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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): JULY 16, 1996
APPLIED DIGITAL ACCESS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 000-23698 68-0132939
(State of other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
9855 SCRANTON ROAD, SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (619) 623-2200
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Item 2. Acquisition or Disposition of Assets
a) On July 16, 1996, Applied Digital Access, Inc. (the "Company"),
acquired certain assets of MPR Teltech Ltd., ("MPR Teltech"), a subsidiary of BC
TELECOM, Inc. The assets acquired were part of MPR Teltech's operating unit
commonly known as the Special Services Network division ("SSN"). The Company and
its Canadian subsidiary, Applied Digital Access - Canada, Inc. ("ADA-Canada")
acquired the assets for $4.2 million in cash and 150,000 shares of the Company's
common stock. The cash payment was made from the Company's existing funds.
The acquisition of the assets will be treated as a purchase
for accounting purposes. Accordingly, the Company will allocate the purchase
price to the fair value of the tangible and intangible assets, including
goodwill, acquired. The assets acquired include equipment, furniture, and
intangible assets valued at approximately $5.5 million.
b) The SSN operating unit of MPR Teltech, located in Vancouver, British
Columbia, Canada, is an operations systems software development group with
expertise in development of network management systems for public carriers. SSN
developed operations systems software for Prism Systems Ltd., a joint venture of
Northern Telecom ("Nortel") and BC TELECOM. Nortel subsequently acquired BC
TELECOM's interest in November 1994 and re-positioned it with the Northern
Telecom Network Services Management division in December 1995. SSN has become
part of ADA-Canada and will develop network performance management operations
systems software products for the Company and its customers, including Nortel.
The Company intends to use the acquired equipment in the same manner in which it
was previously used and intends to maintain a majority of these assets and
related operations in Vancouver, British Columbia, Canada for the foreseeable
future.
The Company expects to take a one-time charge in the third
quarter for purchased research and development related to the asset acquisition.
Item 7. Financial Statements and Exhibits
a) Financial Statements of SSN operating unit of MPR Teltech:
As of the filing of this report it was impractical to provide
the financial statements of SSN. The Company will file the required financial
statements under cover of Form 8-K/A on or before September 30, 1996.
b) Pro Forma Financial Information:
As of the filing of this report it was impractical to provide
pro forma financial information. The Company will file the required pro forma
financial information under cover of Form 8-K/A on or before September 30, 1996.
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c) Exhibits:
2.1 Asset Purchase Agreement effective July 16, 1996 between
Applied Digital Access, Inc. and MPR Teltech Ltd., with the
Exhibits which contain information which may be material to an
investment decision and which are not otherwise disclosed in
the agreement. Certain exhibits have been omitted pursuant to
Item 601. (b)(2) of Regulation S-K of the Securities Exchange
Act of 1934, as amended. The Company agrees to furnish
supplementally a copy of any omitted schedule to the
Commission upon request.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Applied Digital Access, Inc.
Date: July 31, 1996 /s/ Peter P. Savage
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Peter P. Savage
Director, President and
Chief Executive Officer
Date: July 31, 1996 /s/ James L. Keefe
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James L. Keefe
Vice President Finance and
Administration and Chief
Financial Officer
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LIST OF OMITTED SCHEDULES
The following schedules have been omitted from this agreement:
1. Schedule A, Purchased Assets
2. Schedule B, Contracts
3. Schedule C, Third Party Software Licenses
4. Schedule D, Allocation of Purchase Price
5. Schedule E, Employees and Employee Benefits
6. Schedule F, Purchaser's Offers to Employees
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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BETWEEN
APPLIED DIGITAL ACCESS, INC.
AND
MPR TELTECH LTD.
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1. INTERPRETATION 2
1.1 Definitions 2
1.2 Interpretation 4
1.3 Schedules 4
2. PURCHASE AND SALE 5
2.1 Purchase of Purchased Assets 5
2.2 Excluded Assets 5
2.3 Excluded Physical Assets 5
2.4 No Assumption of Liabilities 6
2.5 Purchase Price 6
2.6 Manner of Payment 6
2.7 Issuance of Stock 6
2.8 Allocation of Purchase Price. 6
2.9 Taxes 6
2.10 Title 6
2.11 Election 6
3. MPR's REPRESENTATIONS AND WARRANTIES 7
3.1 Representations and Warranties 7
3.2 Purchased Assets "AS IS, WHERE IS" 11
3.3 Purchaser's Sole Remedy 11
3.4 Survival of MPR's Representations and Covenants 11
3.5 MPR's Liability 11
3.6 Conditions for Indemnification 12
3.7 No Liability for Customer Software 12
3.8 Covenant of BC Telecom. 13
4. PURCHASER'S REPRESENTATIONS AND WARRANTIES 13
4.1 Representations and Warranties 13
4.2 MPR's Sole Remedy 14
4.3 Survival of Purchaser's Representations and Covenants 14
4.4 Purchaser's Liability 14
4.5 Conditions for Indemnification 15
4.6 Offers of Employment 15
5. CONDITIONS TO CLOSING 15
5.1 Conduct of SSN Business Unit 16
5.2 Subsequent Events 16
5.3 Conditions for Purchaser's Benefit 16
5.4 Conditions for MPR's Benefit 17
5.5 Non-Fulfilment of Conditions 17
5.6 No Prejudice to Other Rights 17
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6. CLOSING 18
6.1 Time and Place of Closing 18
6.2 MPR's Obligations on Closing 18
6.3 Purchaser's Obligations on Closing 18
7. POST-CLOSING MATTERS 19
7.1 MPR to Provide Access and Facilities 19
7.2 Post-Closing Access to Books and Records 19
7.3 Accounts Receivable 20
7.4 Assignment of Material Contracts 20
7.5 Reimbursement for Acquisition of Third Party Licenses 20
7.6 Restriction on Competition 21
8. CONFIDENTIAL INFORMATION 21
8.1 Confidentiality 21
8.2 Publicity 21
9. GENERAL PROVISIONS 21
9.1 Assignment 21
9.2 Counterparts; Facsimile 22
9.3 Conflict in Terms 22
9.4 Costs and Expenses 22
9.5 Entire Agreement 22
9.6 Finder's Fee 22
9.7 Further Assurances 22
9.8 Governing Law 23
9.9 Notice 23
9.10 No Consequential Losses 23
9.11 No Waiver 24
9.12 Severability 24
SCHEDULE A - PURCHASED ASSETS
SCHEDULE B - CONTRACTS
SCHEDULE C - THIRD PARTY SOFTWARE LICENSES
SCHEDULE D - ALLOCATION OF PURCHASE PRICE
SCHEDULE E - EMPLOYEES AND EMPLOYEE BENEFITS
SCHEDULE F - PURCHASER'S OFFERS TO EMPLOYEES
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT dated for reference the 11th day of July, 1996
BETWEEN:
APPLIED DIGITAL ACCESS, INC., a corporation duly incorporated under
the laws of the State of California and having an office at 9855
Scranton Road, San Diego, California, U.S.A. 92121
(hereinafter referred to as "Purchaser")
OF THE FIRST PART
AND:
MPR TELTECH LTD., a corporation duly incorporated under the laws of
Canada and having an office at 8999 Nelson Way, Burnaby, British
Columbia, Canada V5A 4B5
(hereinafter referred to as "MPR")
OF THE SECOND PART
WHEREAS:
MPR is a high technology company which provides advanced telecommunications
systems and products to telecommunications carriers, vendors and users;
MPR's operations includes its SSN Business Unit (as hereinafter defined)
which is a design service consulting group focused on developing software
intensive communications products for MPR's Customer (as hereinafter
defined);
Purchaser and MPR have entered into a Letter of Intent (as hereinafter
defined) pursuant to which Purchaser has expressed an interest in
purchasing certain assets of the SSN Business Unit; and
Purchaser wishes to buy, and MPR wishes to sell and on the terms and
conditions set out in this Agreement, certain assets of the SSN Business
Unit;
NOW THEREFORE in consideration of the premises and covenants contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
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ARTICLE
INTERPRETATION
1.1 DEFINITIONS. In this Agreement (including the recitals, this
Article and each Schedule), unless there is something in the subject matter or
context inconsistent therewith or unless otherwise expressly provided, the
following words and expressions shall have the following meanings:
"ADA" means ADA Canada, Inc. a British Columbia company;
"Affiliates" means any person or entity controlling controlled by or under
common control with a party hereunder (with control, together with its
correlative meaning "controlled by," meaning the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such person or entity whether through ownership of voting securities
by agreement or otherwise);
"BC TEL Group" means BC Telecom Inc. and its subsidiaries, including MPR;
"Closing" means the completion of the sale to and the purchase by Purchaser of
the Purchased Assets in accordance with Article 2;
"Closing Date" means the date for the Closing as specified in Section 6.1;
"Customer" means Northern Telecom Limited;
"Development Agreement" means the agreements respecting the development of DSS
II Custom Software, consisting of
a) the Master Agreement dated December 11, 1992, and any development agreements
entered into pursuant thereto,
b) the Development Program Agreement dated April 18, 1994,
c) the Letter Agreement dated June 2, 1994,
d) the Letter Agreement dated July 18, 1994,
e) the Business Agreement dated December 22, 1994, and
f) the Business Agreement dated March 9, 1995,
and any and all amendments thereto;
"Employee Benefits" means all bonus, severance, deferred compensation,
retirement, stock option, stock purchase, insurance or other benefits or
arrangements providing benefits to employees of the SSN Business Unit
maintained, sponsored or participated in by MPR or to which MPR has contributed;
"encumbrance" means a security interest, adverse claim (including right of first
purchase, option, first refusal or pre-emption), burden, charge or other
interest attaching to the Purchased Assets and created by, through or under MPR;
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"Intellectual Property" means, excluding the rights of MPR under the November
1994 License Agreement, any published or unpublished, written or unwritten
discoveries, improvements, ideas, patents, patent applications, copyrights,
copyright applications, industrial designs, industrial design applications, mask
works, trademarks, trademark applications, trade secrets, know-how, business
plans, goodwill and the like, including, without limitation, computer programs,
source codes, object codes, documentation, technical writings, pictorial
reproductions, drawings and other graphic representations, formulae and
manufacturing processes whether or not copyrighted or patented or registered or
protected, or capable of such registration or protection;
"Letter of Intent" means the Letter of Intent executed by Purchaser and MPR and
dated April 16, 1996;
"Losses" means all demands, claims, actions, causes of action, fines, penalties,
costs, interest or damages, including reasonable attorney's fees and
disbursements;
"Material Contracts" means all material agreements relating to the business and
operation of the SSN Business Unit as set out in Schedule to this Agreement,
including, without limitation, all Third Party Licenses, all consultants'
agreements, equipment leases, license agreements, operating agreements,
agreements and/or arrangements with suppliers of services or vendors of goods
related to the Purchased Assets and all agreements regarding confidentiality
and/or proprietary rights with respect to inventions or innovations between MPR
and its employees, officers, directors, agents, consultants or professionals to
the extent they relate to the SSN Business Unit or the Purchased Assets, but
excluding the Development Agreement;
"November 1994 License Agreement" means the License Agreement among BC TEL,
Microtel Limited, MPR Teltech Ltd and Prism Systems Inc. dated November 10,
1994;
"person" means an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature;
"Purchased Assets" means the certain assets of the SSN Business Unit which
assets shall include inventory and supplies, office equipment, furniture and
fixtures, equipment, vehicles and, to the extent owned by or licensed to MPR,
all SSN Intellectual Property, and other proprietary rights and other assets of
MPR utilized by or on behalf or in connection with the operation of the SSN
Business Unit as of the Closing Date, including the assets set out in Schedule A
to this Agreement, but excluding the Excluded Assets and the Material Contracts;
"SSN Business Unit" means the Special Services Network Business Unit of MPR's
Network Products and Systems Business Group;
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"SSN Intellectual Property" means all Intellectual Property of MPR
arising out of or related to all products and development projects of
the SSN Business Unit as of the Closing Date, except that arising out of
or related to the Development Agreement;
"Stock Purchase Agreement" means the Stock Purchase Agreement to be
entered into contemporaneously with this Agreement;
"Third Party Licenses" means those licenses to MPR and agreements of MPR
regarding proprietary rights made with respect to the SSN Business Unit
set out in Schedule ;
"Time of Closing" means the time on the Closing Date specified in
Section ; and
"Transition Period" means that 120 day period following the Closing
Date.
1.2 INTERPRETATION. For purposes of this Agreement, except as otherwise
expressly provided:
a) "this Agreement" means this agreement, including the Schedules
hereto, as may from time to time be supplemented or amended and in
effect;
b) all references in this Agreement to a designated "Article",
"Section", "Subsection" or other subdivision or to a Schedule are
to the designated Article, Section, Subsection or other subdivision
of, or Schedule to, this Agreement;
c) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section, Subsection or other subdivision or
Schedule;
d) the headings in this Agreement are for convenience only and do not
form a part of this Agreement and are not intended to interpret,
define or limit the scope, extent or intent of this Agreement or
any provision hereof;
e) unless expressed to be in some other currency, all references to
currency refer to lawful money of the United States of America. The
references to currency in the Schedules, excluding Schedule D,
refer to Canadian currency; and
f) words importing the masculine gender include the feminine or neuter
gender and words in the singular include the plural and vice versa.
1.3 SCHEDULES. The following Schedules are attached to and form a part
of this Agreement:
a) Schedule A - Purchased Assets;
b) Schedule B - Contracts;
c) Schedule C - Third Party Software Licenses;
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d) Schedule D - Allocation of Purchase Price;
e) Schedule E - Employees and Employee Benefits; and
f) Schedule F - Purchaser's Offers to Employees.
ARTICLE 2
2. PURCHASE AND SALE
2.1 PURCHASE OF PURCHASED ASSETS. Upon the terms and subject to the conditions
herein contained, MPR shall transfer, sell, assign and convey the Purchased
Assets to Purchaser or ADA as designated by Purchaser and Purchaser and ADA
shall purchase and receive from MPR all of MPR's right, title and interest in
and to the Purchased Assets.
2.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary contained in
Section 2.1 above, the following shall not be included in the Purchased Assets
and shall not be sold by MPR to Purchaser hereunder (the "Excluded Assets"):
a) all cash and cash equivalents;
b) all accounts receivable;
c) all contracts and leases of equipment or other property not
assigned to and assumed by Purchaser as part of the Purchased
Assets, Material Contracts or as otherwise contemplated by this
Agreement;
d) all real estate and all leases of real property;
e) all prepaid expenses and deposits;
f) all causes of actions and litigation against third parties;
g) all tax returns of MPR and all tax refunds due MPR from any
governmental agency; and
h) any solvents or chemicals which are identified by Purchaser on or
before the Closing Date,
which items and substances shall be identified by Purchaser on or before the
Closing Date (the "Excluded Physical Assets").
2.3 EXCLUDED PHYSICAL ASSETS. MPR shall cause the Excluded Physical Assets to be
segregated from the Purchased Assets and placed in a space in MPR's building
segregated from the space used or occupied by Purchaser after the Closing Date
pursuant to Section 7.1. Purchaser shall have no control over, interest in or
liability or responsibility of any kind whatsoever for the Excluded Physical
Assets and/or MPR's use or possession of same.
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2.4 NO ASSUMPTION OF LIABILITIES. Purchaser shall not assume and shall not be
liable for any liabilities of MPR of whatever type or nature whatsoever
including for all employee accruals for unpaid vacation pay, premiums for
unemployment insurance, health premiums, Canada Pension Plan premiums, accrued
wages, salaries and commissions and employment benefit plan payments and MPR
assumes full responsibility with respect to all such employee accruals, referred
to in this subparagraph up to the Time of Closing.
2.5 PURCHASE PRICE. In full consideration for the purchase by Purchaser of the
Purchased Assets, Purchaser shall pay to MPR the purchase price (the "Purchase
Price"), composed of:
a) the sum of $4,200,000.00 (U.S. Dollars) in cash; and
b) 150,000 shares of Purchaser's Common Stock at the closing price on
July 15, 1996, no par value.
2.6 MANNER OF PAYMENT. In partial payment of the Purchase Price, Purchaser and
ADA, if designated by Purchaser, shall pay the sum set out in Subsection 2.5(a)
to MPR at the Closing by certified cheque or bank draft drawn on the bank of
Purchaser and ADA payable to or to the order of MPR in immediately available
funds.
2.7 ISSUANCE OF STOCK. The issuance of common stock in partial payment of the
Purchase Price as set out in Subsection 2.5(b) shall be governed by the Stock
Purchase Agreement.
2.8 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated as set
out in Schedule D.
2.9 TAXES. Purchaser shall be responsible for and shall pay any and all sales,
transfer or other Canadian federal or provincial or United States federal or
state taxes associated with or arising out of the sale of the Purchased Assets
to Purchaser under this Agreement.
2.10 TITLE. Title to the Purchased Assets shall pass to Purchaser at the Time of
Closing and the Purchased Assets shall be at the risk of MPR prior to Closing.
MPR and Purchaser acknowledge that it is intended that MPR shall be entitled to
the benefit of all revenues arising from the SSN Business Unit up to the Closing
and shall be responsible for all expenses incurred by the SSN Business Unit up
to the Closing.
2.11 ELECTION. MPR and the Purchaser shall elect jointly under Subsection 167(1)
of the Excise Tax Act (Canada), in the form prescribed for the purposes of that
subsection, in respect of the sale and transfer of the Purchased Assets
hereunder, and MPR shall file such election in its GST return for its reporting
period that includes the Closing Date. MPR represents that its GST Registration
Number is R103678892.
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ARTICLE 3
3. MPR'S REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES. MPR represents and warrants to Purchaser, as
warranties and representations that are true at the date hereof and at the Time
of Closing as if such warranties and representations were made at such time,
that:
a) MPR is a corporation duly organized, validly existing and in good
standing under the laws of British Columbia and Canada, and has all
requisite corporate power and authority to carry on the business of the
SSN Business Unit as now conducted;
b) MPR has all requisite corporate power and authority (i) to execute,
deliver and perform its obligations under the Material Contracts, the
Development Agreement and this Agreement, and (ii) to execute, deliver
and perform its obligations under all other agreements and instruments
executed and delivered by it pursuant to or in connection with this
Agreement. All corporate action on the part of MPR, its officers,
directors and shareholders necessary for the authorization, execution
and delivery of this Agreement and the performance of all obligations of
MPR hereunder has been taken or will be taken prior to the Closing, and
this Agreement constitutes valid and legally binding obligations of MPR,
enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting enforcement of creditors' rights
generally and (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies;
c) the execution and delivery of this Agreement by MPR and the consummation
of the transactions herein provided for will not result in:
i) the breach or violation of any of the provisions of, or constitute
default under, or conflict with or cause the acceleration of any
obligation of MPR under
A) any contract related to the SSN Business Unit to which MPR
is a party or by which it is or its properties are bound,
including, without limitation, the Material Contracts and
the Development Agreement,
B) any provision of the constating documents or by-laws or
resolutions or articles of the board of directors or
shareholders of MPR,
C) any judgment, decree, order or award of any court,
governmental body or arbitrator having jurisdiction over
MPR,
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D) any license, permit, approval, consent or authorization
held by MPR or necessary to the operation of the SSN
Business Unit, or
E) any applicable, statute, ordinance, regulation or rule; or
ii) the creation or imposition of any encumbrance on any of the
Purchased Assets;
d) no consent, authorization, order or approval of, or filing or
registration with, any governmental authority or other person or entity
is required for the execution and delivery by MPR of this Agreement,
the Stock Purchase Agreement and the consummation by MPR of the
transactions contemplated by such agreements;
e) subject to the rights of third parties set out in Section 2 of
Schedule A , the Purchased Assets are owned by MPR free and clear of
all liens and encumbrances;
f) the Purchased Assets and the Material Contracts include all
equipment and assets currently used or required to conduct the business
of the SSN Business Unit as presently conducted excluding the Excluded
Assets and assets used to provide the support services referred to in
Section 7.1;
g) except as disclosed in writing, the Development Agreement and the
Material Contracts are valid and in full force and effect and binding
upon the parties thereto and MPR is not in breach of same;
h) MPR's financial records present fairly the assets and liabilities of
the SSN Business Unit and its financial condition as of the dates of
such financial records and fairly present the results of operations of
the SSN Business Unit for the periods reflected in the financial
records in accordance with generally accepted accounting principles
consistently applied (except as may be indicated in the notes thereto
and subject to normal year-end adjustments in the case of any interim
financial statements);
i) there are no claims, proceedings, actions or lawsuits in existence,
threatened or asserted against or with respect to the Purchased Assets
which would have a material adverse effect on the Purchased Assets or
the value thereof;
j) Schedule B to this Agreement sets forth a true, complete and
accurate list of all Material Contracts as of the date hereof. No
customer or supplier has terminated or cancelled any Material Contract
and, to MPR's knowledge, no customer or supplier has any intention to
do so;
k) to the best of MPR's knowledge, the Material Contracts and the
Development Agreement are valid. No event occurrence or condition
exists which constitutes a default by any party under any Material
Contract. MPR has not defaulted under any Material Contract. MPR has
not released any of its rights under any Material Contract or the
Development Agreement. MPR is not subject to any legal obligations to
renegotiate, nor does MPR have knowledge of a claim for a legal right
to renegotiate, any Material Contract;
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l) MPR has duly filed on a timely basis, all tax returns required to be
filed by it and has paid all taxes due and payable, and all assessments
and reassessments, governmental charges, penalties, interest and fines
due and payable by it. MPR has made adequate provision for taxes
payable in respect of the Purchased Assets for the current period and
any previous period for which tax returns are not yet required to be
filed. There are no actions, suits, investigations, proceedings or
claims pending against MPR in respect of taxes, governmental charges or
assessments which would have an adverse effect on this Agreement or the
Purchased Assets. MPR has withheld from each payment made to any of its
past or present employees, officers or directors, or to any
non-resident of Canada, the amount of all taxes and all other
deductions required to be withheld therefrom, and has paid the same to
the proper tax or other receiving officers within the time required
under any applicable legislation. MPR has remitted to the appropriate
tax authorities, when required by law to do so, all amounts collected
by it on account of GST;
m) all employee accruals, in respect of SSN Business Unit employees,
for unpaid vacation pay, premiums for unemployment insurance, health
premiums, Canada Pension Plan premiums, accrued wages, salaries and
commissions and all Employment Benefits have been or will be discharged
prior to the Closing or within a reasonable period thereafter;
n) all Employee Benefits are described in Schedule E to this Agreement;
o) no notice has been received by MPR of any complaint filed by any of
the employees of the SSN Business Unit against MPR claiming that MPR
has violated the Employment Standards Act (British Columbia), the Human
Rights Act (British Columbia) or of any complaints or proceedings of
any kind involving MPR or to MPR's knowledge, any of the employees of
MPR before any labour relations board. There are no outstanding orders
or charges against MPR relating to the SSN Business Unit under the
Regulations to the Workers Compensation Act (British Columbia). All
levies, assessments and penalties made against MPR pursuant to the
Workers Compensation Act (British Columbia) have been paid by MPR and
MPR has not been reassessed under any such legislation during the past
three years;
p) there are no material agreements entered into by MPR in respect of
the SSN Business Unit, other than the Development Agreement, except as
disclosed in writing in Schedule B to this Agreement;
q) there are no collective bargaining agreements with respect to any of
the personnel of the SSN Business Unit;
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r) since the date of execution of this Agreement, there have been no
changes in the individual or collective compensation or contractual
arrangements of the key employees of the SSN Business Unit except for
normal changes in the ordinary course of business;
s) to the best of MPR's knowledge, MPR has complied in all material
respects with all laws, rules, regulations and orders and has obtained
all permits and licenses required to operate the SSN Business Unit, and
the present use by MPR of the Purchased Assets in the operation of the
SSN Business Unit does not violate any laws, rules, regulations or
orders;
t) to the best of MPR's knowledge, there are no licenses, permit
registrations or governmental approvals, agreements or consents applied
for, pending by, issued or given to MPR as it relates to the SSN
Business Unit, and no agreements with governmental authorities
(provincial, state, local or foreign) entered into by MPR as it relates
to the SSN Business Unit, which are in effect or have been applied for
or are pending;
u) MPR is the owner of or duly licensed to use each item of SSN
Intellectual Property and its associated goodwill. No other firm,
corporation, association or person claims the right to use (or is
using) in connection with similar or closely related goods and in the
same geographic area, any mark which is identical or confusingly
similar to any trademark of the SSN Business Unit. No third party
asserts ownership rights in any of the SSN Intellectual Property. MPR's
use of the SSN Intellectual Property does not infringe any right of any
third party. No third party is infringing any of MPR's rights in any of
the SSN Intellectual Property;
v) except for MPR's building, MPR does not own any real property used
in connection with the SSN Business Unit;
w) MPR (and all other persons to the extent that such persons, from
time to time, have owned, leased, occupied or conducted operations on
any real property or facility used in connection with the SSN Business
Unit) has complied with all laws (including rules and regulations
thereunder) of all applicable Canadian federal or provincial local and
foreign governments, and their respective agencies, concerning the
environment, public health and safety and employee health and safety,
and no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, demand or notice has been filed or commenced
against any of them alleging any failure to comply with any such law or
regulation;
x) MPR has not caused or permitted anything to be done on, about or
beneath MPR's premises prior to the Closing Date which has resulted or
will result in contamination or environmental damage to such premises
which will require cleanup, removal or disposal of contaminated
materials or other remedial action by Purchaser pursuant to any
federal, provincial or municipal law, regulation, order or governmental
action which would have an adverse effect on this Agreement or the
Purchased Assets; and
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y) MPR has delivered to Purchaser a true, complete and accurate list of
all of the SSN Business Unit's current employees, such employees'
salaries or hourly rates, and annual bonuses (last paid or payable), if
any, and the total value and list of any other fringe benefits or
incentives paid or payable to such employees as set out in Schedule E.
To the best knowledge of the SSN Business Unit's senior managers, Randy
Fawcett, Eddie Ho and Kirk Moir, no key employee or group of employees
of the SSN Business Unit has any plans to terminate employment with MPR
or with Purchaser subsequent to Closing.
3.2 PURCHASED ASSETS "AS IS, WHERE IS". THE PURCHASED ASSETS ARE SOLD ON AN AS
IS, WHERE IS BASIS, EXCEPT AS EXPRESSLY SET OUT IN THIS AGREEMENT. THERE ARE NO
OTHER WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND WHATSOEVER, EITHER
EXPRESS OR IMPLIED WHETHER ARISING BY STATUTE, CONTRACT, TORT, PRODUCT LIABILITY
OR OTHERWISE, REGARDING THE PURCHASED ASSETS, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES, REPRESENTATIONS AND GUARANTEES AS TO MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, DESIGN, TITLE, CONDITION OR QUALITY OF THE PURCHASED ASSETS.
3.3 PURCHASER'S SOLE REMEDY. PURCHASER'S SOLE REMEDY FOR BREACH OF THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE SHALL BE LIMITED TO THE
INDEMNITY SET OUT IN SECTION 3.5.
3.4 SURVIVAL OF MPR'S REPRESENTATIONS AND COVENANTS. Each representation,
warranty, covenant and agreement of MPR contained herein shall survive the
execution and delivery of this Agreement and the Closing, and shall expire 16
months after the Closing Date unless, on or before such expiry date, Purchaser
has delivered to MPR written notice of a claim relating to such representation,
warranty, covenant or agreement.
3.5 MPR'S LIABILITY. Subject to Section 3.4, and except as otherwise expressly
provided for in this Agreement, MPR shall be liable to Purchaser for, and shall
indemnify and save harmless Purchaser from and against Losses sustained or
incurred by Purchaser which arise out of, are based on, or are the result of:
a) any misrepresentation or breach of representation, warranty,
covenant or agreement made by MPR herein or in any certificate or
other document delivered by or on behalf of MPR pursuant hereto; or
b) any failure of MPR to comply with, or any breach by MPR of, any of
the covenants or agreements in this Agreement to be performed by
MPR; or
c) the operations of the SSN Business Unit (including, without
limitation, all employee accruals, in respect of SSN Business Unit
employees, for unpaid
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vacation pay, premiums for unemployment insurance, health premiums,
Canada Pension Plan premiums, accrued wages, salaries and commissions
and all Employment Benefits to the Closing Date) or the creation,
development, distribution or deployment of the Purchased Assets prior
to the Closing Date, excluding in any event:
i) anything for which MPR is indemnified pursuant to Section 4.4; and
ii) anything for which liability is disclaimed pursuant to Section 3.7;
excepting in each case any Losses to the extent that the same are
caused by the negligence of Purchaser. No claim shall be made by
Purchaser hereunder unless written notice of such claim is
delivered to MPR within the time stipulated in Section 3.4 and such
claim, together with any prior claims by Purchaser, exceeds 10% of
the Purchase Price. In no event shall MPR's cumulative liability
under this Section 3.5 exceed the Purchase Price.
3.6 CONDITIONS FOR INDEMNIFICATION. The indemnity contained in Section 3.5 shall
apply only where the following conditions are satisfied:
a) MPR shall have sole conduct of all proceedings and negotiations
connected with such claims;
b) Purchaser will promptly notify MPR of all such claims and will not
make any admissions regarding them;
c) Purchaser will provide MPR with reasonable assistance and authority
in connection with such claims; and
d) if a claim of infringement is alleged, or MPR reasonably believes
that a claim of infringement will be alleged then, at its own
expense, MPR may procure for Purchaser a license to continue using
the infringing item, and/or MPR may modify or replace the
infringing item to avoid infringement.
3.7 NO LIABILITY FOR CUSTOMER SOFTWARE. The parties contemplate that Purchaser
will obtain rights to certain software, documentation and tools from Customer,
including software, documentation and tools previously licensed or assigned to
Customer from MPR or another member of the BC TEL Group, or created by MPR
pursuant to agreements with Customer, including the Development Agreement.
Purchaser agrees that, solely as between Purchaser and the BC TEL Group:
a) Purchaser has such software, documentation and tools on an "as is"
basis, without warranty from any member of the BC TEL Group of any
kind, either express or implied, including but not limited to, the
implied warranties of title, merchantability and fitness for a
particular purpose; and
b) to the extent Purchaser uses or exploits same in any way, Purchaser
does so at its own risk. In no event will any member of the BC TEL
Group be
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liable to Purchaser for any damages, including any loss of profits,
lost savings, or other incidental or consequential damages arising
out of Purchaser's use or exploitation of same or inability to use
or exploit same, even if any member of the BC TEL Group knows or
has been advised of the possibility of such damages, provided that
nothing in this Section 3.7(b) shall release MPR from any liability
arising from a claim made by Purchaser indirectly through Customer.
3.8 COVENANT OF BC TELECOM. MPR shall arrange for BC Telecom Inc. to agree to
cause MPR to comply with and fulfil MPR's obligations to Purchaser under
Sections 3.5, 7.2 and 7.6 of this Agreement, or perform such obligations
directly.
ARTICLE 4
4. PURCHASER'S REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES. Purchaser hereby represents and warrants to
MPR, as warranties and representations that are true at the date hereof and at
the Time of Closing as if such warranties and representations were made at such
time, that:
a) Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of California and has all
requisite corporate power and authority to carry on its business as
now conducted and as proposed to be conducted. Purchaser is duly
qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would be reasonably
expected to have a material adverse effect on the business,
operations, properties, assets, prospects or condition (financial
or otherwise) of Purchaser, taken as a whole. Except as disclosed
in Purchaser's SEC filings, Purchaser has no subsidiaries;
b) Purchaser has all requisite corporate power and authority (i) to
execute, deliver and perform its obligations under this Agreement
and (ii) to execute, deliver and perform its obligations under all
other agreements and instruments executed and delivered by it
pursuant to or in connection with this Agreement. All corporate
action on the part of Purchaser, its officers, directors and
shareholders necessary for the authorization, execution and
delivery of this Agreement and the performance of all obligations
of Purchaser hereunder has been taken or will be taken prior to the
Closing, and this Agreement constitutes valid and legally binding
obligations of Purchaser, enforceable in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditor's rights generally and (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies;
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c) the consummation by Purchaser of the transactions contemplated
herein will not violate, nor be in conflict with, the provisions of
any agreement or instrument to which Purchaser is a party or by
which Purchaser is bound, or any judgment, decree, order, law,
statute, rule or regulation applicable to Purchaser;
d) Purchaser is able to pay the cash portion of the Purchase Price in
cash;
e) all shares in the common stock of Purchaser to be issued to MPR in
partial payment of the Purchase Price shall be issued in a private
transaction under the terms and conditions of the Stock Purchase
Agreement and MPR's rights thereunder shall be governed by the
terms and conditions of the Stock Purchase Agreement;
f) the financial statements of Purchaser present fairly the assets and
liabilities of Purchaser and its financial condition as of the
dates of such financial statements and fairly present the results
of operations of Purchaser for the periods reflected in the
financial statements in accordance with generally accepted
accounting principles consistently applied (except as may be
indicated in the notes thereto and subject to normal year-end
adjustments in the case of any interim financial statements); and
g) Purchaser is an American-controlled entity within the meaning and
for the purposes of the Investment Canada Act, and will give notice
of its acquisition of the Purchased Assets to Investment Canada in
accordance with that Act.
4.2 MPR'S SOLE REMEDY. MPR'S SOLE REMEDY FOR BREACH OF THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS ARTICLE 4 SHALL BE LIMITED TO THE INDEMNITY SET OUT
IN SECTION 4.4.
4.3 SURVIVAL OF PURCHASER'S REPRESENTATIONS AND COVENANTS. Each representation,
warranty, covenant and agreement of Purchaser contained herein shall survive the
execution and delivery of this Agreement and the Closing, and shall expire 16
months after the Closing Date unless, on or before such expiry date, MPR has
delivered to Purchaser written notice of a claim relating to such
representation, warranty, covenant or agreement.
4.4 PURCHASER'S LIABILITY. Subject to Section 4.3 and except as otherwise
expressly provided for in this Agreement, Purchaser shall be liable to MPR for,
and shall indemnify and save harmless MPR from and against all Losses sustained
or incurred by MPR which arise out of, are based on, or are the result of:
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a) any misrepresentation or breach of representation, warranty,
covenant or agreement made by Purchaser herein or in any
certificate or other document delivered by or on behalf of
Purchaser pursuant hereto; or
b) any failure of Purchaser to comply with, or any breach by Purchaser
of, any of the covenants or agreements in this Agreement to be
performed by Purchaser; or
c) the creation, development, distribution or deployment of the
Purchased Assets, where the infringement or Losses arise from the
exploitation of a modification, variation or improvement to the
Purchased Assets which causes a claim for infringement or Losses or
the combination of the Purchased Assets with software or materials
which causes a claim for infringement or Losses (including, without
limitation, claims alleging quality issues) following the Closing
Date, excluding anything for which Purchaser is indemnified
pursuant to Section 3.5;
excepting in each case any Losses to the extent that the same are caused by the
negligence of MPR. No claim shall be made by MPR hereunder unless written notice
of such claim is delivered to Purchaser within the time stipulated in Section
4.3 and such claim, together with any prior claims by MPR, exceeds 10% of the
Purchase Price. In no event shall Purchaser's cumulative liability under this
Section 4.4 exceed the Purchase Price.
4.5 CONDITIONS FOR INDEMNIFICATION. The indemnity contained in Section 4.4 shall
apply only where the following conditions are satisfied:
a) Purchaser shall have sole conduct of all proceedings and
negotiations connected with such claims;
b) MPR will promptly notify Purchaser of all such claims and will not
make any admissions regarding them; and
c) MPR will provide Purchaser with reasonable assistance and authority
in connection with such claims.
4.6 OFFERS OF EMPLOYMENT. Purchaser shall make offers of full-time, regular
employment to those MPR employees listed in Schedule F on the terms as set out
in Schedule F, and Purchaser shall be responsible for all payments made and all
expenses and costs required to be made in connection with the termination of
employment subsequent to the Closing Date of those MPR employees who become
employees of Purchaser on or subsequent to the Closing Date.
ARTICLE 5
5. CONDITIONS TO CLOSING
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5.1 CONDUCT OF SSN BUSINESS UNIT. From and after the date of this Agreement to
and including the Time of Closing MPR: (a) will carry on the business of the SSN
Business Unit in the usual and ordinary course and will not change the character
of such business; and (b) will use all reasonable efforts to preserve and
maintain the business and organization of the SSN Business Unit intact, to
preserve the goodwill of the SSN Business Unit, to retain the present employees
of the SSN Business Unit and to maintain the relationships of the SSN Business
Unit with suppliers and customers so that all of them will be preserved for
Purchaser on and after the Time of Closing.
5.2 SUBSEQUENT EVENTS. MPR shall promptly, and in any event prior to the Closing
Date, advise Purchaser in writing of the occurrence of any event or the
existence of any state of facts that would render any representation or warranty
of MPR hereunder inaccurate in any material respect or that would preclude
satisfaction of any condition contained in Article 5 of this Agreement; provided
that no such notification shall affect any such representation, warranty or
condition.
5.3 CONDITIONS FOR PURCHASER'S BENEFIT. The obligations of Purchaser under this
Agreement shall be subject to the satisfaction at or prior to the Closing of the
following conditions (each of which is for the exclusive benefit of Purchaser
and may be waived in writing by Purchaser):
a) all actions on the part of MPR necessary to authorize the
execution, delivery and performance of this Agreement and the other
agreements provided for herein, and the consummation of the
transactions contemplated herein and therein, shall have been duly
and validly taken by MPR;
b) all of MPR's representations and warranties contained in this
Agreement shall be true in all material respects at and as of the
Time of Closing and MPR shall have performed and satisfied in all
respects all covenants and agreements required by this Agreement to
be performed and satisfied by MPR at or prior to the Closing;
c) during the period from the execution of this Agreement to the Time
of Closing, there shall not have been any material loss of or any
material damage to, the Purchased Assets or to the SSN Business
Unit and there shall not have been any adverse change materially
limiting the use of the Purchased Assets;
d) MPR shall have executed and delivered to Purchaser the Stock
Purchase Agreement;
e) BC Telecom Inc. shall have executed and delivered to Purchaser an
agreement pursuant to which BC Telecom Inc. agrees to be bound with
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Purchaser by the obligations of BC Telecom Inc. set out in Section
3.8 of this Agreement; and
f) MPR and Customer shall have executed and delivered to Purchaser the
assignment of the Development Agreement from MPR to Purchaser, the
Master Agreement between Customer and ADA, and the License
Agreement between Customer and Purchaser, all in the form in which
those agreements exist on the date of this Agreement.
5.4 CONDITIONS FOR MPR'S BENEFIT. The obligations of MPR under this Agreement
shall be subject to the satisfaction at or prior to the Closing of the following
conditions (each of which is for the exclusive benefit of MPR and may be waived
in writing by MPR):
a) all actions on the part of Purchaser necessary to authorize the
execution, delivery and performance of this Agreement and the other
agreements provided for herein, and the consummation of the
transactions contemplated herein and therein, shall have been duly
and validly taken by Purchaser;
b) all representations and warranties of Purchaser contained in this
Agreement shall be true in all material respects at and as of the
Time of Closing and Purchaser shall have performed and satisfied in
all respects all covenants and agreements required by this
Agreement to be performed and satisfied by Purchaser at or prior to
the Closing;
c) Purchaser shall have executed and delivered to MPR the Stock
Purchase Agreement; and
d) Purchaser and Customer shall have executed and delivered to MPR the
assignment of the Development Agreement from MPR to Purchaser in
the form in which that agreement exists on the date of this
Agreement.
5.5 NON-FULFILMENT OF CONDITIONS. If any of the conditions referred to in
sections 5.3 or 5.4 shall not be fully satisfied at or before the Closing, then
the party for whose benefit such condition has been included in this Agreement
may, at its option, either:
a) complete the transactions contemplated by this Agreement, in which
event such party shall be deemed to have waived such condition; or
b) elect not to complete the transactions contemplated by this
Agreement.
5.6 NO PREJUDICE TO OTHER RIGHTS. No waiver by either party of the conditions
set forth in sections 5.3 or 5.4 in whole or in part shall in any way prejudice
or limit the rights and remedies of either party to claim or recover damages and
compensation from
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the other party in respect of any inaccuracy in any representation or warranty
that is not the subject of the waiver, or in respect of any breach or
non-performance of any covenant or agreement of the other party contained in
this Agreement that is not the subject of such waiver. No election by either
party not to complete the transactions contemplated by this Agreement as a
result of any breach or non-performance by the other party of any covenant or
agreement contained in this Agreement, which breach or non-performance has
resulted in a condition set forth in sections 5.3 or 5.4 failing to be satisfied
at or before the Closing, shall in any way prejudice or limit the rights of the
party electing not to complete in respect of such breach or non-performance by
the other party.
ARTICLE 6
6. CLOSING
6.1 TIME AND PLACE OF CLOSING. The Closing shall take place at the offices of
MPR commencing at 10:00 a.m. on the 16th day of July, 1996, or at such other
time and place as the parties may agree.
6.2 MPR'S OBLIGATIONS ON CLOSING. At the Closing, MPR shall deliver to
Purchaser:
a) a bill of sale in respect of the Purchased Assets;
b) a certified copy of an extract from a resolution of the Board of
Directors of MPR authorizing the sale of the Purchased Assets and
the execution and delivery of this Agreement and all agreements
contemplated under this Agreement;
c) a copy of the Stock Purchase Agreement executed on behalf of MPR;
d) the assignment of the Development Agreement from MPR to Purchaser,
executed on behalf of MPR;
e) the prescribed form electing to have Section 167 of the Excise Tax
Act (Canada) apply to the transfer of the Purchased Assets,
executed on behalf of MPR.
6.3 PURCHASER'S OBLIGATIONS ON CLOSING. At the Closing, Purchaser shall deliver
to MPR:
a) certified cheques or bank drafts payable to "MPR Teltech Ltd." in
the amount of $4,200,000.00;
b) share certificate(s) representing 150,000 common shares in the
stock of Purchaser in the name of "MPR Teltech Ltd.";
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c) certified cheques or bank drafts payable to "MPR Teltech Ltd.", or
as MPR may direct, for all taxes (if any) required by law to be
collected by MPR on the sale of the Purchased Assets;
d) a certified copy of a resolution of the Boards of Directors of
Purchaser and ADA, if applicable, authorizing the purchase of the
Purchased Assets and the execution and delivery of this Agreement
and all agreements contemplated under this Agreement;
e) a copy of the Stock Purchase Agreement executed on behalf of
Purchaser;
f) the assignment of the Development Agreement from MPR to Purchaser
or ADA, executed on behalf of Purchaser or ADA; and
g) the prescribed form electing to have Section 167 of the Excise Tax
Act (Canada) apply to the transfer of the Purchased Assets,
executed on behalf of Purchaser.
ARTICLE 7
7. POST-CLOSING MATTERS
7.1 MPR TO PROVIDE ACCESS AND FACILITIES. After the Time of Closing and until
December 31, 1996, or such earlier date of which Purchaser gives MPR notice, MPR
shall allow the employees of Purchaser who were formerly employees of MPR to
continue to occupy those premises of MPR occupied by the SSN Business Unit as of
the Closing Date, and allow Purchaser's other employees to occupy such premises.
MPR shall provide to Purchaser support services presently utilized by such
employees, and similar services for Purchaser's other employees, excluding
legal, human resources, purchasing and payroll services. MPR shall charge
Purchaser only MPR's cost of the expenses so incurred and support services so
provided. Purchaser shall pay MPR's monthly invoices for the expenses so
incurred and support services so provided and shall comply with the terms of any
agreement binding MPR with respect to such services and premises, including the
lease of such premises.
7.2 POST-CLOSING ACCESS TO BOOKS AND RECORDS. Purchaser and MPR agree that,
subsequent to the Closing Date, they will grant to each other and each other's
agents reasonable access during normal business hours to any books and records
then in their possession or in the possession of their respective affiliates
solely to the extent of information contained in such books and records that
relates to MPR's operation of the SSN Business Unit prior to the Closing Date
and is shown to be needed for tax, accounting, operations or other reasonable
business purposes.
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7.3 ACCOUNTS RECEIVABLE. Purchaser shall provide all reasonable assistance to
MPR with respect to the collection from Customer and Bell Sygma by MPR of any
accounts receivable which relate to the Purchased Assets and which accrued prior
to the Closing. If Purchaser receives payment of any such accounts receivable,
such payment shall be received in trust for MPR and shall forthwith be paid by
Purchaser to MPR. Purchaser shall provide MPR with reasonable details of any
payment received by Purchaser and paid over to MPR pursuant to this Section,
and, if requested by MPR, a full accounting of all such payments received by
Purchaser.
7.4 ASSIGNMENT OF MATERIAL CONTRACTS. For the duration of the Transition Period:
a) MPR will use reasonable efforts, which efforts shall not include an
obligation to expend funds, to obtain assignments of the Material
Contracts or assignments or equivalent rights respecting the Third
Party Licenses;
b) Purchaser shall use reasonable efforts to assist MPR in obtaining
the assignment to Purchaser of all MPR's interest in the Material
Contracts;
c) where assignments of Third Party Licenses cannot be obtained
without incurring out-of-pocket expenses, Purchaser shall use
reasonable efforts to obtain a favourable price for the assignment
or acquisition of equivalent rights, which efforts shall include
seeking the assistance of Purchaser to obtain such favourable
pricing; and
d) Purchaser may use or exploit the software governed by the Third
Party Licenses.
7.5 REIMBURSEMENT FOR ACQUISITION OF THIRD PARTY LICENSES. If, on or before the
end of the Transition Period, Purchaser is unable to obtain assignments of Third
Party Licenses to software reasonably necessary for Purchaser to carry on the
business of the SSN Business Unit as carried on at the Time of Closing, the sole
remedy of Purchaser shall be:
a) Purchaser shall give notice to MPR identifying such software,
including
i) the names, versions, and number of copies of such software,
ii) the cost of obtaining assignments of such licenses or the
purchase of equivalent rights, whichever is less, and
iii) evidence that Purchaser has paid such costs for the purpose of
obtaining such licenses or equivalent rights; and
b) without regard to the limitation set out in Section 3.5, MPR shall
pay to Purchaser, within 30 days of receiving such notice, the
amount actually paid by Purchaser in obtaining such rights,
provided that MPR shall not
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pay to Purchaser any amount on account of obtaining rights to any
software for a higher version number or number of copies than those
specified in Schedule C.
7.6 RESTRICTION ON COMPETITION. The BC Tel Group shall not, for a period of 5
years after the Closing Date, engage, directly or indirectly, in any business
similar to or in competition with the business of Purchaser as such business is
carried on at the Closing Date solely with respect to the development and sale
of hardware products for telecommunications networks "Fault Management" and
"Performance Management" as defined in International Telecommunications Union -
Telecommunications (ITUT) Recommendation M.3010, Principles for a
Telecommunications Management Network, and ITUT Recommendation M.3400, TMN
Management Functions, and the business of the SSN Business Unit as carried on by
MPR prior to the Closing Date.
ARTICLE 8
8. CONFIDENTIAL INFORMATION
8.1 CONFIDENTIALITY. Except as required by law, all information provided to
Purchaser in contemplation of and pursuant to this Agreement and the terms and
conditions of this Agreement shall be kept confidential by Purchaser in
accordance with the terms of the Applied Digital Access Inc. Confidentiality
Agreement dated March 13, 1996 and executed by Purchaser.
8.2 PUBLICITY. No party to this Agreement shall make any public disclosure or
publicity release or disclose the existence of or the terms and conditions of
this Agreement to any other person without the prior written consent of the
other party, except that either party may disclose the existence of this
agreement to: (i) its agents, representatives or others who will assist such
party in conducting, evaluating or facilitating each party's due diligence
review; (ii) its lenders or investors; and (iii) governmental agencies, where
counsel deem such disclosure necessary to comply with applicable laws; provided
that the foregoing shall not be deemed to prevent either MPR or Purchaser from
making any public announcement which may be required by the Securities Exchange
Act of 1934, as amended, and the regulations promulgated thereunder or the rules
and regulations of any securities exchange upon which the securities of MPR or
Purchaser are traded.
ARTICLE 9
9. GENERAL PROVISIONS
9.1 Assignment. Prior to Closing, Purchaser shall not assign all or any part of
this Agreement or any of the rights or obligations of Purchaser under this
Agreement without
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MPR's prior written consent, which consent may be withheld in the complete
discretion of MPR. Notwithstanding the foregoing, Purchaser may assign all or
any part of this Agreement to an Affiliate provided no such assignment shall
relieve Purchaser of its obligations hereunder.
9.2 COUNTERPARTS; FACSIMILE. This agreement may be executed in counterparts with
the same effect as if both parties had signed the same document. All
counterparts shall be construed together and shall constitute one and the same
agreement. This Agreement may be executed by the parties and transmitted by
facsimile transmission and if so executed and transmitted, this Agreement shall
be for all purposes as effective as if the parties had delivered an executed
original Agreement.
9.3 CONFLICT IN TERMS. Wherever any provision of any Schedule to this Agreement
conflicts with any provision in the body of this Agreement, the provisions of
the body of this Agreement shall prevail. All documents executed and delivered
pursuant to this Agreement are subordinate to the provisions of this Agreement
and, except as otherwise expressly provided, the provisions of this Agreement
shall govern and prevail in the event of a conflict between the provisions of
any such document and the provisions of this agreement.
9.4 COSTS AND EXPENSES. Each party shall be responsible for and shall pay its
own costs and expenses incidental to the preparation of and carrying out of this
Agreement and the documents and agreements contemplated hereunder.
9.5 ENTIRE AGREEMENT. This Agreement, including the Schedules thereto, states
and comprises the entire agreement between the parties and shall supersede and
replace any and all prior agreements between the parties and may be amended only
by written instrument signed by both parties.
9.6 FINDER'S FEE. Each party represents that it neither is nor will be obligated
for any finder's fee or commission in connection with this transaction. Each
party agrees to indemnify and hold harmless the other from any liability for any
commission or compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability or asserted liability) for which
the indemnifying party or any of its officers, partners, employees or
representatives is responsible.
9.7 FURTHER ASSURANCES. At Closing and thereafter as may be necessary or
desirable, and without further consideration, each of the parties shall execute,
acknowledge and deliver such other documents, including, without limitation,
assignments of the SSN Intellectual Property included in the Purchased Assets
and shall take or refrain from taking such action as the other party may
reasonably require to evidence, carry out and give full effect to the terms,
conditions, intent and meaning of this Agreement and to assure the completion of
the transactions contemplated hereby.
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9.8 GOVERNING LAW. This Agreement shall governed by and construed in accordance
with the laws of the Province of British Columbia, Canada and the courts of the
Province of British Columbia and appellate courts therefrom shall have exclusive
jurisdiction to determine all matters in dispute hereunder and the parties
hereby attorn to the jurisdiction of such courts.
9.9 NOTICE. Any notice, direction or other instrument required or permitted to
be given hereunder shall be in writing and may be given by facsimile
transmission or by delivery, addressed as follows:
To MPR: MPR Teltech Ltd.
8999 Nelson Way
Burnaby, British Columbia
V5A 4B5
Attention: Mr. Ian Bardsley, President
Telephone No.: (604) 294-1471
Facsimile No.: (604) 293-6161
To Purchaser: Applied Digital Access, Inc.
9855 Scranton Road
San Diego, California
U.S.A. 92121
Attention: President
Telephone No.: (619) 623-2200
Facsimile No.: (619) 623-2208
Either of the parties may from time to time change its address for service
herein by giving written notice to the other party. Any notice may be served by
personal service upon a party or by facsimile to the number for notice
hereunder. Any notice given by service upon a party and any notice given by
facsimile shall respectively be deemed to be given to and received by the
addressee on the day (except Saturdays, Sundays, and statutory holidays) of
service or the day of receipt.
9.10 NO CONSEQUENTIAL LOSSES. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY IN CONTRACT OR IN TORT FOR DAMAGES FOR LOST PROFITS, LOST SAVINGS,
OR INCIDENTAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES IN
CONNECTION WITH THE DELIVERY, IMPORTATION, SALE OR USE OF THE PRODUCTS OR ANY
PART THEREOF OR THIS AGREEMENT, EVEN IF CAUSED BY SUCH PARTY'S NEGLIGENCE AND
EVEN IF SUCH PARTY HAS KNOWLEDGE OF THE POSSIBILITY OF SUCH POTENTIAL LOSS OR
DAMAGE.
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9.11 NO WAIVER. No failure on the part of either party to exercise Any right or
remedy in respect of this Agreement shall operate as a waiver thereof, unless it
is in writing and signed by such party. Unless expressly provided for therein,
such waiver shall not limit or affect the rights of the party with respect to
any other or subsequent breach of the same or any other provision. No single or
partial exercise of any right or remedy in respect of this Agreement shall
preclude any other or further exercise thereof or the exercise of any right or
remedy at law or in equity or by statute or otherwise conferred.
9.12 SEVERABILITY. In the event that any particular provision or provisions of
this Agreement is or are determined to be invalid, illegal or unenforceable in
any respect, then the particular provision or provisions shall be deemed to be
severed from the remainder of this Agreement and the validity, legality or
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired, unless as a result of any such determination
this Agreement would fail in its essential purpose.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date first above written.
APPLIED DIGITAL ACCESS, INC.
by its authorized signatory:
Per:
--------------------------------
Name:
Title:
MPR TELTECH LTD.
by its authorized signatory:
Per:
--------------------------------
Name:
Title:
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