PURCHASE AGREEMENT
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This Agreement dated April 12, 2000 is made
B E T W E E N:
WORKING VENTURES CANADIAN FUND INC.
(the "Vendor")
- and -
BCB VOICE SYSTEMS INC.
(the "Purchaser")
RECITALS:
A. The authorized capital of International Neural Machines Inc. (the
"Corporation") consists of an unlimited number of common shares (the "Common
Shares") and an unlimited number of special shares, of which 20,000 Common
Shares are issued and outstanding;
B. The Vendor is the registered and beneficial owner of (i) 7,300 Common
Shares (the "Subject Shares"), representing 36.5% of the issued and outstanding
Common Shares, and (ii) a debenture dated March 20, 1997 between the Corporation
and the Vendor for the advance of funds in the principal amount of up to
$1,250,000 bearing interest at 10% per annum, payable quarterly, secured by a
floating charge on all of the assets of the Corporation (the "Debenture").
C. The Purchaser is willing to purchase and the Vendor is willing to sell the
Subject Shares and the Debenture 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 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:
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(1) "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.
(2) "APPLICABLE LAW" means, with respect to any Person, property,
transaction, event or other matter, any law, rule, statute, regulation, order,
judgment, 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
(3) "BCB SHARES" has the meaning given in Section 2.1.
(4) "BOARD OF DIRECTORS" means the board of directors of the Corporation.
(5) "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.
(6) "CANADIAN DOLLARS" means the lawful currency of Canada.
(7) "CLAIM" has the meaning given in Section 5.1.
(8) "CLOSING" means the completion of the purchase and sale of the Subject
Shares and the Debenture in accordance with the provisions of this Agreement.
(9) "CLOSING DATE" means Thursday, April 13, 2000, or such other date as
the Parties may agree.
(10) "CLOSING TIME" means the time of closing on the Closing Date provided
for in Section 3.1.
(11) "CORPORATION" has the meaning given in Recital A.
(12) "DEBENTURE" has the meaning given in Recital B.
(13) "INCLUDING" means "including without limitation", and "INCLUDES" means
"includes without limitation".
(14) "INDEMNIFIED PARTY" means a Person whom the Vendor or the Purchaser,
as the case may be, has agreed to indemnify under Article 5.
(15) "INDEMNIFYING PARTY" means, in relation to an Indemnified Party, the
Party to this Agreement that has agreed to indemnify that Indemnified Party
under Article 5.
(16) "LIEN" means any lien, mortgage, charge, hypothec, pledge, security
interest, prior assignment, option, warrant, lease, sublease, right to
possession, encumbrance, claim, right
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or restriction which affects, by way of a conflicting ownership interest or
otherwise, the right, title or interest in or to any particular property.
(17) "MATERIAL ADVERSE CHANGE" means a change in the business, operations
or capital of the Corporation which has had or could reasonably be expected to
have a significant adverse effect on the value of the Subject Shares or the
Debenture.
(18) "PARTY" means a party to this Agreement and any reference to a Party
includes its successors and permitted assigns; and "PARTIES" means every Party.
(19) "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.
(20) "PURCHASE PRICE" has the meaning given in Section 2.1.
(21) "SHAREHOLDERS" means collectively every Person that is a party to the
Unanimous Shareholders' Agreement as of the Closing Date, and "SHAREHOLDER"
means, individually, any one of them.
(22) "SUBJECT SHARES" has the meaning given in Recital A.
(23) "TAXES" 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, customs duties, fees, assessments or similar charges
in the nature of a tax, 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.
(24) "UNANIMOUS SHAREHOLDERS' AGREEMENT" means the unanimous shareholders'
agreement dated March 20, 1997 among the Corporation, the Vendor, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
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. All dollar amounts referred to in this Agreement are stated in
Canadian Dollars.
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1.6 SECTION REFERENCES. Unless the context requires otherwise, references in
this Agreement to Sections or Exhibits are to Sections or Exhibits of this
Agreement.
EXHIBITS
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A Vendor's Bring-Down Certificate
B Director's Resignation
C Director's Release
D Vendor's Release
E Purchaser's Bring-Down Certificate
F Corporation's Release
G Assumption Agreement
H Opinion of Purchaser's legal counsel
ARTICLE 2
PURCHASE AND SALE
2.1 PURCHASE AND SALE AND PURCHASE PRICE. At the Closing Time, subject to the
terms and conditions of this Agreement, the Vendor agrees to sell to the
Purchaser and the Purchaser agrees to purchase from the Vendor the Subject
Shares and the Debenture in consideration of an aggregate purchase price of
$2,270,000 (the "Purchase Price"), $1,250,000 of which will be paid and
satisfied by a cash payment to the Vendor and $1,020,000 of which will be paid
and satisfied by the issue to the Vendor from treasury of the Purchaser of
400,000 common shares in the capital of the Purchaser (the "BCB Shares"). The
Purchase Price shall be allocated to the Subject Shares and the Debenture as
follows:
Purchase Price Allocation
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Subject Shares $1,645,000
Debenture $625,000
2.2 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid and satisfied by
the Purchaser delivering at the Closing Time a certified cheque payable to the
Purchaser in the amount of $1,250,000, together with a share certificate
representing the BCB Shares in the name of the Vendor.
2.3 REGULATORY APPROVAL. Completion of the transactions provided for herein are
subject to receipt by the Purchaser of the consent of the Canadian Venture
Exchange to the issue of the BCB Shares forming part of the Purchase Price.
2.4 SECURITIES LAWS. The Vendor acknowledges that the BCB Shares issued to the
Vendor in partial payment of the Purchase Price are being acquired pursuant to
the prospectus exemption contained in clause 72(1)(l) of the Securities Act
(Ontario). The BCB Shares may be subject to
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hold periods or other resale restrictions imposed by applicable securities laws
or regulatory authorities, including the Ontario Securities Commission and the
Canadian Venture Exchange.
ARTICLE 3
CLOSING ARRANGEMENTS AND CONDITIONS
3.1 CLOSING. The Closing shall take place at 2:00 p.m. on the Closing Date at
the offices of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, or at such other time on the Closing Date or such
other place as may be agreed orally or in writing by the Vendor and the
Purchaser.
3.2 VENDOR'S CLOSING DELIVERIES. At the Closing, the Vendor shall deliver or
cause to be delivered to the Purchaser the following documents and the Vendor
hereby acknowledges that the obligation of the Purchaser to purchase the Subject
Shares and Debenture is subject to the satisfaction of such deliveries at or
before the Closing Time:
(1) the certificate(s) representing the Subject Shares, duly endorsed in
blank for transfer to the Purchaser;
(2) and assignment of the Debenture;
(3) a bring-down certificate of a senior officer of the Vendor in the form
of Exhibit "A" hereto;
(4) a resignation, duly executed by each of the Vendor's nominees on the
Board of Directors, in the form of Exhibit "B" hereto;
(5) a release, duly executed by each of the Vendor's nominees on the Board
of Directors, in the form of Exhibit "C" hereto, as required under
clause 5.2(c) of the Unanimous Shareholders' Agreement;
(6) a release, duly executed by the Vendor in the form of Exhibit "D"
hereto;
(7) a written document, executed by each Shareholder consenting to the
transactions contemplated herein and waiving any and all rights
pursuant to sections 7.2, 7.4 and 7.5 of the Unanimous Shareholders'
Agreement including, without limiting the generality of the foregoing,
the right of first refusal, for the purposes of the transactions
contemplated by this Agreement (collectively, the "Shareholder
Waivers"); and
(8) all such other assurances, consents, agreements, documents and
instruments as may be reasonably required by the Purchaser to complete
the transactions provided for in this Agreement.
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3.3 PURCHASER'S CLOSING DELIVERIES. At the Closing, the Purchaser shall deliver
or cause to be delivered to the Vendor the following documents and payments and
the Purchaser hereby acknowledges that the obligation of the Vendor to sell the
Subject Shares and Debenture is subject to the satisfaction of such deliveries:
(1) payment of the Purchase Price in accordance with Section 2.2;
(2) a bring-down certificate of a senior officer of the Purchaser in the
form of Exhibit "E";
(3) a release, duly executed by the Corporation, in the form of Exhibit "F"
hereto;
(4) an assumption of the Unanimous Shareholders' Agreement, duly executed
by the Purchaser, in the form of Exhibit "G" hereto;
(5) an opinion of the Purchaser's legal counsel addressed to the Vendor, in
the form of Exhibit "H" hereto; and
(6) all such other assurances, consents, agreements, documents and
instruments as may be reasonably required by the Vendor to complete the
transactions provided for in this Agreement.
3.4 WAIVER OF CONDITIONS. Any Party may waive the fulfilment of any condition
set forth in this Article 3 that is for the benefit of such Party.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF THE VENDOR. As a material inducement to
the Purchaser entering into this Agreement and completing the transactions
contemplated by this Agreement and acknowledging that the Purchaser is entering
into this Agreement in reliance upon the representations and warranties of the
Vendor set out in this Section 4.1, the Vendor represents and warrants to the
Purchaser as follows:
(1) Incorporation and Status of the Corporation. The Corporation is a
corporation incorporated and validly existing under the laws of the Province of
Ontario.
(2) Authorization by Vendor. The Vendor has the 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 the Vendor.
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(3) Enforceability of Vendor's Obligations. This Agreement constitutes a
valid and binding obligation of the Vendor enforceable against the Vendor 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.
(4) Principal Amount of Debenture. As at the date hereof, the aggregate
principal amount of funds which have been advanced by the Vendor to the
Corporation in accordance with the terms and conditions of the Debenture, and
which remain outstanding thereunder, is $625,000.
(5) Ownership of Subject Shares and Debenture. The Vendor is the registered
and beneficial owner of the Subject Shares and the Debenture with good and
marketable title thereto, free and clear of any Lien, claim, security interest
or other encumbrance.
(6) Power to Transfer. The Vendor has full legal right, power and
authorization to sell, assign, transfer and deliver the Subject Shares and the
Debenture in the manner provided for in this Agreement and upon delivery of and
payment for such Subject Shares and Debenture hereunder, the Purchaser will
acquire valid and marketable title to such Subject Shares and Debenture free and
clear of any lien, claim, security interest or other encumbrance other than the
Unanimous Shareholders' Agreement.
(7) No Obligation with Respect to Subject Shares and Debenture. As at the
date hereof (other than pursuant to the Unanimous Shareholders' Agreement and
this Agreement), no person, firm, corporation or other entity has or will have
any agreement, or option, or right, or privilege (whether pre-emptive or
contractual) capable of becoming an agreement for the purchase from the Vendor
of any of the Subject Shares or the Debenture or entitling any person other than
the Vendor to share in the proceeds of the Purchase Price and no person has any
agreement or option, including convertible securities, warrants or convertible
obligations of any nature, for the purchase, subscription, allotment or issuance
of any of the unissued Common Shares or special shares in the capital of the
Corporation or any other securities of the Corporation.
(8) Consents and Approvals. Other than the Shareholder Waivers, 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.
(9) Brokerage Fees. Neither the Vendor nor the Corporation has entered into
any agreement which would entitle any person to any valid claim against the
Purchaser for a broker's commission, finder's fee or any like payment in respect
of the purchase and sale of the Subject Shares and the Debenture or any other
matters contemplated by this Agreement.
(10) Residence of Vendor. The Vendor is not a non-resident of Canada for
the purposes of the Income Tax Act (Canada).
4.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser represents
and warrants to the Vendor as follows:
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(1) Due Authorization. The Purchaser 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 the Purchaser.
(2) Enforceability of Obligations. This Agreement constitutes a valid and
binding obligation of the Purchaser enforceable against the Purchaser 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.
(3) Reporting Issuer Status. The Purchaser is a reporting issuer in Ontario
under the Securities Act (Ontario), and has been a reporting issuer in Ontario
for at least 12 months from the date hereof.
(4) Capital of the Purchaser. The authorized share capital of the Purchaser
consists of an unlimited number of common shares and an unlimited number of
non-voting preference shares, of which 8,059,813 common shares are issued and
outstanding as at April 10, 2000.
(5) BCB Shares. The BCB Shares issued to the Vendor in partial satisfaction
of the Purchase Price are duly and validly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be duly and
validly issued as fully paid and non-assessable shares in the capital of the
Purchaser.
4.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(1) The representations and warranties of the Vendor contained in Section
4.1 or any other agreement, certificate or instrument delivered pursuant to this
Agreement shall survive the Closing for a period of 18 months from the Closing
Date, and notwithstanding the Closing and any inspection or inquiries made by or
on behalf of the Purchaser, shall continue in full force and effect for the
benefit of the Purchaser, after which time the Vendor shall be released from all
obligations in respect of such representations and warranties except with
respect to any Claims asserted by the Purchaser 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 there shall be no time limit on
the representations and warranties of the Vendor set out in Section 4.1 which
relate to the incorporation and status of the Corporation, the due authorization
of this Agreement by the Vendor or the enforceability of the Vendor's
obligations under this Agreement,
(2) The representations and warranties of the Purchaser contained in
Section 4.2 or any other agreement, certificate or instrument delivered pursuant
to this Agreement shall survive the Closing for a period of 18 months from the
Closing Date, and notwithstanding the Closing, shall continue in full force and
effect for the benefit of the Vendor, after which time the Purchaser shall be
released from all obligations in respect of such representations and warranties
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except with respect to any Claims asserted by the Vendor 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 the Purchaser set out in Section 4.2 which
relate to the due authorization of this Agreement by the Purchaser and the
enforceability of the Purchaser's obligations under this Agreement.
ARTICLE 5
INDEMNIFICATION
5.1 INDEMNITY BY THE VENDOR. The Vendor shall indemnify and hold the Purchaser,
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
Vendor 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-fulfilment of any covenant or agreement on the
part of the Vendor under this Agreement or under any other agreement,
certificate or instrument executed and delivered pursuant to this Agreement.
5.2 INDEMNITY BY THE PURCHASER. The Purchaser shall indemnify and hold the
Vendor, its 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 the
Purchaser 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 the Purchaser under this Agreement or under any other agreement, certificate
or instrument executed and delivered pursuant to this Agreement.
5.3 EXCLUSION OF OTHER REMEDIES. No Party shall have any right to bring any
proceedings against the other Party for a breach of any representation,
warranty, covenant or agreement contained in this Agreement whether in contract,
tort or otherwise, except pursuant to an action under Section 5.1 or 5.2, as
applicable.
5.4 LIMITS ON INDEMNIFICATION. The maximum liability of the Vendor for
indemnification under Section 5.1 shall be the lessor of (i) the amount of any
claim and (ii) the cash portion of the Purchase Price received by the Vendor on
the Closing Date.
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ARTICLE 6
GENERAL
6.1 EXPENSES. Each Party shall be responsible for its own legal and other
expenses (including any Taxes imposed on such expenses) incurred in connection
with the negotiation, preparation, execution, delivery and performance of this
Agreement and the transactions contemplated by this Agreement and for the
payment of any broker's commission, finder's fee or like payment payable by it
in respect of the purchase and sale of the Subject Shares and the Debenture
pursuant to this Agreement.
6.2 PAYMENT OF TAXES. Except as otherwise provided in this Agreement, the
Purchaser shall pay all Taxes applicable to, or resulting from transactions
contemplated by this Agreement (other than Taxes payable under applicable
legislation by the Vendor) and any filing or recording fees payable in
connection with the instruments of transfer provided for in this Agreement.
6.3 PUBLIC ANNOUNCEMENTS. Except to the extent otherwise required by law or with
the prior consent of the other Party, neither Party shall make any public
announcement regarding this Agreement or the transactions contemplated by this
Agreement. Notwithstanding the foregoing, the Vendor may disclose the
transactions contemplated herein to its shareholders, in accordance with past
practice, without the Purchaser's consent.
6.4 NOTICES.
(1) 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 Vendor, to:
Working Ventures Canadian Fund Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
Stikeman Elliott
Commerce Court West
53rd Floor, P.O. Box 85
Toronto, Ontario M5L 1B9
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(ii) if to the Purchaser, to:
BCB Voice Systems Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇ ▇▇.
▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(2) 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. 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.
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(3) 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.
6.5 TIME OF ESSENCE. Time shall be of the essence of this Agreement in all
respects.
6.6 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.
6.7 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).
6.8 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.
6.9 NON-MERGER. Each party hereby agrees that all provisions of this Agreement,
other than (a) the conditions in Article 3 and (b) the representations and
warranties contained in Article 4 and the related indemnities in Sections 5.1
and 5.2 hereof (which shall be subject to the special arrangements provided 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.
6.10 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.
6.11 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable in that Province.
6.12 SUCCESSORS AND ASSIGNS. This Agreement shall enure to the benefit of, and
be binding on, the Parties and their respective successors and permitted
assigns. Neither 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 Party.
6.13 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
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form and the Parties adopt any signatures received by a receiving fax machine as
original signatures of the Parties; provided, however, that either Party
providing its signature in such manner shall promptly forward to the other Party
an original of the signed copy of this Agreement which was so faxed.
IN WITNESS WHEREOF the Parties have executed this Agreement.
WORKING VENTURES CANADIAN FUND INC.
By: (Signed) "▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇"
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
BCB VOICE SYSTEMS INC.
By: (Signed) "▇▇▇▇▇ ▇▇▇▇▇▇"
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman
EXHIBITS
--------
A Vendor's Bring-Down Certificate
B Director's Resignation
C Director's Release
D Vendor's Release
E Purchaser's Bring-Down Certificate
F Corporation's Release
G Assumption Agreement
H Opinion of Purchaser's legal counsel
EXHIBIT "A"
VENDOR'S BRING-DOWN CERTIFICATE
TO: BCB VOICE SYSTEMS INC. (THE "PURCHASER")
This certificate is given pursuant to Section 3.2 of the Purchase Agreement
dated April 12, 2000 (the "Agreement") between Working Ventures Canadian Fund
Inc. (the "Vendor") and the Purchaser. Unless otherwise stated, terms used in
this Certificate have the meanings given to them in the Agreement.
I hereby certify on behalf of the Vendor and not in my personal capacity
that, to the best of my knowledge, information and belief, after due inquiry:
1. All of the terms and conditions set out in the Agreement to be complied
with or performed by the Vendor at or prior to Closing have been
complied with or performed by the Vendor.
2. All of the representations and warranties set out in Section 4.1 of the
Agreement are true and correct with the same force and effect as if
such representations and warranties were made on and as at the date
hereof.
Dated April __, 2000.
----------------------------------
Name:
Title:
EXHIBIT "B"
RESIGNATION OF DIRECTOR
TO: INTERNATIONAL NEURAL MACHINES INC.
(the "Corporation")
I hereby resign as a director of the Corporation, to be effective
immediately.
DATED as of the day of April __, 2000.
----------------------------------
Name:
EXHIBIT "C"
DIRECTOR'S RELEASE
TO: INTERNATIONAL NEURAL MACHINES INC.
(THE "CORPORATION")
RE: PURCHASE AGREEMENT DATED APRIL 12, 2000 BETWEEN
WORKING VENTURES CANADIAN FUND INC. AND BCB VOICE SYSTEMS INC.
(THE "PURCHASE AGREEMENT")
RE: RELEASE REQUIRED UNDER CLAUSE 5.2(C) OF THE UNANIMOUS SHAREHOLDERS'
AGREEMENT DATED MARCH 20, 1997 AMONG THE CORPORATION, WORKING VENTURES
CANADIAN FUND INC., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (THE "UNANIMOUS
SHAREHOLDERS' AGREEMENT")
--------------------------------------------------------------------------------
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Releasor hereby remises, releases and forever
discharges the Corporation and the directors, officers, employees and agents of
the Corporation (the "Releasee", which term includes any one or more of the
foregoing) from all actions, causes of action, suits proceedings, debts,
guarantees, accounts, bonds, covenants, contracts, claims, liabilities, damages,
grievances, executions, judgements and demands of any kind whatsoever, both in
law and equity, whether implied or expressed ("Claims") (except any Claim for
which the Releasor is entitled to be indemnified by the Corporation in
accordance with clause 5.2(d) of the Unanimous Shareholders' Agreement), which
the Releasor, in its capacity as a director of the Corporation, but not in any
other capacity, now has or hereafter may have against, against the Releasee.
The Releasor represents and warrants that the Releasor has not assigned to
any person, partnership, body corporate or other entity any claim which the
Releasor releases by the Release.
The Releasor declares that it has executed this Release voluntarily after
having been given sufficient time to consider its actions and to seek such
independent legal or other advice as the Releasor deems appropriate with respect
to this matter and the terms of this document and that it fully appreciates the
nature, extent and consequences of this Release.
The Releasor acknowledges and agrees that, notwithstanding the execution
and delivery of this Release, no Releasee admits any liability or obligation
whatever to the Releasor and any such liability and obligation is denied.
Capitalized terms used herein and not defined have the meaning given to
them in the Purchase Agreement.
-2-
The provisions of this Release survive the closing of the transaction
contemplated by the Purchase Agreement and shall enure to the benefit of each
Releasee's successors and assigns and shall be binding upon the successor and
assigns of the Releasor as the case may be. This Release shall be governed by
and interpreted and enforced in accordance with the laws enforced in the
Province of Ontario.
DATED the ____ day of April, 2000.
Witness:
------------------------------- -------------------------------
Name of director
EXHIBIT "D"
VENDOR'S RELEASE
TO: INTERNATIONAL NEURAL MACHINES INC.
(THE "CORPORATION")
RE: PURCHASE AGREEMENT DATED APRIL 12, 2000 BETWEEN WORKING VENTURES CANADIAN
FUND INC. AND BCB VOICE SYSTEMS INC.
(THE "PURCHASE AGREEMENT")
--------------------------------------------------------------------------------
In consideration of the payment of the Purchase Price by the Purchaser and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned (the "Releasor") hereby remises, releases
and forever discharges the Corporation and the directors, officers, employees
and agents of the Corporation (the "Releasee", which term includes any one or
more of the foregoing) from all actions, causes of action, suits proceedings,
debts, guarantees, accounts, bonds, covenants, contracts, claims, liabilities,
damages, grievances, executions, judgements and demands of any kind whatsoever,
both in law and equity, whether implied or expressed which the Releasor, in its
capacity as a Shareholder of the Corporation (except for any claims arising out
of the Purchase Agreement), but not in any other capacity, now has or hereafter
may have against, against the Releasee.
The Releasor represents and warrants that the Releasor has not assigned to
any person, partnership, body corporate or other entity any claim which the
Releasor releases by the Release.
The Releasor declares that it has executed this Release voluntarily after
having been given sufficient time to consider its actions and to seek such
independent legal or other advice as the Releasor deems appropriate with respect
to this matter and the terms of this document and that it fully appreciates the
nature, extent and consequences of this Release.
The Releasor acknowledges and agrees that, notwithstanding the execution
and delivery of this Release, no Releasee admits any liability or obligation
whatever to the Releasor and any such liability and obligation is denied.
Capitalized terms used herein and not defined have the meaning given to
them in the Purchase Agreement.
The provisions of this Release survive the closing of the transaction
contemplated by the Purchase Agreement and shall enure to the benefit of each
Releasee's successors and assigns and shall be binding upon the successor and
assigns of the Releasor as the case may be. This Release shall be governed by
and interpreted and enforced in accordance with the laws enforced in the
Province of Ontario.
DATED the ___ day of April, 2000.
WORKING VENTURES CANADIAN FUND INC.
By:
------------------------------------
Name:
Title:
EXHIBIT "E"
PURCHASER'S BRING-DOWN CERTIFICATE
TO: WORKING VENTURES CANADIAN FUND INC. (THE "VENDOR")
This certificate is given pursuant to Section 3.3 of the Purchase Agreement
dated April 12, 2000 (the "Agreement") between the Vendor and BCB Voice Systems
Inc. (the "Purchaser"). Unless otherwise stated, terms used in this Certificate
have the meanings given to them in the Agreement.
I hereby certify on behalf of the Purchaser and not in my personal capacity
that to the best of my knowledge, information and belief, after due inquiry:
1. All of the terms and conditions set out in the Agreement to be complied
with or performed by the Purchaser at or prior to Closing have been complied
with or performed by the Purchaser.
2. All of the representations and warranties set out in Section 4.2 of the
Agreement are true and correct with the same force and effect as if such
representations and warranties were made on and as of the date hereof.
Dated April __, 2000
---------------------------------
Name:
Title:
EXHIBIT "F"
CORPORATION'S RELEASE
TO: WORKING VENTURES CANADIAN FUND INC.
(THE "VENDOR")
RE: PURCHASE AGREEMENT DATED APRIL 12, 2000 BETWEEN THE VENDOR AND BCB VOICE
SYSTEMS INC.
(THE "PURCHASE AGREEMENT")
--------------------------------------------------------------------------------
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned (the "Releasor") hereby remises,
releases and forever discharges the Vendor and the directors, officers,
employees and agents of the Vendor (the "Releasee", which term includes any one
or more of the foregoing) from all actions, causes of action, suits proceedings,
debts, guarantees, accounts, bonds, covenants, contracts, claims, liabilities,
damages, grievances, executions, judgements and demands of any kind whatsoever,
both in law and equity, whether implied or expressed, and which have arisen or
may arise as a result of the Releasee having been a shareholder of the Releasor
(except for any claims arising out the Purchase Agreement), which the Releasor,
now has or hereafter may have against, against the Releasee.
The Releasor represents and warrants that the Releasor has not assigned to
any person, partnership, body corporate or other entity any claim which the
Releasor releases by the Release.
The Releasor declares that it has executed this Release voluntarily after
having been given sufficient time to consider its actions and to seek such
independent legal or other advice as the Releasor deems appropriate with respect
to this matter and the terms of this document and that it fully appreciates the
nature, extent and consequences of this Release.
The Releasor acknowledges and agrees that, notwithstanding the execution
and delivery of this Release, no Releasee admits any liability or obligation
whatever to the Releasor and any such liability and obligation is denied.
Capitalized terms used herein and not defined have the meaning given to
them in the Purchase Agreement.
The provisions of this Release survive the closing of the transaction
contemplated by the Purchase Agreement and shall enure to the benefit of each
Releasee's successors and assigns and shall be binding upon the successor and
assigns of the Releasor as the case may be. This Release shall be governed by
and interpreted and enforced in accordance with the laws enforced in the
Province of Ontario.
DATED the ____ day of April, 2000.
INTERNATIONAL NEURAL MACHINES INC.
By:
-------------------------------------
Name:
Title:
EXHIBIT "G"
ASSUMPTION, CONSENT AND WAIVER AGREEMENT
WHEREAS BCB Voice Systems Inc. (the "Transferee"), proposes to acquire from
Working Ventures Canadian Fund Inc. (the "Transferor") 7,300 Common Shares (the
"Subject Shares") of International Neural Machines Inc. (the "Corporation")
pursuant to the terms of a purchase agreement to be executed concurrently with
this Assumption Agreement;
AND WHEREAS the transfer of the Subject Shares is governed by the terms and
conditions of a unanimous shareholders' agreement dated March 20, 1997 among the
Corporation, the Transferor, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Unanimous
Shareholders' Agreement");
AND WHEREAS pursuant to paragraph 7.1(d) of the Unanimous Shareholders'
Agreement, the transfer of the Subject Shares is conditional upon the Transferee
entering into an agreement with the other parties to the Unanimous Shareholders'
Agreement, agreeing to be bound the terms thereof;
NOW THEREFORE this agreement witnesses that, in consideration of the
provisions set out below, the acquisition of the Subject Shares and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Any capitalized term used, but not defined shall have the meaning set out
in the Unanimous Shareholders' Agreement.
2. The Transferee hereby consents to the terms and conditions of the Unanimous
Shareholders' Agreement and agrees to assume all of the obligations of the
Transferor thereunder as they relate to the Subject Shares, as though the
Transferee was the Transferor and had been an original signatory to the
Unanimous Shareholders' Agreement.
3. The Transferee hereby acknowledges receipt of a copy of the Unanimous
Shareholders' Agreement.
4. The Transferee hereby advises that its address and fax no. for purposes of
section 11.2 of the Unanimous Shareholders' Agreement is as follows:
BCB Voice Systems Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
5. Each of the parties to the Unanimous Shareholders' Agreement consent to the
transfer from the Transferor to the Transferee referred to herein and waive
all rights such parties may have thereunder with respect to such transfer,
including without limitation under Article 7 of the Unanimous Shareholders'
Agreement.
6. This agreement shall enure to the benefit of the parties and their
respective heirs, executors, administrators, legal personal
representatives, successors (including, without limitation, any successor
by reason of amalgamation of any party) and permitted assigns. Neither this
agreement nor any rights or obligations hereunder shall be assignable by
any party except pursuant to the provisions of the Unanimous Shareholders'
Agreement.
IN WITNESS WHEREOF the parties have executed this agreement effective as of
April __, 2000.
BCB VOICE SYSTEMS INC.
By:
---------------------------------
INTERNATIONAL NEURAL MACHINES INC.
By:
---------------------------------
Name:
Title:
WORKING VENTURES CANADIAN FUND INC.
By:
---------------------------------
Name:
Title:
Witness:
------------------------------------ -------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Witness:
------------------------------------ -------------------------------------
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT "H"
OPINION OF BLAKES
April [13], 2000
Working Ventures Canadian Fund Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Dear Sirs:
RE: PURCHASE AND SALE OF SHARES AND DEBENTURE OF
INTERNATIONAL NEURAL MACHINES INC.
--------------------------------------------
We have acted as counsel to BCB Voice Systems Inc. (the "Purchaser") in
connection with an agreement dated April 12, 2000 (the "Purchase Agreement")
between the Purchaser and Working Ventures Canadian Fund Inc. (the "Vendor") for
the sale by the Vendor to the Purchaser of: (i) 7,300 common shares (the
"Subject Shares") of International Neural Machines Inc. (the "Corporation") and
(ii) a debenture dated March 20, 1997 between the Corporation and the Venture
for the advance of funds in the principal amount of up to $1,250,000 (the
"Debenture").
This opinion is delivered to you pursuant to subsection 3.3(4) of the
Purchase Agreement. All capitalized terms used but not defined in this opinion
have the meanings set out in the Purchase Agreement.
We have examined such corporate records of the Purchaser, such certificates
of officers of the Purchaser, public officials and others and originals, copies
or facsimiles of such other agreements, instruments, certificates and documents
as we have deemed necessary or advisable as a basis for the opinion expressed
below.
For the purpose of this opinion, we have assumed, with respect to all
documents examined by us, the genuiness of all signatures, the authenticity of
all documents submitted to us as originals and the conformity to authentic
original documents of all documents submitted to us as certified, conformed,
photostatic or facsimile copies.
For the purpose of the opinion expressed in paragraph 1 as to the corporate
existence of the Purchaser, we have relied exclusively upon a certificate of
status dated the date hereof issued by the Ministry of Consumer and Commercial
Relations.
This opinion is based upon and limited to the laws of the Province of
Ontario and the laws of Canada applicable therein.
Based and relying on the foregoing and subject to the qualifications herein
expressed, we are of the opinion that:
1. The Purchaser is a corporation existing under the Business Corporations Act
(Ontario).
2. The Purchaser has taken all necessary corporate action to issue the BCB
Shares to the Vendor in accordance with the provisions of the Purchase Agreement
and such shares are duly issued as fully paid and non-assessable and the Vendor
is the registered holder of such shares in the books of the Corporation.
* * * * * * * *
This opinion is provided to you and may be relied on you solely in
connection with the transaction described herein. This opinion may not be relied
upon by or disclosed to anyone else for use for any other purposes, without our
prior written consent.
Yours truly,
