EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
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1. PURCHASE AND SALE OF ASSETS
1.1 Description of Assets
2. PURCHASE PRICE AND ALLOCATION
3. PAYMENT OF THE PURCHASE PRICE
3.1 Purchase Price
3.2 Vendor Goods and Services
4. ASSUMPTION OF LIABILITIES
5. REPRESENTATIONS AND WARRANTIES OF THE VENDOR
5.1 Capacity to Sell
5.2 Authority to Sell
5.3 Sale Will Not Cause Default
5.4 Assets
5.5 Intangible Property
5.6 Material Change
5.7 Litigation
5.8 Conformity with Laws
5.9 Terms of Employment
5.10 Material Contracts
5.11 No Defaults
5.12 Deferred Revenue
5.13 Accuracy of Representations
6. COVENANTS OF THE VENDOR
6.1 Conduct of Business
6.2 Access by Purchaser
6.3 Taxes
6.4 Termination of Employees
6.5 Exclusivity
7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
7.1 Status of Purchaser
7.2 Authority to Purchase
8. COVENANTS OF THE PURCHASER
8.1 Offer Employment
8.2 Consents
9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION
9.1 Survival of Representations, Warranties and Covenants
9.2 Indemnification
10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER
10.1 Vendor's Representations and Warranties
10.2 Vendor's Covenants
10.3 Vendor's Certificate
11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE VENDOR
11.1 Purchaser's Representations and Warranties
11.2 Purchaser's Covenants
12. CLOSING
12.1 Closing Date
12.2 Place of Closing
12.3 Documents to be Delivered by the Vendor
12.4 Documents to be Delivered by the Purchaser
13. RISK OF LOSS
14. FURTHER ASSURANCES
15. SET-OFF
16. NOTICE
17. ENTIRE AGREEMENT
18. TIME OF THE ESSENCE
19. APPLICABLE LAW
20. MEDIATION AND ARBITRATION
21. SUCCESSORS AND ASSIGNS
22. HEADINGS
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THIS AGREEMENT is made May 8, 2007.
BETWEEN:
SEMOTUS SOLUTIONS INC. WITH OFFICES LOCATED AT SUITE 202, 000 XXXXXXXXXX
XXX., XXX XXXXX, XXXXXXXXXX 00000
(the "Vendor")
AND:
STOCKGROUP SYSTEMS LTD., WITH OFFICES LOCATED AT SUITE 500 - 000 XXXX
XXXXXX XXXXXX, XXXXXXXXX, X.X. X0X 0X0
(the "Purchaser")
BACKGROUND
A. The Vendor carries on the business of providing software for wireless
enterprise applications, more specifically the Vendor's software connects
customers wirelessly to critical business systems, information and
processes (the "Vendor's Business").
B. The Vendor has agreed to sell, and the Purchaser has agreed to purchase,
subject to certain exceptions listed in this Agreement, certain assets and
undertakings of the Vendor's Business related to its financial data
wireless services and software (the "Vendor's Financial Data Business") on
the terms and subject to the conditions provided in this Agreement.
TERMS OF AGREEMENT
In consideration of the premises and the covenants, agreements, representations,
warranties and payments contained in this Agreement, the parties agree with the
others as follows:
1. PURCHASE AND SALE OF ASSETS
1.1 DESCRIPTION OF ASSETS
Upon the terms and subject to the conditions of this Agreement, the Vendor
agrees to sell, assign and transfer to the Purchaser, and the Purchaser agrees
to purchase from the Vendor at Closing, the undertaking and certain assets of
the Vendor's Financial Data Business, including, without limiting the foregoing:
(a) all contracts, engagements or commitments to which the Vendor is entitled
in connection with the Vendor's Financial Data Business, and in particular
all right, title and interest of the Vendor in, to and under the material
agreements and contracts (the "Material Contracts") described in the
Schedule of Material Contracts;
(b) all right and interest of the Vendor to all registered and unregistered
trademarks, trade or brand names, copyrights, designs, restrictive
covenants, domain names, proprietary software (including source code) and
other industrial or intellectual property used in connection with the
Vendor's Financial Data Business (the "Intangible Property"), including,
without limitation, the intangible property described in the Schedule of
Intangible Property; and
(c) the accounts receivable and all other debts owed to the Vendor in
connection with the Vendor's Financial Data Business. The accounts
receivable of the Business as of Closing ("Closing Accounts Receivable")
shall remain the property of the Vendor. Closing Accounts Receivable shall
be accounted for on a basis consistent with past practices of the Vendor's
Financial Data Business in recognizing sales and xxxxxxxx. Vendor shall
have the right to allow the Vendor's Financial Data Business to continue to
receive and collect Closing Accounts Receivable in the ordinary course of
business. Purchaser shall use commercially reasonable efforts to collect
the Closing Accounts Receivable and promptly (end of each month) remit such
collections to the Vendor. Following a period of 120 days from the Closing,
the Purchaser shall remit back to the Vendor any uncollected Closing
Accounts Receivable balance and records and the Vendor shall have the right
to pursue commercially reasonable collection efforts against such customers
for the outstanding Closing Accounts Receivable amounts still owed.
all of which are collectively called the "Assets".
2. PURCHASE PRICE AND ALLOCATION
The purchase price payable by the Purchaser to the Vendor for the Assets will be
up to Three-Hundred Fifty Thousand Dollars (USD$ 350,000).
3. PAYMENT OF THE PURCHASE PRICE
3.1 PURCHASE PRICE
The purchase price shall be paid and satisfied as follows:
(a) The Purchase Price shall be up to a total of USD$350,000 (Three Hundred and
Fifty Thousand Dollars) for the Assets, payable as follows:
(i) USD$150,000 (One Hundred Fifty Thousand) payable by certified cheque,
wire transfer or bankers draft payable to or to the order of the
Vendor and delivered at the Closing; and
(ii) 30% of Gross Revenue payable monthly to the Vendor, up to a total of
$200,000 (Two Hundred Thousand Dollars) as defined in 3(c) below. If
Gross Revenue falls below twenty-five (25%) within six (6) months of
Closing, fifteen percent (15%) per month of Gross Revenue will be
payable to the Vendor, up to a total of $200,000.
(b) The Purchase Price shall be deemed paid in full if any of the following
events occur:
(i) Gross Revenue falls below USD$15,000 (Fifteen Thousand Dollars) a
month; or
(ii) USD$200,000 (Two Hundred Thousand Dollars) in fees have been paid; or
(iii) Two years from the Closing Date.
(c) Gross Revenue shall mean total revenues (as determined in accordance with
the generally accepted accounting principles) that are earned by, or
generated from the Vendor's Financial Data Business, and including the
amount paid on behalf of subscribers for per device and/or per quote stock
exchange fees up to a maximum total of USD$2500 a month.
(d) Purchaser shall pay to the Vendor all monthly data feed costs per month for
the Transition Services Period in accordance with the Transition Services
Agreement, attached hereto and incorporated herein.
(e) Vendor shall pay to Purchaser all fees collected by the Vendor as it
relates to a Vendor's customer that refuses assignment of a Material
Contract to the Purchaser. Vendor shall maintain the right to invoice the
customer under the existing agreement and remit all monies collected under
the agreement to the Purchaser.
3.2 VENDOR GOODS AND SERVICES
As part of the Purchase Price, the Vendor shall provide the following:
(i) moving and functioning set-up of the production environment to the
Purchaser's facility located at 00000 Xxxxxxxxx Xxxxx, Xxxxxx Xxxxx,
XX, X.X.X.; and
(ii) two key employees, as listed in the Schedule 3.2(ii) attached hereto
and incorporated herein, (the "Key Employees") will be hired directly
by Purchaser.
4. ASSUMPTION OF LIABILITIES
4.1 ASSUMED INDEBTEDNESS
Purchaser shall be responsible for liabilities under any of the Material
Contracts after the Closing (described in Section 12 below). All other
obligations and liabilities of Vendor shall be expressly excluded. Vendor shall
be responsible for all liabilities and administrative obligations related to the
Vendor's Financial Data Business for the period up to and including the Closing
(collectively, the "Assumed Indebtedness") and the Vendor shall indemnify and
save the Purchaser harmless from all claims, demands, suits and actions in
respect of the Assumed Indebtedness.
4.2 OTHER OBLIGATIONS
On and after closing the Purchaser shall assume, perform and discharge all
obligations arising under the Material Contracts (except as provided in section
4.3) and all other contracts, commitments or engagements which are entered into
by the Vendor between the date of this Agreement and closing in the ordinary
course of the Vendor's Financial Data Business and which are not prohibited by
this Agreement or are consented to in writing by the Purchaser, and the
Purchaser shall indemnify and save the Vendor harmless from all claims, demands,
suits and actions under the Material Contracts in respect of events after
closing.
4.3 RELEASE OF VENDOR
At or before the Closing the Purchaser shall execute and deliver all such
covenants and assurances with respect to the Assumed Indebtedness and with
respect to the obligations assumed under section 4.2 as may reasonably be
required as a condition to the release of the Vendor from any liability in
respect of the Assumed Indebtedness.
5. REPRESENTATIONS AND WARRANTIES OF THE VENDOR
The Vendor represents and warrants to the Purchaser as follows, with the intent
that the Purchaser will rely on these representations and warranties in entering
into this Agreement, and in concluding the purchase and sale contemplated by
this Agreement.
5.1 CAPACITY TO SELL
The Vendor is a corporation duly incorporated, validly existing and in good
standing under the laws of Nevada with respect to the filing of annual reports,
and has the power and capacity to own and dispose of the Assets and to carry on
the Vendor's Business as now being conducted by it, and to enter into this
Agreement and carry out its terms to the full extent.
5.2 AUTHORITY TO SELL
The execution and delivery of this Agreement and the completion of the
transaction contemplated by this Agreement have been duly and validly authorized
by all necessary corporate action on the part of the Vendor, and this Agreement
constitutes a legal, valid and binding obligation of the Vendor enforceable
against the Vendor in accordance with its terms except as may be limited by laws
of general application affecting the rights of creditors.
5.3 SALE WILL NOT CAUSE DEFAULT
Neither the execution and delivery of this Agreement nor the completion of the
purchase and sale contemplated by this Agreement will:
(a) violate any of the terms and provisions of the memorandum or articles
of the Vendor, or any order, decree, statute, by-law, regulation,
covenant or restriction applicable to the Vendor or any of the Assets;
(b) give any person the right to terminate, cancel or remove any of the
Assets, except to the extent that the consents of the other parties to
the Material Contracts are required to assign the Material Contracts;
or
(c) result in any fees, duties, taxes, assessments or other amounts
relating to any of the Assets becoming due or payable by the Purchaser
in connection with the purchase and sale.
5.4 ASSETS
The Vendor owns and possesses and has a good marketable title to the Assets free
and clear of all mortgages, liens, charges, pledges, security interest,
encumbrances and other claims except as described in the Schedule of Material
Contracts.
5.5 INTANGIBLE PROPERTY
The Schedule of Intangible Assets is a true and correct listing of all
Intangible Property and the Vendor owns and possesses the Intangible Assets free
and clear of any and all encumbrances.
5.6 MATERIAL CHANGE
Since the date of the Letter of Intent there has not been and change to the
Assets as described in Section 1.1 of this Agreement.
5.7 LITIGATION
There is no litigation or administrative or governmental proceeding or inquiry
pending, or to the knowledge of the Vendor, threatened against or relating to
the Vendor, the Vendor's Business or any of the Assets, nor does the Vendor know
of any reasonable basis for any such action, proceeding or inquiry.
5.8 CONFORMITY WITH LAWS
All governmental licences and permits required for the conduct in the ordinary
course of the operations of the Vendor's Business and the uses to which the
Assets have been put, have been obtained and are in good standing and such
conduct and uses are not in breach of any order, decree, statute, by-law,
regulation, covenant, restriction, plan or permit, including those regulating
the discharge of materials into the environment and the storage, treatment and
disposal of waste or otherwise relating to the protection of the environment and
the health and safety of persons. For greater certainty, the Assets have not
been used in a manner which does or will give rise to any obligation of
restoration or removal or any liability for the costs of restoration or removal
or for the payment of damages to any third party.
5.9 TERMS OF EMPLOYMENT
The Vendor is not a party to any collective agreement relating to the Vendor's
Business with any labour union or other association of employees, and no part of
the Vendor's Business has been certified as a unit appropriate for collective
bargaining. The Vendor's Business has employees and group employee termination
legislation would not apply to a termination of all employees at one time.
Additionally, the Key Employees may be dismissed on one year's notice or less,
without further liability.
5.10 MATERIAL CONTRACTS
The Schedule of Material Contracts contains a true and correct listing of each
written or oral contract of the following types to be acquired or assumed by the
Purchaser:
(a) contracts or commitments out of the ordinary course of business;
(b) contracts or commitments involving an obligation to pay in the
aggregate $100 or more or of a duration greater than one year;
(c) contracts or commitments in respect of the Intangible Property;
(d) except as required by statute or regulation, contracts or commitments
in respect of bonuses, incentive compensation, pensions, group
insurance or employee welfare plans, all of which are fully funded as
determined by an independent and reputable firm of actuaries employed
by the Vendor;
(e) employment contracts or commitments other than unwritten employment
contracts of indefinite duration entered into in the ordinary course
of the Vendor's Business; and
(f) contracts or commitment in respect to vendors of the Vendor.
5.11 NO DEFAULTS
Except as otherwise expressly disclosed in this Agreement or in any Schedule to
this Agreement there has not been any default in any obligation to be performed
under any Material Contract, each of which is in good standing and in full force
and effect, unamended, except as set forth in the Schedule of Material
Contracts.
5.12 DEFERRED REVENUE
There are no deferred revenues or any other future obligation related to the
Vendor's Financial Data Business nor does the Vendor know of any reasonable
basis for any such deferred revenue obligation. The Vendor shall indemnify and
save harmless the Purchaser from and against all deferred revenue obligations
related to the Vendor or the Vendor's Financial Data Business.
5.13 ACCURACY OF REPRESENTATIONS
No certificate or statement furnished by or on behalf of the Vendor to the
Purchaser at Closing in respect of the representations, warranties or covenants
of the Vendor will contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements misleading.
6. COVENANTS OF THE VENDOR
6.1 CONDUCT OF BUSINESS
Until Closing, the Vendor shall conduct the Vendor's Financial Data Business
diligently and only in the ordinary course and will use its best efforts to
preserve the Assets intact, to keep
available to the Purchaser its present employees and to preserve for the
Purchaser its relationship with its suppliers, customers and others having
business relations with it.
6.2 ACCESS BY PURCHASER
The Vendor shall give to the Purchaser and Purchaser's counsel, accountants and
other representatives full access, during normal business hours throughout the
period prior to Closing, to all of the properties, books, contracts, commitments
and records of the Vendor relating to the Vendor's Financial Data Business and
the Assets, and shall furnish to the Purchaser during that period all such
information as the Purchaser may reasonably request.
6.3 TAXES
The Vendor has withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party pertaining to the Assets
or otherwise pertaining to the Vendor's Financial Data Business.
6.4 PROCURE CONSENTS
The Vendor shall diligently take all reasonable steps required to obtain all
consents to the assignments of the Material Contracts and any other of the
Assets for which a consent is required.
6.5 EXCLUSIVITY
The Sellers will not:
(a) solicit, initiate, or encourage the submission of any proposal or
offer from any entity or person relating to the acquisition of the
Assets or any substantial portion of the Assets.
(b) The Vendor will notify Stockgroup immediately if any entity or person
makes any proposal, offer, inquiry, or contact with respect to any of
the foregoing.
7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Vendor as follows, with the intent
that the Vendor will rely on these representations and warranties in entering
into this Agreement, and in concluding the purchase and sale contemplated by
this Agreement.
7.1 STATUS OF PURCHASER
The Purchaser is a corporation duly incorporated, validly existing and in good
standing under the laws of the state of Nevada with respect to the filing of
annual returns, has the power and capacity to enter into this Agreement and
carry out its terms.
7.2 AUTHORITY TO PURCHASE
The execution and delivery of this Agreement and the completion of the
transaction contemplated by this Agreement have been duly and validly authorized
by all necessary
corporate action on the part of the Purchaser, and this Agreement constitutes a
legal, valid and binding obligation of the Purchaser enforceable against the
Purchaser in accordance with its terms except as limited by laws of general
application affecting the rights of creditors.
8. COVENANTS OF THE PURCHASER
8.1 OFFER EMPLOYMENT
The Purchaser does covenant with the Vendor to offer employment at Closing to
the Key Employees.
8.2 CONSENTS
The Purchaser shall at the request of the Vendor execute and deliver such
applications for consent and such assumption agreements, and provide such
information as may be necessary to obtain the consents referred to in section
6.4 and will assist and co-operate with the Vendor in obtaining the consents.
9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION
9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
All statements contained in any certificate or other instrument delivered under
this Agreement or in connection with the transaction contemplated by this
Agreement shall be deemed to be representations and warranties. Except as
provided in this sentence, all representations, warranties, convenants and
agreements (other than the provisions of Sections 6.3 and this Section 9.1)
shall terminate upon expiration of two (2) years after the Closing Date
("Expiration Date"). The representations and warranties in Section 6.3 shall
survive until the expiration of the applicable statute of limitations (with
extensions) with respect to the matters addressed in such sections.
9.2 INDEMNIFICATION.
Each Party shall indemnify and save and hold harmless the other and each of
their affiliates and subsidiaries, and their respective representatives, from
and against any and all Indemnified Liabilities; provided however, that the
Indemnified Party makes a written claim for indemnification against the
Indemnifying Party within the applicable survival period.
"Indemnified Liabilities" means
(a) any and all liabilities or obligations, whether accrued, absolute,
contingent or otherwise, existing on or prior to the Closing Date and
which, as it relates to Vendor's Indemnified Liabilities, are not
agreed to be assumed by the Purchaser under this Agreement;
(b) any and all damages resulting from any misrepresentation, breach of
warranty or non-fulfillment of any covenant under this Agreement or
from any misrepresentation in or omission from any certificate or
other instrument furnished or to be furnished under this Agreement;
and
(c) any and all claims, actions, suits, demands, costs and legal and other
expenses incident to any of the foregoing.
Defense of Claims. If a claim for Damages (a "Claim") is made by a party
entitled to Indemnification or Set Off Rights hereunder against the Indemnifying
Party, the party claiming such indemnification or Set Off Rights shall give
written notice (a "Claim Notice") to the other Party (the ("Indemnifying Party")
as soon as practicable after the party entitled to indemnification or Set Off
Rights (the "Indemnified Party") becomes aware of any fact, condition or event
which may give rise to Damages for which indemnification or Set Off Rights may
be sought. If any lawsuit or enforcement action is filed against any party
entitled to the benefit of indemnity or Set Off Rights hereunder, the Claim
Notice thereof shall be given to the Indemnifying Party as promptly as
practicable (and in any event within thirty (30) calendar days after the service
of the citation or summons). After such notice, if the Indemnifying Party shall
acknowledge in writing to the Indemnified Party that the Indemnifying Party
shall be obligated under the terms of its indemnity or Set Off Rights hereunder
in connection with such lawsuit or action, then the Indemnifying Party shall be
entitled, if it so elects, (1) to take control of the defense and investigation
of such lawsuit or action, (2) to employ and engage attorneys of its own choice
to handle and defend the same, at the Indemnifying Party's cost, risk and
expense unless the named parties to such action or proceeding include both the
Indemnifying Party and the Indemnified Party and the Indemnified Party has been
advised in writing by counsel that there may be one or more legal defenses
available to such Indemnified Party that are different from or additional to
those available to the Indemnifying Party, and (3) to compromise or settle such
Claim, which compromise or settlement shall be made only with the written
consent of the Indemnified Party, such consent not to be unreasonably withheld.
If the Indemnifying Party fails to assume the defense of such Claim within
fifteen (15) calendar days after receipt of the Claim Notice, the Indemnified
Party against which such Claim has been asserted will (upon delivering notice to
such effect to the Indemnifying Party) have the right to undertake, at the
Indemnifying Party's cost and expense, the defense, compromise or settlement of
such Claim on behalf of and for the account and risk of the Indemnifying Party.
In the event the Indemnified Party assumes the defense of the claim, the
Indemnified Party will keep the Indemnifying Party reasonably informed of the
progress of any such defense, compromise or settlement. The Indemnifying Party
shall be liable for any settlement of any action effected pursuant to and in
accordance with this Section and for any final judgment (subject to any right of
appeal), and the Indemnifying Party agrees to indemnify and hold harmless an
Indemnified Party from and against any Damages by reason of such settlement or
judgment.
Cooperation. The Indemnified Party shall cooperate in all reasonable respects
with the Indemnifying Party and the attorneys defending the Indemnification
Claims, or Claims covered by Set Off Rights, in the investigation, trial and
defense of such lawsuit or action and any appeal arising therefrom; provided,
however, that the Indemnified Party may, at its own cost, participate in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom. The parties shall cooperate with each other in any
notifications to insurers.
10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER
All obligations of the Purchaser under this Agreement are subject to the
fulfillment at or before Closing of the following conditions:
10.1 VENDOR'S REPRESENTATIONS AND WARRANTIES
The Vendor's representations and warranties contained in this Agreement and in
any certificate or document delivered under this Agreement or in connection with
the transactions contemplated by this Agreement will be true at and as of
Closing as if such representations and warranties were made at and as of such
time.
10.2 VENDOR'S COVENANTS
The Vendor will have performed and complied with all agreements, covenants and
conditions required by this Agreement to be performed or complied with by it
before or at Closing.
10.3 VENDOR'S CERTIFICATE
The Vendor will have delivered to the Purchaser a certificate of the President
and Secretary of the Vendor, dated the Closing Date, certifying in such detail
as the Purchaser may specify to the fulfillment of the conditions set forth in
sections 10.1 and 10.2.
The foregoing conditions are for the exclusive benefit of the Purchaser and any
such condition may be waived in whole or in part by the Purchaser at or before
Closing by delivering to the Vendor a written waiver to that effect signed by
the Purchaser.
11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE VENDOR
All objections of the Vendor under this Agreement are subject to the
fulfillment, before or at Closing, of the following conditions:
11.1 PURCHASER'S REPRESENTATIONS AND WARRANTIES
The Purchaser's representations and warranties contained in this Agreement will
be true at and as of Closing as though such representations and warranties were
made as of such time.
11.2 PURCHASER'S COVENANTS
The Purchaser will have performed and complied with all covenants, agreements
and conditions required by this Agreement to be performed or complied with by it
at or before Closing.
Each of the foregoing conditions is for the exclusive benefit of the Vendor and
any such condition may be waived in whole or part by the Vendor at or before
closing by delivering to the Purchaser a written waiver to that effect signed by
the Vendor.
12. CLOSING
12.1 CLOSING DATE
Subject to the terms and conditions of this Agreement, the purchase and sale of
the Assets will be completed at a closing to be held at 11:00 a.m., local time
in New York, New York, on May 8, 2007 or at such other time and date agreed upon
in writing between the parties (the "Closing Date").
12.2 PLACE OF CLOSING
The Closing will take place at the offices of the Purchaser, Suite 1500 - 0 Xxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx.
12.3 DOCUMENTS TO BE DELIVERED BY THE VENDOR
At the Closing the Vendor will deliver or cause to be delivered to the
Purchaser:
(a) all deeds of conveyance, bills of sale, transfer and assignments, in
form and content satisfactory to the Purchaser's counsel, appropriate
to effectively vest a good and marketable title to the Assets in the
Purchaser to the extent contemplated by this Agreement, and
immediately registrable in all places where registration of such
instruments is required;
(b) N/A;
(c) possession of the Assets;
(d) the certificate of the President and Secretary of the Vendor to be
given under section 10.3; and
(e) certified copies of those resolutions of the shareholders and
directors of the Vendor required to be passed to authorize the
execution, delivery and implementation of this Agreement and of all
documents to be delivered by the Vendor under this Agreement;
12.4 DOCUMENTS TO BE DELIVERED BY THE PURCHASER
At the Closing the Purchaser will deliver or cause to be delivered:
(a) a covenant of the Purchaser in favour of the Vendor agreeing to assume
and pay or perform and indemnify the Vendor against the Assumed
Indebtedness and other obligations agreed to be assumed by the
Purchaser under this Agreement in the manner and to the extent
provided in this Agreement;
(b) a certified cheque, wire transfer or banker's draft payable to the
Vendor for that portion of the Purchase Price payable in cash; and
(c) a statement of the Assumed Indebtedness.
13. RISK OF LOSS
From the date of this Agreement to Closing, the Assets will be and remain at the
risk of the Vendor. If any of the Assets are lost, damaged or destroyed before
Closing, the Purchaser may, in lieu of terminating this Agreement under Article
10, elect by notice in writing to the Vendor to complete the purchase to the
extent possible without reduction of the purchase price, in which event all
proceeds of any insurance or compensation in respect of such loss, damage or
destruction will be payable to the Purchaser and all right and claim of the
Vendor to any such amounts not paid by Closing will be assigned to the
Purchaser.
14. FURTHER ASSURANCES
The parties will execute such further and other documents and do such further
and other things as may be necessary to carry out and give effect to the intent
of this Agreement.
15. SET-OFF
Subject to the limitations set forth in this Section 15, Purchaser may withhold
and set off against the Purchase Price determined in accordance with Section
3.1(a)(ii), with the Purchase Price determined in accordance with Section
3.1(a)(i) not subject to recourse, any amount as to which the Vendor is
obligated to pay Purchaser pursuant to any provision of this Agreement (the "Set
Off Rights"). The Purchaser shall have Set Off Rights or any other right or
action permitted by law, from and against any and all costs, losses, taxes,
liabilities, damages, lawsuits, deficiencies and expenses (whether or not
arising out of third-party claims), reasonable attorneys' fees and all amounts
paid in investigation, defense or settlement of any of the foregoing (herein,
"Damages"), incurred in connection with, arising out of, resulting from or
incident to (1) any breach of any representation or warranty or the inaccuracy
of any representation made by the Vendor in this Agreement, or (2) any breach of
any covenant or agreement made by the Vendor in this Agreement; provided,
however, that the Purchaser makes a written claim if the Purchaser chooses to
exercise its Set Off Rights against the Vendor within the applicable survival
period. As used throughout this Section 15, "Damages" means out-of-pocket
amounts actually suffered or sustained by the Indemnified Party, and shall not
include any amounts in the nature of consequential damages, lost profits,
diminution in value, damage to reputation or goodwill, or the like. In computing
Damages, such amount shall be computed net of any related recoveries to which
the Indemnified Party is entitled.
16. NOTICE
All notices required or permitted to be given under this Agreement will be in
writing and personally delivered to the address of the intended recipient set
forth on the first page of this Agreement or at such other address as may from
time to time be notified by any of the parties in the manner provided in this
Agreement, and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method; the day after it is sent if sent for next day
delivery to an address by recognized overnight delivery service (e.g., Federal
Express); and upon receipt if sent by certified or registered mail, return
receipt requested.
17. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties and there
are no representations or warranties, express or implied, statutory or otherwise
and no collateral agreements other than as expressly set forth or referred to in
this Agreement.
18. TIME OF THE ESSENCE
Time will be the essence of this Agreement.
19. APPLICABLE LAW
This Agreement will be governed by and interpreted in accordance with the laws
of the state of Nevada (without reference to the choice of law provisions of
Nevada law).
20. MEDIATION. Except for failure to pay fees due under this Agreement, breach
of confidentiality agreement or infringement of the other party's
intellectual property rights in which event the affected party shall be
entitled to bring an action in any court of competent jurisdiction to (a)
enjoin the acts giving rise to the default or obtain other equitable
relief, and (b) recover damages for the other party's breach, in the event
of a dispute related to this Agreement, the parties shall use the following
procedure as a condition precedent to either party pursuing other available
remedies:
A party who believes a dispute exists (the "Disputing Party") shall notify
the other party (the "Responding Party") in writing of the dispute. Such
notice shall state the substance and scope of the dispute, the Disputing
Party's position, including legal and factual justifications, the remedy
sought, and any other pertinent matters. The Responding Party shall respond
in writing to the Disputing Party's notice within five (5) business days.
Such writing shall state the Responding Party's position and response to
each of the items included in the Disputing Party's notice. A telephone
conference shall be held within five (5) days between representatives of
the parties having decision-making authority regarding the dispute, to
negotiate in good faith a resolution of the dispute.
If, within ten (10) business days after such telephone conference, the
parties have not succeeded in negotiating a resolution of the dispute, the
parties shall submit the dispute to a mutually agreed upon third party
mediator. The parties shall share the mediation fees equally. Mediation
shall take place at San Jose, California or any other location mutually
agreeable to the parties. In the event the parties resolve their dispute in
mediation, they shall enter into a written agreement, which shall be
binding on all parties thereto. In the event such dispute has not been
resolved within ninety (90) days after the selection of the mediator
pursuant to this Section, then, any dispute or controversy arising out of
or relating to this Agreement shall be settled by final and binding
arbitration. Such arbitration shall be conducted before a single arbitrator
and, except as otherwise set forth herein, shall be conducted in accordance
with the then-existing rules of the Arbitration Association and judgment
upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitration award shall be specifically
enforceable; judgment upon any arbitration award may be entered in any
court with personal jurisdiction over the parties and subject matter of the
disputes. By entering into this provision, it is the parties' intention to
expedite, and limit the costs involved in, resolution of any future
dispute, and therefore pre-hearing discovery shall be limited to production
of key documents and, if appropriate, subpoena of not more than two key
witnesses, as determined by the arbitrator, and shall not extend to
depositions of parties. No arbitrator shall be empowered to award any other
damages, including, but not limited to, consequential, compensatory, or
punitive damages.
21. SUCCESSORS AND ASSIGNS
This Agreement will enure to the benefit of and be binding upon the parties and
their respective successors and assigns.
22. HEADINGS
The headings appearing in this Agreement are inserted for convenience of
reference only and will not affect the interpretation of this Agreement.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AS OF THE
DATE FIRST ABOVE WRITTEN.
SEMOTUS SOLUTIONS INC.
Per: /s/ Xxxxxxx X. XxXxxx
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Authorized Signatory
STOCKGROUP SYSTEMS LTD.
Per: /s/ Xxxxx Xxxxxx
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Authorized Signatory
SCHEDULES
CONFIDENTIAL
