PURCHASE AND SUBSCRIPTION AGREEMENT
This Agreement made in duplicate this 17th day of September, ▇▇▇▇
▇ ▇ ▇ ▇ ▇ ▇ ▇:
POWERTRADER, INC., a corporation
incorporated under the laws of the State of
Delaware, U.S.A.
(hereinafter called "PTI")
OF THE FIRST PART
- and -
458468 B.C. LTD., a corporation
incorporated under the laws of the
Province of British Columbia and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of the
City of Port Coquitlam, in the Province
of British Columbia
(hereinafter called the "Vendor")
OF THE SECOND PART
- and-
POWERTRADER SOFTWARE INC.,
a corporation incorporated under the laws
of the Province of British Columbia
(hereinafter "PTSI")
OF THE THIRD PART
- and -
FINANCIAL MODELS COMPANY INC.
a corporation incorporated under the laws of
the Province of Ontario
(hereinafter called "FMC")
OF THE FOURTH PART
RECITALS
A. Vendor is, or will be at Closing, directly or indirectly, the registered and
beneficial owner of 1,309,696 shares of the Common Stock;
B. At Closing FMC is willing to purchase and the Vendor is willing to sell its
respective interest in the shares of Common Stock on the terms and conditions
contained in this Agreement;
C. Concurrent with the purchase of the shares of Common Stock from the Vendor,
FMC is willing to subscribe for and purchase, and PTI is willing to issue and
sell, 14,000,000 shares of Common Stock on the terms and conditions contained in
this Agreement;
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions. In this Agreement, the following terms shall have the meanings
set out below unless the context requires otherwise:
(1) "Affiliate" means, with respect to any Person, any other Person
who directly or indirectly controls, is controlled by, or is
under direct or indirect common control with, such Person, and
includes any Person in like relation to an Affiliate. A Person
shall be deemed to control a Person if such Person possesses,
directly or indirectly, the power to direct or cause the
direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or
otherwise; and the term "controlled" shall have a similar
meaning.
(2) "Agreement" means this Agreement, including the Exhibits and the
Schedules to this Agreement, as it or they may be amended or
supplemented from time to time, and the expressions "hereof",
"herein", "hereto", "hereunder", "hereby" and similar expressions
refer to this Agreement and not to any particular Section or
other portion of this Agreement.
(3) "Applicable Law" means, with respect to any Person, property,
transaction, event or other matter, any law, rule, statute,
regulation, order, judgement, decree, treaty or other requirement
having the force of law (collectively, the "Law") relating or
applicable to such Person, property, transaction, event or other
matter. Applicable Law also includes, where appropriate, any
interpretation of the Law (or any part thereof) by any Person
having jurisdiction over it, or charged with its administration
or interpretation.
(4) "Assets" means all the properties, assets, interests and rights
of PTI and PTSI including the following:
(a) all rights and interests of PTI and PTSI to and in the
Leased Premises and under the Premises Leases, including
prepaid rents, security deposits and options to renew or
purchase, rights of first refusal under the Premises Leases
and all leasehold improvements owned by PTI and PTSI and
forming part of the Leased Premises;
(b) the inventories;
(c) the Receivables;
(d) all rights and interest under or pursuant to all
warranties, representations and guarantees, express,
implied or otherwise, of or made by suppliers or others in
connection with the Assets;
(e) the Intellectual Property;
(f) the Contracts;
(g) the Licenses and Permits;
(h) the Books and Records;
(i) all prepaid charges, sums and fees paid by PTI and PTSI
before the Closing Time;
(j) all goodwill of PTI and PTSI including the present
telephone numbers, internet domain addresses and other
communications numbers and addresses of the Corporations;
(k) all of the issued and outstanding shares in the capital of
the subsidiaries; and
(l) all proceeds of any or all of the foregoing received or
receivable after the Closing Time.
(5) "Books and Records" means all books, records, files and papers of
PTI and PTSI including (to the extent assignable) computer
programs used by PTI and PTSI in connection with the above,
manuals and data, sales and advertising materials, sales and
purchases correspondence, trade association files, research and
development records, lists of present and former customers and
suppliers, personnel, employment and other records, and the
minute and share certificate books of PTI and PTSI, and all
copies and recordings of the foregoing.
(6) "Business" means the business carried on by PTI and PTSI which
primarily involves the design, development and provision of
software products, internet services and related services to the
financial services sector.
(7) "Business Day" means any day except Saturday, Sunday or any day
on which banks are generally not open for business in the City of
Toronto.
(8) "Canadian Dollar" means the lawful currency of Canada.
(9) "Claim" has the meaning given in Section 8.1.
(10) "Closing" means the completion of the purchase and sale of the
Shares in accordance with the provisions of this Agreement.
(11) "Closing Date" means the Business Day as soon as practicable
after completion of all conditions and due diligence, but in no
event later than October 15, 1998 unless the parties shall
otherwise agree.
(12) "Closing Time" means the time of closing on the Closing Date
provided for in Section 5.1.
(13) "Common Stock" means 14,000,000 authorized but unissued common
shares of PTI U.S.$0.01 par value per share.
(14) "Consents and Approvals" means all consents and approvals
required to be obtained in connection with the execution and
delivery of this Agreement and the completion of the transactions
contemplated by this Agreement or required to carry on the
Business after the Closing Date as the Business is currently
carried on by PTI and PTSI.
(15) "Contracts" means all rights and interests of PTI and PTSI in all
pending and/or executory contracts, agreements, leases and
arrangements to which any of PTI and PTSI is a party or by which
either of PTI or PTSI or any of the Assets or the Business is
bound or affected, as listed in section 7.1(14) and 7.1(15).
(16) "Corporations" is defined in Section 7.1(8).
(18) "Debenture" means the convertible debenture substantially in the
form of Exhibit A hereto.
(19) "Direct Claim" has the meaning given in Section 8.5.
(20) "Director" means a director of PTI; and "Directors" means every
Director.
(21) "Employee" means an individual who is or has been employed by
either PTI or PTSI; and "Employees" means every Employee.
(22) "Employee Plans" has the meaning given in Section 7.1(24).
(23) "Financial Statements" has the meaning given in Section 7.1(12).
(24) "GAAP" means those accounting principles which are recognized as
being generally accepted in the United States from time to time
as set out in the handbook published by the American Institute of
Certified Public Accountants, consistently applied.
(25) "Indemnified Party" means a Person whom the Vendors and PTI and
PTSI or FMC, as the case may be, has agreed to indemnify under
Article 8. "Indemnifying Party" means, in relation to an
Indemnified Party, the Party to this Agreement that has agreed to
indemnify that Indemnified Party under Article 8.
(26) "Intellectual Property" means all of PTI's and PTSI's rights to
and interests in:
(a) all business and trade names, corporate names, brand names
and slogans Related to the Business;
(b) all patents, patent rights, patent applications (including
all reissues, divisions continuations, continuations-
in-part and extensions of any patent or patent
application), industrial designs and applications for
registration or industrial designs and trade secrets
Related to the Business;
(c) all copyrights and trade-marks (whether used with software
or services and including the goodwill attaching to such
trade-marks), registrations and applications for
trade-marks and copyrights Related to the Business; and
(d) all licenses of the intellectual property listed in items
(a) to (c) above.
(27) "Interim Period" means the period from the date of this Agreement
to the date of Closing.
(28) "Knowledge" of any Person means in the case of an individual, the
knowledge of that individual after reasonable inquiry of those
persons who ought reasonably to have knowledge of the matter and
in the case of a corporation, the knowledge of any of the
officers or directors of such corporations after reasonable
inquiry of those persons who ought reasonably to have knowledge
of the matter.
(29) "Leased Premises" means all real property that is leased or
occupied by PTI or PTSI under the Premises Leases.
(30) "Liabilities" means all costs, expenses, charges, debts,
liabilities, claims, demands and obligations, whether primary or
secondary, direct or indirect, fixed, contingent, absolute or
otherwise, under or in respect of any contract, agreement,
arrangement, lease commitment or undertaking, Applicable Law and
Taxes.
(31) "License Agreement" means the agreement providing FMC with use of
the source code for DataMill and associated documentation,
substantially in the form of Exhibit B hereto.
(32) "Lien" means any lien, mortgage, charge, hypothec, pledge,
security interest, prior assignment, option, warrant, lease,
sublease, right to possession, encumbrance, claim, right or
restriction which affects, by way of a conflicting ownership
interest or otherwise, the right, title or interest in or to any
particular property.
(33) "Material Adverse Change" means a change in the Business, Assets
or capital of PTI and PTSI which has had or is reasonably likely
to have a significant adverse effect on the value of the Shares.
(34) "Notices" means the notices required to be given to any Person
under Applicable Law or pursuant to any contract or other
obligation to which either of PTI or PTSI is a party or by which
either of PTI or PTSI is bound or which is applicable to any of
the Assets in connection with the execution and delivery of this
Agreement or the completion of the transactions contemplated by
this Agreement or the carrying on of the Business after the
Closing as the Business is currently carried on by the PTI and
PTSI.
(36) "Officer" means an officer of any of ▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ BC Ltd.;
and "Officers" means every Officer.
(38) "Party" means a party to this Agreement and any reference to a
Party includes its successors and permitted assigns; and
"Parties" means every Party.
(39) "Permitted Liens" means the mortgages, charges and other liens
listed in Schedule 1.1(39)
(40) "Person" is to be broadly interpreted and includes an individual,
a corporation, a partnership, a trust, an unincorporated
organization, the government of a country or any political
subdivision thereof or any agency or department of any such
government, and the executors, administrators or other legal
representatives of an individual in such capacity.
(41) "Preferred Stock" means the authorized but unissued shares of
Preferred Stock having those rights and privileges as are set
forth in Schedule 1.1(41).
(42) "Premises Leases" means all the leases, agreements to lease,
subleases, licence agreements and occupancy or other agreements
relating to the Leased Premises.
(43) "Purchase Price" has the meaning given in Section 2.1.
(44) "Purchaser's Solicitors" means ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
(45) "Receivables" means all accounts receivable, bills receivable,
trade accounts, book debts and insurance claims of PTI and PTSI
together with any unpaid interest accrued on such items and any
security or collateral for such items, including recoverable
deposits, but excluding any amounts owing to or from Affiliates.
(46) "Regulation S" means Regulation S adopted by the United States
Securities and Exchange Commission under the Securities Act.
(47) "Related to the Business" means used in, arising from or relating
in any manner to the Business.
(48) "SEC" means the United States Securities and Exchange Commission.
(49) "Securities Act" means the U.S. Securities Act of 1933, as
amended.
(50) "Securities Laws" means, collectively, (i) the Securities Act;
(ii) the Securities Exchange Act of 1934, as amended; and (iii)
Canadian provincial and federal securities laws.
(51) "Shares" means collectively, the Vendor's shares of Common Stock,
the Common Stock to be issued by PTI in accordance with Section
2.2 hereof, and the Preferred Stock of PTI and "Share" means any
such shares.
(52) "Software" means all rights to and interest in the computer
application programs, associated information processing
technology, databases, procedures and data files, comprising,
without limitation, PowerTrader Analyst, PowerTrader Data Mill,
PowerTrader Pro, Investors On-Line, and the QuoteDesk, provided
by PTI and/or PTSI and all copyrights therein, and technology,
computer programs and other computer software (including systems
and applications), source code, object code, algorithms and
architecture related thereto.
(53) "Subscription Price" has the meaning given in Section 2.2.
(53) "Taxes" (individually, "Tax") means all taxes, charges, fees,
levies, imposts, and other assessments, including all income,
sales, use, goods and services, value added, capital, capital
gains, alternative, net worth, transfer, profits, withholding,
payroll, employer health, excise, franchise, real property and
personal property taxes, and any other taxes, custom duties,
fees, assessments or similar charges in the nature of a tax
including Canada Pension Plan and provincial pension plan
contributions, unemployment insurance payments and workers'
compensation premiums, together with any instalments with respect
thereto, and any interest, fines and penalties imposed by any
governmental authority, (including federal, state, provincial,
municipal and foreign governmental authorities), and whether
disputed or not.
(54) "Third Party Claim" has the meaning given in Section 8.5.
(55) "United States" means the United States of America, its
territories and possessions, any State of the United States and
the District of Columbia.
(56) "U.S. Person" means a U.S. Person as that term is defined in
Regulation S under the Securities Act.
(57) "Vendor" means 458468 B.C. Ltd.
(58) "Vendor's Shares" means the 1,309,696 shares of Common Stock
owned by 458468 B.C. Ltd.
(59) "Vendor's Solicitors" means Gallop, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇. for
PTI and the Vendor and Kerr, Redekop, Leinburd & ▇▇▇▇▇▇▇ for
PTSI.
1.2 Headings and Table of Contents. The division of this Agreement into Articles
and Sections, the insertion of headings, and the provision of any table of
contents are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
1.3 Number and Gender. Unless the context requires otherwise, words importing
the singular include the plural and vice versa and words importing gender
include all genders.
1.4 Business Days. If any payment is required to be made or other action is
required to be taken pursuant to this Agreement on a day which is not a Business
Day, then such payment or action shall be made or taken on the next Business
Day.
1.5 Currency and Payment Obligations. Except as otherwise expressly provided in
this Agreement:
(1) all dollar amounts referred to in this Agreement are stated in
Canadian Dollars; and
(2) any payment contemplated by this Agreement shall be made by cash,
certified cheque or any other method that provides immediately
available funds.
1.6 Statute References. Any reference in this Agreement to any statute or any
section thereof shall, unless otherwise expressly stated, be deemed to be a
reference to such statute or section as amended, restated or re-enacted from
time to time.
1.7 Section and Schedule References. Unless the context requires otherwise,
references in this Agreement to Sections, Exhibits or Schedules are to Sections,
Exhibits or Schedules of this Agreement. The Exhibits and Schedules to this
Agreement are as follows:
EXHIBITS
--------
A. Convertible Debenture
B. Licence Agreement
SCHEDULES
---------
1.1(39) Permitted Liens
1.1(41) Preferred Stock
7.1(2) Authorized Capital
7.1(6) Ownership of Shares
7.1(8) Organization of Corporations
7.1(12) Financial Statements
7.1(13) Assets
7.1(14) Leased Premises
7.1(15) Material Contracts
7.1(17) Intellectual Property and Software
7.1(20) Consents and Approvals
7.1(22) Litigation
7.1(23) Employment Contracts
7.1(24) Employees Plans
7.1(25) Suppliers
7.1(26) Product Warranties
7.1(27) Affiliated Transactions
7.1(28) Intercompany Services
7.1(29) Filings
7.1(31) Tax Paid
ARTICLE 2
PURCHASE OF SHARES
2.1 Agreement to Purchase Vendor's Shares. At the Closing Time, subject to the
terms and conditions of this Agreement, 458468 B.C. Ltd. shall sell to FMC, and
FMC shall purchase from the Vendor, 1,309,696 shares of Common Stock at a price
of US$0.01 per Common Shares for aggregate proceeds to the Vendor of
US$13,096.96 (the "Purchase Price"):
2.2 Agreement to Purchase and Issue Shares. At the Closing Time, subject to the
terms and conditions of this Agreement, FMC agrees to subscribe for and purchase
from PTI, and PTI agrees to issue and sell to FMC, 14,000,000 shares of
authorized but unissued Common Stock at a price of US$0.01 per share for
aggregate proceeds of US$140,000. (the "Subscription Price").
2.3 Amount of Purchase Price and Subscription Price. The total of the Purchase
Price and the Subscription Price payable by FMC for Shares shall be
US$153,096.96. (the "Total Purchase Price").
2.3.1 Deposit on Purchase Price and Subscription Price. FMC, upon execution of a
letter of intent, dated 27th August, 1998, deposited with PTI and 458468 BC
Ltd., US$10,000 each for the benefit of PTI and the Vendor, respectively. FMC
agrees the deposit in favour of the Vendor shall be non-refundable, payable
immediately upon execution of the aforesaid letter of intent and applied by the
Vendors to the Purchase Price at Closing Time. The deposit in favour of PTI
shall be applied to the Subscription Price at Closing Time or, in any event,
paid to PTI on 11th September, 1998; provided, however, that the deposit in
favour of PTI shall be refunded to FMC in the event that:
(1) PTI unreasonably fails to complete the transaction contemplated
by this Agreement; or
(2) Any of the following matters are reasonably established as a
result of due diligence by FMC, to its sole satisfaction, to be
materially inaccurate on or before Closing:
(a) PTI and PTSI have developed a set of software products for
use by securities professionals and private investors to
manage, process and analyse transactions and related
information via the Internet. In addition, PTI and PTSI
have developed certain complementary data acquisition and
trading software for the investment industry. As of the
27th August, 1998 and as of the Closing Time, the Software
is in good working condition, free of material defects,
time bombs, viruses, trap doors and hidden access codes,
and when operated on suitable computer equipment functions
properly and consistently with the documentation thereof.
(b) The documentation and specifications associated with the
above Software are of sufficient clarity and quality, such
that a software developer of reasonable competence and
ability can, upon the expenditure of no more than three
months of effort, implement and cause the Software to
operate successfully in an appropriate computer
environment.
(c) There are no known legal actions or other legal proceedings
that have been instituted or are pending against either PTI
or PTSI, except for a commercial contract dispute with
Digidyne which dispute does not affect in any PTI's or
PTSI's rights to and in the Software.
(d) FMC is satisfied as to any other matters which it
reasonably determines are relevant in the context of this
transaction.
2.4 Payment of Purchase Price and Subscription Price. The Purchase Price and
Subscription Price, after credit for the relevant Deposits provided for above,
shall be paid and satisfied by FMC by certified cheque, bank draft or wire
transfer at the Closing Time.
ARTICLE 3
QUALIFICATION
3.1 PTI shall, on or before the Closing Time, take or cause to be taken,
including the passing of requisite resolutions of the directors of PTI, all
actions to provide for the issuance of the 14,000,000 shares of Common Stock and
to designate the terms and conditions attaching to the Preferred Stock by filing
a certificate pursuant to the applicable law of the State of Delaware, to
establish the number of Preferred Shares to be included in any series, and to
fix the designation, powers, preferences and rights of the Preferred Shares and
the qualifications, limitations or restrictions thereof in accordance with
Schedule 1.1(41) hereof. In addition, PTI shall, on or before the Closing Time,
take or cause to be taken, including the passing of requisite resolutions of the
directors of PTI, all actions to provide for the issuance of the Debenture in
favour of FMC at such time or times as FMC may determine to loan funds to PTI,
on terms generally in accordance with those contained in the draft debenture
attached hereto as Exhibit B.
3.2 All actions required to be taken by or on behalf of PTI so as to permit FMC
to purchase the authorized but unissued 14,000,000 Common Shares and the
Vendor's Shares pursuant to regulatory exemptions pursuant to the Securities
Laws shall have occurred on or prior to the Closing Time.
ARTICLE 4
DUE DILIGENCE
4.1 The Vendor, PTI and PTSI shall allow and assist FMC and its representatives
to conduct all due diligence investigations of, without limitation, the
business, the corporate records, the shareholder lists, products, customer
lists, environmental condition, results of operation, financial condition,
assets, liabilities, obligations and business prospects which FMC may reasonably
require on or before Closing.
ARTICLE 5
CLOSING ARRANGEMENTS
5.1 Closing. The Closing shall take place at 10:00 a.m. on the Closing Date at
the offices of the Purchaser's Solicitors, or at such other time on the Closing
Date or such other place as may be agreed orally or in writing by the Vendor,
PTI, and FMC.
5.2 Vendors' Closing Deliveries. At the Closing, each of the Vendor, PTI and
PTSI shall deliver or cause to be delivered to FMC the following documents, as
applicable:
(1) the certificate or certificates representing the Common Stock;
(3) a transfer of the Vendor's Shares in a form to be agreed upon by
the Parties, acting reasonably, duly executed by the Vendor;
(4) a bring-down certificate of PTI, PTSI and 458468 B.C. Ltd. in a
form to be agreed upon by the Parties, acting reasonably;
(5) a corporate certificate of the Secretary or other officer of each
of PTI, PTSI and 458468 B.C. Ltd. in a form to be agreed upon by
the Parties, acting reasonably;
(6) evidence in form satisfactory to FMC, acting reasonably, that the
Consents and Approvals required to be obtained by the 458468 B.C.
Ltd. or PTI and PTSI have been obtained;
(7) an opinion of the Vendors' Solicitors addressed to FMC in a form
to be agreed upon by the Parties, acting reasonably;
(8) the License Agreement, duly executed by PTI; and
(9) all such other assurances, consents, agreements, documents and
instruments as may be reasonably required by FMC to complete the
transactions provided for in this Agreement.
5.3 FMC's Closing Deliveries. At the Closing, FMC shall deliver or cause to be
delivered to the Vendors and PTI and PTSI, as applicable, the following
documents and payments:
(1) a bring-down certificate of the President or other senior officer
of FMC dated as of the Closing Date in a form to be agreed upon
by the Parties, acting reasonably;
(2) a corporate certificate of the Secretary or other officer of FMC
in a form to be agreed upon by the Parties, acting reasonably;
(3) the payments referred to in Section 2.2;
(4) evidence in form satisfactory to the Vendors, acting reasonably,
that the Consents and Approvals required to be obtained by FMC
have been obtained;
(5) an opinion of the Purchaser's Solicitors addressed to the Vendors
in a form to be agreed upon by the Parties, acting reasonably;
(6) all such other assurances, consents, agreements, documents and
instruments as may reasonably be required by the Vendors to
complete the transactions provided for in this Agreement.
ARTICLE 6
CONDITIONS OF CLOSING
6.1 FMC's Conditions. FMC shall not be obliged to complete the purchase and sale
of the Vendor's Shares or the subscription for the Common Stock pursuant to this
Agreement unless, at or before the Closing Time, each of the following
conditions has been satisfied, it being understood that the following conditions
are included for the exclusive benefit of FMC and may be waived, in whole or in
part, only in writing by FMC at any time; and the Vendor, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, PTI
and PTSI agree with FMC to take all such actions, steps and proceedings as are
reasonably within their control as may be necessary to ensure that the following
conditions are fulfilled at or before the Closing Time:
(1) Representations and Warranties. The representations and
warranties of the Vendor PTI and PTSI in Section 7.1 shall be
true and correct at the Closing in all material respects.
(2) Vendor's/Corporations' Compliance. The Vendor and the
Corporations shall have materially performed and complied with
all of the terms and conditions in this Agreement on their part
to be performed or complied with at or before Closing and shall
have furnished or caused to have been furnished to FMC such
certificates, affidavits or statutory declarations of the
Corporations and of the Vendor or of officers of the Corporation
and of the Vendor as FMC or FMC's counsel may reasonably think
necessary in order to establish that the terms, covenants and
conditions contained in this Agreement to have been performed or
complied with by the Vendor or by the Corporations, as the case
may be, at or prior to the time of Closing have been performed
and complied with and that the representations and warranties of
the Vendor and the Corporations herein given are true and correct
at the Closing.
(3) Material Adverse Change. During the Interim Period, there shall
have been no Material Adverse Change.
(4) No Litigation. There shall be no litigation or proceedings other
than as herein disclosed:
(a) pending or threatened against any of the Parties or against
any of their respective Affiliates or any of their
respective directors or officers, for the purpose of
enjoining, preventing or restraining the completion of the
transactions contemplated by this Agreement; or
(b) pending or threatened against any of the Parties or against
any of their respective Affiliates or any of their
respective directors or officers which:
(i) in the result, could adversely affect the right of
FMC to acquire or retain the Shares; or
(ii) in the reasonable judgment of FMC, would have a
substantial and adverse impact on the Business.
(5) Directors and Officers. All directors and officers of the
Corporations specified by FMC shall resign as at the Closing Time
and such nominees as FMC may specify shall be appointed as
directors and officers as at the Closing Time. All directors and
officers of the Corporations shall, upon their resignation,
release the Corporations from any and all possible claims against
the Corporations (other than for indemnification under Article
VIII of the Bylaws and for any indebtedness owed by the
Corporations to such person) arising from any act, matter or
thing arising at or prior to the Closing Date.
(6) Transfer of Shares/Designation of Preferred Stock. All necessary
steps and proceedings shall have been taken by 458468 B.C. Ltd.
to permit the 1,309,696 shares of Common Stock to be duly and
regularly transferred to and registered in the name of FMC. All
necessary steps and proceedings shall have been taken by PTI to
(i) permit the issuance of the 14,000,000 authorized shares of
Common Stock to be registered in the name of FMC, and (ii) to
establish the designation, powers, preferences and rights of the
Preferred Stock and the qualifications, limitations or
restrictions thereof as set forth in Schedule 1.1(41).
(7) Consents and Approvals. All the Consents and Approvals have been
obtained, including Consents and Approvals:
(a) in connection with any shareholders agreement, indenture,
lease, deed of trust, mortgage, loan agreement, or other
material agreements Related to the Business; and
(b) in connection with any credit agreement and any related
security agreements entered into by the Vendors, the
Corporations or their Affiliates; and
(c) in connection with the issuance to FMC of a Debenture to
secure monies to be advanced by FMC to PTI after the
Closing.
(8) License Agreement. FMC and PTI shall have entered into the
Licence Agreement.
(9) Obligations of 458468 B.C. Ltd. At Closing 458468 B.C. Ltd. shall
have executed a Consultant Agreement with PTSI for the services
of ▇▇▇▇▇▇▇ and shall have cancelled all prior such agreements
with PTSI and shall have acknowledged the surrender and expiry of
350,000 options to purchase shares of Common Stock of PTI.
(10) Form and Legality. The form and legality of all matters
incidental to the sale by the Vendors and the Corporations and
the purchase by FMC of the Shares shall be subject to the
approval of FMC's Solicitors.
6.2 Condition not Fulfilled. If any condition in Section 6.1 has not been
fulfilled in all material respects at or before the Closing Time, and unless the
Parties have agreed to extend the Closing Date, then FMC may, in its sole
discretion, without limiting any rights or remedies available to FMC at law or
in equity, either:
(1) terminate this Agreement by notice to the Vendor PTI and PTSI in
which event FMC shall be released from its obligations under this
Agreement to complete the purchase of the Shares; or
(2) waive compliance with any such condition without prejudice to its
right of termination in the event of non-fulfilment of any other
condition.
6.3 Vendor's/Corporations' Conditions. The Vendor PTI and PTSI shall not be
obligated to complete the transactions contemplated by this Agreement unless, at
or before the Closing Time, each of the following conditions has been satisfied,
it being understood that the following conditions are included for the exclusive
benefit of the Vendor PTI and PTSI, and may be waived, in whole or in part, only
in writing by the Vendor PTI and PTSI at any time; and FMC agrees with the
Vendor PTI and PTSI to take all such actions, steps and proceedings as are
reasonably with FMC's control as may be necessary to ensure that the following
conditions are fulfilled at or before the Closing Time:
(1) Representations and Warranties. The representations and
warranties of FMC in Section 7.2 shall be true and correct at the
Closing in all material respects.
(2) FMC's Compliance. FMC shall have materially performed and
complied with all of the terms and conditions in this Agreement
on its part to be performed or complied with at or before the
Closing Time and shall have furnished or caused to have been
furnished to the Vendor, PTI and PTSI such certificates,
affidavits or statutory declarations of FMC or of officers of FMC
as the Vendor, PTI and PTSI or their respective counsel may
reasonably think necessary in order to establish that the terms,
covenants and conditions contained in this Agreement to have been
performed or complied with by FMC at or prior to the time of
Closing have been performed and complied with and that the
representations and warranties of FMC herein given are true and
correct at Closing.
(3) Consents and Approvals. All of the Consents and Approvals to be
obtained by FMC shall have been obtained.
6.4 Condition not Fulfilled. If any condition in Section 6.3 shall not have been
fulfilled at or before the Closing Time, and unless the Parties have agreed to
extend the Closing Date, and without limiting any rights or remedies available
to the Vendor or PTI and PTSI at law or in equity, then:
(1) any of the Vendors or PTI and PTSI may, in their sole discretion,
terminate this Agreement by notice to FMC, in which event all of
the Vendors and PTI and PTSI shall be released from all
obligations under this Agreement; or
(2) all of the Vendors and PTI and PTSI may, in their sole
discretion, waive compliance with any such condition without
prejudice to any right of termination they may have in the event
of non-fulfillment of any other condition.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 Representations and Warranties of the Vendors and the Corporations. As a
material inducement to FMC's entering into this Agreement and completing the
transactions contemplated by this Agreement, and acknowledging that FMC is
entering into this Agreement in reliance upon the representations and warranties
set out in this Section 7.1, the Vendors, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and PTI and PTSI
jointly and severally represent and warrant to FMC as follows:
(1) Incorporation and Authorization. Each of PTI, PTSI and 458468
B.C. Ltd. is a corporation duly incorporated under the laws of
the jurisdiction of its organization and is duly organized,
validly subsisting and in good standing under such laws, and each
has all necessary corporate power, authority and capacity to
enter into this Agreement and all other agreements and
instruments to be executed by them as contemplated by this
Agreement and carry out their obligations under this Agreement
and such other agreements and instruments. Each of the Vendors
and Corporations has all necessary capacity and authority to
execute this Agreement and to perform their respective
obligations hereunder. The execution and delivery of this
Agreement and such other agreements and instruments and the
completion of the transactions contemplated by this Agreement and
such other agreements and instruments have been duly authorized
by all necessary corporate action on the part of PTI, PTSI and
458468 B.C. Ltd.
(2) Authorized Capital. As of the date hereof, the only authorized
and issued and outstanding shares in the capital of PTI and PTSI
are set out in Schedule 7.1(2). Except as set forth in Schedule
7.1(2), there are outstanding no other shares, warrants, rights
or securities convertible into shares or other evidence
whatsoever of an interest in the Corporations and no shares of
the Corporations are under option or are agreed to be
conditionally or unconditionally issued, except pursuant to this
Agreement. As at the Closing Date, the rights, privileges,
restrictions and conditions attached to the shares of Preferred
Stock as are set out in Schedule 1.1(41) and of the shares of
Common Stock outstanding are as set out in Schedule 7.1(2).
(3) Dividends. No dividends have been declared or paid on or in
respect of the Shares and no other distribution on any of its
securities or shares has been made by either of the Corporations
since June 30, 1998.
(4) Enforceability of Obligations. This Agreement constitutes a valid
and binding obligation of the Vendors and the Corporations
enforceable against each of the Vendors and the Corporations in
accordance with its terms, subject, however, to limitations on
enforcement imposed by bankruptcy, insolvency, reorganization or
other laws affecting the enforcement of the rights of creditors
and others and to the extent that equitable remedies such as
specific performance and injunctions are only available in the
discretion of the court from which they are sought. Neither of
the Vendors is an insolvent person within the meaning of the
Bankruptcy and Insolvency Act (Canada) and the U.S. Bankruptcy
Code and will not become an insolvent person as a result of the
Closing.
(5) Residence of Vendors. The Vendor is not a non-resident of Canada
for purposes of Section 116 of the Income Tax Act (Canada).
(6) Ownership of Common Shares. 458468 B.C. Ltd. will be at the
Closing Time the registered and beneficial holder of the number
of shares of Common Stock specified in Section 2.1 with good and
marketable title thereto, free and clear of all Liens and at the
Closing shall transfer to FMC good and valid title to such Common
Stock, and such shares are all of the issued and outstanding
shares of Common Stock owned beneficially by 458468 B.C. Ltd. in
PTI, save and except for a further 65,000 shares of Common Stock
to be retained by 458468 B.C. Ltd. Except as set out in Schedule
7.1(6), no Person other than FMC has any agreement, option, right
or privilege capable of becoming an agreement for the purchase
from 458468 B.C. Ltd. of any of the Common Stock.
(7) Issuance of Shares to FMC. The Common Stock issued at Closing by
PTI to FMC will be validly authorized and issued, fully paid up
and non-assessable.
(8) Organization of the Corporations.
(a) The information set out in Schedule 7.1(8) concerning the
name and jurisdiction of incorporation, and the directors
and officers of each of PTI, PTSI and 458468 B.C. Ltd.
(the "Corporations" or the "Corporation", as applicable) is
true and complete.
(b) PTI owns all of the issued and outstanding shares of PTSI
and New Financial Publishing L.L.C.;
(c) The Corporations are incorporated and validly subsisting
under the laws of their jurisdiction of incorporation.
(d) Each Corporation is licensed or qualified to do business
under the laws of the jurisdictions specified in Schedule
7.1(8) and neither the character nor the location of the
properties owned by any Corporation nor the nature of the
business conducted by it requires licensing or
qualification under the laws of any other jurisdiction.
Each Corporation has full corporate power to carry on its
business and to own and operate its assets, properties and
business as now carried on and owned and operated. Except
as set forth in Schedule 7.1(2), there are no rights,
subscriptions, warrants, options, conversion rights, calls,
commitments or plans or agreements of any kind outstanding
which would enable any Person to purchase or otherwise
acquire any shares or other securities of any Corporation
including, without limitation, any securities convertible
into or exchangeable or exercisable for shares or other
securities of any Corporation.
(9) Corporate Records. The minute book of each of PTI and PTSI, save
as noted in Schedule 7.1(9) hereto, contains true, correct and
complete copies, in all material aspects, of its articles, its
by-laws, the minutes of every meeting of its board of directors
and every committee thereof and of its shareholders and every
written resolution of its directors and shareholders. The share
register of shareholders, register of transfers and register of
directors and officers of each Corporation are complete and
accurate in all material respects. In those matters where any
minute book aforesaid requires the execution of further
documents, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ undertakes and agrees to provide such
assistance as is reasonably requested by FMC in order to make
such minute book true, correct and complete.
(10) Bankruptcy. Neither PTI nor PTSI has made an assignment in favour
of its creditors nor a proposal in bankruptcy to its creditors or
any class thereof nor had any petition for a receiving order
presented in respect of it. No Corporation has initiated
proceedings with respect to a compromise or arrangement with its
creditors or for its winding up, liquidation or dissolution. No
receiver has been appointed in respect of any Corporation or any
of the Assets and no execution or distress has been levied upon
any of the Assets.
(11) SEC Reports and Financial Statements. PTI has filed with the SEC,
and has heretofore made available to FMC, true and complete
copies of, all forms, reports, schedules, statements and other
documents required to be filed by it since August 22, 1996 under
the Securities Laws, excluding Form-10KSB for the fiscal year
ended June 30, 1998, ( collectively, the "PTI SEC Documents"). As
of their respective dates or, if amended, as of the date of the
last such amendment, the PTI SEC Documents, including without
limitation, any financial statements or schedules included
therein (a) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading and (b) complied in all material respects with the
applicable requirements of the Securities Laws, and the
applicable rules and regulations of the SEC thereunder. None of
PTI's subsidiaries is required to file any forms, reports or
other documents with the SEC.
(12) Financial Statements. The Corporations have furnished FMC with
the annual audited consolidated financial statements of PTI for
the fiscal year ended June 30, 1997, together with unaudited
consolidated financial statements for the periods ended June 30,
1998 and August 31, 1998 (the "Financial Statements"), true and
complete copies of which are annexed as Schedule 7.1(12). The
balance sheets contained in such Financial Statements present
fairly, in all material respects, the financial position of the
Corporations as of their respective dates and the results of its
operations for the periods indicated, in accordance with U.S.
GAAP consistently applied.
(13) Title to Assets. The Corporations have good and marketable title
to all the Assets, free and clear of any and all Liens, except
for Permitted Liens. The Assets are sufficient to permit the
continued operation of the Business in substantially the same
manner as conducted on the date of this Agreement. Schedule
7.1(13) sets out a complete and accurate list of all locations
where the Assets are situate. There is no agreement, option or
other right or privilege outstanding in favour of any Person for
the purchase from the Corporations of the Business or of any of
the Assets out of the ordinary course of business except as set
forth in Section 7.1(13).
(14) Leased Premises. Schedule 7.1(14) lists all the Premises Leases
and describes accurately the lease agreements relating thereto.
FMC has received a true and complete copy of such lease
agreements. Each Premises Lease is in full force and effect,
unamended by oral or written agreement, and the Corporations are
entitled to the full benefit and advantage of such Premises Lease
in accordance with the terms thereof. Except as set forth in
Schedule 7.1(14) each Premises Lease is in good standing and
there has not been any material default by any of the
Corporations, and to the Knowledge of the Corporations, by any
other party thereto under any Premises Lease nor are the
Corporations aware of any material dispute between any
Corporation and any landlord under any of the Premises Leases.
None of the Premises Leases has been assigned by a Corporation in
favour of any Person. The current uses of the Leased Premises
comply with Applicable Law.
(15) Contracts. Schedule 7.1(15) lists all the Contracts and the
status of each of such Contracts, other than the Premises Leases,
and the Corporations have provided true and complete copies of
same to FMC. Except as set forth in Schedule 7.1(15) no
Corporation is in material default under any Contract and there
has not occurred any event which, with the lapse of time or
giving of notice or both, would constitute a default under any
Contract by an Corporation or to the Knowledge of the
Corporations, any other party to the Contract. Except as set
forth in Schedule 7.1(15) each Contract is in full force and
effect, unamended by written or oral agreement, and the
Corporation is entitled to the full benefit and advantage of each
Contract in accordance with its terms. No Corporation has
received any notice of a default by the Corporation or a dispute
between the Corporation and any other party in respect of any
Contract. Neither Corporation is a party to or bound by any
contract or commitment to pay any royalty, licence fee or
management fee, save as disclosed in Schedule 7.1(15).
(16) Receivables. The Receivables are valid obligations which arose in
the ordinary course of business and to the Knowledge of the
Corporations will be collected in the ordinary course of
business, in the aggregate, at their full face value subject to
the usual reservation for bad debts, which reservation is
adequate for all reasonably foreseeable events.
(17) Intellectual Property and Software.
(a) Schedule 7.1(17) lists all of the registrations and
applications for registration of any material Intellectual
Property and Software. All of the registrations and
applications for registration of any material Intellectual
Property are valid and subsisting in good standing and are
recorded in the name of the Corporations.
(b) Except as set forth in Schedule 7.1(17)(b), the
Corporations have the exclusive right to use, sell, license
and dispose of, and have the right to bring actions for
infringement of any material Intellectual Property and
Software.
(c) The Corporations are the sole owners, except as set out in
Schedule 7.1(17), of the Intellectual Property and the
Software free of any and all claims of interest by any
third party, and are entitled to the exclusive and
uninterrupted use of the Intellectual Property and Software
without payment of any royalty or other fees.
(d) The Corporations have made every reasonable effort to
protect their legal rights to the use of the Intellectual
Property and the Software. Subject to the licenses granted
by the Corporations, no other Person has any right, title
or interest in any of the Software. Except as described in
Schedule 7.1(17), and except as provided in a Software
Security Agreement between PTI and West Coast Title Search
Ltd. of November, 1997, all copies of any software forming
a part of the Software have been disclosed or distributed
solely in Object Code form and subject to agreements with
appropriate copyright and confidentiality restrictions and
limitations of liability. Except as described in Schedule
7.1(17), the Source Code for any of the Software has not
been delivered to any Person by or on behalf of the
Corporations.
(e) Schedule 7.1(17 ) lists all current litigation, including
all pending or to the Knowledge of the Corporations,
threatened actions, suits or claims, relating to the
Intellectual Property and/or the Software.
(e) Except as listed in Schedule 7.1(17), all employees and
independent contractors of each Corporation and other
Persons involved in the development of the Software and the
trade secrets included in the Intellectual property since
May 2, 1997 have entered into non-disclosure agreements
pursuant to which they have agreed to maintain the
confidentiality of the Software and of such trade secrets
included in the Intellectual Property, have assigned all
rights they may have in such Software and trade secrets to
the Corporations and no shareholder, officer, director or
employee of the Corporations, or any other Person, has any
right, title or interest in any of the Software or the
Intellectual Property.
(f) To the Knowledge of the Corporations, no Person has
infringed or misappropriated the Corporations' rights to
the Intellectual Property.
(g) To the Knowledge of the Corporations, there is no
governmental prohibition or restriction on the use of the
Intellectual Property.
(h) All of the Corporations' permissions and licences to use
intellectual property of other Persons in relation to or in
connection with the Software which is embodied in the
Software and which is material to the operation of the
Software (excluding commercial off-the-shelf software) are
disclosed in Schedule 7.1(17). Except as disclosed in
Schedule 7.1(17), the Software does not contain nor embody
any third party intellectual property, including software,
development tools and utilities material to the performance
of the Software. All such licences referred to in Schedule
7.1(17) are in full force and effect and neither the
Corporations nor the other party to any such licence is in
default of its obligations thereunder.
(i) To the Knowledge of the Corporations, neither the
manufacture, marketing, sale, license or use of any
Software or services based upon the Software currently
manufactured, marketed, licensed, sold, provided or used by
the Corporations violates, in any material way, any licence
or agreement of the Corporations with any Person or
infringes upon, or constitutes misappropriation of, the
intellectual property rights of any other Person, whether
common law or statutory, including rights relating to
defamation, rights of privacy or publicity and contractual
rights.
(l) The computer software comprising part of the Software is in
good operating condition and functions in accordance with
the specifications described in the documentation related
thereto, and to the Knowledge of the Corporations, is free
from material errors in design and material operating
defects. All source code for the computer software
comprising part of the Software is sufficiently documented
in the source code or in the associated documentation to
enable a software developer reasonably skilled in such
environment to understand, modify, compile and otherwise
utilize all aspects of the Software within a reasonable
time.
(18) Licences and Permits. The Corporations hold all Licences and
Permits required to carry on the Business free and clear of any
and all Liens, other than Permitted Liens, and all such Licences
and Permits are in full force and effect, no Corporation is in
violation of any term or provision or requirement of any such
Licences and Permits, and no Person has threatened to revoke,
amend or impose any condition in respect of, or commenced
proceedings to revoke, amend or impose conditions in respect of,
any such Licence or Permit.
(19) Undisclosed Liabilities. The Corporations do not have any
liabilities, obligations, indebtedness or commitments, whether
accrued, absolute, contingent or otherwise, which are not
disclosed in the Financial Statements or referred to or disclosed
herein, other than liabilities, obligations and indebtedness
incurred in the normal course of business since the date of the
Financial Statements.
(20) Consents and Approvals. All the Consents and Approvals are listed
in Schedule 7.1(20). Except for the Consents and Approvals, no
consent or approval of any Person is required in connection with
the execution and delivery of this Agreement and the completion
of the transactions contemplated by this Agreement or to permit
the Corporations to carry on the Business after the Closing as
the Business is currently carried on by the Corporations.
(21) Absence of Conflicting Agreements. The execution, delivery and
performance of this Agreement by the Vendors and the Corporations
and the completion (with any required Consents and Approvals) of
the transactions contemplated by this Agreement do not and will
not result in or constitute any of the following:
(a) a material default, breach or violation or an event that,
with notice or lapse of time or both, would be a material
default, breach or violation of any of the terms,
conditions or provisions of the articles or by-laws of the
Corporations;
(b) an event which, pursuant to the terms of any Contract or
Licence or Permit, causes any right or interest of any
Corporation to come to an end or be amended in any way that
is detrimental to the Business or entitles any other Person
to terminate or amend any such right or interest;
(c) the creation or imposition of any Lien on any Asset; or
(d) the violation of any Applicable Law by any of the Vendors
or the Corporations.
(22) Litigation. Except as set out in Schedule 7.1(22), there is no
action, suit, proceeding, claim, application, complaint or
investigation in any court or before any arbitrator or before or
by an regulatory body or governmental or non-governmental body
pending or threatened by or against any Corporation Related to
the Business or affecting the Business or the operation or
capital of the Corporations or the transactions contemplated by
this Agreement, and, to the Knowledge of the Corporations and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, there is no factual or legal basis which is
reasonably likely to give rise to any such action, suit,
proceeding, claim, application, complaint or investigation.
(23) Employment Contracts. Schedule 7.1(23) lists, as of the date of
this Agreement, the compensation and benefit of each of the
senior employees and directors of the Corporations and the
Corporations have provided true and complete copies of same to
FMC. To the Knowledge of the Corporations, the Corporations are
in compliance with all Applicable Laws relating to Employees and
terms of employment and, except as set out in Schedule 7.1(23)
are not a party to or bound by any additional or other contracts
for the employment of any senior employee or director or any
bonus, deferred compensation, profit sharing, retirement,
hospitalization insurance or other plans or arrangements
providing employee benefits, except for the plans providing
employee benefits described in Schedule 7.1(24). Except for
remuneration paid to employees in the usual and ordinary course
of business and made at current rates of remuneration no payments
have been made or authorized by the Corporations to officers,
directors or employees of either Corporation.
(24) Employee Plans. The Corporations have made available to FMC all
the employee benefit, health, welfare, supplemental unemployment
benefit, bonus, pension, profit sharing, deferred compensation,
stock compensation, stock purchase, retirement, hospitalization
insurance, medical, dental, legal, disability and similar plans
or arrangements or practices relating to the Employees or former
Employees, more particularly set out in Schedule 7.1(24), which
are currently maintained or were maintained at any time in the
last five calendar years (the "Employee Plans"). All obligations
regarding the Employee Plans have been satisfied, there are no
outstanding defaults or violations by any party to any Employee
Plan and no Taxes, penalties or fees are owing or exigible under
any of the Employee Plans.
(25) Customers and Suppliers. Schedule 7.1(25) lists all customers and
the largest suppliers of the Corporations (or such additional
customers or suppliers of such Corporation which are sufficient
to constitute twenty per cent or more of total sales or
purchases, as the case may be) for the 12 month period
immediately before the date of this Agreement, and the aggregate
amount which each customer was invoiced and each supplier charged
and was paid during such period. Except as set out in Schedule
7.1(25), no Corporation is aware of, nor has it received notice
of, any intention on the part of any such customer or supplier to
cease doing business with the Corporations or to modify or change
in any material manner any existing arrangement with the
Corporations for the purchase or supply of any products or
services. The relationships of each Corporation with each of its
principal suppliers, shippers and customers are satisfactory and,
except as set out in Schedule 7.1(25), there are no unresolved
disputes with any such supplier, shipper or customer
(26) Product Warranties. To the Knowledge of the Corporations there
are no existing, pending or threatened claims against any
Corporation on account of product warranties or with respect to
the production or sale of defective or inferior products.
(27) Affiliated Transactions. Except as described in Schedule 7.1(27),
no Corporation is liable in respect of advances, loans,
guarantees to or on behalf of any shareholder, officer, director,
Employee or Affiliate of the Corporation or any other Person with
whom the Corporation does not deal at arm's length.
(28) Intercompany Services. Except as described in Schedule 7.1(28),
there are no material intercompany services provided by any
Corporation by the Vendors or by any Affiliate of the Vendors.
(29) Filings. Except as set out in Schedule 7.1(29), each Corporation
has prepared and filed on time with all appropriate government
bodies including, without limitation, all securities commissions
and regulatory bodies, all tax returns, declarations,
remittances, information returns, reports and other such
documents of every nature required to be filed by or on behalf of
the Corporations in respect of any Taxes or in respect of any
other provision in any domestic or foreign, federal, provincial,
municipal, state, territorial or other relevant statute for all
fiscal periods ending prior to the date hereof and will continue
to do so in respect of any fiscal period ending on or before the
Closing Date. All such filed returns, declarations, remittances,
information returns, reports and other documents are correct and
complete in all material respects, and no material fact has been
omitted therefrom. PTI is a "reporting issuer" in the United
States and is not in default or on the list of defaulting
reporting issuers maintained under any Applicable Laws.
(30) Cease Trade Order. No securities commission or similar regulatory
body nor any securities exchange has issued any order preventing
or suspending trading in any securities of PTI and PTI is not in
default of any requirements of any Applicable Laws relating to
securities.
(31) Taxes Paid. Except as set out in Schedule 7.1(31), each
Corporation has paid in full all Taxes required to be paid on or
prior to the date hereof and has made adequate provision in the
Financial Statements in accordance with generally accepted
accounting principles for the payment of all Taxes in respect of
all fiscal periods ending on or before the Closing Date.
(32) Absence of Certain Changes or Events. Except as otherwise
disclosed herein, and since August 31, 1998, no Corporation has:
(a) suffered any Material Adverse Change;
(b) amended its certificate or articles of incorporation;
(c) declared or made any payment of any dividend or other
distribution in respect of its shares and has not redeemed,
purchased or otherwise acquired any shares;
(d) issued or sold any shares or other securities or issued,
sold or granted any option, warranty or right to purchase
any shares or other securities;
(e) disposed of any of the Assets reflected on the balance
sheet forming part of the Financial Statements, except
sales of inventories in the normal course of business;
(f) changed any accounting or costing systems or methods
(including, without limitation) revenue recognition
methods) in any material respect;
(g) suffered any extraordinary loss or cancelled or waived any
material debt, claim or other right other than as
specifically agreed to herein;
(h) incurred or assumed any liabilities, obligations or
indebtedness (whether accrued, absolute, contingent or
otherwise) or extended any guarantee except current
liabilities, obligations and indebtedness in the normal
course of business;
(i) made or granted any bonus, increased the compensation paid
(other than for normal merit and cost of living increases)
or made or guaranteed any loans or advances to any
Director, Officer, senior employee or Affiliate in any
material way;
(j) mortgaged, pledged, granted a security interest in or
otherwise encumbered any of the Assets, except in the
normal course of business;
(k) entered into any Contract or any other transaction that was
not in the normal course of business; or
(l) terminated, cancelled or modified in any material respect
or received notice or a request for termination,
cancellation or modification in any material respect of any
Contract, except in the normal course of business.
(33) Securities Laws.
(a) PTI is not, and as a result of the sale of the Common Stock
and the Vendor's Shares contemplated hereby will not be an
"investment company" as defined in the United States
Investment Company Act of 1940, as amended;
(b) None of PTI, its affiliates or any person acting on its or
their behalf have engaged or will engage in any form of (i)
general solicitation or general advertising (as those terms
are used in Regulation D under the Securities Act) with
respect to offers or sales of the Common Stock and the
Vendor's Shares, including advertisements, articles,
notices or other communications published in any newspaper,
magazine or similar media, or broadcast over radio, or
television, or any seminar or meeting whose attendees have
been invited by general solicitation or general advertising
or (ii) any Directed Selling Efforts in the United States
(within the meaning of Regulation S) with respect to the
Common Shares and the Vendor's Shares.
(c) Except with respect to the offer and sale of the Shares of
Common Stock and the Vendor's Shares offered hereby,
neither of PTI nor any of its affiliates have, for a period
of six months prior to the date hereof, sold, offered for
sale or solicited any offer to buy any of its securities in
the United States.
(34) Full Disclosure. The foregoing resolutions and warranties
(including the Schedules) do not contain any untrue statement of
a material fact or omit to state any material fact necessary to
make any such statement or representation not misleading to a
prospective purchaser of the Shares seeking full information as
to the Corporations and their respective properties, businesses
and affairs.
7.2 Representations and Warranties of FMC. FMC represents and warrants to the
Vendors and the Corporations as follows:
(1) Incorporation and Power. FMC is a corporation duly incorporated
under the laws of the jurisdiction of its incorporation and is
duly organized, validly subsisting and in good standing under
such laws.
(2) Due Authorization. FMC has all necessary corporate power,
authority and capacity to enter into this Agreement and all other
agreements and instruments to be executed by it as contemplated
by this Agreement and to carry out its obligations under this
Agreement and such other agreements and instruments. The
execution and delivery of this Agreement and such other
agreements and instruments and the completion of the transactions
contemplated by this Agreement and such other agreements and
instruments have been duly authorized by all necessary corporate
action on the part of FMC.
(3) Enforceability of Obligations. This Agreement constitutes a valid
and binding obligation of FMC enforceable against FMC in
accordance with its terms subject, however, to limitations on
enforcement imposed by bankruptcy, insolvency, reorganization or
other laws affecting creditors' rights generally and to the
extent that equitable remedies such as specific performance and
injunctions are only available in the discretion of the court
from which they are sought.
(4) Consents and Approvals. No consent or approval of any Person is
required by FMC in connection with the execution and delivery of
this Agreement and the completion of the transactions
contemplated by this Agreement.
(5) No Registration. FMC understands that the Common Stock and
Vendor's Shares have not been and will not be registered under
the Securities Act or any applicable state securities laws and
that the contemplated sale is being made in reliance on the
exemption from registration provided by Regulation S under the
Securities Act.
(6) Restrictions on Resale. FMC agrees that if it decides to offer,
sell or otherwise transfer any of the Shares of Common Stock or
Vendor's Shares, such shares may be offered, sold or otherwise
transferred only (i) in accordance with the provisions of
Regulation S promulgated under the Securities Act, (ii) pursuant
to an effective registration statement or (iii) pursuant to an
available exemption from registration under the Securities Act
and in compliance with any applicable state securities laws. FMC
further agrees not to engage in hedging transactions with such
securities unless in compliance with the Securities Act.
(7) Legend. FMC 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 Securities Act or
applicable state securities laws, certificates representing
Shares of Common Stock and Vendor's Shares, and all certificates
issued in exchange 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
"SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH
SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER
THE SECURITIES ACT, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE
STATE SECURITIES LAWS."
provided, that if any such securities are being sold pursuant to an exemption
under section 7.2(6)(iii) above, the legend may be removed by delivery to the
registrar and transfer agent and PTI of an opinion of counsel, of recognized
standing reasonably satisfactory to PTI that such legend is no longer required
under applicable requirements of the Securities Act or state securities laws.
(10) Consent. FMC consents to PTI making a notation on its records or
giving instructions to any transfer agent of the Common Stock in
order to implement the restrictions on transfer set forth and
described herein.
(11) Residency. FMC certifies that it is not a U.S. Person as that
term is defined by Rule 902(k) of Regulation S. Neither PTI nor
the Vendors offered to sell or solicited an offer to buy from
FMC, nor did FMC offer to purchase or solicit an offer to sell
the Shares from either PTI or the Vendors, at a time when FMC or
any of FMC's agents or representatives, acting as such in
connection with this transaction, were physically located within
the United States. At the time the purchase agreement originated,
FMC was physically located outside the United States. FMC is not
subscribing for Shares as a result of or, to FMC's knowledge,
subsequent to any activity undertaken for the purpose of, or that
could reasonably be expected to have the effect of, conditioning
the market in the United States for the Common Stock, including,
any advertisement, article, notice or other communication
published in any newspaper, magazine or other publication of
general circulation in the United States.
(10) FMC Acquiring for Own Account. FMC will acquire the Shares for
FMC's own account for investment and not with a view to the sale
or disposition thereof or the granting of any participation
therein. FMC has no present intention of distributing or selling
to others any interest in the Shares or granting any
participation therein. FMC certifies that it is not acquiring the
securities for the account or benefit of any U.S. Person or is a
U.S. Person when it purchased securities in a transaction that
did not require registration under the Securities Act.
7.3 Survival of Representations and Warranties.
(1) The representations and warranties contained in Section 7.1 or
any other agreement, certificate or instrument delivered pursuant
to this Agreement shall survive the Closing for a period of two
years from the Closing Date, and notwithstanding the Closing and
any inspection or inquiries made by or on behalf of FMC, shall
continue in full force and effect for the benefit of FMC, after
which time the Vendors and Corporations, as applicable, shall be
released from all obligations in respect of such representations
and warranties except with respect to any Claims asserted by FMC
in writing (setting out in reasonable detail the nature of the
Claim and the approximate amount of such Claim) before the
expiration of such period, but (a) there shall be no time limit
on the representations and warranties of the Vendors and the
Corporations which relate to the enforceability of the Vendors'
or the Corporations' respective obligations under this Agreement
in Section 7.1(4), the incorporation of the Corporations in
Section 7.1(8), the due authorization of this Agreement by the
Corporation in Section 7.1(1) or to the title of the Vendor's
Shares in Section 7.1(6}, and (b) the time limit in connection
with the representations and warranties of the Corporations
relating to Intellectual Property and Software matters in Section
7.1(17) shall be five years.
(2) The representations and warranties of FMC contained in Section
7.2 or any other agreement, certificate or instrument delivered
pursuant to this Agreement shall survive the Closing for a period
of two years from the Closing Date, and notwithstanding the
Closing, shall continue in full force and effect for the benefit
of the Vendors and the Corporations, after which time FMC shall
be released from all obligations in respect of such
representations and warranties except with respect to any Claims
asserted by the Vendors or the Corporations in writing (setting
out in reasonable detail the nature of the Claim and the
appropriate amount thereof) before the expiration of such period,
but there shall be no time limit on the representations and
warranties of FMC which relate to the incorporation of FMC in
Section 7.2(1), the due authorization of this Agreement by FMC in
Section 7.2(2) and the enforceability of FMC's obligations under
this Agreement in Section 7.2(3).
(2) Despite Sections 7.3(1) and 7.3(2), in the event that any
representation or warranty of any Party under Section 7.1 or 7.2
is made with the intent to deceive in reckless disregard of the
accuracy of such representation and warranty, such representation
and warranty shall survive the Closing in perpetuity.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnity by the Vendors/Corporations. The Vendors and the Corporations
shall on a joint and several basis indemnify and hold FMC, its directors,
officers, employees, agents and representatives harmless in respect of any
claim, demand, action, cause of action, damage, loss, cost, liability or expense
(hereinafter referred to as a "Claim") which may be made or brought against an
Indemnified Party or which it may suffer or incur directly or indirectly as a
result of, in respect of or arising out of:
(1) any incorrectness in or breach of any representation or warranty
of the Vendors or the Corporations contained in this Agreement or
under any other agreement, certificate or instrument executed and
delivered pursuant to this Agreement; or
(2) any breach of or any non-fulfillment of any covenant or agreement
on the part of the Vendors or Corporations under this Agreement
or under any other agreement, certificate or instrument executed
and delivered pursuant to this Agreement,
provided however that the Corporations shall not be liable for any Claim by FMC
in connection with the breach of any representation or warranty of the Vendors
contained in this Agreement or under any other agreement, certificate or
instruments executed and delivered pursuant to this Agreement relating to the
enforceability of the Vendors' obligations under this Agreement in Section
7.1(4), or to the title of each Vendor to the Common Stock in Section 7.1(6) or
the breach or non-fulfillment of any covenant or agreement on the part of the
Vendors under this Agreement or any other agreement, certificate or instrument
executed and delivered pursuant to this Agreement.
8.2 Indemnity by FMC. FMC shall indemnify and hold each of the Vendors and the
Corporations, their directors, officers, employees, agents, representatives and
Affiliates and their respective directors, officers, employees, agents and
representatives harmless in respect of any Claim which may be made or brought
against an Indemnified Party or which it may suffer or incur directly or
indirectly as a result of, in respect of or arising out of:
(1) any incorrectness in or breach of any representation or warranty
of FMC contained in this Agreement or under any other agreement,
certificate or instrument executed and delivered pursuant to this
Agreement; or
(2) any breach or non-fulfilment of any covenant or agreement on the
part of FMC under this Agreement or under any other agreement,
certificate or instrument executed and delivered pursuant to this
Agreement.
8.3 ▇▇▇▇▇▇▇ Indemnity. In addition, FMC shall indemnify ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ for any
liability against him imposed or arising from any activity or out of actions
taken or omitted, as a Director or Officer of PTI and/or PTSI, in whole or in
part from the transactions contemplated by this Agreement and effected during
the period commencing immediately prior to the execution of the letter of intent
and ending on the Closing Date.
8.4 Limitation. Except to the extent relating to any known and undisclosed
liability or fraud, no Party shall have any Liability for indemnification
pursuant to Sections 8.1 and 8.2. Neither of the Vendors or the Corporations
shall have any Liability for indemnification pursuant to Section 8.1(1) in any
amount in excess of the portion of the Purchase Price received by such Vendor or
Corporation as the case may be. FMC shall have no Liability for indemnification
pursuant to Section 8.2 in any amount in excess of the portion of the Purchase
Price paid by FMC to the Vendor or the Subscription Price paid to the
Corporation.
8.5 Notice of Claim. If an Indemnified Party becomes aware of a Claim in respect
of which indemnification is provided for pursuant to any of Sections 8.1, 8.2 or
8.3, as the case may be, the Indemnified Party shall promptly give written
notice of the Claim to the Indemnifying Party. Such notice shall specify whether
the Claim arises as a result of a claim by a Person against the Indemnified
Party (a "Third Party Claim") or whether the Claim does not so arise (a "Direct
Claim"), and shall also specify with reasonable particularity (to the extent the
information is available):
(a) the factual basis of the Claim; and
(b) the amount of the Claim, if known.
If through the fault of the Indemnified Party, the Indemnifying Party does not
receive notice of any Claim in time effectively to contest the determination of
any liability susceptible of being contested, then the Liability of the
Indemnifying Party to the Indemnified Party under this Article shall be reduced
by the amount of any losses incurred by the Indemnifying Party resulting from
the Indemnified Party's failure to give such notice on a timely basis.
8.6 Direct Claims. In the case of a Direct Claim, the Indemnifying Party shall
have 60 days from receipt of notice of the Claim within which to make such
investigation of the Claim as the Indemnifying Party considers necessary or
desirable. For the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or before the expiration of such 60 day period (or any mutually agreed
upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim, failing which the matter shall be referred to
non-binding mediation in such manner as the parties may agree or shall be
determined by a court of competent jurisdiction.
8.7 Third Party Claims. In the case of a Third Party Claim, the Indemnifying
Party shall have the right, at its expense, to participate in or assume control
of the negotiation, settlement or defence of the Claim. If the Indemnifying
Party elects to assume such control, the Indemnifying Party shall reimburse the
Indemnified Party for all of the Indemnified Party's out-of-pocket expenses
incurred as a result of such participation or assumption. The Indemnified Party
shall have the right to participate in the negotiation, settlement or defence of
such Third Party Claim and to retain counsel to act on its behalf, provided that
the fees and disbursements of such counsel shall be paid by the Indemnified
Party unless the Indemnifying Party consents to the retention of such counsel at
its expense or unless the named parties to any action or proceeding include both
the Indemnifying Party and the Indemnified Party and a representation of both
the Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to the actual or potential differing interests between them
(such as the availability of different defences). The Indemnified Party shall
cooperate with the Indemnifying Party so as to permit the Indemnifying Party to
conduct such negotiation, settlement and defence and for this purpose shall
preserve all relevant documents in relation to the Third Party Claim, allow the
Indemnifying Party access on reasonable notice to inspect and take copies of all
such documents and require its personnel to provide such statements as the
Indemnifying Party may reasonably require and to attend and give evidence at any
trial or hearing in respect of the Third Party Claim. If, having elected to
assume control of the negotiation, settlement or defence of the Third Party
claim, the Indemnifying Party thereafter fails to conduct such negotiation,
settlement or defence with reasonable diligence, then the Indemnified Party
shall be entitled to assume such control and the Indemnifying Party shall be
bound by the results obtained by the Indemnified Party with respect to such
Third Party Claim. If any Third Party Claim is of a nature such that (i) the
Indemnified Party is required by Applicable Law or the order of any court,
tribunal or regulatory body having jurisdiction, or (ii) it is necessary in the
reasonable view of the Indemnified Party acting in good faith and in a manner
consistent with reasonable commercial practices, in respect of (A) a Third Party
Claim by a customer relating to products or services supplied by the Business or
(B) a Third Party Claim relating to any Contract which is necessary to the
ongoing operations of the Business or any material part thereof in order to
avoid material damage to the relationship between the Indemnified Party and any
of its major customers or to preserve the rights of the Indemnified Party under
such an essential Contract, to make a payment to any person (a "Third Party")
with respect to the Third Party Claim before the completion of settlement
negotiations or related legal proceedings, as the case may be, then the
Indemnified Party may make such payment and the Indemnifying Party shall,
promptly after demand by the Indemnified Party, reimburse the Indemnified Party
for such payment. If the amount of any liability of the Indemnified Party under
the Third Party Claim in respect of such a payment was made, as finally
determined, is less than the amount which was paid by the Indemnifying Party to
the Indemnified Party, the Indemnified Party shall, promptly after receipt of
the difference from the Third Party, pay the amount of such difference to the
Indemnifying Party. If such a payment, by resulting in settlement of the Third
Party Claim, precludes a final determination of the merits of the Third Party
Claim and the Indemnified Party and the Indemnifying Party are unable to agree
whether such payment was unreasonable in the circumstances having regard to the
amount and merits of the Third Party Claim, then such dispute shall be referred
to and finally settled by binding arbitration from which there shall be no
appeal.
8.8 Settlement of Third Party Claims. If the Indemnifying Party fails to assume
control of the defence of any Third Party Claim, the Indemnified Party shall
have the exclusive right to contest, settle or pay the amount claimed. Whether
or not the Indemnifying Party assumes control of the negotiation, settlement or
defence of any Third Party Claim, the Indemnifying Party shall not settle any
Third Party Claim without the written consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed; provided, however, that
the liability of the Indemnifying Party shall be limited to the proposed
settlement amount if any such consent is not obtained for any reason within a
reasonable time after the request therefor.
8.9 Interest on Claims. The amount of any Claim submitted under Section 8.1 or
8.2 as damages or by way of indemnification shall bear interest from and
including the date any Indemnified Party is required to make payment in respect
thereof at the Prime Rate calculated from and including such date to but
excluding the date reimbursement of such Claim by the Indemnifying Party is
made, and the amount of such interest shall be deemed to be part of such Claim.
8.10 Tax Adjustments. The amount of any Claim submitted under Section 8.1 or 8.2
as damages or by way of indemnification shall be determined on an after-Tax
basis, and without limiting the generality of the foregoing shall (a) be net of
the present value of any Tax benefits to the Indemnified Party resulting from
the claim for indemnity and (b) include the amount necessary to hold the
Indemnified Party harmless after Tax. The present value of any Tax benefits
shall be the amount, calculated on the date that is the Business Day immediately
preceding the date of payment of the Claim, that is required to provide a yield
from such date to the last day of the latest taxation year of the Indemnified
Party to which the Tax benefits relate that is equal to the sum of the yield to
maturity on such date, assuming semi-annual compounding, that a non-callable
Government of Canada bond would carry if issued in Canadian dollars in Canada at
100% of its principal amount on such date and maturing approximately on the last
day of the latest taxation year of the Indemnified Party to which the Tax
benefits relate, plus five per cent.
8.10 Set-0ff. FMC shall be entitled to set-off the amount of any Claim submitted
under Section 8.1 as damages or by way of indemnification against the
Corporations, once finally determined, against any other amounts payable by FMC
to the Corporations whether under this Agreement or otherwise.
8.11 Dispute Resolution. In the event that any Party shall have any
disagreement, dispute, controversy or claim arising out of or relating to this
Agreement, the performance or interpretation hereof, the relationship
contemplated hereby, or the breach, termination or invalidity hereof or thereof
( a "Dispute"), then such Party shall notify each other in a writing setting
forth briefly the nature of the Dispute and the amount involved, if any. Within
ten (10) days of receipt of such notice, the Parties shall each designate a
representative with full power and authority to resolve the Dispute, who shall
meet within fifteen (15) days of their designation to attempt through good faith
negotiation to reach an amicable resolution. If the Parties are unable to
resolve the Dispute within sixty (60) days following the date on which
negotiations commenced, any Party can submit the Dispute to mediation in
accordance with the procedures of the American Arbitration Association. Nothing
in this Agreement is intended to limit a Party's right to seek, at any time,
injunctive or other provisional judicial relief if in the circumstances such
relief is necessary to avoid irreparable harm or other injury for which there is
no adequate remedy at law.
8.12 Except as provided in Section 8.11 above, in no event shall any party
commence litigation against any other until the conclusion of the ten (10) day
period provided in Section 8.11 above for demanding mediation with such notice
having been made or, if demand has been made, until the arbitrator declares that
the arbitration has concluded without successful resolution or three (3) months
have elapsed since the arbitrator accepted his appointment.
ARTICLE 9
INTERIM PERIOD
9.1 Investigation. Until the Closing, FMC and its representatives and advisers
shall be permitted to make such investigations, inspections, surveys or tests of
the properties and assets of the Corporations, their predecessor companies and
their Affiliates and of their respective financial and legal condition as FMC
deems necessary or desirable to familiarize itself with such properties, assets
and other matters. Without limiting the generality of the foregoing, FMC shall
be permitted complete access to all documents relating to information scheduled
or required to be disclosed under this Agreement, to the Books and Records, the
Contracts, the Leased Premises, the Employees, records regarding suppliers,
customers and regulators and environmental reports, surveys, inspection reports
and all other reports prepared by advisers of the Corporations, their
predecessor companies and their Affiliates and the Corporations shall provide to
FMC photocopies of all such written information and documents as may be
reasonably requested by FMC. Any such investigations, inspections, surveys or
tests shall not, however, affect or mitigate the representations and warranties
of the Vendors and the Corporations under this Agreement which shall continue in
full force and effect as provided under this Agreement.
9.2 Authorizations. The Vendors and the Corporations shall execute and deliver
any authorizations required to permit the investigations, inspections, surveys
or tests described in Section 9.1.
9.3 Confidentiality.
(1) Each party shall hold in strictest confidence and not use in any
manner, other than as expressly contemplated by this Agreement,
any Confidential Information (as defined below) of the other
Party.
(2) Section 9.3(1) shall not apply to the disclosure of any
Confidential Information where such disclosure is required by
Applicable Law. In that case, the Party required to disclose
shall, as soon as possible in the circumstances, notify the other
Party of the requirement. Upon receiving such notification, the
other Party may take any reasonable action to challenge the
requirement, and the affected Party shall, at the expense of the
other Party, assist the other Party in taking such reasonable
action.
(3) Following the termination of this Agreement, each Party shall
promptly, upon request from the other Party, return to the
requesting Party all copies of any tangible items (other than
this Agreement), if any, which are or which contain Confidential
Information of the requesting Party; provided that if the Party
so obligated to return Confidential Information has prepared
summaries or analyses containing or concerning Confidential
Information, then such Party may, instead of returning the
summaries or analyses, destroy them and provide a certificate to
that effect to the requesting Party.
(3) For the purposes of this Section 9.3:
(a) "Confidential Information" of a Party at any time means all
information relating to the business of such Party and its
Affiliates (including business plans, way of doing
business, business results and prospects and customer
lists) which,
(i) at the time is of a confidential nature (whether or
not specifically identified as confidential) and is
known or should be known by the other Party as being
confidential, and
(ii) has been or is from time to time made known to or is
otherwise learned by the other Party as a result of
the matters provided for in this Agreement, including
the following information:
(iii) the terms of this Agreement;
(iv) a Party's proprietary software and Intellectual
Property; and
(v) a Party's business records, but not including any
information that at such time:
(vi) has become generally available to the public other
than as a result of a disclosure by the other Party.
9.4 Risk of Loss. Until the Closing, the Corporations shall maintain in full
force all the policies of property damage insurance under which any of the
Assets is insured. If before the Closing any of the Assets is lost, damaged or
destroyed and the loss, damage or destruction constitutes a Material Adverse
Change, then FMC may terminate this Agreement in accordance with the provisions
hereof.
9.5 Action During Interim Period. During the Interim Period, the Corporations
shall be operated and managed in the usual and ordinary course of business such
that the Corporations shall:
(1) other than changes to compensation or other benefits which have
been approved by a majority of the board of directors or in
accordance with existing agreements, not make or agree to make
any material change in the compensation of any Senior Employee
and not pay or agree to pay or set aside any bonus, profit
sharing, retirement, insurance, death, severance or fringe
benefit or other extraordinary or indirect compensation to, for
or on behalf of any Senior Employee;
(2) not dispose of any of the Assets, except for sales of inventories
in the normal course of business;
(3) not enter into any Material Contract that is not in the normal
course of business;
(4) not issue any shares or other securities of the Corporations in
connection with the warrant transactions or the exercise of
options already granted;
(4) not declare or cause to be paid any dividend or make any other
form of distribution or payment on the Shares or any other
securities of the Corporations;
(5) use all reasonable efforts not to default in the performance of
any term or condition of any Material Contract or Licences and
Permits;
(6) not cancel any policy of insurance which relates to the
Corporations or any of the Assets, except with the prior written
consent of FMC;
(7) use all reasonable efforts to maintain relations with the
suppliers, customers and landlords of the Corporations in
accordance with past custom and practice; and
(8) except as otherwise disclosed herein, pay before delinquency all
Taxes and other obligations which become due and payable by the
Corporations.
9.6 Exclusive Dealings. During the Interim Period neither the Vendors nor the
Corporations without the consent of FMC, not to be unreasonably withheld, shall
take any action, directly or indirectly, to encourage, initiate or engage in
discussions or negotiations with, or provide any information to, any Person,
other than FMC and the designated and authorized representatives of either
party, concerning any sale, transfer or assignment of the Shares or the Assets
(other than sales in the ordinary course of business) involving the
Corporations. The Vendors and the Corporations shall notify FMC promptly if any
such discussions or negotiations are sought or if any proposal for a sale,
transfer or assignment of the Shares or the Assets is received or being
considered. Notwithstanding the foregoing, the restrictions set out in this
Section 9.6 shall not apply following the termination of this Agreement.
9.7 Regulatory Approvals. The Vendors shall cooperate, and shall cause the
Corporations to cooperate, with FMC and render all necessary assistance required
by FMC in connection with any application, notification or filing of FMC to or
with any regulatory agency, at FMC's expense.
9.8 Updates to Information. The Vendors and the Corporations shall update on or
before Closing, by amendment or supplement, any of the information disclosure
schedules referred to in this Agreement and any other disclosure in writing to
FMC as soon as reasonably possible after new or conflicting information comes to
the attention of the Vendors or the Corporations. FMC shall not be obligated to
accept any such amendment or supplement if it results in a Material Adverse
Change in the Business and receipt of any such amendment or supplement shall not
be deemed to be a waiver or release by FMC of any provision of this Agreement.
ARTICLE 10
GENERAL
10.1 Expenses. FMC shall be solely responsible for and bear all of its own
respective expenses, including, without limitation, expenses of legal counsel,
accountants, and other advisors incurred at any time in connection with pursuing
or consummating the transactions contemplated in this Agreement. PTI shall be
responsible for and bear all of the expenses of PTI, PTSI and the Vendors,
including, without limitation, expenses of legal counsel, accountants, and other
advisors, incurred at any time in connection with pursuing or consummating the
transactions contemplated in this Agreement. Any GST taxes incurred by the
Vendors as a result of the Closing shall be paid as part of the purchase price
by FMC.
10.2 Public Announcements. Except to the extent otherwise required by law or
with the prior consent of the other Party, no Party shall make any public
announcement regarding this Agreement or the transactions contemplated by this
Agreement. The parties shall mutually agree upon an appropriate public
announcement to be made after execution of this Agreement.
10.3 Post-Closing Covenants.
(1) FMC agrees to resell the securities purchased hereunder only in
accordance with the provisions of Regulation S promulgated under
the Securities Act, pursuant to an effective registration
statement, or pursuant to an available exemption from
registration, and agrees not to engage in hedging transactions
with regard to such securities unless in compliance with the
Securities Act.
(2) The parties agree that PTI will not register any transfer of the
securities acquired by FMC hereunder not made in accordance with
the provisions of Regulation S promulgated under the Securities
Act, pursuant to an effective registration statement, or pursuant
to an available exemption from registration; provided, however,
that if such securities are in bearer form or foreign law
prevents PTI from refusing to register securities transfer, PTI
shall implement reasonable procedures to prevent any transfer of
the securities not made in accordance with the provisions of
Regulation S, promulgated under the Securities Act.
10.4 Notices. Any notice, certificate, consent, determination or other
communication required or permitted to be given or made under this Agreement
shall be in writing and shall be effectively given and made if (i) delivered
personally, (ii) sent by prepaid courier service or mail, or (iii) sent prepaid
by fax or other similar means of electronic communication, in each case to the
applicable address set out below:
(i) if to the Vendors, to:
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
#▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
Fax:
(ii) if to the Corporations, to:
PowerTrader Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
Attn. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CEO
Fax:
with a copy to:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
c/o Gallop, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to FMC, to:
Financial Models Company Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Bank Tower
Toronto ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any such communication so given or made shall be deemed to have been given or
made and to have been received on the day of delivery if delivered, or on the
day of faxing or sending by other means of recorded electronic communication,
provided that such day in either event is a Business Day and the communication
is so delivered, faxed or sent before 4:30 p.m. local time of the recipient on
such day. Otherwise, such communication shall be deemed to have been given and
made and to have been received on the next following Business Day. Any such
communication sent by mail shall be deemed to have been given and made and to
have been received on the fifth Business Day following the mailing thereof;
provided however that no such communication shall be mailed during any actual or
apprehended disruption of postal services. Any such communication given or made
in any other manner shall be deemed to have been given or made and to have been
received only upon actual receipt. Any Party may from time to time change its
address under this Section by notice to the other Party given in the manner
provided by this Section.
10.5 Entire Agreement. This Agreement constitutes the entire agreement between
the Parties pertaining to the subject matter of this Agreement and supersedes
all prior agreements, understandings, negotiations and discussions, whether oral
or written. There are no conditions, warranties, representations or other
agreements between the Parties in connection with the subject matter of this
Agreement, whether oral or written, express or implied, statutory or otherwise)
except as specifically set out in this Agreement.
10.6 Waiver. A waiver of any default, breach or non-compliance under this
Agreement is not effective unless in writing and signed by the party to be bound
by the waiver. No waiver shall be inferred from or implied by any failure to act
or delay in acting by a party in respect of any default, breach or
non-observance or by anything done or omitted to be done by the other party. The
waiver by a party of any default, breach or non-compliance under this Agreement
shall not operate as a waiver of that party's rights under this Agreement in
respect of any continuing or subsequent default, breach or non-observance
(whether of the same or any other nature).
10.6 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such prohibition or unenforceability and shall be severed from
the balance of this Agreement, all without affecting the remaining provisions of
this Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction.
10.7 Non-Merger. Each party hereby agrees that all provisions of this Agreement,
other than (a) the conditions in Article 6 and (b) the representations and
warranties contained in Article 7 and the indemnities in Sections 8.1, 8.2 and
8.3 hereof (which shall be subject to the arrangements made in such Articles or
Sections) shall forever survive the execution, delivery and performance of this
Agreement, Closing and the execution, delivery and performance of any and all
documents delivered in connection with this Agreement.
10.8 Further Assurances. Each Party shall promptly do, execute, deliver or cause
to be done, executed and delivered all further acts, documents and things in
connection with this Agreement that the other Party may reasonably require for
the purposes of giving effect to this Agreement.
10.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Provinces of Ontario and the laws of Canada
applicable in such Province.
10.10 Successors and Assigns. This Agreement shall enure to the benefit of, and
be binding on, the Parties and their respective successors and permitted
assigns. No Party may assign or transfer, whether absolutely, by way of security
or otherwise, all or any part of its respective rights or obligations under this
Agreement without the prior written consent of the other Parties, provided,
however, that from and after the Closing, FMC shall be entitled to transfer all
or a portion of the Shares, and all ancillary rights therein and thereto,
without the prior written consent of any other Party.
10.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument.
Counterparts may be executed either in original or faxed form and the Parties
adopt any signatures received by a receiving fax machine as original signatures
of the Parties; provided, however, that any Party providing its signature in
such manner shall promptly forward to the other Parties an original of the
signed copy of the Agreement which was so faxed.
IN WITNESS WHEREOF the Parties have executed this Agreement as of the
15th day of October, 1998.
FINANCIAL MODELS COMPANY INC. POWERTRADER, INC.
Per: Per:
----------------------------- ---------------------------------
Name: Name:
Title: Title:
POWERTRADER SOFTWARE INC. 458468 BC, LTD.
Per: Per:
----------------------------- --------------------------------
Name: Name:
Title: Title:
)
)
)
)---------------------------------
) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
)
