker's Fees. There is no person, firm or corporation
acting or purporting to act at the request of Intel who is
entitled to any brokerage or finder's fee in connection with the
transactions contemplated herein.
(g) Intel as Principal. Intel is purchasing the Subscribed
Shares as principal for its own account, not for the benefit of
any other person, and not with a view to the resale or
distribution of all or any of the Subscribed Shares.
<PAGE> 16
(h) Securities Exemptions. Intel acknowledges that the
Subscribed Shares will be issued to it pursuant to exemptions
from the prospectus and registration requirements of applicable
securities laws in Canada and the United States and that such
securities laws (including the requirements of the TSE) provide
restrictions on the ability of Intel to resell the Subscribed
Shares.
(i) U.S. Securities Matters. Intel has executed this
Agreement in the United States, has concurrently executed and
delivered a Certificate and Agreement of Institutional Accredited
Investor in the form attached as Schedule "C" to this Agreement
and has been afforded an opportunity to obtain and has received
all information reasonably requested by it which IIA possesses or
can acquire without unreasonable effort or expense. Intel
understands that the Subscribed Shares have not been and will not
be registered under the U.S. Securities Act or any applicable
state securities laws, and that the sale contemplated hereby is
being made in reliance on a private placement exemption from such
registration requirements.
ARTICLE 6
Survival of Representations and Warranties
6.1 Survival of Representations and Warranties. All
representations and warranties of the Parties contained in this
Agreement or contained in any agreement, certificate or other
document delivered or given pursuant to this Agreement (except in
respect of a breach thereof which has been disclosed in writing
by or for the benefit of a Party to the other Party and waived in
writing by the other Party prior to the Time of Closing on the
Closing Date) shall survive the Closing and, notwithstanding any
investigation made by or on behalf of the other Party with
respect thereto.
ARTICLE 7
Covenants of IIA and Intel
7.1 IIA's Covenants. IIA covenants with Intel as follows:
(a) Confidentiality and Non Compete Agreement. IIA shall
use best reasonable efforts to cause its Key Employees and all
other employees of IIA to execute and deliver to IIA a
Confidentiality and Non Compete Agreement in the form of Schedule
A prior to the Time of Closing.
(b) Use of Funds. IIA shall apply the net proceeds received
by IIA from the sale of the Subscribed Shares to Intel to modify
the IIA Internet Call Manager and Flexline software to operate on
the Linux operating system and to develop these and other new
services for the Intel Web appliance and set-top box platforms.
(c) Fulfillment of Conditions. IIA shall use best
reasonable efforts to cause the conditions specified in Article 8
herein to be satisfied or fulfilled on or prior to the
<PAGE> 17
Closing Date, without prejudice to Intel's rights and remedies
under this Agreement in the event that any such condition is not
satisfied or fulfilled.
(d) Ordinary Course. From the date hereof to the Time of
Closing, IIA shall, and shall cause Subsidiary to, conduct its
business in the ordinary course and, without limiting the
generality of the foregoing, neither IIA nor Subsidiary shall
(without the prior written consent of Intel, not to be
unreasonably withheld):
(i) make or assume any commitment, obligation or
liability which is outside the ordinary course;
(ii) sell or otherwise in any way alienate or dispose
of any of its assets, other than in the ordinary course;
(iii) make any loans or advances to any person, other
than ordinary advances for travel expenses;
(iv) except for the issuance of stock options pursuant
to the Stock Option Plan, enter into any transactions with any
officers, directors or employees of IIA or Subsidiary or any
entity controlled by any such individuals;
(v) except for the issuance of stock options pursuant
to the Stock Option Plan and the issuance of common shares
pursuant to the exercise of stock options or share purchase
warrants, split, combine or reclassify any of its shares, or
issue, redeem, retire, repurchase or otherwise acquire shares in
its capital or any warrants, rights, bonds, debentures, notes or
other corporate security, or reserve, declare, make or pay any
dividend, or make any other distributions or appropriations of
profits or capital;
(vi) make any change in its accounting principles and
practices as utilized in the preparation of the Financial
Statements, other than in the ordinary course; or
(vii) modify its capital structure.
(e) Access. IIA shall, from the date hereof to the Time of
Closing, (i) permit Intel and its employees, counsel, accountants
or other representatives without undue interference to the
ordinary conduct of the business of IIA and Subsidiary, to have
reasonable access during normal business hours and upon
reasonable notice to (w) the premises of IIA and Subsidiary, (x)
the assets and in particular, to any information, including all
books and records whether retained by IIA and Subsidiary or
otherwise, (y) all contracts, and (z) the senior personnel of IIA
and Subsidiary, and (ii) furnish to Intel or its employees,
counsel, accountants or other representatives such financial and
operating data and other information with respect to the assets
and business of IIA and Subsidiary as Intel shall from time to
time reasonably request.
<PAGE> 18
(f) Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the SEC that may
permit the sale of the Registrable Securities to the public
without registration, IIA agrees to use its best efforts to:
(i) make and keep public information regarding IIA
available as those terms are understood and defined in Rule 144
under the U.S. Securities Act at all times;
(ii) file with the SEC in a timely manner all reports
and other documents required of IIA under the U.S. Exchange Act;
and
(iii) so long as a Holder owns any Registrable
Securities, furnish the Holder, upon written request, with a
written statement by IIA as to its compliance with the reporting
requirements of Rule 144 and of the U.S. Exchange Act, a copy of
the most recent annual or quarterly report of IIA and such other
reports and documents so filed as the Holder may reasonably
request in availing itself of any rule or regulation of the SEC
allowing the Holder to sell any such securities without
registration.
7.2 Intel's Covenants. Intel covenants with IIA as follows:
(a) Regulatory Requirements. If required by applicable
securities legislation or policies in Canada or the United
States, or by any securities regulatory body, including the TSE,
Intel will execute, deliver, file and otherwise assist IIA in
filing such reports, questionnaires, undertakings and other
documents with respect to the issue of the Subscribed Shares to
Intel, including, without limitation, the Private Placement
Questionnaire and Undertaking required by the TSE.
(b) Fulfillment of Conditions. Intel shall use best
reasonable efforts to cause the conditions specified in Article 8
herein to be satisfied or fulfilled on or prior to the Closing
Date without prejudice to IIA's rights and remedies under this
Agreement in the event that any such condition is not satisfied
or fulfilled.
7.3 Filings and Required Consents. Each of IIA and Intel, as
promptly as practicable after the execution of this Agreement,
will (i) make, or cause to be made, all such filings and
submissions under all laws applicable to it, as may be required
for it to consummate the issuance and subscription of the
Subscribed Shares in accordance with the terms of this Agreement
and any applicable laws, including securities laws of Nova
Scotia, and (ii) use its best efforts to obtain, or cause to be
obtained, all required consents necessary to be obtained by it in
order to consummate such subscription. IIA and Intel will
coordinate and cooperate with one another in exchanging such
information and supplying such assistance as may be reasonably
requested by each in connection with the foregoing including,
without limitation, providing each other with all notices and
information supplied to or filed with any governmental entity
(except for notices and information which IIA or Intel, in each
case acting reasonably, considers highly confidential and
sensitive which may be filed on a confidential basis), and all
notices and correspondence received from any governmental entity.
<PAGE> 19
7.4 Notice of Untrue Representation or Warranty. IIA shall
promptly notify Intel, and Intel shall promptly notify IIA, upon
any representation or warranty made by it contained in this
Agreement becoming untrue or incorrect between the date hereof
and the Time of Closing. Any such notification shall set out
particulars of the untrue or incorrect representation or warranty
and details of any actions being taken by IIA or Intel, as the
case may be, to rectify that state of affairs.
ARTICLE 8
Conditions to Closing
8.1 Intel's Conditions. The obligations of Intel to complete the
subscription for the Subscribed Shares on the Closing Date shall
be subject to the satisfaction or fulfillment at or before the
Time of Closing of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of IIA set forth in this Agreement shall be true and
correct as at the Time of Closing as if made at the Time of
Closing and IIA shall have delivered to Intel a certificate to
that effect dated as at the Closing Date.
(b) Performance of Covenants. IIA shall have fulfilled or
complied with all covenants contained in this Agreement to be
fulfilled or complied with by it at or prior to the Closing Date,
and IIA shall have executed and delivered to Intel a certificate
to that effect. The receipt of such certificate and the Closing
shall not constitute a waiver by Intel of any of the covenants of
IIA which are contained in this Agreement.
(c) Required Consents. All required consents shall have
been obtained on terms acceptable to Intel, acting reasonably.
(d) Deliveries. IIA shall deliver or cause to be delivered
to Intel the following in form and substance satisfactory to
Intel, acting reasonably:
(i) share certificates representing the Subscribed
Shares;
(ii) certified copies of all resolutions of the board
of directors of IIA approving the entering into and completion of
the transactions contemplated by this Agreement;
(iii) a certificate of status, compliance, good
standing or like certificate with respect to IIA issued by
appropriate government officials of its respective jurisdiction
of incorporation and of each jurisdiction in which IIA carries on
its business; and
(iv) the certificate referred to in Section 8.1(a) and
(b);
<PAGE> 20
(e) No Proceeding. No action or proceeding shall be pending
or threatened by any person to enjoin, prohibit or materially
restrict Intel from consummating any of the transactions
contemplated herein.
(f) Closing Documents. IIA shall have delivered to Intel
all closing documentation in connection with the completion of
the transactions contemplated hereby as reasonably required by
Intel which shall be satisfactory to Intel, acting reasonably,
including for greater certainty and without limitation, the
Business Agreement and the Registration Rights Agreement.
(g) Due Diligence. Intel shall have completed its
investigation into the books, records and affairs of IIA and such
investigations shall not have disclosed any matter which Intel
considers to be material to its decision to acquire the
Subscribed Shares.
(h) TSE Approval. The TSE shall have accepted IIA's notice
with respect to the issuance of the Subscribed Shares to Intel
and the completion of the transactions contemplated by this
Agreement and the Subscribed Shares shall have been approved for
listing on the TSE.
(i) Legal Opinion. Intel shall have received an opinion of
Bennett Jones, solicitors to IIA, as to the matters set out in
Schedule "D" hereto, satisfactory to Intel, acting reasonably.
(j) Confidentiality and Non Compete Agreement. All Key
Personnel shall have executed and delivered to IIA
Confidentiality and Non Compete Agreements in the form of
Schedule "A".
The foregoing conditions are for the exclusive benefit of Intel
and Intel shall be entitled to waive compliance with same in
whole or in part in its sole discretion without prejudice to any
of its rights under this Agreement in the event of non-
performance of any other condition in whole or in part.
8.2 IIA's Conditions. The obligation of IIA to complete the
issuance of the Subscribed Shares on the Closing Date shall be
subject to the satisfaction or fulfillment at or before the
Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Intel set forth in this Agreement shall be true and
correct as at the Time of Closing as if made at the Time of
Closing and Intel shall have delivered to IIA a certificate to
that effect dated as at the Closing Date.
(b) Performance of Covenants. Intel shall have fulfilled or
complied with all covenants contained in this Agreement to be
fulfilled or complied with by it at or prior to the Closing Date,
and Intel shall have executed and delivered to IIA a certificate
to that effect. The receipt of such certificate and the Closing
shall not constitute a waiver by IIA of any of the covenants of
Intel which are contained in this Agreement.
<PAGE> 21
(c) No Proceeding. No action or proceeding shall be pending
or threatened by any person to enjoin, prohibit or materially
restrict IIA from consummating any of the transactions
contemplated herein.
(d) Closing Documents. Intel shall have delivered to IIA
all closing documentation in connection with the completion of
the transactions contemplated hereby as reasonably required by
IIA which shall be satisfactory to IIA, acting reasonably,
including for greater certainty and without limitation, the
Business Agreement and the Registration Rights Agreement.
(e) TSE Approval. The TSE shall have accepted IIA's notice
with respect to the issuance of the Subscribed Shares to Intel
and the completion of the transactions contemplated by this
Agreement and the Subscribed Shares shall have been approved for
listing on the TSE.
The foregoing conditions are for the exclusive benefit of IIA and
IIA shall be entitled to waive compliance with same in whole or
in part in its sole discretion without prejudice to any of its
rights under this Agreement in the event of non-performance of
any other condition in whole or in part.
8.3 Waiver.
(a) No waiver of any of the provisions of this Agreement
shall be deemed to constitute a waiver of any other provision
(whether or not similar), nor shall such waiver be binding unless
executed in writing by the party to be bound by the waiver.
(b) No failure on the part of IIA or Intel to exercise, and
no delay in exercising any right under this Agreement shall
operate as a waiver of such right; nor shall any single or
partial exercise of any such right preclude any other or further
exercise of such right or the exercise of any other right.
8.4 Notice of Unfulfilled Condition. If any Party shall
determine at any time prior to the Closing Date that it intends
to refuse to consummate the transactions contemplated hereunder
because of an unfulfilled or unperformed condition precedent
contained herein on the part of the other Party to be fulfilled
or performed, such Party shall so notify the other Party
forthwith upon making such determination to the end that such
other Party shall have the right and opportunity to take such
steps at its own expense as may be necessary for the purpose of
fulfilling or performing such condition precedent prior to the
Closing Date.
ARTICLE 9
Indemnification
9.1 By IIA. IIA shall indemnify, defend, save and hold harmless
Intel and its officers and directors from and against any and all
claims, damages, costs, losses, liabilities, judgments, lawsuits
and expenses, including, without limitation, lawyers' fees (on a
solicitor/client basis) and disbursements, experts' fees and all
amounts paid in investigation, defense, audit or
<PAGE> 22
settlement of any of the foregoing (herein, "Damages"), incurred
in connection with, arising out of, resulting from or incident to
(i) any breach of any representation or warranty, or the
inaccuracy of any representation or warranty, made by IIA in or
pursuant to this Agreement; or (ii) any breach of any covenant or
agreement made by IIA in or pursuant to this Agreement.
9.2 By Intel. Intel shall indemnify and save and hold harmless
IIA and its officers and directors, from and against any and all
Damages incurred in connection with, arising out of, resulting
from or incident to (i) any breach of any representation or
warranty, or the inaccuracy of any representation or warranty,
made by Intel in or pursuant to this Agreement; or (ii) any
breach of any covenant or agreement made by Intel in or pursuant
to this Agreement.
9.3 Defense of Claims. If a claim for Damages (a "Claim") is to
be made by a party entitled to indemnification hereunder against
the indemnifying party, the party claiming such indemnification
shall give written notice (a "Claim Notice") to the indemnifying
party as soon as practicable after the party entitled to
indemnification becomes aware of any fact, condition or event
which may give rise to Damages for which indemnification may be
sought hereunder. The Claim Notice shall include the amounts the
indemnified party believes in good faith are subject to
indemnification and a brief basis of the claim. The indemnified
party may revise its estimate of any claim by notice to the other
party.
9.4 Third Party Claims. If any action is filed against any party
entitled to the benefit of indemnity hereunder, written notice
thereof shall be given to the indemnifying party as promptly as
practicable (and in any event within fifteen (15) calendar days
after the service of the statement of claim, citation or
summons). The failure of any indemnified party to give timely
notice hereunder shall not affect rights to indemnification
hereunder, except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such
notice, if the indemnifying party shall acknowledge in writing to
the indemnified party that the indemnifying party shall be
obligated under the terms of its indemnity hereunder in
connection with such lawsuit or action, then the indemnifying
party shall be entitled, if it so elects, (i) to take control of
the defense and investigation of such lawsuit or action, (ii) to
employ and engage lawyers of its own choice (which shall be
reasonably acceptable to the indemnified party) to handle and
defend the same, at the indemnifying party's cost, risk and
expense unless the named parties to such action or proceeding
include both the indemnifying party and the indemnified party and
the indemnified party has been advised in writing by counsel that
there may be one or more legal defenses available to such
indemnified party that are different from or additional to those
available to the indemnifying party, in which case the
indemnified party shall be able to retain its own counsel at the
reasonable expense of the indemnifying party), and (iii) to
compromise or settle such Claim, which compromise or settlement
shall be made only with the written consent of the indemnified
party, such consent not to be unreasonably withheld. If the
indemnifying party fails to assume the defense of such Claim
within fifteen (15) calendar days after receipt of the Claim
Notice, the indemnified party against which such Claim has been
asserted will (upon delivering notice to such effect to the
indemnifying party) have the right to undertake, at the
indemnifying party's cost and expense, the defense, compromise or
settlement of such Claim on behalf of and for the account and
risk of the indemnifying party. In the event the indemnified
party assumes the defense of the Claim, the indemnified party
will keep the indemnifying party reasonably informed of the
progress of any such defense, compromise or settlement. The
indemnifying party shall be liable for any settlement of any
action effected pursuant to and in
<PAGE> 23
accordance with this Section 9.4 and for any final judgment
(subject to any right of appeal), and the indemnifying party
agrees to indemnify and hold harmless an indemnified party from
and against any Damages by reason of such settlement or judgment.
ARTICLE 10
Public Announcements and Confidentiality
10.1 Public Announcements. Except as may be required by law, the
Parties hereto shall not issue any press release or public
announcement, including announcements by any Party for general
reception by or dissemination to employees, agents, or customers,
with respect to this Agreement, the Business Agreement, the
Registration Rights Agreement and any other transactions
contemplated by this Agreement without the prior consent of the
other Party (which consent shall not be withheld unreasonably.
10.2 Confidentiality. Confidential Information (as defined
below) shall not be disclosed by any party hereto to any third
party except in accordance with this Article 10. For purposes of
this Agreement, the term "Confidential Information" refers to the
following items: (A) the existence of this Agreement and the
Business Agreement, and (B) the terms and provisions of this
Agreement and the Business Agreement, provided, however, that
Confidential Information shall not include any information that
was (a) publicly known and generally available in the public
domain prior to its disclosure, (b) becomes publicly known and
generally available in the public domain through no action or
inaction on the part of a party hereto or (c) becomes publicly
known by written consent or other action of the parties hereto.
10.3 Permitted Disclosures. Notwithstanding the foregoing, (i)
any party may disclose any of the Confidential Information to its
current or bona fide prospective investors, employees, investment
bankers, lenders, accountants and attorneys, in each case only
where such persons or entities are under appropriate
nondisclosure obligations (IIA shall be responsible for any
failure of any such person to comply with the provisions of this
Section 10.3(i)); and (ii) Intel may disclose its investment in
IIA and other Confidential Information to third parties or to the
public at its sole discretion and, if it does so, IIA shall have
the right to disclose to third parties any such information
disclosed in a press release or other public announcement by
Intel.
10.4 Legally Compelled Disclosure. Except to the extent required
by law or judicial or administrative order or except as provided
herein, IIA shall not disclose any Confidential Information
without Intel's prior written approval; provided, however, that
IIA may disclose any Confidential Information to the extent
required by law or judicial or administrative order or by the
TSE, provided that IIA will notify Intel promptly before such
disclosure and will cooperate with Intel to seek confidential
treatment with respect to the disclosure if requested by Intel to
the maximum extent, in the reasonable judgment of counsel of IIA,
possible under law. Notwithstanding the foregoing provisions or
any other provision to the contrary, IIA agrees that, except to
the extent required by law or judicial or administrative order,
IIA will not file this Agreement or the Business Agreement with
any governmental authority or any regulatory body; provided,
however, that to the extent required under securities law,
regulation or the rules and administrative policies of securities
regulatory authorities having jurisdiction, including the TSE
(the "Rules and Regulations"), upon the advice of counsel, IIA
may (A) file this Agreement as an exhibit or ancillary disclosure
to any filing required to be made by IIA under the Rules and
<PAGE> 24
Regulations, (B) identify Intel as "Intel Corporation" and (C)
describe the material terms of Intel's investment. IIA agrees
that it will provide Intel with drafts of any documents, press
releases or other filings (including the filing permitted by the
proviso of the immediately preceding sentence) in which IIA
desires to disclose this Agreement, the Business Agreement, the
transactions contemplated hereby or any other Confidential
Information, at least three (3) business days prior to the filing
or disclosure thereof, and that it will make any changes to such
materials as reasonably requested by Intel unless advised by
counsel that the Rules and Regulations or any other provisions of
law or regulation require otherwise.
10.5 The provisions of this Article 10 shall be in addition to,
and not in substitution for, the provisions of any separate
nondisclosure agreement executed by any of the parties hereto
with respect to the transactions contemplated hereby. The
Parties shall continue to be bound by the confidentiality
provisions of the Confidentiality and Nondisclosure Agreement
number 127398 dated April 15, 1999 between IIA and Intel and any
Confidential Information Transmittal Records provided in
connection therewith.
ARTICLE 11
Costs
11.1 Costs. Except as provided in Section 11.2, all legal, tax
and other costs and expenses incurred by a Party in connection
with the preparation of this Agreement, the Business Agreement
and the Registration Rights Agreement and the consummation of the
transactions contemplated herein and therein shall be paid by the
Party incurring such expenses.
11.2 Intel Legal Fees. IIA agrees to pay to Intel on the Closing
Date the sum of $15,000 (U.S.) to reimburse Intel for legal
expenses incurred in connection with the transactions
contemplated by this Agreement.
ARTICLE 12
Termination
12.1 Events of Termination. Subject to Section 12.2 below, this
Agreement and the transactions contemplated hereby may be
terminated and abandoned:
(a) at any time prior to the Closing, by mutual written
consent of IIA and Intel;
(b) by Intel, if a condition precedent to its performance
set forth in Section 8.1 shall not be satisfied or waived at the
Time of Closing;
(c) by IIA, if a condition precedent to its performance set
forth in Section 8.2 shall not be satisfied or waived at the Time
of Closing; or
(d) by either Intel or IIA if the Closing has not occurred
on or before the Closing Date, or such later date as the parties
shall mutually agree upon in writing.
<PAGE> 25
12.2 Limitation on Right to Terminate. A Party shall not be
allowed to exercise any right of termination pursuant to Sections
12.1(b) or 12.1(c), as the case may be, if the event giving rise
to the termination right shall be due to the willful failure of
such Party seeking to terminate this Agreement to perform or
observe in any material respect any of the covenants or
agreements set forth herein to be performed or observed by such
Party.
12.3 Rights Upon Termination. If this Agreement is terminated as
permitted under this Article 12, such termination shall be
without liability of or to any Party (except pursuant to this
Article 12 and Article 10 and Article 11, which shall survive
such termination) or any shareholder, director, officer,
employee, agent, servant, consultant or representative of such
Party. Notwithstanding the above, if any such termination shall
result from the willful failure of any Party to perform a
covenant under this Agreement or to fulfil a condition to the
performance of such Party (other than the failure to deliver any
certificate or opinion that would be incorrect as to matters of
fact or law as a result of changes in facts or the law occurring
after the execution of this Agreement or as a result of the party
making the representation and warranty becoming aware of such
changed fact or law after the execution of this Agreement) or if
such termination shall result from a material and willful breach
of this Agreement or the representations and warranties made
herein by any Party, then such Party shall be fully liable for
any and all damages sustained or incurred by the other Party in
connection with such failure or breach.
ARTICLE 13
Covenants After Closing
13.1 Obligation to Deliver Information. Following Closing and as
long as Intel owns not less than 20% of the Subscribed Shares,
IIA agrees to deliver to Intel:
(a) audited annual financial statements within 90 days after
the end of each fiscal year;
(b) unaudited quarterly financial statements within 45 days
of the end of each fiscal quarter;
(c) an annual budget within 30 days prior to the end of each
fiscal year; and
(d) copies of IIA's 20F's, 10-Q's, 6-K's and Annual Reports
to shareholders (or the Canadian equivalents, including Annual
Information Forms, Management Discussion and Analyses, Annual
Financial Statements, Quarterly Financial Statements, Management
Proxy Circulars and Material Change Reports) promptly after such
documents are filed with the SEC or the equivalent Canadian
authorities.
13.2 Intel Observer.
(a) IIA will allow a nominee of Intel, satisfactory to IIA,
acting reasonably, to attend all meetings of the Directors of IIA
as a non-voting observer (the "Observer").
<PAGE> 26
Upon the request of Intel, IIA shall use best reasonable efforts
to elect or appoint the Observer to the Board of Directors of
IIA.
(b) IIA acknowledges that Intel will likely have, from time
to time, information that may be of interest to IIA
("Information") regarding a wide variety of matters including, by
way of example only, (1) Intel's technologies, plans and
services, and plans and strategies relating thereto, (2) current
and future investments Intel has made, may make, may consider or
may become aware of with respect to other companies and other
technologies, products and services, including, without
limitation, technologies, products and services that may be
competitive with IIA's, and (3) developments with respect to the
technologies, products and services, and plans and strategies
relating thereto, of other companies, including, without
limitation, companies that may be competitive with IIA. IIA
recognizes that a portion of such Information may be of interest
to IIA. Such Information may or may not be known by the
Observer. IIA, as a material part of the consideration for this
Agreement, agrees that Intel and its Observer shall have no duty
to disclose any Information to IIA or permit IIA to participate
in any projects or investments based on any Information, or to
otherwise take advantage of any opportunity that may be of
interest to IIA if it were aware of such Information, and hereby
waives, to the extent permitted by law, any claim based on the
corporate opportunity doctrine or otherwise that could limit
Intel's ability to pursue opportunities based on such Information
or that would require Intel or Observer to disclose any such
Information to IIA or offer any opportunity relating thereto to
IIA. The disclosure and exchange of confidential information
between IIA and Intel (including the Observer) shall be governed
solely by the terms of the Corporate Non-Disclosure Agreement No.
127398 dated April 15, 1999 executed between IIA and Intel and
any related Confidential Information Transmittal Records (CITR)
provided in connection therewith. The CITR that shall govern
the exchanges of confidential information with the Observer shall
be in the form attached hereto as Schedule "I".
13.3 No Senior Registration Rights. IIA shall not, without
Intel's prior consent in writing, enter into or be party to any
agreement (i) pursuant to which it grants registration rights or
rights to have a prospectus filed and cleared in any Canadian
province which are inconsistent with the rights granted to Intel
under this Agreement or the Registration Rights Agreement or
otherwise conflict with their provisions or (ii) which gives any
other holder of shares in the capital of IIA rights to have such
shares registered or cleared by prospectus (as the case may be)
which are more advantageous than the rights granted to Intel
under the Registration Rights Agreement or which would permit
registration or clearance by prospectus of such holder's shares
in priority to those of Intel under the Registration Rights
Agreement.
ARTICLE 14
General
14.1 Notice. Any notice (including any invoice, statement or
request or other communication) herein required or permitted to
be given by any Party to the other Parties shall be in writing in
<PAGE> 27
the English language and shall be delivered or sent by facsimile
transmission or other means of prepaid recorded communication to
the applicable address set forth below:
(a) in the case of IIA to the following:
InfoInterActive Inc.
1550 Bedford Highway
Suite 600, Sun tower
Bedford, Nova Scotia
B4A 1E6
Attention: Patricia Muzyk
Fax No.: 902)832-1015
with a copy to:
Bennett Jones
4500 Bankers Hall East
855 - 2nd Street S.W.
Calgary, Alberta
T2P 4K7
Attention: Garnet M. Schulhauser
Fax No.: (403)265-7219
(b) in the case of Intel, to the following:
Intel Corporation
2200 Mission College Blvd.
Santa Clara, California 95052-8119
USA
Attention: M&A Portfolio Manager - M/S RN6-46
Fax No.: (408) 765-6038
With a second copy to the same address:
Attention: General Counsel
Fax No.: (408) 765-1859
with a third copy to:
Stikeman Elliott
1155 Rene Levesque Blvd. West
Suite 4000
Montreal, Quebec
H3B 3V2
Attention: Edward B. Claxton and Peter Castiel
Fax No.: (514) 397-3222
<PAGE> 28
Any notice delivered shall be deemed to have been validly and
effectively given on the day of such delivery. If the day of
delivery is not a business day, notice shall be deemed to have
been given and received on the next business day following such
date. Any notice sent by facsimile transmission or other means
of prepaid recorded communication shall be deemed to have been
validly and effectively given on the business day next following
the day on which it was sent.
14.2 Waiver. The failure of a Party in any one or more instances
to insist upon strict performance of any of the terms of this
Agreement or to exercise any right or privilege arising under
this Agreement shall not preclude such Party from requiring by
reasonable notice that the other Party duly perform its
obligations or preclude such Party from exercising such a right
or privilege under reasonable circumstances, nor shall waiver in
any one instance of a breach be construed as an amendment to this
Agreement or waiver of any later breach. No amendment to or
wavier of any provision of this Agreement shall be effective
unless embodied in writing and duly signed by each Party.
14.3 Assignment. Neither this Agreement nor any of the rights
and obligations of a Party hereunder may be assigned by such
Party in whole or in part without the prior written consent of
the other Party; provided however, that Intel may assign and
transfer this Agreement and any of its rights and obligations
hereunder to an affiliate without the prior written consent of
IIA, and provided further that Intel shall not be released from
its obligations hereunder by reason of any such assignment and
transfer. This Agreement shall enure to the benefit of and be
binding upon the Parties hereto and their respective successors
and permitted assigns, but no other person.
14.4 Further Assurances. The Parties shall execute all documents
and do all acts and things as may be necessary or desirable
within their respective powers to carry out and give effect to
the true intent and purpose of this Agreement including the
execution after the Closing Date of such further assurances in
law as any Party deems necessary or desirable to perfect the
completion of any of the transactions referred to in this
Agreement.
14.5 Time of Essence. Time is of the essence of this Agreement.
14.6 Third Parties. Except as provided for in Article 9, this
Agreement shall not benefit or create any right or cause of
action in, or on behalf of, any person other than the Parties to
this Agreement and no person, other than the Parties to this
Agreement shall be entitled to rely on the provisions of this
Agreement in any action, suit, proceeding, hearing or other
forum.
14.7 Entire Agreement. The Agreement constitutes the entire
agreement between the Parties pertaining to the subject matter
hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the
Parties with respect to the subject matter hereof.
14.8 Counterparts. This Agreement may be executed by facsimile
and in two counterparts each of which when so executed shall be
deemed to be an original and all of which when taken together
shall constitute one and the same Agreement.
<PAGE> 29
IN WITNESS WHEREOF the parties hereto have duly executed this
Agreement effective as of the date first above written.
INFOINTERACTIVE INC.
Per: /s/Patricia Muzyk
-------------------------
Patricia Muzyk
CEO
INTEL CORPORATION
Per: /s/Noel S. Lazo
--------------------------
Noel S. Lazo
Assistant Treasurer, Cash
Management ans Systems, as
designee for Arvind Sodhani,
Vice President and Treasurer
Per:
--------------------------
Name:
Title:
Signature Page for Common Share Purchase
Agreement made as of the 28th day of February 2000.
<PAGE>
SCHEDULE "A"
Confidentiality and Non Compete Agreement
BETWEEN: INFOINTERACTIVE INC. (the "Company") and (the
"Employee")
WHEREAS the Company is engaged in the development,
marketing, licensing and support of software and related
services;
AND WHEREAS the Employee has knowledge, abilities, training,
experience and skills in the area of software and business
operations of the company;
AND WHEREAS the Company and the Employee have agreed to
enter into an employment relationship to their mutual benefit;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in
consideration of the mutual covenants and agreements herein, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to the
terms and conditions herein, the parties covenant and agree as
follows:
1. Employment
The Company agrees to employ and the Employee agrees to
serve as an employee upon terms and conditions set out in a
letter from the Company to the Employee or, in the absence of a
letter, to continue with employment under the terms and
conditions as currently exist or as modified from time to time
through mutual agreement.
The Employee agrees to comply with the terms and conditions
of this Agreement.
2. Disclosure of Inventions
For the purposes of this Agreement, "Inventions" shall mean
all source code, inventions, processes, methods, formulas,
techniques, improvements or modifications and enhancements,
whether or not patentable or subject to copyright or trade-mark
or other protection, made by the Employee, whether or not during
the hours of the Employee's employment with the Company or with
the use of the Company's facilities, materials or personnel,
either solely or jointly, during the Employee's term of
employment with the Company and which relate to the Company's
present or related and demonstrable future business activities.
Where the employee wishes to undertake work outside of the hours
of employment that may be unrelated to the company's business
activities the employee may seek permission to do so and such
permission will not be unreasonably withheld.
The Employee agrees to disclose promptly and fully to the
Company all Inventions made, conceived or developed by the
Employee during the term of the Employee's employment with the
Company, either solely, or jointly with others, and related to or
suggested by the present or related and demonstrable future
business activities of the Company or the Company's actual or
related and demonstrable anticipated processes or research and
development. The Employee hereby waives any moral rights which
the Employee may have with respect to the creation, conception or
development of the
<PAGE> 2
Inventions. The Employee hereby assigns, sets over and transfers
to the Company, all the Employee's rights, title and interest in
and to all Inventions and in all intellectual property rights to
the Inventions which may have been filed or issued during the
term of employment.
3. Confidential Information
For the purposes of this Agreement, "Information" shall mean
all confidential information, without limitation and regardless
of whether or not marked confidential or proprietary, all
proprietary and trade secrets, software products, source code,
inventions, research and development and results derived
therefrom, specifications and designs, algorithms, prototypes,
simulations and test results, technical reports and analyses,
technical industrial skills, agreements, and business information
relating to prototyping, strategies and methods which are not
standard industry practices, tables of operating conditions,
operating and testing procedures, software designs and
engineering processes, business and financial plans, accounting
and personal records, customer and supplier lists and attendant
confidential information, initiatives, projects and strategic
alliances undertaken or to be undertaken by the Company,
technical data and know-how relating to both existing and
proposed software products.
The Employee acknowledges and agrees that no title or
ownership of the Information is transferred to the Employee, that
the Information and the intellectual property rights in and to
the Information are and will remain the sole and exclusive
property of the Company, and that the Employee will not have any
right or interest in the Information and the intellectual
property rights to the Information.
The Employee agrees to keep confidential and not disclose or
permit access to the Information or the Inventions to any third
party, or to use it for any purpose either during the Employee's
employment, except as may be necessary in the proper discharge of
the Employee's employment, or after termination of the Employee's
employment for any reason, except with the written permission of
the Company. The Employee also agrees that the unauthorised
disclosure of the Information or the Inventions during the
Employee's employment with the Company will constitute just cause
for the Employee's immediate dismissal.
4. Company's Property
The Employee acknowledges and agrees that all items of any
and every nature or kind created by the Employee pursuant to the
Employee's employment with the Company or furnished by the
Company to the Employee, and all equipment, automobiles, credit
cards, books, reports, files, manuals, notes, data, tapes,
reference items, sketches, drawings, memoranda, records,
diskettes and other materials in any way relating to any of the
Information, the Inventions or to the Company's business produced
by the Employee or coming into the Employee's possession by or
through the Employee's employment, shall remain and be considered
the exclusive property of the Company at all times and shall be
immediately returned to the Company in good condition at the
request of the Company or, in the absence of a request, on the
termination of the Employee's employment with the Company.
5. Non-competition
The Employee agrees with and for the benefit of the Company
that during the Employee's employment and for a period of one (1)
year from the date of termination of the Employee's employment
for any reason, the Employee will not for any reason, directly or
indirectly, in any manner:
<PAGE> 3
(a) carry on, be engaged in, concerned with, advise, or be
employed by a person, business, or a division of a company
primarily concerned with or engaged or interested in a business
which is the same as, or directly competitive with, a current
product of the Company or a product which will be released within
6 months of the date of termination or:
(b) solicit or accept business with respect to products
competitive with those of the Company from any of the Company's
clients and customers, wherever situate.
6. Non-solicitation
The Employee agrees that during the Employee's employment
with the Company and for a period of one (1) year following
termination of his/her employment for any reason, the Employee
will not hire or take away or cause to be hired or taken away any
employee or independent contractor of the Company
7. Time Limitations and Geographic Restriction
In the event that any time limitation or geographic
restriction contained in this Agreement is deemed to be
unreasonable by a court of competent jurisdiction, the time
limitation or geographic restriction shall be reduced to a period
of time deemed by the court reasonable.
8. Severability
In the event that any provision in this agreement shall be
deemed void or invalid by a court of competent jurisdiction, the
remaining provisions shall be and remain in full force and
effect.
9. Waiver
The waiver by either party of any breach or violation of any
provision of this agreement shall not operate, or be construed,
as a waiver of any similar subsequent breach or violation of it.
10. Entire Agreement
This agreement and appended letter of employment constitutes
the entire agreement between the parties with respect to the
matters set out in regard to the employment of the Employee and
any and all previous agreements, written or oral, express or
implied between the parties or on their behalf relating to such
matters in regard to the employment of the Employee by the
Company are terminated and cancelled and each of the Parties
releases and forever discharges the other of and from all manner
of action, causes of action, claims or demands under or in
respect of any agreement.
11. Modification of Agreement
Any modification to this agreement must be in writing,
signed by the parties or it shall have no effect and shall be
void.
<PAGE> 4
12. Headings
The headings utilized in this agreement are for convenience
only and are not to be construed in any way as additions to or
limitations of the covenants and agreements contained in this
agreement.
13. Independent Legal Advice
The Employee acknowledges that he/she has read, understands
and agrees with all of the provisions of this agreement, and
acknowledges that he/she has had the opportunity to obtain
independent legal advice with respect to it.
IN WITNESS WHEREOF the parties have duly executed this
agreement this ------------ day of ------------ 1999, in --------
- ------------, Province of Nova Scotia.
SIGNED AND DELIVERED IN THE PRESENCE OF
InfoInterActive Inc.
Per: --------------------------
EMPLOYEE
Per: --------------------------
<PAGE>
<TABLE>
SCHEDULE "B"
ENCUMBRANCES : PROVINCE OF NOVA SCOTIA
<CAPTION>
I. Debtor: InfoInterActive Inc.
# Secured Type of Registration Date of
Party Security Number Registration Expiry Assets
- --- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
1. Canadian PPSA # 2549978 January 18, January 18, All accounts, debts, claims, choses in action
Imperial Financing 2000 2003 and receivables; and also all securities,
Bank of Statement instruments, documents of title, chattel
Commerce paper, intangibles, money, (all as defined in
Personal Property Security Act), bills, notes,
and other documents, electronically stored
data, books of account, and other books and
records, evidencing or relating to the
collateral or the proceeds there from which
now are or which may at any time hereafter be
due to or owing to or owned by the debtor.
Proceeds: goods, securities, fixtures, money,
crops or licences as defined in Personal
Property Security Act, derived directly or
indirectly from any dealings with the
collateral.
2. Maritime PPSA # 2029655 July 23, July 23, Centaur Access Control Card System, valued
Office Financing 1999 2001 $4,791.00
Equipment Statement Kantech Access Control-Addition valued
Rental Ltd. $2,029.00
3. Steelcase PPSA # 1066054 October 16, October 16, All furniture and equipment leased or financed
Financial Financing 1998 2003 from Steelcase Financial Services Ltd.
Services Statement Including but not limited to the items set
Ltd. forth in master Lease no. 11856 and any master
lease equipment schedules, including proceeds.
4. Canadian Consolidatio Pre-PPRS January 14, _____ _____
Imperial n of Registration 1997
Bank of Conditional # 001438
Commerce Sales
<PAGE> 2
5. Canadian Assignment Pre-PPRS January 14, _____ _____
Imperial of Book Registration 1997
Bank of Debts # 000047
Commerce
II. Debtor: InterActive Telecom Incorporated
# Secured Type of Registration Date of Expiry Assets
Party Security Number Registration
1. Canadian Assignment Pre-PPRS September 9, _____ ___________
Imperial of Book Registration 1995
Bank of Debts # 001118
Commerce
2. Canadian Consolidatio Pre-PPRS January 31, _____ ___________
Imperial n of Registration 1994
Bank of Conditional # 003074
Commerce Sales
</TABLE>
<PAGE>
SCHEDULE "C"
CERTIFICATE AND AGREEMENT OF INSTITUTIONAL ACCREDITED INVESTOR
TO: INFOINTERACTIVE INC. (THE "CORPORATION")
In connection with the purchase by the undersigned
subscriber (the "Subscriber") of common shares ("Common Shares")
of the Corporation, the subscriber hereby certifies and agrees
for your benefit that:
1. The Subscriber is an "Institutional Accredited Investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under the United
States Securities Act of 1933 (the "1933 Act").
2. The person signing on behalf of the Subscriber is the chief
financial officer or other executive officer of the Subscriber.
3. The Subscriber is aware that the sale to it of the Common
Shares is being made in reliance on an exemption from
registration contained in Rule 506 under the 1933 Act, and the
Subscriber certifies that it is and will be acquiring the Common
Shares for its own account.
4. The Subscriber agrees that if it decides to offer, sell or
otherwise transfer, pledge or hypothecate all or any part of the
Common Shares, it will not offer, sell or otherwise transfer,
pledge or hypothecate all or any part of such Common Shares
(other than pursuant to an effective registration statement under
the 1933 Act), directly or indirectly unless:
(a) the sale is to the Corporation; or
(b) the sale is made outside the United States in accordance
with the requirements of Rule 904 of Regulation S under the 1933
Act and in compliance with applicable local rules and
regulations; or
(c) the sale is made pursuant to the exemption from
registration under the 1933 Act provided by Rule 144A thereunder;
or
(d) the Common Shares or any part thereof are sold in a
transaction that does not require registration of the Common
Shares of the Corporation under the 1933 Act or any applicable
United States state laws and regulations governing the offer and
sale of securities, and we have furnished to the Corporation an
opinion to that effect of counsel of recognized standing
reasonably satisfactory to the Corporation.
5. The Subscriber understands and acknowledges that upon the
original issuance thereof, and until such time as the same is no
longer required under applicable requirements of the 1933 Act or
state securities laws, the certificates representing the Common
Shares and all certificates issued in exchange therefor or in
substitution thereof, shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "U.S. SECURITIES ACT") OR APPLICABLE STATE SECURITIES
LAWS. SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED ONLY: (A) TO THE CORPORATION; (B) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH RULE 904 OF
<PAGE> 2
REGULATION S UNDER THE U.S. SECURITIES ACT ("REGULATION
S"); (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER
THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF
APPLICABLE, OR RULE 144A AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS; OR (D) PURSUANT TO ANOTHER
EXEMPTION FROM REGISTRATION. IF THE COMMON SHARES ARE
LISTED ON A STOCK EXCHANGE, DELIVERY OF THIS CERTIFICATE
MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA. A NEW
CERTIFICATE, BEARING NO LEGEND, DELIVERY OF WHICH WILL
CONSTITUTE "GOOD DELIVERY" MAY BE OBTAINED FROM THE
REGISTRAR AND TRANSFER AGENT FOR THE COMMON SHARES UPON
DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED
DECLARATION, IN A FORM SATISFACTORY TO THE REGISTRAR AND
TRANSFER AGENT FOR THE COMMON SHARES AND THE CORPORATION,
TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED
HEREBY IS BEING MADE AT A TIME WHEN THE CORPORATION IS A
"FOREIGN ISSUER" AS DEFINED IN REGULATION S IN COMPLIANCE
WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES
ACT, TOGETHER WITH SUCH DOCUMENTATION AS MAY BE REQUESTED
BY THE CORPORATION.
provided that if the Common Shares or any part thereof are being
sold under paragraph 4(b) above at a time when the issuer thereof
is a "foreign issuer" as defined in Regulation S under the 1933
Act, the legend may be removed by providing a declaration to the
transfer agent for the Common Shares to the following effect (or
as the Corporation may prescribe from time to time):
"The undersigned (a) acknowledges that the sale of the securities
of InfoInterActive Inc. (the "Corporation") to which this
declaration relates is being made in reliance on Rule 904 of
Regulation S under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act") and (b) certifies that (1)
the undersigned is not an affiliate of the Corporation as that
term is defined under the U.S. Securities Act, (2) the offer of
such securities was not made to a person in the United States and
either (A) at the time the buy order was originated, the buyer
was outside the United States, or the seller and any person
acting on its behalf reasonably believed that the buyer was
outside the United States or (B) the transaction was executed on
or through the facilities of The Toronto Stock Exchange and
neither the seller nor any person acting on its behalf knows that
the transaction has been prearranged with a buyer in the United
States, (3) neither the seller nor any affiliate of the seller
nor any person acting on any of their behalf has engaged or will
engage in any directed selling efforts in the United States in
connection with the offer and sale of such securities, (4) the
sale is bona fide and not for the purposes of "washing off" the
resale restrictions imposed because the securities are
"restricted securities" (as such term is defined in Rule
144(a)(3) under the U.S. Securities Act), (5) the seller does not
have a short position in the securities sold in reliance on Rule
904 of Regulation S under the U.S. Securities Act and does not
intend to replace such securities with fungible unrestricted
securities, and (6) the contemplated sale is not a transaction,
or part of a series of transactions, which, although in technical
compliance with Regulation S, is part of a plan or scheme or
evade the registration requirements of the U.S. Securities Act.
Terms used herein have the meanings given to them by Regulation
S."
6. The Subscriber understands and acknowledges that the
Corporation has the right to instruct the transfer agent of the
Common Shares not to record a transfer without first being
notified by the Corporation that it
<PAGE> 3
is satisfied that such transfer is exempt from or not subject to
registration under the 1933 Act and any applicable state
securities laws.
7. The Subscriber agrees that the above representations,
warranties and covenants will be true and correct both as of the
execution of this agreement and as of the completion of the
issuance of the Common Shares ("Closing") and will survive the
Closing.
8. The foregoing representations, warranties and covenants are
made by the undersigned with the intent that they be relied upon
in determining its suitability as a subscriber for Common Shares
and the undersigned agrees to indemnify the Corporation against
all losses, claims, costs, expenses and damages or liabilities
which it may suffer or incur caused or arising from reliance
thereon.
DATE: February 28, 2000.
INTEL CORPORATION
Per: /s/Noel S. Lazo
--------------------------
Noel S. Lazo
Assistant Treasurer, Cash
Management ans Systems, as
designee for Arvind Sodhani,
Vice President and Treasurer
Signature Page of the Certificate and Agreement of Accredited
Investor dated February 28, 2000.
<PAGE>
SCHEDULE "D"
LEGAL OPINION OF COUNSEL TO IIA
February 28, 2000
Stikeman Elliott
1155 Rene Levesque Blvd. West
Suite 4000
Montreal, Quebec
H3B 3V2
- - and to -
Intel Corporation
2200 Mission College Blvd.
Santa Clara, California
95052-8119
U.S.A.
Dear Sirs:
Re: Acquisition by Intel Corporation ("Intel") of 1,803,922
Common Shares of InfoInterActive Inc. ("IIA")
We have acted as counsel to IIA in connection with the
acquisition by Intel of 1,803,922 common shares (the "Common
Shares") of IIA pursuant to the terms and conditions of a Common
Share Purchase Agreement made as of February 28, 2000 between IIA
and Intel (the "Purchase Agreement"). As counsel for IIA and
jointly with Stikeman Elliott, counsel for Intel, we have
participated in the preparation of the Purchase Agreement and a
Registration Rights Agreement, dated February 28, 2000 between
IIA and Intel (the "Registration Rights Agreement"). We
understand that IIA and Intel have also executed a Software
Development and Services Agreement dated February 23, 2000 (the
"Business Agreement") (the Purchase Agreement, Registration
Rights Agreement and Business Agreement are collectively referred
to as the "Agreements"). Capitalized terms used herein have the
meanings ascribed to them in the Purchase Agreement unless
otherwise defined herein.
For the purposes of giving the opinions herein, we have reviewed
and examined such statutes, public records, agreements and other
documents, have considered such matters of law and have made such
enquiries of officers of IIA and other persons as we have
considered appropriate and necessary in order to enable us to
give the opinions expressed herein. As to certain matters of
fact that have not been independently established, we have relied
upon certificates of public officials. The term "Securities
Laws" when used herein means the Securities Act (Nova Scotia)
<PAGE> 2
and regulations thereto and the rules, orders and published
policy statements of the Nova Scotia Securities Commission.
The opinions set forth below are subject to the following
qualifications:
(a) in giving the opinion set forth in paragraph 1, we have
relied solely upon:
(i) for IIA, a Certificate of Status dated February 24,
2000 prepared by the Registrar of Corporations, Alberta; and
(ii) for Subsidiary, an opinion of Boyne Clarke dated
February 28, 2000 ("Boyne Clarke Opinion"), a copy of which has
been delivered to you today;
(b) in giving the opinion set forth in paragraphs 2 (with
respect to Subsidiary), 5, 7, 8, 9, 12, 14 and 16, we have relied
upon the Boyne Clarke Opinion as to matters of Nova Scotia law;
(c) in giving the opinions set forth in paragraph 9, we have
relied upon a certificate of an officer of IIA dated February 28,
2000, a copy of which has been delivered to you today;
(d) in giving the opinion set forth in paragraph 8, we have
relied upon an opinion of Tory's dated February 28, 2000,
("Tory's Opinion"), a copy of which has been delivered to you
today, as to matters of United States law;
(e) in giving the opinion set forth in paragraph 10 as to
issued common shares, we have relied solely upon a letter from
Montreal Trust Company of Canada dated February 23, 2000, a copy
of which has been delivered to you today; and
(f) in giving the opinion set forth in paragraph 14, we have
relied solely upon Certificates of Reporting Issuer not in
Default prepared by the Securities Commissions in Alberta,
Ontario and Quebec, copies of which have been delivered to you
today and on the Boyne Clarke Opinion for Nova Scotia.
To the extent that the opinions herein are stated to be to the
best of our knowledge, such opinions are based upon our actual
knowledge at the date hereof, without representing that we have
made any specific inquiry or investigation, and in expressing
such opinions, we have not undertaken any specific review of any
agreement or instrument, other than the Agreements, nor have we
undertaken any specific review of our files or notes.
In the opinions expressed below, we have assumed without
independent investigation:
(a) the genuineness of all signatures, the authenticity of
all documents submitted to us as original copies of such
documents and the conformity to the originals of all documents
submitted to us as certified, notarial or other copies or
facsimiles thereof; and
<PAGE> 3
(b) that each of the agreements or documents referred to in
our opinion below to which IIA is a party, and each of the
approvals received by or on behalf of IIA, has been duly
authorized, executed and delivered by the party or parties
thereto other than IIA, that such party or parties had the due
capacity to do so, and the due organization, existence and
capacity of such party or parties.
We are qualified to practice law in the provinces of Alberta and
Ontario and our opinions herein are restricted to the laws of
such provinces and the laws of Canada applicable therein, except
for paragraphs 1, 2, 5, 7, 8, 9, 12, 14 and 16 in which we also
express an opinion with respect to the laws of the Province of
Nova Scotia and in respect of which we have relied upon the Boyne
Clarke Opinion, and except for paragraph 8 in which we also
express an opinion with respect to the laws of California and the
United States and in respect of which we have relied upon the
Tory's Opinion. The Boyne Clarke Opinion and the Tory's Opinion
are in form acceptable to us and we believe that you and we are
entitled to rely thereon. Our opinions expressed in such
paragraphs are expressly subject to the qualifications and
assumptions expressed in such opinions, which qualifications and
assumptions may not be expressly set out in this opinion.
Based on, relying upon and subject to the foregoing, we are of
the opinion that:
1. Incorporation. IIA has been duly incorporated and is a valid
and subsisting corporation under the laws of Alberta and
Subsidiary has been duly incorporated and is a valid and
subsisting company under the laws of Nova Scotia.
2. Corporate Power and Authority. IIA has the necessary
corporate power and authority to enter into the Agreements to
offer, issue, sell and deliver the Subscribed Shares and to
consummate the transactions contemplated by the Agreements and
each of IIA and Subsidiary has the necessary corporate power and
authority to own, lease and operate its assets and properties and
to conduct its businesses as presently conducted.
3. Corporate Action. The execution, delivery and performance of
the Agreements, the creation, execution, issuance by IIA, and the
delivery by IIA to Intel, of the Subscribed Shares, and the
consummation of the transactions contemplated by the Agreements
have been duly authorized by all necessary corporate or other
action of IIA.
4. Execution. Each of the Agreements has been duly executed and
delivered by IIA.
5. Enforceability. Each of the Agreements and each agreement
delivered pursuant thereto constitute a legally valid and binding
obligation of IIA. The Purchase Agreement and the Registration
Rights Agreement are enforceable against IIA in accordance with
their terms, subject to the qualifications described below.
6. No Breach. The execution and delivery of the Agreements by
IIA, and the consummation of the transactions contemplated
thereby do not (or would not with the passage of time or the
giving of notice, or both) violate or conflict with, constitute
or result in a breach of or a default under, any provision of the
Articles of Incorporation or By-Laws of IIA or any resolutions of
IIA's shareholders or directors.
<PAGE> 4
7. No Violation of Law. The execution and delivery of the
Agreements by IIA and the consummation of the transactions
contemplated thereby do not (or would not with the passage of
time or the giving of notice, or both) violate or result in a
failure to comply with any statute, law, ordinance, regulation,
rule or order of any federal, provincial or local government or
any other governmental department or agency, or any judgment,
decree or order of any court, applicable to IIA or Subsidiary.
8. Authorizations. No consent, approval, authorization or order
of, or filing, registration, qualification or recording with or
notice to any federal, provincial or local government or any
other governmental department or agency, is required in
connection with the execution and delivery of the Agreements, or
the performance by IIA of the Purchase Agreement, except for the
filing of a Form 20, and the payment of the requisite filing
fees, with the Nova Scotia Securities Commission within 10 days
of Closing, the filing of a Form D with the SEC within 15 days of
Closing and the filing of the Form D with the California
Securities Commission, along with the requisite filing fees and a
consent to service, within 15 days of Closing.
9. No Actions Pending. No action is pending or, to our
knowledge, threatened (i) against IIA or Subsidiary, or (ii)
which questions the validity or legality of the transactions
contemplated by the Agreements.
10. Authorized Capital. The authorized capital of IIA consists
solely of an unlimited number of common shares, an unlimited
number of First Preferred Shares, issuable in series, and an
unlimited number of Second Preferred Shares, issuable in series,
of which 16,442,721 Common Shares (and no more) are issued and
outstanding as fully paid and non-assessable as at the close of
business on February 23, 2000 and no First Preferred Shares or
Second Preferred Shares are issued and outstanding.
11. Subscribed Shares. The Subscribed Shares have been duly and
validly authorized and allotted to Intel and, upon payment of the
Purchase Price by Intel to IIA, will be validly issued as fully
paid and non-assessable and registered in the name of Intel.
12. Subsidiary Shares. IIA is the sole registered and beneficial
owner of all the issued and outstanding shares in the capital of
Subsidiary.
13. Listing. The Common Shares of IIA are listed on the TSE and
the Subscribed Shares have been conditionally accepted for
listing by the TSE, subject to the filing of the documents
referred to in the conditional approval letter from the TSE dated
February 21, 2000.
14. Reporting Issuer. IIA is a reporting issuer in the Provinces
of Nova Scotia, Quebec, Ontario and Alberta and is not on the
list of defaulting reporting issuers maintained pursuant to the
securities laws of such provinces.
15. Certificate. The form of certificate evidencing the Common
Shares has been approved by the directors of IIA and complies
with the rules of the TSE, the Business Corporations Act
(Alberta) and the articles, by-laws and resolutions of IIA.
<PAGE> 5
16. Securities Laws. In reliance upon the representations and
warranties of Intel set forth in the Purchase Agreement, the
offering, issue, sale and delivery of the Subscribed Shares by
IIA to Intel are exempt from the prospectus and registration
requirements of the Securities Act (Nova Scotia) and regulations
thereto, and the only filing, proceeding, approval, permit,
consent, order or authorization required to be made, taken or
obtained to permit the offering, issue sale and delivery of the
Subscribed Shares to Intel is the filing (in duplicate) within
ten days from the date of Closing, of a report of the issue and
sale prepared on Form 20 and executed in accordance with
applicable Securities Laws, together with the requisite filing
fee.
The opinions expressed herein as to the enforceability of the
Agreements and the obligations and remedies set forth therein are
subject to:
(a) applicable bankruptcy, reorganization, winding up,
insolvency, moratorium, preference or other laws of general
application from time to time in effect affecting the enforcement
of creditors' rights;
(b) the equitable and statutory powers of the courts of
Canada to stay execution and judgment and to grant relief against
forfeiture;
(c) the fact that specific performance and injunctive relief
are equitable remedies which may be ordered by a court in its
discretion and, accordingly, may not be available as a remedy in
an action to enforce a covenant;
(d) the qualification that the failure of a party to
exercise a right of action within any period of time prescribed
by the Limitation of Actions Act (Nova Scotia) (and any statute
that may be substituted therefor), as from time to time amended
may result in a right of action not being enforceable; and
(e) to the extent that rights to indemnity and contribution
under the Agreements may be limited under applicable law.
No persons other than those to whom this opinion is expressly
addressed shall have the right to rely on the opinions expressed
herein for any purpose without our prior consent.
Yours truly,
BENNETT JONES
<PAGE>
SCHEDULE "E"
CONDUCT OF BUSINESS IN THE ORDINARY COURSE
The following matters have occurred since September 30, 1999:
1. The issuance of common shares and warrants pursuant to the
exercise of Special Warrants.
2. The cancellation of the Broker Warrants held by CT
Securities.
3. The acquisition of 1,000 common shares pursuant to the
Corporation's Normal Course Issuer Bid.
4. The issuance of common shares pursuant to the exercise of
outstanding options and warrants.
5. The issuance of new options pursuant to the Stock Option
Plan.
6. Employment contracts with five senior executives to be
effective January 4, 2000 (including compensation increases).
7. Entered into contracts with Bell Atlantic and Sprint Canada
and a letter of intent to amend the GTE-Internetworking contract.
8. Negotiating a Distribution and Development agreement with
Centigram Communications Corporation.
9. Listing of common shares on TSE (December 6, 1999) and OTCBB
(January 31, 2000).
<PAGE>
SCHEDULE "F"
MATERIAL ADVERSE CHANGES
None
<PAGE>
SCHEDULE "G"
MATERIAL CONTRACTS
1. Telesector Resources Definitive Agreement November 1, 1999
Group Inc. d/b/a for the Purchase and
Bell Atlantic License of ICM
Network Services Hardware, Software,
Services and
Documentation
2. Cincinnati Bell Service Deployment March 31, 1999
Telephone Company Agreement
3. GTE-Internetworking Software License, December 7, 1998
Development and
Service Agreement
(ICW)
4. I.D. Internet Direct Service Deployment July 23, 1999
Ltd. Agreement
5. Witchity Capital ICM Deployment April 1, 1999
Corporation Ltd. Agreement
6. BC TELECOM Inc. Memorandum of July 23, 1998
Understanding
TELUS Communications June 24, 1998
Inc. Memorandum of
Understanding
7. Sprint Canada Service Deployment Being negotiated
Agreement
IIA has signed a
Letter of
Agreement with
Sprint and
expects to enter
into a
definitive
agreement by
April 3, 2000.
8. Centigram Distribution and Being negotiated
Communications Development
Corporation Agreement Expected to be
signed in the
week of February
28, 2000
<PAGE>
SCHEDULE "H"
EMPLOYMENT CONTRACTS AND BENEFIT PLANS
1. The following senior executives of the Corporation have
signed (or are negotiating) employment contracts, each dated
January 4, 2000, which contain, inter alia, provisions relating
to notice of termination or severance pay in lieu thereof:
O Bill McMullin
O Mike Smith
O Patricia Muzyk
O Bob Richardson
O Steve Murphy
2. The Corporation has a cash Bonus Plan for its employees.
The Bonus Plan for 2000 has not yet been finalized by the
Compensation Committee.
<PAGE>
SCHEDULE "I"
CONFIDENTIAL INFORMATION TRANSMITTAL RECORD ("CITR")
See next page.
<PAGE>
CONFIDENTIAL INFORMATION TRANSMITTAL RECORD ("CITR")
CITR DATE: ----------, 200--- CNDA # ----------------------
(Date Disclosure(s) will (Fill in Number from Executed
commence) CNDA)
Participant's Name: --------------------------------------------
(Use Same Name as on CNDA)
-----------------------------------------------------------
(Location of Disclosure
-----------------------------------------------------------
City State Zip Code
Intel and Participant agree that the Confidential Information
described below shall be kept confidential by the receiving
party. This CITR incorporates all the terms and conditions of
the Corporate Non-Disclosure Agreement ("CNDA") executed by the
parties.
1. Describe Confidential Information disclosed by each party.
(Be specific. Include subject or product, any document title,
drawing/document number, date, rev., etc.) Identify visuals,
foils, and verbal disclosures. (Use additional sheets if
necessary).
Intel Confidential Information: All Intel Confidential
Information, including oral disclosures, disclosed by the board
observer representing Intel at any of Participant's board of
directors meetings where Intel's board observer was in
attendance, as such attendance is documented by the Participant's
board of director meetings minutes.
Participant's Confidential Information: All Participant's
Confidential Information, including oral disclosures, pertaining
to any of Participant's board of directors meetings that is
disclosed to Intel prior to Participant's board meetings, all
Participant's Confidential Information, including oral
disclosures, disclosed during any of Participant's board of
directors meetings for those portions of such meetings where
Intel's board observer was in attendance, as such attendance is
documented by the Participant's board of director meetings
minutes, and all other Participant's Confidential Information,
including oral disclosures, disclosed to Intel's board observer
in their capacity as an observer of Participant's board of
directors.
2. This CITR covers the above described Confidential
Information to be conveyed commencing on the CITR Date stated
above provided it is marked as required under the CNDA.
3. Unless a shorter period is indicated below, the disclosing
party will not assert any claims of breach or misappropriation of
trade secrets against the receiving party arising from the
receiving party's disclosure of the disclosing party's
Confidential Information under this CITR more than five (5) years
from the date when such information was disclosed. However,
unless at least one of the exceptions set forth in Section 4 of
the CNDA has occurred, the receiving party will continue to treat
such Confidential Information as the confidential information of
the disclosing party and only disclose any such Confidential
Information to third parties under the terms of a non-disclosure
agreement.
If initialed and filled in below, the period after which the
disclosing party agrees not to assert claims against the
receiving party with respect to the Confidential Information
disclosed under this CITR will be _____ months (not less than
twenty-four (24) months nor more than sixty (60) months).
(_____/_____)
4. Either party may at any time request in writing the
immediate return of all or part of its Confidential Information
disclosed hereunder, and all copies thereof, and the receiving
party shall promptly comply with such request.
5. All other terms and conditions of the executed CNDA shall
remain in full force and effect. Nothing contained herein shall
be construed as amending or modifying the terms of the CNDA
referenced above.
6. Both parties understand and acknowledge that no license
under any patent, copyright, trade secret or other intellectual
property right is granted to or conferred upon either party in
this Agreement or by the transfer of any information by one party
to the other party as contemplated hereunder, either expressly,
by implication, inducement, estoppel or otherwise, and that any
license under such intellectual property rights must be express
and in writing.
PARTICIPANT: ---------------
(Company Name, Division/Sub
if applicable)
INTEL CORPORATION
2200 Mission College Blvd. -----------------------------
Santa Clara, CA 95052-8119 Address
-----------------------------
City, State, Zip
Represented By: Represented By:
- ----------------------------- -----------------------------
Signature Signature
- ----------------------------- -----------------------------
Printed Name Mailstop Printed Name
- ----------------------------- -----------------------------
Title Phone Title
- ----------------------------- -----------------------------
Date Date
<PAGE>
EXHIBIT 2
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
<PAGE>
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed private placement purchaser
of listed securities or securities which are convertible into
listed securities.
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) Name of Issuer of the Securities:
InfoInterActive Inc.
(b) Number and Class of Securities to be Purchased:
1,803,922 Common Shares
(c) Purchase Price: $3.825 per share for an aggregate of
$6,900,001.65
2. DETAILS OF PURCHASER
(a) Name of Purchaser:
Intel Corporation
(b) Address:
2200 Mission College Blvd., Santa Clara, California,
95052-8119, United States
(c) Names and addresses of persons having a greater than
10% beneficial interest in the Purchaser:
None
3. RELATIONSHIP TO ISSUER
(a) Is the purchaser (or any person named in response to
2(c) above) an insider of the issuer for the purposes of the
Ontario Securities Act (before giving effect to this private
placement)? If so, state the capacity in which the purchaser (or
person named in response to 2(c)) qualifies as an insider:
No
(b) If the answer to (a) is "no", are the purchaser and the
issuer controlled by the same person or company? If so, give
details:
No
<PAGE> 2
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser, as principal, in
the securities of the issuer (other than debt securities which
are not convertible into equity securities), directly or
indirectly, within the 60 days preceding the date hereof:
None.
<PAGE> 3
UNDERTAKING
TO: The Toronto Stock Exchange
The undersigned has subscribed for and agreed to purchase, as
principal, the securities described in Item 1 of this Private
Placement Questionnaire and Undertaking.
The undersigned undertakes not to sell or otherwise dispose of
any of the said securities so purchased or any securities derived
therefrom for a period of six months from the date of the closing
of the transaction herein or for such period as is prescribed by
applicable securities legislation, whichever is longer, without
the prior consent of The Toronto Stock Exchange and any other
regulatory body having jurisdiction.
Dated at ------------------ this 28th day of February, 2000.
Intel Corporation
------------------------------
(Name of Purchaser - Print)
/s/Noel S. Lazo
------------------------------
(Authorized Signature)
Assistant Treasurer, Cash
Management and Systems,
as designee for Arvind Sodhani,
Vice President and Treasurer
------------------------------
(Official Capacity - Print)
------------------------------
(Print - name of individual
whose signature appears above
if different from name of
purchaser printed above)
Signature page of the TSE Private Placement Questionnaire and
Undertaking dated February 28, 2000.
